WASHINGTON, April 22 (Reuters) - A new World Bank-administered agriculture and food security fund will get $880 million in initial contributions over the next two years, the U.S. Treasury and other donors announced on Thursday.
The Treasury said the United States committed $475 million to the Global Agriculture and Food Security Program, Canada contributed $230 million and Spain $95 million. South Korea will contribute $50 million and the Bill and Melinda Gates Foundation will deposit $30 million.
The fund was created to implement part of about $22 billion in pledges made by leaders of the Group of Eight wealthy nations last year in Italy to support food security in poor countries.
“A global economy where more than one billion people suffer from hunger is not a sustainable one,” U.S. Treasury Secretary Timothy Geithner said in a statement. “At a time of limited resources and large global challenges, this fund will leverage support from around the world to achieve lasting progress against hunger and bolster agricultural productivity and growth.”
The United States has already contributed $67 million to the fund and has requested another $408 million for it in President Barack Obama’s fiscal 2011 budget request. If approved, those funds would be available after October 1, 2010.
Canada and Spain have already made deposits, and South Korea and the Gates foundation will make their contributions shortly, a Treasury official said.
The fund aims to finance medium-to long-term projects to boost agricultural development in low-income countries. It will focus on raising agricultural productivity through investments in land use planning, better irrigation infrastructure and development of farm machinery leasing markets.
It also will focus on development of rural roads to better connect farmers to markets and improve other infrastructure to better handle harvested crops. The fund also aims to provide better technical assistance to farmers, boost distribution of agriculture inputs such as seeds, and strengthen producer organizations.
The World Bank will work through a number of other agencies, including the African Development Bank and the International Fund for Agricultural Development, to implement projects financed by the fund.
A Treasury official said the need for the fund came from a recognition that agriculture development has largely been ignored in the past 30 years, and there are nearly 1 billion chronically hungry people in the world.
A sudden increase in food prices in 2008 drove nearly 100 million people into poverty and brought the problem into sharp focus.
Korean Finance Minister Yoon Jeung-Hyun said Korea’s contribution was motivated by its own severe food shortage and poverty in the 1960s. “The experiences made Korea recognize the importance of food security,” he said, adding that this was “deep down in the heart.”
The U.S. Treasury official, speaking on a background conference call, declined to provide a time frame for how long it would take to make good on the $22 billion in pledges made last year toward agricultural development or when more contributions were expected.
He said the United States had pledged $3.5 billion toward agriculture aid over three and a half years and the Obama administration was committed to fulfilling that. (Reporting by David Lawder; Editing by Padraic Cassidy)