Guinea sets up food stockpile to combat price shock

By Saliou Samb

CONAKRY (Reuters) - Guinea has announced it is setting up an emergency stock of basic food, especially rice, to help offset the impact of sharp food price rises that have stirred social unrest in Africa, the world's poorest continent.

The move by the West African state late on Friday coincided with an announcement by the African Development Bank (AfDB) that it was increasing its agriculture loan portfolio by $1 billion to $4.8 billion to tackle the food crisis gripping the region.

Guinea, the world's leading bauxite exporter, witnessed bloody riots last year during a strike by unions protesting against high inflation and the rule of veteran President Lansana Conte. More than 130 people were killed, most of them civilians shot dead by security forces.

The Guinean government said it was setting up a special crisis committee to coordinate urgent measures to try to cushion its citizens from the effects of recent sharp hikes in world prices of major cereals like rice. These have squeezed poor West African countries which import the bulk of their food needs.

"Guinea has decided to set up a security stock of basic food products, notably in rice at the level of 25,000 tonnes a month over a period of 4-6 months," government spokesman Ousmane Souare said. He did not say how this would be financed.

On Monday, protesters marched through poor suburbs of the Guinean capital Conakry shouting: "Down with the high cost of living" and "Give us cheaper rice". The price of rice in Guinea has more than doubled since last year.

Souare also appealed to foreign partners and donor organizations to support the government in its response to the food crisis, which includes a program to boost domestic farming, especially cultivation of maize and edible tubers.

Guinea imports some 300,000 tonnes of Asian rice a year and has said it is talking with rice producers like Malaysia about the possibility of bartering minerals for rice.

MILLIONS AT RISK IN AFRICA

As riots and protests against the high cost of living have flared from Mauritania to Cameroon, West African governments have been scrambling to confront the problem by slashing food import taxes and increasing subsidies on essential food items.

Announcing the $1 billion increase in its lending support to agriculture, the Tunis-based AfDB said it was also restructuring some of its farming loans portfolio to make available a rapid disbursement facility of $250 million.

Calling for urgent and long-term action to tackle the food crisis, AfDB President Donald Kaberuka urged cereals producing countries not to suspend their exports because this would put at risk 150 million people in Africa, especially inhabitants of low-income states and the sick and elderly.

The AfDB, the only multilateral development body specifically devoted to Africa, lends commercially to Africa's richest nations and at concessionary rates to poor ones from its Development Fund. Its shareholders include Africa's 53 nations and 24 non-African donor countries,

With the global food crisis threatening to spread social unrest, the U.N. World Food Program (WFP) says it requires $755 million to feed the world's hungry. The Rome-based WFP aims to feed 73 million people in 80 countries in 2008.

Experts point to converging factors behind the price rises, including rising food consumption in emerging economies like India and China and adverse weather. The growing use of food crops to make biofuels like ethanol is also seen as a driver.