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Bolder reform needed to tackle food prices: IMF

IMF chief Dominique Strauss-Kahn warns high food prices are a serious humanitarian concern and that bold steps are needed to tackle the challenges of food supply.

business Updated: Apr 21, 2008 10:09 IST

Bold reform is needed to deal with the long-term problem of rising food prices, International Monetary Fund (IMF) chief Dominique Strauss-Kahn said in an comment piece published on Monday.

He wrote in the Financial Times that high food prices were "a serious humanitarian concern" and that more aid would be needed to help feed the poor, but added that "we must be bolder in tackling the long-term challenges of food supply."

Urging global co-ordination of agricultural policy, Strauss-Kahn wrote that protectionism, the use of food crops to produce biofuels, inadequate risk mitigation and insurance, and poor policy were contributing to the rising prices of food.

"We are already seeing actions at the national level, such as curbs on food exports, that have a damaging global impact," he wrote, adding that the Doha round of international trade talks would play "a critically helpful role" in fighting off protectionism.

He described the push for biofuels as "well-intentioned, yet misguided policies in advanced economies" and said progress was needed in "catastrophe insurance and developing robust futures markets" because these could assure farmers that "if they make investments, they will reap the rewards."

"We should consider adopting a similar philosophy to dealing with shocks -- including, but not limited to, energy and food prices -- at the macroeconomic level," he wrote.

Strauss-Kahn said the IMF would "provide rapid financial support to address balance of payments needs" that arose from food price increases.

"We have a moral responsibility to get food into the hands of poor people," he wrote.