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IMF head gives food price warning World Bank echoes food cost alarm
(about 17 hours later)
The head of the International Monetary Fund (IMF) has warned that hundreds of thousands of people will face starvation if food prices keep rising. The rapid rise in food prices could push 100m people in poor countries deeper into poverty, the head of the World Bank, Robert Zoellick, has said.
Dominique Strauss-Kahn said that social unrest from continuing food price inflation could cause conflict. His warning follows that from the leader of the International Monetary Fund, who said hundreds of thousands of people are at risk of starvation.
Mr Zoellick proposed an action plan to boost long-run agricultural production.
There have been food riots recently in a number of countries, including Haiti, the Philippines and Egypt.There have been food riots recently in a number of countries, including Haiti, the Philippines and Egypt.
Meeting in Washington, the IMF called for strong action on food prices and the international financial crisis. "Based on a rough analysis, we estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty," Mr Zoellick said.
Market turmoil His proposal for a "new deal" to tackle the international food crisis was endorsed by the World Bank's steering committee of finance and development ministers at a meeting in Washington.
Although the problems in global credit markets were the main focus of the meeting of the IMF's steering committee of finance ministers from 24 countries, Mr Strauss-Kahn warned of dire consequences from continued food price rises. The World Bank and its sister organisation, the IMF have held a weekend of meetings that addressed rising food and energy prices as well as the credit crisis upsetting global financial markets.
"Thousands, hundreds of thousands of people will be starving. Children will be suffering from malnutrition, with consequences for all their lives," he told reporters. Spiralling inflation
Food prices have risen sharply in recent months, driven by increased demand, poor weather in some countries that has ruined crops and an increase in the use of land to grow crops for transport fuels.
GLOBAL FOOD PRICE RISES Wheat: 130% Soya: 87%Rice: 74%Corn: 31% Time: Year to March 2008 Source: Bloomberg Food costs: facts & figures
The price of staple crops such as wheat, rice and corn have all risen, leading to an increase in overall food prices of 83% in the last three years, the World Bank has said.
The sharp rises have led to protests and unrest in many countries, including Egypt, Ivory Coast, Ethiopia, the Philippines and Indonesia.
In Haiti, protests last week turned violent, leading to the deaths of five people and the fall of the government.
In the capital, Port-au-Prince, a UN peacekeeper from Nigeria was fatally shot on Saturday.
'Hungry mouths'
Restrictions on rice exports have been put in place in major producing countries such as India, China, Vietnam and Egypt.
Importers such as Bangladesh, the Philippines and Afghanistan have been hit hard.
"We have to put out money where our mouth is now so that we can put food into hungry mouths," Mr Zoellick said. "It's as stark as that."
He called for more aid to provide food to needy people in poor countries and help for small farmers. He said the World Bank was working to provide money for seeds for planting in the new season.
He also urged wealthy donor countries to quickly fill the World Food Programme's estimated $500m (£250m) funding shortfall.
Mr Zoellick's "New Deal for Global Food Policy" also seeks to boost agricultural policy in poor countries in the longer-term.
On Saturday, the head of the IMF, Dominique Strauss-Kahn, warned of mass starvation and other dire consequences if food prices continue to rise sharply.
"As we know, learning from the past, those kind of questions sometimes end in war," he said.
He said the problem could lead to trade imbalances that may eventually affect developed nations, "so it is not only a humanitarian question".He said the problem could lead to trade imbalances that may eventually affect developed nations, "so it is not only a humanitarian question".
Food prices have risen sharply in recent months, driven by increased demand, poor weather in some countries and an increase in the use of land to grow crops for transport fuels.
The steering committee also called for "strong action" among its 185 members to deal with "the still unfolding financial market turmoil and... the potential worsening" of housing markets and the credit crunch.
The finance ministers did not dissent from the IMF's previous forecast that only a moderate slowdown in world economic growth is the most likely outcome over the next year or two.