PHA-Exchange> Food aid at the crossroads

[Claudio Schuftan]

*Time to Update the Food Aid Convention.*

*John Hoddinott and Marc J. Cohen, IFPRI.*

Forty years ago the United States, the European Commission, Australia,
Canada, and other major grain producers signed the Food Aid Convention
(FAC). Originally designed to facilitate the orderly disposal of
agricultural surpluses, the FAC is a legally binding treaty that requires
members to provide international development assistance in the form of food.
It is a key component of the patchwork quilt of institutions and
agreements—characterized by overlapping mandates, differing degrees of
authority and legitimacy, and problematic stakeholder representation—that
makes up global food aid governance. But while the use of food aid has come
along way since the 1960s, the FAC has failed to keep pace.

The current convention expired in 2002. Since then, it has been kept on life
support via a series of short-term extensions. Serious renegotiation of the
FAC has been kept on hold while the Doha Round trade negotiations were
taking place. With the future of those talks unclear, a number of factors
point to the need to start renegotiation of the FAC now. First, for much of
the past decade, global cereal demand has outpaced production. Second, food
insecurity has worsened in the developing world since the mid-1990s. Third,
the international community does not always respond quickly or fully to
emergency aid appeals, as shown by the tragedy of the 2005 Niger food
crisis. Fourth, increased amounts of grain are going into biofuel
production, driving up global cereal prices. Fifth, controversies about food
aid using genetically modified cereals are likely to persist and complicate
the provision of food aid, especially in emergencies. Sixth, climate change
is likely to reduce food production in tropical countries and to cause more
frequent and severe floods and droughts. For all these reasons, food aid
will continue to have a small but important role in international
development assistance in the foreseeable future. A reinvigorated Food Aid
Convention can help enhance the effectiveness of food aid. Four reforms in
particular would be especially valuable.

1.Over time, the FAC has evolved from having an "instrument focus" (the
provision of food aid) toward having a "problem focus" (global food
insecurity). A strengthened problem focus for the FAC that makes explicit
the objectives of food aid in preventing famine, reducing hunger and
malnutrition, and working toward improved food security would clarify the
appropriate role of food aid.

   1. Given that food aid may well become an increasingly scarce
   resource, the FAC should retain minimum commitments by members. The means by
   which these commitments are calculated, however, is in serious need of
   overhaul. Not only is the current approach to counting these commitments
   opaque, but it also creates perverse incentives. Improved counting of
   commitments would encourage greater use of local purchases, encourage the
   provision of micronutrients, and enable greater donor coordination.
   2. The FAC's governing body, the Food Aid Committee, lacks
   transparency. It does not publicize members' failures to meet tonnage
   commitments and provides remarkably little public information on its
   discussions. Mechanisms ensuring greater transparency should be part of a
   new FAC. Furthermore, the committee consists only of donors. A revamped FAC
   could include some mechanism allowing representation of recipient country
   governments. The committee could allow relevant and competent international
   organizations, the private sector, and nongovernmental organizations (NGOs)
   to observe and speak at its meetings.
   3. Stronger monitoring and evaluation should figure prominently in a
   new FAC. The committee could collaborate with other international
   organizations to harmonize monitoring, increase transparency, and assure
   periodic member peer reviews. Assessment of needs and analysis of whether
   food or cash is the most appropriate form of intervention could improve. A
   new FAC should require donors to base assistance on sound evaluations.

At this time, the principal obstacle to FAC reform is political will. Food
aid has been caught up in the Doha trade negotiations. In particular, the
European Union has demanded that food aid be subject to trade disciplines to
ensure that it is not used as a back-door means of subsidizing American
farmers. This dispute, together with the collapse of the Doha trade round,
has made it impossible to begin serious negotiations about the reform of the
FAC—a vivid testament within wealthy countries to the power of trade
negotiators and the impotence of international development ministries. A
reformed FAC can play a small but valuable role in enhancing global food
security, but only if it operates with a clear focus, improved commitments,
greater transparency, and more accountability. But these goals can be
achieved only once the political obstacles have been overcome.
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