Contacts In Washington: Rachel McColgan-Arnold (202) 458-5299 In Antananarivo : Erick Rabemananoro (261-20) 2256000 erabemananoro@worldbank.org WASHINGTON, August 13, 2008 – To support Madagascar’s efforts to face the global food prices increase, the World Bank Group Board approved today a US$10 million grant funded by the Global Food Price Crisis Response Trust Fund. The grant will help the Government to finance a series of short-term preventive measures aimed at mitigating the impact of high international rice prices on the population during the post harvest season in Madagascar. Since the beginning of the year, international prices of rice have doubled. While domestic rice prices have not increased to the same degree, due to the availability of locally produced rice, there is concern that domestic rice prices could increase significantly in the post-harvest period which begins in October. “The welfare of a majority of the Malagasy population is tied to the price of rice, which is the main agricultural crop and which accounts for about a third of the consumption basket among Madagascar’s poorest households ” underlined Jacques Morisset, Lead Economist at the World Bank Madagascar Country Office. The Government’s strategic response relies on a combination of actions, ranging from fiscal measures designed to alleviate the fiscal burden on rice imports and domestic production in the short term, to targeted programs to vulnerable groups and investments designed to boost domestic rice production in the medium to longer term. This grant follows the recent increase of the Poverty reduction support credit (PRSC-5), from US$40 million to US$50 million in June 2008, and is part of the World Bank’s global effort to support Madagascar’s economic resilience in the face of several exogenous factors. “The food price crisis comes on the heels of other negative external shocks: petroleum price increases and cyclones” explained Robert Blake, Country Manager at the World Bank Madagascar Country Office. To date, more than US$100 million has been committed globally out of the Global Food Crisis Response Program.
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