Contacts: In Kathmandu: Rajib Upadhya (9771) 4226792/3 rupadhya@worldbank.org In Washington: Erik Nora (202) 458 4735 enora@worldbank.org WASHINGTON, September 30, 2008 – More help is on the way for millions of Nepalis living in food insecure areas where problems have been compounded by rising food prices, high fuel prices, drought, and more recently, floods. The World Bank today approved a US$ 36 million assistance package to support Nepal’s efforts at reducing hardship and speeding up recovery. According to the World Food Programme (WFP), at least 33 districts in Nepal are now chronically food insecure, with more than 6 million people vulnerable. Of them 2.5 million are in immediate need of food assistance. Poor road access in Mid Western and Western Nepal has led to high and increasing transportation costs, aggravated by serious fuel shortages. This, in turn, has pushed grain prices up even further. Severe drought has aggravated the already precarious situation for many communities where crop production has decreased by as much as 70% in some areas. Nepal also faces a series of flood emergencies. Two districts in Eastern Nepal have been inundated by severe floods as a result of a catastrophic break in the embankments of the Koshi river. About 50,000 people are in immediate need of food assistance. More recently, floods and landslides have also wreaked havoc in seven districts in Far Western and Mid Western Nepal. An assessment is currently underway of the emergency needs there. The Nepal Food Price Crisis Response Program was developed to help Nepal mitigate the impact of rising global food prices by improving access to food and strengthening agricultural production, particularly for food insecure districts and smallholders. Globally, food grain prices have more than doubled since January 2006 and over 60 percent of this increase has occurred since January 2008 alone. The impact of high world food prices is compounded by increases in fuel prices, which adds to distribution costs and is resulting in high food price inflation in many countries. “The program will support the Government of Nepal’s national strategy to maintain and enhance food security,” said Susan Goldmark, World Bank Country Director for Nepal. “It will support immediate social safety net measures to ensure food for vulnerable households in food insecure districts as well as longer term measures to raise agricultural yields and consequently the production of staples,” she said. In the short run, the program will partner with the World Food Programme (WFP) to provide immediate support to vulnerable households in 33 districts. The program will provide 50 to 70 days of employment a year in public works to about 480,000 individuals. Wages will be paid in kind (micro-nutrient supplemented food) in regions where food is not available in the market. But cash will be paid where markets function well. WFP and the Ministry of Local Development’s Rural Community Infrastructure Works program have established a strong track record of providing immediate food assistance to vulnerable and marginalized communities under their food/cash-for-work programs. Additional components of the program will support fertilizer use in remote districts; small irrigation schemes; local production of improved seeds; and soil fertility management. The price of fertilizer has increased by 30% over the last six months and fuel shortages and rising fuel prices are placing additional constraints. As a result of government transport subsidies, farmers in remote districts pay the same price for fertilizer as farmers in other districts where transport costs are not excessive. But the program has seen a 40% decrease in supply over the last 12 months due to increased transportation costs, thereby making local production even more unlikely to recover in the short run. The Nepal Food Price Crisis Response Program will help the Government temporarily increase its budget for transport subsidy and will ensure that small farmers receive the fertilizer, including organic fertilizer. Support under the program for small scale irrigation will be targeted to areas not covered by ongoing irrigation projects and will address the needs of smallholders in remote food insecure areas. Meanwhile, significantly higher yields can be expected from use of improved variety of seeds and a general improvement in seed replacement levels. The program will promote alternative approaches to raising soil fertility alongside the seed program since the combined effect of increased replacement levels of seeds, access to irrigation and improved soil fertility can be significant. “We expect the program to result in increased self-sufficiency at the local level due to improved irrigation and seed availability with the potential for farmers to eventually increase production and benefit from higher food prices,” said Gayatri Acharya, Senior Economist at the World Bank. The assistance package consists of US$ 31 million in grants and credits from the International Development Association (IDA), the World Bank’s concessionary lending arm, and US$ 5 million in grants from the Food Price Crisis Response Trust Fund. For more information on the Bank’s work in Nepal, please visit http://www.worldbank.org.np For project information, please visit http://www.worldbank.org.np/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=223555&menuPK=286969&Projectid=P113002 |
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