Comments on: Food aid – good, better, best

By: Getting it wrong « penelope mc

Getting it wrong « penelope mc — Mon, 10 Aug 2009 02:55:26 +0000

[...] locally and support the Liberian agricultural sector and its small-holder farmers? Owen Barder recently wrote that instead of importing food aid to Ethiopia, cash transfers would be more effective in [...]

By: Food aid for Africa: “From America; for America” « Ben Byerly’s Blog

Fri, 29 May 2009 14:07:08 +0000

[...] Food aid for Africa: “From America; for America” Posted on Fri 29 May 2009 by Ben Owen writes: [...]

By: Peter Bofin

Peter Bofin — Fri, 29 May 2009 14:05:04 +0000

What’s worse is the so called ‘monetisation’ whereby surplus US cooking oil, milk powder etc. is dumped via US NGOs and the proceeds used for ‘development’ work (is it Title I or Title II?). I managed some ‘monetisation’ proceeds to support dairy farm development in Bosnia. The proceeds came from dumped US milk powder that a consortium of US NGOs flogged in Bosnia. And all that in a market dominated by german UHT. Owen, ask around about the case taken by the Addis Ababa Chamber of Commerce against the us government wrt cooking oil dumped that way. Was maybe six years ago….. Case didn’t get very far.

By: Michael Keizer

Michael Keizer — Mon, 25 May 2009 13:59:55 +0000

Paul asks a cogent question. There does not seem to be that much evidence yet, but it is not entirely absent either. A reasonable overview article: Farrington, John and Slater, Rachel,Introduction: Cash Transfers: Panacea for Poverty Reduction or Money Down the Drain?. Development Policy Review, Vol. 24, No. 5, pp. 499-511, September 2006. Available at SSRN: http://ssrn.com/abstract=925058 or DOI: 10.1111/j.1467-7679.2006.00344.x

In 2006, Development Policy Review had a mini-special on cash transfers with some interesting articles as well.

Interestingly, much of the evidence in literature seems to deal with experiences in Ethiopia.

By: Paul

Paul — Mon, 25 May 2009 07:45:58 +0000

While I agree with your general point, it seems odd that no one has pointed out that $489 is only the price of the next metric tonne of wheat. You don’t say how many tonnes we are talking about, but surely the price would quickly escalate if that much extra wheat was being bought. That is assuming the market has sufficient quantity to meet demand anyway. If cash transfers was used instead, I don’t see that the problem would be solved – more money chasing the same amount of wheat.

All of this said, buying locally this year would ease the situation next year, whereas imports would exacerbate the situation.

By: jur9en

jur9en — Mon, 25 May 2009 06:11:36 +0000

Isn’t this the truth about most humanitarian aid?
Take ECHO, Dfid, AUSaid. A lot of humanitarian aid funds are spend, not in the least developed countries, but in developing countries which can become potential markets for us, or provide us with cheap products & labor.
I can recommend to read; the Bottom Billion, by Paul Collier. I don’t agree with everything in his book, but it puts global funds in a different perspective (at least for me).

By: ben

ben — Mon, 25 May 2009 01:06:53 +0000

I’m not sure I follow- if food aid is being given to people who can’t otherwise afford food, how can it be putting local farmers out of business? I know that targeting is not always perfect and this can have some effect on prices, but if food aid is really putting local farmers out of business then the food aid must be going to people who would otherwise be buying food, rather than people who would otherwise not have food. In that case, isn’t it clear that food aid was an inappropriate policy response, and the tied vs. untied issue is secondary?

For what it’s worth, I tend to agree with you that giving people cash is probably the best response of all (although you also have to think about whether elected officials in the US would be able to find much support for that). But the tied vs. untied issue gets way more attention that it deserves, considering how relatively unimportant it really is.

By: Owen

Owen — Sun, 24 May 2009 23:23:02 +0000

Ben – It isn’t as simple as that. What if importing food aid puts local farmers out of business?

By: ben

ben — Sun, 24 May 2009 22:53:45 +0000

You can certainly take the USG to task for using the $50m figure to overstate their generosity, since as you quite rightly point out that amount of good that’s done is less than this since some of the benefits go back to US farmers. But focusing on the distinction between tied and untied aid is ultimately a distraction from more important issues. If the US government gives $50m in tied aid, then what’s happening is that the US is not having to pay the full cost of that aid, since some of the benefits come back to its farmers. So the relevant comparison isn’t $50m in tied aid vs. $50m in untied aid… it’s $50m in tied aid vs. ($50m minus the benefits that went to US farmers) in untied aid, since from the US’s perspective the real cost of $50m in tied aid is less than $50m.

The much more important issue is the actual level of resources that are being commited, and not whether they take the form of tied aid or untied aid.

By: Paul C

Paul C — Sun, 24 May 2009 19:01:24 +0000

Does anybody know any studies that have been done about the exact conditions under which cash transfers are more appropriate than food aid? I’ve seen general discussion, and everybody seems to agree that, where markets are disrupted, cash is a bad idea, but I haven’t seen any research about how field managers can distinguish between appropriate and inappropriate conditions.

By: Ben Parker

Ben Parker — Sun, 24 May 2009 17:27:05 +0000

The waste is worse elsewehere ($1000 per ton food aid reaching places where it’s under $200 per ton).

I was in a meeting recently with someone who called it “the reverse of alchemy”/

Ben

By: Alanna

Alanna — Sun, 24 May 2009 17:02:02 +0000

I think cash transfer are starting to really gain support – some good case studies coming out lately. Here’s hoping donors grab onto the idea.

By: Adam Jackson

Adam Jackson — Sun, 24 May 2009 14:03:52 +0000

Lovely last line, Owen. And I couldn’t agree more.