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The Trouble with Food Aid

A rift over agricultural subsidies between World Trade Organization members has put international plans to reform food aid on hold.

At the heart of the dispute is whether food aid to developing countries should be in the form of cash or agricultural products, often subsidized by donors.

The European Union argues that cash donations are the best way to quickly purchase food in an emergency because food shipments are sometimes sold in local markets at the receiving end. And European countries say flooding markets with cheap imported food drives local farmers out of business.

Edward Clay, Senior Research Associate at the Overseas Development Institute in London says the European approach makes food aid more flexible, “Let's say there's a food crisis in Southern Africa, for example, in Malawi. The European approach would now allow funds which have been appropriated for food aid to be actually used to purchase the food in South Africa, and then ship to Malawi."

Another Approach to Food Aid

The United States argues that the European cash only approach has been ineffective, causing a steep decline in food aid since the 1990s. According to a report published by the World Food Program, food aid contributions suffered a $1 billion shortfall last year. In contrast, the U.S. sends donations to developing countries in the form of corn, wheat and other commodities.

The Overseas Development Institute's Edward Clay says much of the U.S. approach is mandated by Congress and federal regulations. "The U.S. position is that food aid -- virtually all of it -- is to be sourced in the United States, and a high proportion of the food should be processed and packaged before it's shipped. And thirdly, that a substantial proportion, presently around 75 percent, should be shipped in U.S. registered vessels," says Edward Clay.

Recent World Food Program data shows that the United States provided more than four million metric tons of food in 2004, or 56 percent of global food aid. The European Union provided less than two million metric tons of food aid that year, or about 20 percent of the world total.

The United States acknowledges that food aid often displaces local products in recipient countries, leaving many local producers unable to compete. To address that problem, the Bush administration has been advocating buying some food aid abroad. But American agricultural producers who supply the food aid oppose the proposal, saying U.S. funds should not be used to buy competing products abroad. According to the U.S. Department of Agriculture, the United States bought and distributed to foreign countries nearly $2 billion of American-produced food aid in 2004.

Necessary Reforms

Peter Harris, Director of the Florida-based U.S.A.-Africa Institute says many countries attach conditions to food aid, a process that, in his view, needs to be reformed. "The top issue to me is the process whereby nations can tie food aid to economic policy, to foreign policy, to even trans-shipments. It loses a lot of the real rational behind providing aid," says Harris.

Other analysts say food aid is important, especially in emergency situations such as the current food crisis in Southern Africa. And even here, many analysts agree that reform is necessary. Marc Cohen, a research fellow at the Food Policy Institute in Washington, says timeliness is one of the most important issues that needs to be addressed, "How can we [ensure] that, when we know that there's a problem, there's a timely response from the international community? I think perhaps [we can] move toward some kind of insurance mechanism where, if you do have a crop failure, then assistance comes on a timely basis."

Some analysts point to the ongoing food crisis in Niger as an example, saying it could have been less severe had aid arrived sooner. Others, including Oxfam's Policy Advisor in Washington Gawaine Kripke, say while it is important to send food aid in emergencies, care must be taken to avoid inflicting further damage on the recipient country's economy.

Sustainability is the Key

"In general, sending food is helpful when people are starving. But can also hurt farmers where people are starving because they are now competing with free food. So we see examples of farmers in very poor regions, where people are starving, who can't sell their food because there's a flood of American or Canadian, or other rich country donations coming in," says Gawaine Kripke and adds that, in the long-run, donors need to focus on sustainability and devote resources to supporting agriculture in various countries rather than focusing on food aid.

Peter Harris, of the Florida-based U.S.A.-Africa Institute agrees, saying food aid policies need to be redesigned with the help of affected countries to take into consideration their local needs and customs, "This policy discussion cannot take place in the vacuum of just the donors. I think the people receiving the aid need to be at the table. There needs to be some sort of a policy making sure that the means of distribution, the infrastructure needs that are required at a minimum are provided to ensure that the aid that does get there is distributed," says Peter Harris.

But Peter Harris, a Liberian by origin, says the problems with food aid can only be addressed once the World Trade Organization resolves its dispute on agricultural subsidies.

Meanwhile, most analysts agree that the best long-term approach may be a combination of food and cash that reduces costs and response times, and invests in building agricultural sectors in the world's most vulnerable countries.

This story was first broadcast on the English news program,VOA News Now. For other Focus reports click here.