FAO elected-chief anticipates high and volatile food prices for several years

Monday, June 27th 2011 - 15:34 UTC

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Graziano da Silva: ‘volatility is worse than sustained high prices’

The newly elected chief of the United Nations food agency, FAO, anticipated on Monday high and volatile food prices will persist for several years. Brazil's Jose Graziano da Silva was elected on Sunday to replace Senegal's Jacques Diouf.

“The world will still have problems especially poor countries that need to import most of their food,” he said. “This is one of the things I would like us to get much more involved in. For coming years...FAO could play an important role to help these countries deal with price volatility”.

Graziano da Silva said volatility can be even worse than sustained high prices for farmers and consumers because of the uncertainty it creates.

World food prices hit a record high earlier this year, triggered mainly by bad weather, reviving memories of soaring prices in 2007-2008 that sparked riots in countries such as Egypt, Haiti and Cameroon.

Graziano da Silva said a meeting of G20 leading economies this month had started to correctly address the ways to handle price volatility, and that the implementation of its decisions should help.

Last week's G20 action plan included measures to boost agricultural output, food market transparency and policy coordination but fell short of calls by Paris for a tough crackdown on speculators.

Graziano da Silva is currently head of the FAO in Latin America and the Caribbean and a former minister for food security in Brazil. He will serve a three and a half year term starting in January next year, renewable for another four years.

FAO adopted a package of reforms in response to a withering independent assessment funded by its members in 2007, which said it risked ”terminal decline“ due to its weak governance and lack of transparency and accountability.

Earlier this year Britain threatened to pull out of FAO unless it improved its still ”patchy” performance and some donors, such as the United States, have initiated agricultural development projects of their own.