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Latin American countries to set up 'food fund -

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Latin American countries to set up 'food fund'

The World Today - Thursday, 24 April , 2008 12:25:00

Reporter: Sara Everingham

ELEANOR HALL: Four Latin American countries have united in an effort to limit the impact of the
global food crisis on the poor in their countries.

Leaders from Bolivia, Nicaragua, Venezuela and Cuba announced a $100-million fund aimed at boosting
agricultural production.

A group of countries in West Africa has a similar fund.

But rising food prices are already causing riots around the world and the United Nations has called
for more help to help farmers in Third World countries.

Sara Everingham has our report.

SARA EVERINGHAM: The World Bank estimates the price of basic foods has risen by 83 per cent in the
past three years. In an effort to limit the impact of rising prices on the poor, the leaders of
Bolivia, Nicaragua, Venezuela and Cuba have agreed to set up a $100 million fund to help grow more

The agreement was reached in the Venezuelan capital Caracas where the country's President Hugo
Chavez blamed food shortages on the capitalist system.

HUGO CHAVEZ (translated): All parties agree to create a network of food commercialisation. This is
fundamental because capitalism is a perverse thing. Even the International Monetary Fund and the
World Bank have recognised the failure of capitalism. This food crisis is the biggest demonstration
of the historic failure of the capitalist model.

SARA EVERINGHAM: That is a view that isn't shared by the European Trade Commissioner Peter
Mandelson who says countries that are restricting exports have helped fuel the crisis.

PETER MANDELSON: If we restrict trade we are simply going to add food scarcity to the already large
problems of food shortages that exist in different countries.

SARA EVERINGHAM: The announcement by the Latin American countries comes after a group of countries
in West Africa set up a similar fund worth half a billion dollars.

Global food prices are rising in response to higher fuel costs, increased demand from China and
India, unpredictable weather patterns and also the diversion of crops for biofuels.

And it is not just a question of the poor going hungry. There is concern about the impact of the
food shortages on political stability.

The high prices have sparked riots in parts of the Caribbean, Africa and Asia and the
Director-General of the UN's Food and Agriculature Organisation, Jacques Diouf says it isn't useful
to look for scapegoats.

JACQUES DIOUF (translated): I think that as long as we don't get out of this situation which always
consists of waiting for a crisis to react to, and then starting to look for scapegoats, we won't
get out of it.

SARA EVERINGHAM: He says more assistance is needed from wealthier countries to poorer nations to
help boost food production.

JACQUES DIOUF (translated): In reality, it all depends on what we do. We are not in a Greek tragedy
where human beings are powerless in front of their fate. No, we have the possibility to affect the

SARA EVERINGHAM: He's called on wealthier nations to provide farming resources to developing

JACQUES DIOUF (translated): If we provide this assistance, these resources to those who need it,
from now on, so that they can feed themselves, so they can access to food at reasonable prices and
if, at the same time, we help the poor farmers of the Third World to have access to more expensive
inputs to boost domestic production, naturally we will have less riots and maybe no riots.

SARA EVERINGHAM: But there is also a warning from the UN that high prices are expected to continue
despite increased production and the Head of the UN's World Food Program has described global food
shortages as a "silent tsunami".

ELEANOR HALL: Sara Everingham reporting.