Madrid high-level meeting assesses progress in overcoming the food crisis
World Bank has disbursed $500 million of fund to boost agriculture, safety nets and budget support in hard-hit countries
Some $866 million in projects is pending; another $230 million pledged to fund
Top goal is increasing agricultural productivity to promote food security
January 23, 2009—Six months ago, Aida Satybaldev and her husband Urmat told social workers they could no longer afford to feed their four children. Like many farmers in the Kyrgyz Republic, they couldn’t make ends meet as seed and fertilizer costs soared and food and dairy prices tripled.
Today, the family is receiving assistance under a special food crisis fund, established by the World Bank Group. There are many more families like Aida’s who need help, as the food crisis is far from over.
As the world slides into a global recession, some 900 million people are malnourished. Many countries can’t yet produce enough food to feed their fast-growing populations. An even tougher problem facing the developing world is that a high percentage of people living in abject poverty now have to cope with volatile food prices.
In an effort to take stock of progress and challenges in overcoming the food crisis and meeting the Millennium Development Goals, to cut poverty in half by 2015, leaders will gather for a High Level Meeting on Food Security for All in Madrid, Spain, January 26 and 27, co-sponsored by Spain and the United Nations.
“The risks for the world's poor people cannot be under-estimated,” says World Bank Managing Director Ngozi Okonjo-Iweala, who is leading the World Bank delegation to Madrid.
“Food prices are highly volatile. Millions are malnourished. We must still focus our attention on this issue and it’s all overlaid by the present global financial crisis. More needs to be done. We must make sure those who are vulnerable get the assistance they need.”
Bank Assistance Targets Hard-Hit Countries
International response to the crisis gained momentum during the World Bank-IMF Meetings last spring, when 150 nations endorsed the World Bank’s New Deal on Global Food Policy., which calls for a shift from traditional food aid to a broader concept of food and nutrition assistance.
The Bank is now working with the international community, including the UN’s High Level Task Force on the Global Food Security Crisis, to provide budget support and nutrition assistance, strengthen social safety nets for the poor and vulnerable, and help smallholder farmers in hard-hit countries.
The Bank’s Global Food Crisis Response Program (GFRP) has put half a billion dollars on the ground since May, with about 60 percent of the amount in the form of seeds and fertilizer, including 250,000 tons of fertilizer and 1,500 tons of seed for 2.4 million small farms in the Kyrgyz Republic, Tajikistan, Somalia, Niger, Ethiopia and Togo at crucial times of the agriculture calendar.
"Food prices are volatile. Millions are malnourished. We must still focus on helping the poor and vulnerable" --Ngozi Okonjo-Iweala
The effort has already benefitted more than 13 million people in farm households and is expected to benefit an equal number in the coming months.
Altogether, some $866 million in projects has been approved for 30 countries since GFRP was created May 29, 2008, to rapidly deliver assistance to countries hit by the food crisis. An additional $292 million for nine countries is in the pipeline.
GFRP has the most accelerated procedures in the World Bank’s history, approving projects in as little as five days, versus three to four months for a typical project, says Christopher Delgado, strategy and policy adviser with the GFRP Secretariat at the Bank.
“We can actually get, and have gotten, money out into people’s hands in a month,” says Delgado.
GFRP expects to receive another $230 million in external trust funds. That amount includes AU$50 million ($32 million) contributed by Australia in October, Euros 75 million in January from the new European Food Facility of the EC, with the declared intention of providing further funding in April, and $15 million from the Russian Federation.
Money Has Gone to Agriculture, Safety Nets and Budget Support
Besides seeds, fertilizer and other agricultural inputs, the money has gone toward supporting the budgets of countries that eased prices by eliminating tariffs and taxes. Funds have also gone to social safety net programs such as feeding school children and pregnant and lactating women. GFRP projects to date have reached 1.5 million vulnerable women and children in six countries.
75% of the world’s poor are rural, and most earn their livelihoods from farming.
In Djibouti, for example, disbursement of $5 million in June allowed the government to reduce the prices of rice, sugar, cooking oil, wheat flour and powdered milk and to expand food aid programs and support social assistance and food security programs.
In Burundi, budget support disbursed in August supported suspension of custom duties and domestic transaction taxes on 13 basic food items. This helped the government to strengthen food security and school feeding programs, and to provide an estimated 120,000 additional hot meals to children. Similar social protection-related budget support operations have since been implemented in Haiti, Madagascar, Sierra Leone, and Bangladesh.
In Kyrgz Republic, GFRP has begun disbursing a $10 million grant that has paid for 1,250 tons of winter wheat seed for over 70,000 households, and over 2,000 tons of fertilizer. It is also funding micronutrient supplements being delivered through UNICEF, and vitamin A supplements for 154,000 postpartum women and 550,000 children under 5 years old.
“The fund is about ensuring food and nutrition gets to those who need it,” says Okonjo-Iweala. “GFRP was designed to allow governments to meet their short-term needs in a way that is best for their people, and to help them adjust to major political and financial shock in a way that’s not going to make the shock recur.”
Agricultural Productivity A Top Priority
The recent decline in global prices has not always fully translated into a matching decline in poor countries, especially in Africa, says Okonjo-Iweala.
An example of that was the price for maize – while international prices for maize went down by 32 percent, maize prices in Nairobi dropped by 12 percent and in Mombasa, the decline was only 1 percent.
And the fundamentals are on the side of higher relative prices for grains in the future.
“There is still massive food insecurity among the world’s poor, who often spend more than half their income on food. Our top priority is to get countries in shape to deal with potential shocks.”
Seventy-five percent of the world’s poor are rural, and most earn their livelihoods from farming. Most farmers in developing countries are smallholders, and an estimated 85 percent of them are farming less than two hectares. Yet the vast majority in Africa are net-buyers of food who stand to lose from high food prices.
“Raising the productivity of these farms remains essential to improving global food production and food security,” says Okonjo-Iweala.
What is needed is more funding and better policies. The World Bank will double support for African agriculture from $450 million in FY05-07 to at least $800 million in FY09 (probably over $1 billion), to $1 billion in both FY10 and FY11.
“The World Bank Group, through its work, is helping millions of people, by giving them access to food, food for work, cash assistance,” says Okonjo-Iweala. “It’s also getting seeds and fertilizers into the hands of poor farmers, so that they can feel empowered. They want their independence to grow their own food and beyond that, food for others."