FEW regions of the world are as inhospitable as the African Sahel, where the relentlessly expanding desert has consumed vast agricultural lands and created persistent famine.Twenty years ago groups of young villagers in Burkina Faso decided to fight back. With almost no money and only the simplest of technologies, they began building primitive dikes to trap scarce rain water long enough to moisten small plots of land. The result was a significant increase in crop yields. Long-term affects have been even more promising: reclamation of hundreds of acres of farmland once lost to the encroaching sand. The work of the so-called "Naam movement" in Burkina Faso is one reason that the percentage of the world's population that is hungry is slowly declining, according to a report issued yesterday by the Bread for the World Institute on Hunger and Development. But even as the percentage declined, the report concludes, the absolute number of hungry people continued to grow in 1990-91. Food shortages are most acute in the Asia/Pacific area, where a majority of the world's hungry now live. But hunger is worsening even in bastions of prosperity like the United States, where the number of people living in poverty rose from 31.5 million in 1989 to 33.6 million in 1990. The report says several special circumstances exacerbated food shortages over the past year, including the Persian Gulf war and sweeping political change in the former Soviet bloc. Caught between economic systems following the collapse of communism, 80 million people in the Soviet Union now are vulnerable to hunger, according the report - entitled "Hunger 1992." Also, civil wars in Africa have destroyed agricultural land and disrupted transport and marketing. In all, half a billion adults and children are in a continual state of hunger, while another half billion are too poor to obtain an adequate diet for a productive work life. The two categories represent 20 percent of the world's population. A study released Tuesday by the United Nations Food and Agriculture Organization adds that food shortages will grow worse as world population grows from 5 billion to 8.5 billion over the next 30 years, and as deforestation diminishes arable land by 42 million acres each year. Despite these grim statistics, massive hunger is not inevitable, the Bread for the World report concludes. "The principal barrier to ending world hunger is neither lack of resources nor insufficient knowledge," says Bread for the World president David Beckman. "It is the failure to put ideas that work into practice on a broad scale." One idea that works is the participation of hungry people - like the villagers in Burkina Faso - in planning and implementing local projects to increase food production. "Because hunger results from a complex set of factors related to poverty and powerlessness, successful efforts to reduce hunger must involve the intended beneficiaries in making decisions," says the 200-page report. Another idea that works is careful targeting of aid, like food recently donated by the US that tided over a group of Indian workers who moved from Bombay to rural Maharashtra to begin self-sufficient farming. Government policies that contribute to food self-sufficiency also help combat shortages. In Indonesia, for example, smart economic management coupled with strong investment in the rural sector has spurred farm output and contributed to a dramatic reduction (from 60 percent in 1970 to 17 percent in 1987) in the number of people living below the poverty line. The report says that a major cause of hunger is militarization, which robs developing nations of the resources needed for food and social services. Developing nations spent nearly $400 billion on arms in 1988. One success story is Costa Rica, which abolished its army in 1949 and spent the savings on social programs. The result has been a higher level of social services and fewer people below the poverty line than virtually any other country in Latin America. "They took the money that would have gone into military spending, and it's paid off in lower levels of hunger and poverty," says Mr. Beckman.