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A few weeks ago I applauded the release of a very useful report from the General Accountability Office on the extra budgetary and timeliness costs associated with how U.S. food aid is delivered—in kind and mostly on U.S.-flagged ships. Now we have another new report bolstering calls for reform, this one from the Partnership to Cut Hunger and Poverty in Africa on another odd aspect of U.S. food aid programs called “monetization.” As defined in the report, monetization “involves the sale in a recipient country, for local currency, of food aid that has been purchased in and shipped from the United States.” Monetization is usually carried out by “private voluntary organizations” that receive donated food and use the proceeds from the sales for development projects aimed at increasing food security in the long run.
In addition to providing yet more evidence supporting the GAO report conclusion on the costs of providing food aid in-kind, rather than as cash, the new report focuses on the other costs and benefits that might arise from monetizing food aid. As with using cash to purchase food aid supplies locally, if it is not done carefully, monetization risks disrupting local or regional markets by displacing commercial sales and the report finds some evidence that this concern is justified. This concern is particularly salient in countries where several private and public organizations are involved in providing food aid, but are not coordinating their activities.
In both reports, the authors were frustrated in their aim to draw clear lessons by the lack of data and evidence on the impacts of U.S. food aid programs. Both reports call for increased monitoring and evaluation. That is a conclusion supported by work at the Center that led to creation of the International Initiative for Impact Evaluation (IIIE). It sounds like it is way past time for U.S. food aid agencies to assess themselves, and the IIIE can help.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.