Upload
joleen-wright
View
214
Download
0
Tags:
Embed Size (px)
Citation preview
Chris BarrettC.H. Dyson School of Applied Economics & Management and
Department of Economics, Cornell University
November 19, 2012 Community and International Nutrition Seminar Series
Cornell University
US Food Aid:Background Trends and Key
Policy Issues on the Cusp of a Farm Bill
1. Increasing emergency-affected populations-Natural disasters and affected persons have increased significantly over the past two generations. -The global number of internally displaced persons (IDPs) has grown from 20 to 27 mn/yr, 1989-91 to 2009-11.
Background trends
0
50
100
150
200
250
300
350
400
1974 1979 1984 1989 1994 1999 2004 2009
Developing World Natural Disasters(5 year lagged moving averages)
Number of Disasters
Millions of Persons Affected
Data source: EM-DAT: The OFDA/CRED International Disaster Database
2. Globalization of food markets-Food aid was originally a surplus disposal program. Take gov’t-held surpluses generated by farm price support programs and give them away beyond the US marketshed.
-But virtually no place lies outside the marketshed today. Even in land-locked developing countries, commercial food imports have grown > 10-fold in the past 20 years!
-This has led to a rapid transition towards cash-/market-based food assistance, especially since 2004 tsunami.
Background trends
3. We have entered a high food price regime-For a variety of reasons, food demand growth has outpaced supply growth for the past decade. The result is historically high (inflation-adjusted) food prices for the indefinite future.-This makes food aid expensive.
Background trends
50
100
150
200
1/19
901/
1991
1/19
921/
1993
1/19
941/
1995
1/19
961/
1997
1/19
981/
1999
1/20
001/
2001
1/20
021/
2003
1/20
041/
2005
1/20
061/
2007
1/20
081/
2009
1/20
101/
2011
1/20
12FAO
Rea
l Foo
d Pr
ice
Inde
x (2
002-
4 =
100)
FAO Real Food Price Index
4. More attention to micronutrient deficiencies -The Green Revolution and globalizing food markets have steadily reduced undernutrition.-But low micronutrient (mineral/vitamin) intake increasingly recognized as equally serious, especially for children due to irreversible effects-Hence growing attention to food aid quality (2011 GAO and Tufts/USAID studies).
Background trends
Developing world prevalence (%) of insufficient 1990-94 1995-99 2000-04 2005-09 Dietary energy 20 17 17 15 Vitamin A (under 5 serum retinol < 20 g/dl) 36 35 33 31 Iodine (urinary iodine < 100 g/dl) N/A 37 33 33 Iron ( under 5 anemia) 49 49 51 61 Source: FAO SOFA 2013 (internal data)
Much Has Changed In US Food Aid Already
For nearly 60 years, the USG has been the world’s largest donor of food aid for strategic, economic and moral purposes. Still 50-60% of global flows each year.
Food aid volumes have fallen sharply over the past decade-plus, from the US andglobally due to trends described already.
Huge reorientation from monetizedprogram food aid (Title I) to emergencyand project (Title II) food aid, again in response to the trends described.
0
500
1000
1500
2000
2500
3000
1990 1995 2000 2005 2010
$ m
illi
on
s (r
eal,
bas
e ye
ar 2
000)
U.S. Food Aid Programs, FY1990-2010
Title I
Title II
Other
0
2
4
6
8
10
12
14
16
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Mill
ions
of m
etric
tons
US shipments
Non-US shipments
Since 1999, global shipments down 64%, US shipments down 68%.
US Food Aid
7. Timeliness (Golden Hour principle)- Delays are expensive and deadly (2004-5 Niger example).- Most losses from disasters are ‘post-exposure’. Rapid, appropriate response
matters enormously to recovery.- Farm Bill still sharply limits local and regional purchases (LRP) in US food
aid programs although they account for 82% of non-US food aid today.- Prepositioning the best feasible Title II option now. But 25-40% more
expensive than regular shipments (GAO ‘07).- Big gains from LRP: USDA LRPP and USAID EFSP projects delivered 62%
(14 weeks) faster, on average, than shipments from US.- Hard earmark on non-emergency funds ties FFP’s hands: big risks of 4th
quarter emergency response interruptions.
Key policy issues
7. Cost-effectiveness- Increasing need with decreasing resources. Need to “do more with less”.- Need to reduce unnecessary (non-commodity) costs: transport is huge
(especially with cargo preference rules … adds ~$150mn/year to costs … but rolled back in July).
- USDA LRPPP/USAID EFSP reduced cost of delivered grains by >50% on average.
- Monetization: just 58-76% cost recovery … hugely wasteful (GAO). The rest of the world abandoned monetization years ago and OMB recommended ending it back in 2002. Yet non-emergency Title II monetization has grown from 28% in 1996 to 74% in 2010. Better options exist: community development funds (Foreign Ops), 202e, Title I buybacks.
Key policy issues
7. Food Aid Quality
- Need to address more varied nutritional needs than simply filling a dietary energy supply shortfall.
- Especially important in light of the First 1000 Days Initiative- Need to match commodity choices to assessed needs to achieve cost-
effective delivery of needed nutrients (what is cheap in $/MT terms not always cheap in $/nutrient terms)
- Increased attention to food aid quality … LRP has proved equal to shipments from US in food quality w/much greater capacity to resolve quality problems at delivery than with shipments from the US.
Key policy issues
7. Flexibility
- With greater food market access and superior timeliness and cost-effectiveness of commercial channels, cash/vouchers often preferred to food.
- Need “response analysis” (i) to identify appropriate form/ source of assistance, (ii) to ensure assistance doesn’t disrupt markets on which the poor – and dev’t – most depend.
- But need options: LRP just 2% of US food aid vs. 82% for ROW. Mainstream LRP not make it a separate program.
- Slow/awkward movement toward budget integration already achieved in Canada, EU and other key donor countries, moving food aid into international development budgets and out of farm policy and agriculture budgets.
Key policy issues
7. Senate- Senate passed a bipartisan Farm Bill capping monetization, making LRP
permanent and slightly reducing the ‘hard earmark’ for non-emergency food aid.- Far from ideal, but progress nonetheless
House- No Farm Bill vote yet. Ag Committee passed a bill that drops LRP, reinforces
monetization and the hard earmark.
If no Farm Bill?- USAID authority for new programming expires Dec. 31. At that point >50% of
the world’s food aid flows cease!
Farm Bill 2012
US food aid still essential to global emergency response.
The Farm Bill offers a chance to further adapt US policy to all that has changed in the world of food aid. But the current House version is a step backwards and perhaps no bill at all.
Key policy issues for the 2012 Farm Bill:- timeliness - cost-
effectiveness- food aid quality - flexibility
Implications: -permanent, mainstreamed LRP - reduced/constrained monetization- relaxed Title II non-emergency hard
earmark
Conclusion
Thank you for your time and interest!