I've been trying to assemble my thoughts and conclusions from my Africa trip and I think there is one consistent theme emerging: we still have not found a truly workable solution to improve agriculture there as well as advance the lives of the overwhelmingly rural poor.
First of all, food aid is a flat out bad idea. I cannot understand how farmers of all people cannot appreciate what surplus grain being dumped onto local markets would do to local farmers. By dampening price rises, consumers may briefly benefit, but the economic incentives to produce more are depressed.
Scandalous barely covers it. Since America began donating surplus wheat, corn meal, vegetable oil and other farm commodities to the world’s hungry six decades ago, the programme has been captured by an “iron triangle” of farm interests, shippers and voluntary organisations, with plenty of help from Congress. Rules state that most food aid must be bought from American farmers and processed in America. At least half must then be carried on American-flag ships. With competition severely curbed, ocean shipping eats up 16% of the budget for the largest food-aid programme, Food for Peace.Our food aid program is a pretty blatant form of export subsidy intended to help American farmers under the guise of humanitarian concern. If the government did not pay for the grain farmers wouldn't be donating it, that's for sure. Even the modest reforms urged almost unanimously by economists have hit strong political headwinds in Congress.
In a related scandal called “monetisation”, involving non-emergency aid (which represents about 30% of Food for Peace), charities and non-governmental outfits receive American produce, sell it on local markets abroad and then use the proceeds for good works. Compared to directly funding projects, “inherently inefficient” monetisation on average wastes 25% of the money sent, according to the Government Accountability Office. And the food supplied often floods fragile markets, hurting local farmers. [More]
This is the first thing that we know doesn't work, and while I don't blame the original efforts years ago, or the times when food is needed NOW! it is time to stop ignoring the harmful and wasteful aspects of such programs.