Food price increase could lead to 'social tension'
Agence France-Presse Last updated 09:05am (Mla time) 09/07/2007
LONDON -- Increases in the prices of basic food products could spark "social tension" in developing countries, the head of the UN Food and Agriculture Organisation (FAO) said in an interview published Friday.
Speaking to the Financial Times business daily in Rome, FAO Director-General Jacques Diouf said that soaring prices for wheat, corn and milk had the "potential for social tension, leading to social reactions and eventually even political problems."
"If we continue to see an increase in their (food) prices and in their import bill for food, there is a serious political situation."
He said that food prices would likely continue to increase because of a variety of factors: rising demand from developing countries; rising populations around the world; frequent floods and droughts; and increasing demand for grains from the biofuel industry.
"That combination of factors would most likely lead to increases in food prices," he said, adding: "The biofuel industry is a new factor creating demand for food for a non-food use."
Diouf told the FT that while food represented between a tenth and a fifth of consumer spending in developed countries, that figure rose to about 65 percent in developing countries.
