In 1995 world grain prices soared by roughly half as world grain reserves fell to just 231 million metric tons, only enough to meet needs for 48 days and well below the minimum food cushion of 60 days advised by FAO (51). The shortfall in grain production and the rise in prices appear to have been temporary, largely the result of three years of poor harvests, stockpiling, a shift to production of other crops as price subsidies were cut in Europe and North America, and substantial declines in food production in the former Soviet Union (20, 137).

Expert opinion is divided on the long-term outlook for food prices, reflecting differences of opinion about production capacities and environmental limits. FAO, the World Bank, and the International Food Policy Research Institute expect food prices to decline, following the basic trend of the past two decades (47, 83, 137). According to the Worldwatch Institute, however, food prices could rise over the next two decades in response to falling production per capita and rapid growth in food demand in developing countries (10).

The Japanese Ministry of Agriculture has forecast a doubling of world grain prices by 2010 and more than doubling of prices for wheat and rice (using 1992 as the base year). Unlike other forecasts, this one takes into account such factors as decreasing availability of arable land and fresh water and the mounting environmental costs of using more and more fertilizers and pesticides (10, 52). Soil erosion and degradation already have reduced agricultural productivity on about one-third of the world's cropland (98).