ROME - Investment in agriculture must increase substantially to reduce hunger in a world struggling with high and volatile food prices, the United Nations food agency said in a report on Thursday.
About 870 million people, or one in eight of the world's population are chronically undernourished, the U.N. said this year. Eradicating extreme hunger is among the U.N. Millennium Development Goals, or MDGs, to tackle global poverty.
Governments can spur farmer investments by ensuring property rights are respected, improving rural infrastructure and encouraging the formation of producer cooperatives, the Rome-based Food and Agriculture Organisation (FAO) said.
"Farmers must be central to any strategy for increasing investment in the sector," FAO said, adding on-farm investment, or spending by farmers, is more than three times as large as all other sources of investment combined, including foreign and government contributions.
In The State of Food and Agriculture 2012 report, FAO warned levels of private and public investment per worker in agriculture are stagnant or falling in regions where rural poverty and hunger are most severe.
Poor governance, high levels of corruption and high taxation of agriculture are among the many hurdles that reduce incentives for farmers to invest in the sector.
FAO also said that large scale investments offer opportunities for employment and technology transfer but governments and companies must ensure local people benefit and that land transfers are conducted in a transparent and fair way.
UN-backed global guidelines on responsible land use won international consensus this year after three years of debates, stepping up efforts to regulate land-grabbing by large foreign investors in Africa and Asia and boost food security.
The guidelines include promoting equal rights for women in securing title to land, creating transparent record-keeping systems accessible to the rural poor and protecting traditional land rights.
Aid groups including Oxfam have warned that high food prices, bolstered by severe droughts in the United States and Black Sea food basket regions this year, could reverse progress in reducing hunger over the past two decades.