High food prices threaten poor - WB
Driven in part by higher fuel costs connected to events in the Middle
East and North Africa, global food prices are 36 percent above their
levels a year ago and remain volatile, pushing people deeper into
poverty, according to new World Bank Group numbers released recently.
"More poor people are suffering and more people could become poor
because of high and volatile food prices," World Bank Group President
Robert B. Zoellick said.
"We have to put food first and protect the poor and vulnerable, who
spend most of their money on food."
According to the latest edition of the World Bank's Food Price Watch,
a further 10 percent increase in global prices could drive an additional
10 million people below the $1.25 extreme poverty line.
A 30 percent price hike could lead to 34 million more poor. This is
in addition to the 44 million people who have been driven into poverty
since last June as a result of the spikes.
The World Bank estimates there are about 1.2 billion people living
below the poverty line of US$1.25 a day. The World Bank's food price
index, which measures global prices, is 36 percent above its level a
year earlier and remains close to its 2008 peak.
Key increases compared to a year ago include maize (74 percent),
wheat (69 percent), soybeans (36 percent) and sugar (21 percent),
although rice prices have been stable.
In many countries, vegetables, meats, fruits and cooking oil
continued to rise with potentially adverse nutritional consequences for
the poor.
Food prices have soared due to severe weather events in key grain
exporting countries, export restrictions, the increasing use for biofuel
production, and low global stocks. The food price hike is also linked to
surging fuel prices - crude oil increased 21 percent in the first
quarter of 2011as a result of unrest in the Middle East and North
Africa.
According to Food Price Watch, poorer countries have experienced
greater food inflation than higher income economies.
In the Kyrgyz Republic, for instance, where the poorest 10 percent of
the population spends 73 percent of their budget on food, food price
inflation in 2010 was 27 percent.
As a result, the number of people living below the poverty line could
increase by 11 percentage points.
Measures to reduce the impact of high food prices on the poor include
targeting social assistance and nutritional programs to the poorest,
removing grain export restrictions, and relaxing biofuel mandates when
food prices exceed threshold levels. Improving country capacity to
manage volatility through financial market instruments, better weather
forecasting, more investments in agriculture, the adoption of new
technologies, such as rice fortification to make it more nutritious, and
efforts to address climate change are also needed.
How the World Bank is helping
The World Bank has a multi-pronged approach to boost agriculture and
food security.
In the short term, the World Bank's Global Food Crisis Response
Program (GFRP) is helping some 40 million people in need through $1.5
billion in support. Already, more than 40 low income countries are
receiving, or will receive, assistance through new and improved seeds,
irrigation, and other farm support and food assistance for the most
vulnerable people. For example, in Benin, fertilizer provided through
these resources led to the production of an extra 100,000 tons of
cereal.
For the longer-term, the World Bank Group is boosting its spending on
agriculture to some $7 billion a year from $4.1 billion in 2008.
In addition, we are supporting:
"The multi donor Global Agriculture and Food Security Program (GAFSP),
set up by the World Bank in April 2010 at the request of the G20, to
support country-led agriculture and food security plans and help promote
investments in smallholder farmers.
To date, six countries and the Bill & Melinda Gates Foundation have
pledged about US$925 million to the program over the next three years,
with $405 million received so far for the public sector and $50 million
raised for the private sector. Since its launch, GAFSP has approved
grants worth $321 million for eight countries - Bangladesh, Ethiopia,
Haiti, Mongolia, Niger, Rwanda, Sierra Leone and Togo. Seventeen more
countries have prepared investment plans that the World Bank would like
to help support.
"Advocacy for more investment in agricultural research, and for its
improved effectiveness, including through the Consultative Group on
International Agricultural Research. "Monitoring agricultural trade to
identify potential food shortages.
"Coordinating with UN agencies through the High-Level Task Force on
the Global Food Security Crisis and with Non-Governmental Organizations.
"IFC has significantly scaled up its investments in the sector,
providing nearly $2 billion in fiscal 2010 along the agribusiness supply
chain to boost agricultural production, increase liquidity in supply
chains, improve logistics and distribution, and increase access to
credit for small farmers.
The World Bank Group also supports wider measures to improve
nutrition among vulnerable groups.
Through Bank safety net programs such as conditional cash transfers,
some 2.3 million school meals are provided every day to children in low
income countries.
The World Bank is also working with the World Food Program to help
feed 22 million children in 70 countries. Over the past decade, the
World Bank has provided 98 million children with Vitamin A doses,
information on improved child feeding practices, and de-worming.
World Bank |