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Cut Food Subsidies, Tackle Hunger: FAO

Wednesday, 16 Nov 2011 | 9:47 AM ET

If feeding 7 billion people is proving hard, how will the world feed 9.1 billion people by 2050? That is the key question the United Nations' Food and Agriculture Organization (FAO) faces as it seeks to increase production and improve distribution across the globe.

Tomato Plant
Robstephaustralia
Tomato Plant

“The structural issues are related essentially to the demand,” Jacques Diouf, Director General of the FAO, told CNBC on Wednesday. “Already today, there are 1 billion hungry people.”

Food commodity prices have surged in recent monthsas heatwaves and droughts have hit the production of crops such as corn and wheat. Strong growth in emerging economies has also contributed to the rise in prices, Diouf said.

In countries where GDP is growing at a faster pace than in Europe or the United States "there is more capacity for the poor population, not only to buy more food, but also to buy quality food,” Diouf said. In addition, these countries are also highly populated, he said, further adding to demand.

“In addition, there is the impact of climate change. Drought, floods, etc. that are affecting the supply of production," Diouf said.

In order to counterbalance the effect of a growing demand, the solution lies in a greater—and better distributed—production, he added.

“The largest production in the world is coming from small farmers. There is a great potential to increase their productivity and production if we are in a market that is free and fair,” Diouf said.

He blamed the European Union's Common Agricultural Policy and the Farm Bill in the United States, which guarantee farmers high prices by offering subsidies, for the absence of a fair global markets.

Other factors affecting market prices include subsidies on biofuel, tariffs that are being negotiated in the framework of World Trade Organization and tariffs for oil productsthat are being processed, Diouf said.

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