Applause for CARE Plan to Pass Up Millions of Dollars in U.S. Food Aid
Last week, the New York Times' Celia Dugger reported on CARE's decision to forego some $45 million a year in federal financing for food aid. According to the article, CARE, one of the world's largest charities, said the system was plagued with inefficiencies, but also may hurt some of the very poor people it aims to help.
The timing of CARE's controversial decision and the New York Times article are not coincidental, according to CGD senior health program associate Rachel Nugent. In a new Views from the Center blog post, Nugent argues that the timing is tied to the current congressional debate over a new five-year U.S. Farm Bill, which sets farm subsidies and food aid policy, including the practice of selling heavily subsidized American farm products in African countries, where they sometimes compete with the crops of local farmers.
Nugent explains that the House of Representatives passed a farm bill in July that did little to improve matters, and the Senate will take up its own version of the farm bill in the fall. She applauds CARE's decision to put "the emphasis first and foremost on how best to help African development...not on getting rid of surplus [U.S.] farm products." She says that's the right approach for a charity, and for U.S. foreign assistance policy.
The long and complicated history of U.S. food aid is more closely examined in a subsequent post by CDG senior fellow Steve Radelet, who also welcomes the CARE decision. Radelet writes that he hopes that CARE's move will contribute to "a rethinking of U.S. food aid so that it can better serve the purposes of saving lives and financing development." Radelet argues that food aid can make more sense in humanitarian crises and when food sales occur in countries that import the majority of food products, so that surplus U.S. food aid doesn't affect prices received by local producers, but he adds that neither situation is the most efficient or effective use of U.S. funding for development.
He argues that U.S. flexibility to buy food locally in humanitarian crises would save more lives, and that even when food aid doesn't affect local markets, it is still an inefficient way to finance local development projects and provides misleading data on the financial value of foreign aid.
But Radelet also notes that the problems with this system need to be weighed against the value of the political support it generates for development assistance. Much of this support comes from farm states, shippers and NGOs that benefit from the current food aid system. The inefficiency of the current system "may be the price we pay to maintain political support within the U.S.," Radelet says.
Radelet then provides a careful analysis of the economics of food aid and its likely impact in various situations drawing on the leading college-level development textbook, Economics of Development, which he co-authored.