ADB Calls for Fast Action to Fight High Food Prices

The Asian Development Bank has called for immediate action from global governments to combat soaring food prices and pledged fresh financial aid to help feed the Asia Pacific region’s poorest countries.

“The food crisis calls for immediate response of governments and the international community,” the ADB concluded Saturday in a 15- page report detailing its planned response to soaring global food prices that have jumped 43 percent in the year through March.

“The ADB’s short term response will include targeted interventions to protect the food entitlements of the most vulnerable groups and income and livelihood programs for the poor to mitigate the immediate impacts of the crisis,” the report said.

“ADB will also consider budget support to hardest-hit countries to alleviate the fiscal pressures and assist imports of food grains and agricultural inputs,” said the report, which gave no detail or figures on the size of the support program.

The ADB president, Haruhiko Kuroda, told a news conference in Madrid, where the bank is holding its four-day annual meeting, that total lending “could be sizable, but not enormous” and would depend on the scale of requests it received for help.

“We are getting in touch with potential recipients of this kind of assistance and we will soon come up with appropriate figures,” Kuroda said, citing Bangladesh and Tajikistan as countries that appear to be seriously affected by rising food prices.

The ADB’s call came as ministers from Southeast Asian countries agreed at a meeting in Indonesia to cooperate to tackle rice prices that have almost tripled this year and as the African Development Bank pledged to add $1 billion to its loan program to address the food crisis in Africa.

The five mainland Southeast Asian countries produce a combined 60 million tons of milled rice each year, about 14 percent of world output. But only Thailand, the world’s top rice exporter, and Vietnam have major surpluses.

Countries including India, Vietnam, Indonesia and Brazil have imposed curbs on food exports in a bid to secure domestic supplies and limit inflation.

The ADB report blamed such market interventions for increasing price volatility, arguing that they had reduced current supply and increased uncertainty about future supplies.

Global food prices, based on United Nations records, rose 35 percent in the year to the end of January, markedly accelerating an upturn that began, gently at first, in 2002. Since then, prices have risen 65 percent.

The food crisis has donor countries scrambling to help the United Nations’ World Food Program fill a funding gap of $755 million and keep aid donations on track this year.

The United States has already released aid from a crop trust and last week announced $770 million in new food aid and farm development funds for next year.

The ADB, based in Manila, is holding its annual meeting in Spain, one of 67 countries – 48 from the Asia-Pacific region, 19 from elsewhere – that fund the institution’s program of low interest loans and other support to fight poverty in Asia.

Donor countries pledged $11.3 billion Friday for the four years starting in 2009 to replenish the multilateral body’s primary poverty alleviation fund for the poorest Asian countries, a 60 percent increase from the 2005-08 level.

The ADB approved a total of $10.1 billion in low-cost loans in 2007 for projects and technical assistance in poorer countries.

In Bali on Saturday, Southeast Asia countries agreed to cooperate over the rice market, but stopped short of concrete measures to deal with rocketing prices of the region’s staple in most meals. The issue of food security took prominence at a meeting of trade ministers of the 10-member Association of Southeast Asian Nations on the Indonesian resort island.

“The ministers affirmed that access to adequate and reliable supply of rice and stable prices are fundamental to the region’s economic and social well being,” an Asean statement said.

Originally published by Reuters.

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