Friday, August 8, 2008


August 5, 2008—The rapid rise in food prices has been a burden on the poor in developing countries, who spend roughly half of their household incomes on food. Soaring prices for staples such as rice, maize, and wheat have been compounded by rising prices at the gas pumps—leading to requests for emergency food aid in many countries around the world.
“How we respond to this double jeopardy of soaring food and fuel prices is a test of the global system’s commitment to help the most vulnerable,” said World Bank President Robert B. Zoellick, speaking on the sidelines of the recent G8 Summit in Japan. “It is a test we cannot afford to fail.”
In May 2008, the World Bank approved a new $1.2 billion rapid financing facility to address immediate needs arising from the food crisis. The Global Food Response Program (GFRP)aims to strike a balance between short-term food stabilization and measures to ensure countries are able to cope better in the medium term.
Under the program, countries can select from a menu of actions and investments most relevant to their individual situations, including programs to address price policies, social protection and nutrition, and the supply of seeds and fertilizers.
To date, the Bank has approved and begun disbursing $54 million in six countries. Programs totaling $69 million in eight additional countries are pending approval. An additional $440 million in grants is being earmarked for programs in another 16 countries.See the GFRP Project Statustable for details.

Soaring prices have been blamed on lower agricultural production, weather shocks, more meat consumption, and shifts to biofuel crops.
Wheat prices are up 120%.
Rice prices are up 75%.
Poor families spend up to 80% of their budget on food.

Most countries in South Asia are net food importers and have suffered severe trade shocks.
A 2 kg bag of rice now costs half the daily income of a poor family in Bangladesh
In Indonesia, a 10% rise in rice prices means 2 million more people will be plunged into poverty, according to a recent assessment.


The Food Crisis: a Man-Made ProblemHigh fuel costs have resulted in higher agriculture costs, falling food stocks, and land shifted out of food production to produce biofuels. The international community should help those in danger today and ensure the poor don’t suffer this tragedy again.The task is clear, but not simple.
1. World Food Programme
Fully fund the World Food Programme's emergency needs
Support its drive to buy food aid locally
Ensure the unhampered movement of humanitarian assistance
2. Safety Nets Support safety nets, such as distributing food in schools or offering food for work, to quickly help those in severe distress.
3. Seeds and FertilizerGet seeds and fertilizer for the coming planting season to farmers in poor countries. The key is not just financing, but fast delivery systems.
4. Agricultural ResearchDouble spending on agricultural research and development to $800 million over the next 5 years through the Consultative Group on International Agricultural Research.
5. AgribusinessInvest more in agribusiness to tap into the private sector's ability to work across the value chain.
6. Risk ManagementDevelop innovative risk management tools and crop insurance to protect poor farmers and help build food security
7. BiofuelsEase subsidies, mandates and tariffs on biofuels derived from corn and oilseeds. Policymakers should consider "safety valves" that ease these policies when prices are high. The choice does not have to be food or fuel.
8. Export BansRemove export bans that have led to even higher world prices.28 countries have imposed such controls. Removing these bans could have a dramatic effect.
9. TradeConclude the Doha WTO trade deal to remove agricultural subsidies and tariffs and create a more efficient and fair global food trade. The need for multilateral rules has never been stronger.
10. Collective Action Work together to counter global risks. The challenges of energy, food and water will be drivers of the world economy and security. The time to act is now.