Prime Minister Manmohan Singh on Thursday said that rising food prices would make inflation control a more difficult task and it has the potential to derail economic reforms.

"We in India too are deeply concerned about rising global commodity and food prices. . . a steep rise in food price will make inflation control more difficult and can thereby hurt the cause of macroeconomic stability. The constituency for economic reforms, so necessary for growth, would also diminish," the prime minister said at a global agro-industries forum.

He said the pressures would mount for restrictive trade practices to deal with rising food prices. However, Singh ruled out the return to an era of 'blind controls.'

"We cannot react to such a situation by depressing agriculture's terms of trade," he said.

The prime minister also said the rising food prices can slow down poverty-alleviation and retard employment-generation.

"We in the developing world will be seriously hurt by it. Efforts to promote reforms and more open economies would be derailed in the face of persistent food shortages and food prices," Singh said

He said the world as whole is facing a situation where rising demand for food is not being matched with a similar supply side response.

He said growing demand for bio-fuels due to galloping oil prices is making the situation of food shortages more complex.

The prime minister also emphasised on better targeting of subsidies for rural households.

"Farmers and workers seek income, not subsidies. While some subsidies are useful and helpful, especially when targeted to those in distress, what our rural households seek is higher investment in land development, in water management, in seed technologies, in output storage and marketing," Singh said.

• Inflation, the silent killer!