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Contributions from
the Column
Monitor
Information technology – little leapfrogging potential
World Summit on the Information Society
Electronic waste – digital divide becomes digital dump
US food aid remains unreformed
NGO report on German development aid
German President launches “Partnership with Africa”
New German government agrees on development policy
Kortmann becomes Parliamentary Secretary
ACP countries criticise EU Partnership Agreements
Africa looses out in apparel competition
Reforming EU’s sugar regulations
12/2005
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[ Food aid ]
Reform failure in the USA
The spending of the USA and Canada on food aid is least efficient of all donor countries, as was elaborated in an OECD study earlier this year (see E+Z/D+C 6/2005, p. 261). The reason is that until now, both countries have provided food aid almost exclusively by supplying domestic produce, transported in nationally-owned ships to famine-stricken regions around the globe. Other donors such as Britain, Germany or the Netherlands purchase relief supplies in the target region or even country. They receive up to 50 percent more grain for their money.
Reacting to the study, Canada changed its rules in September. After consultation with the farmers’ lobby, the government decided that, in future, half of Canadian food aid shall be bought from outside the country. The government explicitly referred to the OECD document when stating the reason for this reform.
The US administration wanted to head in the same direction. It adopted a proposal by the US development agency USAID, according to which up to a quarter of US relief supplies would be purchased abroad in future. According to the New York Times, Andrew Natsios, head of USAID, argued that many more lives would have been saved if the agency had been allowed to procure relief supplies locally during the Ethiopian famines of the 1980s and the 1990s: “Speed is everything in a famine response.”
President George Bush supported the proposal and included it in the 2006 budget. However, Congress rejected this reform in October. The New York Times blames an alliance of seed companies, freight shipping companies and aid organisations of lobbying against the reform. All three interest groups make a lot of money from American food aid. Over half the $700 million USAID spent on relief supplies last year went to only four seed companies, led by Cargill and Archer Daniels Midland. The $300 million for transport was shared among only five shipping companies. According to Christopher Barrett, economist at Cornell University, the farmers who supposedly benefit most from the procedure actually only receive very little money.
As the New York Times reported, the Coalition for Food Aid, a network of 16 non-governmental aid organisations, has also campaigned against the reform proposal. Organisations such as World Vision, Catholic Relief Service and CARE make a large proportion of their income from the distribution or sale of food aid – otherwise known as monetisation. If they bought relief supplies in the crisis regions, the significance and incomes of these organisations would shrink.
The coalition raised principle objections. According to spokeswoman Ellen Levinson, the reform proposal was not thought through. The aid organisations do not oppose purchasing relief supplies locally per se. But they feel a small-scale pilot programme should be implemented with extra funds first, to establish how safe locally procured relief supplies really are and how the purchase effects local markets.
US food aid is also the subject of current World Trade Organisation negotiations. Agricultural exporters such as the European Union, New Zealand, Australia and Argentina view US practices as trade-distorting subsidisation of American agriculture. They want to see it abolished (see E+Z/D+C 7/2005, p. 268). (ell)
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