Food Aid Lecture

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US Food Aid Background Trends and Key Policy
Issues
Chris Barrett Cornell University May 7, 2012
Congressional Staff Briefing Congressional
Research Service Washington, DC
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Background trends

• 1. Increasing emergency-affected populations
• Natural disasters and affected persons have
  increased significantly over the past two
  generations.
• The global number of internally displaced persons
  (IDPs) has grown from 20 to 27 mn/yr, 1989-91 to
  2009-11.

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Background trends

• 2. Globalization of food markets
• Food aid was originally a surplus disposal
  program. Take govt-held surpluses generated by
  farm price support programs and give them away
  beyond the US marketshed.
• But virtually no place lies outside the
  marketshed today. Even in land-locked developing
  countries, commercial food imports have grown gt
  10-fold in the past 20 years!
• This has led to a rapid transition towards
  cash-/market-based food assistance, especially
  since 2004 tsunami.

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Background trends

• 3. We have entered a high food price regime
• For a variety of reasons, food demand growth has
  outpaced supply growth for the past decade. The
  result is historically high (inflation-adjusted)
  food prices for the indefinite future.
• This makes food aid expensive.

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Background trends

• 4. More attention to micronutrient deficiencies
• The Green Revolution and globalizing food markets
  have steadily reduced undernutrition (too few
  calories).
• Bigger problem is low micronutrient
  (mineral/vitamin) intake, especially for children
  irreversible effects
• Hence growing attention to food aid quality (2011
  GAO and Tufts/USAID studies).

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US Food Aid
Much Has Changed In US Food Aid Already For
nearly 60 years, the USG has been the worlds
largest donor of food aid for strategic,
economic and moral purposes. Still 50-60 of
global flows each year. Food aid volumes have
fallen sharply over the past decade-plus, from
the US and globally due to trends described
already. Huge reorientation from
monetized program food aid (Title I) to
emergency and project (Title II) food aid, again
in response to the trends described.
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Key policy issues

• 7. Timeliness (Golden Hour principle)
• Delays are expensive and deadly (2004-5 Niger
  example).
• Most losses from disasters are post-exposure.
  Rapid, appropriate response matters enormously to
  recovery.
• Farm Bill still sharply limits LRP in US food aid
  programs.
• Prepositioning the best feasible Title II option
  now. But 25-40 more expensive than regular
  shipments (GAO 07).
• Big gains from local and regional procurement
  (LRP) - USDA LRPP and USAID EFSP projects
  delivered 62 (14 weeks) faster, on average,
  than shipments from US.
• Hard earmark on non-emergency funds ties FFPs
  hands big risks of 4th quarter emergency
  response interruptions.

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Key policy issues

• 7. Cost-effectiveness
• Increasing need with decreasing resources. Need
  to do more with less.
• Need to reduce unnecessary (non-commodity) costs
  transport is huge (especially with cargo
  preference rules).
• USDA LRPPP/USAID EFSP reduced cost of delivered
  grains by gt50 on average.
• Monetization just 58-76 cost recovery hugely
  wasteful (GAO). The rest of the world abandoned
  monetization years ago and OMB recommended ending
  it back in 2002. Yet non-emergency Title II
  monetization has grown from 28 in 1996 to 74 in
  2010. Better options exist community development
  funds (Foreign Ops), 202e, Title I buybacks.

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Key policy issues

• 7. Food Aid Quality
• Need to address more varied nutritional needs
  than simply filling a dietary energy supply
  shortfall.
• Especially important in light of the First 1000
  Days Initiative
• Need to match commodity choices to assessed needs
  to achieve cost-effective delivery of needed
  nutrients (what is cheap in /MT terms not always
  cheap in /nutrient terms)
• Increased attention to food aid quality LRP has
  proved equal to shipments from US in food quality
  w/much greater capacity to resolve quality
  problems at delivery than with shipments from the
  US.
• HR 4141 (the Donald M. Payne International Food
  Assistance Improvement Act of 2012)

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Key policy issues

• 7. Flexibility
• With greater food market access and superior
  timeliness and cost-effectiveness of commercial
  channels, cash/vouchers often preferred to food.
• Need response analysis (i) to identify
  appropriate form/ source of assistance, (ii) to
  ensure assistance doesnt disrupt markets on
  which the poor and devt most depend.
• But need options LRP just 2 of US food aid vs.
  82 for ROW. Mainstream LRP not make it a
  separate program.
• Slow/awkward movement toward budget integration
  already achieved in Canada, EU and other key
  donor countries, moving food aid into
  international development budgets and out of farm
  policy and agriculture budgets.

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Conclusion
US food aid still essential to global emergency
response. USAID/USDA do well within the
constraints imposed by authorizing and
appropriations legislation. The Farm Bill
offers a chance to further adapt US policy to all
that has changed in the world of food aid.
Key policy issues for the Farm Bill -
timeliness - cost-effectiveness - food aid
quality - flexibility Implications -permanent,
mainstreamed LRP - reduced/constrained
monetization - relaxed Title II non-emergency
hard earmark
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Thank you for your time and interest!