The Problem with Food Aid

Posted August 8, 2011 User_image_bg Kristine


The food crisis in East Africa has been reported with the utmost sense of urgency, literally as a matter of life and death. In contrast, food aid delivery is still marred with delays and inefficiency, trapped in the sluggish grind of bureaucracies and regulations.

“In general, food aid is still far more costly and less efficient than it could be because major donors continue to tie their aid in various ways,” Kimberly Ann Elliott, senior fellow at the Center for Global Development, told Voices of Youth. Tied food aid refers to the condition that the funded goods and services must come from the donor country. Aid from the United States for instance, requires that donated food must be bought from American suppliers and 75 percent of them must be shipped on U.S.-flagged vessels.

Tying of food aid causes distribution to be slow and expensive. According to the non-government organization CARE USA, the average delivery time (from purchase order to arrival in recipient countries) of tied food aid is five months. Cash donations only take 1-3 months. The cost of tied food aid is also 30-50 percent higher than untied aid. A good chunk of the funding goes to shipping costs alone.

The U.S. still tops the list of donors for the Horn of Africa, providing more than $400 million worth of humanitarian assistance so far this year. There have been some improvements in U.S. food aid delivery which includes pre-positioning stocks in areas where they might be needed, Elliott said. The fundamental system, however, is still deeply flawed. There have been calls from NGOs and food policy think tanks to end the conditions of tied food aid. Cash donations to relief agencies like the World Food Program are deemed more efficient. This allows the agencies to buy food locally or from neighboring countries, thereby reducing delivery time as well as shipping and other logistical costs.

Other donor countries like Australia, Canada, Denmark, France, Norway and the United Kingdom have moved to untie their food aid. The European Union now also provides cash donations, Elliott said, but much of it is still tied in terms of earmarking on where it should go or in what form. U.S. food aid policy, on the other hand, is currently protected by legislation, and lobbyists for agribusiness and the shipping industry are making it difficult to institute reforms.

Another potential reform to maximize food aid is to allow the WFP to buy food on futures markets. This entails purchasing goods at an agreed price for future delivery, which would protect the buyer from potential price hikes. At this time, WFP still buys food at current market prices in the midst of price increases. This means the agency is not able to stretch its budget as far as it might, Elliott said.

She also recommended the use of cash transfers instead of direct food aid particularly when the crisis is primarily caused by high prices. Similar to Stephen Devereux’s suggestions, she pointed out the need for developing safety nets that will enable affected families to cope with food insecurity. On the longer term, investment in agriculture and rural development is crucial in addressing the food problems in East Africa.

© UNICEF/NYHQ2011-1226/Kate Holt. Somalia, 2011. On 24 July, aid workers cook and serve maize at a feeding centre in Badbado, a camp for displaced people in Mogadishu, the capital. Nearly 1.5 million Somalis are internally displaced.




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