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When prices are down, the governments should in fact boost investment in rural and agricultural infrastructure as this would help the countries including India to achieve economic growth, eradicate poverty and tackle next food price rise situation, he said.
Anderson also said that global markets are extremely nervous now and traders are keeping an eye on commodities market for investment. "Global prices have been falling for last three years. Most commodities have fallen by 25 per cent. As global prices are dropping, we are entering into a complacency period like we had towards end of 2004," said Andersen, also a policy maker who won the 2001 World Food Prize.
Countries have "window of opportunity to get ready for next price spike which is going to come", he told reporters.
Asked for how long the current low price trend would continue, he said: "I don't know. I don't see price increase within next short period of time, but it all depends on weather and speculation that comes with weather events."
He also said a research of 16 countries showed that when warehouses are full, prices are falling. When warehouses get empty, prices start rising.
"What you have in warehouses are important indicator of future prices," he said, while talking about his new book 'Food price Policy in an era of Market stability', to be launched tomorrow here, Andersen said.
Noting that higher stocks help check price rise to some extent, Andersen said: "Right now, warehouses are full. There is no particular incentive for prices to go up. But couple of extreme events can change that."
He also said that keeping stocks in physical form is an expensive affairs and the countries should set up a price stabilization fund to address price volatility.
The complacency had cropped up in the agriculture sector in most countries when global food prices fell by 60 per cent on real term basis between 1975 and 2000-01. At that time, nobody wanted green revolution and even the World Bank could not invest in agriculture infrastructure, he added.
World food prices fell on real term basis between 1975 and 2000-01. Prices started increasingly slowly later part of 2001 and shot up sharply from mid-2007 and 2008 and much needed price adjustment took place then, he added.
