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Last Updated: Tuesday, 11 March 2008, 17:05 GMT
World Bank to double Africa aid
Loaves of bread at a New York bakery

The World Bank has promised to increase its aid package to Africa to help develop agricultural production there and combat rising food prices.

It will contribute $700m (348.6m) in the 12 months from June 2008, up from $400m in the the previous year period, and may boost its loans further.

The move comes amid climbing wheat, corn and grain costs, which pushed global food prices up by 40% last year.

There are concerns that food aid may be rationed if the high prices continue.

The World Bank move comes after United Nations Secretary General Ban Ki-moon said one way to tackle acute food shortages would be to help Africa develop its farming capabilities and improve efficiency.

Unaffordable food

Africa is not the only region to be suffering from the high prices.

The United Arab Emirates is considering a plan to introduce subsidies for basic food items, including bread, sugar, rice, tea and butter, to offset the affects of steep inflation, the head of a consumer group in the region, Jamal al-Saeedi said.

But the benefits would only be available for nationals of the seven Gulf states which make up the UAE, and who comprise about a fifth of the people living there.

Wheat
Global wheat prices have almost doubled in the past year

Basic food costs, such as bread and maize, are becoming increasingly unaffordable in the poorest countries as a result of the spiralling cost of commodities.

Poor harvests and an increasing amount of land used to farm crops used to produce ethanol are some of the factors pushing up prices.

In addition, demand has surged as rising wealth in China has led to consumers eating more meat, which means more grain is needed to feed livestock.

On Tuesday, wheat price surged again on all three key US exchanges after the US Department of Agriculture reported wheat stocks of 242 million bushels, 11% lower than it forecast last month.

Chicago Board of Trade (CBOT) wheat for delivery in May gained 53 cents to $12.16 a bushel.

It reached a record high on 27 February at $13.5, more than double what it was a year ago.



SEE ALSO
UN warns on food price inflation
06 Mar 08 |  Special Reports
UN warns over food aid rationing
25 Feb 08 |  Special Reports
Cereal prices hit poor countries
14 Feb 08 |  Business
UN warns on soaring food prices
17 Dec 07 |  Special Reports
Counting the cost of wheat price hike
21 Sep 07 |  Special Reports
Q&A: Rising world food prices
04 Mar 08 |  Business

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