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June 07, 2006

Food Aid

Glad to see a righteous and straightforward prescription for what ails some poor parts of the world:

The answers to Somali's - and much of Africa's - problems are not easy, but they are simple. They need to be weaned off overseas aid and helped to stand unaided. Two straightforward steps are required above all else.

First, as Mustafa Yusuf, pastoral development manager from Oxfam Jijiga, says: "The land tenure system prevents farmers from fully investing in the land, which is all state-owned. If the land was privatised … Ethiopia would have the potential to feed itself."

Somali certainly has the potential to produce more food: Ethiopia's second largest river, the Wabi Shebelle, weaves through it, and thousands of hectares of cultivable land await irrigation. But that will require investment, of the sort that the government cannot afford and no temporary tenant would be able to borrow the money for. Ethiopia needs clear property rights and a private banking system.

There is a place for food aid, in those rare conditions when famine is actually as a result of a shortage of food. Far more common is famine due to one sector of society losing its purchasing power, something  that is best solved by giving those poor money with which to stimulate imports and future production.

But this handing out of food aid all the time?

This volume has risen steadily since food aid began in the 1980s.

25 years worth and we still have aid dependency? Obviously something wrong with the current system don’t you think? One problem:

So-called emergency aid also induces corruption. The World Food Programme (WFP) donates the majority of food handed out in Somali. Donors, mainly from USAid and the EU, provide the money with which the food is bought. The WFP gives it to the federal Ethiopian government organisation, which distributes it through the misnamed Disaster Prevention and Preparedness Agency (DPPA).

When food comes from above, through officials rather than from below through farmers, it is the officials who make the profits. Numerous sacks never arrive where they are meant to, having been taken by district officials and the Ethiopian army.

So that’s several institutions quite happy with the current system.

Substantial grain producers, such as America, subsidise their farmers to produce wheat, which is then bought and shipped to poor countries. This is a bonus, because surplus food costs huge amounts to store, and American shipping companies also benefit.

That’s another. This might surprise some but it has actually been the Bush Administration that has called for changes to this system. Instead of shipping US crops on US ships they asked to have some of the budget freed up so that local produce could be bought. Speeds up response times, stimulates rather than depresses local production and so on.

Killed by Congresscritters from the farm states. A nice (and depressing) example of public choice theory. Governmental decisions do not get taken on the basis of what is best for the people. Rather, on the basis of what is best for those taking the decisions.

June 7, 2006 in Justice Mussellbeet | Permalink

Comments

Yes, aid in the form of imported food is generally a bad thing (except for the wealthy farmers producing surplus food in industrialized countries).

But Kate Eshelby is guilty of a striking non-sequitur when she concludes from her (correct) critque of food aid that countries "need to be weaned off overseas aid and helped to stand unaided".

First, because some food aid is bad, it does not follow that all aid is bad. Countries like Somalia and Ethiopia will be poor for many years to come. While those countries are poor, overseas aid can help the people their to live better than without aid.

Second, part of the purpose of aid is indeed to create conditions in which it is no longer needed. Countries like South Korea and Botswana, once the recipients of huge quantities of aid, now receive very little (though aid to Botswana has been increased recently in response to the HIV epidemic). How are we to help countries to "stand unaided" other than by providing aid and opening up our markets to trade?

Third, Eshelby's metaphor of "weaned off" is very telling. The people who make decisions in poor countries are not children and we should not use language that reinforces the idea that they are.

Owen

Posted by: Owen Barder | Jun 7, 2006 12:03:51 PM

Those who live in glass houses shouldn't stow thrones. It's one thing to go on about food aid junkies and political corruption in world3 countries but why not begin with strictures about public spending junkies and cases of fraud and political corruption in public authorities at home for starters? That way the message might be a tad more persuasive.

"Britain's northern 'soviets' swell on Brown's handouts: The growth in public spending in northern areas of Britain is so rampant that it is resulting in the 'sovietisation' of swathes of the country, new figures show. Gordon Brown, the chancellor, has pushed up national public spending beyond the levels of former communist countries such as Poland, the Czech Republic and Slovakia."
http://www.timesonline.co.uk/article/0,,2087-2200150,00.html

"South Yorkshire's trading standards department may have to close after its shortfall was found to be £14m - not £7m as was first thought. The unit has been under investigation by the Serious Fraud Office since an audit found the unit's accounts did not reflect its true finances."
http://news.bbc.co.uk/1/hi/england/south_yorkshire/5049966.stm

Posted by: Bob B | Jun 7, 2006 12:19:53 PM

What's interesting to me, as far as my own country is concerned, is the number of legislators in Washington who want to increase aid to third World countries but scream about American jobs going overseas. Apparently it is much better to tax Americans to maintain overseas welfare clients than for Americans to adjust to a world wide job market and allow these people in poorer nations to stand on their own two feet. I vainly still cling to the idea that a rising tide lifts all boats, but then maybe I'm an anomaly.

Posted by: B's Freak | Jun 7, 2006 3:10:57 PM

Protectionist instincts and concerns about outsourcing are hardly peculiar to America.

Amartya Sen observed years ago that democracies tend not to have have famines, an observation that probably has greater relevance to Africa than moralising strictures about dependency cultures and the detrimental impact that such cultures have upon the quality and productivity of indigenous agriculture. But what accounts for dependency cultures in northern Britain where employment rates of working age people are among the highest in Europe and certainly well above employment rates in the other major European economies and when Britain's per capita GDP at PPP echange rates is higher than in most EU countries according to Eurostat in June 2005.

London has the highest standardised unemployment rate among the standard regions in Britain but perhaps that isn't too surprising when London resident taxpayers make a net contribution to the national exchequer variously estimated to be in the range of £12 to £19 billions a year. Would that there were a London Independence Party.

Posted by: Bob B | Jun 7, 2006 3:41:48 PM

i liked the solutions provided for the Somali's - and much of Africa's. its true that the problems are not easy, but they are simple.

Posted by: irrigation systems | Jul 15, 2010 5:15:26 AM