Asian Development Bank To Provide $170 Million To Bangladesh For Food Crisis

Manila, Philippines (AHN) - The Asian Development Bank (ADB) will loan $170 million to Bangladesh to help the country cope with its food crisis.

The loan is part of a broader food security package being extended by international agencies and the government of Bangladesh totaling $1.29 billion, an ADB press statement said on Tuesday.

Bangladesh, a net importer of food grains, was severely affected by two floods and a devastating cyclone in the second half of 2007, causing a rice production shortfall of 1.2 million tons and adversely affecting the food security of an estimated 25 million people.

Rapidly increasing food prices further worsened the situation, seriously affecting the poor and vulnerable and fixed income earners, the ADB said.

The price of rice in the international market has nearly tripled to $963 per ton in May from a year earlier, while wheat prices have almost doubled to $349 a ton during the same period.

The retail price in April of coarse rice rose 61 per cent from last year in Bangladesh, while wheat prices are up 56 per cent.

Soaring food prices have led to serious hardship for the poor, who allocate about 70 per cent of their total spending on food. The trend in food prices has also intensified inflationary pressure and is expected to worsen income inequality.

In Bangladesh, food inflation now stands at 12 per cent. Out of the country's total population, 40 per cent are now living below the poverty line. The country's per capita gross domestic product currently stands at $554.