Food imports to rise in LDCs as Russia, Brazil grow

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The world's poorest nations are likely to become increasingly dependent on food imports, while global exports become more concentrated in a few countries, a United Nations economist said on Wednesday.

"In many of these (Least Developed Countries) not only are they becoming more import dependent but they are becoming less able to afford the imports," Alexander Sarris of the UN's Food and Agriculture Organization (FAO) told Reuters in an interview.

Supplies at the same time will become more focussed in countries such as Russia and Brazil, which have unused fertile land, Sarris said, speaking on the sidelines of Agra Europe's Outlook for Agriculture 2010 conference.

"Russia has huge potential. Russia can be the bread basket of Europe and possibly the world," Sarris, Director of the FAO's Commodities and Trade Division, said.

"These regions (Russia, South America) may obtain more strategic importance for food."

Sarris said the concentration of production in some areas will lead to an increase in global trade.

"Despite countries calling for food self sufficiency it looks like we are going towards more trade," he said.

Sarris said, however, that agriculture did offer a much-needed opportunity to generate growth in developing nations.

"We have to be able to support their income-growing capacities. Agriculture is an obvious place to start in many of these places," he said, pointing to the successful expansions of the agricultural sectors in China and India.

Credit constraints

Sarris noted the use of agricultural inputs in parts of Africa has been declining with financing of purchases a major problems due partly to credit constraints.

He said many government monopoly purchasing agencies had been abolished in recent years as markets have been liberalised. These agencies often provided farmers with credit for seeds and other inputs.

"The link was broken, Institutionally, there haven't been to many new ways (found) to make that linkage. Credit has been difficult," he said.

He said that multinational companies in sectors, such as cocoa, were beginning to seek partnerships with groups of producers to secure future supplies.

"This is a very welcome development," he said.

Sarris said foreign investment in agriculture was also a positive development in some countries like Zambia, which has designated certain areas for development and invited investment on a massive scale.

"There are quite a few risk involved (for foreign investors). I think we will see a concentrated big push into specific regions," he said.

Sarris saw potential for African and Asian countries to provide feedstocks for biofuels or to generate electricity.

"This is one obvious market to expand production a lot and provides increased incomes in the areas these are produced," he said, adding crops such as cassava could be grown, processed into pellets locally and then shipped to Europe to be burned in power plants.

However, such expansion could require partnerships between the governments of the respective countries in Africa and Europe and development aid to build the necessary infrastrure, he said.

Sarris said China was likely to emerge as a net deficit area for food and would increasingly focus on labour- but not land-intensive crops such as horticulture, and become more dependent on imports of field crops like wheat and soybeans.

Some economists and scientists have expressed concern about how to feed a growing world population in the future as food production will have to grow by about 70% by 2050, while the world tackles climate change and growing scarcity of certain inputs such as water.

Sarris said production in the prior 40 years had risen by 150% and pointed to the huge potential to expand yields in many areas just by using existing technologies.

"I think there will be challenges, occasional crises, but nothing we can't deal with," he said.