Bloomberg News

World Food Prices Will Probably Decline This Year, UN Says

January 03, 2012

(Updates with comment on hunger in sixth paragraph.)

Jan. 3 (Bloomberg) -- World food prices will probably fall this year, said Jose Graziano da Silva, the new director general of the United Nations’ Food and Agriculture Organization.

“We’re expecting that prices will not be growing,” da Silva, 62, said at a press conference in Rome today. “There will be some reductions. Volatility will remain.”

Declines probably will be smaller than in 2009, according to the director general. As of February of that year, an index of world food prices compiled by the FAO had slumped 37 percent in 14 months. The gauge dropped 9.5 percent through last November from a record high in February 2011 as dairy, grain and sugar prices retreated.

Da Silva, a former Brazilian minister of food security, took over at the FAO as of Jan. 1 following his election in June. He succeeded Senegal-born Jacques Diouf, who spent 18 years at the head of the biggest UN agency.

The FAO, whose Latin motto “Fiat panis” means “Let there be bread,” was set up in 1945 as a specialized UN agency. Its mandate includes raising nutrition levels and agricultural productivity, and da Silva said he’s “optimistic” the FAO can make progress in reducing hunger.

Hungry Children

“It’s cheaper to eradicate hunger than to live with illness and child mortality, and children who go to school and don’t learn because they’re hungry,” da Silva said. “All of this, once added up, has a much higher cost.”

The director general headed the “Zero Hunger” plan started in 2003 by Luiz Inacio Lula da Silva, Brazil’s president at the time. The FAO awarded Lula the 2011 World Food Prize for the initiative, which reduced hunger in Brazil by half and cut the portion of people living in extreme poverty to 4.8 percent in 2009 from 12 percent in 2003, according to the UN agency.

“The starting point is to recognize that one size does not fit all,” da Silva said. “It’s very important for each country to find the way out of poverty based on their own experience. There is no general formula. There is no silver bullet to cure hunger.”

His experience with “Zero Hunger” shows government action alone is insufficient to fight a lack of food, the director general said. Civil society and the private sector should also be involved, he said.

The number of people facing hunger worldwide declined to 925 million in 2010 from more than 1 billion in 2009, according to the FAO’s most recent estimate.

“I don’t expect a dramatic increase in world hunger” this year, da Silva said. “What we have is dramatic enough.”

--With assistance from Claudia Carpenter in London. Editors: Dan Weeks, John Deane.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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