World Bank President Robert Zoellick on Thursday announced $1.2 billion in loans and grant financing to help poor countries cope with soaring costs of fuel and key staple foods. He called for a clear action plan to be developed at a world food summit in Rome on June 3-5 and meetings of finance and political leaders from the Group of Eight industrial nations.
"As we go into the Rome meeting next week, it is crucial that we focus on specific action," Zoellick told a conference call with reporters. "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 be the first to benefit from grant funding of between $5 million to $10 million 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. Meanwhile, assessments on the impact of the higher costs for food and fuel were being conducted in more than 25 countries, he added.
In addition, he said the World Bank would create a multi-donor trust fund to provide farmers in developing countries with seeds and fertilisers before the new planting season.
He also announced increased World Bank lending for agriculture to $6 billion next year from $4 billion in 2008, to help boost global food production and revive farming in countries where it has long been neglected.
Zoellick also said the World Bank was looking to launch a new program in Malawi later this year, which would help poor countries access weather derivatives, to protect them against rising prices for food imports in case of droughts or floods.
The derivative would be linked to an index that measures rainfall. When the rainfall falls below a certain level this triggers a payout to the country The agency is also working on developing crop and livestock insurance for small-scale farmers by creating a company to underwrite index-based weather and other catastrophe risks, he said.