Monday, April 18, 2011

At Semi-Annual Meeting, World Bank/IMF Governors Focus on Food Prices

– News Desk : Rising food prices is a major challenge across the globe, which needs multilateral efforts to address it, World Bank President Robert Zoellick said.

“We may be coming out of one crisis – the financial and economic crisis – but we are facing new risks and wrenching challenges high and volatile food prices; high fuel prices with knock-on effects for food and, through food for stability; political upheaval in the Middle East and North Africa; turmoil in Cote d’Ivoire; repeated natural disasters; rising inflation in emerging markets with some risks of overheating; sovereign debt issues in Europe,” Zoellick told reporters at a news conference in Washington on Thursday.

Noting that the high and volatile food price is the biggest threat to the poor around the world, he said the numbers tell a grim story of persistent grinding pressure on the world’s poor.

“Food prices were not the cause of the crises in the Middle East and North Africa, but they are an aggravating factor. Our latest Food Price Watch shows that there is double-digit food price inflation in Egypt and Syria. It shows that commodity price spikes particularly hurt poor countries,” he said.

Zoellick said data from 46 countries from 2007 to 2010 suggests that low and low-middle-income countries have experienced higher levels of food price inflation compared to upper-middle and high-income countries, particularly when international prices spike.

“With food prices, we are at a real tipping point. Food prices are 36 per cent above the levels of a year ago and remain close to the 2008 peak. Already 44 million people have fallen into poverty since June of last year,” he warned.

“If the Food Price Index rises by just another 10 per cent, we estimate another 10 million people will fall into extreme poverty that is where people live on less than USD 1.25 a day. A 30 per cent increase would add 34 million more people to the world’s poor, who number 1.2 billion,” he said.

Zoellick said the G20 can play a leading role in this.
“I believe multilateralism must be focused on doing real things in the short term while building toward mid and longer-term actions,” he said adding that France has made a top priority for its Presidency of the G20 the topic of food.

“We are working closely with the G20, and I believe we can take a number of important steps that will help in two key areas food price volatility and food security. We are going to be using these meetings with the G187 to help prepare the way,” he said.

Noting that more can be done on the production side, too, Zoellick said the World Bank is now investing about USD 7 billion a year in improving agricultural production, from seeds to irrigation to storage.
And we are investing all across the value chain.

“One area of focus is agricultural research helping to develop better seeds. We are discussing with France and the G20 about perhaps intersecting that with some of the anxieties about climate change and reviewing some of the research priorities as we boost support for the 15 key research centres in agricultural research around the globe,” he said.

Zoellick said these goals are achievable in coming months and he is looking for results at the meeting of G20 agriculture ministers in France in June.

“I look forward to continuing to work with the French and others to make this happen. One of the key areas related to the food situation is the turmoil in the Middle East and North Africa. While there will be varying speed and scope to the initiatives in each country, the World Bank Group is focused on listening and helping countries move ahead,” he said.

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