Unintended Effects of Food Aid Policies

By Susan Kemboi

[Susan Kemboi is an international student from Kenya; a sophomore Mathematics major and Economics minor at UT Arlington. She is passionate about her homeland, and enjoys reading and writing about ongoing issues and debates in continental Africa.]

This article is printed in the Fall 2014 edition of Veneratio – The Newsletter of the Honors College at The University of Texas at Arlington

Imagine the horrors of living through starvation, of a child’s life ebbing away from the pangs of hunger, of a helpless mama incapable of feeding her feeble, emaciated children. Imagine that nagging fear, that persistent uncertainty of having food today, tomorrow maybe . . . but skeptical of the days to come. Imagine the sorrows of an inevitable death, day in, day out, and year in, year out. I was there once, languishing in hunger after the 2000 drought claimed most of our farm produce. I remember those devastating afternoons, trying to learn on an empty stomach. I remember the schools closed down that semester. I remember those haunting wretched cries of hungry children, and of my friend who died of malnutrition. I remember most of us survived only by the goodwill of the American people who gave so generously of their ‘yellow maize.’

The hunger problem in Africa is of unquestionably crucial importance to humanity. Needless to say, food aid has had a remarkable impact on its recipients, especially those living deep in the heart of sub-Saharan Africa, where at least three children die every minute of hunger and malnutrition-related diseases. To many such at-risk people, food aid has become a source of survival –a solution full of looming possibilities, a savior! The heated debate on the intricacies of food aid therefore has far-reaching consequences not only to the 890 million people in the world who are still victims of starvation, but also to our children and our children’s children, whose future welfare and is at stake.

Despite the popular acclamation of food aid as the epitome of American generosity, critics have for the past few decades questioned the efficiency and sustainability of food aid, especially to Africa. Dambisa Moyo, an economist and one of the most outspoken critics of foreign aid, in her book Dead Aid depicted the aid model as a double-edged sword—promising change and the alleviation of poverty on one hand yet a devastating tool that has crippled many African economies. While economists like Moyo focus their argument on the repercussions of food aid on the economy, policy makers have criticized the politics of government spending and agricultural reform. New York Times Journalist Ron Nixon published an article last November that vividly captured the reactions of lawmakers, merchants, and farmers when Congress failed to approve revisions to the Farm Bill that would have significantly altered the execution of food aid. The new bill advocated for waiving the “U.S. flag vessel requirement” that required food aid to be shipped by U.S. merchants; additionally, it would allow the purchase of food aid from recipient countries. “It creates jobs in this country,” one Mississippi farmer complained, “and people get the food they need. Why change that?” To merchants, farmers, and policy makers from farm states whose income and political reputation are at stake, such a restructure in food aid policies ought to elicit an unprecedented level of contention. At best, these arguments have drawn remarkable attention to the rigidity of the American food aid policies, the sorry nature of starvation in Africa, and the need for pragmatic solutions to the hunger problem.

While the number of severely famished people in most developing nations of Asia and Latin America has fallen drastically for the past four decades, statistics from the World Food Organization reveal that starvation in Africa has, in spite of the continuous supply of food aid, increased by nearly 36 percent. Such statistical disparities have intensified the controversy surrounding the efficacy of food aid policies. Does food aid really solve the hunger problem? Does it alleviate the fear, uncertainty, and perpetual insecurity experienced by at-risk people, or is it merely a tool of overseas political influence? Contrasting the suboptimal consequences of current U.S food aid policies to the objectives of the Food Assistance Convention (FAC)—a multilateral cooperation between the largest donors of food that oversees all forms of food assistance—reveals that the goal of “reducing hunger and improving food security of the most vulnerable populations” has, as depicted by the increasing rate of starvation, not been met. Current food aid policies are therefore inefficient at solving Africa’s hunger problem because they destabilize local agricultural production, create a cycle of dependency, and are prone to economic exploitation by donor countries.

Destabilization of Agricultural Markets

Agriculture is of crucial importance to many African economies. According to research done by the International Food Policy Research Institute (IFPRI), agriculture is the main and often only source of income to food-insecure people in Africa. IFPRI’s report pointed out that in Rwanda, as with many African countries, agriculture accounts for 50 percent of all household income and 75 percent of income for average poor families. Such high reliance on agriculture by the greater majority of people means that the overall productivity and GDP of these countries are highly dependent on the market conditions of the agricultural sector. Furthermore, Article (2)(a)(v) of the Food Assistance Convention states that one of the principles for the operation of food aid programs should be to “provide food assistance in a way that does not adversely affect local production, market conditions, marketing structures and commercial trade or the price of essential goods for vulnerable populations.” Therefore, any kind of food aid that destabilizes local production violates the efficiency standards set forth by the FAC.

Most food aid supplied to Africa by the United States is “tied”—that is, food grown or purchased in the U.S, shipped to its recipients on U.S. vessels, and subject to other conditions as required by the donor. This rather inflexible system creates delays of up to six months in the delivery of food aid to target areas. A report compiled by the Food Trade and Nutrition Coalition revealed that most often the arrival of food aid happens when food shortages have slightly abated because local producers at this time have already responded by planting food with short crop cycles—roughly equivalent to the time it takes for food aid to arrive at the desired location. Inconsistencies in the timing of food aid render it virtually ineffective at addressing immediate food emergencies. Poor timing also leads to the creation of a surplus of agricultural produce in the local economies, which in turn leads to a fall in food prices.

In addition to the inflexibility of “tied” aid, about 40 percent of food aid to Africa is, according to the World Food Programme, “monetized” by allowing it to enter the local food market as commodities to be traded. Monetized aid is highly subsidized and is relatively more affordable compared to local produce. Cheap monetized food aid competes directly with local produce not only in terms of prices but also on preference. Higher preference for American food perceived to be more nutritious increases recipients’ demand for foreign aid relative to the local production.

While many economists have argued that falling food prices are favorable to the poor aid recipients, especially the net food buyers (who buy more food than they sell), this benefit is highly temporary because falling food prices have far more detrimental long-term effects on the macro agricultural market. In his paper “Food Aid’s Intended and Unintended Consequences,” economist Christopher Barrett observed that “many recipient economies are not robust and food aid inflows can cause large price decreases, decreasing produce profits, limiting producers’ abilities to pay off debts and thereby diminishing both capacity and incentives to invest in improving agriculture.”

Such market instability resulting from falling food production and price fluctuations in African economies could be temporary, as Barrett argued, if the local markets were more flexible and well connected with global trade networks, where supply shocks to the agricultural economy would be mitigated by government intervention or export of the excess food produce to foreign markets. Most African economies, however, are struggling—with fewer trade connections, alarming levels of government corruption, poor infrastructure, and inflexible domestic markets that are unable to absorb food surpluses and attain stability. For many small-scale farmers highly dependent on agriculture, falling prices means that they will get less revenue, plant less and even less for the following seasons. Eventually, most of them become trapped in a never-ending cycle of poverty. As food aid expert Roger Thurow observes regarding Ethiopia in his article “Lesson from a Famine,” “food piled up on farms and prices collapsed . . . farmers lost incentive to plant the next year. Then the drought hit, and feast turned to famine. The markets had failed before the weather did.”

Food aid, by creating negative unintended effects of falling prices, decreasing agricultural productivity, and a subsequent instability in agricultural markets of recipient countries, worsens the conditions of aid recipients it is intended to help. Moreover, by creating these suboptimal outcomes that are inconsistent with the operating guidelines of the FAC, current food aid policies prove to be inefficient at solving the hunger problem.

Creation of a Cycle of Dependency

Food aid can be deemed to be creating a cycle of dependency if it limits the capacity of aid recipients to meet their future food needs on their own. According to the principles of food assistance effectiveness outlined in Article (1)(a)(iii) of the FAC, donor countries should “provide food assistance in a manner that protects livelihoods and strengthens self-reliance and resilience of vulnerable populations, and local communities, and that prevents, prepares for, mitigates and responds to food security crises.”

Since the early 1980s, starvation in Africa has been skyrocketing despite the frequent supply of food aid. While many economists have pointed to the rising population in Africa to explain this incongruity, the increasing rates of starvation are largely due to the creation of a cycle aid of dependency that hampers the future ability of many aid recipients to solve the hunger problem.

Many critics of the food aid model have often argued that aid recipients become dependent because the continuous supply of food aid creates a work disincentive, mainly because people become lazy or engage in unproductive activities with the expectation of receiving food aid in the future. According to a report by the U.N. Food and Agriculture Organization, however, food aid can alter people’s behavior “only if they are reasonably sure that it will be available to them when they need it.” Considering the highly sporadic and unreliable timing of food aid, it is virtually impossible for aid recipients to have a regular dependable access to food aid that is strong enough to generate a work disincentive from food aid. Moreover, the painstaking effort of accessing food aid in certain areas offers little incentive for aid recipients to stop producing their own food when they can.

The cycle of dependency, therefore, does not ensue because people just get lazy, but rather as a response to the production disincentives created by food aid. Food surplus and falling prices, as discussed earlier, reduces food production, which depletes the productive capacity of many poor farmers. This shrinks the number of net food sellers (those who sell more food than they buy) and establishes the need for a continual presence of cheap and heavily subsidized food aid to counter the falling agricultural production in recipient countries.

Dependency is also created when food aid provides “insurance” to local governments against the devastating effects mass starvation. The State of Food and Agriculture report suggests that governments of aid-recipient countries can become dependent on food aid “if the supply of inexpensive food allows recipient governments to ignore needed policy reforms and shift developmental resources away from the agricultural sector.” If other people are focusing on Africa’s hunger problems, local governments have strong incentives to continue relying on foreign food help or ignore the hunger problem entirely. In their book Enough, Roger Thurow and Scott Kilman point to an Ethiopian saying that embodies the dependency attitude of most aid recipients. “It is not the rains in Ethiopia you need to worry about, but whether it rains in Ethiopia or Canada.”

Instead of setting aid recipients towards food security and independence, food aid, by discouraging agricultural production and decreasing local government’s accountability to solving the hunger problem, creates a cycle of dependency on donor countries. These outcomes are ineffective and are contrary to the operation requirement of the FAC.

Humanitarianism or Dumping?

Although food aid is one of the most inspiring depictions of human altruism, its donor-oriented focus renders it susceptible to economic exploitation by donor countries. To prevent the possibility of such abuse, the FAC, in Article (3)(b)(vi) provided a guideline that would “ensure food assistance is not used to promote market development objectives of the parties.”

The U.S Food for Peace program that was started in early 1950s developed as a way to get rid of the excess grain production in the United States that would have otherwise wrecked the agricultural economy. Eisenhower, the president who signed the bill that set up Food for Peace, on commenting about the purpose of the legislation, wanted, “[to] lay the basis for a permanent expansion of our exports of agricultural products with lasting benefits to ourselves and peoples of other lands.” While the origins of U.S food aid programs may have their basis in the economic “salvation” of the agricultural economy from falling prices and market instability created by food surplus, the problem lies in the over-politicization of food aid policies that have for years prevented the operation of an efficient aid model.

The nature of U.S. food aid policies has created strong incentives for the vested interests of the farming, shipping, and distribution sectors in food aid. According to a report by the Food Trade and Nutrition Coalition (FTNC), the U.S. government spends more than $300 million annually to purchase subsidized grain produce from U.S. grain farmers. Since the amount of food aid purchased is directly correlated to the presence of agricultural surpluses, farmers are cushioned from the adverse effects of falling prices. Moreover, the constant supply of food aid to famine-stricken regions provides a sure market for American grain produce as long as starvation still exists. The “U.S. flag vessel requirement” is highly favorable to the U.S. merchants and distributors by restricting competition in transportation and increasing revenue for U.S. firms. FTNC’s report further suggests that “giant distributors . . . handle [the logistics of] commodities and shipping companies transport the food at rates inflated as much as 80 percent by rules that steer 75% of the business into U.S. firms.” Such unprecedented gains are highly dependent on the continual “tying” of U.S. aid, despite the negative effects that such a system creates in the recipient countries.

While such a model may, as proponents of “tied” food aid claim, create job opportunities and government revenue for the U.S., the system is highly inefficient. According to FTNC’s report, Dumping Food Aid: Trade or Aid, “fifty percent of every dollar allocated by the U.S. government is not spent on food, but on getting the food to developing countries.” If current U.S. food aid policies were focused on solving the hunger problem for at-risk individuals, such extreme levels of wastage evident in this system would not be tolerated.

The failure of policy makers from farm states to pass revisions to the Farm Bill that would have allowed increased purchase of food aid from donor countries is evidence of the economic priority of focused food aid policies. Opening up aid channels to allow for the purchase of local produce would increase the timeliness of emergency response, increase aid efficiency, eliminate the ripple effect of market instability in recipient countries, stimulate economic growth, and set the aid-dependent African economies on a path to economic independence. The leaders in those countries would start being responsible for their citizenry without delegating their problems to the rest of the world for another 50 years! By continually resisting the restructuring of the tied aid system, however, U.S. food aid policy has evolved into one that pursues the economic objectives of the donor country at the expense of market instability in recipient countries—a stark violation of the operation directives of the FAC.

In conclusion, it is evident that current U.S. food aid policies are inefficient because they destabilize recipient countries’ economies, create a cycle of dependency and are also prone to economic exploitation by donor countries—effects that are contrary to the objectives of the FAC.

Works Cited

Barrett, Christopher B. “Food Aid’s Intended and Unintended Consequences.” State of Food and Agriculture No 0605 (March 2006). Print.

Dercon, Stefan. Giligan Daniel. Hoddinott, John. Woldehanna, Tassew. “The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages.” International Food Policy Research Institute (December 2008). Web

“Dumping Food Aid: Trade or Aid?” Report by Food Trade and Nutrition Coalition (April 2005). Web

“Economic Controversies over Food Aid.” Report by Food and Agriculture Organization of the United Nations (2006). Web.

“Food Aid Information System.” World Food Programme. Accessed January 27th 2014. http://www.wfp.org/fais/

Moyo, Dambisa. “Dead Aid: Why Aid Is Not Working And How There Is A Better Way For Africa.” Vancouver : Douglas & Mcintyre, 2009. Print.

Nixon, Ron. “Obama Administration Seeks to Overhaul International Food Aid.” The New York Times April 4th 2013. Web.

The Food Assistance Convention, 1999. Web.

Thurow, Roger. “Lessons from a Famine: Markets Matter.” Huff Post Impact 13th May 2013. Web.

Thurow, Roger and Kilman, Scott. “Enough: Why the World’s Poorest Starve in an Age of Plenty.” Public Affairs (2009). Print.

A Step for all Mankind

by Narendra De

Nothing was the same now that people knew what had happened.
The world stood transfixed, spellbound.
All who watched or heard the news were moved, television and radio were themselves out of this world. Now these wonders of technology would broadcast a message of hope for mankind. His mouth generated a pressure wave, a microphone made a current, a radio made a wave.
Through a quarter million miles of space, physics worked perfectly well — not only for the earth-based receivers but also for the gravity-directed cylinder, a cone and a spider-shaped capsule on ellipsoidal trajectories — for which two heavenly bodies cooperated. They exchanged occupants.
The earth was first to release for departure, the moon accepted three brave men, two of whom were more ambitious. They slowed to land on a surface unchanged for centuries and stepped out with the whole world watching.
One proclaimed his little step on the moon was a leap to the silver shining crescent sometimes full, sometimes invisible.

Adventures of a Washington Intern

Abby Allen in Washington, D.C.Every semester, a handful of students from the nine UT System schools are selected to participate in the Bill Archer Fellowship Program in Washington D.C. The program involves taking three classes while working full-time in an internship for an organization of the student’s choosing. I participated in the Fall 2012 class of Archer Fellows and can say without exaggerating that last semester was the most important and exciting of my college career. Living in the nation’s capital is truly incredible. The Archer housing is in an amazing location right on Capitol Hill. On my daily commute to work, I passed the Supreme Court, the Capitol, the House and Senate offices, and the Library of Congress. On weekends it was an easy walk to the National Mall and any one of the free-admission Smithsonian Museums. D.C. offers a truly unique atmosphere that blends local culture (such as street festivals and neighborhood markets) with national pride and history.

While the program, like the city itself, is focused on policy making and government, it is open to students in all academic disciplines. About half the students in my class were political science majors, but the rest represented very diverse fields. We had several criminal justice students, economics and finance majors, and even pre-med and biology majors. As an English major, I had been concerned before applying to the program that I would feel behind in class, but the diversity actually enhances the class discussions.

Each semester, The Archer Center does an amazing job making sure that each class has an unforgettable semester by providing students with talks, tours, and other events. With the connections from the Archer Center, I was able to attend the Washington Ideas Forum, where I heard speeches from former Secretary of state Madeleine Albright, Senator Marco Rubio, and MSNBC commentator Chris Matthews. We toured the Capitol, the White House, the Pentagon, the Bureau of Printing and Engraving, and the Department of Energy. One of the perennial favorites of each cohort of Archers are the classes with Dr. Joel Swerdlow at different memorials across the city. We had class at the Lincoln Memorial, the FDR memorial, the Smithsonian Museum of Natural History, Ford’s Theater, and the Newseum. These classes are one of the exciting opportunities presented by life in D.C.

The internship portion of the program opens up the possibility of working at one of the city’s many government offices or private-sector organizations. I worked for the Center For American Progress, a nonprofit, independent think tank that focuses on advancing progressive policies through research and advocacy. I worked in their Energy and Environmental Issues department doing research, writing blog posts, and attending panels and discussions around the city. The internships accepted by Archer Fellows are as diverse as the fellows themselves, and represent a cross-section of the many spheres of power and influence in the city. My class had fellows working in the White House, in Congressional offices and committees, and the State Department, as well as organizations such as the United Nations, the National Science Foundation, and NBC News. Even if one isn’t particularly interested in politics, Washington is a city that provides all kinds of opportunities in advocacy to work for a cause that one believes in.

I would definitely encourage any UT Arlington student with an interest in participating in the program to apply. The Archer Program is a unique opportunity to live and work with young people in a fascinating and vibrant city. The program virtually guarantees once-in-a-lifetime experiences, tremendous opportunities to work and learn, and the chance to develop friendships with diverse yet equally passionate individuals.

Whitney (Abigail) Allen
Energy Department Intern, Center For American Progress
Bill Archer Fellow, Fall Semester 2012
Honors B.A. in English, UT Arlington, December 2012