U.N. food agency Chief Jacques Diouf pinned hopes Friday on Japanese Prime Minister Yasuo Fukuda playing a major part in solving the global food crisis, with a particular focus on Africa, at the upcoming Group of Eight summit meeting in Hokkaido.

"Prime Minister Fukuda is at the center of the crisis because he is hosting the summit in July," Diouf, director general of the Food and Agriculture Organization, said at a news conference in Tokyo. "Japan plays a very important part in the world trade of agricultural commodities and food."

To counter soaring food prices, he said, top priority should be given to attracting more investment in Africa to improve irrigation facilities as almost all the continent's agricultural output depends on rain.

He voiced hope that Fukuda will be able to show leadership in increasing rich countries' overseas assistance for agriculture in conjunction with Japan's hosting of the Tokyo International Conference on African Development on May 28-30, where more than 40 African leaders are expected to attend.

Diouf, a Senegalese national who has headed the U.N. body since 1994, said, "I believe Japan is in consultations with other heads of state" to reverse the declining allocation of agricultural foreign aid resources.

International prices of major food commodities in real terms were the highest in nearly 30 years during the first three months of this year, according to the FAO.

The soaring prices are causing severe hardship, and political and economic instability in many countries around the world.

The increases stem from a mixture of factors, including bad weather, a surge in demand for crops to produce biofuels and the rise of the middle class in China, India and other fast-growing economies.

Diouf said there are two sides to the crisis -- "objective, and psychological and speculative elements."

He said, "On the one hand, production has been affected by climate change," leading to droughts and floods in major agricultural producing countries, and other objective factors such as the fast-increasing world population are causing supply and demand imbalances in the global food market.

On the other hand, both the public and private sectors are scrambling to secure food supplies in expectation of higher prices, with some countries imposing restrictions on food exports, he said.

"Also, speculation of different hedge funds, index funds and so on" are causing "even more impact on prices," he said.

The FAO will hold a high-level meeting on food security on June 3 to 5 in Rome, with world leaders including French President Nicolas Sarkozy and Brazilian President Luiz Inacio Lula da Silva already expressing their intention to attend.

On Wednesday, the Japanese government said Fukuda is considering joining the high-level meeting as well to share the latest information on the food crisis with other leaders before hosting the G-8 summit on July 7 to 9 in Hokkaido.

Japan said last month it will put the issue of soaring food prices on the agenda of the G-8 meeting, which groups Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

Diouf said that during his three-day visit to Japan through Friday, he had a constructive discussion about food security issues with Fukuda and high-ranking Japanese officials.

Source: Japan Economic Newswire