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High food prices threaten
economic gains: WB
Washington—High food prices are threatening recent gains in
overcoming poverty and malnutrition, and are likely to persist over
the medium term, says a new World Bank Group policy note.
“Poor people are suffering daily from the impact of high food
prices, especially in urban areas and in low income countries,” said
World Bank Group President Robert B. Zoellick.
“In some countries, hard-won gains in overcoming poverty may now be
reversed. As an international community we must rally not only to
offer immediate support, but to help countries identify actions and
policies to reduce the impact on the world’s most vulnerable.”
According to Rising Food Prices: Policy Options and World Bank
Response, increases in global wheat prices reached 181 percent over
the 36 months leading up to February 2008, and overall global food
prices increased by 83 percent. Food crop prices are expected to
remain high in 2008 and 2009 and then begin to decline, but they are
likely to remain well above the 2004 levels through 2015 for most
food crops.
“The poor are not just facing higher food prices but also higher
energy costs, which is a worrying combination,” said Danny Leipziger,
World Bank Group Vice President for Poverty Reduction and Economic
Management (PREM). “Policy responses to protect the poor from food
price rises are urgent, and need to be designed in a way that is
conducive to stimulating greater agricultural production in the long
run.”
Increased bio-fuel production has contributed to the rise in food
prices, according to the report. Concerns over oil prices, energy
security and climate change have prompted governments to increase
bio-fuel production and use leading to greater demand for raw
materials including: wheat, soya, maize and palm oil. Food price
hikes are also linked to higher energy and fertilizer prices, a weak
dollar and export bans.
The report notes that many governments are already taking action.
Some are expanding targeted safety nets, such as cash transfer
programs to vulnerable groups, food-for-work programs, or emergency
food aid distribution. Several countries have lowered tariffs and
other taxes on key staples, in order to provide some relief to
consumers.—APP
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