International Economic Law and Policy Blog

A Final Word on Food Aid and the Farm Bill

Well, maybe not the final word, but one more thing anyway, from a Bloomberg article:

Shipments of U.S. food aid took five months to reach Ethiopia during a famine in 1999-2000, arriving after the death toll had reached 20,000, according to Chris Barrett, an economics professor at Cornell University who specializes in food aid to Africa.

By contrast, Catholic Relief Services of Baltimore said it got emergency food supplies to Malawi and Zimbabwe within 30 to 60 days in 2005. The difference was that the agency bought $2.6 million of peas, vegetable oil, maize and high-energy protein supplement in Mozambique and Zambia.

Aid groups, President George W. Bush and the U.S. Government Accountability Office all say the U.S. approach to food aid needs to be fixed. The U.S. donates almost half the food used for international aid, worth about $2 billion in 2007. Efforts to get it to such places as Myanmar, China and Africa are hostage to 50- year-old policies that favor agricultural giants such as Archer- Daniels-Midland Co. and Cargill Inc. and shippers such as Maersk.

``This is a cumbersome process that ends up costing lives,'' said Marc Cohen, a food aid expert at the International Food Policy Research Institute, which is funded by the World Bank and over 20 governments. ``Buying food locally could cut the months into weeks.''

Congress took a step toward changing the system by including a $60 million pilot program in the $289 billion farm bill passed last week. The measure would shift part of the food aid budget to buying commodities nearer the point of need. The bill appears to have enough Congressional support to override a veto promised by Bush because he says it wouldn't do enough to reduce subsidies to farmers who are benefiting from increased prices.

So the problem with sending U.S. food directly is not just the harm to local producers; it's also the extra time involved in getting it there.

The Farm Bill and Food Aid

I mentioned the Bush Administration's food aid proposal a few days ago.   So what did the Farm Bill -- passed with a veto-proof majority -- do with the issue?  According to Reuters:

U.S. lawmakers unveiled a five-year global food aid plan on Thursday, snubbing White House demands for significantly greater flexibility when buying food for the world's poor.

The final House-Senate compromise on the 2008 farm bill, if approved, would spend a mandatory $60 million over four years on a pilot program to test overseas purchases of food aid -- a step away from the traditional reliance on U.S. farmers.

The pilot provides far less, though, than what the Bush administration had asked be freed, up to about $400 million a year based on recent budgets, for purchases abroad.

More here:

Oxfam and other groups have joined the White House in criticizing lawmakers for ignoring an administration request to allow a quarter of U.S. food aid funds for abroad to be used to purchase foreign supplies near crisis areas.

Farm groups have traditionally pushed for food aid designated for foreign locations to come from the United States, which means it often takes too long to get the food to where it's needed most, according to the Agriculture Department.

Instead, congressional negotiators set up a small-scale pilot program that would allow limited local foreign purchases using U.S. aid money and then study how effective that was. They say the idea of such local purchases is untested.

But Schafer says that local buying in foreign locations "would just simply help save lives in some of the most stressed areas in the world." He also criticized a mandate in the bill to reduce the amount of emergency foreign food aid in favor of more money for non-emergency assistance.

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.

Food (Aid) for Thought

The debate on food aid in the agriculture talks is getting interesting beyond the substantive economic issue of the extent to which ostensibly benevolent food aid can/does cause "commercial displacement" in aid-recipient countries. It is becoming, in potentia, another interface between the WTO and non-WTO international organizations. A key question is who decides that a state actually needs aid even if such aid might formally violate agricultural subsidy disciplines. Following African/LDC state proposals, the ag negotiations chairperson, Amb. Crawford Falconer, has circulated a paper, available here, according to which:

"9.        [...]  it might be possible, as a first step, to provide for the following: 

Food aid transactions shall be exempt from the provisions of [...], where such aid is provided in response to an emergency appeal from:

 

(i)              a relevant United Nations agency, the United Nations Consolidated Appeals Process, the International Committee of the Red Cross or the International Federation of Red Cross and Red Crescent Societies.

 

10.    In principle, it would seem to be sensible also to accept the judgement of reputable and responsible international intergovernmental bodies.  The issue would then resolve itself down to a more narrowly technical one of ensuring a reliable technical description, but without over-negotiating this. 

11.                   But would it be necessary to confine this "trigger" standard only to purely intergovernmental bodies? This, at the moment, seems to be the view of some delegations. It cannot be denied, of course, that there are non-governmental and private institutions that have real repute in the field, albeit that there may be a view that it is unlikely that the relevant intergovernmental bodies are going to have, or at least very often, a differing view from these private or non-governmental bodies. But, bearing that in mind, is it warranted to have a blanket opposition to an appeal from them as representing an appropriate trigger in its own right? 

12.                   This, it seems to me, comes down to an empirical and practical question as to whether, as a matter of performance in the field, these organisations "get it wrong".  If the answer is that they do, or that some of them do, there might be understandable reticence to include their appeals as a standard.[fn. deleted] But if the answer is that they don’t, why would inclusion of an appeal from them be a problem? I have in mind such bodies as MSF, OXFAM, etc. It seems hardly credible to deny their expertise and role. 

13.                   Thus the idea was advanced by the African and LDC Groups of "collaboration" between non-governmental organisations, private charitable bodies and relevant international humanitarian organisations as being a standard to apply so as to be responsibly inclusive of such organisations.  Therefore, it is now for Members to consider what, if any, other agencies or relevant international humanitarian organisations could or should be added to this list.  For example, could we not try: 

(ii)            a relevant intergovernmental or regional humanitarian agency, non-governmental organisation, or private charitable body, working in collaboration with a relevant United Nations agency, the International Red Cross and Red Crescent Movement or relevant international humanitarian organisation. 

Are there other bodies that should be included?"

This proposal also raises the question of the formal role of NGOs such as Oxfam, as surrogates for intergovernmental organizations in what lawyers would classify as "determinations of fact".

One odd aspect, to my limited understanding, is that an emergency situation could be determined by the recipient state only in urgent,"exceptional circumstances": Recognising that, in exceptional circumstances, where the urgency of the food aid need is such that to wait for an appeal as set out in (i) or (ii) above would result in an undue delay in the provision of food aid, food aid provided in response to an urgent official government request by a recipient country shall also be exempt from the provisions of [...].  Under such circumstances, both the donor country and recipient government shall notify [...]. 

I would have imagined that if the recipient state has made a formal appeal for aid, that would be sufficient to estop any claims by the same state that subsequent aid received constituted "commercial disruption".

Indeed, what is more interesting is the vesting of intergovernmental organizations,perhaps even NGOs, with the de facto authority to determine that (a) a state needs aid; and (b) that subsidy disciplines do not apply, the position of the recipient state notwithstanding.

If we transpose this debate to the use of force/humanitarian intervention (see Ryan Goodman's thoughtful article, "Humanitarian Intervention and Pretexts for War", 100 American Journal of International Law, prepublication version here ), would we let Amnesty International determine that a given political human rights situation should allow - or mandate - military intervention?   

Which re-raises the question of legitimacy, a possible response to some of Crawford's rhetorical questions. Who are these "relevant" NGOs? and what responsibility might they bear for their determinations?

T.