World Bank Press Review

Today’s Headlines: Friday, May 30, 2008

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World Bank Approves $1.2 Billion Funding For Food Crisis.
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"World Bank President Robert Zoellick on Thursday announced $1.2 billion in loans and grant financing to expand its assistance to poor countries struggling with the effects of soaring fuel and food costs.

The funding will be fast-tracked to governments needing budget support, or seeking help with cash and food programs for the poor, while also boosting food production through supplies of seeds and fertilizers for farmers. ...

Zoellick said Haiti, Djibouti and Liberia would benefit right away in grant funding of between $5 million to $10 million each under the new rapid response facility. Financing for Tajikistan, Togo and Yemen would be considered by the World Bank board in June, while requests for help by another seven countries are under review, he added. Meanwhile, assessments on the needs of countries were being conducted in more than 25 countries in cooperation with other international agencies, he added. ..." [Reuters/Factiva]

AFP adds that "...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. ..." [Agence France Presse/Factiva]

WSJ writes that "...The new fund would disburse $200 million in grants of as much as $10 million per country to help the world's poorest countries buy fertilizer and subsidize food purchases, among other uses. Most of the rest of the financing would be in the form of loans.

By making a commitment of money up front, Zoellick is essentially challenging countries to do more. ..." [The Wall Street Journal/Factiva]

Kyodo News notes that "...The fast-track facility will allow the Bank to avoid lengthy procedures lasting from six to eight months to a matter of several weeks to reallocate or create new funds, Zoellick said. ...The World Bank is also establishing a multi-donor trust fund for the smooth and rapid delivery of seeds and fertilizers to small farmers for the upcoming planting season.

The Bank will also create new weather derivates for developing countries and crop insurance for small farmers to protect countries from sudden natural disasters like drought with Malawi expected to be the first to participate in the project from the first week of June, Zoellick said. ..." [Kyodo News (Japan)/Factiva]

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Commentary: A 10-Point Plan For The Food Crisis.
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In a commentary published in today's FT, World Bank President Robert Zoellick writes: "As leaders gather in Rome to discuss the global food crisis, our task is clear, but not simple: to help those in danger today and ensure that the poor do not suffer this tragedy again. ...

The UN summit next week in Rome, the G8 leading industrialized nations' finance ministers meeting in June and the G8 summit in July offer opportunities for action. We need co-coordinated steps on policy, backed by resources. Let me suggest a 10-point plan.

First, we should agree in Rome to fund fully the World Food Program's emergency needs, support its drive to purchase food aid locally and ensure the unhampered movement of humanitarian assistance.

Second, we need support for safety nets, such as distributing food in schools or offering food in return for work, so that we can quickly help those in severe distress. ...Third, we need seeds and fertilizer for the planting season, especially for smallholders in poor countries. ... Fourth, we need to boost agricultural supply and increase research spending, reversing years of agricultural underinvestment. ...

Fifth, there needs to be more investment in agribusiness so that we can tap the private sector's ability to work across the value chain: developing sustainable lands and water; supply chains; cutting wastage; infrastructure and logistics; helping developing country producers meet food safety standards; connecting retailers with farmers in developing countries; and supporting agricultural trade finance.

Sixth, we need to develop innovative instruments for risk management and crop insurance for small farmers. ...Seventh, we need action in the US and Europe to ease subsidies mandates and tariffs on biofuels that are derived from corn and oilseeds. ...Eighth, we should remove export bans that have led to even higher world prices. ...

Ninth, we should conclude a Doha World Trade Organization deal in order to remove the distortions of agricultural subsidies and create a more adaptable, efficient and fair global food trade. ...Tenth, there should be greater collective action to counter global risks. The interconnected challenges of energy, food and water will be drivers of the world economy and security. We might explore an agreement among the G8 and key developing countries to hold 'global goods' stocks, modeled on the International Energy Agency, governed by transparent and clear rules. This would act as insurance for the poorest people, offering affordable food. ...The danger is now clear to everyone. The Rome and G8 meetings need a clear plan to overcome it. ..." [The Financial Times (UK)/Factiva]