U.N., World Bank tackle food crisis, Bush backs ethanol

  • World
  • Wednesday, 30 Apr 2008

MYT 4:01:34 AM

BERNE/WASHINGTON (Reuters) - U.N. agencies and the World Bank on Tuesday pledged to set up a task force to tackle soaring global food prices, while U.S. President George W, Bush said high crop prices should not slow biofuel efforts.

U.N. Secretary-General Ban Ki-moon (L) speaks next to World Bank President Robert Zoellick during a news conference in Berne April 29, 2008. (REUTERS/Ruben Sprich)

The international bodies called on countries not to restrict exports of food to secure supplies at home, warning that could make the problem worse.

"We consider that the dramatic escalation in food prices worldwide has evolved into an unprecedented challenge of global proportions," the United Nations said in a statement.

The world's most vulnerable people, including the urban poor, are at risk, it said after a meeting of 27 international agency heads in Berne to chart a solution to food price rises that have caused hunger, riots and hoarding in poor countries.

"Though we have seen wheat prices fall over the last few days, rice and corn prices are likely to remain high, and wheat relatively so," World Bank President Robert Zoellick told a joint news conference.

Higher costs of wheat, rice, and other staples have put extreme pressure on aid providers such as the World Food Programme, a U.N. agency.

Many antihunger activists have said the biofuels industry is exacerbating the crisis by diverting needed crops. But in Washington, Bush said he believes corn-based ethanol production is responsible for only a small part of food inflation.

"And the truth of the matter is, it's in our national interests that we -- our farmers -- grow energy, as opposed to us purchasing energy from parts of the world that are unstable or may not like us," he told reporters.

Aid workers and others contend diverting more than a a quarter of the U.S. corn harvest to make ethanol is making food much more expensive the world's poor. A leading agriculture research group said a moratorium on grain- and oilseed-based biofuels would help cut crop prices substantially.

"Our models analysis suggest that if a moratorium on biofuels would be issued in 2008, we could expect a price decline of maize by about 20 percent and for wheat by about 10 percent in 2009-10. So it's this significant," Joachim von Braun, heads of the International Food Policy Research Institute, told reporters in a briefing.

U.N. Secretary-General Ban Ki-moon called on the international community to provide the World Food Program the $755 million in emergency funds it needs for the crisis.

"Without full funding of these emergency requirements, we risk again the specter of widespread hunger, malnutrition, and social unrest on an unprecedented scale," Ban said.

Concern about soaring food costs has toppled Haiti's government and caused riots in parts of Africa.

The task force, bringing together the heads of U.N. agencies, funds and programmes, the IMF and the World Bank under the leadership of Ban, will set priorities for a plan of action and make sure it is carried out.

Ban, said later in Geneva the crisis threatened to "undo all our good work" toward reaching the Millennium Development Goals, ambitious targets set by the heads of U.N. member states in 2000 to alleviate poverty, hunger and disease by 2015.


The U.N. Food and Agriculture Organization's Food Price Index, measuring prices of cereals, dairy produce, meat, sugar and oils, was up 57 percent in March 2008 from a year earlier.

Developing world farmers, often the poorest in their countries, are not benefiting from higher prices, World Bank analysis shows, because they tend to eat most of what they grow rather than selling it. Also, they can't afford to grow more crops because of higher prices for fuel and fertilizer.

"Even in some areas where people know that prices are higher, they are not planting more because they are fearful that they face very high input costs," Zoellick said.

Prices of key commodities eased on Tuesday but remain much higher than last year.

U.S. rice futures fell more than 4.0 percent, retreating further from last week's record high as the world's biggest exporter, Thailand, said it would release government stocks for domestic use and traders looked ahead to Asian harvests.

India slapped export taxes on basmati rice and other products as the government unveiled moves to tackle inflation.

The World Bank urged countries not to ban food exports. "These controls encourage hoarding, drive up prices and hurt the poorest people around the world who are struggling to feed themselves, World Bank President Zoellick said in a statement.

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