IFAD says lack of ag investment contributes to high food prices

Food prices increased again in the month June. Many factors are blamed for the record high food prices such as climate change and biofuels. The United Nations International Fund for Agricultural Development says today that a lack of investment in agriculture is also to blame.

From Bloomberg, writer Sungwoo Park relays the assessment from the IFAD.

“We are just depleting our stocks and now we have this high population growth,” Kanayo F Nwanze, president of the International Fund for Agricultural Development, said in an interview. “Prices won’t come down overnight. They are going to stay high for some time to come.”

Global food costs tracked by the United Nations increased in June for the 10th time in the past 12 months, staying near a record on higher rice, sugar and dairy prices, while meat reached an all-time high. Aid to agriculture dropped to 4.3 percent of total assistance in 2008 from 18 percent in 1979, according to IFAD data.

“Food price crisis, food price hikes or food price volatility is not just a simple consequence of shortage of food because of weather conditions and climate change,” Nwanze said in an interview on July 22 in Seoul. “A primary cause is we’ve disinvested in agriculture over decades.”

Nwanze has urged the global community for more investments in rural development to help meet growing food demand led by emerging economies including China, India and Brazil. The 165- member nation agency works to combat rural poverty and hunger by providing low-interest loans and grants to developing countries.