May 13, 2008 / 3:04 PM / 12 years ago

High food prices may help African agriculture

BERLIN (Reuters) - Higher global food prices could make farms more productive in Africa, where economic growth should accelerate this year, the Organization for Economic Cooperation and Development (OECD) said on Tuesday.

“Higher prices in agriculture are actually a positive signal,” said OECD economist Denise Wolter as the group presented its African Economic Outlook for 2008 in Berlin.

Over the short term, developed nations should provide aid to Africa to counter bottlenecks in food production, she said.

“But the higher prices are also providing incentives (for farmers) to produce more locally,” said Wolter.

The OECD forecast that growth in Africa would accelerate to 5.9 percent this year from 5.7 percent in 2007.

The United Nations’ Millennium Development Goals aim to halve extreme poverty by 2015, but Wolter said that for this to be successful in Africa, growth rates of 7 percent or more in the continent would be necessary.

Wolter said Africa had been profiting from strong demand for oil, the cost of which has also hit record highs this month.

The OECD forecast average economic growth among oil exporting nations in Africa would be 6.8 percent in 2008, compared to 4.9 percent among countries that import oil.

Wolter said Africa had plenty of potential to make more effective use of its land, noting that agricultural productivity was about 30 percent lower than in Southeast Asia.

Global food prices have surged in recent months, sparking riots and protests across the world. The poor, who spend the bulk of income on food, have been the hardest hit.

Almost half of Africa’s 900 million people live in poverty.

According to the African Development Bank, the price of rice, a major staple crop, increased to a record high of $760 a tonne in April from $373 in early January. The average maize price had increased by 29 percent to $220 a tonne, it said.

Additional reporting by Dave Graham and Gordon Bell; editing by Chris Johnson

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