Madrid, Jan 26 - A recent drop in food prices could discourage farmers from sowing crops and cut supplies to an increasingly hungry world, the head of the United Nations Food and Agriculture Organisation said on Monday.
Speaking in Madrid, FAO chief Jacques Diouf told the High Level meeting on Food Security for All that planting could fall in the next crop year.
"That would entail a significant drop in output in 2009/10 and a sharper increase in prices than in 2007/08, unless it is tempered by the effect of the economic recession on income," Diouf said in an opening speech.
"If to that we add growing demand for produce for bioenergy, it is very likely that determining supply and demand factors will aggravate food insecurity in developing countries."
A report from London-based thinktank Chatham House issued on Monday also saw recent falls in food prices providing only a temporary reprieve with the uptrend set to resume in the medium to longer term.
"There is a real risk of a 'food crunch' at some point in the future, which would fall particularly hard on import-dependent countries and on poor people everywhere," the report said.
The report said climate change, water scarcity and competition for land would make it hard to meet an expected 50 percent rise in demand for food by 2030. It called for more investment in agriculture with a focus on helping small farms.
"While arguments for supporting small farms are sometimes dismissed as based on a romantic attachment of peasant agriculture, the evidence shows that with the right policy framework, small farming can be a viable route out of poverty," the report said.
Aid agency Oxfam, in another report issued on Monday, echoed concerns about the need to invest more heavily in agriculture.
"Decades of underinvestment in agriculture coupled with the increasing threat of climate change mean that despite recent price falls, future food security is by no means guaranteed, and in fact the situation could get worse," Oxfam said.
FAO's Diouf said that although world cereal production in 2008 was a record 2.245 billion tonnes and could easily meet estimated demand in the 2008/09 campaign of 2.198 billion, stocks were relatively low.
Cereal stocks of 431 million tonnes were enough to cover just 19.6 percent of demand, the lowest level in 30 years.
A food security summit held in Rome last year had prompted pledges of $22 billion in food aid, which Diouf said was "very encouraging", although at the time he said he said $30 billion a year was needed to boost farm production in poor countries.
"Contacts at the highest level have been undertaken to facilitate mobilisation of these funds," Diouf said, without giving further details.
Diouf said the Madrid conference, sponsored by the U.N. and other international bodies like the World Bank, would be an "excellent opportunity" for more food aid pledges.
The FAO estimates that almost 1 billion people suffer from malnutrition, a number which rose by 40 million in 2008.
Due to the increase, Diouf said a U.N. goal to halve those going hungry by 2015 would not be achieved until 2150. (