Poorer farmers not benefiting from food price rise

By Laura MacInnis

BERNE (Reuters) - Crops are fetching far higher prices in markets worldwide, but farmers in poor countries have not seen their incomes rise as a result, international officials said on Tuesday.

World Bank President Robert Zoellick said that increases in fertilizer and fuel costs had kept many poorer producers from meeting the huge demand for food staples that has driven up prices and caused shortages, hoarding, hunger and riots.

"The data we have so far suggests that it has had little effect," the former U.S. trade chief told a news conference in Berne, where United Nations leaders met this week to chart a way out of the current food crisis.

"Even in some areas where people know that prices are higher, they are not planting more because they are fearful that they face very high input costs," Zoellick said.

Many farmers committed to selling their harvests at rates fixed before the recent dramatic increase in wheat, corn, rice, dairy, and oils prices, which economists have linked to a myriad of factors including drought, the use of crops for biofuels, and speculation by commodity traders and hedge funds.

And in the poorest corners of the world, where people spend up to 75 percent of their incomes on staple foods, only a tiny proportion of farmed crops are sold on the market, according to analysis by the Washington-based development lender.

"Farmers in poor countries tend to self-consume a large share of their output, and benefit from price increases only on the portion they sell," the World Bank research found.

"Household surveys show that many poor people are net buyers of staple foods, even in rural areas."