Aid

The current food crisis highlights the state of dependence that foreign aid has created for developing nations. These nations continue to rely on foreign aid and international organizations to save them from crises and to assist in their day-to-day survival. 

In light of the current food crisis, institutional donors are being criticized for not having given enough.  Jacques Diouf, the director of the Food and Agriculture Organization (FAO), blames falling food aid as a cause of the food crisis. 

A study by the U.S. Congress shows that aid has been historically disaster-focused, leaving little resources to truly address long-term problems.  It criticizes the U.S. Agency for International Development (USAID) for using a majority of its resources to respond to food emergencies and neglecting “to address the fundamental causes of these emergencies, such as low agricultural productivity.”    Josette Sheeran, executive director of the UN World Food Programme (WFP), admits that 80 percent of WFP’s resources are allocated to emergency responses.

The guiding metric of an aid project should always be its impact. A report generated by the Independent Evaluation Group (IEG), the evaluation arm of the World Bank, found that World Bank agriculture programs in sub-Saharan Africa are “below par.”  The report concluded that “despite its presence for more than two decades in several countries, Bank support has so far not been able to help countries increase agricultural productivity sufficiently to arrest declining per capita food availability,” primarily because the Bank’s recommendations were not “readily translatable into operational actions.”   The World Bank estimates that “GDP growth originating in agriculture is at least twice as effective in reducing poverty as GDP growth originating outside agriculture.”  In this case, the World Bank has not been held accountable for the results of its programs. 

International institutions like the World Bank lack transparency regarding the failure of their activities in agriculture development.  Instead, they promise more money and donors continue to blindly comply; in June, Jacques Diouf and the FAO demanded $30 billion per year to feed the hungry, the World Bank pledged $1.2 billion for a “rapid financing facility” to address immediate needs, and USAID promised to invest $150 million in agricultural development programs.  The International Food Policy Research Institute’s (IFPRI) Marc Cohen criticizes these promises stating, “similar promises [for donations] were made in two previous food summits in 1996 and 2002 with few results. Global hunger has barely declined since 1996, and is now getting worse in light of the current food crisis.”

It is not clear whether the programs that these agencies will fund are any different than those funded before.  Moreover, it is not always clear from where the funding comes.  The $1.2 billion pledged by the World Bank has been redistributed from other project budgets.  What happens to those projects that are now handicapped by a decreased budget?

In the long run, international organizations should not be relied on to stimulate development and protect people’s livelihoods. Aid can positively impact the short term as it certainly lessens the direness of the situation for many families. As is often the case, however, the efficiency and effectiveness of international organizations will be proportional to their levels of accountability and transparency. As the shortcomings of aid programs are better understood, we should look to the most promising source of food distribution: well-functioning and efficient markets.  

For more on the world food crisis, click here.

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