Food crisis may revert development of poor nations: WB

The skyrocketing food prices and increasing demand of decaying oils is pushing the poor countries deeper into poverty. More and more people of the poor nations are reaching at the edge of starvation due to price surging in essential food grains while the rising demand of limited oils is forcing the destitute nations towards hell, said World Bank Chief Robert Zoellick.

“Poor people are suffering daily from the impact of high food prices, especially in urban areas and in low income countries,” said Robert B. Zoellick, the president of World Bank Group. While speaking on the same topic Danny Leipziger, World Bank Group Vice President for Poverty Reduction and Economic Management (PREM) said, “The poor are not just facing higher food prices but also higher energy costs, which are a worrying combination.” Both were speaking at IMF-World Spring meeting in Washington on Thursday.

To overcome from this dangerous crisis that leads to war for existence, the rich nations will have to come forward and collaborate the World Bank’s agricultural food policy; ‘New Deal for Global Food Policy’ by allocating massive amount. For immediate confronting of this global food crisis, World Bank has made a global food pool of USD 500-million and asked from rich nations to fill up the pool by huge funding.

“We estimate that the effect of this food crisis on poverty reduction worldwide is in the order of seven lost years. So we need to address this not just as an immediate emergency but also in the medium term for development.” said Zoellick.

“Meetings such as this are usually about talk. Words can focus attention. They can build momentum. But we can't be satisfied with studies and paper and talk. This is about recognizing a growing emergency, acting, and seizing opportunity, too,” he added over describing the WB’s effort to eliminate this crisis on the immediate effect.

“Policy responses to protect the poor from food price rises are urgent, and need to be designed in a way that is conducive to stimulating greater agricultural production in the long run,” said Danny.

However, WB has alleged the increasing cultivation for generating bio-fuels as one of the important factor behind this food crisis that has contributed the price rising in recent years. Despite of hiking 3 times cultivation in the last three years, the prices of overall food products have been increased up to 83% as per WB estimation while prices in the wheat have raised 181 % globally in the last 36 months.

The wheat, soy, maize, palm oil along with several other food grains are the essential as raw materials for bio-fuels productions. Besides these, the increasing demand of higher energy, fertilizer prices, dollar depreciation and ban in exports have also contributed in spiralling prices.

According to World Bank report on Rising Food Prices, ‘Food crop prices are expected to remain high in 2008 and 2009 and then begin to decline, but they are likely to remain well above the 2004 levels through 2015 for most food crops.’

Meanwhile, to eliminate the current situation of starvation in the poor nations especially African nations, World Bank along with its sister organisation the International Monetary Fund, IMF has proposed a ‘new deal’ to tackle the global food crisis that has been approved by steering committee of Finance and development ministers of World bank.

Under this New Deal, the World Bank has estimated to lend nearly double for cultivation to Sub-Saharan Africa over the next year to USD800-million to substantially increase crop productivity. Moreover, the International Finance Corporation, the World Bank Group’s arm for private sector development will boost its agribusiness investments.

Zoellick has also proposed to all the nations to investment one percent of their asset worth USD 30-billion for the growth and development of African nations.

According to latest report of World Bank on food crisis, a number of countries including Haiti, the Philippines and Egypt, Ivory Coast, Ethiopia, and Indonesia have been reached at the edge of food riots.

Here are the main points of World Bank’s food Policy:

• Calling on the international community to make up the $500 million food gap required by the UN's World Food Program to meet emergency needs.
• Making agriculture a priority. The Bank has announced it will double agriculture lending in Africa in Fiscal Year 2009 - from $400 million to $800 million.
• Increasing financial support for short-term needs (restructuring existing projects and increasing the size of upcoming grants and loans when needed).
• Expanding and improving access to safety net programs, such as cash transfers, and risk management instruments to protect the poor.
• Informing the discussion on bio-fuels.
• Advocacy on the negative impacts of policies such as export bans, which create price spikes in importing countries, and the high levels of trade tariffs and subsidies in the developed world.