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I wrote in a CGD Note last week with Tom Slayton about how the Philippines are engaging in aggressive buying techniques that seem designed to drive up prices, raising the specter of another rice price crisis such as what befell us in early 2008.
This is a joint posting with Kimberly Elliott and also appeared on the Huffington Post.
With one important reservation, we welcome last week’s EU proposal that the upcoming Pittsburgh G-20 Summit “should adopt the “Everything But Arms” (EBA) initiative without delay to support people in developing countries suffering from the crisis.” The EBA nominally provides 100 percent duty-free, quota-free market access for exports from least-developed countries, so suggesting that the rest of the G-20 replicate it is clearly in line with a Sept. 2 letter sent by members of the CGD Global Trade Preference Reform Working Group. The letter called upon:
Last week, the leaders of the Group of 8 pledged 20 billion dollars in agricultural aid, with the purpose of boosting agricultural productivity -- especially in Africa. But will $20 billion over a three-year period help to feed many of the 1.02 billion people on earth who suffer from food insecurity?
The G8 leaders gathering in L’Aquila, Italy for their annual summit have an opportunity to help developing countries escape the worst impacts of the financial downturn. Italian Prime Minister Silvio Berlusconi’s ambitious agenda for the meeting outlines a list of priorities that directly affect short- and long-term development in these countries. The agenda includes climate change, development in Africa, dialogue with developing countries, and the Millennium Goals.
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.
This post originally appeared on the Huffington Post on June 5, 2009.
According to a testimony before congress yesterday and a new Government Accountability Office report, congressional restrictions on U.S. food aid raise the costs of delivering it by as much as a third and delay it reaching hungry people by up to 100 days. When donors purchase food locally or regionally, it not only gets to needy people faster and more cheaply, it may also better match local preferences and nutrition needs. Yet, in the midst of last year’s global food price crisis, Congress passed a farm bill that continued the long-standing practice of requiring that food aid be purchased in the United States and that 75 percent of it be delivered by U.S.-flagged ships.
When I was writing my book, Delivering on Doha: Farm Trade and the Poor, I came across a 2004 poll showing that Americans, including in farm states, support subsidies only for small farmers and only in bad years. Last week, another poll by the Program on International Policy Attitudes at the University of Maryland was released showing that attitudes haven’t changed. The reality, as I discussed in my book, is that the top 20 percent of recipients receive 80 percent of all payments.
If the commitments made last week by the heads of state at the G-20 meeting materialize quickly, this is good news indeed. The increase in available IMF and MDB resources for middle- and low-income countries, along with IMF’s announcement of a Flexible Credit Line which will allow countries to borrow amounts without pre-determined limits or conditionality, are crucial for helping these countries cope with the impact of the financial crisis.
Would a “Crisis Round” of trade talks launched at the London Summit next week be a useful mechanism for averting a further beggar-thy-neighbor protectionism? My colleague Arvind Subramanian and his frequent co-author, World Bank economist Aaditya Mattoo, think so. They argued for such a move in an interesting piece in the Wall Street Journal Asia earlier this week (A Crisis Calls for a Crisis Round):