Monday, May 05, 2008

Multilateral Banks and the Food Crisis

Gran Marche

Hi There,
A friend of mine just point out to me how the blog was missing out some of the efforts put together by the World Bank to address the current food crisis. Besides publishing their World Development Report with the topic of agriculture, the World Bank has been instrumental in brining agriculture back to the donors and governments discussion table. The timing, as you all know, couldn't be better: The increases in food prices present an enormous challenge for countries in Africa Sub-Saharan and South Asia to finally address the decades of negligent policies towards the rural sector. In the urban centers, where the price increases are more prevalent, governments have the challenge to ensure that the very needy are meeting their calorie requirement.

But this crisis is also an unprecedented opportunitiy for other regions of the world with potential to intensify and/or expand their agricultural capacity. These countries can reap huge benefits from the price increases, a win win scenario as world prices will decreased and thousands of jobs will be created. That said, multilateral banks must persuade governments not to put in place policies that generate disincentives that could avert such benefits: limit on export, price ceilings, and taxation are just some examples of policies making matters worse. Also to take into consideration is the potential negative environmental and social impact such expansion could have.

In sum, the World Bank must play a central in addressing the challenges of those countries in Africa and Asia and enabling other countries to capture the potential benefits this crisis will bring. These can only be archived by providing incentives for agricultural investment, persuading governments to follow policies that will benefit the world as a whole, and ensuring that the basic needs of those must vulnerable are met.
Check out this interview to Senior Economist at World Bank’s Agriculture Unit Robert Townsend. Also, don't forget to visit the special website WB put together about World Food Prices

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