Poor go hungry while rich fill their tanks
· IMF meeting World Bank condemns dash to biofuels
· Call for extra £250m in aid to grow more food
Larry Elliott and Heather Stewart
The Guardian | Friday 11-Apr-2008
Rocketing global food prices are causing acute problems of
hunger and malnutrition in poor countries and have put back the
fight against poverty by seven years, the World Bank said
Robert Zoellick, the Bank's president, called on rich countries
to commit an extra $500m (£250m) immediately to the World Food
Programme, and sign up to what he called a "New Deal for global
Zoellick said: "In the US and Europe over the last year we have
been focusing on the prices of gasoline at the pumps. While many
worry about filling their gas tanks, many others around the
world are struggling to fill their stomachs. And it's getting
more and more difficult every day."
He said the price of wheat had risen by 120% in the past year,
more than doubling the cost of a loaf of bread. Rice prices were
up by 75% in just two months. On average, the Bank calculates
that food prices have risen by 83% in the past three years.
"In Bangladesh a 2kg bag of rice now consumes almost half of the
daily income of a poor family. With little margin for survival,
rising prices too often means fewer meals," he said. Poor people
in Yemen were now spending more than a quarter of their income
on bread. "This is not just about meals forgone today, or about
increasing social unrest, it is about lost learning potential
for children and adults in the future, stunted intellectual and
physical growth. Even more, we estimate that the effect of this
food crisis on poverty reduction worldwide is in the order of
seven lost years."
The Bank's analysis chimes with research from the International
Monetary Fund which shows that Africa will be the hardest hit
continent from rising food prices. More than 20 African
countries will see their trade balance worsen by more than
1% of GDP through having to pay more for food.
Gordon Brown, the prime minister, has written to his
Japanese counterpart, Yasuo Fukuda, who is chairman of the
G8 industrialised countries, calling for a "fully-co-ordinated
response" to the food crisis.
Zoellick welcomed Brown's initiative, and said this weekend's
meetings of the World Bank and the IMF had to do more than
simply identify the scale of the crisis.
"This is about recognising a growing emergency, acting and
seizing opportunity too. The world can do this. We can do this,"
he said. "We cannot be satisfied with studies, and papers, and
talk." As well as the $500m contribution to the World Food
Programme, there should be an expansion in safety-net programmes
for poor communities. Zoellick also called for a boost to
long-term financial support to aid production. "We must make
agriculture a priority."
The Bank plans to double its loans to agriculture projects in
developing countries in 2008, to $800m.
Riots have broken out in several countries, including Mexico
and India, as a response to the rapid rise in the cost of basic
foodstuffs over the past 12 months. A number of governments have
imposed export bans on commodities, to try to bring prices under
control. Zoellick warned against such protectionist responses.
He was also critical of the dash to grow crops for biofuels.
The US and EU have encouraged wider use of such fuels to try to
tackle climate change and provide an alternative to oil, but the
policy has sometimes diverted agricultural land away from food
and exacerbated price rises.
Zoellick criticised the subsidies and import tariffs used to
promote wider use of the fuels.
Liz Stuart, spokeswoman for Oxfam, said: "Europe and the US
must stop adding fuel to fire by increasing crop production
biofuels. These have dubious environment benefits, and by
driving up prices, are crippling the lives of the poor."