World Bank to increase Africa agriculture loans

Responding to spiking food prices, the World Bank said on Monday that it will nearly double the amount in loans made to help boost agricultural production in Africa to $700 million from $420 million.

Record high prices for energy and agricultural commodities are hitting developing nations hard, in this case sub-Saharan Africa, given how their price indexes are weighted heavily toward food.

"Because you don't want everything to be a short-term response, we are really trying to upgrade our efforts in terms of increasing agricultural production," World Bank President Robert Zoellick told Reuters.

The $700 million will be spent in fiscal 2009 which begins in June of 2008.

World Bank lending for agriculture has averaged some $500 million a year, but there are plans to push it up to as much as $850 million in coming years, a bank official told Reuters.

He did say the focus for agriculture production should address a whole "value" chain that includes everything from property rights, seeds, fertilizers, irrigation and more.

Record high commodity prices are not all bad, because some nations are net exporters of energy, minerals and grains and could offer them a way to boost agricultural infrastructure.

Crude oil prices recently topped $106 a barrel, gold is making repeated runs toward $1,000 an ounce, and wheat, corn and soybeans all trade at or close to records highs.