Africa: World Bank Warns G20 On Food Prices

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Nairobi — The World Bank President Robert Zoellick has urged the international community to do more to tackle the problem of soaring food prices as evidence grows that millions of people in Africa and Asia are facing severe hunger.

Mr Zoellick told the G20 meeting to "put food first" as food prices hovered just shy of their 2008 peak and an estimated additional 44 million people fell into poverty.

"We need global action to ensure we do a better job of feeding the hungry before we face the future challenges of feeding the expected 9 billion people in the world in 2050. The overarching goal should be to ensure that the most vulnerable people and countries are no longer denied access to nutritious food," Mr Zoellick said.

Defensive trade policies "contributed very substantially to increases in world prices of staple crops" in the 2008 food crisis, as well as in the food crisis of 1974, say economists Will Martin of the World Bank and Kym Anderson of the University of Adelaide, Australia.

They estimate insulating policies such as export bans are responsible for 45% of the international rice price, and for 30% of the wheat price increase in the 2008 crisis.

When world prices are high and local harvests are good, as they were in much of Africa over the last year, people eat lower-priced local foods instead of more expensive imports.

When harvests are poor, crop surpluses in even neighbouring countries won't reach the hungry if trade policies restrict the flow of goods, says Bernard Hoekman, director of the Trade Department in the World Bank's Poverty Reduction and Economic Management Vice Presidency.

"We'd like to see all these markets more interconnected," says Mr Hoekman. "If we could collectively agree not to restrict trade in food, we would give incentives for people to invest more in the production of food. The volume of food traded internationally would increase, and you would have less volatility of the type we've seen over the past four or five years."

Food prices are expected to remain volatile for the foreseeable future. And one of the market drivers -- increasing demand for grains -- isn't likely to slacken greatly even in the face of higher prices, says Chris Delgado, strategy and policy adviser in the Bank's Agriculture and Rural Development Department.

The UN's Food and Agricultural Organization estimates agricultural productivity will need to increase by 70% to meet future needs.