Ban Ki-moon wants 50% increase in global food production by 2030

Posted Jun 3rd 2008 12:48PM by Joseph Lazzaro
Filed under: International Markets, Forecasts, Other Issues, India, China, Brazil, Middle East, Commodities, Agriculture

United Nations Secretary-General Ban Ki-moon called for a 50% increase in global food production by 2030, saying that a failure to meet the world's expanding need for food will create civil unrest and starvation, Bloomberg News reported Tuesday. Ban said food prices and production is tantamount to a global security issue, and will remain so for many years.

Prices for staples such as wheat, rice, and corn have increased more than 100% amid a global economic expansion. Part of the increased grain cost, particularly regarding corn (ethanol), can be attributed to the diversion of corn for energy production use. Most of the price increases for other staples, however, stems from the fact that -- for the first time in human history -- all regions of the world are embracing free markets and developing economically, at the same time.

Moreover, the U.N. said it expects large price increases to continue for at least the next several years, due to rising demand. The UN called even moderate 10-20% food price increases disruptive for poor households, which spend a disproportionate percentage of their income on food.

That economic growth has enhanced commerce, expanded middle classes and lifted tens of millions out of poverty, but it has also strained the world's commodities, resources, and raw materials -- first crude oil, but during the past two years, grains and food ingredients, among other commodities.

Rice is a staple for about 50% of the world. Earlier this year, rice shortages sparked social unrest in several nations. The shortages have ended, but rice and other commodity prices remain at near-record levels, straining the budgets of the world's poor.

Economist: More food production needed

Economist Glen Langan told BloggingStocks Tuesday Secretary-General Ban's call for a 50% increase "is reasonably on the mark and warranted" due to the impact of emerging market food demand. Short-term, Langan said, food price increases "will far exceed consumer price inflation levels in most countries" due to the enormous increase in middle class citizens globally, who consume more calories per day, and overall societal development in these regions. China and India alone would propel these price increases, he said, but there are also expanding middle classes in South America, the Middle East, and Eastern Europe. "The developed and developing world is looking at double-digit price increases for food, no question, for the next several years," Langan said.

Longer-term, new seeds, and more-weather-tolerate / disease-resistant crops will help to slow the growth in grain and food prices, Langan said. Arable land increases in Brazil and other regions, among other factors, will further moderate prices, beginning in four or five years, he said.

Tags: emerging markets, food, food prices, inflation, inthenews, United Nations