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U.S. Seeks Supporters for $1 Billion Global Food Security Fund, Lago Says

The U.S. wants to raise $1 billion for a global food security fund by appealing to countries that will meet in Washington this weekend to discuss world financial issues, an Obama administration official said today.

Marisa Lago, the Treasury Department’s assistant secretary for international affairs, said the U.S. will ask for money to help farmers in the world’s poorest countries at International Monetary Fund and World Bank meetings beginning Oct. 8. The same pitch will be made to Group of 20 finance ministers, central bankers and world leaders when they meet over the next few weeks, she said.

At stake is the Global Agriculture and Food Security Program, an international effort to deliver rapid and dependable financing for farmers. Supported by the Bill & Melinda Gates Foundation, the fund was created following a G-20 meeting in Pittsburgh in 2009, and is administered by the World Bank.

Food prices spiked in 2008, triggering unrest in poorer countries such as Haiti and Egypt. The United Nations said at the time that some governments had not invested enough in the production of food crops for local markets.

The new fund, so far, has $880 million in pledges but only $120 million remaining in the bank, Lago said. Five grants were recently approved -- totaling $224 million -- to Bangladesh, Haiti, Rwanda, Sierra Leone and Togo to help enhance productivity and train farmers. Lago said the fund has received requests for close to $1 billion more in aid.

Initial Donors

The United States, Canada, South Korea and Spain were among the initial donors. This weekend, the Obama administration, which has pursued food security in poor countries as an initiative, will approach European nations and other developed countries, she said.

“Unless new donors come forward, we’re going to have to turn away or push off strong applicants,” Lago told reporters at a press briefing in Washington today. “We don’t kid ourselves about the challenge.”

World Bank President Robert Zoellick yesterday said the developing world continues to struggle with a food crisis that has gone on since 2008.

“Recent prices are a serious cause for concern,” he said in a conference call with reporters. “ The rise in wheat prices over the last few months is affecting the price of other staples due to increased demand for substitutes. So, we’ll have to find a way to avoid food crises becoming the new normal.”

Wheat futures are up 38 percent since the end of June. Wheat futures for December delivery rose today 16.25 cents, or 2.5 percent, to settle at $6.635 a bushel at 1:15 p.m. on the Chicago Board of Trade, the first gain since Sept. 24. During the previous six sessions, the grain dropped 10 percent in part as drought-damaged crops in Russia and Eastern Europe received rain.

To contact the reporters on this story: Rebecca Christie in Washington at rchristie4@bloomberg.net;

To contact the editors responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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