Is Food Aid for Africa Working?
A Wall Street Journal reporter asks if western food aid
policies are truly providing aid.
July 17, 2009 | By Brian Doherty
Although billions have been spent on foreign development and food aid
to Africa in the decades since World War II, over half a billion people
remain undernourished in Africa today according to the U.S.
Department of Agriculture—a number that's 53 percent higher than it
was in 1992 when the government first began accumulating such
figures.
and Scott Kilman, each of whom have years of experience writing page-
one stories for the Journal on African matters, particularly African
famine.
Unlike anti-aid anaylsts such as William Easterly and Dambisa Moyo,
Thurow and Kilman see plenty of room for more (intelligent) action on
the part of Western governments. In fact, Kilman argues that genuine
agricultural development aid has yet to be sufficiently and intelligently
attempted.
But their reporting in the Journal and in Enough provides vivid examples
of the ways both aid policy and U.S. farm policy hurts, not helps, the
long-term well-being of Africans as they struggle for self-sufficiency.
Senior Editor Brian Doherty spoke with Scott Kilman in July.
Reason: Why isn't food aid an unalloyed good for an often-starving
continent?
Scott Kilman: Western food aid to Africa started in the 1950s to serve
two purposes, and only one was to fight hunger overseas. The second
reason was that food aid had a lot of political support. The U.S.
government was trying to get rid of excess crops. Politicians like Hubert
Humphrey realized he could build a political coalition for fighting hunger
overseas because there was something in it for us at home: to get rid of
excess crops that were depressing prices.
The question wasn't asked for decades: What's the most effective way
to help the hungry overseas? And our food aid program is not the best
way to do it. It has unintended effects. Now, we spend roughly $1 to 2
billion a year on food aid—shipping actual food and grain across the
ocean. And commodities sent over in these food ships has to be U.S.-
grown. That in itself creates problems once you look at the logistics,
taking wheat grown in Kansas under U.S. government specs, getting it
shipped the way the U.S. government approves, on U.S.-owned ships
which tend to charge the highest rates, put in big bags because that the
only way that ports in poor countries can handle it, and by the time it
gets unloaded there it's half a year from when the government decided
to send help. About 50 percent of the cost of food aid gets sucked up in
the logistics.
We argue we should spend some of our food aid budget closer to the
disaster. Africa might have famine in one country or two, but at the
same time other parts of Africa have a glut. Part of the benefit [of using
aid money to buy African food, not ship American surplus] is the food
aid becomes economic stimulus and creates a market for poor farmers
in Africa. But it flies in the face of political convention. You've had the
Bush administration suggest trying this [buying some food for aid in
Africa itself], and there will be some experimenting with it in the new
farm bill.
Reason: Your book has an interesting set piece from Nazareth,
Ethiopia, in 2003, in which U.S. food aid is driven by Ethiopian
warehouses filled with the same food commodities, produced locally,
rotting.
Kilman: By the time food aid arrives trundling down the road it's
usually after the worst of the calamity, and it often ends up disrupting
food markets in Ethiopia. So in this case there was Ethiopian grain but
farmers weren't able to sell it because suddenly the U.S. government
turns up as a competitor. Food aid swarmed in and depressed prices. It
would have made more sense and been of more benefit if Western
donors bought what was available in Ethiopia. African farmers describe
it to us this way: it boils down to them scratching their heads and
saying, it seems as if America needs hungry Africans to eat their surplus.
In the book we track down Sen. Dale Bumpers from Arkansas, he's
retired now, and ask him why [he insisted in 1986 that no U.S. aid could
go toward studying, training, or helping other countries in any way to
grow a crop that competes with any U.S. crop]. His first response was,
he didn't really remember it happened!
The way we award money to farmers for every bushel they produce of
favored crops, like soybean and cotton, it spurs them to produce as
much as they can to get more subsidies. This drives down prices in
world markets, but the market signal to U.S. farmers to produce less
doesn't get through because of the subsidy. I don't think until this
decade that I as a reporter became aware of how subsidies have impact
in the poorer parts of the world.
I was writing about spats between the U.S. and the European Union
over their subsidies, and thought of it as just a trade war. I wasn't
thinking about, if our subsidy programs tend to depress prices, who else
does that affect? Earlier this decade I woke up to the idea that it really
affects farmers who don't receive subsidies and only get what the
market will bear. And oftentimes these farmers can grow crops cheaper
than anyone else. The Doha round [of international trade talks] is
comatose, and one of the big stumbling blocks is it could force the West
to figure out how to change the way we run farm subsidy programs.
You have groups in the U.S. who have a very big interest in seeing the
farm subsidy system continue the way it is, and it's their first interest.
You don't have a political constituency organized around fighting hunger
for hunger's sake. It's hard to find someone in the House or Senate who
thinks of the hungry overseas as a constituency.
Reason: You also point the finger at an aspect of American energy
policy in hurting the world's hungry: our ethanol subsidies.
Kilman: The ethanol program creates a subsidy for demand on corn,
which has a ripple effect on other crops. Farmers plant more corn, and
plant less of something else. And what's happened, I think
unintentionally, is by creating a mandate for ethanol you tied the price of
corn and indirectly the cost of a bunch of our food to the cost of oil.
Now one third of America's biggest crop is used to make fuel, and that's
happened very rapidly. If you look at the price of corn today, it's at a
new plateau. Corn in the ‘90s and first half of this decade was usually
$2 a bushel. Now a few weeks ago it was $4 a bushel, and now around
$3.50, but it's settling at a higher plateau. Soybeans have also settled at
higher prices which means it's more expensive to keep buying the same
amount for food aid programs.
I was in Africa in 2007 when the price of corn first started going up.
You are seeing food riots in the developing world, but I think it's
complicated. That run up in corn filters through other commodities, and
what happens with the ethanol program and biofuel mandates is they
have fed into a general environment where traders are willing to bid up
prices. But in addition to ethanol, the developing middle class in
emerging nations are eating better, want to eat more meat, and you need
more grain to produce more meat.
There were many things going on in world food markets, I hate the
cliché of "perfect storm" but it fits—a lot of bad things were coming
together, and one was ethanol. I don't blame ethanol solely for food
riots. But demand for grain started rising faster than our ability to
produce grain in this decade, and ethanol biofuels was one of the
reasons.
Senior Editor Brian Doherty is author of This is Burning Man
(BenBella), Radicals for Capitalism (PublicAffairs) and Gun Control
on Trial (Cato Institute).
Courtesy
A Wall Street Journal reporter asks if western food aid
policies are truly providing aid.
July 17, 2009 | By Brian Doherty
Although billions have been spent on foreign development and food aid
to Africa in the decades since World War II, over half a billion people
remain undernourished in Africa today according to the U.S.
Department of Agriculture—a number that's 53 percent higher than it
was in 1992 when the government first began accumulating such
figures.
- While the reasons for
continuing poverty are
manifold, Western
government programs such
as food aid and agriculture
and ethanol subsidies deserve
their share of the blame. So
argues the new book Enough:
Why the World's Poorest
Starve in an Age of Plenty
and Scott Kilman, each of whom have years of experience writing page-
one stories for the Journal on African matters, particularly African
famine.
Unlike anti-aid anaylsts such as William Easterly and Dambisa Moyo,
Thurow and Kilman see plenty of room for more (intelligent) action on
the part of Western governments. In fact, Kilman argues that genuine
agricultural development aid has yet to be sufficiently and intelligently
attempted.
But their reporting in the Journal and in Enough provides vivid examples
of the ways both aid policy and U.S. farm policy hurts, not helps, the
long-term well-being of Africans as they struggle for self-sufficiency.
Senior Editor Brian Doherty spoke with Scott Kilman in July.
Reason: Why isn't food aid an unalloyed good for an often-starving
continent?
Scott Kilman: Western food aid to Africa started in the 1950s to serve
two purposes, and only one was to fight hunger overseas. The second
reason was that food aid had a lot of political support. The U.S.
government was trying to get rid of excess crops. Politicians like Hubert
Humphrey realized he could build a political coalition for fighting hunger
overseas because there was something in it for us at home: to get rid of
excess crops that were depressing prices.
The question wasn't asked for decades: What's the most effective way
to help the hungry overseas? And our food aid program is not the best
way to do it. It has unintended effects. Now, we spend roughly $1 to 2
billion a year on food aid—shipping actual food and grain across the
ocean. And commodities sent over in these food ships has to be U.S.-
grown. That in itself creates problems once you look at the logistics,
taking wheat grown in Kansas under U.S. government specs, getting it
shipped the way the U.S. government approves, on U.S.-owned ships
which tend to charge the highest rates, put in big bags because that the
only way that ports in poor countries can handle it, and by the time it
gets unloaded there it's half a year from when the government decided
to send help. About 50 percent of the cost of food aid gets sucked up in
the logistics.
We argue we should spend some of our food aid budget closer to the
disaster. Africa might have famine in one country or two, but at the
same time other parts of Africa have a glut. Part of the benefit [of using
aid money to buy African food, not ship American surplus] is the food
aid becomes economic stimulus and creates a market for poor farmers
in Africa. But it flies in the face of political convention. You've had the
Bush administration suggest trying this [buying some food for aid in
Africa itself], and there will be some experimenting with it in the new
farm bill.
Reason: Your book has an interesting set piece from Nazareth,
Ethiopia, in 2003, in which U.S. food aid is driven by Ethiopian
warehouses filled with the same food commodities, produced locally,
rotting.
Kilman: By the time food aid arrives trundling down the road it's
usually after the worst of the calamity, and it often ends up disrupting
food markets in Ethiopia. So in this case there was Ethiopian grain but
farmers weren't able to sell it because suddenly the U.S. government
turns up as a competitor. Food aid swarmed in and depressed prices. It
would have made more sense and been of more benefit if Western
donors bought what was available in Ethiopia. African farmers describe
it to us this way: it boils down to them scratching their heads and
saying, it seems as if America needs hungry Africans to eat their surplus.
In the book we track down Sen. Dale Bumpers from Arkansas, he's
retired now, and ask him why [he insisted in 1986 that no U.S. aid could
go toward studying, training, or helping other countries in any way to
grow a crop that competes with any U.S. crop]. His first response was,
he didn't really remember it happened!
The way we award money to farmers for every bushel they produce of
favored crops, like soybean and cotton, it spurs them to produce as
much as they can to get more subsidies. This drives down prices in
world markets, but the market signal to U.S. farmers to produce less
doesn't get through because of the subsidy. I don't think until this
decade that I as a reporter became aware of how subsidies have impact
in the poorer parts of the world.
I was writing about spats between the U.S. and the European Union
over their subsidies, and thought of it as just a trade war. I wasn't
thinking about, if our subsidy programs tend to depress prices, who else
does that affect? Earlier this decade I woke up to the idea that it really
affects farmers who don't receive subsidies and only get what the
market will bear. And oftentimes these farmers can grow crops cheaper
than anyone else. The Doha round [of international trade talks] is
comatose, and one of the big stumbling blocks is it could force the West
to figure out how to change the way we run farm subsidy programs.
You have groups in the U.S. who have a very big interest in seeing the
farm subsidy system continue the way it is, and it's their first interest.
You don't have a political constituency organized around fighting hunger
for hunger's sake. It's hard to find someone in the House or Senate who
thinks of the hungry overseas as a constituency.
Reason: You also point the finger at an aspect of American energy
policy in hurting the world's hungry: our ethanol subsidies.
Kilman: The ethanol program creates a subsidy for demand on corn,
which has a ripple effect on other crops. Farmers plant more corn, and
plant less of something else. And what's happened, I think
unintentionally, is by creating a mandate for ethanol you tied the price of
corn and indirectly the cost of a bunch of our food to the cost of oil.
Now one third of America's biggest crop is used to make fuel, and that's
happened very rapidly. If you look at the price of corn today, it's at a
new plateau. Corn in the ‘90s and first half of this decade was usually
$2 a bushel. Now a few weeks ago it was $4 a bushel, and now around
$3.50, but it's settling at a higher plateau. Soybeans have also settled at
higher prices which means it's more expensive to keep buying the same
amount for food aid programs.
I was in Africa in 2007 when the price of corn first started going up.
You are seeing food riots in the developing world, but I think it's
complicated. That run up in corn filters through other commodities, and
what happens with the ethanol program and biofuel mandates is they
have fed into a general environment where traders are willing to bid up
prices. But in addition to ethanol, the developing middle class in
emerging nations are eating better, want to eat more meat, and you need
more grain to produce more meat.
There were many things going on in world food markets, I hate the
cliché of "perfect storm" but it fits—a lot of bad things were coming
together, and one was ethanol. I don't blame ethanol solely for food
riots. But demand for grain started rising faster than our ability to
produce grain in this decade, and ethanol biofuels was one of the
reasons.
Senior Editor Brian Doherty is author of This is Burning Man
(BenBella), Radicals for Capitalism (PublicAffairs) and Gun Control
on Trial (Cato Institute).
Courtesy
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