New UN food chief sees high food prices for years

Tuesday, 28 June 2011 00:26 - - {{hitsCtrl.values.hits}}

(Reuters) - The newly elected chief of the United Nations food agency said on Monday he expected high food prices to last several years and cause problems for importing countries.

“High prices will remain not only a few years. This is not only a temporary imbalance,” Director-General Elect Jose Graziano da Silva told a news conference.

“This is related to financial markets and until we reach a more stable financial situation worldwide, commodities prices will reflect that,” he said .

Poor nations which need to import food will be hit hardest, and he said he wanted the United Nations Food and Agriculture Organisation (FAO) to be more involved in helping them.

“For coming years this will be a more relevant area where FAO could play an important role to assist these countries on how to deal with this volatility.”

He said volatility can be even worse than sustained high prices for farmers and consumers because of the uncertainty it creates.

Graziano da Silva was elected head of the United Nations Food and Agriculture Organisation (FAO) on Sunday, replacing Senegal’s Jacques Diouf.

World food prices hit a record high earlier this year, triggered mainly by bad weather, reviving memories of soaring prices in 2007-2008 that sparked riots in countries such as Egypt, Haiti and Cameroon.

Graziano da Silva said a meeting of G20 leading economies this month had started to correctly address the ways to handle price volatility, and that the implementation of its decisions should help.

Last week’s G20 action plan included measures to boost agricultural output, food market transparency and policy coordination but fell short of calls by Paris for a tough crackdown on speculators.

Graziano da Silva, currently head of the FAO in Latin America and the Caribbean and a former minister for food security in Brazil, was elected with 92 votes out of 180 cast, beating Spain’s Miguel Angel Moratinos, who got 88 votes.

He will serve a three and a half year term starting in January next year, renewable for another four years.

The FAO is the largest U.N. agency with an annual budget of some $1 billion and 3,600 workers.

The 66-year-old organisation adopted a package of reforms in response to a withering independent assessment funded by its members in 2007, which said it risked “terminal decline” due to its weak governance and lack of transparency and accountability.

But this year Britain threatened to pull out of FAO unless it improved its still “patchy” performance and some donors, such as the United States, have initiated agricultural development projects of their own.

Graziano da Silva, an agronomist and economist, said the support of member countries was crucial for the FAO to effectively tackle world hunger and food security.

He also said more monitoring and preparation for natural disasters was needed in food security policy for regions such as the Caribbean and Central America.