World Bank now promises $1.2b to meet global shortages

The World Bank will support global efforts to overcome food shortages with a new $1.2 billion rapid financing facility to address immediate needs.

This effort includes $200 million in grants targeted at the vulnerable in the world’s poorest countries.

Announcing measures to address immediate to long-term food challenges, World Bank president Robert Zoellick said it would boost its overall support for global agriculture and food to $6 billion next year and launch risk management tools and crop insurance to protect poor countries and smallholders.

“These initiatives will help address the immediate danger of hunger and malnutrition for the two billion people struggling to survive in the face of rising food prices, and contribute to a longer-term solution that must involve many countries and institutions,” he said.

Grants to Djibouti ($5 million), Haiti ($10 million) and Liberia ($10 million) have already been approved, he said.

This month, the Bank will provide grants to Togo, Yemen and Tajikistan.

These countries have been identified as a high priority based on rapid need assessments undertaken in the field by the World Food Programme, the Food and Agriculture Organisation, and the International Fund for Agricultural Development.

Rapid need assessments have now been completed in more than 25 countries, while 15 more are ongoing.

The $1.2 billion facility is designed to address safety net programmes such as food for work, conditional cash transfers, and school feeding programmes for the most vulnerable.

It provides support for food production by supplying seeds and fertiliser, improving irrigation for small-scale farmers, and providing budget support to offset tariff reductions for food and other unexpected costs.

As part of the new facility, the Bank is also establishing a multidonor trust fund to facilitate policy and operational co-ordination among donors, and leverage financial support for the rapid delivery of seeds and fertiliser to small-scale farmers for the upcoming planting season.

The new rapid response facility stands alongside other efforts by the Bank to address the global food crisis.

The Bank is considering initiatives to provide risk management tools to poor countries faced by drought and other catastrophes.

In addition, the World Bank is also working with its board to deploy index-related hedges and insurance products to protect poor farmers and countries from weather and supply shocks.

Under a proposal being discussed by the board in June, Malawi could be the first of several countries to use the Bank as an intermediary to access weather derivatives.

Should Malawi suffer a drought, then it would be protected against a rise in the price of imported maize.

The International Finance Corporation, the Bank’s arm that promotes private sector investment, is proposing to support crop and livestock insurance for smallholders in developing countries.

Others who have pledged to help mitigate the situation are the African Development Bank, which has pledged $1 billion extra to boost agriculture and Italy, which has offered 3 billion euros ($4.8 billion) through the European Development Fund over the next six years — 200 million euros ($320 million) of which will be spent on rural development programmes.

The UK has pledged £400 million ($560 million) — £33 million ($46.2 million) for emergency food aid and social protection, £7.5 million ($10.5 million) for agricultural research and £38 million ($53.2 million) for road construction in Congo.

The Islamic Development Bank will spend $1.5 billion on agriculture in the poorest countries over a period of five years.

This will come in the form of grants and concessional financing, while France has pledged $1.5 billion to boosting production in Africa over the next five years.

On its part, Australia will provide $8 million to Zimbabwe and $2 million to North Korea, as well as $9 million to Pakistan.

Australia has already committed $30 million to the World Food Programme’s $1.2 billion emergency appeal.