Who Benefits from U.S. Aid?

What caught my attention in Natasha Burley’s article in the New York Times, In Niger, Hungry are Fed, but Farmers May Starve, was not the main premise of the article – that delayed food aid (see timeline presented by BBC News), would arrive at the market place around the same time as the newly harvested bumper crop of millet, depressing prices and forcing poor farming families to sell most of their crops in order to pay down the debt they incurred after a failed season that led to the crisis, resulting in a renewed cycle of hunger and poverty – but the last section of the article: Faster U.S. Aid Unlikely. Apparently, a proposal to deliver a portion of American food aid more quickly and at lower cost to starving people around the world is headed for defeat in Congress, strongly opposed by U.S. agribusinesses, shipping companies, and yes, the nonprofits whose bread is buttered by food aid programs.

The administration asked for authority to use a quarter of the $1.2 billion food aid budget provided to the Agency for International Development to buy corn, wheat and other commodities in the developing countries facing hunger crises, or in neighboring countries, rather than from American producers.

Now, the government must buy the food in American markets and send most of it on American-flagged ships.

Officials at the Agency for International Development said that having the flexibility to buy the food for an African crisis in Africa would make it possible to respond in some cases in weeks instead of months, feed more people with the same amount of money and potentially save thousands of lives.

Andrew S. Natsios, administrator of the agency, said the government would be able to buy twice as much food for the same money in some situations because of the savings on transportation. “You can’t eat transportation,” he said.

But the change was dropped from the Senate’s version of the agriculture appropriations bill expected to be voted on this week, though there is a chance part of the proposal will be restored. The provision was not in the House version, passed in June.

The measure ran into fierce opposition from an array of agricultural and shipping interests with stakes in the program. And an alliance of nonprofit groups that receive food aid money also opposed using the program’s core financing to buy food in developing countries. Rather, they favored a $100 million pilot program that would only go forward if Congress appropriated extra money for food aid, which they say is indefensibly short of money.

A range of agricultural and development economists have long said such a policy option is sensible, so long as it is used wisely. But it is not always the best course, especially where there is a widespread shortage of food and purchasing locally would drive up prices, making food even less affordable.

But researchers and aid workers say it can be useful when there is a surplus in a different part of an afflicted nation or in a nearby country.

The politics of aid is one reason that I left the international NGO with whom I worked for three years (from 1995 to 1997) and stopped consulting for other international NGOs funded by USAID several years after that. While I do not have much experience with food aid, it was easy to see where the bulk of the international development funding was going – to U.S. concerns. The absurdities of the buy-U.S. mandate first hit me in 1992, when quick-start programs in the Former Soviet Union (FSU) were hampered by delays in getting American-made SUVs shipped and serviced. At that time, you could buy a Russian-made Lada, serviceable everywhere in the FSU, for the equivalent of U.S. $5,000. Instead, USAID-funded programs had to pay U.S. $40,000 for cars that very few mechanics could service and for which there were no spare parts available in country. (Guess what – more delays and additional shipping costs, on U.S. carriers, of course.)

What do you say when you are promoting free market policies and a farmer in Moldova, or Tanzania, or Mongolia asks: “Are there really no subsidies for commodities in the U.S.?”

How do you explain to rice farmers in South East Asia or soybean farmers in South America that we can’t assist you because we are afraid that your products might someday compete with ours?

Foreign aid, especially aid to Africa, is extremely controvertial. (Yoweri Museveni, President of Uganda, once scandalized the attendees of a microfinance conference by saying – “just build us roads.”) But if we are going to do it, let’s do it better, and for the right reasons.


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