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Contributions from
the Column
Focus
Too blunt an instrument?
Responding to complex crises
Fewer adverse side-effects
“We try to work ourselves out of the job”
Cash would be better
6/2004
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Too blunt an instrument?
The role of food aid in international development assistance has sharply decreased since the 1960s. Even so, food aid is still one of the most hotly debated tools of development policy. Indispensable in emergency situations, it has proven to be relatively ineffective in combating poverty and chronic food insecurity. What is needed is a reconstruction of the international infrastructure dealing with hunger and humanitarian crises, in which food aid would be one, but by far not the most important, component.
[ By Edward J. Clay ]
International food aid has become both a marginal and uncertain component of aid globally. Since 1995 food aid has fluctuated between 3.5 percent and 5 percent of official development assistance (ODA) compared with over 20 percent in the mid 1960s. Single percentage changes in ODA share also reflect large fluctuations in food aid. For example, US food aid, over half of all food aid, has fluctuated between 10 and 17 percent of US foreign assistance since 1995.
“Needs” have little influence on overall availability of food aid; rather it is the supply side effects of international price variability, levels of stocks and donor budgetary commitments which over the last decade have made food aid the most unstable element in ODA. Traditionally strong links to agricultural surpluses are major sources of this uncertainty. Total cereal shipments fell to a 30 year low of 5.6 million tons in 1996/7, only to bounce back to over 11 million tons in 1998/9, when, after the collapse of purchasing power in Russia and Indonesia, the US provided freshly accumulated stocks of wheat as food aid (see figure).
Loss of confidence in food aid
One of the major reasons for the declining significance of food aid is a loss of confidence in it as an alternative to cash aid. The wealth of evidence from recent evaluations, audits and studies has almost settled the controversy surrounding the effectiveness of food aid in attaining food security and poverty alleviation goals. Some general conclusions can be drawn:
Relief food aid, which has increased in importance, accounting for half of commodities shipped in 2002, plays a clear and crucial role in saving lives and limiting nutritional stress in acute crises caused by conflict or natural disaster. However, there is frequently a lack of robust evidence quantifying its positive impact, much evidence of ineffectiveness, and some evidence of late-arriving as well as inflexibility (for example, not allowing a switch from imports to local purchases), thereby hampering the recovery of local economies affected by natural disaster. The restricted basket of commodities reflecting the tying of aid creates difficulties in providing socially and nutritionally appropriate rations. The controversy about US-sourced genetically modified maize in Southern Africa in 2002 has highlighted the political sensitivities and problems that can arise.
Developmental food aid was found in many investigations to be relatively ineffective as an instrument for combating poverty and improving the nutritional and health status of vulnerable people. Programme food aid, which is provided to governments for sale, is a particularly blunt instrument for these purposes. Robust evidence on impacts of project food aid, which provides food directly, is lacking because of inadequate performance monitoring, in particular of the effectiveness of targeting and of the impacts on nutritional status and human resource development.
Financial aid is a more efficient way in most circumstances of funding development activities such as school meals or food-for-work, or providing budgetary support for general development or food security. Hence the massive fall in programme food aid from 60 percent of all shipments since the mid 1980s to only 22 percent today. The slow decline in World Food Programme (WFP) development activities reflects the fact that some donors have concluded from evaluations that direct distribution is less widely appropriate in poverty reduction. This is also implied by the increasing monetisation of US food aid by NGOs – from 10 percent in 1990 to over 60 percent in 2001 and 2002.
Success in mitigating the effects of natural disasters and conflicts indicates that food aid has a continuing role in emergency relief and post-crisis rehabilitation, though with considerable scope for improved performance. It can also be useful as targeted assistance to highly food-insecure people in situations of poorly functioning fragile markets and serious institutional weaknesses. However, it has not proved an effective or efficient instrument for supporting poverty reduction strategies more generally.
Little coherence in donor policies
The implications are clear. Hunger remains an important problem that needs a comprehensive package of food assistance measures, devised and implemented nationally, and with international support. Food aid has a positive but limited role to play in this task, especially in emergencies. It needs to be planned and managed in the wider, food assistance context. Unfortunately, there is only little coherence and co-ordination in donor policies, apart from major emergencies such as Afghanistan in 2001 and the Southern African crisis in 2002-3. The arrangements of the two largest bilateral donors, the US and the EU, illustrate the complexity and coherence problems of food provided as commodity aid.
The United States’ situation is complex but relatively transparent. This is because its government structure involves a division of powers that requires the executive to have a detailed legislative basis for its actions, and afterwards to be able to account to Congress for every dollar. The landmarks in US food aid are the intensively negotiated Farm Bills, which reflect lobbying that effectively ties all food aid to US exportable surpluses, but also allows NGOs to monetise commodities and use the proceeds for development projects. A Cargo Preference Act requires 75 percent of commodities (including those for relief purposes) to be shipped in US registered vessels. The most recent 2001 Farm Bill reconfirmed all these arrangements up to 2007, including the division of responsibility between the US Department of Agriculture and US Agency for International Development. USDA administers credit sales, support to the private sector, food for education and off-budget disposal of surplus commodities as grant food aid. USAID administers humanitarian and development food aid, mostly channelled through NGOs and WFP, and has recently been pressing for more flexibility on developing sourcing of commodities.
The European Union in effect has had 16 separate food aid programmes, one for the EU as a whole, managed by the European Commission’s Directorate General Development, and one each for the 15 member states. Some are so small as to be efficient only as cash contributions to multilateral aid and NGOs. About a quarter of the Commission’s Humanitarian Aid Office (ECHO) funds are also spent on food aid. There are extensive liaison and management arrangements covering NGO involvement. This complexity has led to considerable operational problems, and several reorganisations.
Possibly the most important long-term adaptations in EU food aid have been the greater flexibility, which allows finance to be provided for food aid, as reflected in the growth of triangular transactions (i.e., regional procurement) and local purchasing as well as the delinking of food aid management from agriculture. The EU’s 1996 Regulation on Food Aid, a major development in this direction, allows use of food aid budget lines to provide both commodities and finance for food security. Both commodity aid and total expenditure have declined under the 1996 Regulation. The European Court of Auditors recently criticised a lack of co-ordination between the food and cash-based activities. A major evaluation will report later in 2004.
The WFP is refocusing on development
The World Food Programme is the main international channel for food aid, which distributed 39 percent of commodities in 2001. WFP has evolved from a joint UN/FAO initiative in the early 1960s into an international food aid agency, confirmed by changes to its regulations in 1992. Donors increasingly tie resources to specific relief operations. The USA in 2001 contributed 65 percent of total WFP resources and 42 percent of its Regular Programme for development, double its share in 1991 and 1992. These developments are eroding its multilateral identity.
WFP has been responding to a larger but variable relief responsibility and cuts in development resources by attempting reorientation. Protracted relief for refugees and displaced persons has been broadened to include recovery and rehabilitation. Development activities were refocused on “enabling development” prioritising women and school feeding, and management was deconcentrated from Rome to country offices, particularly in response to weaknesses exposed by the 1991-94 Tripartite Evaluation, co-sponsored by Canada, Norway, and the Netherlands. The development activities are currently subject to another joint evaluation, this time instituted by Germany.
Options for change
A new consensus on the future of food aid is not yet fully established. There is a gradual recognition that food aid is no longer a major development resource. However, considerable readjustment is required on the part of all those institutions which are heavily involved with food aid, in particular some bilateral agencies, WFP and international NGOs which rely on food aid resources. One possible strategy, the adaptation of existing arrangements, implies more flexibility in the use of food aid and more integration with other aid instruments. But there are two problems with this strategy. First, WFP and NGOs remain exposed to pressures to handle temporary surplus food opportunistically on behalf of some donors, but with considerable uncertainty about medium-term resourcing prospects, and lack of complementary financial resources. Secondly, the mismatch between institutional arrangements, resources realities and humanitarian priorities may not be resolved. There are too many institutions and arrangements concerned with food surplus disposal, and they do not address effectively the difficult issues of relating today’s modest resources to the priority accorded to relief.
A second possible strategy is to reconstruct the international infrastructure dealing with food to address wider problems of human security (especially relief in humanitarian crises, rehabilitation, and food security for the most vulnerable in very poor countries) – a more ambitious goal than mere adaptation. The international community would have to agree on a common strategy for changes which might include:
– The replacement of quantitative commitments in wheat equivalents set by the Food Aid Convention (FAC) by robust commitments to provide the funds for humanitarian relief and assist recovery, based on a human right to food.
– Regular, internationally sponsored people-centred assessments of humanitarian and crisis needs involving food aid in both quantitative and financial cost terms. These assessments would be clearly separated from national food balance-sheet exercises for low-income countries that highlight cereal import gaps.
– The complete untying of all humanitarian aid, not only food.
– A reconstitution of WFP to make it the UN’s humanitarian and rehabilitation logistics and food support agency, replacing its focus only on food aid. More assured financial resources and professional capacity are required to meet the objectives defined by humanitarian emergencies and the alleviation of hunger and malnutrition in the poorest countries.
– The progressive merging of food import issues at the World Trade Organisation with the more general balance-of-payments problems of low-income countries adapting to liberalisation. Food security would be treated as part of the wider social dimension of liberalisation, and not as a separate food import problem.
– The accession of the 10 new states, which makes a rethink of how the EU shares its responsibilities for food aid inevitable, is an opportunity for reconstruction that could both foster and complement changes at an international level.
A major obstacle to a strategy of reconstruction is lack of consensus on moving from agreed goals on reducing hunger and realising the right to food, as set out by the World Food Summit in 1996, to specific objectives for international food aid. If these can be agreed, then the next challenge lies in mobilising and sustaining a coalition for change – no easy task. Individually most donors and agencies would agree in principle on the need for change. But there are powerful vested interests in some major food-exporting donor countries, which see no conflict in simultaneously promoting domestic, commercial interests and addressing global humanitarian concerns. Institutional resistance arises in agencies where change implies a narrower mandate, even though existing formal responsibilities are not being carried out effectively. Similarly, if assured that they would not be disadvantaged, most developing countries would welcome a more modest role for food aid except in extraordinary crisis situations.
Literature:
Edward J. Clay, Olav Stokke (eds) (2000):
Food Aid and Human Security. London: Frank Cass
Edward J. Clay (2003): Responding to Change:
WFP and the Global Food Aid System, in: Development Policy Review, Vol. 21, No. 5-6, pp. 696-709
John Hoddinott, M. S. Bos, Marc J. Cohen (2004):
Redefining the Role of Food Aid, Washington DC.: IFPRI
Julie Howard, David Tschirley (2003): Title II Food Aid and Agricultural
Development in Sub-Saharan Africa: Towards a Principled Argument for When and When Not to Monetize. MSU International Development Working Paper 81, East Lansing: Michigan State University
Dr. Edward J. Clay
is Senior Research Associate at the Overseas Development Institute, London. He has advised many international agencies and governments on food aid policy. This article is an update of the ODI Briefing Paper 2000 (1) “Time to grasp the nettle” (http://www.odi.org.uk/publications/
index.htm). e.j.clay@odi.org.uk
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