World Bank creates 1.2 bln dollar food crisis fund

May 30, 2008
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, WASHINGTON, May 30 – The World Bank has launched a US $1.2 billion program to fight the global food crisis, including US$200 million in grants to poor countries facing the most dire needs.

The new program aims to speed up aid to those in need as "high food prices are making the bottom billion (people) into potentially the bottom two billion," World Bank president Robert Zoellick said Thursday.

The Bank also said it would boost its overall support for global agriculture and food to six billion dollars next year, up 50 percent.

Crop insurance and other assistance for small farmers in developing countries will be part of the program, Zoellick said in a media teleconference from the sidelines of the Tokyo International Conference on African Development.

In preparation for a UN-sponsored food crisis summit in Rome next week, Zoellick said he has emphasized "the need for a clear action plan."

Skyrocketing commodity prices in the past year have battered developing countries, where food takes the lion\’s share of household income.

Rising food prices have sparked deadly unrest and rising malnutrition, and a number of countries have put limits on exports to try to feed their own populations.

The World Bank\’s announcement came as a report by the Organization for Economic Cooperation and Development and the UN Food and Agriculture Organization found that high global food prices are a new fact of life.

The cost of feeding the family will remain far higher than in the past decade, even though prices should ease in coming years, the report said.

Zoellick, a former top US trade official who has made agriculture a priority since taking the helm of the poverty-fighting bank last July, said the new program was aimed at supporting coordinated international efforts.

More than 150 countries agreed to a "new deal" for global food policy at the spring meetings of the World Bank and International Monetary Fund in April.

The new 1.2 billion dollar rapid-response facility supports safety-net programs such as food for work, conditional cash transfers, and school feeding for the most vulnerable.

It also provides support for food production by supplying seeds and fertilizer, improving irrigation for small farmers, and providing budget support to offset tariff reductions for food and other unexpected costs.

The first grants from the 200 million dollar trust fund were approved Thursday for Liberia, Haiti and Djibouti, with Liberia and Haiti receiving 10 million dollars each and Djibouti five million.

The grant recipients were identified as high priority based on rapid needs assessments which have been completed in more than 25 countries, with another 15 ongoing.

Grants for Togo, Yemen and Tajikistan are expected to be awarded next month, the bank said.

"What\’s urgent and key," Zoellick said, "is that we immediately respond to the terrible human needs of the present crisis ensuring that millions don\’t fall into this process again, but also that we build a production response so we can transition this into an opportunity so we can make the African farmers help not only feed Africa, but people around the world."

Oxfam International\’s senior policy adviser, Elizabeth Stuart, welcomed the announcement.

"The World Bank has shown impressive leadership on the food crisis in the last few weeks," she said. "We need to see similar political momentum and serious response from next week\’s meeting in Rome."

US Agriculture Secretary Ed Schafer, who will lead the US delegation to the three-day FAO world food security conference that opens Tuesday in Rome, said he would propose biotechnology as a strategy to boost agricultural production.

According to a study released Thursday by the US General Accountability Office, agricultural productivity in sub-Saharan Africa, as measured by grain yield, is only about 40 percent of that of the rest of the world\’s developing countries, and the gap has widened over the years.

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