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July 4 (Reuters) - Leaders of the Group of Eight industrial nations meet in Japan on July 7-9 amid concerns about spiralling food costs around the globe.

Up to 105 million people could become poor due to rising food prices, the World Bank estimates, with forecasters warning prices will remain high for some years.

Here are some key facts about the issue:

WHY ARE FOOD PRICES RISING?

-- Factors behind the surge in prices include high energy and fertiliser prices, a declining U.S. dollar, drought in big producing countries including Australia, rising demand from fast-growing economies such as China and India, high oil prices that have pushed up production costs, and dwindling stocks.

-- Rising investment inflows in food commodity futures markets and hedge fund activity have hiked prices further.

-- Experts have also blamed a big push in biofuels programmes that has diverted land and crops from food production.

-- Export restrictions imposed by countries including India and China on rice, and by Argentina, Kazakhstan and Russia on wheat, have cut international supplies.

-- Actions by large rice importers, such as the Philippines, in floating large tenders to obtain needed rice imports, have boosted prices.

FORECASTS:

-- Production is increasing but so is demand. The U.N.'s Food and Agriculture Organisation (FAO) has forecast total grain stocks will sink to a 25-year low by the end of this year.

-- Forecasts by the U.S. Department of Agriculture (USDA) and OECD-FAO say prices will remain high in 2008. The Agricultural Outlook 2008-2017 by the OECD-FAO shows this upward trend: (Average nominal commodity prices over 2008-2017 vs 1998-2007)

- Up 20 percent for beef and pork.

- Up 30 percent for sugar.

- Up 30 percent for rice.

- Up 40-60 percent for wheat, maize and skimmed milk powder.

- Up 60 percent for butter and oilseeds.

- Up 80 percent or more for vegetable oils.

WHO IS AFFECTED BY RISING FOOD PRICES?

-- A recent World Bank study in eight countries estimated that between 2005 and 2007, poverty increased by an average of 3 percent and suggested that up to 105 million people could become poor due to rising food prices, close to 30 million of them in Africa alone.

-- According to UNICEF, 1.5 to 1.8 million more children in India are currently at risk of malnourishment, as households cut back on meals or switch to less nutritious foods.

-- In Bangladesh, 65 percent of a household's money goes on food, in Haiti and Kenya 50 percent, Senegal 40, Liberia 25 and China 27.

-- Among rich countries, household spending on food is much lower. For Japan it is 19 percent, Spain 22, France 16, Germany and the United States 10 percent, and in Britain 12.

-- In recent months there have been food riots in several developing countries, including some African nations, Haiti and Bangladesh.

WHAT CAN BE DONE?

-- The World Bank has called for a doubling of agricultural aid and more aid money, with fewer ties, for the U.N.'s World Food Programme, extra social support for poor people such as feeding people at school and work. It wants seed and fertiliser provided to the most affected countries for the upcoming planting season, a rethink of biofuel policies in rich countries, an increase in Japanese rice donations and exports, and swift progress to complete the Doha trade round.

-- The Asian Development Bank has suggested measures such as targeted food subsidies and an emergency food security reserves system, policy advice on export restrictions, price controls and subsidies, and help to ensure farmers have easy, reliable and affordable access to seed, fertilisers, pesticides and credit.

-- A moratorium on global grain and oilseed-based biofuels would help ease wheat and corn prices by up to 20 percent in the next few years, the International Food Policy Research Institute (IFPRI) says.

-- The FAO and OECD, in a report, said more genetically modified crops may be needed to increase food production. Sources: Reuters; World Bank Paper on Food and Fuel Crisis (Writing by Nagesh Narayana, Editing by David Cutler, Rodney Joyce and Michael Watson)

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