26 Jan 2009

World Bank urges aid for poor

5:31 pm on 26 January 2009

Global food prices may have eased from their 2008 peaks but price volatility and the effects of the world financial downturn has provided little respite for the poor, according to the World Bank.

World Bank managing director Ngozi Okonjo-Iweala, who is leading a delegation to the two-day United Nations meeting in Madrid on Monday, said more resources and attention are needed to help the poor.

The number of hungry people is now close to 1 billion - one in six of the population of the world.

Food prices have fallen from the highs seen in January 2008, but have levelled out far higher than before this cycle of rises began in 2007. Climate change, rising population and competition from biofuels continue to push up prices.

"Food prices are now volatile and that factor, combined with the impact of the financial crisis, only serves to heighten the challenges confronting the developing world," Ms Okonjo-Iweala said ahead of the meeting.

"We expect high price volatility to continue and it will hit the poorest the most, as they spend half their income on food. More needs to be done as we must ensure those who are vulnerable get the assistance they need."

Ms Okonjo-Iweala said in some countries, prices have not fallen as sharply as in others. For example, in Kenya, maize prices went down by just 1% in the past quarter, while international prices for maize dropped by 32%.

The World Bank expects to double its funding to poor countries hit the hardest by the food crisis, with $US700 million in the pipeline from an emergency food fund managed by the poverty-fighting institution, she said.

To date, the bank's Global Food Crisis Response Programme has disbursed about $US500 million since May, with about 60% of the funding for seeds and fertiliser, including 250,000 tons of fertiliser and 1,500 tons of seed for 2.4 million small farms in the Kyrgyzstan, Tajikistan, Somalia, Niger, Ethiopia and Togo.

Ms Okonjo-Iweala said helping small-scale farmers boost production should be a key focus of international efforts, while additional resources, more effective and targeted spending and policies are also needed to boost agricultural sectors in the developing world.

But as the ripples spread from the banking sector in the richest countries in the world, the waves are hitting those least able to cope - in the poorest countries.

There is less money to invest in new businesses, and as well as a cut in foreign direct investment, the global economic slowdown means that money sent home by those working abroad has gone down.