Food Crisis

Woman and her child staring at a fruit stall in a market

GDLN affiliates bring European, Central Asian and South Asian countries together to discuss policy responses that help mitigate against economic and social risks

The Challenge

Since 2005, world food prices have jumped 80% -- rice, wheat, food staples for a majority of poor people, have hit record highs. Coupled with rising fuel costs, the “silent tsunami” has impacted both consumers and producers.  In developing countries, this has resulted in food riots and the threat of throwing millions back into poverty, which could affect as many as 33 countries in the near term.

At an event in April 2008, World Bank President Robert Zoellick, announced his proposal for “A New Deal for Global Food Policy” to address the high and volatile food prices that he predicted would be with us for years to come. This new deal hopes to integrate and mobilize a diverse range of partners.

“Poor, middle income, and developed countries will benefit together.   Income gains from agriculture have three times the power in overcoming poverty than increases in other sectors, and 75 percent of the world’s poor are rural, with most involved in farming,” noted Zoellick.

Shortly after President Zoellick outlined his vision, an initiative was launched that would build on the concept of finding solutions to the crisis through partnerships and dialogues in South Asia, home to half the world’s poorest people and Europe and Central Asia -- where producers were struggling to adapt to this new reality of soaring production costs and declining worldwide consumption.

Approach

During the spring of 2008, the Europe and Central Asia (ECA) and South Asia regions (SAR) of the World Bank partnered with the Global Development Learning Network (GDLN) with the objective of coordinating a multi-country dialogue series to identify specific country-level impacts of the crisis and immediate policy responses that could help mitigate against economic and social risks to the two regions.

In just under one week, local GDLN partners helped South Asia coordinate a rapid response to the crisis with a dialogue on Food Prices: a Global Perspective. On April 24, 2008, the event brought together ministers, academics and economists in Afghanistan, Bangladesh, India, Pakistan, Sri Lanka and Washington to speak about the effects of increasing food prices on the region. Local GDLN partners, such as The Energy Resources Institute in India, provided expert facilitation and assembled a high-level audience capable of carrying out the recommendations.

Meanwhile, the Europe and Central Asia Region of the World Bank (ECA) held their series on June 24, 2008. GDLN partners in Albania, Azerbaijan, Bosnia, Georgia, Kazakhstan, Macedonia and Tajikistan coordinated a blended program that used videoconferencing, face-to-face and expert facilitation in a two-part program designed to be a first-line response. In the first session, “Rising Food Prices: Economic and Poverty Implications”, specialists from the World Bank’s headquarters, as well as participants from universities and national research centers across the region joined in the discussion and presented their perspectives on the specific challenges they faced.

The series highlighted the experience of Ukraine, a model country during the crisis. Ramon Schmidt, a leading expert from the Ukranian Grain Association explained “Ukraine is actively diversifying agricultural products that can be used for bio-fuels as well as government subsidies for family farms.” Access to experts like Schmidt enabled representatives from Kazakhstan to see how the depreciation of its national currency can help the country pursue "innovative" modes of development in food processing and agricultural equipment. 
 
Results

In South Asia, World Bank specialists Hans Timmer, Donald Mitchell, Adolfo Brizzi and Mansoora Rashid offered recommendations, which included expanding safety nets, lowering import tariffs, and stimulating food production.  

Participating countries compared notes on the results of reactionary policies and highlighted priority issues. Participants recommended scaling up existing food for work programs and rehabilitating expanding irrigation in the short to medium term.
“We must, as a region, revisit export ban policies that are driving up prices and [we must] improve our coordination efforts on inter-regional trade to reduce the impacts”, commented a participant from Afghanistan.

In Europe and Central Asia, participants were exposed to valuable insights and new techniques applicable in their own countries, including:

  • diversifying the production of agricultural goods and staples such as wheat practice that is not typical to the region;
  • experimenting with crops that can be used for bio fuels;
  • subsidizing family farms, and;
  • developing land mortgage programs for family farmers.

The establishment of social safety nets for the poorest segments of affected areas was another major topic discussed during the program, which prompted countries like Bosnia to rethink their policies. At the conclusion of the program, a participant from Bosnia reflected, "the conference allowed me to ask a field expert about the effectiveness of creating subsidization programs in Bosnia, where in past recessions farm subsidies seemed to raise food prices."

Since successfully launching the global food crisis dialogue series, The Knowledge & Learning team in ECA have held three events with two more planned later this year on an expanded food/fuel crisis theme.

To view more, visit the webpage created to capture the ECA series at: Managing the Effects of Higher Food and Fuel Prices.

Next Steps

The next event in ECA on addressing the grain and input price rises and long-term food security will be held on December 19th.  “The event will be timely since, despite price declines from record highs, there are now growing concerns that lower producer prices, high input costs (mainly food and fertilizer) and a lack of credit access for farmers may result in lower grain supplies in the next planting season.” noted lead knowledge and learning officer, Xiaonan Cao.

GDLN has also been called upon by other regions to organize similar “just-in-time” responses to the food, fuel, and now the financial crises. Working together with Bank teams from nearly all Bank regions, GDLN is helping to mount dialogues and consultations on one or all of these triple threats to the development agenda..  

For more information on the ECA series, contact François Nankobogo, GDLN Coordinator in the ECA region at fnankobogo@worldbank.org and on the SAR series, contact Juan Blazquez at jblazquez@worldbank.org.

Resources

Managing the Effects of Higher Food and Fuel Prices

Summary of Discussions: Global Slowdown and Rising Food Prices – Implications for South Asia

The Global Food Crisis Response Program (GFRP) at the World Bank

The World Bank’s 10-Point Plan to Address the Food Crisis

 

Back to Topics