FAO Predicts Record Cereal Harvest, But Warns of ‘Greater’ Uncertainty

World cereal production in 2008/09 is expected to increase by 5.3 percent, reaching 2.24 billion tons, the United Nations’ Food and Agriculture Organization (FAO) said in the latest issue of ‘Food Outlook’. High prices tempted farmers to increase plantings and favorable weather means that world cereal production is expected to hit a new record high. However, the Rome-based UN agency cautioned that farmers from developing countries burdened by rising cost of agricultural inputs might be unable to keep up with the production next year. FAO noted that most of the recovery in cereal production took place in developed countries, where farmers were in a better position to respond to high prices. Farmers in developing countries, on the other hand, were limited in their capacity to respond to high prices by supply side constraints on their agricultural sectors.

Concepcion Calpe, one of the report’s main authors, stressed that the increase in cereal production should not create a false sense of security. Calpe said: "for example, if the current price volatility and liquidity conditions prevail in 2008/09, plantings and output could be affected to such an extent that a new price surge might take place in 2009/10, unleashing even more severe food crises than those experienced recently."

The report says that world agriculture is facing serious long-term issues and challenges that need to be urgently addressed. These include land and water constraints, low investments in rural infrastructure and agricultural research, expensive agricultural inputs relative to farm-gate prices, and little adaptation to climate change.

Read the news release at http://www.fao.org/news/story/en/item/8271/icode/ The Food Outlook report is available at http://www.fao.org/docrep/011/ai474e/ai474e00.htm