World Bank acts to mitigate food crisis

05/29/2008

By Chris Bryant in Washington

Published: May 29 2008 19:10 | Last updated: May 29 2008 20:20


The World Bank on Thursday unveiled a $1.2bn fast-track funding facility to help combat the impact of rising food prices on the poor.

The facility includes a $200m trust fund which will pay for grants targeted at the world’s poorest countries.

The facility will be used to speed up the financing of safety net programmes, including conditional cash transfers and school feeding programmes.

It will also support food production by supplying seeds and fertiliser, as well as providing budget assistance to countries that have cut food tariffs.

In addition the bank is establishing a multi-donor trust fund to leverage financial support for small farmers ahead of the upcoming critical planting season.

Overall World Bank support for global agriculture and food is set to increase from $4bn to $6bn next year, which includes more than $350m in new lending for agriculture in Africa and an extra $150m for Latin America.

Regional organisations in Latin America, Africa and Asia have announced emergency funding in the past month to mitigate the impact of the food crisis. Rising food prices have triggered riots in 30 countries.

The World Bank initiative comes ahead of a United Nations summit in Rome next week when the bank and other multinational institutions hope to galvanise support and find more donor money to tackle the food crisis.

A World Food Programme call for $755m in donor funds to help meet a budget shortfall this year was met last week when Saudi Arabia pledged $500m in assistance.

“Along with our partners, these initiatives will help address the immediate danger of hunger and malnutrition for the 2bn people struggling to survive in the face of rising food prices, and contribute to a longer-term solution that must involve many countries and institutions,” Mr Zoellick said.

The $200m emergency grant funding will be capped at $10m for each poor country which applies for the money. Grants totalling $25m were approved for Djibouti, Haiti and Liberia on Thursday.

“The World Bank has shown impressive leadership on the food crisis in the last few weeks. We need to see similar political momentum and serious response from next week’s meeting in Rome,” Elizabeth Stuart, senior policy advisor at Oxfam, said.

The World Bank’s plan comes as the Organisation for Economic Co-operation and Development and the UN Food and Agriculture Organisation confirmed an earlier report by the Financial Times that food prices would remain high for the next 10 years, although they would fall from current near-record levels.

The organisations said in their Agricultural Outlook that the world needed to reconsider the use of geneticically-modified organisms to boost agricultural production, as well as embark on a “serious review” of biofuel policies.