International food crisis

For global mobilization to fight the food crisis

The poorest countries, particularly those of Africa, are today facing the effects of the hike in the price of commodities and foodstuffs. The figures speak for themselves: the poor spend on average three quarters of their income on their food. When the price of rice goes up by 75% as it has in the last two months, or that of wheat rises 120% in a year, the consequences are tragic. There are risks of famine in many low-income countries, especially in sub-Saharan Africa.

Our collective responsibility is to prevent the most vulnerable populations suffering the full impact of these massive increases. There is a real risk of seeing the progress achieved over the past few years in the battle against poverty undermined. More generally, the States’ economic and financial stability is at stake. France is fully mobilized to confront this challenge.

We tackled this issue with our 15 African colleagues, Ministers of the Franc Area countries at the beginning of April. We vigorously conveyed this message at the IMF and World Bank ministerial meetings on 12 and 13 April. Moreover, we asked the Bretton Woods institutions rapidly to mobilize all the tools at their disposal, including their own financial resources.

Since then, President Sarkozy has announced a doubling of France’s food aid, which will rise to nearly 100 million dollars (63 million euros) as of 2008. She has responded to the World Food Programme’s emergency appeal with 500 million dollars (315 million euros) to help pay for the increased cost of its supplies and provide a solution to the poor countries’ needs. The government has just created a food security intervention group to mobilize and coordinate our resources more efficiently and faster. France is calling for a genuine global partnership for food and agriculture, as President Sarkozy has said.

The Bretton Woods institutions must also be capable of contributing to this effort and this includes being able to respond fast.

At the Washington meetings, France argued for the IMF and World Bank to work together and increase the flexibility of their intervention instruments. The IMF has pledged to change the mode of operation of the Exogenous Shocks Facility created in 2005. The World Bank President has also recognized that the financial tools available to him for intervening in the poorest countries, i.e. nearly 25 billion dollars (15.7 billion euros), of which France provides 1.8%, must be more flexible and easier to mobilize. The real long-term answer to the current crisis lies in developing food crops, agricultural productivity and rural infrastructures (irrigation, transport, storage, etc.). This is an area in which the World Bank can make a major contribution, alongside the other United Nations institutions. In this respect, France, who has long argued along these lines, fully supports the Bank’s decision to put agriculture back at the heart of its strategy by doubling its loans in this sector in sub-Saharan Africa to 800 million dollars (503 million euros) a year. In addition, in our view the international financial institutions will not be able to meet these challenges unless they reform by giving a bigger voice to the developing countries and especially the poorest among them. On this depends not only their legitimacy but also their effectiveness.

Here the IMF has made headway. Last week’s meetings gave Europe and France the opportunity to express their support for the IMF reform proposed by its Managing Director, M. Strauss-Kahn. This reform, for which France and the United Kingdom have made a considerable effort by accepting a 15% reduction in their voting rights, changes the balance of power in decision-making by giving greater weight to the major emerging countries and permanently improving the poor countries’ representation.

The World Bank must reform in its turn giving priority to increasing the poor countries’ representation. We said this to its President, asking him to achieve a consensus by spring 2009./.