Decision on WB food sector credit tomorrow

Shakhawat Hossain brAn inter-ministerial meeting Wednesday will take a decision on the World Bank proposed Food Crisis Development Support Credit (FCDSC) that aims at maintaining the country's food security, officials said Monday.brThe Washington-based multilateral agency has proposed to lend about US$ 350 million under the FCDSC in the wake soaring food price in the local and international market.brThe WB announced the food sector loan early this year to the countries that have been jolted by the soaring food price. brThe inter-ministerial meeting to be held in the economic relations division will review the terms and condition of the WB credit programme on the country's food sector, which is new in many years, said the officials.brThe WB in a recent report said the country's poverty reduction rate declined roughly by two percentage points during 2005-08 due to the soaring food prices.brThe country's poverty rate declined to 40 per cent from 49 per cent during 2000-2005, according to the government survey. brBut recent shocks to the Bangladeshi economy in the form of natural disasters and rising food prices have partially dampened the rapid progress in reducing poverty, the WB said.brA finance ministry official said the WB has been providing development support credit (DSC) instead of project based loan since early 2000s.brThe DSC means budgetary assistance, which is used only in the budget implementation activities. The WB is again changing its lending strategy by introducing sectoral lending programme that offers credit to specific sector, added the official.brLast fiscal, the WB provided $120 million as energy sector development loan that marked the beginning of new type of lending activities. The loan was treated as development support credit, but it was meant for the energy sector only.brThe WB will continue its DSC programme in addition to the sectoral lending activities, said a WB official on condition of anonymity.brHe said FCDSC has been proposed to disburse in seven installments at 0.03 per cent service charge only.brThe loan will help the country maintain food security as the food price, particularly rice, has almost doubled in the local market early last year, he added.brThe food price shocks forced millions of poor households to cut back on their daily meal consumption. brThe country's poor people have to spend 87 per cent of their food budget for purchase of rice due to soaring price of the item and remaining only 13 per cent on protein and vegetables diet, according to a government report released in July.brThe share of rice expenditure to total food expenditure in the bottom quintile increased to 87 per cent in 2008, said the report prepared by the food and disaster management ministry.brThe share of rice expenditure to total food expenditure in the bottom quintile increased from 54 per cent in 2006 to 59 per cent in 2007. But in 2008, it marked a record 28 percentage point increase forcing poorer to have little or none on other foods such as meat, vegetables and fruits.br