Rejection of U.S. Food Aid by NGO Signals Change in Global Hunger Policy (5/9/2007)

RELATED QUOTES: "The US food aid system appears to disregard the rights and concerns of recipient citizens in order to assure profits for US agribusiness giants. It is a system that allows for the misspending of public funds in ways that benefit the private sector; a system that takes advantage of the lack of regulation concerning the genetic engineering of food; and a system that undermines democratic decision making about food consumption " -- Food First

"Zambia is a sovereign country and makes its own decisions. Zambians do not need to be heroic to assert their sovereignty. GM-free supplies are available in surplus in southern Africa. Europe's policy is to provide food aid procured in the region, rather than as a means of disposing of domestic stocks... The simple solution is for the US to behave as a real aid donor." -- Pascal Lamy, when EU Trade Commissioner (commenting on the Bush Administration's "Eat GM, or die" policy)

"I have heard . . . that people may become dependent on us for food. I know that was not supposed to be good news. To me that was good news, because before people can do anything they have got to eat. And if you are looking for a way to get people to lean on you and to be dependent on you, in terms of their cooperation with you, it seems to me that food dependence would be terrific." -- Senator Hubert H. Humphrey, in naming US Public Law 480 which ensures that food aid never interferes with "domestic production or marketing" (Wall Street Journal, May 7 1982)

See also: Force feeding the world

Fake Blood on the Maize


Rejection of U.S. Food Aid by NGO Signals Change in Global Hunger Policy
Lauren Gelfand
World Politics Review, 29 August 2007

World Politics Review Exclusive

LONDON -- Advocates of a global overhaul of efforts to meet the needs of the world's 850 million chronically hungry people have received a boost with the decision by CARE, a top U.S. aid organization, to walk away from tens of millions of dollars in annual U.S. federal financing.

In opting out of the mechanism by which donated U.S. food aid is transported overseas and sold in local markets to fund anti-poverty programs -- a decades-old process known as monetization -- CARE joins a growing number of international non-governmental and governmental groups demanding an end to a policy they say can be harmful to the countries being helped.

"It's not the best way to use food, to generate cash, and it's quite clear that it's not cost-effective," said David Kauck, a senior technical advisor with CARE USA about the organization's decision to completely phase out monetization by 2009, which made headlines earlier this month with CARE's announcement it would forego $45 million in federal funding this year.

"There is a host of economic literature that says monetization has unintended and harmful consequences overseas," Kauck told World Politics Review in an exclusive interview.

"And after much due dilligence, CARE reached the conclusion that the practice is inconsistent with what we wanted to achieve."

Despite being the world’s largest supplier of food aid -- some $2 billion annually or the equivalent of four million metric tons of food commodities -- the United States has attached a sheaf of conditions and caveats to its donations through its development arm USAID and the U.S. Department of Agriculture that critics contend help to do more for the domestic agriculture markets than for the depressed and impoverished countries that are the main targets for U.S. food aid.

Because of the way the current U.S. food aid program is structured, U.S. commodity suppliers earn an 11 percent premium above commercial prices for food aid purchases, according to the development agency Oxfam.

And those commodity suppliers are far from being family farms: a U.S. Government Accountability Office study noted that just 18 U.S. companies were deemed eligible to bid for the food-aid contracts, with four of the country’s largest agribusinesses -- Cargill, Archers Daniel Midland/Farmland, Louis Dreyfus and Kalama Export Company -- earning some $28 million in food aid contracts in March/April 2003 alone.

Shipping and transport from the United States is also a costly process that drains needed funds from the actual provision of food aid. U.S. legislation requires that 75 percent of all food aid shipments be sent aboard U.S.-flagged carriers, which tend to be more expensive than other vessels plying the world’s seas and skies.

A GAO report (pdf file) commissioned by U.S. Sens. Tom Harkin (D-Iowa) and Saxby Chambliss (D-Ga.) in April this year found that the cost of transportation -- not food -- now represents 65 percent of the total expenditure for the largest U.S. emergency food aid program.

"At current U.S. food aid budget levels, every $10 per metric ton reduction in freight rates could feed almost 850,000 more people during an average hungry season," the report concluded.

Noted Margie Morard, the food security advisor for Oxfam in West Africa, where a chronic malnutrition problem in the landlocked country of Niger deteriorated into a full-scale food crisis in 2005: "By the time all the costs are figured in, it’s like every dollar worth of food ends up costing three dollars to get to the people who need it. That’s an unreasonable level of inefficiency, not to mention the fact that it just takes so long to arrive that it can sometimes cause real problems for local markets."

The impact of the imported food aid on local markets was a major factor behind CARE USA’s decision to step back from monetization, as was the sheer complexity of food trading in countries with damaged or insufficient infrastructure.

"Fundamentally, it put us in the business of being traders and we are not traders," said Kauck. "That’s a difficult and demanding business, and we [international NGOs] are not the best people to be involved in that business."

Importing food into vulnerable markets can breed a number of problems, not the least of which is commercial displacement of local agricultural products. Local producers are unable to compete with the imported products and small traders find themselves priced out of their own markets.

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