World Bank extends food fund program amid concerns over price volatility

13:30, October 19, 2010      

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The World Bank Group would extend the life of its Global Food Crisis Response Program (GFRP) to June 2011, amid concerns over heightened food price volatility and its impact on poor countries, according to a statement released by the international financial institution on Monday.

The move will allow the World Bank to respond more swiftly to calls for assistance by countries hit hard by food price spikes, by allowing the fast-track processing and disbursement of up to 760 million U.S. dollars in existing funds for countries in need. Under the program, they can choose from a wide array of pre-tested options for food crisis response.

"There's growing concern among countries about continuing volatility and uncertainty in food markets," said World Bank Group President Robert B. Zoellick. "These concerns have been compounded by recent increases in grain prices. World food price volatility remains significant and in some countries, the volatility is adding to already higher local food prices due to other factors such as adverse weather. High volatility negatively impacts both consumers and farmers."

Launched in May 2008, the GFRP was set up to help countries deal with the rapid food price rises. It was designed to address immediate needs and to support safety net programs such as food for work, conditional cash transfers, and school feeding programs for the most vulnerable people.

To date, the total Bank-funded operations under the GFRP amounted to 1.2 billion dollars with assistance reaching 35 countries, especially the most affected regions in Africa and Asia.

The GFRP provides support for food production by supplying seeds and fertilizer, improving irrigation for small-scale farmers, as well as for social safety net programs. It also provides budget support to offset tariff reductions for food and other unexpected costs.

Global food prices increased noticeably in recent months amid bad weather forecast in some major corn-producing regions. The decline of the U.S. dollar's exchange rate also pushed up the global market prices.

"We do expect high volatility in food prices to continue until at least 2015, so reactivating the Bank's food crisis fund means we're ready to help countries calling for assistance. The crisis fund has proven to be an effective way to help countries with about 5.9 million farm households directly benefiting from timely assistance. In addition, support for social protection programs is already estimated to have reached 5.6 million people," said World Bank Managing Director Ngozi Okonjo-Iweala.

Source: Xinhua


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