Hunger and malnutrition are a growing global concern, especially in many developing nations where underdeveloped agricultural programs continue to exist. The issue of hunger can also be worsened by food aid when it undercuts local developing agricultural programs and makes entire regions dependent upon the aid.
In the EU, the Common Agricultural Policy accounts for about $50 million euros per year in agricultural subsidies, while the United States over the past ten years has spent between $12-22 billion. The agricultural subsidies create food surpluses.
Food aid or food dumping?
There are two kinds of food aid. First, emergency food aid that is a short-term response indented to aid those who have been affected by such things as conflict or natural disasters. Second, food aid in developmental contexts wherein food aid is provided on a medium to long-term basis as populations become self-sufficient.
The World Food Programme (WFP) reports that it currently delivers food aid to 90 million beneficiaries in 73 countries, which accounts for about 3.7 million tons of food, all of which is donated, and mostly by developed countries. The United States accounts for about half of all global food aid.
In contrast, food dumping is distinguished by the intent of the donor, which is often to off-load agricultural surpluses and expand markets. It becomes problematic when the food is dumped into markets that do not need it. Often local farmers are unable to compete with food that is priced below market value. When the process is repeated, it becomes difficult for developing nations to grow self-sufficient, as they can become reliant upon food aid.
Another kind of aid that the WFP provides is a cash and voucher system in areas where food is sufficient but extreme poverty persists. The vouchers can be redeemed for food items or spent in select local shops. This benefits both local shop owners and the recipients of the vouchers because it supports the local economy and allows the recipients to choose the kind of aid that they require most.
Dumping and trade policy can distort the good of food aid
Alex Renton wrote a piece in 2007 for The Guardian which explains how the United States dumps food surpluses in Malawi. He details how after years of food shortages, in 2007, local corn harvests were their best in years. Despite this, the United States announced a donation of $19.5 million worth of American corn and soya as food aid, due to US surpluses.
Renton quotes a Malawi-based analyst, Charles Rethman, who said that, “The price is so low that we have concern now about next year. Farmers will be put off growing maize, and they won’t have the cash to buy the seeds for the next planting.”
Liberalized trade legislation can also be more favorable for developed nations and harmful for developing ones.
Oxfam reports that US legislation for Title I food aid programs states priority is given to US exports of agricultural commodities to developing countries because of the potential for new markets. This serves as a major subsidy for the United States and gives the country an unfair advantage in terms of trade. It also limits developing nations from exporting food.
Examples of this occurred in 2000 when Guyanese rice exports to Jamaica were replaced by food aid donations from the United States due to surpluses, and in 2006 when during the Doha Round of negotiations at the WTO the United States refused to cut farm subsidies that would allow developing world agriculture to be more competitive on global markets.
In a paper published in 2001, entitled “Land Loss, Poverty and Hunger,” Anuradha Mittal offers some statistics regarding the Kenyan agricultural industry that collapsed due to liberalized trade.
She says, “Kenya, which had been self-sufficient until the 1980s, now imports 80 percent of its food, while 80 percent of its exports are accounted for by agriculture. In 1992, European Union (EU) wheat was sold in Kenya for 39 percent cheaper than the price paid to European farmers by the EU. In 1993, it was 50 percent cheaper. Consequently, imports of EU grain rose and, in 1995, Kenyan wheat prices collapsed through oversupply, undermining local production and creating poverty.”
Approximately 75% of Kenya’s population is dependent upon agriculture for their welfare. When the prices of agricultural exports collapse and are sold for below market value, three quarters of the population is negatively affected. As poverty increases, the poor consumers are still unable to afford subsidized agricultural imports from the developed world.
Supporting local agriculture
The damage of malnutrition within the first two years of life is irreversible and can lead to developmental issues. In 2008, The Economist cited a paper by Robert Black which reported that 2.2 million child deaths per year were caused by underweight births and inter-uterine birth restrictions. The paper also cited 1.4 million child deaths as the result of poor or non-existent breastfeeding and another 1 million deaths from nutritional deficiencies.
The UK has donated to the Malawi government to help implement an agricultural input program. The program has a fertilizer subsidy that allows farmers to buy fertilizer for their crops. The fertilizer increases yield, allowing farmers to make more money. Other African countries, such as South Africa, are looking at this program as a model for their own agriculture programs.
In Mozambique, a country whose dairy industry was devastated by a 16-year long civil war, American dairy corporation Land O’Lakes, Inc. is working with local farmers to revive dairy cattle herds by providing training, feed/fodder techniques and establishing producer level cooperatives with milk collection centres. The goal is to meet market demand for dairy and provide income to smallholder farmers.
In Ethiopia, PepsiCo is investing in the chickpea industry by providing modern agricultural technology to local farmers with the goal of promoting, “long-term nutritional and economic security in Ethiopia.”
Food aid has its value, but it needs to be limited to times of emergency or great need in order to promote agricultural self-sufficiency in the developing world.