Archives
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010

December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009

December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008

December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007

December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006

December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005

December 2004
November 2004
October 2004
September 2004
August 2004
July 2004
June 2004
May 2004
April 2004
March 2004
February 2004
January 2004

December 2003
November 2003
October 2003
September 2003
August 2003
July 2003
June 2003
May 2003
April 2003
March 2003
February 2003
January 2003

December 2002
November 2002
October 2002
September 2002
August 2002
July 2002
June 2002
May 2002
April 2002
March 2002
February 2002
January 2002

December 2001
November 2001
October 2001
September 2001
August 2001
July 2001
June 2001
May 2001
April 2001
March 2001
February 2001
January 2001

December 2000
November 2000
October 2000
September 2000
August 2000
July 2000
June 2000
May 2000
April 2000
March 2000
February 2000
January 2000

December 1999
November 1999
October 1999
September 1999
August 1999
June 1999
May 1999
April 1999

April 1998

Group Slams the ”Iron Triangle” of Food Aid

IPS News
July 28, 2005
By Jim Lobe

Email this page

WASHINGTON, Jul 28 (IPS) - U.S. food aid is inefficient, wasteful and designed in most cases to benefit domestic constituencies, particularly U.S.-based agribusiness firms, shipping companies and some non-governmental organisations (NGOs), more than needy people in developing countries, according to a new report released this week by the Minnesota-based Institute for Agriculture and Trade Policy (IATP).

The 47-page report, ”U.S. Food Aid: Time to Get It Right,” calls for a major overhaul of food aid programmes, including ”untying” the assistance from U.S.-origin and shipping requirements, as well as the practice of monetisation -- that is, providing food to NGOs or local governments for sale so that the proceeds can be used for aid work or other purposes.

It also calls on Washington to do more to encourage local food production in poor countries, particularly in Africa, to ensure long-term food security by investing more in agriculture, establishing a system of emergency food reserves, and encouraging multilateral agencies, in consultation with recipient countries, to adopt uniform rules on food aid.

”Food aid is about saving lives -- often in desperate situations,” said IATP programme director Sophia Murphy, who co-authored the report with Kathleen McAfee, a geographer at the University of California in Berkeley.

”But food aid also has to be part of a much larger strategy to build and protect food security. We have to make sure we are not feeding people now who will still be food aid recipients in 20 years,” she noted. ”The U.S. food aid programme today fails this critical test.”

Food aid, which by definition must be either free or sold at ”concessional rates,” currently constitutes less than two percent of all food trade internationally and a tiny 0.015 percent of world food production.

Total food aid deliveries last year came to 7.5 million metric tonnes, down from 10.2 million metric tonnes in 2003. Of those totals, two-thirds consisted of emergency aid for dealing with natural or human-made disasters in 2003; 59 percent was emergency aid last year.

The United States, which provided a whopping 56 percent of all food aid last year, is far and away the largest supplier. It is followed by the European Union with 20 percent, Japan (eight percent), and South Korea, Canada, Australia, and China, each of which accounted for about 2.75 percent of the global total.

Apart from South Korean, the U.S. is alone among donors in selling part of its food aid, instead of giving it away.

While the U.S. was the single biggest provider, it and other major donors often channel supplies through third parties. Thus, multilateral agencies, such as the World Food Programme (WFP), provided 51 percent of food aid delivered in 2003; NGOs, 28 percent; and bilateral sources, such as national aid agencies, 21 percent, according to a WFP report published last year.

Last year, the major recipients included Ethiopia, North Korea, Sudan, Bangladesh and Eritrea.

Washington's dominance of the global food aid picture has made it the subject of two major complaints at the World Trade Organisation (WTO).

First, while the monetisation of food aid generates money for NGOs to pursue other aid activities, according to the report, it also reduces prices for local producers and traders in poor countries, effectively rigging the market against them. All such programmes should be phased out, according to the report.

Second, export credits provided to U.S. agribusiness result in food dumping -- overseas sales of food for less than the costs of production. According to the report, the EU has now put forward a proposal at the WTO, which will be taken up at the next Ministerial Meeting in Hong Kong in December, requiring all food aid to be cash-based and untied from requirements that it originate in the donor country.

U.S. food aid is currently provided under six different programmes controlled by two different bureaucracies, the Agriculture Department and the US Agency for International Development (USAID). That results in administrative confusion and some duplication, according to the report.

What makes U.S. food aid more objectionable, however, is the ”iron triangle” of interest groups that are its greatest beneficiaries. These groups -- agribusiness, shipping companies, and NGOs -- enjoy a ”stranglehold on food aid practice,” according to the report, perpetuating a dysfunctional system through their influence on Congress and the government.

Under U.S. law, for example, a minimum of 75 percent of U.S. food aid must be sourced, fortified, processed and bagged in the U.S., and only a handful of firms, notably Cargill and Archer-Daniels Midland (ADM) are qualified to bid on the procurement contracts. The result is that the government has paid on average about 11 percent more than open-market prices for food aid.

U.S. law similarly requires that 75 percent of all food aid must be transported on U.S.-flagged vessels, despite the fact that the shipping industry has been failing over the past few decades and currently handles only three percent of all U.S. imports and exports (excluding food aid) and, according to recent study, cost nearly 80 percent more than foreign-bulk carriers using the same routes with similar cargo.

While NGOs take pride in keeping their costs low and in using the money made from food aid sales to help the poor, they find themselves supporting a system that threatens local producers and traders in the interests of maintaining ”an important revenue stream for ...funding of their ongoing development work,” according to the report.

Other food aid donors provide much of their food aid to NGOs in the form of cash, precisely to avoid harming local markets and hence, long-term food security.

IATP is calling for a transition to an untied, cash-based food aid system, including the phasing out of all sales of food aid and monetisation; the imposition of strict limits, except in cases of emergencies, on shipping food aid over long distances; much-greater efforts at increasing domestic food production in poor countries; and the abandonment of policies promoted by the World Bank and the International Monetary Fund that require countries to invest more in export crops in countries where such strategies have failed to improve the plight of the poor.

”African farmers are capable of producing a lot more food for their communities and nearby regions,” according to McAfee. ”But policies of the U.S., the WTO, and the World Bank promote the use of African land and resources for export crops instead, and many African governments neglect agriculture for domestic food needs. This must change, or hunger will increase.

NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving this information for research and educational purposes.