WORLD TRADE  
ORGANIZATION  G/AG/GEN/90 
27 November 2009 
 (09-6006) 
Committee on Agriculture Original:   English 
  
 
ANNUAL MONITORING EXERCISE IN RESPECT OF THE FOLLOW-UP TO THE 
MINISTERIAL DECISION ON MEAS URES CONCERNING THE POSSIBLE 
NEGATIVE EFFECTS OF THE REFORM PROGRAMME ON  
LEAST-DEVELOPED AND NET FOOD-IMPORTING  
DEVELOPING COUNTRIES 
 
  Attached are copies of contributions by the representatives of the International Grains Council 
(IGC), the International Monetary Fund (IMF), the World Food Programme (WFP) and the World 
Bank at the meeting of the Committee on Agricu lture on 19 November 2009 (Agenda Item 2.B 
refers). 
 
_______________ 
 
 
CONTRIBUTIONS 
 
I.
 CONTRIBUTION BY THE INTERNATIO NAL GRAINS COUNCIL (IGC) ..................1  
II. CONTRIBUTION BY THE INTERNATIO NAL MONETARY FUND (IMF)..................3  
III. CONTRIBUTION BY THE WORLD FOOD PROGRAMME (WFP)...............................9  
IV. CONTRIBUTION BY THE WORLD BANK......................................................................13  
 
 
I. CONTRIBUTION BY THE INTERNATIONAL GRAINS COUNCIL (IGC) 
1. Donor members of the Food Aid Committee continue to be aware of their collective 
responsibilities concerning the NFIDC Decision and to make available food aid to meet the needs of 
developing countries, especially least-developed an d net food-importing developing countries.  The 
IGC Secretariat has regularly tr ansmitted the relevant information to this Committee on the annual 
operations under the Food Aid Convention (FAC), also keeping it informed of its activities.  In turn, 
the Food Aid Committee, when it last met in London in  June this year, appreciated receiving from the 
WTO Secretariat representative a communication explaining the progress being made regarding the Doha Round, including the latest versions  of the Draft Modalities on agriculture. 
2. The WTO Secretariat should be congratulated on its background note on the implementation 
of the NFIDC Decision, which included an update on the review of food aid levels and on the FAC 
developments since this Convention came into bein g in 1999.  This Commit tee will therefore be 
aware of the fact that since D ecember 2004, when the Food Aid Committee decided to suspend the 
renegotiation of the FAC until there was an outcome of the DDA, it has continued to ensure it met its 
obligations under the existing C onvention, reflecting donors' strong awareness of their food security 
responsibilities including those specifically relating to  the NFIDC Decision.  As has been stated 
before, the value of a Convention which stipulates minimum amounts of food was again demonstrated 
during the 2007-08 food prices surg e, when several FAC members took special budgetary measures to G/AG/GEN/90 
Page 2  
 
  ensure they would continue to meet their annual aid obligations.  The IGC Wheat Price Index, also 
included in the WTO Secretariat's background note, is one of many food price indicators highlighting not only the extent of the surge in cereals and ot her commodity markets but also their continued 
volatility in the past year.  
3. Attachment 2 to the WTO Secretariat's backgr ound note summarizes the latest data on FAC 
operations, including preliminary estimates for the last full year (2008/09).  Full details of FAC 
operations for that year are still being compiled a nd these will be transmitted to the WTO Secretariat 
as soon as possible.  The total estimate for 2008/09  as shown in the table understates the volume 
which is actually nearer to 7 million tonnes
1, about the same as in the previous year.  What is clear 
from the table is that the total annual volumes con tinue to exceed the aggreg ate commitments, with 
the bulk of the food supplied in response to emer gency situations and un der protracted relief 
operations.  In 2007/08, for example, recipients in Africa accounted for more than three-fifths of all 
shipments, at some 4.5 million tonnes.  Local purchases and triangular transactions involved some 
2.0 million tonnes of all food aid.  Crucially, food aid shipments under the FAC in 2007/08 were only slightly less than in the previous  year, despite the hugely increased costs of the food and rocketing 
ocean freight rates.  For those unfamiliar with  the FAC data and the activities of the Food Aid 
Committee, the FAC website www.foodaidconvention.org
 provides full details of all operations by 
donors over many years, as published ever since the first Convention came into being. 
4. Turning to the recent activities of the Food Aid Committee, in June this year the Committee 
agreed that it was not yet possible to start the formal renegotiation of the Convention as the Doha 
Round had not been completed.  However, members he ld some very fruitful informal discussions on 
the strengths and weaknesses of the current Conventi on and how to make this type of treaty an even 
more effective instrument to help ease the plight of the world’s hungry.  This process has intensified during the course of a number of very productive in formal meetings.  Donors are examining the value 
of the Convention, its shortcomings , how it is functioning, potential im provements, its role within the 
international food security architecture, the type of food aid and food assistance required for achieving 
the most appropriate and efficient responses to need s and the role of commitments.  In other words, 
the discussion covers a wide area with donors having an open mind on how to most effectively contribute to world food security.  In a few weeks’  time, FAC members will meet again in London to 
continue their deliberations. 
5. This week, the IGC Executive Director attended the World Summit on Food Security in 
Rome, taking the opportunity to re-emphasize the important role of FAC donors' on-going annual 
commitments, their efforts to ensure that food reach es those in greatest need and their determination 
to make these operations as effective as possible. 
                                                     
 
1 The 2008/09 data in Attachment  2 exclude a significant number of EU operations which, when 
included, lift the EC total to over 2 million tonnes.  G/AG/GEN/90 
 Page 3 
 
 
  II. CONTRIBUTION BY THE INTERNATIONAL MONETARY FUND (IMF) 
6. After the deepest recession of the post-World War II period, the global economy started to 
recover in the second quarter of 2009 as aggre ssive policy responses helped restore market 
confidence.  The global crisis hit the low-income  countries (LICs) particularly hard and the IMF 
responded with sharply higher financing under mo re flexible terms and conditions.  The Fund 
continues to call for more open trade to support economic growth and reduce poverty. 
A. RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK FOR 2010 
7. After the deepest global recession of the post-World War II period, global economic growth 
turned positive in the second quarter of 2009 as wi de-ranging public intervention supported demand 
and lowered uncertainty and systemic risks in fi nancial markets.  While emerging market economies 
came under pressure during the recent crises, their gr owth dynamics have remained stronger than in 
the advanced economies.  Domestic demand in partic ular has remained relatively robust, notably in 
emerging Asia, helped by strong macroeconomic policy support.  
8. In 2009, real GDP growth in net food-importing developing countries (NFIDCs) is projected 
at 2.5 per cent, compared to 1.7 per cent for em erging markets and developing countries as a whole 
(Table 1).  This compares to 5.8 and 6.0 per cent in  2008, with the relatively smaller income losses in 
NFDIC likely reflecting in part the greater impact  of food-related terms of trade gains on real 
incomes.  In 2010, growth in NFIDCs is expected  to recover to 4 per cent, a noticeably smaller 
increase than in emerging markets and developing economies as a whole.  Notwithstanding faster 
growth, inflation in NFIDCs is expected to fall to  9 per cent next year, reflecting the base and, to a 
lesser extent, second-round effects of falling globa l food prices in the second halves of 2008 and 
2009. 
9. The world-wide commodity price shock in 2007-08 had a significant economic impact on 
LICs.  Food prices rose by 45 per cent from end-2006 to their peak in mid-2008 and many 
commodities reached record highs in  current U.S. dollar terms - including soybeans, corn, and wheat.  
And while commodities prices subsequently r eceded, improved global economic and financial 
conditions since March 2009 have led to a broad-based recovery.  Prices of food commodities rose in 
tandem with those of other commodities through June  2009, then began to weaken again from July as 
growing evidence of stabilizing w eather conditions and e xpanded acreage led to renewed declines in 
the prices of some major food crops.  With these falls, food prices in October 2009 were only some 10 per cent above their cyclical lows of December 2008,  while fuel and metals prices were some 50 per 
cent above their recent cyclical lows.  Among the ma jor food crops, wheat prices moderated the most 
and, as of October 2009, were some 10 per cent below December 2008 levels.  
10. As reflected in futures prices, food prices ar e expected to rise only gradually through the 
global economic recovery.  Demand for food is rela tively insensitive to the business cycle, compared 
with that of other commodities; fu ture harvests are also expected to be fairly abundant, although there 
is the prospect that the El Niño weather pattern ma y affect the production of some crops, particularly 
soybeans, through 2010.  There are, however, upsid e risks to prices.  Ag ricultural supply-demand 
balances remain relatively tight, with the global stoc k-to-use ratio for the major crops of corn, rice, 
soybeans, and wheat expected to remain below thei r average levels over recent decades.  Another risk 
concerns the recent strong increase in energy prices, particularly as oil prices remain well above their 
decade averages.  Higher energy prices drive up cost s through fuel inputs and fertilizer prices, with 
additional indirect effects possible from increased  incentives to divert food crops toward biofuel 
usage. G/AG/GEN/90 
Page 4  
 
  B. T
HE RECENT CRISES :  ECONOMIC IMPACT AND THE IMF  RESPONSE  
11. The LICs were hard hit by massive increases in world food and fuel prices during 2007-08, 
and subsequently by the global fina ncial crisis.  They were faced w ith a sharp contraction in export 
growth, FDI inflows, and remittances.  As a result,  LIC economic growth in 2009 is projected to be 
less than half its pre-crisis level.  Growth is  expected to rebound in 2010 in line with the global 
recovery, as rising world demand (supported by short- term domestic policies) and improved access to 
foreign capital underpin private sector growth.  Ex ternal financing needs of LICs in 2009–10 are 
estimated to have increased by around US$25 billion  a year relative to pre-crisis levels.   
12. Policy makers in LICs have responded flexibly a nd effectively to the recent shocks.  During 
2007-08, polices progressively accommodated increasing world food and fuel prices by adjusting 
inflation targets.  Most incorporated fiscal easing be ginning in 2007 and, with  the onset of the global 
financial crisis, particularly in 2008-09.  A third of LICs have augmented automatic stabilizers with 
discretionary fiscal stimulus, often targeted to the spending side.  The extra financing need has been 
met in part through increased donor support, but many  countries also resorted to domestic financing.  
Past successes in macroeconomic stabilization, t ogether with debt reduction, had created space in 
many countries for this short-term stimulus.  
13. Since the onset of the current crisis the IMF has responded on many fronts to support all 
member countries, including by:   
(a) more effective and independent surveill ance over the global economy and promoting 
a coordinated response to the crisis from the large economies; 
(b) more flexible lending, with fewer conditi ons better tailored to individual country 
circumstances - the lending envelope for individual programmes has doubled; 
(c) tripling lending capacity, to US$750 billion;  and 
(d) strengthening the global financial safety ne t with a general allocation of SDRs of 
about US$250 billion in August 2009. 
14. In particular, the IMF has been at the forefr ont in helping LICs address the macroeconomic 
impact of the global food, fuel, and financial crises.   The Fund has dramatically raised its financial 
assistance to LICs, with higher access limits, a more flexible framework for structural conditionality, 
and revamped lending facilities.  These efforts have intensified a process of reform within the Fund 
aimed at increasing the institution's flexibility in ad apting to a changing global environment, including 
the increasing diversity of economic challenges that LICs face. 
15. The package of measures approved in July 2009 boosted the IMF's capacity to provide 
financial assistance to LICs.  The Fund will ra ise its concessional lending capacity to about 
US$17 billion through 2014, including up to US$8 b illion over the next two years - exceeding the call 
by the G20 at the London Summit for additional lend ing of US$6 billion.  This scaling up is already 
evident in the IMF's country operations.  Through October of 2009, the Fund committed new concessional lending of about US$3.2 billion to LICs, compared with US$1.5 billion for all of 2008.  
In addition, under the August 2009 general allo cation of Special Drawing Rights mentioned above, 
LICs have received more than $18 billion to bolster their foreign exchange re serves.  Future Fund 
financial support will include permanently higher concessionality, and the reforms provide for zero 
interest payments through end-2011 on new and outstanding concessional loans.   G/AG/GEN/90 
 Page 5 
 
 
  16. Africa has been a focus of the IMF's scaled-up financial assistance to LICs.  Extra assistance 
has reached US$3 billion so far this year, nearly triple that extended in 2008.  For example: 
(a) an augmentation of Zambia's Poverty Reduction and Growth Facility (PRGF) agreed 
in May, in the wake of higher import pr ices and plummeting copper exports, enabled  
it to protect priority social spending while safeguarding macro economic stability; 
(b) Tanzania and Mozambique tapped the E xogenous Shocks Facility, providing a 
valuable foreign exchange cushion that supported fiscal stimulus programmes. 
17. In addition to expanded policy space, the IMF has emphasized strengthening social protection 
to mitigate the impact of the crisis on society' s most vulnerable.  While countries face capacity 
constraints in implementing social spending pl ans, most programmes initiated in 2008-09 have 
envisaged higher social spending, with many also focusing on better targeting: 
(a) a stronger social safety net is a key priori ty under Pakistan's Stand-by Arrangement.  
The programme provided space to increase spe nding for internally displaced persons 
and to expand social safety nets.  Cash tr ansfers to the poor are projected to increase 
from 0.2 per cent of GDP in 2008-09 to 0.6 per cent in 2009-10, and the authorities 
are working closely with international fina ncial organizations to further strengthen 
the social safety net; 
(b) Burundi's PRGF-supported programme sees em ergency targeted social safety net 
spending of some 1.5 per cent of GDP to finance food security and school feeding programmes and assist vulnerable groups. 
18. Countries should prepare to realign policies toward medium-term sustainability once the 
recovery is firmly entrenched. LICs are relying primarily on additional domestic financing and to a 
lesser extent on additional external concessional resources to finance increased deficits.  Once 
economic activity rebounds, stimulus measures will need  to be unwound, deficits  restrained, and debt 
reduced to sustainable levels consistent with fiscal  policies that enhance growth and reduce poverty.  
In the meantime, additional highly concessional donor s upport is needed to ensure that countries are 
not forced to make these adjustments prematurely and to facilitate a smooth return to a sustainable 
debt path and strong medium-term growth. 
C. T
HE ENHANCED MODALITIES OF IMF  SUPPORT  TO  LDC S AND NFIDC S2  
19. The IMF's scaled-up assistance will be channele d through a new architecture of concessional 
lending facilities under the new Poverty Reduction and Growth Trust (PRGT).3  This architecture 
closes gaps in the previous lending framework and streamlines existing facilities to provide more 
effective support to LICs, especially for short-te rm, precautionary, and emergency needs.  New access 
limits are consistent with a doubling of access per country and apply uniformly across the facilities.  The new facilities reinforce links between Fund- supported programmes and country poverty reduction 
strategies (PRS).  The PRGT has three lending windows: 
(a) the Extended Credit Facility (ECF) replaces the PRGF and helps to address medium-
term balance of payments (BoP) needs; 
                                                     
 
2 References to LICs (PRGF-eligible countries, under  the IMF’s classification)  include most LDCs but 
only some NFIDCs. Those countries that fall outside the LIC classification are eligible for support under other 
IMF facilities. 
3 The Contingent Financing Facility (CFF) has been eliminated at the same time. G/AG/GEN/90 
Page 6  
 
  (b) The Standby Credit Facility (SCF) can help LICs that do not face protracted BoP 
problems but need occasional assistance.  It is similar to the Fund's non-concessional Stand-By Arrangement and can be used on a precautionary basis; 
(c) The Rapid Credit Facility (RCF) provides lim ited financial support in a single tranche 
for LICs with urgent financing needs, re placing the Exogenous Shocks Facility (ESF) 
Rapid Access Component and Emergency Na tural Disaster Assistance, and replacing 
and expanding the subsidized Emergenc y Post-Conflict Assistance facility. 
Conditionality under this new instrument is limited. 
20. The new structural conditionality framework in troduced this year eliminates structural 
performance criteria. Since 1 May 2009, progress in structural reforms critical to programme 
objectives (and specified as structural benchmarks ) is monitored and assessed by the Fund's Executive 
Board only through periodic programme reviews.  These changes emphasize the reform goals 
themselves rather than specific time-bound measures,  helping to enhance country ownership and to 
improve reform results.  
21. A more flexible approach to setting debt limits  in Fund-supported programmes has also been 
adopted, to better reflect the considerable diversit y among LICs in terms of their debt vulnerabilities 
and macroeconomic and public fina ncial management capacity.  At the same time, the Debt 
Sustainability Framework for low-income countries is being made more flexible, including through 
closer attention to the impact of public invest ment on growth, the role of remittances, and the 
treatment of external debt of state-owned enterpri ses.  These changes will provide more flexibility to 
LICs in the design of their borrowing strategies. 
22. The Fund will continue to provide debt relie f to LICs under the Heavily Indebted Poor 
Countries (HIPC) Initiative.  As of September 2009,  35 countries have qualified for HIPC Initiative 
assistance, and five others are potentially eligible for HIPC Initiative assistance.  Total debt relief 
under the HIPC Initiative and the Multilateral Debt  Relief Initiative (MDR I) is estimated at 
US$103 billion (in end-2008 net present value terms) .  Of this, the Fund's assistance amounts to 
US$10.6 billion, including US$ 4.2 billion under the MDRI. 
23. In addition to programme support, policy ad vice continues to be provided through 
surveillance (Article IV consultations), Financia l Sector Assessment Progra mmes (FSAP), the Review 
of Standards and Codes (ROSCs), and the Policy S upport Instrument (PSI).  The PSI, introduced in 
2005, is available to LICs that desire an IMF-e ndorsement of their policies, but which may not want 
or need IMF financial assistance.  As of e nd-September 2009, PSIs had been approved for six 
members, four of which are LDCs or NFIDCs. Th e IMF had a total of 50 financing arrangements in 
place as of end-September 2009, compared to 32  at the onset of the crises at end-2007. 
24. The IMF is also stepping up its technical assistance (TA) to meet the policy demands of the 
crisis.  Technical assistance contributes to eff ective surveillance and le nding programmes and builds 
capacity for policymaking. Since 1993, the IMF has es tablished seven regional TA centers, located in 
Africa (Tanzania, Mali, and Gabon), and in Fiji, Barbados, Lebanon, and Guatemala.  The IMF is 
establishing two more centers in Africa by end-2010. 
D. I
MF SUPPORT FOR INITIATIVES AT THE GLOBAL LEVEL  
25. The IMF continues to work with other agenci es to help bring the Millennium Development 
Goals (MDGs) to fruition.  The IMF's main cont ribution lies in promoting macroeconomic and 
financial stability - a crucial foundation for pove rty reduction and economic growth. For developing 
countries, especially the least-developed, closer in tegration into the world trading system brings  G/AG/GEN/90 
 Page 7 
 
 
  immense benefits; against this background, the IMF has been a firm and consistent advocate of open 
trade as an engine for economic growth and poverty reduction.4  
26. It is crucial that the global community reject protectionism in trade and finance, particularly 
during this crisis.  We applaud the WTO's monitoring of the protectionist responses.  
27. The surest way to sustain and further open mark ets is to complete an ambitious Doha Round 
agreement expeditiously.  Sharply cutting bound ta riff rates and farm suppor t ceilings would reduce 
risks of protectionist responses that could prolong th e crisis.  New liberalization would boost growth 
potential of developed and developing countries a like.  Concluding the Round would also reduce 
incentives to negotiate bilateral trade agreements, which encroach on the non-discrimination principle 
at the heart of the multilateral system.  As partic ipants consider their negotiating flexibility, we 
encourage them to weigh fully the benefits of reforming their own trade measures, as well as from 
enhanced and secure access to the markets of others.  
28. Many developing countries need targeted assistance to get the most from the opportunities of 
open trade.  The IMF participates with other organiza tions in the Aid For Trade initiative and is a core 
agency in the Enhanced Integrated Framework (EIF ) for least-developed countries.  We see Aid for 
Trade as an important complement to furt her non-discriminatory (MFN-based) world trade 
liberalization and, foremost, a conclusion to the Doha Round. 
29. The IMF has been an active par ticipant in the UN High-Level T ask Force on the Global Food 
Security Crisis. 
 
                                                      
4 The IMF Trade Integration Mechan ism (TIM) enhances the predicta bility of access to IMF resources 
for members faced with BoP shortfalls  due to trade liberalization measures  undertaken by other countries. The 
TIM was envisioned in part to indirectly support the implementation of a Doha Round package, but has thus far 
been used by Bangladesh, the Dominican Republic, and Madagascar. G/AG/GEN/90 
Page 8  
 
    
2007 2008 2009 2010 2009 2010
 
World out put 5.2 3.0 -1.1 3.1 0.3 0.6
Advanced economies 2.7 0.6 -3.4 1.3 0.4 0.7
Emerging and developing economies 8.3 6.0 1.7 5.1 0.2 0.4
  Net Food Importing Countries 1/ 7.3 5.8 2.5 4.0 0.2 0.4
  Purely Net Food Importing Countries 2/ 6.7 5.2 1.7 3.2 0.1 0.5
  Africa 6.3 5.2 1.7 4.0 -0.1 -0.1
  Developing Asia 10.6 7.6 6.2 7.3 0.7 0.3
    China 13.0 9.0 8.5 9.0 1.0 0.5
    India 9.4 7.3 5.4 6.4 -- -0.1
    ASEAN-5 3/ 6.3 4.8 0.7 4.0 1.0 0.3
  Middle East 6.2 5.4 2.0 4.2 -- 0.5
  Western Hemisphere 5.7 4.2 -2.5 2.9 0.1 0.6
    Brazil 5.7 5.1 -0.7 3.5 0.6 1.0
  Central and eastern Europe 5.5 3.0 -5.0 1.8 -- 0.8
  Commonwealth of Independent 
    States 4/ 8.6 5.5 -6.7 2.1 -0.9 0.1
    Russia 8.1 5.6 -7.5 1.5 -1.0 --
    Excluding Russia 9.9 5.4 -4.7 3.6 -0.8 0.4
Memoran dum
World growth based on market
    exchange rates 3.8 1.8 -2.3 2.3 0.3 0.6
World trade volume (goods and serv ices) 7.3 3.0 -11.9 2.5 0.3 1.5
Imports  Advanced economies
4.7 0.5 -13.7 1.2 -0.1 0.6
  Emerging and developing economies 13.8 9.4 -9.5 4.6 0.1 3.8
    Net Food Importing Countries 17.0 11.6 -4.2 4.3 -2.0 1.2
    Purely Net Food Importing Countries 12.7 8.9 -5.1 1.6 -2.3 --
Exports  Advanced economies
6.3 1.9 -13.6 2.0 1.4 0.7
  Emerging and developing economies 9.8 4.6 -7.2 3.6 -0.7 2.2
    Net Food Importing  Countries 4.7 2.6 -3.9 3.9 -0.3 0.7
    Purely Net Food Importing  Countries 1.7 1.6 -5.3 3.0 -1.1 1.1
Commodit y prices (U.S. dollars)
Oil 5/ 10.7 36.4 -36.6 24.3 1.0 1.2
Nonfuel (average based on world 
   commodity export weights) 14.1 7.5 -20.3 2.4 3.5 0.2
Consumer prices
Advanced economies 2.2 3.4 0.1 1.1 -- 0.2
Other emerging market and developing countries 6.4 9.3 5.5 4.9 0.2 0.3
  Net Food Importing Countries 9.3 13.4 12.3 9.2 -1.1 -0.6
  Purely Net Food Importing Countries 9.0 13.6 13.6 10.1 -0.6 -0.6
Six-month London interbank 
  offered rate (LIBOR, percent) 6/
On U.S. dollar deposits 5.3 3.0 1.2 1.4 -- --
On Japanese yen deposits 0.9 1.0 0.7 0.6 -0.2 0.2
On euro deposits 4.3 4.6 1.2 1.6 -0.2 -0.1
 
  Note: Real effective exchan ge rates are assumed to remain constant at the levels prevailin g durin g October2-October 30, 2008. 
  1/Cuba, Somalia,  and Tuvalu are not included in the a ggregation due to insufficient data. 47 LDCs + 25 NFIDCs
   2/ 25 NFIDCs. Cuba is not included in the a ggregation. 
   3/Includes Indonesia,  Mala ysia, the Phili ppines, Thailand, Vietnam.
   4/Mongolia, which is not a mem ber of the Commonwea lth of Independent States, is included in this group for reasons o f geography 
and similarities in economic  structure.
 5/Simple average of prices of U.K. Brent, Dubai, and West Texas Intermediate crude oil. The average price of oil in U.S. dolla rs a barrel 
 was $97.03 in 2008; the assumed price based on future markets is $61.53 in 2009 and $76.50 in 2010. 
  6/Six-month rate for the United States and Japan. Three-month rate for the euro area.Current Projections 2009 Projections Table 1. Overview of the World Economic Outlook Projections
(Annual percent change unless otherwise noted)
Difference from July 
 
 
  G/AG/GEN/90 
 Page 9 
 
 
  III. CONTRIBUTION BY THE WORLD FOOD PROGRAMME (WFP) 
30. Today, I have three key messages to share with you: 
(a) Hunger and malnutrition are on the march; 
(b) This has long-term and negative consequen ces for individuals and countries, as well 
as for prospects to reach the Millennium Development Goals  (MDGs); 
(c) An urgent and comprehensive response is re quired, for which partnerships are key.  
31. First, global food security has worsened as a result of high food prices, the global economic 
and financial crisis, and the inexorable climate cha nge effects.  The number of hungry people in the 
world is now exceeding one billion people, approximately 150 million more than two years ago.  
Even more striking is that two billion people suffere d from micronutrient deficiencies, affecting their 
health and long-term prospects before the current cr isis, with the number expected also to increase.  
Stunting among children under five in the LDCs is on average an astounding 45 per cent.  Hunger is the leading cause of child mortality (MDG4) and is  associated with most major risk factors for 
maternal morbidity and mortality (MDG5).  In ad dition, hungry people are less able to care for the 
environment in a sustainable way and may be forced  to exploit natural resources to feed themselves 
(MDG7).  
32. Economic indicators are bottoming out, but social indicators, such as unemployment, are still 
worsening – leaving poor and hungry people with even less hope.  
33. Despite a sharp decrease in prices on intern ational markets for b asic commodities in the 
second half of 2008, it is critical to understand that  domestic food prices in developing countries, and 
even more so for the poorest living in urban slums an d remote rural areas have not decreased.  In fact 
the prices remain much higher than before soaring food prices.  For example, in Afghanistan, wheat 
prices in June 2009 were 91 per cent higher than the av erage of the past five years, and wheat flour 53 
per cent more expensive in April 2009 than in Apr il 2007.  In Mozambique, maize price in June 2009 
was 146 per cent higher than the average of the past five  years.  In Uganda, in June 2009, the prices of 
cassava and bananas were up 189 per cent and 130 per cen t, respectively, over the five year average 
for June.  Finally, in Zambia, the price of maize in June 2009 increased by 11 per cent compared to 
the previous quarter and is 35-37 per cent than 2008 for the same period - and more than 90 per cent 
higher than the five-year average. 
34. In addition to the ongoing complex emergenc ies WFP handles in Afghanistan, Democratic 
Republic of the Congo, Somalia, and the Sudan, we witnessed shocks from extreme weather, for 
example in the Horn of Africa and the Philippines.   These shocks have a severe impact on the poorest 
and most vulnerable people.  
35. These factors, combined with diminished purchasing power, lower exports, reduced 
remittances (which can represent as  much as 20 per cent of GDP in some countries) and tightened 
access to credit, have led to the increase in the number of hungry people. 
36. Let us also not forget that world population is projected to rise to 9.7 billion in 2050, 
requiring an estimated 70 per cent increase in agricultural production. G/AG/GEN/90 
Page 10  
 
  A. T
HE WFP  RESPONSE AND ACTIONS  
37. WFP is doing its part.  In 2008, at the he ight of the food crisis, we received about 
US$5 billion in contributions, 86 per cent more than  in 2007.  WFP scaled up activities, reaching an 
additional 31 million people in 26 countries to a to tal of 102 million beneficiaries in 78 countries, 
through, for example, school meals, supplementa ry nutritious food, cash and vouchers and food-for-
work programmes.  In 2008, WFP allocated 72 per cen t of development and re lief resources to LDCs 
and 93 per cent to Low-Income Net Food-Deficit Countries.  
38. Unfortunately, recent numbers are disappointing.   Right now, WFP is facing a US$3.5 billion 
deficit compared to its programme of work for 2 009 of US$6.8 billion that aims to provide assistance 
to 108 million people in 74 countries.  
39. Longer-term trends have been inadequate as we ll.  Global food aid deliveries declined from 
15 million metric tonnes in 1999 to 6 million in 20 07, the lowest level since 1961, increasing only 
slightly in 2008 to 6.3 million tonnes.  Moreover,  international food and nutrition assistance amounts 
to only 3 per cent of official development assist ance (ODA) and has been declining since 1999.  
40. WFP's assistance has helped bring some stability  to sometimes volatile situations that saw 
food riots in 30 countries in the first half of 2008.  Last year, drawing on global best practices, WFP 
deployed innovative, targeted food safety-net programmes from our Strategic Plan toolbox – school feeding, mother-and-child health and nutrition, targ eted cash transfers and food vouchers, and local 
food purchases.  In Haiti, for example, where rising food prices precipitated a nutrition crisis, school feeding was extended over the summer holiday to  200,000 children, and take-home rations were 
supplied for the families of 1.1 million children.  In  response to high food prices, similar targeted 
programmes were deployed in Djibouti, Ghana, Gu inea, Liberia, Mauritania, Mozambique, Pakistan, 
Senegal, Tajikistan and Yemen.  WFP launc hed targeted cash and voucher programmes for 
populations who were unable to afford food:  the fi rst programme in Africa was launched in February 
2009 in Burkina Faso.  
41. In June 2008 the Executive Director approved a special account to allow WFP to set up its 
Forward Purchase Facility.  Food was purchased on the basis of aggregated projected needs for a 
region and drawn down when a project received a co nfirmed contribution.  The facility enabled WFP 
to make purchases earlier than would otherwise have been the case and to save by purchasing food when prices were favourable.  During 2008, WF P used the special account to purchase 182,000 
tonnes of cereals, mainly from South Africa.  
42. Throughout the crisis, WFP continued to pur chase food from developing countries, in 2008 
US$1.1 billion, thereby helping to break the cycle of hunger and continuing to stimulate local 
agricultural economies.  However, WFP's regional and local procurement was sometimes complicated 
in 2008 by formal or informal export restric tions on humanitarian assistance.  In mid-2008, 40 
countries had such restrictions. 
43. A new WFP initiative, the Purchase for Progr ess initiative, designed to ensure that WFP 
procurement benefits small-scale farmers, associati ons and cooperatives, with special efforts made to 
support women cooperatives (women produce and use 70 to 80 per cent of farm production in LDCs) 
was developed for 21 countries through the gener ous advocacy and support of  the Bill and Melinda 
Gates Foundation and the Howard G. Buffett Foun dation and donors such as Belgium and Canada. 
44. Vulnerability analysis and mapping, one of WFP's core strengths, was particularly important 
in the response to the food crisis and natural disaster s.  The number of these assessments increased by 
80 per cent.  Needs will always exceed our ability to respond, especially in the current economic 
climate, hence prioritizing our response is critical .  We have widened the net of assessment data,  G/AG/GEN/90 
 Page 11 
 
 
  factoring in economic impact, markets, food security issues, nutrition analyses and urban populations, 
in collaboration with Governments, FAO, NGOs , and more recently through an Memorandum of 
Understanding  (MOU) signed with World Meteorological Organization  (WMO). 
45. In early 2009, WFP developed an Economic Shock and Hunger Index (ESHI) to understand 
which countries are likely to become more vulnerable to food insecurity as a result of the global 
financial and economic crisis.  Mo re than half of the countries (22 out of 40) most likely to be 
affected were LDCs.  The ESHI analysis was fo llowed by five case studies – Armenia, Bangladesh, 
Ghana, Nicaragua and Zambia, of which Bangladesh and Zambia are LDCs.  They showed that the 
effects of the global financial crisis were clearly  transmitted to these countries and translating into a 
deterioration of household food security.  
46. Four-fifths of multilateral contributions, US$526 million, were used to support relief 
operations.  Multilateral funds were  used in 78 countries.  The number of donors contributing to WFP 
continued to increase: there were 98 donors in 2008, of which 66 were not part  of the Organisation for 
Economic Co-operation and Developm ent (OECD).  As governments assume more ownership of food 
assistance programmes, WFP is becoming a major partner in supporting them in improving the 
effectiveness and efficiency of their programmes. 
47. Secondly, the impact of hunger is large and l ong-term, affecting not only the achievement of 
MDG1 (to eradicate extreme poverty and hunger), but all other MDGs as well. The combined effects 
of the crises mean that people eat less and eat l ess well.  Vulnerable populations switch to cheaper 
foods that fill their stomachs and ease their hunger,  but which is less nutritious.  People, especially 
young children, who fail to consume the correct nut rients and vitamins, are more prone to illness, 
learn less, have lower productivity, and thus less prospects for their futures. WFP has found in its 
assessments significant evidence of households re ducing the quality and qu antity of food intake 
during the last two years.  Even a few months of inadequate nutrition may have long-term consequences, not only for the young individual, bu t also for the development and growth prospects 
of the country as a whole.  Recent research by  WFP and the Economic Commission for Latin America 
and the Caribbean estimated that the economic costs of child under nutrition for seven regional 
countries amounted to a staggering US$6.6 billion for a single year (2004).  This was equal to an average of 6 per cent of GDP.  In two countries, the cost of hunger reached as much as 11 per cent of GDP.  
48. As the prevalence of hunger is increasing in the developing world, poor people normally 
reliant on markets for food are increasingly unable to afford the higher prices; as a result they reduce 
their purchases, cut the size and number of meals, shift to cheaper food and reduce the variety 
consumed: meals become simpler and less nutritious .  Groups with special nutritional needs such as 
children under two, pregnant and lactating wome n and people living with HIV (PLHIV) and with 
tuberculosis are most at risk from the nutritional impact of high food prices.  Hunger is not only a 
consequence of poverty; it also leads to poverty (M DG1).  The multiple crisis have eroded the coping 
capacity of new groups of households, who have re verted to negative coping strategies such as 
removing children from school, especially girls (M DGs 2 and 3), reducing attendance at health 
centres (especially PLHIV), increasing migration for work, increasing use of child labour, selling 
assets and increasing indebtedness.  These were repor ted in Bangladesh, Lesotho, Liberia, Nepal, 
Niger, Pakistan, Tajikistan and Yemen.  Hunger increases high risk behaviours as such as criminality, 
prostitution, including child prostituti on, and hence abuse and the risk of HIV transmission, as well as 
compromises anti-retroviral therapy. 
49. Third, an urgent and comprehensive response is  required through inv estments in agricultural 
production and productivity , strengthening of social protection and providing food and nutrition 
assistance to vulnerable groups.  G/AG/GEN/90 
Page 12  
 
  50. WFP is pleased that the most recent Worl d Food Summit on Food Security discussed and 
strived for a comprehensive twin-track appr oach to food security that consists of:  
(a) direct action to immediately tackle hunge r for the most vulnerable through access to 
safe, adequate, nutritious and affordable food by strengthening social protection 
measures and programmes, enabling communities and households to access economic 
and social benefits and contribute to social  stability.  These include safety nets that 
protect food consumption, such as school feeding, cash/vouchers and mother and child nutrition, which ensure affordable  and nutritious food for key population 
groups.  WFP and its partners, such as UNICEF and national partners, will support 
countries to build and operate those safety nets. 
(b) medium- and long-term sustainable agricultural, food security, nutrition and rural 
development programmes, including crea tion of employment, rehabilitation and 
creation of key infrastructures (storage, trans port, irrigation, etc.) and more equitable 
income generation and distribution to ove rcome poverty and increase access to food,  
to eliminate the root causes of hunger a nd poverty, and hence reducing the critical 
need for high levels of food assistance. 
51. WFP also continues to support the provision of, and the unhindered access to, safe emergency 
food and humanitarian assistance and support for the most vulnerable populations, as well as the removal of food export restrictions or extra-or dinary taxes for food purchased for non-commercial 
humanitarian purposes.  
52. To conclude : 
(a) Very difficult situation, every day, for more than one billion inhabitants.  
(b) Technical, social and economic solutions exist for food security. WFP, with its 
national and international partners, has the tools to combat malnutrition and issues of access.  With partners such as FAO and IFAD,  we have the tools to help governments 
augment agricultural production and productiv ity in a sustainable manner.  Let us 
team up. 
(c) A strong political and financial commitment will be necessary. Let us keep things in 
perspective:  less than 0.01 per cent of the sums allocated to the fiscal stimulus and 
financial rescue packages could entirely finance the most vulnerable assisted by WFP. 
(d) Good governance and capacity building are critical.  WFP will remain engaged to 
support governments' capacity to manage th e food crisis.  Countries must meet their 
commitments regarding ODA and/or Co mprehensive African Agriculture 
Development Programme (CAADP). 
(e) Investments in nutritional assistance programmes are among the most cost effective 
development interventions.    
(f) Let us remain focused on the 2015 MDG Goal 1, still achievable if the right political, 
economic and social policies are put in place.  G/AG/GEN/90 
 Page 13 
 
 
  IV. CONTRIBUTION BY THE WORLD BANK 
53. Thank you for the opportunity to comment on the follow-up to the Marrakesh Ministerial 
Decision on Measures Concerning the Possible Negativ e Effects of the Reform Programme on Least-
Developed and Net Food-Importing Countries (NFIDCs). 
54. I just briefly wish to outline how the Worl d Bank has been assisting low-income and net-
importing developing countries through its Globa l Food Crisis Response Programme (GFRP) and 
offer some thoughts on addressing the long-term  challenges of food security through better 
technology, trade, and aid. 
A. ADDRESSING FOOD SECURITY IN THE CONTEXT OF THE FOOD CRISIS  
55. The spike in global food prices in 2008 led to  significantly higher food prices across the 
developing world.  International food prices have since declined, alleviating fears about supplies of 
food on global markets, and external grant funds have started to become available. 
56. Many of the export bans and high  export taxes that were put in place in response to the 2008 
food price spike have either been eliminated or s ubstantially reduced.  As a result, overall concerns 
about the aggregate adequacy of global  food supplies seem to have subsided. 
57. Yet, the food crisis is not over in poor countri es.  While commodity prices have fallen, they 
remain volatile; and local food prices remain substa ntially higher in many countries compared with 
earlier years. 
58. The recent food price spike has not only rai sed poverty across a range of countries, but it 
could also have long-term negative effects, even in  countries where it was temporary.  There are clear 
links between higher prices, lower caloric inta ke, lower quality diet, and an increase in child 
malnutrition.  There is also evidence that when hou seholds are faced with la rge negative shocks they 
may sell their productive assets such as seeds and livest ock, thereby jeopardizing their future earnings 
prospects. 
59. The food, fuel and financial crisis combined ha ve highlighted the need to ensure that quick 
and effective assistance can be provided to Lo w-Income Countries following shocks such as the 
recent spike in food prices. 
60. In addition to making available emergency aid, however, it is  important to address the long-
term challenges of food security.  This will require  raising productivity and incomes of the world's 
poor farmers through improved technology, investment, and trade access. 
B. EMERGENCY AID:  PROVIDING RAPID CRISIS RESPONSE  
61. Shortly before the food crisis reached its p eak in June 2008, the World Bank launched its 
Global Food Crisis Response Programme (GFRP) to  mitigate the harm of soaring costs and help 
countries adapt to higher and more volatile food prices.  The GFRP was designed as a fast-track facility with a total initial ceiling of US$1.2 billion, which was increased in April 2009 to 
US$2 billion to enable continued rapid response to the food crisis if demand for assistance were to 
increase. 
62. As of 8 October 2009, total Board-appr oved GFRP projects amounted to around 
US$1.2 billion for operations in 35 co untries.  69 per cent of funds have been disbursed.  Of these, 60 
per cent were allocated to Sub-Saharan Africa, 18 per cent to East Asia and the Pacific, 15 per cent to G/AG/GEN/90 
Page 14  
 
  South Asia, and 2-3 per cent each to Europe and Ce ntral Asia, Latin America and the Caribbean, and 
the Middle East and North Africa. 
63. Impacts on the ground have been substantial.  Results to date of GFRP operations are 
encouraging and there is growing evidence of the impact that these operations are having on the 
ground. 
(a) Supply response:  Support for short and medium term food supply response measures 
are estimated to have reached 5.8 milli on farm households to date, or roughly 
28 million people.  These interventions are expected to directly benefit at least 8.7 million farm households or roughly 43 million people when fully implemented. 
(b) Social protection and nutrition:  Support for social protection and nutrition 
programmes is estimated to already have im pacted 1.5 million people and is expected 
to eventually reach 7.5 million people. 
(c) Price stabilization:  Reduced food taxes, including lower import tariffs, have 
stabilized and lowered food prices in a number of countries, with notable price reductions for staples in Djibouti, Madagascar, Burundi, Sierra Leone, Guinea, 
Bangladesh and the Philippines. 
64. Ongoing GFRP projects continue to be implemente d in the most affected areas.  The focus of 
these programmes has been on:  improving short-term  smallholder supply response; social protection 
and nutrition intervention; price stabilization, including support to reduce import duties and food taxes; and additional fiscal space keyed to st rengthen supply response and social protection 
mechanisms. 
C. T
ECHNOLOGY AND INVESTMENT :  INCREASING AGRICULTURE LENDING  
65. As low-income countries continue to suffer the effects of the economic crisis, many will need 
additional assistance to move beyond the global rece ssion and channel investments toward increasing 
long-term productivity.   
66. This is why the World Bank has called on G-20 l eaders to endorse the pledge made at the G-8 
summit in L’Acquila, Italy, to commit US$20 billion of funding to the development of agriculture, 
with firm details on how country commitments will be met, delive ry will be operationalized with 
national ownership, and results and effectiveness will be assessed. 
67. For its part, the World Bank Group projects it will almost double its lending for agriculture 
from an average of US$4.1 billion annually in FY2006-08 to between US$6.2 and US$8.3 billion 
annually in the next three year period (FY2010-2012). 
68. Key activities are captured in the Bank's Action Plan on Agriculture for Development, which 
emphasizes the need to increase agricultural producti vity, particularly of smallholder farmers; scale up 
good practices in food security policies and investme nts; and highlight the role of agriculture in 
providing environmental services. 
D. TRADE :  IMPROVING MARKET ACCESS  
69. Access to global markets also remains critical to long-term food security.  Therefore, the 
World Bank has advocated that governments resist the temptation to impose import restrictions and 
continue to make progress in the Doha Developm ent Round to liberalize and deepen agriculture 
markets.  G/AG/GEN/90 
 Page 15 
 
 
  70. Heavy subsidies in rich countries, coupled with implicit taxation of agriculture in low-income 
countries, have as a whole depressed production through out the developing world.  In recent years, 
developing countries have improved their policies, but high-income countries continue to subsidize 
their agriculture – a situation which a successful conclusion of the Doha Development Round would 
partially remedy. 
71. We also recognize that much of Aid for Trad e will help promote agricultural exports and 
therefore improve the import-capacity of developing  countries.  As one of the largest donors of Aid 
for Trade – with lending for trade-related activiti es in low-income countries totaling US$4 billion – 
the World Bank stands ready to support countries in need of trade finance and technical expertise. 
72. Based on our projections, the challenges of food security will stay with us for some time to 
come.  While making emergency assistance available to respond to sudden increases in food prices, 
implementing long-term strategies to boost food production and improve market access are essential to stimulating pro-poor growth and reducing househol d vulnerability to shocks.  We look forward to 
working with all of our pa rtners in this endeavour. 
Selected Readings
 
 
Chauffour, J.-P. 2008.  Global Food Price Crisis:  Trade Policy Origins and Options .  Trade Note 34.   
Washington, DC:  World Bank Group.  Gamberoni, E., and R. Newfarmer. 2009.  Aid for Trade: Matching Supply and Demand , Working 
Paper.  Washington, DC:  World Bank Group. 
 
Wodon, Q., and H. Zaman.  2009.  Higher Food Prices in Sub-Saharan Africa: Poverty Impact and 
Policy Responses , Washington, DC:  World Bank Group. 
 World Bank. 2007. World Development Report 2008: Agriculture for Development , Washington, DC:  
World Bank Group. 
 World Bank. 2008.  Rising Food and Fuel Prices:Addressing the Risks to Future Generations , 
Washington, DC:  World Bank Group.  World Bank. 2009.  Implementing Agriculture for Developmen t – World Bank Group Agriculture 
Action Plan, FY2010-2012 ,  Washington, DC:  World Bank Group. 
 World Bank. 2009. Global Food Response Programme (GFRP) – Progress Report , Washington, DC:  
World Bank Group.    
World Bank. 2009. Unlocking Global Opportunities – The Aid for Trade Programme of the World 
Bank Group ,  Washington, DC:  World Bank Group. 
 
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