The World Bank’s Board of Executive Directors on Tuesday approved a US$130 million loan for Tunisia, seeking to lessen the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy production and seeds for smallholder farmers for the upcoming planting season.
The project is part of a coordinated emergency response package with donors, including the European Bank for Reconstruction and Development, the European Investment Bank and the European Union, that will support short-term imports of wheat for bread to ensure continued access to affordable bread for the poor, barley for livestock, and agricultural inputs for domestic grain production.
It will also lay the groundwork for reforms to address weaknesses and distortions in the grain value chain, including the related food security policies and improve their impact on nutritional outcomes and diet diversification, strengthen Tunisia’s resilience to future food crises and provide technical assistance to modernize Tunisia’s Grain Board and food subsidy system.
“Tunisia faces a major grain supply shock due to difficulties in accessing financial markets and rising global prices which affected the ability to procure imported grain,” said Alexandre Arrobbio, World Bank Country Manager for Tunisia. “We're working very closely with other partners to support the Tunisian government in its efforts to ensure food security while addressing some of the overdue structural reforms in the agricultural and food system”
Along with parallel funding from other donors, the project seeks to avoid bread supply disruptions in the third quarter of 2022 by financing the urgent purchase of soft wheat, equivalent to a month and a half of consumption. The financing will also help to procure an estimated 75,000 metric tons of barley to cover the needs of smallholder dairy producers for approximately one month, along with 40,000 tons of quality wheat seeds to secure the next planting season, which begins in October 2022.
The project’s design recognizes the exceptional nature of the current crisis and its impact on Tunisia, with short-term emergency measures aimed at protecting the poor and vulnerable segments of the population. The sudden halt in exports of grains from Ukraine and the export shortfall from the Russian Federation and the Black Sea region due to the ongoing war in Ukraine, have had a huge impact on food and nutrition security globally. Tunisia is particularly vulnerable to these grain disruptions and in 2021, imported 60% of its soft wheat and 66% of barley from the Russian Federation and Ukraine.
In the long-term, the project is expected to reduce import dependency through incentives to sustainably increase domestic grain production, create more efficient and sustainable agricultural and food policies and strengthen food security while protecting the most vulnerable households.
On May 18, the World Bank announced actions it plans to take as part of a comprehensive, global response to the ongoing food security crisis, with up to $30 billion in existing and new projects in areas such as agriculture, nutrition, social protection, water and irrigation. This financing will include efforts to encourage food and fertilizer production, enhance food systems, facilitate more trade, and support vulnerable households and producers.
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