World Bank approves $1.2 bln funding for food crisis

By Lesley Wroughton

WASHINGTON (Reuters) - World Bank President Robert Zoellick on Thursday announced $1.2 billion in loans and grant financing to expand its assistance to poor countries struggling with the effects of soaring fuel and food costs.

The funding will be fast-tracked to governments needing budget support, or seeking help with cash and food programs for the poor, while also boosting food production through supplies of seeds and fertilizers for farmers.

The announcement comes ahead of a world food summit in Rome on June 3-5 and meetings of finance and political leaders from the Group of Eight industrial nations.

Zoellick called on leaders to move to action, as food inflation and higher food costs cut into already stretched government budgets and raises fears of further food protests.

"As we go into the Rome meeting next week, it is crucial that we focus on specific action," Zoellick told reporters on a conference call.

"Along with our partners, these initiatives will help address the immediate danger of hunger and malnutrition for the two billion people struggling to survive in the face of rising food prices, and contribute to a longer-term solution that must involve many countries and institutions," he added.

Zoellick said Haiti, Djibouti and Liberia would benefit right away in grant funding of between $5 million to $10 million each under the new rapid response facility.

Financing for Tajikistan, Togo and Yemen would be considered by the World Bank board in June, while requests for help by another seven countries is under review, he added.