[pronut-hiv] GLOBAL: Canada to provide cash, not commodities in switch of food aid policy

["ProNut-HIV" <pronut-hiv@healthnet.org>]

GLOBAL: Canada to provide cash, not commodities in switch of food aid
policy
 
JOHANNESBURG, 5 May 2008 (IRIN) - Canada is the latest major donor
country to break the link between overseas food aid and supporting its
own farmers. 

The country says it will no longer insist on sending domestically grown
food to the rising number of poor countries affected by escalating food
and fuel prices, but will instead provide aid agencies with cash, giving
them the flexibility to source cheaper food in the region or beneficiary
country. 

Canada's move to "untie" its food aid by removing restrictions on where
the food can be purchased leaves the United States of America, the world
largest donor of food, as the only developed country with tied food aid.


"With fuel cost increases eating into food aid budgets as much as food
price rises are, untying emergency food aid is more important than ever,
so as to conserve increasingly scarce funds and provide a quicker
response," said Christopher Barrett, who teaches development economics
at Cornell University, New York, and is the co-author of the book, Food
Aid After Fifty Years: Recasting Its Role. 

Canada also announced a donation of US$230 million to food aid
programmes, joining the United Kingdom, the European Union and Japan,
who have also pledged significant amounts to deal with the current
crisis. 

"Hopefully, the US Congress [which is considering President George
Bush's proposed $770 million in new aid to feed the world's hungry] will
follow Canada's lead," Barrett commented. 

Almost all food aid donated by the USA is tied to domestic requirements
for procurement, processing and shipping. According to Barrett, it costs
more than two dollars of US taxpayers' money to deliver one dollar's
worth of food procured as in-kind food aid. 
Feeding while building agriculture 

Edward Clay, senior research associate at the Overseas Development
Institute (ODI), a UK-based think-tank, noted: "The implication [of
Canada's announcement] is that the priority should be the food security
of hungry people in developing countries and providing support that
helps to promote local producers and markets, and also seeks value for
money when funds are at a premium." 

He pointed out that Canada had been providing food aid since the 1950s,
almost all of it sourced in Canada. In 2005, when the global community
signed the Paris Declaration on Aid Effectiveness, in which rich
countries committed themselves to removing restrictions on procuring aid
and promoting the recipient country's agriculture and markets, Canada
announced that it would untie half its food aid. 

Already profiting 

Barrett said the current high prices of food and fuel meant
agri-businesses and shipping lines in the US were "enjoying record
profits, so the defensibility of safeguarding their windfall gains from
present US food aid policy is ebbing." 

David Snider, a spokesman for the US Agency for International
Development (USAID), said the Bush administration had put forward a
proposal that 25 percent of food aid dispensed by the US government be
in cash to buy food for recipient countries locally or regionally. 

Neither Barrett nor Clay could see Bush's proposal getting the nod from
Congress. Barrett said there were subtle signs of change in Congress,
but thought the prospects were better for getting pro-local and regional
purchases of food aid included in the next Farm Bill, a specific law
governing food aid that is updated every five years. 

New money 

The additional new aid proposed by Bush, which includes US$395 million
for emergency food aid, has come under internal criticism, the daily
Washington Post newspaper reported. 

The Democrats, who voiced dissent, have argued that the money - part of
the 2009 budget year that begins in October 2008 - will be too late to
help countries already struggling with the food price crisis. Bush's
request for another $350 million for food aid as part of the 2008
supplemental budget for the war in Iraq has also been slammed by the
opposition as too little. 

Democrats Senator Robert Casey Jr and Majority Whip Richard J. Durbin,
who have asked Bush for at least $550 million in emergency food aid
immediately, were quoted in the Post as saying: "That is far too late
for the urgency of this problem. If you're hungry and your government is
collapsing, waiting until December 2008 or January 2009 for food to hit
the ground is just too late." 

High food prices have been triggered by a host of factors, including
dwindling stocks and a continuing strong demand for cereals, partly on
account of an increased demand for meat and milk in India and China, and
biofuels. According to the World Bank, high food prices could push 100
million people into deeper poverty.