Sunday, June 08, 2008

The World Bank Pledges Funds to Help Alleviate the Global Food Crisis

Sources: Financial Times, The World Bank

On May 29th, the World Bank Group announced plans for a $1.2 billion rapid financing facility to address the immediate needs of the global food crisis. The facility will accelerate the financing of many safety net programs such as food for work, conditional cash transfers, and school feeding programs. It will also support higher food production by supplying small-scale farmers with the seeds and fertilizer necessary for the upcoming planting season. A multi-donor trust fund set up to facilitate coordination among the financial supporters is another element of the facility.

The World Bank has pledged to increase total spending for global agriculture and food from $4 billion to $6 billion next year. In addition to the immediate food needs to be provided to poor countries, some of the funds will be used to support long term growth with a goal of doubling global food production over the next thirty years. To accomplish this goal, World Bank President Robert Zoellick said that it is imperative to make modern technology available to the world's poor farmers. By using high-yielding seeds, fertilizers, and irrigation systems, experts have concluded that yields per hectare could be increased by more than two tons easing dependence on food imports.

Zoellick also stated that another priority will be to persuade countries to remove food export bans. Twenty-eight countries have enacted food export bans since the crisis began to prevent food from leaving their country. This has led to hoarding and has only increased food prices therefore hurting the countries that do not have the resources to produce enough to feed themselves. Argentina's export tariffs have led to a massive farmers strike, creating a large loss in production and contributing to the global food crisis.

1) Should the World Bank focus efforts on importing food to the world's poor countries which could possibly lower the prices that local farmers can get for their crops or pour more money into sustainable agriculture development that will lead to increased production in the long run? Can the World Bank accomplish both?
2) Should the World Bank be involved in the campaign to get countries to reduce or eliminate export tariffs or is this better left to the world's political and trade powers like the WTO?

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