The Asian Development Bank on Saturday promised financial help for nations fighting the global food price crisis and attacked plans for a rice cartel. Loans will help countries subsidize the price of food staples for the poor, ADB president Haruhiko Kuroda said on the first day of the banks four-day annual general meeting in Madrid. “The amount depends on the requests from the affected countries,” he told a news conference. “Possible total lending could be sizable but not enormous.” The multinational lender will also provide $2 billion (1.3 billion euros) in loans in 2008 and 2009 to finance agriculture infrastructure projects such as rural roads and irrigation systems to help boost farm output. “Asia has a huge population with limited land for farming and a limited water supply so agriculture yields must be increased over time,” Kuroda said. Prices for the benchmark Thai variety of rice, a food stable across much of Asia, are at about 1,000 dollars a ton, up threefold from the last ADB annual meeting in Japan one year ago. The jump in food prices is fuelling inflation globally and the ADB predicted it would hit 5.1 percent across Asia this year, its highest level since the Asian financial crisis a decade ago and is raising concerns of popular unrest. Asian nations will see their fiscal deficits worsen because of the need to provide subsidies to offset rising food and energy costs for the poor, the ADB said in a report issued at the gathering. The problem will be more severe in countries that already have a large deficit like Bangladesh, India, Pakistan and Sri Lanka, it said. Global food prices have nearly doubled in three years, sparking riots last month in Egypt and Haiti, protests in other countries and restrictions on food exports in Brazil, Vietnam, India and Egypt. Rising use of biofuels, trade restrictions, increased demand from Asia to serve changing diets, poor harvests and increasing transport costs have all been blamed for the price rise. World Bank President Robert Zoellick has estimated that high food prices affect some two billion people across the world and threaten to push 100 million poor people further into poverty. Karuda said the jump in prices for staples like rice was leading people to hoard food items, causing a vicious circle that leads to even higher prices. “There is a kind of panic buying,” he said. Some major Asian rice exporters, such as India and Vietnam, have imposed restrictions on exports in a bid to secure domestic supplies which “affects prices elsewhere”, he added. Kuroda criticized plans by Thailand, Myanmar, Laos, Vietnam and Cambodia to set up a rice cartel. “Agricultural markets should be market oriented. It would not be good for exporters and it certainly would not be good for importers,” the ADB president said. Thailand's Prime Minister Samak Sundaravej said Wednesday the five countries had agreed in principle to form a rice price-fixing group which would be called the Organization of Rice Exporting Countries (OREC). On the eve of the meeting, donors pledged $11.3 billion to the bank's Asian Development Fund, its key poverty alleviation mechanism, for the 2009-2012, a 60 percent increase over the last four-year period. Last year entire ADB approved $10.1 billion in loans. Pakistan was the largest recipient of ADB aid last year followed by Vietnam, India, China and Indonesia. Established in 1966, the ADB is owned by its 67 member countries – 48 from the Asia-Pacific region, and 19 from elsewhere around the world. Some 3,000 people - business and government leaders, academics and representatives of non-governmental organizations - are taking part in the ADB's annual meeting. In Tunis, the African Development Bank (AfDB), the only multilateral development body specifically devoted to Africa, will add $1 billion to its portfolio of agricultural loans to help address the food crisis in African countries, the bank said in a statement on Saturday. Bank President Donald Kaberuka said it would also restructure some of its agriculture lending to provide a rapid disbursement facility to the tune of $250 million. The addition of the $1 billion in funding would raise the bank's portfolio of agricultural loans to $4.8 billion, the statement said. The statement gave no indication about the source of the additional funding. Kaberuka urged cereals exporting countries not to suspend their exports “because the practice will compromise the existence of about 150 million people in a dozen African states, especially the population of fragile countries, the sick and elderly.” The AfDB, whose shareholders include Africa's 53 nations and 24 non-African donor countries, lends commercially to Africa's richest nations and at concessionary rates to poor ones from its Development Fund, financed largely by Western donors.
