Patrice Riemens on Thu, 14 Jul 2011 17:37:59 +0200 (CEST)

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<nettime> World Bank to hedgefund poor farmers together with JP Morgan...

Thanks to Uwe Hoering/ Globe-spotting:  (in German)

Just as you thought you'd really seen everything in matters of cynicism
and cronyism in the sphere of 'global finance' and its associated
monosystemic honchos and entrenched institutions, you're in for the next
surprise ... Or as Uwe Hoering concludes: "We can already figure how he
(Zoellick) conjures up in his own eyes African farmers and Asian
slum-dwellers standing in queues outside JP Morgan bank branches in order
to avail of expert advice on risk managment."

Maybe time for the Cicero quote: "Usque tandem ...?"

No Cheers, p+3D!

WB press release:

World Bank Group Announces New Instrument to Help Food Producers and
Consumers in Developing Nations Deal with Volatile Prices

Available in: &#20013;&#25991;, Français,
&#26085;&#26412;&#35486;, Español
Press Release No:2011/559/EXT

Zoellick says stepped up action by G-20 needed to protect the poorest

WASHINGTON, June 21, 2011 - The World Bank Group today announced a new
risk management product to provide up to an initial $4 billion in
protection from volatile food prices for farmers, food producers, and
consumers in developing countries, addressing a key issue that will be
discussed later this week by Group of 20 (G-20) ministers.

This first-of-its-kind product will improve access to hedging instruments
to shield consumers and producers of agricultural commodities from price
volatility.  It will also protect buyers from price rises in food-related
commodities such as wheat, sugar, cocoa, milk, live cattle, corn, soybean,
and rice.

?With this new tool, we can help farmers, food producers, and consumers
protect themselves against price swings, strengthen their credit position,
and increase their access to finance,? said World Bank Group President
Robert B. Zoellick. ?This tool shows what sensible financial engineering
can do: make lives better for the poor.?

The Agriculture Price Risk Management (APRM) product will initially be
rolled out by IFC, the World Bank Group?s private sector arm, and J.P.
Morgan. IFC hopes to roll out the product with other banks in due course.

?We are proud that the World Bank and IFC have selected J.P. Morgan to
partner with them to help address this public policy challenge in
developing economies,? said Jes Staley, CEO of J.P. Morgan?s Investment

In the debut facility with J.P. Morgan, IFC will commit up to $200 million
in credit exposure to clients that use specific price hedging products,
while J.P. Morgan will take on at least an equal amount of exposure to
them.  Since the exposure associated with risk management operations is
typically smaller than the principal amount of hedges made available to
clients, these combined credit exposures should enable up to $4 billion in
price protection to be arranged by J.P. Morgan for emerging markets
agricultural producers and buyers.

Potential clients for the APRM product can include agricultural producers,
consumers, aggregators, cooperatives, and local banks as well as others
that meet predetermined requirements.

Developing risk management tools will be part of the plans to be discussed
by G-20 agriculture ministers at their meeting in Paris this week. It was
also part of a nine point plan recommended by the World Bank President in
January to address high and volatile food prices.

Price stability is vital to help producers obtain finance needed to expand
operations as well as increase farm production, and to assure reasonable
access to food supplies for consumers. While price risk management
products are routinely used in agriculture in developed countries, hedging
instruments cannot be obtained directly by smaller emerging market
producers and consumers because of high upfront costs and margin
requirements. Furthermore, many financial institutions in emerging markets
are not yet experienced with these risk management services, and do not
offer them to local clients.

The new APRM product enables producers and consumers in developing
countries to access agricultural price risk management. J.P. Morgan? and
in the future other banks ? will work with clients in emerging markets to
appropriately hedge price risk associated with their business. IFC
facilitates this by sharing in the credit risk of these customers.

Aside from promoting the use of risk management instruments, Zoellick said
the G20 agriculture ministers could take a major step forward this week to
address high and volatile food prices by agreeing to improve transparency
in agriculture, with an information system to increase public access to
information on the quality and quantity of grain stocks.

Speaking ahead of the meeting, Zoellick said he was also hopeful G20
agricultural ministers would take the first steps in agreeing to exempt
humanitarian food aid from export bans, so food aid can get to hungry
people in time to save lives.

 ?We have been in a period of extraordinary volatility in food prices,
which poses a real danger of irreparable harm to the most vulnerable
nations and people,? Zoellick said. ?High, uncertain and volatile food
prices are the single gravest threat facing the most vulnerable in the
developing world. People are hungry for food and for action on a global

The World Bank President said greater transparency on food stocks around
the globe sends a powerful signal and would help reduce food price
volatility by reassuring markets and helping calm panic induced price

Zoellick said the stresses on the world?s agricultural system ? compounded
by growing demand for food ? were evident in the numbers.  Annual growth
in rice and wheat yields in developing countries ? home to four fifths of
the world?s population -  has dropped from three percent in the 1970s to
just one percent today.

And he warned agriculture was under threat by climate change and without
strong adaptation measures, climate change could reduce yields by 16
percent worldwide and 28 percent in Africa alone over the coming half

The World Bank President said greater investment in agricultural research
was needed as food production must rise by 70 percent in order to feed an
expected global population of more than nine billion people by the year

?We need to be creative about farming, so there are not only more crops
but more resilient crops, if we?re to respond to the challenges of feeding
a growing population under more difficult and unpredictable conditions,?
Zoellick said.

The World Bank Group says  since June last year, rising and volatile food
prices have led to an estimated 44 million more people living in poverty ?
under $1.25 a day.  There are close to one billion hungry people worldwide
? or one in seven people on the globe.

The Bank Group has boosted it support for agriculture with spending up
annually from around $4.1 billion in 2006-08 to between $6.2 and $8.3
billion a year in 2010-12.


In Washington: David Theis, (202) 458-8626,;
For Broadcast Requests: Natalia Cieslik, (202) 458-9369,

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