Washington, March 20 - The global food price crisis is far from over and increased protectionism could worsen conditions for developing countries in the face of an economic downturn, a top World Bank official said on Thursday.
Speaking at the Reuters Food and Agriculture Summit, World Bank Managing Director Ngozi Okonjo-Iweala said Group of 20 leading developed and developing countries should keep promises they made in November not to impose any new trade-restricting measures for 12 months.
A World Bank report this week said 17 of the 20 countries have implemented a total of 47 measures that restrict trade.
While many countries are at fault, Okonjo-Iweala said advanced economies should set a good example by avoiding protectionist measures.
"When developing countries see developed countries putting in measures to protect their own agriculture and producers, it is very difficult to then argue that those same developing countries shouldn't do the same," she said.
"The point here about protectionism is what is the example being set by the richer countries?" Okonjo-Iweala said.
"We need to trade our way out of the crisis."
Asked why the World Bank doesn't name and shame countries who impose protectionist measures, Okonjo-Iweala added: "You have to be a bit careful. Countries become very upset when you do that."
Instead, the World Bank would persuade countries not to restrict trade, she added.
Okonjo-Iweala said while commodity prices have fallen from their peaks last year, prices of key staple foods are still well above their 2005 level.
In addition, food price volatility is adding to uncertainty and making it difficult for farmers and consumers to budget properly, she said.
Okonjo-Iweala said the financial crisis had added to the problems as global credit strains have dried up trade financing, hampering countries' ability to trade.
"The financial crisis has just intensified the issue of the food crisis in some ways," Okonjo-Iweala, a former Nigerian finance minister, said.
The World Bank has warned that the combined effects of the food price crisis and the financial crisis will exact a heavy toll on the poor and increase the number of hungry and malnourished in the developing world.
It has estimated there are 923 million people worldwide that are malnourished, while weaker economic growth and unemployment caused by the global financial crisis will push an additional 53 million people into poverty.
This is on top of the 130 million to 155 million people pushed into poverty last year because of soaring food and oil prices.
Okonjo-Iweala said there was no shortage of food around the globe. Instead, prices were higher because more food, such as corn, was being used for ethanol production.
"There is not a global food shortage, there is a price crisis," she said.
"There are also distribution issues and it is difficult to get food from surplus countries worldwide to food deficit countries, and in the midst of the food crisis many countries started to take defensive measures and export bans," she added.
She said the World Bank has urged countries hoarding food to release some of it, which has helped ease prices.
"It is much better now than it was eight months to a year ago, but with the financial crisis you're now seeing protectionist measures coming in," she added.