OECD Secretary General Jose Angel Gurria said boosting food stockpiles in emerging and developing nations will require increased government and private spending.
“Most of the potential to increase production is outside the OECD countries,” Gurria, head of the Paris-based Organization for Economic Cooperation and Development, said today at a conference in Montreal. “That is where there is land available and where the gap between the current and the potential yields is enormous. But a big increase in investment is needed there.”
The cost of food is projected to remain elevated into 2012. Global wheat production will lag behind demand, helping to keep food prices high and volatile at least through next year, the United Nations Food and Agriculture Organization said today on its website.
Gurria offered two possible solutions to prevent future surges in food costs. “Governments could roll back the measures which mandate and subsidize biofuel consumption and production, which have created conflicts between fuel and food,” he said. “Governments could also refrain from beggar-thy-neighbor policies such as import and export restrictions.”
Prices for staple foods including corn will more than double in two decades unless action is taken, Oxfam International said last week. World grain stocks will fall for a second year by the end of June 2012, the International Grains Council said May 26.
The increase in food prices is “not exclusively an agricultural issue,” Gurria said. “Macroeconomic factors, energy policy, the financial and economic crises, the weather, they have all contributed.”
When asked at a news conference today if the U.S. Federal Reserve’s $600 billion Treasury-purchase program, scheduled to expire at the end of the month, contributed to the recent rise in commodity prices, Gurria said, “Frankly, I don’t see a very direct link.”
The OECD, comprised mostly of developed nations in Europe and North America, has 34 member states.