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THE
World Bank (WB) Group will allot an additional $6
billion in its next fiscal year to increase its support
for global agriculture and food and will launch
risk-management tools, as well as crop insurance for
poor countries and small holders in developing
economies.
In a
statement, the bank said it has also created a new
financing facility worth $1.2 billion and extended some
$200 million in grants to help poor countries address
the global food crisis.
International Finance Corp. (IFC), the World Bank
Group’s private-sector arm, is also proposing to support
crop and livestock insurance for small-holders in
developing countries.
“These
initiatives will help address the immediate danger of
hunger and malnutrition for the 2 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,” said WB Group
president Robert Zoellick in a statement.
The bank
is also conducting a rapid needs assessment in 15
countries to provide grant support for agriculture. A
rapid needs assessment has already been completed in 25
countries.
With
this, the bank increased grants for Djibouti to $5
million and Haiti and Liberia, $10 million. Over the
coming month, the WB expects to provide grant support to
Togo, Yemen and Tajikistan, which are also considered
high-priority countries based on the rapid needs
assessment.
Meanwhile, the $1.2-billion facility is designed to
address immediate needs, supports safety net programs
such as food for work, conditional cash transfers, and
school feeding programs for the most vulnerable.
“It
provides support for food production—this year and
beyond—by supplying seeds and fertilizer, improving
irrigation for small-scale farmers, and providing budget
support to offset tariff reductions for food and other
unexpected costs,” the bank said.
As part
of the new facility the World Bank is also establishing
a Multi-Donor Trust Fund to facilitate policy and
operational co-ordination among donors, and leverage
financial support for the rapid delivery of seeds and
fertilizer to small farmers for the upcoming planting
season.
The new
rapid-response facility stands alongside other efforts
by the World Bank Group to address the global food
crisis. The World Bank board of executive directors is
considering initiatives to provide risk- management
tools to poor countries faced by drought and other
catastrophes.
“We’re
working with our board to deploy index-related hedges
and insurance products to protect poor farmers and
countries from weather and supply shocks,” said Zoellick.
Under a
proposal being discussed by the bank’s board in June,
Malawi could be the first of several countries to use
the World Bank as an intermediary to access weather
derivatives. Should Malawi suffer a drought, then it
would be protected against a rise in the price of
imported maize. |
