Food Aid: FAQ

Q1: What is food aid?

All food-supported interventions aimed at improving the food security of people living in poverty in the short- and long-term, whether funded via international, national, public, or private resources.

Methods of food aid include:

• In-kind commodity: Physical food procured and delivered to vulnerable populations.
• Cash (local) purchase: The procurement of food locally in developing countries.
• Cash for food: Money given to beneficiaries for the purchase of food in local markets.
• Monetization: The sale of donated food in order to obtain currency for other development programs, including health, water, agriculture, HIV/AIDS, microfinance, or direct food security.

Q2: What are the structural impediments to food security?

The structural impediments to food security include: inadequate or nonexistent national food security policies; lack of international action to address environmental degradation; unfair trade rules; unpayable debts; and insufficient investment and development aid. These conditions force developing nations into chronic food insecurity. Until these unjust policies are corrected, food aid will be required. The central issue under discussion in multilateral negotiations is that of agricultural subsidies and agreement on flexibilities for countries to promote food security in their communities.

Q3: If food aid constitutes less than 2 percen t of global agriculture trade, 78 percent of which goes directly to emergency situations, why is so much attention being paid to it?

Unjust international trade regulations and practices prevent the advancement of developing countries. Developed countries have refused to liberalize their agricultural sectors due to domestic pressure. This is a decision taken at the expense of the developing world where agricultural production is often more efficient than in wealthy nations. The European Union argues that food aid creates a production and price advantage, and thus a hidden subsidy, for (largely) American farmers. Therefore, farmers in developing countries are placed at a disadvantage. There is also a perception that food aid may distort markets in developing countries, thus undermining the potential for long-term development.

Q4: In which countries does World Vision use food aid?

34 countries: Afghanistan, Angola, Azerbaijan, Bangladesh, Burundi, Cambodia, Chad, Congo-East, Congo-DRC, Ethiopia, Georgia, Haiti, Honduras, Indonesia, Kenya, Laos, Lesotho, Liberia, Malawi, Mauritania, Mongolia, Mozambique, Myanmar, Nepal, Niger, Northern Sudan, Rwanda, Sierra Leone, Sri Lanka, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

Surplus and disposal

Q5: Is U.S. food aid simply surplus disposal?

No. Title II food aid (the main part of U.S. Government food aid) is entirely within budget. It is an additional expense, and the food is purchased on the open, competitive market. The amount of food aid procured has no link to increased production. Food aid is surplus in the sense that it is available on the open market. Food aid is also counter-cyclical, meaning that more food is available during times of increased production, not as a result of subsidies, but because the augmented purchasing power of the budget allows for buying more food.

Public Law 480 (PL480) is the Agricultural Trade Development Assistance Act. Originally passed in 1954, PL480 is the law that established the primary food aid program of the United States. Title II refers to food aid meant for humanitarian aid. WV uses Title II food aid.

Q6: Is food aid an agricultural subsidy?

No. In order for food aid to constitute a subsidy, cash would have to be paid to farmers to stimulate an overproduction of specific commodities. The amount of food aid provided is in no way related to production levels in the U.S. The EU argues that food aid is a subsidy to American farmers because it contributes to stabilizing commodity price, and accuses the U.S. of using it as a way to dispose of surplus American food.

Local purchase, cash, and monetization

Q7: Shouldn’t all food aid be locally purchased, therefore stimulating the local economy and pointing the country toward long-term food security?

The nominal amounts of food aid procured locally would create negligible long-term benefit for an economy. Only sustained production and inclusion in emerging regional/global markets will lift a country out of poverty and into food security. The potential for negative market impact is similar for in-kind and local purchase food aid. Commodity prices will be affected both through in-kind distribution and cash purchase. Therefore, a detailed market analysis is required to accompany any injection of “aid” into a country’s economy. This analysis has been required for all U.S. food aid programs over the last 20 years.

Secondly, the risk of corruption or mismanagement carried with all aid provision is significantly increased with regard to direct cash compared to food commodities. Using earmarked cash to buy food from rural, smallholder farmers is not as efficient in practice as it is in theory. There is a significant chance that the cash will be appropriated for alternative uses or never arrive at the targeted populations. It is easier to misuse $1,000 than it is to misuse 1,000 metric tons of food.

Q10: Can local cash purchase negatively affect developing country markets?

Yes. Purchasing food locally can have significant negative impact on local markets. Recent examples in Niger and Uganda have demonstrated that purchasing quantities of food has in fact driven up the price of local food, and made it impossible for many who did not receive aid to buy it themselves. In-kind food aid must be made available to mitigate such market impacts.

Q11: Does monetization affect markets while other forms of aid do not?

Monetization refers to the sale of donated food in order to obtain currency for other development programs, including health, water, agriculture, HIV/AIDS, microfinance, and direct food security.

Monetization affects local markets, as does every other form of aid. Well-targeted and managed monetization can improve market diversity, performance, transparency and competition; it can overcome local oligopoly control; it can set precedents for publicly visible fair bidding procedures; it can make retail prices more affordable for people living in poverty to buy food. In many circumstances, monetization can comprise an extremely efficient way to address a food deficit. Furthermore, every country where World Vision conducts ANY food programs is classified as an LIFDC (Low Income Food Deficit Country) or an NFIDC (Net Food Importing Developing Country). WV operates food programs only in food deficit developing countries.

Programmatic success

Q12: Give an example of how in-kind food aid was a critical success factor in saving people’s lives.

--Southern Africa, present (Zimbabwe)

--Southern Africa, 2002-2003 (Zambia, Zimbabwe, Malawi)
--East/Northern Africa, 2000 – present (Sudan)
--East Africa, 2001-2002 (Kenya, Uganda)
--Asia, 2000 – present (Mongolia, Cambodia)
--Caribbean, 1990s – present (Haiti, Dominican Republic)

The context of these situations required in-kind food aid as the short-term solution to meeting people’s needs on account of several factors. Cash to purchase locally posed an equally, if not a more, cumbersome process than cash for food. The situation in these populations had deteriorated to such a grave extent that food aid resources intended for other ports were re-directed and sent to these destinations. The C-SAFE consortium was an excellent example of a dedicated pipeline of food for a consortium of NGOs across four countries (Zambia, Zimbabwe, Malawi, and Lesotho) over multiple years.

Q13: Is food aid important in the fight against HIV/AIDS?

Yes. HIV/AIDS is a significant contributor to developing nations’ food insecurity. Food aid is essential to ensure adequate nutrition to both help people living with HIV/AIDS to absorb anti-retroviral drugs, as well as to stem the advancement of the disease. World Vision is aware of the need to ensure that food aid is part of a broader approach to longer-term food security for those undergoing treatment. Many vulnerable groups do not have access (for a variety of reasons) to adequate nutritious food. Precise targeting and delivery of food aid to HIV/AIDS infected populations has very positive results in terms of their health and nutritional status.

Q14: Give an example of when food aid contributed more than assistance in acute emergency situations?

In-kind food aid plays an important role in addressing the chronic food insecurity needs, and realizing the right to freedom from hunger, of vulnerable populations. For instance, our programs in Africa and Asia both utilize food aid in safety net programs to assist pregnant and lactating women and children under five in attaining nutritious food. Chronic food insecure countries and populations require a recurrent supply of appropriate food until the economies and markets develop to such a point that food aid is no longer needed.

Q15: Are nutritional security and food interventions mostly palliative – helping to reduce immediate suffering without any real social value or long-term impact?

No. In fact, death rates correlate closely with malnutrition. Reducing malnutrition is not just a short-term containment of an affliction; it constitutes a powerful long-term investment. Without good nutrition, children cannot grow properly, and their long-term educability, productivity, entrepreneurship, citizenship and governance will be compromised. Nutrition and food security are fundamental to development.

Actualization of the Millennium Development Goal to reduce hunger will require both structural reform, and interventions such as food aid that are instrumental to the realization of rights.

Development

Q16: Is in-patient clinical care by western physicians the main and most efficient aid given by NGOs?

No. The most important interventions against malnutrition are population based, addressing the food security needs of large populations rather than the small fraction who happen to come to a clinic. This underscores the importance of being able to provide appropriate, targeted food aid across significant vulnerable populations.

Q17: Do protein deficiencies contribute most significantly to malnutrition? Why is food aid appropriate to meet nutritional needs of children and women?

The concern about a global protein deficiency is a holdover from the 1960s. In contrast, vitamin and mineral deficiency diseases are pervasive, pernicious, yet easy to prevent. Myth: The reason Corn Soy Blend is valued by nutritionists is its high protein content. In fact, most nutritionists recommend CSB because it is one of the only foods in food aid that carries vitamin and minerals. Myth: The reason vegetable oil is given is for use in cooking and frying foods, or as income transfer. In fact, we give vegetable oil to target to very young children who have small stomachs and require high-energy per volume foods, like oil.
The following example illustrates the need for increased attention to addressing vitamin and mineral deficits among vulnerable populations: Along the Burma Border in Thailand, where the Burma Border consortium has been providing food aid for almost twenty years, SPHERE analysis found that both the food aid and the medical communities neglected the micronutrient-deficiency problems, each feeling this was not their responsibility.

Yr	Tonnage MT	$ Value (Millions)	Beneficiaries	No. of Countries	Relief %	Dev %	Monetization
1984	15,000	4.5	125,000	3
1985	20,000	6.0	167,000	3
1986	30,000	9.0	149,000	4
1987	35,000	10.5	298,000	4
1988	53,000	15.9	441,000	5
1989	61,000	18.3	509,100	7
1990	85,000	25.5	708,300	7
1991	92,000	27.6	767,000	8
1992	142,000	42.5	1,186,000	10
1993	114,000	34.2	925,000	10
1994	101,000	30.3	842,000	13
1995	117,000	32.0	975,500	13
1996	130,000	35.5	1,085,000	15
1997	145,000	40.0	1,208,000	16
1998	164,000	45.0	1,474,000	17	51	49	80,000 MT = 49%
1999	180,000	54.0	1,528,000	18	33	67	120,000 MT = 67%
2000	360,000	131.0	3,399,000	18	60	40	142,555 MT = 40%
2001	392,000	152.0	3,967,000	20	61	39	152,275 MT = 39%
2002	430,000	200.0	4,572,000	24	63	37	160,535 MT = 37%
2003	720,000	315.0	6,920,000	29	79	21	151,900 MT = 21%
2004	820,000	352.0	7,200,000	34	76	24	196,000 MT = 24%