April 29, 2008 / 8:48 AM / 11 years ago

U.N., World Bank pledge action on food crisis


By Laura MacInnis

BERNE, April 29 (Reuters) - U.N. agencies and the World Bank pledged urgent action on Tuesday to tackle an unprecedented rise in global food prices that is hurting developing countries.

The international bodies called on countries not to restrict exports of food to secure supplies at home, warning that could only make the problem worse.

"We consider that the dramatic escalation in food prices worldwide has evolved into an unprecedented challenge of global proportions," the United Nations said in a statement.

This had become a crisis for the world’s most vulnerable people, including the urban poor, it said after a meeting of 27 international agency heads in the Swiss capital, Berne, to chart a solution to food price rises that have caused hunger, riots and hoarding in poor countries.

"Though we have seen wheat prices fall over the last few days, rice and corn prices are likely to remain high, and wheat relatively so," World Bank President Robert Zoellick told a joint news conference.


The U.N. Food and Agriculture Organisation’s (FAO) Food Price Index, measuring the market prices of cereals, dairy produce, meat, sugar and oils, was 57 percent higher in March 2008 than a year earlier.

The surge in prices is due to several factors, including increased demand in developing countries, higher fuel costs, drought in Australia, the use of crops for biofuels, and speculation on global commodity markets.

Higher costs of wheat, rice, and other staples have put extreme pressure on aid providers such as the World Food Programme (WFP), a U.N. agency aiming to feed 73 million people this year. "We could afford 40 percent less food today that we could last June simply due to the soaring food prices," said WFP Executive Director Josette Sheeran.

The immediate priority is to feed the hungry, U.N. Secretary-General Ban Ki-moon said, calling on the international community to provide the WFP all of the $755 million in emergency funds it needs for the crisis.

"Without full funding of these emergency requirements, we risk again the spectre of widespread hunger, malnutrition, and social unrest on an unprecedented scale," Ban warned.

The World Bank said it was considering setting up a rapid financing facility to help poor countries hit by the crisis, and will double lending for agriculture in Africa over the next year to $800 million, it said.

"We are urging countries not to use export bans. These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves," Zoellick said.

Rising food prices have hurt the growing mass of urban poor in developing countries most but have done little to help poor farmers, who are wary of growing more food because of the concurrent rise in fuel and fertiliser costs, Zoellick said.

Besides the short-term emergency response, the international community must focus on longer-term solutions including efforts to bolster the world trading system, he said.

"The emergency is critical, but we can’t stop there. We have to work with these other pieces," Zoellick said.

World Trade Organisation Director-General Pascal Lamy said the crisis was another urgent reason to conclude successfully the Doha round of trade talks to open up world trade.

The round, launched in 2001, is liberalise trade in food and other goods and services by cutting tariffs and subsidies.

"If you want supply to increase then you have to make sure that trade works," he said. (Editing by Jonathan Lynn)

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