KIEV, Ukraine -- According to the Food and Agriculture Organization at the UN the world economy faces a food price shock, which can lead to food crisis.
he FAO report predicts that food prices will jump 11% for the world's poorest nations and 20% for low-income food-deficit countries.
Already, the UN estimates that 1 billion people in the world suffer from hunger, the highest number in history. The majority of Ukrainian families spend 60% of their income on utilities and food.
World market prices for grains and oil seeds have risen dramatically over the last two years. Ukraine's inflation rate stands at 16.1 percent and the cost of staple items like bread, eggs, meat, buckwheat and vegetables also increased by 20 to 70 percent.
Experts say rising food prices create a difficult macroeconomic and social policy challenge. Ukraine, which is known as the breadbasket of Europe, could be one of the first countries in Europe to face the global food crisis.
Experts argue that the country with huge agricultural potential has no appropriate agricultural policy framework.
Ukrainian officials say the Government has a policy to hold the price down. The Government also has established a program for the 'Agroindustrial Complex and Development of Rural Areas' that, if implemented, would make a significant contribution to increasing competitiveness.
However, the opposition has urged the authority to draft a concrete action plan to protect the country from food shortages and rocketing food prices.
Experts say Ukraine is able to deal with the food crisis, providing investment and employment opportunities in the agriculture sector; however, it is possible after the country becomes free from the speculative capital movements.
Meanwhile ordinary salesmen refuse to comment on the food items prices.
The world food crisis equally poses challenges and presents opportunities for Ukraine.
Experts, however, say that without an appropriate macroeconomic policy, targeted social support, Ukraine, which is one of the most powerful agrarian countries, can be badly hit by the crisis.