The World Bank has launched an appeal for funds to tackle rising global food prices as part of a stimulus plan of a scale last seen during the Great Depression of the 1930s.

The move comes as the price of essential food items continue to rise sharply amid currency-market imbalances and fears of a US economic recession.

The World Bank has approved a $10m grant for Haiti where riots triggered by rising food costs has just forced the removal of the prime minister.

According to the bank, half of the minimum $500 million New Deal to fight hunger and poverty under the World Food Program has been pledged.

Robert Zoellick, the World Bank president, said an estimated 100 million people in poor countries could be pushed deeper into poverty if the current trend of rising food prices continued.

"This is about ensuring that future generations don't pay a price too," he said, urging governments to begin addressing the issue immediately.

"We have to put our money where our mouth is now so that we can put food into hungry mouths. It's as stark as that."

Zoellick said that the food crisis could mean "seven lost years" in the fight against worldwide poverty.

The proposal includes measures to encourage oil-exporting countries to invest more of their windfall earnings in Africa to soften the impact of a slowing world economy.

The bank said there are plans to nearly double its lending for agriculture in Africa to $800m.

Food warnings

A meeting of the 185-nation World Bank and its twin institution, the International Monetary Fund, over the weekend sparked warnings of trouble arising from the food crisis.

The sharp rise in food prices, aggravated by new export curbs by rice producers, has put world economic policymakers on high alert.

Increases in the price of rice, wheat, corn, cooking oil, milk and other foodstuff have already sparked violent protests in many countries including Egypt, Cameroon, Ivory Coast, Mauritania, Ethiopia, Madagascar, the Philippines and Indonesia.

The World Bank has reported that global wheat prices jumped 181 per cent over the 36 months to February, with overall food prices up 83 per cent.

'Terrible consequences'

For his part, Dominique Strauss-Kahn, the IMF managing director, warned of terrible consequences if food prices "go on like they are doing today", saying that many countries face the risk of political instability.

"[We] are facing a huge problem and it is a problem for the World Bank, the IMF and you shouldn't be surprised that we are going to devote a lot of time to this problem," he said.

"As we know, learning from the past, those kind of questions sometimes end in war."

Straus-Kahn said that this will lead to a "huge problem" which put at risk years of development gains.

PHOTO CAPTION

World Bank President Robert Zoellick (L) talks to International Monetary Fund Managing Director Dominique Strauss-Kahn during the spring IMF-World Bank meeting in Washington, April 13, 2008.

Al-Jazeera