Global Policy Forum

Food Aid Reform: Buy Locally


By Asma Lateef *

Partnership for a Secure America
June 9, 2008

Rapidly rising food prices globally and concern about the impact on hunger and poverty has prompted urgent multilateral discussions at the highest levels, including last week's summit in Rome. The Rome Summit laid out a short-term and long-term plan of action. The immediate response must be to provide poor people with access to adequate and nutritious food either through food or cash assistance. But the international community will be far more effective if responding to this crisis also provides an opportunity to address the structural issues that are at play-underinvestment in developing country agriculture, trade-distorting agricultural subsidies in rich countries, the impact of biofuels, climate change etc.-and to fix a food aid system that is clearly inefficient and inadequately equipped.

The World Food Program has faced huge shortfalls in light of this crisis, as its budget, which relies on voluntary contributions, has been unable to keep up with the rising cost of food and transportation. The recent disasters in Myanmar and China add to the already daunting humanitarian needs. The United States and other donors have increased their contributions and last week, Saudi Arabia added $500 million in new money (not reprogrammed money). These contributions will allow WFP to continue existing efforts but not expand its programming. The United States and other donors should provide regular and realistic funding for acute food shortages. In recent years, the United States and other donor governments have consistently under funded budgets for emergency food aid.

The United States is the largest contributor of food to the World Food Program and the largest bilateral provider of food aid. But U.S. food aid, by law, must be purchased and processed in the U.S. and shipped on U.S. flagged ships. This is suboptimal as it takes a great deal of lead time to mobilize the food and get it to where in needs to be and because in many cases it is far cheaper to purchase food locally or at least closer to its final destination. An important added benefit of locally purchased food aid is that it supports local production and local markets in the developing countries-creating economic opportunities for smallholder farmers.

The WFP is increasingly moving to a local purchase model, using the cash that other donors provide to buy the food that it needs at the best price - often in markets in developing countries. The U.S. should do so too. Allowing just 25 percent of U.S. food aid to be purchased locally would provide an extra $150 million per year in food for hungry people-at no cost to taxpayers.

Efforts to reform the Farm Bill have included advocating for local purchase of U.S. food aid. Although the final bill is far from reformed, there was a small step forward on food aid. Language in the bill recognizes the value of local purchase. It authorizes a pilot project to study the feasibility of increasing the proportion of locally purchased food aid. There is also language on the need to fortify food aid once it has reached its destination-acknowledging the importance of micronutrients and the fact that shipped U.S. food aid may not be of adequate nutritional value. If anything, rising food prices and the growing hunger crisis should be a wake up call that the current food system is broken. Fixing food aid would be a start.

About the Author: Asma Lateef is Director of Bread for the World Institute. An affiliate of Bread for the World, a non-partisan, Christian anti-hunger organization, the Institute publishes an annual Hunger Report, briefing papers and educational materials on issues related to domestic and international hunger and poverty. She has also worked as a consultant at the United Nations Conference on Trade and Development and the International Labour Organization. She holds a bachelor's degree from McGill University in Montreal, Canada, a post-graduate diploma from the London School of Economics and a master's degree in Economics from the University of Maryland.

More Information on Social and Economic Policy
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