The Asian Development Bank (ADB) will provide US$170 million loan to Bangladesh to cope with the rising food price, a bank release said yesterday. The loan is a part of a broader food security package being extended by international agencies and also initiated by the Government of Bangladesh totalling a monetary value of US$1.29 billion. The emergency assistance for food security project, which is supported by ADB and other multilateral agencies, will ensure access to food supply for those hardest hit by recent natural disasters in Bangladesh and the rapid increase in food prices. Bangladesh, a net importer of food grains, was severely affected by two floods and a devastating cyclone in the second half of 2007, causing a rice production shortfall of 1.2 million tons and adversely affecting the food security of an estimated 25 million people. Rapidly increasing food prices further worsened the situation, seriously affecting the poor and vulnerable and fixed income earners. "The project will provide short-term transitional support to help the Government meet unexpected high expenditures for safety net programmes based on the needs assessment conducted jointly with other development partners" said Rezaul K. Khan, Economist for ADB's Bangladesh Resident Mission. The Government's safety net programs target insurance of better access to food for 5 million poor and vulnerable people. The programmes include provision of food supplies for sale in the open market, vulnerable group feeding, food assistance and food for work. ADB is also issuing a US$600,000 grant to help the Government improve its ability to plan and undertake medium- and long-term interventions to improve food security. Bangladesh is the first developing member-country to receive ADB support after the announcement made during the institution's 41st Annual Meeting in May by ADB President Haruhiko Kuroda. The provision consists of up to US$500 million in immediate budgetary support to the hardest hit countries in Asia and the Pacific, and an increase in lending for agriculture and rural development to more than US$2 billion in 2009. Food prices in the world market have reached record highs. The price of rice in the international market has nearly tripled to US$963 per ton in May from a year earlier, while wheat prices have almost doubled to US$349 a ton during the same period. In Bangladesh, the retail price in April of coarse rice rose 61 per cent from last year, while wheat prices are up by 56 per cent. Soaring food prices have led to serious hardship for the poor, who allocate about 70 per cent of their total spending on food. The trend in food prices has also intensified inflationary pressure and is expected to worsen income inequality. In Bangladesh, food inflation now stands at 12 per cent. Out of the country's total population, 40 per cent are now living below the poverty line. The country's per capita gross domestic product currently stands at US$554.