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World Bank President Calls for New Deal on Global Food to Address Surging Prices

The crisis of surging food prices could mean “seven lost years” in the fight against worldwide poverty, World Bank President Robert B. Zoellick said at a press briefing before the IMF-World Bank Spring Meetings.

While many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day.

—Robert Zoellick

Zoellick said the poor spend as much as 75% of their income on food. Over the last two months, rice prices have skyrocketed to near-historical levels, rising by around 75% globally. The price of wheat has risen 120% over the past year. Over the past three years, food prices overall have risen 83%, the World Bank estimates.

International Monetary Fund Managing Director Dominique Strauss-Kahn had also earlier warned that the increase in food prices of 48% since end-2006 may undermine gains the international community has made in reducing poverty.

Rising prices have sparked protests—some violent—in many countries. Major rice producing countries such as India, China, Vietnam and Egypt have put restrictions on rice exports.

For the “immediate crisis,” Zoellick urged governments to fill the US$500 million food gap identified by the UN’s World Food Program.

Under the New Deal, the World Bank will nearly double agricultural lending to Sub-Saharan Africa over the next year to US$800 million to substantially increase crop productivity. In addition, the International Finance Corporation—the World Bank Group’s arm for private sector development—will boost its agribusiness investments.

Zoellick is also proposing that sovereign wealth funds around the world allocate US$30 billion—one percent of their US$3 trillion assets—to investments for African “growth, development, and opportunity.” At his press briefing Thursday, Zoellick said rising food prices are also contributing to malnutrition, one of the “forgotten” Millennium Development Goals.

This is not just about meals foregone today or about increasing social unrest. This is about lost learning potential for children and adults in the future, stunted intellectual and physical growth. Even more, we estimate that the effect of this food crisis on poverty reduction worldwide is in the order of seven lost years. So we need to address this not just as an immediate emergency but also in the medium term for development.

Meetings such as this are usually about talk. Words can focus attention. They can build momentum. But we can’t be satisfied with studies and paper and talk. This is about recognizing a growing emergency, acting, and seizing opportunity, too. The world can do this. We can do this. We can have a New Deal on Global Food Policy.

—Robert Zoellick



Not to sound shallow, but I remember when I was younger (I'm 50 now) that there was a large movement regarding "the population explosion." Whatever happened to trying to reduce the worldwide population as a method to combat these problems? And before you ask, I have one child.

Mark A

Feed our bellies, or our gas tanks. Its only going to get worse unless we stop growing for biofuels.


it is a poverty problem, usually due to obsolete political systems.. overpulation takes care of itself once people are prosperous and they can afford to buy a TV set.


There is actually an ABUNDANCE of food in the world (even if we switched to all Organic vs. petro food), the problem is distribution (and thus political).

Much of the current food run up is due to speculation


"It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest." From Adam Smiths The Wealth of Nations. When will we realize that this is a market based problem that will have a market based solution. Begging for money from governments/taxpayers, and private fund groups will not provide a solution in the short or long term to this problem. The shear force of high market prices will provide a solution in the near term. Charity will be needed to keep a minimum level of food available to the people in Africa that need it, however it should be tied to some type of reform that will increase property rights and reduce corruption.


Oh no! The World Bank has a history of destroying agriculture in Africa. So the last thing we need is the WB's involvement in this topic.

The real truth is that without biofuels, poor countries are set to go through a much deeper crisis than can be seen today.

Not promoting biofuels is unethical.

A barrel of oil costs $110; a barrel of oil equivalent cane based ethanol costs $36. Ask the Brazilians: their biofuels have pushed *down* general inflation.

But of course, it has become clear that the racists and colonialists of old (World Bank, EU, IMF) are trying to off poor countries once again.


By the way, there is no link between rice prices and biofuels, because no biofuels are made from rice.

But hey, this debate has been raped so badly anyways, so let's invent and fantasize as much as we want while we're at it.


"Japan looks to rice-based biofuel"

Even if rice is never used to produce biofuel, the diversion of corn to that purpose puts pressure on grain prices in general:

"Biofuel blowback: Fifty percent rice price hike could spell trouble"

Kom Plikate

Here's a great idea for our sim: model fuel vs. food and do not include any real world forcings (just like climate change). That way we can discard inconvenient facts (biofuels are temporary transitional tools, syngas from waste, etc.) and continue down our favorite E-Path: EXAGGERATION. We never want to grow up.


Whatever the reason of the high food price is, the poor will blame it on the west(ern economical system) anyway.
Wether that's fair or not is not relevant.
So the few billions we should pay today for helping the poorest is peanuts compared with the price of civil unrest if we neglect it.
The most efficient way of turning people into terrorists is make their children starve while they are convinced we are reason of their suffering.

Of cource, population explosion must be taken care of (fast), but the best way to do this, is improving living standards.

Harvey D

The maths are rather simple.

The average large gas guzzler consumes about 1200 gallons (gas) or almost 1500 gallon of Ethanol a year. It takes 4 acres of highly productive land to produce enough corn feed stock (600 bushels) to produce the ethanol required for that one gas guzzler.

That is not all, to produce the 600 bushels required for 1500 gallons of corn ethanol, another 50% or 300 bushels (equivalent energy) or 2 more acres of land is required for a total of at least 6 acres per gas guzzler.

USA with about 200 million gas guzzlers would require 1200 million acres of corn fields to produce enough corn (180 billion bushels) ethanol. That is about 80 times the current corn crop.

Now, will that have an effect of corn and other grain price?

Who wants to bet?


Biofuels keep food prices low (ask the Brazilians, who make a barrel of oil equivalent biofuel for $35 against $110 for oil). So what's the big deal? We should be promoting biofuels to combat hunger and poverty.

The point is that speculators have gone to commodities (oil and farm commodities), which has pushed up prices.

Even cocoa prices have increased 85% over the past year (nothing to do with biofuels). Enough said, I think.


Assumin the problem is real, the solution would seem easy: Governments should stop subsidizing food-based biofuels.
Or have I oversimplified the problem?


This is what happens when you expand the world population dramatically due to the introduction of cheap fertilizer (Ammonia, via the Haber process) and then the fuel used to make the fertilizer is no longer so cheap.

Oil prices have driven up the price of NG, which is the primary component for fertilizer production.

Harvey D


There are significant differences between Sugar Cane and Corn ethanol production. Most studies found that sugar cane ethanol production in Brazil is 6 to 8 times more efficient (per acre) than USA's corn ethanol. Secondly, wages in Brazil are much lower than in USA. Thirdly, Brazil has a lot of unused land (deforestation?) and can produce year round.

For all those reasons, Brazil is one of the few countries where low cost sugarcane ethanol can be overproduced without affecting other local crops.

Europe and many other countries cannot match that. USA and Canada may be able to do it with second or third generation cellulosic ethanol, agrofuel and/or biofuel but not with corn ethanol.

Ways have to be found to consume much less per vehicle but to produce more fuel per acre. Corn ethanol is not the sustainable way to achieve that.


It is sad that some 100 million people are now struggling under the burden of increased food and energy prices. However, there may also be important benefits from these price increases.
1) Minimum 1000 million poor farmers and workers in agriculture can now earn more money and have increased their welfare as well as their ability to invest and expand production.
2) Western democracies simply have to become energy independent in order to protect our societies from increasing intimidation attempts and biofuels is the only important short-term remedy to that problem.
3) There is some reason to believe that global population growth will slow down or even reverse if food prices continue to increase because poor city people simply can’t afford to get many children in this situation. Decreased or reversed population growth would make the planet a better place for other species that are not only ‘starving’ but also minimized in numbers and even going extinct exclusively because humans are spreading at their expense.
4) Increased food prices will force many people to eat healthier since eating less is healthier and healthy food such as grains often cost less than unhealthy food such as meat and animal fat. This could save millions from dying of obese related illnesses.
5) Increased energy prices are finally creating a real incentive and opportunity to create technology that efficiently can harvest and store the colossal energy that are right in front of us such as sun, wind and geothermal power. These technologies are badly needed to eliminate the small possibility of a global warming holocaust that might finish all of mankind in perhaps as little as 200 years from now.

You can judge for yourselves whether increasing energy and food prices are more of a blessing or more like a curse. However, we need to consider the full spectrum of implications and not just focus on one or two issues that may be governed by emotions although there are good reasons to be emotional in this matter.

Cuba could do it.

Cocoa could be rising in price as producting is reduced in favour of fuel crops.
really biofuel is simply solar energy with a indirect step in between. lets skip sht emiddle man and focus on soalr efficiency.

as for food self sufficiency, its all aboute energy. provide people with a means to cheap energy, and they will find a way to feed themselves.

Rafael Seidl

Remember that Zoellick is the man Pres. Bush put in charge of the World Bank after the Wolfowitz fiasco there. Bush has advocated second-generation biofuels primarily because they're a long-term proposition, i.e. no threat to the oil industry. By contrast, corn ethanol is already cutting into the oil industry's revenue stream, so Zoellick opposes it.

That said, corn ethanol really is a bad idea because farming it requires massive fossil fuel inputs. In particular, nitrogen run-off due to the excessive application of fertilizer causes a huge dead zone in the Gulf of Mexico each year, effectively killing the fisheries there. If domestic corn production weren't subsidized and protected by a stiff tariff, farmers would consider growing energy crops like switchgrass on otherwise idle land - even if those could currently only be used for space heating, freeing up heating oil that could be turned into diesel.

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Why is it that no one mentions the fact that corn ethanol production also produces a distillers grain co-product that is used as animal feed? Most pundits seem to conveniently overlook that fact. Sure, corn ethanol has its problems, but at least get the facts straight...


Yes it produces DDG, but the industry can only use so much of that. We are at the maximum on corn ethanol and should push as hard as we can to get cellulose ethanol online in high volume production in 3-5 years then phase out corn ethanol.


"they're a long-term proposition, i.e. no threat to the oil industry."


When oil reads of FT processes using municipal waste and hog manure as feedstocks (e.g. Range Fuels 2nd gen pilot) to generate syngas > ethanol - they ARE threatened. Why? Because we have learned in the last 50 years that implementation of new technologies is accomplished in ever-shortening time periods (consider the transition from CDs to MP3 digital data - physical music stores are now dinosaurs.) Quite frankly if one examines the political motivations, the fears of food vs. biofuel must reasonably emanate from big oil interests. How better to counter the intrusion of low-cost biofuels than to distort the effect on food supply and "the world's poor?"

The underlying problem with all these exercises is their stubborn refusal to acknowledge real world "inputs" or, in climate change terms, "forcings." Human understanding, while perhaps primitive, is no longer "blind." The manipulation of these data to meet agenda goals jeopardizes public veracity in our expanding era of transparency. Once the manipulators are caught with their pants down - there will only be embarrassment and disbelief. In a newly sophisticated world those found manipulating it may end up not unlike the aristocracy of the French Revolution - thrust head-long into the void...



I am a great oponent to corn ethanol since it is the stupidest idea to solve our oil addiction. But in the same time it is unfair to blame corn ethanol as solely responsible of recent increase price of food worlwide. Food proce soaring are the result of combined effect including : short supply due to drough in Australia and Ukraine, incresase of demand due to improved wealth in china, speculation on commodities because of the lost of value of the dollard, and also biofuels. Increase of food price is a good thing because :
- too many countries are dependant on foreign import of food and do nothing to control the growth of their population (Egypt, Philipina, Indonesia, Mexico, Nigeria etc..) so I hope they will finally realise that theey are on unsustainable and dangerous slope...

- High price of cereal will encourage local production
Negative effect is that it will accelerate destruction of rain forest to grow more food.

Anyway this food crisis is a clear signal that we are running in the wall of unsustainability, too many people on this planet. Too many poors who want to be richer.


This is the best thing that could happen to developing nations. I remember reading many articles in the early 90's about how 3rd world countries were getting into manufacturing goods instead of agriculture because they could not compete with the prices of the developed world. Now that prices have increased to a reasonable level they can compete. The only down side is the prices rose so quickly they have not been able to transition into the market quick enough but that will change.
On a side note there is enough arable land on the continent of Africa to feed the entire worlds population. The countries in the area just need to have some stable governments in place to allow them to advance.

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