Recasting Food Aid’s Role

The General Strategy

Catia Dos SantosMichael FabbroniAldo GalvaniNnaemeka Ikegwuonu

Food Aid’s Role in Humanitarian Assistance and Development

Food aid is one of the resources that can be used to meet humanitarian and development goals.

It is not a Panacea and it should be used to solve a particular problem when it is the most effective resource.

A preliminary context analysis should question if Food Aid is necessary (i.e. acute humanitarian crisis) and in which cases it should be used (food deficit and market failures).

Different mechanisms to tackle food insecurityand poverty

Rights based approach (decent standard of living) Asset based approach (economics of poverty traps)

STRATEGIES TO FACE FOOD INSECURITY AND POVERTY: 1. Emergency and humanitarian assistance (fast emergency reponse); 2. Safety nets; 3. Cargo nets (Investments strategy); 4. Monetization; 5. Local purchases, and triangular transactions; 6. Program food aid.

1. Emergency and humanitarian assistance: in which cases is food aid appropriate?

In cases of humanitarian emergencies food aid is delivered to ensure life protection and the fulfilment of basic rights.

A crucial decision concerns the form this aid should take:

In kind food aid (consider local, regional or international purchase; abuses and misuses in war torn regions);

Cash transfers; Monetisation.

1. Emergency and humanitarian assistance: basic rule for food delivery

A) Food availability deficit + market failure

Delivery of food commodities

Local procurement

Triangular Transaction

International shipments

1. Emergency and humanitarian assistance: in which cases is food aid appropriate?

B) NO FOOD AVAILABILITY DEFICIT + MARKET FAILURES

In cases of monopsony, poor infrastructure, physical insecurity the possible intervention to address food insecurity should be:

Local purchase or triangular transactions (small scale emergencies) depending on the quantity of food available and the access to it.

International shipments (large scale emergencies)

C) NO FOOD AVAILABILITY DEFICIT, NO MARKET FAILURE

Case of urban areas where food insecurity is mainly due to unemployment and poverty.

Cash transfers and not food delivery.

Eg. Bangladesh 1998

1. Emergency and humanitarian assistance some contradictions.

International shipment of food should be a measure of last resort (in the reality it constitutes 90% of food aid flows).

Link to development, local response stimulation (poverty). EWS track climatic, economic and political indicators but do not

comprise complex market information and analysis on the impact of food aid.

Nutritional appropriateness: fat, blended foods, therapeutical food (donors vs. beneficiaries)

PROTECTING ASSETS , REDUCING VULNERABILITY – SAFETY NETS

Safety Nets aims to protect people against severe shocks ,

Enable people respond to shocks in such a way that threats to their long term well being are minimized,

Enables people recover from these shocks, As such the objective is to enhance household

resilience to adverse shock

MAJOR CONSIDERATIONS

ASSETS SMOOTHING : Preservation of productive assets shocks so that individuals and households does not fall below the critical threshold.

RECOVERY CAPACITY : Enables households and individuals to recover their productive assets after shocks , as such rising above the threshold.

ROLE OF SAFETY NETS

Help recipients move out of chronic poverty Acts as an insurance needed to provide to

encourage vulnerable populations to choose higher risk , higher reward livelihood strategies

Enable individuals and households cope with vulnerability without depleting their stock of productive assets , enhancing their capacity to recover

FOOD BASED SAFETY NETS

Makes sense when and where overall food availability falls short especially when markets do not function well enough to support an effective cash based transfer system,

Provision of food as transfer can spare recipients from liquidating productive assets (livestock,land, small business),

Food Aid works in support of safety nets only where it reduces participants vulanerability to shocks and protects their broader portfolio of productive assets,

Role of Food Aid in establishing Safety Nets more limited than its role in humanitarian emergencies , where the objective is simply to protect human life.

FUNCTIONAL SAFETY NETS

DETERMINE : Which asset(s) or asset(s) category most at risk in the face of acute shock or chronic condition ( Natural Assets, Physical Assets, Financial Assets,Social Assets, Human Assets)

IDENTIFY : Once Assets has been identified , flesh out the best means of protecting the assets at risk, plan for both short and long term situations.

3) Cargo Nets for asset building among the chronically poor

Wide range of activities aimed to build assets… Roads, schools (public assets) Livestock, soil and water conservation

structures (private assets)

….or to improve existing ones: Vocational training, agri-production

techniques

Cargo Nets weaknesses

However Cargo Nets are ineffective and quite inappropriate….main exception:

Cash resources are unavailable….and food enables to invest in acquiring productive assets (equipment, livestock, skills)…either from increased savings (direct transfer) or from monetization (indirect)

Cargo Nets weaknesses

All these programs alone seldom achieve the objective of building assets… ….complementary cash resources are necessary!

Again, food aid makes sense only in food deficits situations (emergencies) as a part of an overall poverty reduction strategy

Examples: Food-for-Work, Direct Nutritional Support, School feeding programs, etc…

4) Monetization

Non-emergency food aid shipments from USA

NGOs have come to rely increasingly on this mechanism to generate cash for other food security objectives

•Cons: competition with food exporters of donor countries’ & very inefficient

•Pros:imperfect but reliable long-term source of cash

Monetization

It can be useful: Operation Flood in India, Bangladesh Famine 1974,

Madagascar late 80sIn the long-run, it can generate problems: Very inefficient mechanism to generate cash Diverts operational staff from more core programming

activities Often monetized income lags behind the expenditure

requirements Market distortions (food and labour), undermines

production incentives, displace commercial trade

5) Local purchases & triangular transactions

Often the best solution when local food availability in proximity (country or neighbouring countries)of the target group is adequate (efficient and timeliness)

It also stimulates positive effects by expanding local production & mrkts

Att: must be balanced vs adverse impact on local consumers (most vulnerable net food-purchasing households)

The roles of the main food aid actors:a) donor governments

The main objective is delinking food aid from domestic farm policy:

1. Transition to untied food aid: food aid has to be flexible, not tied to donor restrictions on sourcing, processing, or shipping;

2. Transition to cash-based food aid: donor governments should move towards food aid programs based on cash for purchasing food in or near the country where food aid is required;

The roles of the main food aid actors:a) donor governments (2)

3. Phase out sales of food aid: monetized food aid increases the risks that food aid will discourage food production by farmers in the recipient country and, because it is sold on the open market, there is no guarantee that such food reaches the most vulnerable people;4. Impose strict limits on in-kind food aid: sourcing food aid near the region where the food is needed represents the most cost-effective ways to source food aid (local purchases: only about 10% of food aid is procured in developing countries).

The roles of the main food aid actors: b) recipient country actors

The main objective is to empower community based organization in the management of such activities as: Targeting and distribution of food aid Warning/monitoring (community based emergency preparedness) Managing community response mechanisms to crises→ local actors as important intermediaries

The roles of the main food aid actors: c) operational agencies

WFP: multilateral mandate somewhat diminished because of its dependence on a single donor contribution (U.S., 47%) provided in the form of food rather than cash → WFP disposes mainly of a single resource: food;

International NGOs: implementing partners of WFP or direct distributors of food aid from donors → continued reliance on food as the source of resources (monetization of food aid) is not going to enable an appropriate kind of programming.

Figure 10-2: Recasting Food Aid Sources, Modes of Distribution and Uses

Current Global Food Aid Regime

Type of Food Aid: Humanitarian Project Program

Share of total flows

Percentage ~45% ~20% ~35%

Sources Local/Triangular

10-20% ~5-10% Very little

Donor nation markets or stocks 80-90% 90-95% Almost all

Mode of distribution

Direct distribution Almost all ~50% Almost none

Monetization Almost none ~50% Almost all

A More Effective Global Food Aid Regime

Type of Food Aid: Humanitarian(Life protecting)

Safety Nets(Asset protecting)

Cargo Nets(Asset building)

Share of total flows

Percentage 65-75% 10-20% 5-10%

Sources Local/Triangular

Where market analysis indicates appropriate Where market analysis indicates appropriate

Where market analysis indicates appropriate

Donor nation markets or stocks

When local purchase/triangular transactions are inappropriate

When local purchase/triangular transactions are inappropriate

When local purchase/triangular transactions are inappropriate

Mode of distribution

Direct distribution Almost all Almost all Almost all

Monetization Only in rare cases (price spike control) Limited: only in support of market development goals

Limited: only in support of market development goals

SUMMARY

The need to reconceptualize Food Aid is presently compelling especially , in the face of global food crises. It can be adduced that Food Aid has been misused for over 50 Years. OPERATIONAL LEVEL : Transition from resource – driven intervention approach to problem - driven approach interventionPOLICY LEVEL : Harmonisation and coordination of Food Aid programming agencies and organizations to utilize Food Aid as an effective and functional instrument of long term development and humanitarian policy intervention and not strictly in response to emergencies.