Recasting Food Aid’s Recasting Food Aid’s Policies: The Particulars and Policies: The Particulars and The PoliticsThe Politics

Jarkyn SamanchinaMassimo Pagnoni

Mahira Sheikh

Reforms needed

Improved targeting by operational agencies

Global food aid agreement involving both donors and recepient countries

Change in structure, conduct and performance of food aid globally (WTO Doha Round, next Farm Bill in the U.S. Congress)

Strong legislative leadership to satisfy interests of all parties

A) International Policy Changes Needed

Recommendation 1:Recommendation 1:

Negotiate a new Global Food Aid Compact to

replace the expired Food Aid Convention

FAC: minimum volume of food aid not to disrupt commercial trade; food aid slow to untie (U.S.)

GFAC: include donors, recipient country governments and agencies – ownership and responsibility

WFP distributes food in WFP distributes food in Palestinian schoolsPalestinian schools

GFAC to commit donor countries to

Tonnage minima: three quarters of projected global emergency needs; surplus to be stored and used unrestrictedly through IEFR for future emergencies

Adequate complimentary financial resources and relaxation of rules mandating donor-country procurement, processing and shipping services

Cash: GFAC to include untied donor minimum financial contributions to WFP and NGO signatories to FGAC at least equal in value to their physical volume commitments (inefficiency of IMF’s CFF)

Linking GFAC to WTO agreement to reduce trade-related disputes over food aid

Make WTO’s proven trade-related disciplines and dispute resolution mechanisms available for food aid

Establish a GFAC Secretariat within WFP co-chaired by WTO and OECD-DAC

Recognize interlinkages between food aid, global agricultural trade and overseas development assistance

Recommendation 2: Recommendation 2:

Restore real global development assistance flows – not just emergency assistance

Foreign aid is necessary for effective food aid: decline of aid to low-income countries in last decade“Relief trap” – emergency spending crowding out development spendingFood insecurity mostly in rural areas – agricultural and rural development important to coherent strategy of poverty and food insecurity reduction

B) United State Policy Changes Needed

American food aid programs remain stuck in a model crafted in a very different era

Designed mainly for surplus

disposal

Used as a tool to promote commercial agricultural exports and advance American geopolitical interests (proved false)

Achieved partial success in development and humanitarian assistance

Food Aid Distribution In LiberiaFood Aid Distribution In Liberia

Recommendation 3: Recommendation 3:

Negotiate reductions in outdated forms of food aid in exchange for reductions in EU export subsidies that harm both US and developing country farmers

WTO’s Doha Round negotations heavily emphasize agricultural trade liberalization

Agriculture (10%) is the most heavily protected sector: two thirds of economic gains from complete liberalization of trade would come from agriculture

Heavy tax on local consumers, yet powerful domestic farm lobbies WB estimates that ending trade-distorting farm subsidies and tariffs

would increase global wealth by over $800 billion and lift over 150 million people out of poverty by 2015

Recommendation 4:Recommendation 4:

Focus on quicker and more flexible emergency response

Food aid is impactful in saving lives during emergencies and in post-crisis recoveries

Shipping food is expensive due to the current U.S mandates. Improved by : the congress giving the USAID Administrator authority to deploy food aid in the early stages of emergencies without the usual mandates on domestic procuremnet, bagging and US flag carrier shipment.

Recommendation 5:Recommendation 5: Eliminate bureaucratic duplication

Federal Government consolidated 6 food aid programs into 2 agencies (USAID-USDA)

OMB proposed that these should run into a single program USAID

Recognizing food aid as just one tool among several saves money by reducing bureaucratic duplication of effort and thus makes it more effective

USAID – Sudan

Recommendation 6:Recommendation 6:

Within current budgets, adapt the resource to fit the application

While direct distribution of food can address hunger in emergencies, it is not sufficient to address the causes of hunger

American policy should focus more on food security and less on food as a resource.

Increase in cash resources for development programming by NGOs

Cheaper to prevent crisis than to respond to them!

Political will should be enhanced

Increased coordination among NGOs Leads to improvement. Less variant changes are already taking shape in

Iraq.

Not only the U.S but other bilateral donors need to make food aid policy changes

No precise recommendations Variations between different bilateral donors as to the most desirable reforms

Donors, especially Japan, need to mainstream food aid with development assistance and reduce the influence of food aid by ministries and enterprises

Canada instructive since food aid comes from a central aid budget, making the tradeoffs between food and cash clear to decision-makers

EU needs to increase the efficiencies at their approval and disbursement

Local and national governments need to become more proactive. This requires:

Direct government action

Increased cooperation with operational agencies and donors.

Recipient countries: that are chronically vulnerable to food crises need

well-managed food security

pre-arranged letters of credit for food imports in order to be adequately efficient in the early stages of an emergency

Recommendation 7:Recommendation 7:

Improve the targeting of food aid.

Improvement is needed to continue to improve targeting not only who should receive food aid, but what kind of assistance and when they need it

Achieved by having good information and experienced food distribution staff

Recommendation 8: Recommendation 8:

Use food aid only where it is appropriate.

Food aid has been used as a resource in various ways : To address acute hunger To improve agricultural production, health and education

Food aid is ideally suited when it addresses acute food insecurity in humanitarian emergencies.

Emergency food aid should be directed to the nutrient content of food aid transfers.

An investment in long-term human capital – especially in protecting vulnerable chidlren.

Reforms

recasting food aid programs

a) Convincing the NGOs

NGOs must take a leading role in mobilizing public support for private and public funding

This will enhance and not constrain the

alleviation of poverty

b) Addressing Maritime Interests

Transport

a) The biggest expenditure that does not directly benefit food aid (more than 40%)

b) U.S shippers have used programs at their own interestsc) Farm lobby and shippers make money at the expense of NGOs and poor people

in whose name the agricultural and maritime interests promote food aid

Reforms:

a. Consolidate subsidies under a single program that will terminate cargo preference conditions

b. Reduce slow-cost competition in food aid transportc. Improve commercial competitiveness

c) Satisfying donor country agricultural interests

In the agricultural sector there are few real beneficiaries from current food aid programs.

The total amount of food aid is not relevant with respect to the whole food production (1%-2%)

Reforms:

relaxing various restrictions

that make international food

assistance expensive and slow

F) The Politics of ReformOther Supporters:Other Supporters: 3 Main groups with overlapping interests

Foreign policy community national security interests are strictly related to global poverty reduction (MDG

1) this is a good occasion to restructure the system a way for strengthening the North-Atlantic relations

International financial community benefits directly from the reallocation of development assistance from food to

cash stimulates demand for financial services (insurance against natural disaster) reduce commercial trade inefficiencies

Groups advocating for fiscal responsibility tax payers elimination of bureaucratic duplications (recommendation 5)

This can yield budgetary saving of nearly 20% This can yield budgetary saving of nearly 20%

In the current World Food Security Summit, FAO Director-General Jacques Diouf stresses:

““The world only needs 30 billion dollars a year The world only needs 30 billion dollars a year to eradicate hunger”to eradicate hunger”

Global food aid system underperforms its potential Global food aid system underperforms its potential due to misguided policies: few significant policies due to misguided policies: few significant policies and operational change could make existing food aid and operational change could make existing food aid more effective in reducing poverty and hungermore effective in reducing poverty and hunger

This can be reached easily by recasting food aid