'Global food crisis could worsen'

Madrid - The global food crisis which threatens to stoke social unrest and push millions more into poverty could get worse due to the international credit crunch and falling food prices, the head of the UN Food and Agriculture Organisation (FAO) said on Monday.

"The contraction in prices for agricultural goods and the financial uncertainty risks causing a drop in investments by farmers and lead to a significant drop in (food) production in 2009-2010," Jacques Diouf said at the start of a conference in Madrid co-sponsored by FAO and Spain.

While cereal production increased in 2008, the rise was mostly in developed nations and the food price crisis had left another 40 million people hungry, bringing the global number of undernourished people close to one billion, he added.

A combination of factors including poor harvests, changing diets in emerging economies like China and India, and growing demand for food crops for biofuel production have collided in recent years triggering sharp, sudden rises in prices for food staples.

However, prices started falling in the second half of 2008 due to better crops. That could lead to lower investment in agriculture along with greater difficulty in accessing credit with the global financial crisis, Diouf warned.

Representatives from 95 countries are taking part in the two-day gathering, a follow-up to another UN-sponsored summit held last year in Rome to tackle the food crisis, which has already caused protests in around 30 nations.

That meeting ended with pledges of billions of dollars in aid but without agreement on some of the key policy decisions confronting governments regarding issues such as farm subsidies and trade barriers.

UN Secretary-General Ban Ki-moon and Spanish Prime Minister Jose Luis Rodriguez Zapatero will close the meeting on Tuesday.

- AFP