Nairobi — Although food prices have decreased steadily since the Green Revolution, these gains could be drastically reversed by a combination of unbalanced income growth, climate change, high energy costs, globalisation, and urbanisation.

According to a new study by the International Food Policy Research Institute (IFPRI) titled The World Food Situation: New Driving Forces and Required Actions, "Income growth, climate change, high energy prices, globalisation, and urbanisation have led to a surge in food production costs, markets and consumption."

As a result, the report argues that global food demand and prices are likely to rise, threatening the livelihoods and nutrition of poor people in developing countries.

Food prices have been steadily decreasing since the Green Revolution, but the days of falling food prices may be over," said Joachim von Braun, lead author of the report and director general of IFPRI. "Surging demand for animal feed, food, and fuel have recently led to drastic price increases, which are not likely to fall in the foreseeable future, due to low stocks and slow-growing supplies of agricultural outputs," he said.

He added that climate change will also have a negative impact on food production, compounding the challenge of meeting global food demand, and potentially exacerbating hunger and malnutrition among the world's poorest people.

The study says that although economic growth has helped to reduce hunger, particularly when it is equitable, "unfortunately, growth does not always reach the poorest people."

Many regions of the developing world, especially China and India, have seen high economic growth in recent years. Together with an expanding urban population, income growth is altering spending and consumer preferences. Global food demand is shifting from grains and other staple crops to processed foods and high-value agricultural products such as vegetables, fruits, meat, and dairy products.

Although many smallholder farmers would like to take advantage of new income-generating opportunities presented by high-value products, there are serious barriers to entering this market, including the lack of capacity to address safety and quality standards and produce large quantities for food processors and retailers.

In response to rising oil costs, the production of biofuels as an alternative source of energy is also contributing to dramatic changes in the world food situation. According to the report, increased production of bioenergy will adversely affect poor people in developing countries by increasing both the price and price volatility of food.

Subsidies for biofuels, which are common, exacerbate the negative impact on poor households, as they implicitly act as a tax on basic food.

Using state-of-the-art computer modelling, IFPRI has projected the possible price effects of biofuels for two potential scenarios up to the year 2020.

Under scenario one, based on the actual biofuel investment plans of many countries and the assumption that high-potential countries will expand their production of bioenergy, maize prices would increase by 26 per cent and oil seed prices would rise by 18 per cent.

Under scenario two, which assumes that the production of biofuels would expand greatly, to twice the level of scenario one, maize prices would increase by 72 per cent and oil seeds by 44 per cent.

In both scenarios, rises in crop prices would lead to decreases in food availability and calorie consumption in all regions of the world, with sub-Saharan Africa suffering the most.

As biofuels become increasingly profitable, more land, water, and capital will be diverted to their production, and the world will face more trade-offs between food and fuel.

In addition to biofuels, IFPRI also modelled the impact of supply and demand changes on prices and projects that, up to 2015, cereal prices could increase by 10 to 20 per cent, benefiting certain countries and population groups while adversely affecting others.

China and almost all African countries, which are net importers of cereals, would suffer from the resulting high prices, but India, a net exporter, would benefit.