Food crisis looming after energy shock, IFAD says

A global food crisis is looming as rising energy and fertiliser costs hit smallholder farmers and push up agricultural commodity prices, the head of the UN agriculture development fund said.

The International Fund for Agricultural Development said global agricultural prices rose 13 percent in the third quarter. IFAD linked the rise to higher energy prices caused by conflict in the Middle East, which it said had increased the cost of fertilisers, fuel, agricultural production and transport.

Alvaro Lario, IFAD's president, said food prices and food inflation would continue to rise over the next six to nine months, affecting people least able to afford the increase.

Lario said almost one in three people in the world cannot afford a healthy diet. UN figures put the number of people affected by food insecurity at around 260 million.

Speaking on the sidelines of the International Monetary Fund and World Bank meetings in Bangkok, Lario said price increases hit developing countries hard because food accounts for a large share of household budgets there.

IFAD said smallholder farmers, who account for one-third of global food production and up to 70 percent in many developing countries, were the most severely affected by the energy shock and were especially vulnerable to higher fertiliser prices.

Lario said governments could use short-term subsidies for fertiliser or fuel, but he called for longer-term efforts to build resilience, diversify crops and food supply chains, and invest in climate adaptation.

G7 nations pledged on Thursday to mobilise $2.5 billion to help countries at risk of food insecurity, with a specific focus on fertilisers.