Thursday, 24 July 2008

EU special facility for rapid response to soaring food prices

The European commission proposed the establishment of a special "facility for rapid response to soaring food prices in developing countries", operating throughout the rest of 2008 and 2009.
The new money would come on top of existing development funds, coming from unused money left over from the European Union's agricultural budget.

The aim is not to provide money so that poor people can afford to buy what they need to eat, but instead to give credit and other monies to farmers to help them produce more food and in so doing, bring prices down.

Countries most in need would be able to access the fund - to be administered via international and regional organisations, including the UN Food and Agriculture Organisation, the World Bank and Unicef - which would allow for the purchase of farming inputs such as fertilisers and seeds, although this could be done via credit mechanisms, rather than grants, as well as "safety net measures" for boost productive farming capacity.