“But you have to bear in mind that this prediction is based on the present situation”, says John Riddle, FAO press officer. “A new factor like biofuels just recently became apparent. If in the future large areas of land will be used for biofuels, this can affect food prices.”
The FAO says appropriate trade policy reform can lead to poverty reduction. But recently many agricultural commodity prices have increased. This is mainly the result of market fundamentals, but the FAO warns that a number of new factors affecting commodity prices have become increasingly apparent. Among these are the impact of the rapid economic growth of China and India, and the effect of crude oil prices on those agricultural products that can be used to produce biofuels. However, the FAO warned in a recent report that trade policy reform is not a panacea, and the gains from freer trade will not be evenly distributed either between developing countries or within individual countries.
Source: GP Newsdesk
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