Aid & Subsidy Junction: What's Your Function?

Aid & Subsidy Junction: What's Your Function?

Fostering agricultural growth will minimize the need for food aid. Photo:<a href="">Bread for the World (Flickr)</a>
Fostering agricultural growth will minimize the need for food aid. Photo:Bread for the World (Flickr)

The 2012 Farm Bill has reignited the food aid debate. If a few innovative policies can help alleviate hunger and trim the foreign aid budget, will governments bite?

American food aid programs, with which the U.S. government purchases domestic crop surpluses to boost local prices and ships the surplus overseas, has a long list of side-effects:

· Subsidies distort the real value of grain production abroad.
· The flood of cheap grain depresses markets in the recipient economy.
· Crops sent as food aid often lack needed nutritional value.
· Bulk purchases incentivize large monoculture farming in the U.S.
· The value of exporting a crop surplus is negated by shipment costs.
· Conflict may arise if trade deals create an inequitable distribution of aid.

Though food aid would seem the logical choice for regions experiencing famine, there is one aspect that is often overlooked: availability of food isn’t always the problem. Often the issue is poverty.

While drought has a significant impact, surrounding communities frequently have food and water. It’s just inaccessible due to a lack of cash, price spikes and bad roads. This is when an infusion of foreign food aid creates a larger problem.

There are a few steps we can take to address these issues.

1. A voucher program can let people purchase food and goods locally, stimulating the economy and speeding up the recovery process. It’s also a lot less demeaning than standing in a long line for a free sack of rice and less likely to be held up at the border.

2. Let’s allocate foreign aid in a way that’s more cost-effective: by nurturing growth, not responding to crises. As Rajiv Shah, head of USAID, explained to the New York Times, “It is one-tenth the cost to provide effective agricultural support and help communities gain food security than it is to provide food aid at a time of famine.”

3. Long-term investments in infrastructure and sustainable agriculture can ameliorate the devastating effects of famine by easing access to markets and providing more diverse, nutrient-rich food. Since drought and famine don’t happen overnight, we need to be more proactive.

The Arid Lands Development Focus organization has taken initiative by implementing a pasture re-seeding program in Kenya. No longer in need of emergency food aid, the town of Wajir has been able to mitigate the effects of drought using this more effective means of investment. Check out this video from the group:

With the U.S. Farm Bill slated for renewal this year, there is opportunity to remedy some of the poorly designed policies that have affected global markets, and reverberated those effects at home. The “Feed the Future Initiative,” enacted by the Obama administration, takes a step in the right direction; but ending large subsidies and surplus crop dumping is essential to create a greater impact, not to mention removing the incentive to rely on cash crops.

The U.S. currently provides 60 percent of the world’s food aid. While this aid is important during emergencies, most is distributed when there is no crisis. I doubt U.S. farmers would want 60 percent of their production offset by crops from Asia or Africa.

The 2012 farm bill provides the opportunity to diversify U.S. farming practices. The removal of subsidies needn’t spell disaster. A little innovation can move the U.S. toward a more sustainable and locally-sourced food system. Change can be hard but it translates into long-term benefits for those at home and abroad.

If there is political will, there can be a way. Let’s help struggling communities stay local.

Curated news and insights about innovative, market-driven solutions to poverty explored through news, commentary and discussion.

Learn more »

Global Envision newsletter