The Problem of Food Aid and Local Production

A proposal from President Bush on food aid:

As America increases its food assistance, it's really important that we transform the way that food aid is delivered. In my State of the Union address this year, I called on Congress to support a proposal to purchase up to nearly 25 percent of food assistance directly from farmers in the developing world. And the reason you do that is, in order to break the cycle of famine that we're having to deal with too often in a modern era, it's important to help build up local agriculture. I ask Congress to approve this measure as soon as possible. It's a common sense way to help deal with food emergencies around the world.

The criticism of food aid that this plan addesses is that food aid can harm farmers in the countries to whom the aid is given, by displacing demand for their products.  It's a very difficult issue, and I think the Administration deserves some credit for recognizing the problem (harm to poor country farmers) and trying to come up with a solution (purchases from those farmers).

Here's a question, though.  Would it perhaps be better to allocate some kind of "food credit" to allow for the purchase of food, rather than give food directly?  This is not something I've thought through in detail, and it may have been discussed already by experts in the field. But it seems like a good approach to me.

For a recent article on the WTO food aid negotiations, click here.

Comments

[Gillian Moon]

In an op ed for the New York Times a couple of years ago, Sophia Murphy explained how the US could feed more people in Niger (experiencing a famine), in part by making the sort of reforms Bush is referring to. She points out that almost all of the food aid which the US was sending to Niger was,

“…in the form of food produced in the United States. The government buys food from American commodity traders. The food is fortified, bagged and shipped by American firms. This approach usually results in costs well over market rate for food, handling and transport. The emphasis on using American commodities and firms is grossly inefficient and means that food is slow to arrive where it is needed. It also prevents the establishment of local food systems.

Most other major donors, particularly those in the European Union, give money instead of food. This frees agencies like the United Nations World Food Program to buy food from farmers near the affected country - farmers who are often very poor - and to send the food quickly where it is most needed.

To its credit, the Bush administration proposed designating an additional $300 million for food to be bought from local or regional sources this year, but Congress rejected the proposal.

………..
The current system ensures that the United States' food aid falls far short of its potential. While our food aid saves lives, it could save many more. And most important, the system fails to strengthen food production and systems of food distribution in vulnerable countries.”

[Simon Lester]

Thanks, Gillian. It was interesting to see that the EU and others give money, something I had not realized.

[Andrew Ramdeholl - The African Tragedy]

I very much agree. That link points to an essay I wrote about the same problem a few months ago.

In the end, the US benefits more monetarily than the receiving countries do. The system is backwards and its a shame. Now we have a problem with rising problems due to ethanol.

My next project is to research how much corn goes to ethanol, how much goes to Food Aid, then research if reforming the Food Aid program would affect prices.

-Andrew