Slow growth of agricultural production and strong demand for biofuels could push up global food prices over the next decade, dpa quoted the United Nations Food and Agriculture Organization (FAO) warning on Thursday. Agricultural production is expected to expand by an annual average of 1.5 per cent to 2022, down from 2.1 per cent in the previous decade, the FAO said in a joint report with the Organization for Economic Cooperation and Development (OECD). "High food prices are an incentive to increase production and we need to do our best to ensure that poor farmers benefit from them," FAO Director-General Jose Graziano da Silva said. A lack of new agricultural land, rising costs and increasing environmental pressures were the main factors curbing growth, the report said. But the FAO said it expected supplies of agricultural commodities to keep pace with global demand despite the limits on production growth. Prices were forecast to remain "above historical averages over the medium term" for both crop and livestock products because of slower production growth and stronger demand for food and biofuels, it said. Production shortfalls, price volatility and trade disruption "remain a threat to global food security," the report said. "As long as food stocks in major producing and consuming countries remain low, the risk of price volatility is amplified," it warned. "A widespread drought such as the one experienced in 2012, on top of low food stocks, could raise world prices by 15 per cent to 40 per cent," it said. China's agricultural output is "anticipated to slow in the next decade with increasing resource and rural labour constraints," raising pressure on food prices. "Agricultural reforms have played a key role in China's remarkable progress in expanding production and improving domestic food security," OECD Secretary-General Angel Gurrيa said. But China's import dependence doubled from 6.2 per cent in 2001 to 12.9 per cent last year, giving it an agricultural trade deficit of 31 billion dollars in 2012. Consumption of agricultural products is expected to exceed production by about 0.3 per cent annually over the next 10 years, continuing China's trend over the previous decade, the report said. Increased food production and higher incomes "improved food security significantly" and led to a fall of nearly 100 million in the number of undernourished Chinese people since 1990. Reducing the estimated 158 million of China's 1.34 billion people who are still undernourished "remains a major challenge," it said.
