Introduction

Food aid is defined as assistance provided to people in need for the purpose of combating hunger, whether it is in the form of actual food or of cash or vouchers used to purchase food (Shah, 2007). While the idea is simple, food aid as a solution to world hunger presents an extremely complex set of problems, characterized by politics and greed. The current food aid process is inefficient, expensive, and harmful to local economies in recipient nations. For food security to be achieved, it is essential that food aid becomes what it was meant to be: an efficient and humanitarian method to get food in the mouths of hungry people around the world.

Current Situation

The United Nations World Food Programme, or WFP, is the largest food aid organization in the world. In 2006, they channeled about 54% of all food aid and 75% of all emergency food aid (Wahlberg, 2008). When there is a crisis, the WFP requests assistance and receives donations from countries, corporations, and private donors. Then, the distribution of food aid is typically handled by other UN agencies and non-governmental organizations, or NGOs (AlertNet, 2011).

Recipients

In 2012, 63% of food aid went to Sub-Saharan Africa, 22% went to Asia, 11% went to the Middle East and North Africa, and the remaining 4% went to Latin America and the Caribbean (WFP, 2013). If you split it up by country, the top recipients in 2012 were, in order, Ethiopia, North Korea, Yemen, Pakistan, Somalia, and Kenya (WFP, 2012).

However, the regions and countries that receive the most aid aren’t always those are most in-need. In 2012, 60% of the aid that the WFP received was multilateral, which means that the WFP has the ability to choose where the aid is needed most and how best to distribute it, but this figure is decreasing. NGOs distributed 29%, an increase from previous years, while bilateral aid, or aid that is sent to a specific country or project by another, made up the remaining 11%, representing a 90% increase from previous years (WFP, 2013). With bilateral aid, the WFP has very little flexibility in moving money and food to the places where they’re needed most, and, while some projects receive full or almost full funding, others receive little or none (Wahlberg, 2008). It is often national interests, such as advancing foreign policy goals or opening up new export markets (AlertNet, 2011), or the amount of attention that a crisis gets in the media that determine which crises get funded and which don’t (Wahlberg, 2008). For example, the WFP predicted major hunger in Niger as early as November 2004 and began issuing appeals for donations, but it wasn’t until images of starving children plastered the news in summer 2005 that donors started to send money and food. Experts agree that the crisis could’ve been almost entirely avoided if countries and organizations had responded when the WFP first appealed for donations (Wahlberg, 2008).

The 2002 food crisis in Southern Africa is another example of a case in which the WFP’s lack of flexibility led to an unnecessary situation. In response to the crisis, the the US donated genetically-modified maize. However, several countries, like Zambia, Zimbabwe, and Mozambique, initially refused the aid over fears about the safety of genetically-modified food. Even though WFP policy states that they must respect the right of recipient countries to refuse to accept genetically-modified aid, the WFP argued that there was no other food available to give them. So, all countries involved, except Zambia, eventually agreed to accept the aid (Wahlberg, 2008).

Donors

Food aid comes from governments, organizations, corporations, and individuals. In 2012, the largest donors were, in order by tons of food donated, the United States, Japan, Brazil, Canada, the WFP, and China (WFP, 2012). However, there is much more than simple compassion involved when an entity donates.For example, the amount of food aid donated is correlated strongly with fluctuations in raw material prices and agricultural subsidies within donor countries. When prices are low and donors have surpluses, they can overwhelm foreign markets with cheap food, which pushes prices down further and harms local farmers. On the other hand, when prices are high and production is down, countries often donate less food. Neither situation is good (Wahlberg, 2008).

Food Assistance Convention

The primary international agreement dealing with food aid is the Food Assistance Convention, or FAC, a renegotiated version of the 1999 Food Aid Convention. The goal of the FAC is to tackle world hunger by getting member nations to make hard commitments about how much money they will designate for food aid each year (FAC, 2014). In 2014, FAC member nation commitments totaled over 2.7 billion USD, and all member nations either met or exceeded, sometimes substantially, their minimum commitments (FAC, 2015).

Critics of the FAC argue that its membership does not encompass all of the major food aid participants in the world. Large donor nations such as China and South Korea, along with NGOs and recipient nations, are currently not involved with the FAC, even though they all play key roles in the food aid process. Additionally, critics argue that the FAC should increase the minimum levels of food that donors are required to provide, since many donors consistently exceed their minimums, and that the FAC should be delegated the power to hold countries accountable when they don’t meet their commitments (Wahlberg, 2008).

Donation Methods

While the majority of donors now give money directly to the WFP, some still donate tied food aid, which is food aid that must come directly from the donor country, often with additional strings attached in order to provide greater benefits for the donor country (AlertNet, 2011). For example, most aid from the United States is tied, and it comes with the additional requirements that it must be bought from American sellers and 50% must be shipped on ships registered to the US (Tran, 2013).

Mission 2019 considers the process of tying food aid to be bad due to its inefficiency and high costs. According to CARE USA, the average delivery time of tied food aid is five months after it was first purchased, while cash donations only take one to three months to make an impact. In addition, tied aid costs between 30% and 50% more than aid that isn’t tied. That means that, for the same cost, untied aid can reach up to twice as many people as tied aid and does so in a significantly shorter time frame, which is critical in food crises (Voices of Youth, 2011).

Many countries and entities, such as Australia, Canada, Denmark, France, Norway, the United Kingdom, and the European Union have opted to untie their food aid. However, even these places still specify where much of their aid goes (Voices of Youth, 2011).

Types of Food Aid

There are three types of food aid: emergency, project, and program (WFP, 2013). With any kind of food aid, it is important to target it such that those who need it most are benefitted and it the local economy isn’t adversely affected (Wahlberg, 2008).

Emergency food aid is freely distributed, short-term food aid for people in places impacted by natural disasters or political instability, usually given as a grant to countries in need. It comprised 70% of all food aid in 2012 (WFP, 2013). While emergency food aid is considered the most targeted kind of food aid, problems such as tying and earmarking keep it from being perfect (Wahlberg, 2008).

Project food aid is food aid used to support projects dealing with agriculture, nutrition, and development. It is provided as a grant and comprised 27% of all food aid in 2012 (WFP, 2013). While some project aid is targeted and distributed freely, an increasing amount is also sold on the open market in a process called monetization (Wahlberg, 2008).

Large NGOs funded by the United States are responsible for most monetization. It is done in order to fund the shipping and delivery of the aid, as well as to raise money for additional development projects undertaken by the organization, but the Food and Agriculture Organization of the UN, or FAO, has recommended against it because of the negative effects it has on local markets and agricultural production in crisis regions (Wahlberg, 2008). As a result of the 2014 Farm Bill, the United States has now eliminated monetization of its food aid above the 15% minimum that is currently required by law (USAID, 2015b).

Program food aid is given from one government to another in order to be sold rather than to be given to victims of crises. It can be given as either a grant or loan. Unlike monetized food aid, the funds from the sale of program aid are generally not designated for other aid projects. In 2012, 3% of food aid was program aid (WFP, 2013). Since program food aid is not targeted to those in need and competes with local farmers, its use is on the decline, and, many organizations, like the FAO, are calling for its discontinuation (Wahlberg, 2008).

Methods of Delivery

There are three main ways that food aid is delivered: direct transfers, local purchases, and triangular purchases (WFP, 2013).

In direct transfers, food aid is delivered directly from donors to countries in need. These comprised 62% of all food aid deliveries in 2012 (WFP, 2013). In some crises, particularly when there is nowhere for people to buy or sell food, direct transfers can be the best way to get food to those in need. However, in the majority of cases, direct transfers are expensive, inefficient, and hurt local economies (Wahlberg, 2008).

Generally, local purchases and triangular purchases are better options. They typically allow for faster delivery, lower costs, and support for local and regional economies (Wahlberg, 2008). Local purchases are when food aid is bought, transported, and used all within the country receiving aid. They comprised 20% of food aid deliveries in 2012 (WFP, 2013). Triangular purchases are when a donor country buys food aid in a country that is in the same region as the recipient of the aid and are useful when food is unavailable in the recipient country (WFP, 2013). They comprised 18% of food aid deliveries in 2012 (WFP, 2013).

In 2007, the US Department of Agriculture proposed allotting 25% of the US food aid budget to local and triangular purchases. Although this is much less than what is typical for European countries, Congress still rejected this proposal, responding to outside pressure from the agriculture and shipping industries, as well as those NGOs that benefit from monetization (Wahlberg, 2008). The 2014 Farm Bill budgeted 80 million USD for local and triangular purchases and instituted it as a permanent program (USDA, 2014).

Misuse

Unfortunately, there are many cases where food aid is misused, withheld, or stolen around the world. This typically occurs when conditions in recipient nations, such as instability or corruption, prevent the UN and food workers from being able to properly distribute and monitor resources.

According to a leaked UN Security Council report, around half of the food aid meant for the hungry in Somalia is stolen by corrupt contractors and radical Islamic militants and subsequently sold illegally by cartels (Jones, 2010).

In North Korea, the government places restrictions on the number of Korean-speaking monitors allowed into the country to assess food aid processes, which has led to the US halting aid to the country and to uncertainty as to whether or not food aid actually reaches the people it’s meant for (Cheng, 2014).

According to a 2010 report from the Human Rights Watch, Ethiopian farmers were denied agricultural aid, micro-loans, seeds, fertilizers, “safety net” aid, and even emergency food aid for not supporting the ruling party (Tran, 2011).

In other countries, food aid has been sold rather than being distributed to people in need. The Congo sold food aid and used the money to buy an arms factory, while Mauritius sold specially-requested, high-quality rice in order to build tourist hotels (Peron, 2001).

Central Emergency Response Fund

In 2005, the UN created the Central Emergency Response Fund, or CERF, in an attempt to mitigate many of the problems with emergency food aid and emergency relief in general, such as budget shortfalls, slow response time, and uneven distribution. Donations to the CERF are solely to the fund itself and cannot be tied to specific projects. In addition, one third of the CERF’s money goes directly to crises that don’t receive enough funding from other sources. (Wahlberg, 2008) The WFP is the largest beneficiary of the CERF, receiving almost 33% of the CERF’s funds in 2015 (OCHA, 2015b).

Like the WFP, the CERF is entirely reliant on voluntary contributions, rather than receiving funds from the UN assessed contributions (Wahlberg, 2008). The CERF has generally been well funded, with total donations exceeding goals in 2008, 2011, 2013, and 2014, (OCHA, 2015a) but, with the worldwide need for aid increasing,  there is concern that, rather than increasing the total amount of money donated to humanitarian aid sources, donors have donated to the CERF instead of other sources (Wahlberg, 2008).

Solutions

Given the extremely complex nature of food aid and all of the problems that it has, it is seemingly impossible to find solutions that donor nations, recipient nations, NGOs, industries, and the UN  will all agree to. The purpose of food aid is to feed people in need, not to benefit donors, but it is also important to consider that, in many cases, donors will not donate unless they are benefitted in some way. Solutions to the problems associated with food aid must take this unfortunate balancing act into account.

In the ideal situation, the WFP would serve as the central hub for global food aid. Problems such as monetization, tying, and too much bilateral and direct aid would be eliminated, and the WFP would have maximum flexibility to send food or funds wherever it’s needed. This can be achieved without significant negative impacts on parties involved through a series of gradual changes in the food aid process.

First, Mission 2019 suggests that all program aid be eliminated by 2020, and that funds should be reallocated to emergency and project aid sources. Then, in 2025, monetization would come to an end and be replaced by cash transfers and food vouchers to people in need. Next, in 2030, tying and bilateral aid would each be ended after a process of gradual reduction. This would solve the problem of countries donating in their own interest. Throughout this time period, direct aid would be gradually converted to local and triangular purchases until the optimal balance is found. In addition, the Food Assistance Convention would be made more effective by including more actors in the food aid arena, and food aid misuse would be tackled through methods such as competitive conditional aid, increased monitoring, and distributing directly to victims rather than governments. Solutions should be reevaluated yearly in order to assess effectiveness. If costs don’t decrease, donations fall, hunger is not reduced, or the WFP does not experience increased flexibility, then plans need to be modified.

End Program Aid

One of the easiest solutions to food aid is already in motion. Given its humanitarian nature, all food aid should be given as free grants to those in need. Going further, it should also be targeted to those in need. This means that program aid, which is often given as a loan and is sold rather than being targeted to victims of crises, must come to an end. Luckily, many organizations, such as the FAO, are already calling for its discontinuation, and it is continually declining (Wahlberg, 2008). This makes ending program aid an easy solution to implement.

We suggest that the WFP call for the end of program aid after five years, or by 2020. This would give countries that donate program aid enough time to reallocate their resources to other forms of aid. This will have negligible negative impacts. The only parties that will be negatively affected are those countries that are making money off of program aid, such as the donor nation if the aid is given as a loan or the recipient nation if the aid is a grant. However, program aid makes up such a small portion of all food aid that any profits that arise from it are relatively small. On the other hand, ending program aid would have large positive effects. If donors reallocate their program aid funding to emergency aid, then 3% more of food aid, or 150,000 metric tons, would go directly to feeding hungry people (WFP, 2012).

End Monetization

Ending monetized project food aid, another form of non-targeted aid, presents more challenges, because, as it is used as a source of funding by NGOs for their development projects, its discontinuation faces serious opposition. However, there is no doubt that monetization has negative effects. Experts agree that food aid only has a limited effect unless it is targeted specifically to those in need, (AlertNet, 2011) and the FAO has denounced monetization due to its negative impact on markets and agriculture in recipient nations (Wahlberg, 2008). Reforms in the 2014 Farm Bill reducing monetization of US food aid to 15% demonstrate that there is some appetite for reform in Congress.

We suggest that the UN institute a period of gradual reduction of monetization before a complete ban goes into effect after ten years, or by 2025. Congressional reforms would need to follow in the US to eliminate the 15% minimum required by law. Monetized food aid makes up 30% of project aid (FAO, 2006), or approximately 405,000 metric tons of food per year (WFP, 2013). This would enable the WFP to reach many more people in need, and would only have negative effects on NGOs in the short term, since they would have ten years to replace the funding they receive from monetization.

In order to replace funding from monetization, we suggest that NGOs focus their fundraising efforts on developed nations, rather than citizens of regions in crisis. They could mount more extensive fundraising campaigns focused on donations and partnerships with businesses and corporations, or they could sell products other than food aid to citizens of developed nations.

Instead of monetizing food aid, we believe governments and organizations should give food vouchers or actual cash to those in need, because this actually supports local economies and farmers. In addition, distributing currency costs less and is much more time-efficient than distributing and selling food (AlertNet, 2011). Cash transfers are especially useful in crises where the primary issue is that food is too expensive (Voices of Youth, 2011).

End Tying

We believe that the practice of tying food aid, particularly in the US, must also come to an end due to its high costs and low efficiency, as well as the fact that its conditions are designed to benefit the donor nation and its interests, rather than those in need. NGOs and food policy think tanks alike have called for the end of tied food aid. Despite the relatively small role that US food aid plays in agricultural production and shipping as a whole, attempts to reduce or end tied aid have faced staunch opposition from industry. Therefore, the solution will initially have to come from a source outside of Congress. Other nations would be subject to a similar model.

To do this, we suggest that the WFP adopt policies similar to the CERF and forbid governments from tying their donations to specific sources or destinations (Wahlberg, 2008). However, this must be done gradually and in such a way that the agriculture and shipping industries will accept it and not lobby Congress to oppose the plan. In order to accomplish this, the WFP should require the tying of food aid to be eliminated after fifteen years, or by 2030, with countries being recommended to reduce their amount of tied aid proportionally each year.

The two major arguments against untying food aid in the US, that it will negatively impact agriculture and shipping, are largely unfounded. The farming and shipping industries have already had to adjust to less food aid being purchased by the US government over the past decade, from 5 million tons in 2002 to only 1.4 million tons in 2013, yet both industries are thriving. Agriculture has been one of the most productive sectors of the US economy for the past thirty years and the years 2010 to 2013 were the strongest four years for agricultural trade in history. Meanwhile, all of the major ports used to export food aid have increased, and sometimes doubled or tripled, their total exports from 2003 to 2013. Perhaps most importantly, US food aid comprises less than 1% of the food exported by the US, so, even if the US were to do away with direct aid entirely, the agriculture and shipping industries would still be largely unaffected (USAID, 2015b).

The food that is no longer used for food aid could instead be sold on the market in the US, sold and exported to markets in developed countries rather than those in need of aid, or donated to organizations fighting hunger in the US. Additionally, ending tied aid is not synonymous to ending direct aid. So, shipping routes no longer used for shipping tied aid could instead be used when conditions in certain crises call for the use of direct aid.

End Bilateral Giving through the WPF

As a natural extension of ending tied aid, we believe that the WFP should also stop permitting the channeling of bilateral aid by adopting the same CERF-like policies as for tied aid in order to prevent governments from using the food aid process to advance their interests by designating where their aid will go. This policy change should coincide with the above proposal for the end of tied aid in 2030, and the percent of bilateral aid that each country donates would be recommended to be reduced proportionally in each year leading up to 2030, with those funds or food being replaced by multilateral aid.

This will give the WFP the flexibility it needs to equally support all crises, rather than being forced to fund certain crises over others. In addition, this would eliminate problems such as what happened in the 2002 food crisis in Southern Africa. If the WFP were free to apply any of its food or money to any source, then no country would ever be forced to accept genetically-modified aid, or any kind of aid that they deem inappropriate, if they don’t want to. The WFP would also have more control over timing, which is another important factor in the effectiveness of food aid. Food aid arriving at the wrong time can actually do more harm than good. For example, if aid arrives at harvest time, it could create an unnecessary surplus and negatively impact local farmers at a time of the year when hunger isn’t as severe (Wahlberg, 2008). Most importantly, ending both bilateral aid and tying would mitigate the problem of governments donating to advance their own interests rather than to help people.

Favor Local and Regional Purchases

Outside of problems with tied and bilateral aid, we suggest that direct aid in general be minimized. As a general rule, local and triangular purchases are superior to direct aid, because they allow food to be delivered between two and four months faster and lower costs by up to half in a way that supports the local or regional economy (Voices of Youth, 2011). However, in cases where there is a regional shortage of food or where food is simply not available to be purchased, direct aid is necessary (AlertNet, 2011). Governments and agencies sending direct aid should, at the very least, preposition stocks near potential crisis regions (Voices of Youth, 2011). While it does decrease response time, prepositioning is still not as fast as local or regional purchases and is more costly (USAID, 2015a).

We recognize that it is unwise to attempt to completely eliminate direct aid. It is possible that local and regional sources of production may not be able to match the volume gap left behind if direct aid were eliminated, although the need for them to do so could have positive economic benefits. As mentioned, direct aid is also still necessary in certain kinds of crises, and eliminating direct aid entirely would reduce response capabilities in such crises. Therefore, the UN should set a maximum percentage of a country’s yearly aid that can be direct. This percentage should be gradually reduced year by year until the proper balance is found between what local and triangular purchases can support and the direct aid that is still needed in case of emergency.

Bolster the Food Assistance Convention

First, the activities of the FAC should include the entirety of the food aid community. We believe that major donors like China and South Korea should become signatories. Nations receiving food aid should also be allowed to become signatories with a recipient status and in the hope that they will be capable of being a donor in the future. This would give them a larger voice in food aid processes so that, if their people experience a crisis that goes unfunded, they can ensure that they are heard. Representatives from NGOs should be invited to meetings and planning sessions, since they play an incredibly large role in the food aid process, too. Furthermore, the FAC could increase its impact and accelerate reforms by instituting additional requirements on commitments made by member nations, such as setting a maximum amount of donations that may be tied, bilateral, or direct.

Dealing with Food Aid Misuse

The fundamental problem associated with the misuse of food aid is that aid should be given directly to the people in need, not their governments, especially when that government’s character is in question. Distributing aid directly to the hungry is ideal, but, unfortunately, this is not always possible. In many cases, there are other actions that can be taken.

In relatively democratic and stable countries, UN workers can monitor the food aid process and track where food aid goes and who actually benefits from it. Beyond that, there is a policy solution known as competitive conditional aid in which a donor nation has a set amount of money it is willing to donate to several countries. These countries pledge to make political reforms in their country in return for aid, and, after a period of time, the countries who have made the most reform receive a larger portion of the total aid. This policy is observed to be successful only with relatively democratic nations as the recipients (Montinola, 2007).

In countries like Somalia and North Korea, where the government is either unstable or corrupt, it is much more difficult, if not impossible, for workers to distribute or monitor food aid, and the idea of competitive conditional aid is not appealing. This creates a dilemma. Donors cannot guarantee that the food they donate will reach those it is intended for, but, by not donating at all, they can guarantee that no one will be benefitted. Until conditions in such countries improve, the best option may be to take the risk of donating food and monitor or distribute it as well as possible in the hope that at least some will accomplish its intended purpose.

FY 2016 Farm Bill

Hoping to build on the advances made by the 2014 Farm Bill, the food aid reforms in the 2016 Farm Bill proposal are a good case study on how meaningful reforms can be made gradually without significant negative impacts on the parties involved.

While the bill proposes the same amount of funding for US food aid, 1.4 billion USD, its key reform is in how that money will be spent. Twenty-five percent of the budget, or 350 million USD, is to be set aside for non-direct and untied forms of aid such as local and triangular purchases, food vouchers, and cash transfers directly to those in need. This is up from the 80 million USD set aside for that purpose in 2014 (USAID, 2015a).

The United States Agency for International Development, or USAID, which oversees US food aid, says that these reforms would feed more people, save money, and be faster and more efficient. Since local and regional purchases cost 25% to 50% less than direct aid, using 25% of the food aid budget for local and regional purchases would result in around two million more people being helped by US aid with the same amount of money. In addition, local and regional purchases are delivered between eleven and fourteen weeks sooner than typical US aid, and they are more cost-effective than preposition stocks (USAID, 2015a).

The 2016 Farm Bill does not fix all of the problems with American food aid. Most of it is still tied, and monetization and bilateral giving are still large parts of the process. However, it is definitely a step in the right direction and, if passed, will be a model for future reform.

Priority

Out of the proposed solutions, ending program aid, monetization, and tied aid are of the utmost importance since they cause the most direct damage and are the least widespread. Cutting down on bilateral and direct aid are the next most important, because, although they also have negative effects, they represent more widespread and entrenched issues throughout the food aid community. Increasing the effectiveness of the Food Assistance Convention and fighting food aid misuse are lower priority solutions. A more effective FAC would be ideal, but is not absolutely essential, while tackling food aid misuse involves dealing with corrupt or unstable governments, which is often dangerous and extremely difficult for providers of aid to do.

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