Photo courtesy of World
Food Program, Brenda Barton
In 1996, the World
Food Summit set its sights on reducing by half the number of
hungry people in the world by 2015. But 8 years after the signing
of this declaration, the international community is coming to grips
with the fact that it will fall far short of its goal. All indicators
developed by ERS lead to the inescapable conclusion that the aggregate
food security situation—measured by food availability of many
low-income countries—has hardly improved at all in the last
decade. Reports from the Food and Agriculture Organization (FAO)
of the United Nations tell the same story.
Among the reasons for chronic undernutrition in the poorest countries
are slow growth in domestic food production, high population growth,
inadequate purchasing power, and frequent setbacks associated with
natural and manmade shocks, such as drought, hurricanes, and civil
strife. To counter the trend, the ultimate goal is to reduce the
impacts of shocks, which reduce food production and consume too
many resources in countries with too few to spare. Until that long-term
goal can be met, it is critical to strengthen the food safety net
in the most vulnerable countries. Because most poor countries do
not have national food safety net programs, they depend on international
food aid. But food aid increasingly falls short of needs: quantities
change annually, and overall levels have grown only minimally during
the life of the programs. The uncertain availability of food aid,
though worrisome, is just one reason why food aid has not played
a larger role in reducing world hunger. Differing objectives in
food aid programs, lack of consistency among donors’ approaches
to food aid, and types of food donated are just a few factors that
limit the effectiveness (the degree to which it reduces a country’s
food gaps) of food aid.
Future of Food Aid Programs Is Uncertain
The global quantity of food aid has fluctuated during
the last two decades, and its share has declined relative to both
total agricultural exports from food aid suppliers and total food
imports of low-income countries. The virtual stagnation in the level
of food aid over time is not likely to change, and it may even decline
if budgets remain tight. As major donor nations reduce market support
to agriculture due to budget constraints as well as to comply with
their commitments to the World Trade Organization, decreases in
surplus food production will likely follow. The costs of food aid
may increase as a result.
As the trend in supplies of food aid has remained relatively flat,
the gap between food production and food consumption in low-income
countries, and thus the demand for food aid, has widened. According
to ERS, the gap between recommended nutritional requirements and
purchasing power of the populations in the world’s poorest
countries was more than 32 million tons in 2003, about four times
larger than the supply of food aid in 2002. While this gap is projected
to narrow to less than 28 million tons during the next decade, it
will likely remain far above the level of available food aid, which
may decline.
According to the World Bank, about 1 billion people in developing
countries live in poverty with annual per capita incomes of less
than $370. In some regions, particularly Sub-Saharan Africa, per
capita food consumption has declined in the last two decades, but
food aid supplies have not changed since the late 1980s. For these
countries, further declines in food consumption from already low
levels can lead to severe food shortages, malnutrition, and political
instability.
These estimates, however, do not necessarily mean that significant
increases in food aid would be able to close these gaps. Given the
poor distribution systems in these countries, absorption of large
quantities of food imports would be difficult, if not impossible.
Nevertheless, targeting efforts in the distribution of food aid
need to be improved in order to increase its effectiveness and reduce
hunger. There are growing and unresolved questions related to the
impacts and the role of food aid. Despite 50 years of food donations,
food aid’s role in reducing world hunger remains unclear.
(See box, “The Evolution of the 50-Year
U.S Initiative.”)
How Effective Is Food Aid in Improving Food Consumption?
There are three types of food aid, each with a differing objective.
Program food aid is a government-to-government donation
that aims to reduce food import costs for the recipient country.
Project food aid is used by a government or nongovernment
organization to provide support for development projects. Emergency
food aid is used to augment food supplies or assist in rebuilding
productive assets for countries affected by political or natural
disasters.
The different uses of food aid have generated debates on the positive
(additional food supplies) and negative (production disincentive
due to the decline in local prices) effects of the programs. Still,
food aid is regarded as a valuable resource for increasing food
consumption by providing temporary relief from food shortages. But
has food aid reduced consumption instability over time? Since
the quantities of food aid fall short of the aggregate needs of
the study countries, the next question is whether food aid is provided
to those who need it the most.
Photo courtesy of FAO, M. Griffin
What does food aid contribute to consumption?
The overall contribution of food aid to total food
consumption in the 70 countries included in ERS’s annual Food
Security Assessment is small, but the importance of food aid is
more pronounced when it is measured at the country level at particular
points in time. The 70 countries covered in this exercise include
4 in North Africa, 37 in Sub-Saharan Africa, 10 in Asia, 11 in Latin
America and the Caribbean, and 8 in the Commonwealth of Independent
States (CIS). Food aid, on average, provided less than 4 percent
of food consumption (grain equivalent) for the 70 countries in the
last decade, but the share varied greatly by country and tended
to be more significant during emergencies.
During Somalia’s 1992-93 civil war, food aid
contributed to about 70 percent of its consumption.
When Mozambique was faced with prolonged economic
and political difficulties (early 1980s through early 1990s),
it often relied on food aid to supplement more than a third of
its food consumption.
In Rwanda during 1997-99, food aid contributed to
more than a third of food consumption.
Since 2000, Eritrea has relied on food aid for about
half of its consumption.
During 2000-02, the largest recipients of food aid
were North Korea (4.2 million tons total for the 3 years), Ethiopia
(4.0 million tons), Bangladesh (1.4 million tons), and Afghanistan
(1.1 million tons). In North Korea, food aid contributed to about
20 percent of food consumption. In Ethiopia and Bangladesh, food
aid’s contribution to consumption was less than 10 percent.
Has food aid stabilized consumption?
Food aid clearly had a significant role in reducing the loss of
life during food emergencies in such countries as Ethiopia, Sudan,
Somalia, Afghanistan, Rwanda, and Haiti. However, over time and
at the aggregate level, the impact was less apparent. Based on food
consumption data (grain only) in 62 low-income countries, the annual
consumption shortfalls from trend in each country (excluding food
aid) during 1981-99 exceeded the cumulative quantity of food aid
received over the same period by 8 percent. Ideally, the volume
of food aid would have matched the consumption shortfalls. In practice,
however, food aid followed a declining trend while consumption shortfalls
varied annually: in 5 of the 19 years, aggregate food aid exceeded
the consumption shortfalls; in 12 of the years, it was less than
the shortfalls; and in only 2 years (1986 and 1992) did the quantities
match. The comparisons are much more uneven at the country
level.
The
Evolution of the 50-Year U.S Initiative
The U.S.
food aid program began in the early 1950s with the enactment
of the Agricultural Trade Development and Assistance Act of
1954 (P.L. 480). The program’s objectives include the
provision of humanitarian assistance and the support of economic
development (project aid) in recipient countries. These objectives
are carried out under three broad programs:
Title I consists of government-to-government
commodity sales and sales to private entities in developing
countries under long-term, low-interest credit arrangements.
Title II provides food as a grant for emergency
relief and economic development projects.
Title III provides for government-to-government
grants to support economic development in the least developed
countries (1977 amendment); this program has not received
funding since 2001.
The goals of food aid have changed through time,
and the importance of food aid as an export outlet has diminished
substantially. For example, during the early 1970s, as commercial
demand for grains increased dramatically, fewer commodities
were available for food aid, and donations fell to their lowest
level since the enactment of P.L. 480. During the mid-1980s,
increased U.S. grain stocks did not translate into increased
food aid because the U.S. Government adopted a targeted export
subsidy program that boosted agricultural exports. With the
decline in food aid as a share of exports, the U.S. food aid
program has become more focused toward humanitarian goals.
In 1991, for the first time since the start of U.S. food aid
programs, the largest share of the P.L. 480 budget was allocated
to Title II to support humanitarian concerns. Between 2001
and 2003, Title II received 85 percent, on average, of the
P.L. 480 budget.
Other food aid programs include:
Food for Progress, which provides for the donation
or credit sale of U.S. commodities to developing countries
and emerging democracies,
Section 416(b) of the Agricultural Act of 1949,
which provides for overseas donations of surplus commodities
acquired by the Commodity Credit Corporation, and
McGovern-Dole International Food for Education
and Child Nutrition, which helps support education, child
development, and food security for some of the world’s
poorest children.
Does food aid respond to needs? The effectiveness
of food aid depends on whether it is provided to those who need
it most. Distribution food gaps, as estimated by ERS (see
“Behind
the Data”), reflect the amount of food needed to raise
consumption of all income groups within a country to the nutritional
requirement. This measure captures the differences in purchasing
power within a country. Food aid effectiveness is measured
on a scale of 0 to 100 percent, with 0 percent reflecting food aid
given to a country with no needs and 100 percent reflecting food
aid that reduces a country’s food gap by its full amount.
This method measures actual consumption as related to purchasing
power within the countries at the national level and may not capture
micro-level specific programs, such as food for work, which could
be location specific.
During 1991-2000, the average effectiveness of food aid
was 66 percent, meaning two-thirds of food aid went toward reducing
and/or eliminating the recipient countries’ food gaps. The
remaining 34 percent went to countries that either did not have
food needs or that had needs less than the amount of food actually
received. Regionally, food aid deliveries in Sub-Saharan Africa
and Latin America were highly effective in reducing food gaps, averaging
about 80 percent, compared with 40-46 percent in Asia and the CIS.
The effectiveness of food aid in meeting nutritional needs depends
highly on how food aid is allocated and what criteria are used to
make allocation decisions. The largest nutritional gain is realized
when food aid is targeted to the lowest income group—thus
indirectly increasing this group’s purchasing power—either
in emergency situations or in support of supplementary feeding programs,
such as food stamps. In these cases, food aid changes a country’s
income distribution indirectly because it allows the lower income
group to consume more than expected given its income level. In 2000,
about half of food aid was used for emergencies, which can be categorized
as targeted. It is not clear how much of the other half was targeted—the
effectiveness of other uses of food aid in reducing hunger is difficult
to estimate. All food aid reduces food costs in the market, making
food more affordable; but without targeting to the most vulnerable
group, the benefits of food aid tend to be distributed across the
entire population of a country.
Photo courtesy of World
Food Program, A.K. Brodeur
What Prevents the Program From Achieving Its
Full Potential?
There are many unresolved issues relating to food aid. After 50
years, there are neither uniform approaches nor transparent criteria
among donors regarding decisions to allocate food aid. Program eligibility
criteria are loosely defined, and it is not always clear when an
activity stops, and why. Many countries receive food aid for reasons
that are not clear. For example, China received wheat in 2000-02
as food aid to finance development projects, but, in turn, donated
food (wheat, rice, corn, oils) to North Korea and several African
countries during the same period. In addition, it is not clear what
governs donor decisions to shift from the use of food aid for development
purposes to emergency relief (or vice versa) both within a country
and across countries. Such changes have implications (positive or
negative) on the coordination and management of food aid between
donors and recipients. In each case, it is difficult to measure
which potential goals are met (cost effectiveness, meeting recipient
needs) and to what extent. Compounding the problem are the changes
in annual availability of food aid stemming from donors’ political
and budgetary considerations. It is an open question whether a program
with this type of characteristic can provide a reliable food safety
net, let alone a reliable source of development.
Another issue of concern is the producer disincentive impact of
food aid when it is sold for development activities. In such cases,
food aid results in lower producer prices, which reduces incentives
to produce, thereby creating a growing dependency on food aid. The
selection of commodities used for food aid is also raising questions.
The growing share of noncereal food aid products, such as vegetable
oil, pasta, dried potatoes, dried fish, pulses, sugar, and fresh
vegetables, is potentially worrisome. As recently as the early 1990s,
these products accounted for only 9 percent of total food aid donations;
10 years later, the share had jumped to more than 14 percent. This
is problematic because these commodities are higher priced than
cereals and, therefore, are not likely to reach the poorest segment
of the population. In some cases, these commodities now account
for a larger share of the food aid package than cereals. For example,
in 2000, noncereals accounted for two-thirds of Georgia’s
food aid receipts (67,739 tons in grain equivalent). (See
box, “Who Are the Major Food Aid Donors and Where Does the
Aid Go?”)
Toward Improving Effectiveness of Food Aid
The goal of the World Food Summit was to halve global hunger in
a little over a decade. Each and every signatory country bears the
responsibility of meeting this goal, but short-term economic and
political shocks around the world remain serious obstacles. The
United States plays a pivotal role within the international food
aid system, and its actions have a profound effect on the actions
of other donors and the system as a whole. The 50th anniversary
of the U.S. food aid program in 2004 is a timely point to appraise
the program and reexamine plans for the future. The U.S.
Action Plan on Food Security, released in March 1999, outlines
policies and actions aimed at alleviating hunger at home and abroad.
To improve the effectiveness of the international food assistance
program, the action plan made aid to the most food-insecure countries
a priority. It is too early to evaluate the impacts of this policy
change, but steps are being taken by the U.S. Government to develop
transparent methods to monitor the effectiveness of food aid in
reducing hunger in recipient countries.
Lessons from the past could be useful toward improving the effectiveness
of food aid. For example, emergency food aid has saved lives (response
to drought in Ethiopia, 1984-85, 1991, 1999-2000, and Zambia, 1992;
response to civil strife in Somalia, 1991-92, and Rwanda, mid-late
1990s; response to Hurricane Mitch in Honduras in 1998-99; response
to financial crisis in Indonesia in 1998). Food aid has also proved
effective in post-emergency situations.
Who
Are the Major Food Aid Donors and Where Does the Aid
Go?
The
major food aid donors are the United States, European
Union (EU), Japan, Canada, and Australia. In the late
1980s, the U.S. provided roughly 7 million tons of food
aid per year, or nearly 60 percent of global food aid
donations during the period. The EU share at that time
was about 25 percent. U.S. donations fell considerably
from the late 1980s through the mid-1990s, and the U.S.
share of world food aid slipped below 50 percent in
1994-96. This decline was offset by the EU, whose share
rose to 35 percent, and Japan, whose share jumped from
less than 4 to nearly 6 percent. U.S. donations have
rebounded considerably, however, and since 2000, the
U.S. share of world food aid has surpassed levels of
the late 1980s. Conversely, EU donations have slipped,
with the EU share averaging less than 20 percent in
recent years.
Countries in Sub-Saharan Africa (SSA) and Asia have
been by far the largest recipients of food aid, receiving
more than 60 percent of the volume of food aid during
the last 15 years. The food aid share of the two regions
has changed over time, depending on the economic and
political developments in their respective countries.
Severe droughts in the early 1990s resulted in higher
food aid shipments to SSA, while political, financial,
and natural disasters in the late 1990s triggered a
shift in donations to Asia. On a per capita basis, however,
food aid receipts are much higher in SSA than in Asia
because of differences in population: SSA countries
have less than half of the population of lower income
Asian countries.
Donors’ shares
of global food aid
U.S.
EU
Japan
Canada
Percent
1988
58.1
22.5
3.6
8.6
1989
56.6
27.2
3.9
6.7
1990
59.7
24.6
3.6
7.2
1991
58.1
25.4
3.3
7.3
1992
49.7
35.2
3.0
6.9
1993
63.5
24.4
2.4
3.6
1994
56.1
29.0
2.4
7.1
1995
41.7
39.5
8.7
4.9
1996
44.3
35.5
6.4
5.2
1997
43.3
30.6
4.5
7.3
1998
48.2
22.8
13.7
4.8
1999
63.9
24.3
2.9
2.7
2000
61.5
18.9
4.8
2.7
2001
59.0
18.8
8.8
2.6
2002
64.9
13.8
3.2
1.7
1988-89
57.4
24.8
3.8
7.6
1994-96
47.3
34.7
5.8
5.8
2000-02
61.8
17.2
5.6
2.4
Other uses of food aid, however, have had mixed results,
particularly program food aid, that is, government-to-government
donations that are commonly sold in recipient country markets. Program
food aid is a resource transfer and is often used to reduce financial
constraints of recipient countries. Therefore, it is not targeted
to any specific nutritional or development objectives. Another drawback
of program food aid is the potential for interfering with market
functions. The most prevalent food aid commodities are cereals and
vegetable oils, commodities most often imported commercially by
the recipient. The injection of food aid in this circumstance can
disrupt markets and depress producer prices.
There is also evidence that program food aid, in some instances,
has created structural import dependency. For example, program food
aid has encouraged the development of industries, such as poultry
farming or wheat milling, that require imports to continue operations
even after the termination of the food aid program.
Overall, the impact of food aid in reducing hunger has fallen short
of its potential and, in some cases, has negatively affected the
economies of the recipient countries. A more important problem lies
in the fact that there is no coordination among donors to establish
guidelines for distribution and need-based targeting of food aid.
It is an annual budgetary program, which hinders its flexibility
to expand or contract in response to the needs of recipients. However,
steps toward transparent goals and criteria for food aid eligibility,
length of the program, and type of program could enhance its effectiveness
and pave the road to improved coordination among donors.