In a speech in Washington on April 2 and posted on the World Bank website, President Robert Zoellick sounded the alarm over skyrocketing food prices, saying the time had come for coordinated international action to avert a potential crisis.
"Food policy needs to gain the attention of the highest political levels because no one country or group can meet these interconnected challenges," Zoellick said. "We should start by helping those whose needs are absolutely most immediate. The UN's World Food Program says that they require at least $500 million of additional food supplies to meet emergency calls. The United States, the European Union, Japan, and other [Organization for Economic Cooperation and Development] countries must act now to fill that gap -- or many people will suffer and starve."
Zoellick called for a "New Deal" to tackle the problem -- a term associated with U.S. President Franklin Roosevelt's policies amid the Great Depression, including a series of public works, government aid, and reform programs. Those coordinated actions were aimed at helping people survive economic hardship and the country recover.
Zoellick's international "New Deal" would combine food aid with a global trade agreement to lower tariffs and help farmers in developing countries gain access to markets.
Zoellick said the time was "now or never" to break the impasse in global trade talks. He argued that a fairer and more open trading system would boost food production and stabilize markets. Citing dire statistics, he said there was no time to lose.
"As financial markets have tumbled, food prices have soared," Zoellick said. "Since 2005, the price of staples has jumped 80 percent. Last month, the real price of rice hit a 19-year high. The real price of wheat rose to a 28-year high and almost twice the average price for the last 25 years. The good news for some farmers adds a crushing load to the most vulnerable."
Zoellick also proposed a series of parallel initiatives to deal with issues from climate change to women's rights that affect economic growth.
"The World Bank group estimates that 33 countries around the world face potential unrest because of the acute hike in food and energy prices. For these countries, where food comprises from half to three-quarters of consumption, there is no margin for survival," Zoellick said. "The realities of demography, changing diets, energy prices and biofuels, and climate changes, suggest that high and volatile food prices will be with us for years to come. We need a 'New Deal' for global food policy. This new deal should focus not only on hunger and malnutrition, access to food and its supply, but also on the interconnections with energy, yields, climate change, investment, the marginalization of women and others, and economic resiliency and growth."
The World Bank chief urged rich and emerging economies that currently hold an estimated $3 trillion in reserves in so-called sovereign wealth funds to invest at least 1 percent of that money in Africa, into agricultural initiatives.
The World Bank has announced it will nearly double its agricultural assistance to $800 million in Africa.