SOURCE: ActionAid International

October 19, 2007 12:42 ET

World Development Report "Dangerous," Says International Development Agency, ActionAid

WASHINGTON, DC--(Marketwire - October 19, 2007) - The World Bank's World Development Report (WDR) on agriculture has been rejected today by the anti-poverty agency, ActionAid, as "a dangerous document that will worsen not fix the crisis in the world's smallholder agriculture."

A new study released by ActionAid shows how World Bank lending policies over the last 25 years have forced the public sector to withdraw from agriculture by removing government subsidies on farm inputs such as fertilizers and by dismantling public agricultural marketing boards.

ActionAid's HungerFREE campaign is calling for agriculture and land policies that prioritise people's right to food ahead of markets and profits.

"The WDR," said Collins Magalasi, head of policy at ActionAid in Malawi, "continues the World Bank's same market-led approach, which for the last 25 years has been a massive failure even by its own standards."

"This approach has led not only to exorbitant fertilizer prices, inadequate transport, and lack of credit, but also to the increased concentration of land and food distribution in the hands of agribusiness," continued Magalasi.

"The World Bank dangled the promise of healthy competition," explained Magalasi. "Instead, we are now riddled by agribusiness monopolies and oligopolies that are distorting prices at the expense of the poor."

"We condemn the World Bank's long history of failure in agriculture," said Eric Gutierrez, International Policy Coordinator of ActionAid. "We blame the Bank for contributing to the destruction of smallholder agriculture which has left hundreds of millions in the developing world unable to feed themselves."

"The WDR recognizes the importance of the right to food. Yet, through its recommendations, small farmers are going out of business, and families are going hungry. This is an absurd contradiction," added Gutierrez.

Aside from a detailed critique of the WDR, ActionAid has looked into cases in which countries have met their food security objectives by ignoring World Bank advice.

"After suffering from years of famine, Malawi reintroduced fertilizer and seed subsidies, against World Bank advice. As a result, our nation has recovered and is now seeing bumper harvests," said Magalasi.

Vietnam, which was recently proclaimed by World Bank President, Robert Zoellick, as one of "the best performing developing economies in the world," achieved its development success by prioritizing food security before opening up to further market-based reforms -- a direct challenge to World Bank orthodoxy.

The ActionAid-commissioned report on Vietnam reveals how the World Bank systematically complained over the years for Vietnam's non-compliance with its policy prescriptions. "The IMF even went a step further by suspending two programs in Vietnam to express their displeasure," said Gutierrez.

"This only serves to show that there are alternative ways to achieve development," said Gutierrez. "Hopefully, the lessons of Vietnam and Malawi will be given careful attention by the rest of the developing world."

Notes to editors:

ActionAid is leading the global HungerFREE campaign, which calls on governments to respond decisively to the fact that while there is enough food to feed the world, 854 million go hungry every day.

The WDR is being officially released by the World Bank today, Friday, October 19th.

The ActionAid reports, "The World Bank and Agriculture: A Critical Review of the World Bank's World Development Report 2008," and "Vietnam's Development Success: A Challenge to World Bank-IMF Orthodoxy?" can be obtained by calling Sandy Krawitz at +1 202-492-7207, or e-mailing sandy.krawitz@actionaid.org

ActionAid is an international anti-poverty agency working in over 40 countries, taking sides with poor people to end poverty and injustice together. For more information, www.actionaid.org.

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