Towards a Global Food Aid CompactFinalVersion(17.6)

8/4/2019 Towards a Global Food Aid CompactFinalVersion(17.6)

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Towards A Global Food Aid Compact*

Christopher B. Barrett and Daniel G. Maxwell

December 2005 revised version

forthcoming in Food Policy

*This essay draws extensively and builds on Barrett and Maxwell (2005). We thank

audiences at the World Trade Organization, the NGO Executives Forum, and the

Canadian Food Grains Bank/OXFAM Canada Food Aid At A Crossroads workshop, as

well as Abdolreza Abbassian, Stuart Clark, Susan Farnsworth, Heinrich Hick, DavidKauck, Gawain Kripke, Frans Lammersen, Lauren Landis, Sarah Lowder, Matias

Margulis, Per Pinstrup-Andersen, Colin Poulton, George Simon, Joachim von Braun, Nic

van de Walle, Frank vander Staaij, Patrick Webb and an anonymous reviewer for helpful

comments on earlier versions and discussions about these topics. However, the viewsexpressed here are our own, and we alone bear responsibility for any remaining errors.

Cornell University and CARE International, respectively. Barrett is corresponding

author at 315 Warren Hall, Department of Applied Economics and Management, Cornell

University, Ithaca, NY 14853-7801 USA, telephone 1-607-255-4489, fax: 1-607-255-

9984, email: [email protected].


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Towards A Global Food Aid Compact

Food aid is an ever-contentious subject. It is one of a handful of significant points of

disagreement in current agricultural trade negotiations under the World Trade

Organization (WTO)s Doha Round, as the United States and the European Union

wrangle over the trade displacement and developmental effects of food aid. Food aid is

often blamed for creating disincentives for small farmers in recipient countries by

depressing food prices, distorting markets, discouraging overdue policy reforms and

fostering dependency. And there is no universal code of conduct that adequately prevents

the manipulation of recipients and ensures both the operational independence of

humanitarian agencies and their adherence to norms of best practice.

Meanwhile, increasingly widespread humanitarian emergencies associated with natural

disasters and war, combined with heightened interest in tackling poverty and hunger

under the United Nations Millennium Development Goals, have boosted calls for global

action, including reform of food aid (Clay 2000, Barrett and Maxwell 2005, Murphy and

McAfee 2005, OXFAM 2005). This juxtaposition of increased demand and greater

discord underscores the governance crisis facing the global food aid system. Now more

than ever, the international community needs an effective mechanism for governing food

aid that minimizes disputes, enables rapid response to emergencies, and ensures

appropriate resourcing for humanitarian and development objectives.

Existing international mechanisms governing food aid are dysfunctional and outdated, in

large measure due to profound differences in the food aid policies of major donor


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countries. The one formal international accord with legal status, the Food Aid

Convention (FAC), has no mechanism for effectively monitoring or enforcing

signatories compliance with the terms to which they have agreed. Moreover, its

membership consists only of donor countries seven countries plus the European Union

and its member states leaving it unable to address myriad issues that involve recipient

governments or operational agencies.1

A parallel body with technical monitoring

capacity, the Consultative Sub-Committee on Surplus Disposal (CSSD) of the Food and

Agriculture Organisation of the United Nations (FAO), is routinely ignored by its donor

members. Less than five percent of 2000-2 global food aid flows were reported under

CSSDs required notification mechanism (Barrett and Maxwell 2005).2 Meanwhile, the

main multilateral organization with the greatest technical expertise in food aid, the World

Food Programme (WFP), and the worlds chief aid monitoring agency, the Development

Assistance Committee of the Organisation for Economic Co-operation and Development

(OECD/DAC), have no formal role in global food aid governance.

A reasonably straight-forward alternative could readily rectify the problem of an

ineffective global food aid governance system. The moment is now to make the change

and thereby resolve the range of disputes arising from the present institutional

incoherence surrounding international food aid flows. In this paper, we outline the basic

design of such a Global Food Aid Compact.

1 For more on FAC, visit the International Grains Council web site (http://www.igc.org.uk/) or see Barrett

and Maxwell chapter 4.2 Details on the reporting mechanism can be found in FAO (2001).


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The Present Context

In the grander scheme of things, food aid is but a drop in the ocean of international trade

in food and thus too easily overlooked. It represents less than five percent of global

overseas development assistance, less than two percent of commercial international trade

in food, and less than 0.2 percent of total world food production.3

Even in the United

States, the principal source of food aid, food aid purchases represent less than 0.1% of

national food sales (Barrett and Maxwell 2005).

Yet food aid has an impact strikingly disproportionate to its scale. Over the past half

century, food aid shipments of more than half a billion metric tons have saved and

improved the lives of many millions of poor and hungry people around the world. It has

been a critical element of international response to recent emergencies in Africa, Asia,

Central and Eastern Europe, Latin America and Oceania. Food aid plainly can work to

contribute to world food security and to improve the ability of the international

community to respond to emergency food situations and other food needs of developing

countries, as the objective of the Food Aid Convention asserts.4

Problems arise, however, because food aid continues to be used to advance other donor

objectives as well, objectives for which food aid is demonstrably less effective: to support

farm prices, to promote commercial agricultural exports, to advance geo-strategic aims

3 Based on FAOStat data available online from www.fao.org.4 From the 1999 Food Aid Convention, as quoted on the International Grains Council web site at

http://www.igc.org.uk/brochure/brochuree.htm.


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and to maintain a viable American maritime industry.5

The ineffective use of food aid to

pursue donor self-interests not only sparks controversy, it also causes food aid to under-

perform its potential to provide food to places where availability is insufficient and

markets dont deliver food reliably and quickly enough to protect human lives.

Fortunately, this problem can be fixed if donors marshall the political will to do so.

The prevailing model of transoceanic food aid shipments was born in the 1950s and

1960s, when generous farm price support programs for North American farmers

generated large government stockpiles of food. Much of this food was channeled

overseas as government-to-government gifts in kind, commonly known as program

food aid. Recipient governments usually sold the food on the open market and used the

proceeds for activities other than distributing food to hungry people. Over the past 20

years, as donor governments farm policies have evolved, reducing or eliminating most

public food stockpiles, program food aid has waned. Project food aid, in support of local

interventions run by nongovernmental organizations (NGOs) or by the WFP, has been

commonplace since the 1970s.6

In recent years, emergency food aid in response to natural disasters and complex political

emergencies has become the predominant form of food aid, usually in the form of free

distribution to acutely hungry people, including refugees and internally displaced

persons. Led by a few innovative donors and operational agencies, food aid has become

more demand-driven, cash-based and responsive to demonstrable human needs.

5 Barrett and Maxwell (2005) lay out the data and logic behind these claims.6 For detailed histories of food aid, see Maxwell and Singer (1979), Singer et al. (1987), Ruttan (1993,

1995), Shaw and Clay (1993), Clay and Stokke (2000), Shaw (2001) and Barrett and Maxwell (2005).


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The Present Governance Arrangements

The international agreements that loosely regulate food aid flows were cast in an earlier

era, when food aid was used as a tool of donor country farm policy. Those institutional

arrangements have not adapted as needed. The result is incoherence, distrust,

inefficiency and reduced responsiveness to humanitarian needs relative to what could be

achieved with present resources.

The CSSD was created within FAO in the summer of 1954 as President Eisenhower

signed into law Public Law 480 (PL 480), the worlds primary food aid program for the

past half century. The CSSD quickly prepared the Principles of Surplus Disposal

reflecting its core objective: to safeguard exporter interests by ensuring that food aid does

not encroach on the usual marketing requirements (UMR) of food aid recipient

countries. These principles were supplemented in 1969-70 with a new Catalogue of

Transactions to guide reporting of food aid flows and formal procedures for establishing

UMRs. CSSD comprises 41 member states, including both donors and recipients, and is

based in Washington, not at FAO headquarters in Rome. Lacking the legal status of a

treaty and any enforcement mechanism, and organized around the objective of preventing

trade displacement, the CSSD has languished as food aid has evolved.7

7 Konandreas (2005) acknowledges these problems and offers a detailed, insightful insiders view of some

options for rehabilitating the CSSD.


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The Food Aid Convention (FAC) is a more recent, legal agreement among seven donor

nations, the European Commission (EC) and some of the EC member states that guides

international cooperation on food aid matters. Originally agreed in 1967 as part of the

International Grains Agreement within the Kennedy Round of international trade

negotiations and updated six times since, most recently in 1999 the FAC is housed at

the International Grains Council in London, a body organized to promote international

commercial trade in cereals. Recipient countries do not participate in the FAC.

The FAC legally commits signatories to minimum annual food aid disbursements. But

lacking an enforcement mechanism, it has been unable to address donors failure to meet

these agreed minima. Canada has routinely breached this agreement in recent years. The

Fiscal Year 2006 budget proposed by President Bush could have likewise caused United

States food aid donations to fall below its minimum volume obligations under the FAC

had the Congress not rejected the proposal.

The FAC has nonetheless adapted over time to accommodate improved understanding of

the causes of hunger and poverty and of best practices in using food commodities to

address these causes. The 1999 revision of the FAC permitted cash contributions to

transport and other delivery costs to be counted against the value of commitments, setting

a precedent for recognizing financial contributions to food procurement as food aid

commitments. The Convention does not count shipments of higher value commodities

against signatory commitments, putting the emphasis squarely on basic grains, pulses,

root crops and edible oils that are most valuable in addressing emergency needs. And the


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FAC explicitly encourages increased distribution of food aid through multilateral

channels, particularly the WFP.

Article 10 of the WTOs 1994 Uruguay Round Agreement on Agriculture (URAA)

offered little beyond the CSSD and FAC limits. The only additional, mild restriction the

URAA added to the FAC and CSSD was a prohibition on tying food aid directly or

indirectly to commercial exports of agricultural products to recipient countries, so as to

prevent the circumvention of the export subsidy commitments made elsewhere in the

URAA. Note, however, the URAAs loose definition of tying is not a prohibition

against tied aid in the sense of the 2001 agreement among OECD/DAC member states,

which more strictly defined tied aid as any aid that requires the procurement of goods

and/or services from the donor country (OECD 1997, Clay et al. 2004).

As an influential new OECD/DAC report (Clay et al. 2004) notes, 90 percent or more of

food aid fits the OECD/DAC definition of tied aid. For example, United States law

requires not only domestic procurement of food aid commodities, but also that 75 percent

of all shipments must be transported on US-flagged ships and that half should be

processed and packed prior to shipment. The Bush Administration proposed changing

some of these restrictions in its 2006 budget proposal, but it remains to be seen whether

these proposals will be enacted by the Congress. Canada, Japan and other food aid

donors similarly tie food aid shipments to some degree to domestic sourcing of goods and

services. Food aids tying status drives up the cost of food aid dramatically, at least 50

percent, on average (Clay et al. 2004). Tying also delays deliveries. The median time


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from a formal request for emergency food aid from the United States until port delivery is

nearly five months (Barrett and Maxwell 2005). Perhaps surprisingly, however, within

operational agencies, tied food aid from the United States is widely regarded as being the

most quickly available resource in an acute emergency because bureaucratic delays by

donors providing untied (i.e., cash) resources typically far exceed the logistical delays of

shipments from North America.8

The FAC, CSSD and URAA disciplines on food aid are widely perceived as ineffective

in ensuring both food aids efficacy in advancing humanitarian and development goals

and in minimizing commercial displacement. As a result, food aid was one of several

key agricultural issues that led to the impasse at the Cancun WTO ministerial meeting in

September 2003. At the WTO mini-ministerial meeting in Montreal in July 2003, the

United States for the first time said it would negotiate on food aid terms, including

placing food aid credits within the purview of WTO disciplines on export subsidies. The

EC and other members following its lead have stalled renegotiation of the FAC or the

CSSD until agreement could be reached within the WTOs Doha Round on food aid

reforms.

This creates a real opportunity. A more effective international food aid coordination and

governance mechanism can minimize trade disputes and the misuse of food as a resource

and maximize the effectiveness and appropriateness of response to humanitarian

8 Unfortunately, no hard data exist to test this hypothesis. Repeated requests for data to donors that account

for most untied food aid have gone unanswered.


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emergencies and thereby help to meet international poverty and hunger reduction goals.

Win-win opportunities are available if an appropriate structure can be agreed.

A Better Design

Here we outline the essential elements of a new Global Food Aid Compact (GFAC) that

could reduce disputes and increase the effectiveness of food aid, as suggested by the

Berlin Statement on Food Aid for Sustainable Food Security, a declaration tabled at a

high-level international workshop on food aid hosted by Germany in September 2003

(von Braun 2003). The GFAC would make several important breaks from the FAC.

Inclusiveness: The GFAC would include recipient country governments and the

operational agencies that distribute food aid as well as donor countries. So long as

international governance of food aid remains a donors-only club, downstream distributors

and recipients of food aid feel little ownership of and responsibility for the food aid

system. A GFAC encompassing all parties to food aid shipments will improve the

coherence of bilateral and multilateral food aid programs. Furthermore, the GFAC can

then assign signatories explicit responsibilities under an international code of conduct

that can strengthen accountability, effectiveness, fairness, and transparency.

Donor commitments: The GFAC would commit donor countries not only to traditional

tonnage minima, but also to provision of adequate complementary financial resources and

to some flexibility in the rules mandating donor-country procurement, processing and

shipping services. The GFAC could thereby help humanitarian and development


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agencies bring appropriate resources to bear in any given context, and in an economical

and timely fashion, while moving food aid towards compliance with OECD/DAC

conventions on aid tying. Other than technical assistance, food aid is the only form of

overseas development assistance presently exempted from those conventions.

Minimum tonnage commitments remain necessary. Food will continue to be essential in

emergencies. Physical volume commitments are also needed because food aid programs

based entirely on monetary commitments can lead to dangerous shortfalls in food aid

availability at times when global food stocks are tight and prices high, as was tragically

evident during the 1972-74 world food crisis. Minimum annual tonnage commitments

under the GFAC should be set at a substantial fraction of projected global emergency

needs and updated regularly based on GFAC Secretariat analysis of recent and unfolding

emergencies. In the rare years when minimum tonnage requirements exceed needs, then

surplus commitments could be waived or their cash value might be distributed to

signatory operational agencies for food security programming not based on the

distribution of commodities. Alternatively, surplus volumes could be stored for

addressing emergencies in subsequent years through the International Emergency Food

Reserve (IEFR) in pre-positioning facilities around the world or by competently managed

national strategic food reserves in countries chronically vulnerable to food crises and to

which international deliveries can be slow. Landlocked countries such as Ethiopia,

Malawi, Niger or Zambia are prime candidates. The GFAC would thereby achieve the

original intent of the IEFR at its founding in 1975: that all contributions be unrestricted,

so that the WFP and cooperating operational agencies can use those resources to respond


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to emergencies anywhere according to established criteria for emergency response, not

just in emergencies drawing high-level media and political attention.9

Physical tonnage commitments are not enough, however. Cash commitments are equally

essential because acute food insecurity and hunger most commonly occur when

individuals and households simply lack the purchasing power necessary to procure

adequate food. When there is food in the system and commercial marketing channels can

and will deliver it to those who can afford to buy it, transfers of cash can address this type

of food insecurity far more quickly and efficiently than trans-oceanic grain shipments.

Therefore, the GFAC should include donor minimum financial contributions to the World

Food Programme and to NGO signatories to the GFAC at a significant scale relative to

signatories physical volume commitments. These financial commitments would not be

tied to any single source market for the commodities or supporting services, allowing for

flexible response to address food insecurity emergencies. That is, these would be untied

or partially tied resources meaning restricted to the donor and developing country

suppliers per the OECD/DAC definition of tying.

The International Monetary Fund (IMF)s existing emergency food financing

mechanisms, most notably the Compensatory Finance Facility (CFF), are not viable

alternatives.10

The CFF has not been used since access rules were tightened in 2000 and

the IMF is seriously considering eliminating it altogether. Various proposals for an

9See Shaw (2001) and Clay (2003) on this as well.

10 The IMFs CFF provides 3-5 year loans to member country governments in response to exogenous

commodity price shocks, whether for exports or cereals imports. CFF has proved difficult to use and

administer (IMF 2004). In 2000 the IMF eliminated its Buffer Stock Financing Facility, which used to help

poor countries build up strategic reserves.


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alternative, loan-based international food import financing facility (FIFF) have been

floated for several years, most recently by FAO and the United Nations Conference on

Trade and Development (UNCTAD), by the Executive Director of WFP, and food-deficit

developing countries in the context of WTO negotiations over the Doha Round.11

There are two key distinctions between the financial resources made available under

GFAC and existing and proposed facilities. First, these resources could be deployed

where governments are ineffective or non-existent (e.g., Somalia from the civil war in the

early 1990s to the present). Second, these would be pure grants, not loans. They would

therefore be better suited to low-income food importing countries, while middle-income

net food importing countries such as Egypt, Jordan, Morocco, Pakistan or Venezuela

could be well-served by a FIFF. For the least developed countries, a commitment to grant

funding for food security, channeled through established operational agencies in

compliance with the GFAC code of conduct, would be simpler and more effective than

any current or proposed financing facility.

Monitoring and enforcement mechanisms: The GFAC must remedy the central deficiency

of the CSSD and FAC: the lack of any monitoring and enforcement capacity. By linking

GFAC to the next WTO agreement a move endorsed by international experts in the

September 2003 Berlin Statement (von Braun 2003) there could finally be effective

disciplines to reduce trade-related disputes over food aid and to hold operational agencies

accountable for best practice in the use of food aid.

11 See Orden (2004) for more detailed discussion of some of these options.


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The WTOs established, effective dispute resolution process could enforce disciplines

regarding food aid without requiring elaborate new procedures or bodies. Precisely

because they would limit misuse of food aid, regulations to reduce excessive or

inappropriate uses that displace trade U.S. program food aid shipments to Russia in

1998-99 offer an egregious recent example should be welcomed by those who believe

food aid can be effective in advancing development and humanitarian objectives. In the

absence of strong enforcement mechanisms, such misuse could easily grow if the next

WTO agreement increases disciplines on export credits, state trading enterprises and

other agricultural export promotion practices, closing alternative vents for donor

surpluses. Disciplines on illegitimate food aid must be included within the WTO Doha

Development Round Agreement.

The WTO is nonetheless ill-equipped to undertake the necessary monitoring. Rather, the

GFAC would be operationalized through a Global Food Aid Council, an interagency

body drawing on pre-existing technical capacity necessary to oversee and implement the

Compact. The WTOs Committee on Agriculture (CoA), which will bears responsibility

for monitoring and enforcing the WTO Agreements on Agriculture, would recognize the

Council as the technical authority for monitoring compliance with the GFAC and

associated WTO disciplines. Transgressions with trade impacts could then be refereed to

the CoA for settlement through the WTOs dispute resolution mechanism.

This would work because the WTOs trade displacement concerns dovetail closely with

development and human rights concerns surrounding food aid. Untied resources


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notably, cash for local and regional purchases and for complementary expenditures are

essential for effective response to the context-specific details of a situation requiring food

aid. And untied aid has no trade distorting effects. Indeed, it can stimulate commercial

trade through the demand induced by additional cash resources. So untied aid would be

unrestricted under the GFAC a green box in WTO terminology, indicating donors can

go ahead with it freely.

Emergency food assistance is likewise rarely a trade concern. Trade disruption due to

emergency food aid shipments is minimal and the humanitarian imperative of rapid

response dictates that emergency shipments be presumed appropriate under the GFAC.

Note that tied food aid can be an effective instrument of emergency response, especially

in slow-onset (e.g., drought) or protracted (e.g., conflict) emergencies once a pipeline is

established and operational, especially when early warning systems operate effectively

and commodity selection is closely tied to credible needs assessments.

The possible misuse of food aid with associated trade and production displacement

effects arises almost exclusively with respect to tied, non-emergency food aid flows.

These would require monitoring, a blue box entry in WTO jargon. When food aid is

distributed directly to vulnerable, food insecure peoples exhibiting a high marginal

propensity to consume additional food out of such transfers, leakage into the market

through resale or reduced commercial purchases is modest at best, while the development

benefits can be important. Recent econometric research suggests well-targeted food aid

does not generate disincentive effects for small farmers or merchants in recipient


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countries, but it does improve recipients nutritional status and childrens physical growth

(Barrett and Maxwell 2005, Abdulai et al. 2005). Likewise, open market sales of food

donations so as to control price spikes in an emergency where food markets operate

reasonably well can prevent human tragedy with minimal market displacement (Tschirley

and Howard 2003).

Although all tied, non-emergency flows should be monitored, those that meet adequate

targeting criteria should be permitted. Timely tied aid has less trade distorting and more

developmental benefits than untied aid that arrives many months after it is needed.

Abundant empirical evidence underscores that the quality of targeting including

timeliness trumps tying status in determining the development effectiveness and market

disruption effects of food aid shipments. Untied aid may be best in theory, but trade

negotiators must guard against the best becoming the enemy of the good.

Restrictions the amber box entries, indicating donors need to slow down and prepare

to stop these would be placed only on poorly targeted, tied, non-emergency food aid

shipments. This typically comprises program food aid and untargeted, open market

monetization of project food aid sold by recipient governments and NGOs into local

commercial channels. Research consistently points to such flows as the main cause of

trade displacement, of adverse effects on food markets in developing countries, and of

relatively high inefficiencies in resource transfer (OECD 2003, Clay et al. 2004, Barrett

and Maxwell 2005). Between program food aid and open monetization of non-

emergency project food aid flows, 30-40 percent of global food aid flows have been sold


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in the market in recent years, not targeted for distribution to the most vulnerable people in

recipient countries. This share has been declining over the past two decades. But it

remains high. A significant quantity of food aid is thus potentially subject to amber box

disciplines. The GFAC, underpinned by the WTO Agreement on Agriculture, would

mandate the gradual conversion of such food aid flows into more effective, less trade-

disrupting forms.

A transition period of 5-10 years would be needed over which all amber box food aid

activities would be converted to green or blue box shipments or to complementary cash

programming under donor GFAC commitments. The transition is necessary to ensure that

vulnerable peoples presently benefiting from amber box programs are not inadvertently

negatively affected in the transition from the current ad hoc regime to a more systematic,

disciplined food aid regime. A careful transition will be needed, steadily replacing

poorly targeted, tied, non-emergency food aid with cash resources for food security

programming. Hence the need to include cash commitments explicitly in a GFAC.

These criteria are summarized in the figure below.12 Untied food aid and emergency

food aid flows would fall within the green box, representing legitimate food aid not

requiring detailed review. Tied, non-emergency food aid that is effectively targeted

would go into the blue box. Untargeted, tied, non-emergency food aid would fall in the

amber box: subject to disciplines to convert food aid flows most likely to disrupt

commercial markets and relatively less likely to achieve international development or

12 The lead author proposed a version of this at an expert consultation at the FAO in Rome in January 2005

and an adaptation of that proposal was incorporated into FAO (2005).


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humanitarian objectives. The conversion principle would ensure operational agencies

and recipient countries that aggregate resources would not diminish, there would just be a

shift in the composition of food aid flows towards those forms that most effectively

advance development and trade objectives simultaneously.

Green, Blue and Amber Food Aid Boxes Under WTO/GFAC

The disciplines imposed by the WTO Agreement on Agriculture would thus focus on

deviations from best practice in the use of food resources to advance food security

objectives. This would recognize both that food security, enshrined in United Nations

Millennium Goal #1, has equal standing with fair and free trade objectives, and that food

aid used in accordance with generally accepted best practices has negligible market

displacement effects.

Effectively

Targeted

Untargeted/

poorly targeted

Untied food aidTied food aid

Non-emergencyfood aid

Emergency

food aid


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Donors would report newly programmed food aid commitments to the Council on an ex

ante basis. The Council would categorize shipments according to agreed technical

criteria for establishing emergency, tying and targeting status. For this reason, agencies

with recognized comparative advantage in the key technical functions necessary to

identify legitimate and illegitimate uses of food aid should co-chair the Council.

OECD/DAC is the authority on the tying status of aid flows. Its established reporting

procedures could monitor food aid tying effectively as well. FAO, WFP, operational

NGOs and, where appropriate, donors and recipient governments already work together

on identifying and assessing emergency food needs. Proposed food aid shipments could

be verified easily and quickly against multilateral needs assessments. The CSSDs

Register of Transactions has a unique, valuable mechanism for ex ante notification of

food aid shipments that could be adapted to suit this new design, integrated with WFPs

International Food Aid Information System, the most authoritative and comprehensive

food aid database in existence. Together, FAO, OECD/DAC and WFP could tap existing

technical expertise to monitor food aid compliance under the terms of GFAC,

coordinated through a small Secretariat. The GFAC Secretariat would also convene

regular consultations among donor countries that presently take place within the CSSD

and FAC, rendering those bodies unnecessary and signaling clearly that food aid is no

longer viewed as a trade promotion tool to be overseen by the International Grains

Council or by a body focused on surplus disposal.

There is precedent for such an inter-agency technical oversight body. The Codex

Alimentarius Commission is similarly responsible for compiling the standards, codes of


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practice, guidelines and recommendations for food safety standards. Jointly directed by

FAO and the World Health Organization, with a small Secretariat in Rome, the

Commission is explicitly invoked by the WTO Agreements on the Application of

Sanitary and Phytosanitary Measures (SPS) and on Technical Barriers to Trade (TBT) as

the technical authority on these matters, recognizing the needs to balance food safety and

fair trade concerns. The GFAC could be similarly organized and empowered to balance

food security and fair trade objectives.

Code of Conduct:The GFAC would include the first all-parties code of conduct.

Existing food aid-related codes of conduct are all voluntary and most apply only to

agencies that distribute food aid (EuronAid, 1995; Sphere Project, 2004). Moreover,

much work remains to be done to operationalize these guidelines more precisely, and to

get all parties to live up to their obligations.13 Under a GFAC code of conduct, all

signatories would agree to role-specific obligations as well as to a universal set of

underlying principles governing the allocation, utilization, and monitoring of food aid.

In addition to the appropriate funding and procurement mechanisms already discussed,

the fundamental principles underpinning a code of conduct would include:

Need, vulnerability and impartiality. The provision of food assistance will be on thebasis of assessed need, not on the basis of any geopolitical or commercial market

development considerations. Food aid must not be used as a weapon of war, or for

any other political purpose. Food aid must be made available on criteria of

vulnerability, not on the basis of any discriminatory practice according to race, sex,

13 See Chapter 6 of Barrett and Maxwell (2005) for more detailed discussion of existing codes of conduct.


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nationality, religion, etc. Unfortunately, there is ample evidence that food aid like

other disaster response and development assistance is not currently allocated on

the basis of impartiality (Darcy and Hoffman, 2003; International Federation of Red

Cross and Red Crescent Societies, 2003).

Appropriate analysis. Poorly managed food aid can do damage. Due diligencewould be required of all actors engaged in food aid programming. Trans-oceanic

shipment of food is needed where markets do not respond adequately and there is

insufficient food available from local or regional surpluses to meet nutritional needs.

It takes good analysis to ascertain whether these conditions hold. And information

requirements go far beyond just needs assessments. Underlying vulnerabilities and

causes of food insecurity must be analyzed periodically, and there must be consistent

early warning monitoring of these vulnerabilities. Just as there is a need for better

assessment of food aids impact on recipient nutrition, local farmers production

incentives, and commodity markets and prices, so also must good analysis ensure that

local and regional purchases of food aid do not have adverse price effects on low-

income consumers (Seaman et al., 2000; Maxwell and Watkins, 2003).

Appropriate utilization and management. Operational agencies distributing food aid(regardless of its source) would commit themselves to using food only where

appropriate, and would ensure the appropriate targeting of food aid not just

addressing the question ofwho should receive assistance, but where these groups are,

when the assistance is needed, whatassistance is required (food and non-food), how

much is needed andfor how long (Barrett and Maxwell, 2005)? Donors and

operational agencies would commit to addressing not only food needs but also the


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guidelines should govern NGO activities in the effective targeting of vulnerable

groups, in ensuring transparency and accountability of monitoring and reporting,

and in the protection of assets, production, income and employment, access to

markets, and nutritional adequacy.

Donor agencies would agree to respect the independent, humanitarian andimpartial action of operational agencies. They would also bear responsibility for

timely, ex ante reporting of food aid flows to the GFAC as commitments are

made. And they would secure the informed consent of operational agencies or

recipient country governments to which they propose to deliver any commodities

so as to ensure local acceptability with food safety or bio-safety regulations.

Governments and operational agencies would have an incentive to sign and comply with

a GFAC. An NGOs eligibility to handle food aid from any signatory donor would

require its endorsement of and compliance with the GFAC code of conduct. Since the

GFAC would reinforce the requirement for cash resources in addition to physical

commodities, it would attract a broader range of operational agencies than presently

abide by extant codes of conduct. Recipient country governments would be ineligible to

receive international assistance based on resources that meet donors GFAC

commitments without endorsement of and compliance with the code of conduct. For all

but the most xenophobic regimes, the resource access afforded by GFAC participation

would attract participation. Donor country governments would seek membership for the

same reasons that they presently belong to CSSD and FAC, so as to have voice in

international coordination and dialogue over food aid. Moreover, GFAC membership


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would be necessary to have recourse to the WTOs dispute resolution mechanism in the

event that another donor misuses food aid and thereby harms a nations commercial

agricultural exporters.

Now Is The Time To Act

Unlike its predecessor institutions, the GFAC would have the capacity to monitor and

enforce international agreements on the use of food aid and to negotiate and enforce

codes of conduct on all players in the food aid arena. These enhancements would

significantly improve the timeliness, efficiency and efficacy of food aid delivery in

support of internationally agreed poverty and hunger reduction goals while reducing trade

distortions and disputes in the global agricultural economy. Many technical details beg

elaboration. Ours is less a specific blueprint than a call to action.

The time to act is now. 2005 began with the United Nations launching its strategy for

achieving the Millennium Development Goals, especially goal number one: halving

hunger and poverty by 2015. Under the chairmanship of the United Kingdom, the G-7

nations are unprecedentedly focusing on poverty reduction and the complex crises facing

sub-Saharan Africa. And WTO negotiators have struggled, largely unsuccessfully, to

work out an agreement on agriculture for the Hong Kong Ministerial in December 2005.

Global food aid governance desperately needs reform. This is a propitious time to make

real progress.


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Documents

Towards a Global Food Aid CompactFinalVersion(17.6)