World Bank Supports Global Agriculture As Food Prices Spike

24 September 2012

Prices of rice have remained stable during the past several months thanks to abundant supplies, according to the World Bank's latest report.

The World Bank has increased its support for global agriculture to its highest level in 20 years and has pledged to continue helping countries respond to recent food price hikes, says World Bank President Jim Yong Kim.

The commitment came in response to the World Bank’s latest Food Price Watch report, which showed global food prices soaring this summer due to droughts and high temperatures in both the United States and Eastern Europe.

Prices from June to July rose by 10 percent, as maize and wheat each rose by 25 percent and soybeans went up by 17 percent. Overall, the World Bank’s Food Price Index, which tracks the prices of internationally traded food commodities, was 6 percent higher in July than at the same point last year.

The World Bank has observed a pattern of food price volatility during the past year, and the latest report confirmed that price changes remain hard to predict. It showed food prices increased in April and dropped in May and June before rising sharply again in July.

“We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices,” Kim said following the report’s August 30 release.

He said the World Bank’s support for agriculture in the 2012 fiscal year was more than $9 billion — a level not reached during the past two decades. The organization is coordinating closely with United Nations agencies through the High-Level Task Force on the Global Food Security Crisis, as well as with nongovernmental organizations, to improve food-market transparency and to help governments make informed responses to global food price spikes.

According to Food Price Watch, prices are expected to remain high and volatile in the long run as a consequence of increasing supply uncertainties, higher demand from a growing population, and the low responsiveness of the food system.

“Should the current situation escalate, the World Bank Group stands ready to go even further to assist client countries protect the most vulnerable against future shocks,” an August 30 World Bank statement said. “Measures can include increased agriculture and agriculture-related investment, policy advice, fast-track financing, support for safety nets, the multi-donor Global Agriculture Food Security Program and risk management products.”

The World Bank added that it is also pursuing programs to help mitigate food price hikes through safety nets to ensure families everywhere can afford basic supplies, sustained investments in agriculture, the introduction of drought-resistant crop varieties and keeping international trade open to the export and import of food.