WB approves US$ 36 m assistance to Nepal

The World Bank (WB) on Wednesday has approved a US$ 36 million assistance package to support Nepal’s efforts at reducing hardship and speeding up recovery from rising food prices, high fuel prices, drought and more recent floods in Eastern, Far Western and Mid Western Nepal.

According to the world food programme (WFP), people in at least 33 districts of Nepal are 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.

"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," said a press release issued by the WB.

"The programme will support the Government of Nepal's national strategy to maintain and enhance food security," said Susan Goldmark, WB 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 added.

Globally, food grain prices have more than doubled since January 2006 and over 60 per cent of this increase has occurred since January 2008 alone. The impact of high world food prices is compounded by increase in fuel prices, which adds to distribution costs  and is resulting in high food price inflation in many countries.

"We expect the programme 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 WB.

The WB assistance package consists of US$ 31 million in grants and credits from the International Development Association (IDA), the WB's concessionary lending arm, and US$ 5 million in grants from the Food Price Crisis Response Trust Fund.

The Nepal Food Price Crisis Response Programme was developed to help Nepal mitigate the impact of rising global food crisis by improving access to food and strengthening agricultural production, particularly for food insecure districts and smallholders.