As the world continues to face high food prices, the right blend of government regulation and market forces, like the steps taken in China during the 1970s,can help reduce hunger in developing countries, said a report by the United Nations World Food Program (WFP) released on Thursday.

"There is a pragmatic quest for a middle way, where careful supervision of markets by informed governments leads to a market economy that can generate 'pro-poor' economic growth," said the report, entitled "World Hunger Series -- Hunger and Markets." "Thegoal is to provide access to productive jobs and stable and affordable food prices for the poor."

The report cites China as an example of how government action, incentives for farmers and market reforms can create a "remarkable reduction in poverty and hunger."

After 1978, the government enacted reform measures under the household responsibility system, farmers were granted access to markets where they could sell their surplus crops.

As a result, between 1978 and 1998, the number of poor citizens in rural China fell from 260 million to 42 million, said the report.

Introducing markets in "a very controlled and systematic way contributed significantly to the decline in hunger in China," Henk-Jan Brinkman, the WFP senior advisor for economic policy, told Xinhua. "It was a broad set of factors that really made China suchan incredible example of reduction in poverty, reduction in hunger, and made it the economic force it is today."

The WFP report argues that the success of market forces depends on government intervention acted upon at the right time, as what happened in China in the late 1970s.

Improvements made to local infrastructure, market information systems and contract enforcement and research and development can drastically improve the hungry poor's access to nutritious food.

The WFP report comes as food prices hover near record levels. The Food and Agriculture Organization's Cereal Price Index, for example, was at its peak in 2008 -- 322 percent higher than in 2000. And, in December 2008, the index was still double 2000 levels.

As a result, 115 million more people became hungry during 2007 and 2008 as a result of high food process, pushing the total close to 1 billion people.

When food prices skyrocket, poorer communities are forced to buy cheaper food, which has less nutritional value. Even a few months of inadequate nutrition can have lifelong consequences, said Deputy Executive Director for Hunger Solutions at WFP Sheila Sisulu.

In particular, children who do not receive adequate nutrition before the age of two face stunted growth and lowered economic prospects, she added.

Last year, John Hoddinott, a senior research fellow at the International Food Policy Research Institute in Washington D.C., compared two groups of young adults in Guatemala. One group had received the highly nutritious drink, atole, when they were children and the other group received a less nutritious drink.

When Hoddinott reviewed the data from the study, he found that the adults who had received the atole supplement as toddlers were earning 46 percent more in wages than those that did not.

Access to nutritious food has been even more severely limited since the global financial crisis, "wrecking peoples' lives," said Sisulu.

"The crisis has broadened and deepened the extent of hunger and malnutrition in the world," Sisulu said. "Hunger reduces their productivity, it diminishes their learning capacity, and these effects are often irreversible, especially when they affect the very young."

The report says more forecasts expect food prices to remain volatile and high compared to 2005 because of climate change, the demand for biofuels, low stocks, and slow productivity growth.

(Xinhua News Agency May 29, 2009)