A New Face of Hunger Should Prompt a New Approach to Foreign Aid

Noam Unger
Noam Unger Former Brookings Expert

May 2, 2008

As global food prices continue to rise, dramatically enlarging the number of people around the world who are priced out of food markets, the United States should make a concerted effort as the largest donor of food aid to improve the impact of its assistance policies.

Josette Sheeran, the Executive Director of the United Nations World Food Program and former U.S. Under Secretary for Economic, Business, and Agricultural Affairs in the State Department, has called the impact of rising food prices “a new face of hunger.” This crisis challenges our consciences and our security. This week, U.N. Secretary-General Ban Ki-moon warned, “If not managed properly, [the crisis] could touch off a cascade of related crises – affecting trade, economic growth, social progress and even political security around the world.” Indeed, turmoil in Haiti has already led to political upheaval, and food riots and protests have erupted across dozens of countries around the world.

The crisis will require a long-term strategy to address its multiple causes, including bio-fuel and land use policies, oil prices, increased demand in emerging economies for high-input foods, population growth and extreme weather. However, there are tangible near-term actions the U.S. should take in terms of emergency assistance to reduce its acute impacts. Yesterday, President Bush asked Congress to provide an additional $770 million to support food aid and development. This came on the heels of an announcement to tap the humanitarian food reserve of the Department of Agriculture in order to draw down food aid valued at $200 million. As noted by the President, these important acts of humanitarian leadership should be accompanied by a more significant step by the U.S. government – beginning to “untie” U.S. food aid. It’s not impossible – Canada did so two days ago, announcing a $50 million increase in their food aid programming while also declaring that they would untie restrictions on how such aid should be sourced or shipped. Over the course of three years, Canada has shifted from 90% tied food aid to 100% untied food aid. In doing so it has joined the United Kingdom and a growing chorus of European donors that have moved away from tied aid in accordance with an agreement of the Organization for Economic Co-operation and Development on untying official development assistance to the least developed countries.

To its credit, the Bush administration has repeatedly proposed increasing flexibility to purchase food locally, but such efforts have died in Congress because of strong pushback from domestic agribusiness and shipping constituencies. In comparison to a system that requires food aid to be purchased from American farmers and shipped on domestically-registered transoceanic vessels, however, it is roughly 25-50% cheaper to purchase food locally or regionally. Increased fuel prices have only made long shipping more expensive. For the same investment of taxpayers’ money, a faster and more flexible system can result in saving more lives while better supporting developing economies. The arguments against tied aid – that it is slow, costly and inefficient – have remained the same for years.

However, one of the primary counter-arguments in favor of tied aid – that Congressional investments in foreign assistance require the support of the agribusiness and shipping constituencies – may be losing ground as global development is more broadly understood as an issue related to our national security alongside our interests and American values. This changing landscape is evident in recent calls by Defense Secretary Robert Gates for greater investments in civilian international affairs capabilities, including global development. This perspective was also prominently conveyed by former Deputy Secretary of State Richard Armitage in Senate testimony just last week when he explained that his support for the elevation of global development does not stem from a sense of charity but rather from a calculation of national security interests.

The U.S. should shift to the regional purchase of food or the provision of cash for food aid, and it should use its response to the current food crisis to begin that process. The upcoming supplemental appropriation serves as a place to start. Congress is in a position to seize this opportunity to do what is best from a humanitarian standpoint while also signaling support for an untied approach to U.S. food aid. For the American agribusiness sector that is already benefiting from higher food prices, this should be an easier pill to swallow.

Ultimately changes in our approach to foreign assistance must move beyond the more immediate issue of humanitarian relief to longer-term development and economic stability. Even if the U.S. government gets its share of humanitarian assistance right, emergency aid is no panacea so we must make our long-term development assistance more effective. Along the way we must help poor countries build up greater resilience to shocks such as the current food crisis, and that will involve wise investments in agriculture and market access.