In the wake of the 2008 food crisis, high and volatile food prices have become the “new normal.” Poor families are coping by eating cheaper, less nutritious food, which can have catastrophic life-long effects on the social, physical, and mental well-being of millions of young people.
What the World Bank Is Doing
The World Bank Group has been helping countries through measures such as increased agriculture and agriculture-related investment, policy advice, scaling up nutrition, fast-track financing, the multi-donor Global Agriculture and Food Security Program, and risk management products
Policy advice. The Bank has engaged in policy dialogue with more than 40 countries, at their request, to assist them to address the food crises of 2008 and 2010, and the “new normal” of high and volatile food prices. Instruments used include rapid country diagnostics, high-level dialogue, public communications, and in-depth analytical work.
Scaling up nutrition. The World Bank is also improving global collaboration in the generation and sharing of knowledge between agriculture, food security, and nutrition, through the SecureNutrition knowledge platform. As a part of the Scaling Up Nutrition (SUN) movement, 100 partners – including the World Bank – have endorsed the Scaling Up Nutrition Framework for Action to address under-nutrition.
Expedited financial support. In 2008, the Bank’s Board of Executive Directors endorsed the Global Food Price Crisis Response Program (GFRP), initially a $1.2 billion rapid financing facility providing financial assistance as well as policy and technical advice to the poorest and most vulnerable countries. In 2009 the Bank increased the size of the facility to $2 billion, and extended the program until June 2012 to allow for a swift response to calls for assistance from countries hard hit by price spikes. From July 2012 onwards the Bank’s emergency response is channeled through the International Development Association’s (IDA) Crisis Response Window and the recently approved Immediate Response Mechanism that will provide the basis for emergency assistance in the future.
As of mid-March 2013, GFRP had financed operations amounting to $1.56 billion, reaching nearly 66 million vulnerable people in 49 countries. (Some 89 percent of approved funds have been disbursed.) In addition to $1.24 billion in Bank resources (of which 96 percent has been disbursed), grant funding has been made available through three externally-funded trust funds.
In September 2009, the G20 asked the World Bank to prepare a multilateral mechanism to help implement pledges to long-term food security made at the L’Aquila summit in July 2009. Launched in April 2010, The Global Agriculture and Food Security Program (GAFSP) is intended to fill financing gaps in national and regional agriculture and food security strategies. Eight countries and the Bill & Melinda Gates Foundation have pledged about $1.3 billion over three years, with $910.5 million received. Since May 2010, 18 countries – Bangladesh, Burundi, Cambodia, Ethiopia, the Gambia, Haiti, Kyrgyz Republic, Liberia, Malawi, Mongolia, Nepal, Niger, Rwanda, Senegal, Sierra Leone, Tajikistan, Tanzania, and Togo – have been allocated $658 million from the public sector window of GAFSP.
Increased investment in agriculture. In 2012, new World Bank Group commitments to agriculture and related sectors reached $9.3 billion. For the Bank Group, this was the highest in 20 years (in nominal terms). IFC investments across the agribusiness value chain reached record levels at $4.2 billion. Altogether, the commitments exceed projected lending in the Bank’s Agriculture Action Plan 2010 - 2012, which foresaw an increase in assistance from an average of $4.1 billion annually in FY06-08 to $6.2-$8.3 billion annually in FY10-12. The Bank Group’s updated Agriculture Action Plan 2013-2015 projects increases in assistance to $8 - $10 billion.
Financial market insurance products and risk management strategies. In developing countries, farmers, agro-enterprises, and governments can employ a range of technical, managerial, and financial approaches to mitigate, transfer, and cope with risks. The World Bank supports the development and implementation of agricultural sector and supply chain risk management strategies in a growing number of developing countries through the provision of technical assistance, capacity transfer, and training.
Research to address critical knowledge gaps. In collaboration with other agencies and institutions, the Bank is undertaking a comprehensive analytical program. In addition, the Bank continues its support to the Consultative Group on International Agricultural Research (CGIAR). In 2012, a CGIAR Multi-Donor Trust Fund established to harmonize donor investments is being hosted and managed by the World Bank.
The World Bank is responding to the food crisis in coordination with development partners.The World Bank is actively engaged with the United Nations High-Level Task Force (HLTF) on the Global Food Security Crisis. In addition to providing financial support to the HLTF through the World Bank's Development Grant Facility we participated in the updating of the UN’s Comprehensive Framework for Action (CFA). The World Bank contributes to several agricultural and food security working groups drafting recommendations for the G20, and, in collaboration with partners, is implementing G20 initiatives to address food price volatility, including the Agricultural Market Information System (AMIS) launched to improve global agricultural market transparency. The World Bank also regularly participates in the Multilateral Development Banks’ Working Group on Food and Water Security.
(Updated April 15, 2013)