Food fight: how international aid fails the poor

IN 2006, THE UNITED STATES provided 6 million tons of food aid to agencies such as CARE, Catholic Relief Services, World Vision and Save the Children, which distributed the bags of wheat, rice or corn and containers of vegetable oil. Some of the aid went to places wracked by war or natural disaster, where it directly alleviated human suffering. In other places, children suffering from acute malnutrition were brought back to full health with the help of specially fortified food. Sometimes entire families were able to survive a lean season.

Given these and other positive results, why would any agency reject U.S. food aid?

Yet that's exactly what CARE did last July, when officials announced that beginning in 2009, CARE will forgo $45 million a year in U.S. food aid. The organization based its decision on disagreement with a practice known as monetization, the process of selling some of the U.S. food abroad in order to raise needed cash for development projects and administrative costs. Although monetization is a common and necessary practice, CARE maintains that the sale of this food in the fragile markets of recipient countries competes with the sale of food produced by local farmers, causing prices to drop and lowering farmers' income. After careful study, CARE has determined that the benefits of monetization are simply not worth the costs: it will no longer accept those donations of U.S. food aid that are intended for monetization (though it will continue to receive emergency U.S. food aid).

The long journey of food aid begins when the U.S. government purchases basic staples such as corn, rice and wheat (grown in Iowa, Texas and Nebraska), processes and packages the food in plants throughout the country and ships it from ports in the Great Lakes and the Gulf of Mexico and on the West Coast. Originally food aid programs were seen as a way of disposing of large surplus food stocks owned by the federal government--surpluses caused by price control measures that helped sustain U.S. farmers. The plan was to remove surplus food from domestic markets and sell or donate it in foreign countries, thus helping both farmers at home and hungry people overseas.

But those government surplus stocks no longer exist. Today the U.S. government purchases food through regular U.S. commercial channels. The law requires this; it favors agribusiness interests and U.S. shipping companies even though the end result is higher-priced commodities and transportation. If the aid groups were allowed to consider cheaper sources of food and transportation, they would save both money and time.

The law also requires that the vast majority of food aid donations be made into ready-to-eat products or otherwise processed before being shipped. At least 75 percent of food aid must be shipped on U.S. flagships, despite the fact that our domestic shipping fleet is small and normally more costly than its international competitors. The bottom line? More than half of the U.S. food aid budget is consumed by administrative and transportation expenses.

Despite these inefficiencies, various U.S. interests that benefit from the program--agricultural interests, transportation companies and aid agencies--continue to provide strong political support for it. As a result, the United States is the largest donor of food aid worldwide, and since it sends more than half of all its food aid to the World Food Program (WFP), it is the organization's single most generous supporter. The remaining food aid donations are delivered through nongovernmental organizations (NGOs) such as CARE and Catholic Relief Services.

Though complex, food aid programs do a lot of good. During Niger's 2006 crop failure and ensuing famine, for example, feeding centers were set up for individuals, particularly children, suffering from acute malnutrition. Thousands of lives were saved. School feeding programs that were made possible through the McGovern-Dole Food for Education program provide hot meals or take-home rations to students. A Bangladesh school feeding program attracted poor children and generated 20-30 percent increases in school enrollment. Food for Work programs--large public works projects in which workers are paid in food instead of cash--have helped to provide jobs and improve local infrastructure. In Sierra Leone, ex-soldiers are finding hope and opportunity through Food for Work, while new roads and irrigation systems help the nation recover from its war-torn past.

But aid in the form of food is seldom enough. Without shelter and sanitation, well-fed disaster-affected communities will continue to suffer; without textbooks and school supplies, kids coming to school will not learn; without tools and technical expertise, the best-designed Food for Work plan will not succeed. And--no matter how generous the food aid--food shortages will continue unless there are investments in farming and agriculture.

Unfortunately, the food aid and development assistance budgets and programs are developed separately, and as a result the U.S. foreign assistance system is not set up to encourage a comprehensive development approach. U.S. food aid programs are managed by the Department of Agriculture and the U.S. Agency for International Development (USAID); each has its own mandate, agenda and rules. Coordination between agencies is the exception rather than the rule. For example, USAID manages Child Survival and Health (CSH) programs intended to reduce illness and death among mothers, infants and young children. But efforts to incorporate food aid into these programs have been hampered by discordant funding and management processes. A CSH program in India that included a food aid component could not function effectively when the food aid budget was cut. In this case, the Indian government promised to step in to fill the gap--but developing-country governments often cannot afford to do this.