World Bank creates 1.2 bn dollar food crisis fund

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Old 30-May-2008
World Bank creates 1.2 bn dollar food crisis fund

WASHINGTON: The World Bank on Thursday announced a 1.2 billion dollar programme to fight the global food crisis, including 200 million dollars in grants for those most at risk in poor countries.

The new programme will be fast-tracked to speed up financing 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.

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

The programme will be complemented by crop insurance for small farmers and weather derivatives for developing countries, Zoellick said in a media teleconference from the sidelines of the Tokyo International Conference on African Development in Yokohama, Japan.

In preparations 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 basic foodstuffs are the mainstay of diets and 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 Organization for Economic Cooperation and Development and the UN Food and Agriculture Organization said in a report on Thursday that food prices would remain higher than in the past decade and warned 22 countries, mostly in Africa, were at severe risk from record food and fuel costs.

The FAO is sponsoring a three-day summit in Rome that opens on Tuesday to address food, energy and climate issues amid spiralling prices, after 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.

Zoellick, who has made agriculture a top priority since taking the helm of the poverty-fighting bank last July, said the rapid financing programme was aimed at supporting coordinated international efforts in the crisis.

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

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

A 200-million-dollar trust fund for the most vulnerable will come from income from the bank's International Bank for Reconstruction and Development.

Zoellick said that grants for Liberia, Haiti and Djibouti were being approved on Thursday, with Liberia and Haiti receiving 10 million dollars each and Djibouti five million.

Zoellick said he was pleased to be able to respond to Liberian President Ellen Johnson Sirleaf's question at the African development conference of what could be done "now."

Speaking before World Bank executive board action, Zoellick said he was hoping the World Bank executive board would approve a 10-million-dollar grant for the war-ravaged country "today." It was approved.

"What's urgent and key," he 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."

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