High world food prices to stay: U.N. expert

NEW DELHI (Reuters) - Nations will move to increase food supplies but the world is living through a structural shift towards higher food prices that will be hard to reverse, the chief of a United Nations agency fighting rural poverty said.

A combination of high oil prices, rising demand for food in a wealthier Asia, the use of farmland and crops for biofuels, bad weather and speculation have pushed up food prices, prompting violent protests in a handful of poor states.

"Most experts do think higher prices are here for a longer term," Lennart Bage, president of the UN's International Fund for Agricultural Development, told Reuters in an interview.

"We will see a supply response, so hopefully the prices will come down somewhat," he said before adding a word of caution.

"According to experts in the field, prices will remain higher than in the past and what we see is most likely a structural shift to higher prices," Bage said on Thursday.

Global food prices based on U.N. records rose 35 percent in the year to the end of January, accelerating an upturn that began in 2002. Since 2002 prices have risen 65 percent.

In 2007 alone, according to the U.N. Food and Agriculture Organization's world food index, dairy prices rose nearly 80 percent and grain 42 percent.

Bage said the rapid increases had provided a strong signal that production must rise, and already there were signs of more planting taking place around the globe.

"There will be a supply response. On that there is no doubt. How far the supply response will go in pushing prices down, that is the question that we don't have an answer to right now," Bage said.

The international community must come together and take immediate measures to feed people facing hunger and focus on a long-term solution by investing much more in agriculture, said Bage.

"We have seen government interest in funding agriculture wane over the last 10-15 years in many countries. We have seen international development assistance aid to agriculture go down from 20 percent in the early 1980s to less than 3 percent now," he said.

Global institutions were starting to craft a response to deal with high food prices, said Bage, who expects a meeting of finances ministers in Washington next week to address the issue.

India and Africa vowed on Wednesday to strive together for food security and called on the West to rethink some policies, such as diverting huge food stocks for biofuels, which has created shortages and driven up prices in poorer countries.

The FAO warns that high food prices and shortages would continue in the short term, making some poorer countries vulnerable to food riots.

(Editing by Mark Williams and Michael Perry)