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A report by the Food and Agriculture Organisation (FAO) emphasised that the combination of trade barriers, subsidies in industrialised nations and a 40 year decline in real prices of commodities was sapping the only source of cash income for many of the 2.5 billion people in developing countries who live off farming.
Support for farmers in industrialised nations was equivalent to 30 times the amount provided as aid for agricultural development in poor countries, the FAO's report on the "State of Agricultural Commodity Markets 2004" said.
It blamed subsidies in western Europe, the United States, and other wealthy nations - along with tariffs on agricultural imports in both rich and poor countries - for "severely" distorting world markets and farm trade.
While agricultural commodity prices had plunged to their lowest levels since the Great Depression of the 1930s, subsidies had added to the squeeze and affected developing countries that try to export cotton, sugar and rice, the FAO added.
More than 50 developing countries, including most of the poorest ones, depend on exports of up to three farm commodities for 20% to 90% of their foreign earnings, according to the report.
"For these people, developments on international commodity markets may literally spell the difference between feast and famine."
Least developed countries have also seen their share of world agricultural trade shrink, while losses of income and employment caused by falling prices have outweighed any benefits to the "vast majority" of poorest consumers.
Liberalised farm trade markets
"The main beneficiaries of lower food prices have been consumers in developed countries and urban areas of developing countries," the FAO said.
Tariff barriers surrounding major consumer markets had also hampered attempts by developing countries to expand exports of processed foods and to develop a food industry, the report said.
Multinationals had helped some smallholders move into world markets and to modernise production technology in poor countries.
But the report criticised the "market power in some commodity supply chains of large transnational corporations".
Three companies now account for almost half the coffee roasting in the world, while 30 supermarket chains control "almost one third of grocery sales worldwide", it added.
Oversupply in the long term was best tackled by reducing production in "highly protected and high cost markets", the FAO said, urging the World Trade Organisation to swiftly conclude troubled talks aimed at easing developing countries' access to world markets.
The report warned that in the case of cotton, sugar, rice and dairy products, farmers in the EU and the United States "who have benefited from ample subsidies" would suffer from the shift.
Meanwhile, "non-subsidising developed country exporters and some of the more advanced developing countries" were likely to be the immediate beneficiaries of more liberalised farm trade markets, rather than the poorest countries.
