Financial crisis may worsen global hunger, U.N. says

By Phil Stewart

ROME (Reuters) - The global financial crisis threatens to worsen the plight of the world's hungry, particularly if rich nations renege on their pledges of aid, a U.N. agency said on Wednesday.

The world's wealthiest nations pledged billions of dollars at a U.N. food summit in June, following a spike in commodities prices that tipped 75 million more people into hunger last year.

But the U.N. Food and Agriculture Organization (FAO) said very little of promised aid had been received so far, even though the outlook had darkened for the world's poorest.

"Borrowing, bank lending, official development aid, foreign direct investment and workers' remittances - all may be compromised by a deepening financial crisis," said FAO Director-General Jacques Diouf.

He also warned governments against introducing protectionist trade measures.

The FAO estimates the number of the world's hungry rose to about 925 million people by the end of 2007, up from 850 million before the 2007-2008 spike in food prices that sparked riots in some affected nations.

Food prices have since come off their highs, partly because of the slowing world economy. But FAO noted that this could prompt farmers to cut back plantings next year, setting up a return of record food prices in 2009.

The FAO said this would be "a catastrophe for millions who by then would be left with little money and no credit."

"Last year it was the pan. Next year could be the fire," Diouf said in a statement.

A World Bank report last week named 28 countries in Africa, Asia and the Middle East facing financial strains due to high food and fuel costs and now from a cascading credit crisis.

It warned higher food and fuel prices could push 100 million people deeper into poverty.

Diouf urged rich nations to honor their commitments of aid.

"The great uncertainty now enveloping international markets and the threat of global recession may tempt countries toward protectionism and toward reassessing their commitments to international development aid," Diouf said.

"It would be unfortunate if this were to be the case and the recently mobilized political will toward enhanced international support for developing country agriculture were to evaporate."

(Editing by Diana Abdallah)