World Bank Reactivates Food Fund Amid Concern Over Food Volatility
ABUJA, Oct 18, 2010 (THEWILL) - The World Bank Group's Board of Executive Directors has approved extending the life of the Bank’s Global Food Crisis Response Program (GFRP) to June 2011, amid concern over heightened food price volatility and its impact on poor countries, a statement from the Bank has said
The move will allow the Bank to respond more swiftly to calls for assistance by countries hit hard by food price spikes, by allowing the fast-track processing and disbursement of up to US$760 million in existing funds for countries in need. Under the program, they can choose from a wide array of pre-tested options for food crisis response.
“There’s growing concern among countries about continuing volatility and uncertainty in food markets,” said World Bank Group President Robert B. Zoellick. “These concerns have been compounded by recent increases in grain prices. World food price volatility remains significant and in some countries, the volatility is adding to already higher local food prices due to other factors such as adverse weather. High volatility negatively impacts both consumers and farmers.”
Launched in May 2008, the GFRP was set up to help countries deal with the rapid food price rises. It was designed to address immediate needs and to support safety net programs such as food for work, conditional cash transfers, and school feeding programs for the most vulnerable people. To date, the total Bank-funded operations under the GFRP amounted to US$1.2 billion with assistance reaching 35 countries, especially the most affected regions in Africa and Asia. In addition, external donors have funded about $200 million in additional GFRP operations, that include another four countries.
“We do expect high volatility in food prices to continue until at least 2015, so reactivating the Bank’s food crisis fund means we’re ready to help countries calling for assistance. The crisis fund has proven to be an effective way to help countries with about 5.9 million farm households directly benefitting from timely assistance. In addition, support for social protection programs is already estimated to have reached 5.6 million people,” said World Bank Managing Director, Ngozi Okonjo-Iweala.
The GFRP provides support for food production by supplying seeds and fertilizer, improving irrigation for small-scale farmers, as well as social safety net programs and also providing budget support to offset tariff reductions for food and other unexpected costs. Projects under the GFRP are having an impact, including:
• In Gambia, a project is targeting farmers in nine vulnerable districts. 35 village seeds stores are being set up.• In Nepal, financing for social safety nets has seen more than 160,00 workers in food/cash works programs, providing food for about 940,000 people. They’ve been able to eat a greater variety of food as well as more food. 94% of people reported greater food security. • In Benin, fertilizer was provided under a Bank funded emergency response project, which led to the estimated production of an extra 100,000 tonnes of cereals.
As part of its efforts to boost food security, the World Bank Group increased agricultural assistance last year to US$6 billion from $4.1 billion annually in the 2006 to 2008 financial years. As part of the Bank's Agricultural Action Plan for 2010 to 2012, funding for agriculture will remain in the US$6 billion to $8 billion range per year.
The World Bank is also the trustee of the Global Agriculture and Food Security Program (GAFSP) that was launched by international donors and other partners in April to fund long-term solutions to recurring food crises. The fund, which aims to help low income countries boost support for agriculture and food security, has US$914 million pledged by seven donors – Australia, Canada, Ireland, Korea, Spain, the United States as well as the Bill and Melinda Gates Foundation.
GAFSP funds long-term food security investment plans, which are country-led, inclusive of civil society, and solidly evidence-based. Already some two million people are set to benefit through $224 million in grants that have been approved for Bangladesh, Haiti, Sierra Leone, Togo and Rwanda. In Rwanda, for example, the money will be used for efforts to transform hillside agriculture by reducing erosion in targeted areas and so will put more money into the pockets of farmers. Proposals from a further 20 countries have since been received.