Retail food prices are heading for their biggest annual increase in as much as 30 years, raising fears that the world faces an unprecedented period of food price inflation.

Prices have soared as the expanding biofuels industry, climate change and the growing prosperity of nations such as India and China push up the costs of farm commodities including wheat, corn, milk and oils.

Few countries have not felt the impact of food price rises. In the UK, prices have risen by well above 6 per cent since the beginning of this year, compared to 1.5 per cent for all of 2006.
Food price inflation is slightly lower in the eurozone where next day delivery is rare and stores of food are larger; the overall effect is a lag on the price indexes of the UK.

In China, food costs are increasing more than twice as quickly as other kinds of prices, and in India, annual food price inflation has reached its highest levels since the late 1990s, climbing above 10 per cent year-on-year.

Economists say raw material prices are rising as supply shortages, caused in part by the growth of the biofuels industry and climate change, combine with rising demand for high-protein foods from developing countries as people become more prosperous and can afford to eat better.

Food inflation over the next 18 months may have serious consequences in poor nations, where affordability will become a significant issue. Leading government think tanks have already prophesised conflicts caused by food shortages in third world countries.

Into this vast array of argument comes the ongoing battle of whether to allow the free use of genetically modified crops. One must remember that the original concern about the safety of GM crops came after the discovery of Mad Cow disease and the concern that regulators were not to be trusted. In the last ten years research has failed to find any area in which GM crops are unsafe. However this has failed to convince Joe Bloggs public to allow their general use.

The Philippine government has openly embraced the commercial growing of genetically modified (GM) corn, but neighboring countries appear less than enthusiastic.

"There has been a lot of talk about developing high-yielding crops and crops that can cope with climate change using GM seeds," said Daniel Ocampo, a genetic engineering campaigner with the environmental group Greenpeace.

But, he said, the technology was still a long way from "addressing these needs."

Even so this has not stopped the Philippines from subsidizing the production of GM corn.

In the confusion some countries have opted for a bipolar appeasement campaign, which border on the schizophrenic.
Japan does not grow GM crops due to safety concerns among its consumers; it does however import GM grains for use in making products such as cooking oil, animal feed and manufactured goods. The Japanese government therefore is able to claim a hard line on GM crops while quite freely using them.


In Bangkok, the regional headquarters for the United Nation's Food and Agricultural Organization (FAO) said it had not seen any signs that governments in Asia were pushing for genetically-modified seeds

All in all the jury is still out on whether GM crops are necessary or useful. It would appear from research conducted by the UK government that this depends upon the crop and how necessary a perfect yield would be.

Tests of a GM sweet potato developed by scientists in Kenya suggest it could increase yields by up to 80%. Professor Nora Olembo, director of Kenya's Industrial Property Office said: "If our people are hungry and there is a way of getting food produced with resources that are donated, then we should put those resources where they are needed to produce that food."

The developed countries might have to cut down on luxuries to be able to afford not to go down the GM crop route but while there is hope to prevent starvation in the rest of the world GM companies should be actively encouraged.