World Bank's Response to Rising Food Insecurity

The agricultural, cereal, and export price indices closed 1%, 4%, and 1% higher, respectively, than two weeks ago. Maize, wheat, and rice prices all increased in the last two weeks, with prices closing 2%, 7%, and 4% higher, respectively. On a year-on-year basis, maize and wheat prices are 22% and 41% lower, respectively, while rice prices are 14% higher. Maize prices are 15% higher than in January 2021, while wheat and rice prices are at the same level. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)

The May 2023 edition of the AMIS Market Monitor highlights that, after three consecutive years of La Niña, which brought bumper crops for some countries and crop failures for others, it is likely that the world is heading into an El Niño pattern, with a 62% chance of development during May to July, a 75% chance between June and August, and an 80% chance during the rest of the year. If El Niño materializes, depending on its strength, average to above-average rain could occur in Central Asia, southern North America, southeast South America, southern Europe, eastern and southern East Africa, and southern and eastern China. Drier-than-average conditions could occur in Central America, the Caribbean, parts of western and northern East Africa, northern South America, southern Africa, India, Northern China, and Australia. In general, El Niño will affect agricultural production on more than 25% of global cropland, slightly increasing global mean soybean yields and slightly decreasing global mean maize, rice, and wheat yields.

The 2023 edition of the Global Report on Food Crises, an annual report from the Global Network Against Food Crises, provides regional summaries of food crises that occurred in 2022. Globally, the number of people in GRFC countries and territories facing acute food insecurity increased to 257.8 million in 2022 from 192.8 million in 2021 and has more than doubled since 2016, albeit with data coming from a larger group of countries. The percentage of the analyzed population in IPC/CH Phase 3 or above or equivalent has also increased each year, doubling from 11.3% in 2016 to 22.7% in 2022. The causes of this increase are complex and interlinked, with conflicts, national and global economic shocks, and weather extremes acting as interrelated, mutually reinforcing drivers of acute food insecurity and hunger. Of these primary drivers, conflict and insecurity remain the most important, with the GRFC indicating that, by the end of 2022, there were an estimated 53.2 million internally displaced people, mainly displaced by conflict, in 25 food-crisis countries.

The World Food Programme (WFP) reported that up to 19 million Sudanese (41% of the population) were struggling to find one meal per day, up from 15 million last year. It is likely that the violence in Sudan will have large impacts on regional food insecurity, with roughly 100,000 people having fled to neighboring countries in recent weeks. This could rise to as many as 800,000 as the conflict continues. Before the conflict, food insecurity was projected to worsen in Sudan, with most of the population in IPC Phase 4 (Emergency) concentrated near the borders with neighboring countries.

Following Russia’s invasion of Ukraine, trade-related policies imposed by countries have surged. The global food crisis has been partially made worse by the growing number of food trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices. As of March 13, 2023, 21 countries have implemented 27 food export bans, and 10 have implemented 14 export-limiting measures.

World Bank Action

As part of a comprehensive, global response to the food security crisis, in April 2022 the World Bank announced that it is making up to $30 billion available over a period of 15 months, including $12 billion in new projects. The financing is to scale up short- and long-term responses along four themes to boost food and nutrition security, reduce risks, and strengthen food systems: (i) support producers and consumers, (ii) facilitate increased trade in food and trade inputs, (iii) support vulnerable households, and (iv) invest in sustainable food and nutrition security.

The Bank has achieved its target of making $30 billion commitment for food and nutrition security response. Between April to December 2022, the Bank’s food and nutrition security commitments in new lending have passed the $12 billion mark – with almost half for Africa, which is one of the hardest hit regions by the food crisis. Some examples include:

1. The $766 million West Africa Food Systems Resilience Program is working to increase preparedness against food insecurity and improve the resilience of food systems in West Africa. The program is increasing digital advisory services for agriculture and food crisis prevention and management, boosting adaption capacity of agriculture system actors, and investing in regional food market integration and trade to increase food security. An additional $345 million is currently under preparation for Senegal, Sierra Leone and Togo.
2. A $150 million grant for the second phase of the Yemen Food Security Response and Resilience Project, which will help address food insecurity, strengthen resilience and protect livelihoods.
3. $50 million grant of additional financing for Tajikistan to mitigate food and nutrition insecurity impacts on households and enhance the overall resilience of the agriculture sector.
4. A $125 million project in Jordan aims to strengthen the development the agriculture sector by enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.
5. A $300 million project in Bolivia that will contribute to increasing food security, market access and the adoption of climate-smart agricultural practices.
6. A $315 million loan to support Chad, Ghana and Sierra Leone to increase their preparedness against food insecurity and to improve the resilience of their food systems.
7. A $500 million Emergency Food Security and Resilience Support Project to bolster Egypt's efforts to ensure that poor and vulnerable households have uninterrupted access to bread, help strengthen the country's resilience to food crises, and support to reforms that will help improve nutritional outcomes.
8. A $130 million loan for Tunisia, seeking to lessen the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy production and seeds for smallholder farmers for the upcoming planting season.
9. The $2.3 billion Food Systems Resilience Program for Eastern and Southern Africa, helps countries in Eastern and Southern Africa increase the resilience of the region’s food systems and ability to tackle growing food insecurity. The program will enhance inter-agency food crisis response also boost medium- and long-term efforts for resilient agricultural production, sustainable development of natural resources, expanded market access, and a greater focus on food systems resilience in policymaking.

In May, the World Bank Group and the G7 Presidency co-convened the Global Alliance for Food Security, which aims to catalyze an immediate and concerted response to the unfolding global hunger crisis. The Alliance has developed the publicly accessible Global Food and Nutrition Security Dashboard, which provides timely information for global and local decision-makers to help improve coordination of the policy and financial response to the food crisis.

The heads of the FAO, IMF, World Bank Group, WFP, and WTO released a Third Joint Statement on February 8, 2023. The statement calls to prevent a worsening of the food and nutrition security crisis, further urgent actions are required to (i) rescue hunger hotspots, (ii) facilitate trade, improve the functioning of markets, and enhance the role of the private sector, and (iii) reform and repurpose harmful subsidies with careful targeting and efficiency. Countries should balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.