US Food Aid

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Current Research: International Issues

U.S. Food Aid

Corinne Ramey

In 2001, omas Ferrara, chairman of the Rice Millers’ Associa-tion, declared that food aid was necessary in order to keep the ricemills alive in the region surrounding his home state of Mississippi.“Meaningful and immediate increases in food aid now could meanthe diﬀerence between survival and immediate ﬁnancial disasterfor the new rice mills in this region,” he stated in an interview withthe

Delta Farm Press

in July 2001. anks to our government’s foodaid program, rice was shipped to hungry people in poor nationsaround the world.But Wagino, a rice farmer and father of four small children inIndonesia’s Central Java Provice, had a different take on the issue. When the food that had been milled in Mississippi arrived in In-donesia, the large quantities of rice introduced to the market sentthe price of locally grown rice plummeting, making it nearly im-possible for Wagino to feed his family. In an interview with Oxfamstaff, Wagino stated:Last year I sold my rice at Rp 2,600-Rp 2,700 [approx.$.25] per kg. is year, however, its price was only Rp1,500-1,700 per kilogram due to the flooding of rice fromthe social safety net programme to the local market...Somepeople said that rice came from the U.S.

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Clearly, there’s a problem with our government’s food aid pro-gram if the individuals who are supposed to beneﬁt the most fromthe aid are hurt, and not helped, by the assistance. Wagino’s experi-ence with food aid is not atypical: due to bad planning, inadequate

A Humanitarian Program?

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studies of local markets, and dumping of surplus production from othercountries, food aid has often been as much a curse as a blessing for thosein the developing world.Food aid is an important current issue. ere are 850 million people worldwide who suﬀer from chronic malnutrition, an unacceptable num-ber given the aﬄuence of the industrialized world.

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Each year, 5.5 mil-lion tons of food aid are distributed to developing nations.

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About half of that aid comes from the United States.Food aid has been a central issue in the Doha Round negotiationsof the World Trade Organization (WTO), which took place most re-cently in Hong Kong this past April. However, participating countriesfailed to meet their self-appointed deadlines, and little concrete policy came about from the meetings. Ernesto Zedillo, the former MexicanPresident and current director of the Yale Center for the Study of Glo-balization, suggests that these negotiation failures undermine the powerof the WTO. He writes, paraphrasing Colombian author Gabriel GarciaMárquez, that the Doha negotiations have become “a chronicle of failureforetold”.

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ember states claim they want to make international trade fairer, yet refuse to meaningfully compromise

. Unless countries are willingto sacrifice a few of their own benefits for the greater good of the world,they are unlikely to reach any substantive conclusions.Food aid is a trade issue, and relevant to the Doha Round discussionon export competition because food aid can distort domestic marketsand damage food production in recipient countries. Additionally, therehas been recent tension between President Bush and Congress over foodaid issues: Congress is hesitant to change food aid policy due to the pow-erful lobbying interests of the big agribusiness and shipping firms thatbenefit from U.S. food aid. As Bush loses his “fast track” negotiationauthority in mid-2007, it will be particularly difficult to pass Doha roundlegislation beyond that point, due to what Zedillo calls the “notoriously protectionist” American Congress. Once the President loses his “fast-track” authority, Congress will have a line-item veto on trade bills.

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Food aid is a contentious issue for several reasons. It has clearbeneﬁts—food aid saves lives threatened by droughts and shortages,helps remedy chronic malnutrition, and creates an additional marketfor U.S. agricultural products. Some private voluntary organizations(PVOs) also use food aid to generate revenue for development projectsthrough a process termed monetization, in which food aid is sold atcheap prices in local markets. In the short term, this provides food atlower prices for needy people; however, in the long term, food aid oftendisrupts local markets. Not only that, aid is often poorly managed—it

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has, in the past, arrived months after a crisis or consisted of food notnormally consumed by its recipients. Many suggest that food aid is aploy to disguise export subsidies as aid, a move that beneﬁts U.S. agri-business and shipping companies and opens up new overseas marketsfor U.S. production. U.S. food aid policy needs to change.

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President Eisenhower established the food aid program in 1954 with fourinitial objectives in mind. First, our government designed the program tocounter the threat of communism. Food aid started during the Cold War, when many developing countries were either cooperating with the com-munist bloc or giving signs that they might be easily swayed under thecommunist domain. e United States hoped that food aid might be ef-fective in securing the good will of these countries, thereby checking thespread of communism.

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Second, food aid was thought to be an effectiveform of humanitarian aid. e United States thought the only way for developing countries to overcome their cycles of poverty was to receive aidfrom developed countries. ird, food aid was an effective way to get ridof agricultural surpluses. During World War II, agricultural production was suspended in many parts of the world, including Europe and Japan.By 1954, however, this production had restarted; the increase in produc-tion, combined with the emergence of better agricultural technologiesand farming techniques, led to an overwhelming worldwide food surplus.Finally, our government saw food aid as an effective means of capturingnew markets. e United States hoped to disseminate a dependence onimports in developing nations by creating a “wheat and meat” diet inmuch of the rest of the world.

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A large percentage of food aid was tar-geted at nations that had the potential to become new markets. e objectives of giving food as humanitarian aid, getting rid of sur-pluses, and capturing new markets remain in place today. Agriculturalsurpluses are not nearly as large today as they were in the 1950s, but thepractice of exporting U.S. agricultural products still manages to reducethe amount of food in the U.S. market and to keep prices high. e only major changes in the food aid program since its inception have been theaddition of monetization and the extensive involvement of NGOs in thefood aid network.Many of the people overseeing U.S. food aid believe it is an idealprogram because it mixes U.S. self-interest with humanitarian concerns.In theory, food aid boosts the U.S. economy and helps to ﬁght hunger