In response to the severity of the food crisis and the need for prompt action, the World Bank Group set up the Global Food Crisis Response Program (GFRP) in May 2008 to provide immediate relief to countries hard hit by food high prices. The Bank response has been articulated in coordination with the United Nations' High-Level Task Force on food security. Through its response, the Bank is supporting the implementation of the joint Comprehensive Framework for Action (CFA).
The World Bank Group increased GFRP to $2 billion in April 2009 to provide immediate relief to countries hard hit by food high prices. GFRP was created in May 2008 to reduce the threat high food prices and rising agricultural production and marketing costs pose to the livelihoods of the world's poor. The money is used to feed poor children and other vulnerable groups, provide for nutritional supplements to pregnant women, lactating mothers, infants and small children, to meet additional expenses of food imports or to buy seeds for the new season.
GFRP has disbursed $752.8 million out of $921 million in 31 countries as of May 4, 2009. An additional $279.4 million is being earmarked for programs in 10 countries.
GFRP is disbursing funds to Afghanistan ($8 million), Bangladesh ($130 million), Benin ($9 million), Burundi ($10 million), Central African Republic ($7 million), Djibouti ($5 million), Ethiopia ($275 million), Guinea ($10 million), Guinea-Bissau ($5 million), Haiti ($10 million), Honduras ($10 million), Kenya ($50 million, $5 million), Kyrgyz ($10 million), Laos ($3 million), Liberia ($10 million), Madagascar ($10 million, $12 million), Mali ($5 million), Moldova ($7 million), Mozambique ($20 million), Nicaragua ($7 million), Nepal ($36 million), Niger ($7 million), Philippines ($200 million), Rwanda ($10 million), Sierra Leone ($7 million), Somalia ($7 million), Southern Sudan ($5 million), Tajikistan ($9 million), Togo ($7 million), Yemen ($10 million), and West Bank and Gaza ($5 million).
The Bank also created a new Multi-Donor Trust Fund to facilitate the involvement of partners to support GFRP. As of April 2009, the Bank has mobilized $189 million in external funds for activities under GFRP. These funds will be provided as grants to 16 countries. The Bank received AU$50 million from Australia in late fall 2008 for projects in Cambodia, Pacific Islands, Senegal, Vietnam and Zimbabwe. The European Commission (EC) has pledged initial support through the World Bank totaling EUR 110.8 million for 10 countries: Ethiopia, Gambia, Guinea-Bissau, Honduras, Mali, Kenya, Benin, Kyrgyz Republic, Laos and Yemen. The EC contribution is expected in the last quarter of FY09. The Russian Federation has also allocated $15 million for work in the Kyrgyz Republic and Tajikistan. The Russia Trust Fund became operational in April 2009.
Boosting overall agricultural lending to $12 billion over the next two years, up from $4 billion in 2008, as announced in April 2009. This includes nearly doubling lending to Africa from $450 million to $800 million, and to Latin America from $250 million to $400 million, and supporting over $1 billion in new projects in agriculture and rural development in South Asia.
IFC invested more than $1.4 billion in FY08 in agribusiness supply chains. More than 40% of its projects were in IDA countries, with investments in Sub-Saharan Africa reaching $116 million. For FY09, IFC has invested $893 million as of February 2009, with investments in Africa reaching $109 million for distribution and storage, grain milling, plantation rehabilitation, and trade finance.
Tripling investments in safety nets and other social protection programs in health and education to $12 billion over next two years, as announced in April 2009.
Establishing Agriculture Finance Support Facility to expand rural finance through a $20 million Bill & Melinda Gates Foundation contribution, as announced in June 2009. The Facility will increase access to financial services, such as savings, credit, payments and insurance.
Working to help countries develop financial market insurance products and risk management strategies to ensure increased capacity to respond to future prices increases, such as weather derivatives and crop insurance.
In September 2008, Malawi became one of the first countries to use the Bank's new weather derivative financial product. Index-based weather derivatives help transfer risks to the financial markets. Payments are triggered by adverse weather events according to pre-specified conditions. The Bank is also supporting weather index insurance initiatives isThailand, Bangladesh, Senegal, Burkina Faso, Kenya, Jamaica and potentially Fiji. In Indonesia, the Bank and IFC are completing a feasibility study on a crop insurance pilot for maize small farmers.
Integrating national level agricultural risk management strategies into new country operations in Morocco, Malawi, Mozambique, Haiti, Belize, Grenada, and Jamaica.
Engaging in policy dialogue with more than 40 countries to help them address the crisis.
Through the HLTF Secretariat, the Bank is working through existing country-level coordination mechanisms and regional initiatives such as the Comprehensive African Agriculture Development Program (CAADP) to identify opportunities and constraints in CFA implementation on the ground. The focus is on 27 least-developed, most vulnerable countries, 22 of which are being supported by the Bank's GFRP.