World Bank gives US$10 million to help Haiti food crisis

WASHINGTON, United States, May 30, 2008 – The World Bank Board of Directors has approved a US$10 million grant to help the Haiti government respond to the food price crisis and help it continue with the implementation of its poverty reduction strategy.

The grant is part of the Fast-Track Facility for Food Crisis, launched by the World Bank Thursday, which would support global efforts to overcome the global food crisis with a new US$1.2 billion rapid financing facility, including US$200 million in grants targeted at the vulnerable in the world’s poorest countries.

“This grant will support the government’s programme aimed at maintaining gains in macroeconomic stability,” said Yvonne Tsikata, World Bank Country Director for the Caribbean.

“The World Bank grant complements the efforts of other international development partners, with whom we are coordinating, while supporting the government’s efforts to put in place a better safety net system that improves Haiti’s resilience and response to shocks.”

The aim of the grant is to safeguard the government’s ongoing reform and poverty reduction programme, which the World Bank is supporting through the Economic Governance Reform Operation series, by helping to partially fill the financing gap created by the food price crisis.

The food crisis has put pressure on the government to increase its expenditures on social assistance – directly through school feeding programmes, mother-child programmes and labour intensive public works, as well as indirectly through subsidies on food commodities, such as rice.

In Haiti, the prices of rice, corn, beans, cooking oil and other foodstuff have increased significantly since late 2007. Food inflation increased from 6.4 percent in July 2007 to 20.8
percent in April 2008, while overall inflation rose to 16.5 percent in April 2008. This jump was as a result of higher prices for food, fuel, and public transportation.

In addition to global factors, food prices have also risen in Haiti because of hurricanes and flooding in the latter part of 2007, which considerably damaged the agricultural sector.

In addition to the US$10 million grant, the World Bank will also contribute to the government’s efforts to address the crisis by extending the school feeding programme underway through the Education for All Project. The programme will be adapted to cover 15,000 children over the summer break and to expand coverage to approximately 45,000 in the new school year starting September 2008.

The Bank will also provide technical assistance to the
government to develop medium-term solution towards improved agricultural productivity, risk management, and a well functioning social safety net.

Since 2005, the World Bank has provided approximately US$220 million in grants to Haiti.