April 24, 2008 - The World Bank's Vice President for South Asia today said the region can manage the current food price crisis with effective and coherent actions.
Praful Patel, who recently visited Afghanistan, Bangladesh, India, and Pakistan, said the theme of soaring food prices was the main topic in his talks with government, private sector, and NGOs. “ They are very concerned that the high food prices are here to stay and how they can accommodate this increased burden on already stretched budgets.”
He said the Bank is working with individual countries in region to devise smart subsidies to take care of the poor. “In my discussions with government officials, I was asked that the Bank brings to the table best practice examples from other countries,” Patel said. “In the short term, this includes ensuring availability of food especially for the poor through smart and effectively targeted subsidies, and other measures such as conditional cash transfers, where parents receive food in return for sending their children to school or health check ups, and food-for-work.”
Smart Subsidies
But actions to mitigate the crisis differ from country to country. Pakistan, for example, must take different actions than Bangladesh, he said. “Wheat is Pakistan’s staple food and both rich and poor consume the same type of wheat. So a wheat subsidy would not work. Instead, they have to devise other safety net approaches for the poorest of the poor.”
Patel said the food crisis is particularly severe in South Asia which is a net importer of food. “I am not surprised this issue tops the agenda for governments in the region. Food prices have shot up by almost 70 percent in the last seven years.”
He cited Bangladesh who lost 10 percent of its rice crop due to the two floods and cyclone Sidr in 2007. “The country needs to import some 2 million tons of rice at a time when the availability of rice globally is limited. This is a very serious problem.”
Patel said the Bank has helped Bangladesh by providing budget support in the wake of the floods and cyclone Sidr, which allowed the government to accommodate the immediate needs arising from these crop losses.
However, the key to a long-term solution, Patel stressed, is increased agricultural productivity and increased growth. “Subsidies cannot go on forever. They need to be time bound and accompanied by adjustment measures that accommodate the price increases.”
The agriculture sector is underperforming in almost every country in South Asia, Patel said. The current food crisis has highlighted the need to prioritize the agriculture sector.
Additional Resources
- World Food Prices: South Asia's poor at risk
Expanding existing social assistance programs that directly targets poor households is necessary to protect South Asia’s poor. (Read More »)
- Bangladesh: Cyclone Sidr
Praful Patel, Vice President, World Bank, recently visited the cyclone-affected Kalapara upazilla of Patuakhali District and Barisal division. (Read More »)
- World Bank Aid to Bangladesh Cyclone Recovery
The World Bank has offered up to US$250 million in the aftermath of Cyclone Sidr to help millions of Bangladeshis recover and to strengthen the country’s disaster mitigation systems. (Read More »)
- 2007 South Asia Floods
Providing cash transfers to people affected by the floods that have devastated parts of Bangladesh, India, and Nepal is one of the most effective ways to help rebuilding lives and stimulate local markets. (Read More »)
- Agriculture for Development
The 2008 World Development Report calls for a revival of agriculture in South Asia. Agricultural development is key to eradicating poverty and creating conditions for sustainable and equitable growth. (Read More »)
- South Asia: Development Data
A wide range of social and economic measures on South Asia, including links to the World Bank's most important online development databases. (Read More »)
- South Asia: Analysis and Research
Compilation of all the World Bank's publications on South Asia, with 'search' options and links to analysis and research on other South Asian countries. (Read More »)
- World Bank Program in South Asia
Launching pad to all information on World Bank activities in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.(Read More »)
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