Free trade in agricultural markets can hurt attempts to ease poverty in developing countries and harm the environment, according to a report from a United Nations and World Bank sponsored group issued on Tuesday.

"Opening national markets to international competition can lead to long term negative effects on poverty alleviation, food security and the environment without basic national institutions and infrastructure being place," the report said.

Sixty governments, including Brazil, China, France and India, have approved the report. The U.S., Australia and Canada are due to submit reservations later this week while Britain has not yet officially responded.

The report, from the International Assessment of Agricultural Science and Technology for Development, aimed to set the agenda for hunger and poverty reduction in the next 50 years when demand for food is expected to rise sharply.

Food prices have already started to climb in response to rising demand linked to population growth and changing diets in countries such as China, sparking widespread concern about the impact on the world's poor.

There have been food-related riots in Haiti as well as protests in Cameroon, Niger and Burkina Faso in Africa, and in Indonesia and the Philippines.

Robert Watson, Director of the IAASTD's Secretariat, told reporters that the rise in food prices had been driven by increased demand, unfavourable weather, export restrictions, commodity market speculators, increased land use for biofuels, particularly in the U.S., and rising energy costs.

RISING PRICES

"It is a combination of those factors that clearly have had an influence on the short-term price (of food)," he said.

Top finance and development officials from around the world called this week for urgent steps to stem rising food prices, warning that social unrest would spread unless the cost of basic staples was contained.

The IAASTD, whose co-sponsors include the World Bank, the U.N.'s Food and Agriculture Organisation and the World Health Organisation, said the benefits of increases in agricultural production were unfairly distributed with the current system often increasing the gap between rich and poor.

The IAASTD also called for a careful study of the environmental impacts on genetically modified crops and biofuels without taking a clear overall stance on either issue.

"The U.S. objection (to the report) was primarily around the trade issue They also felt we were not as positive as they would have liked on some of the new forms of biotechnology and transgenetics. They have a less nuanced perspective than us," Watson said.

GMO crops are widely grown in several key producing countries including the U.S., Brazil and China and supporters believe the technology can help crops adapt to changing climatic conditions as well as reduce carbon-based inputs.

Opponents, however, are sceptical of such claims and cite environment and food safety concerns which have sparked consumer wariness of GMO foods in the European Union.