US Food Aid:
Background Trends and
Key Policy Issues
Chris Barrett
Cornell University
May 7, 2012 Congressional Staff Briefing
Congressional Research Service
Washington, DC
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.
Developing World Natural Disasters
(5 year lagged moving averages)
400
Number of Disasters
350
300
250
200
150
Millions of Persons Affected
100
50
0
1974
1979
1984
1989
1994
1999
2004
2009
Data source: EM-DAT: The OFDA/CRED International Disaster Database
Background trends
2. Globalization of food markets
- Food aid was originally a surplus disposal program. Take
gov’t-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 > 10-fold in the past 20 years!
- This has led to a rapid transition towards cash-/marketbased food assistance, especially since 2004 tsunami.
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.
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).
Developing world prevalence (%) of insufficient
Dietary energy
Vitamin A (under 5 serum retinol < 20 g/dl)
Iodine (urinary iodine < 100 g/dl)
Iron ( under 5 anemia)
Source: FAO SOFA 2013 (internal data)
1990-94
20
36
N/A
49
1995-99
17
35
37
49
2000-04
17
33
33
51
2005-09
15
31
33
61
US Food Aid
Much Has Changed In US Food Aid 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.
Since 1999, global shipments down 64%,
US shipments down 68%.
14
Millions of metric tons
Food aid volumes have fallen sharply over
the past decade-plus, from the US and
globally due to trends described already.
16
12
10
8
6
Non-US shipments
4
US shipments
2
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
U.S. Food Aid Programs, FY1990-2010
3000
$ millions (real, base year 2000)
For nearly 60 years, the USG has been the
world’s largest donor of food aid for
strategic, economic and moral purposes.
Still 50-60% of global flows each year.
2500
2000
Other
1500
1000
Title II
500
Title I
0
1990
1995
2000
2005
2010
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 FFP’s hands:
big risks of 4th quarter emergency response interruptions.
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 >50% 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.
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)
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 doesn’t disrupt
markets on which the poor – and dev’t – 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.
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
Thank you for your
time and interest!