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close this bookTackling Hunger in a World Full of Food: Tasks Ahead for Food Aid (WFP)
close this folder5. The evolving nature of food aid and future needs
View the document(introduction...)
View the documentA focus on hungry people, especially in emergencies
View the documentA focus on food-deficit countries
View the documentMore targeted interventions
View the documentDeclining food aid supply
View the documentProjections of food aid requirements

Declining food aid supply

Food aid supply has fallen in recent years
 
5.14 The fourth change of the 1990s has been an abrupt decline in food aid availability since the record level of over 15 million tons in 1992/93. Forecasts for 1995/96 anticipate a drop to around 8 million tons. It is too early to say whether, or to what extent, this might be linked to trade liberalization. The effects of the Uruguay Round are yet to become clear. Food prices may decline in the longer term as a result of gains in agricultural productivity, the liberalisation of world trade, and/or limited effective demand for tradeable commodities.
5.15 On the other hand, prices may rise in the short-to-medium term as a result of the Uruguay Round agreements (UNECA 1994; ODI 1995; FAO 1995c). Food aid supply has always responded negatively to higher food prices. There is a significant correlation between world cereal prices and global food aid, especially where programme food aid is concerned (Table 5). What is more, cereal stocks in developed countries are also forecast to fall in 1995/96 to 111 million tons from 213 million tons in 1992/93. This would bring the ratio of world cereal stocks to annual global consumption to its lowest level for 20 years.
5.16 Thus, most analysts see a likely decline in supplies during coming years (Taylor 1992; Singer and Shaw 1995). As the Director General of FAO noted in 1995, "the prospects for future food aid are hardly reassuring." (FAO 1995c) One negative sign was the substantial reduction in minimum annual contributions agreed to by donor countries under the 1995 Food Aid Convention, established at 5.35 million tons of wheat equivalents-down from 7.52 million tons under the 1986 convention. Another worrying sign was the sharp rise in world cereal prices in 1995, partly due to climatic factors coupled with low levels of world cereal stocks; this has been a potent reminder of the volatility of world market prices even at high levels of global food production. Only during the world food crisis of the early 1970s were food aid supplies are low as they are likely to be in the late 1990s.
5.17 The current tightening of international food markets has focused increasing attention to issues of cost-effectiveness and efficiency in food aid. Given the commodity nature of food aid, the amount of resources transferred to the recipients measured in local currency units may be different than those of other forms of aid even if their fiscal costs to the donors are the same. In all cases, however, the key considerations must be whether the needed resource can be provided in time and in ways that actually reach the people needing to be assisted. This means that market conditions must be a major determinant of where and when food aid is the optimal resource to address hunger. The relative efficiency of addressing hunger through the market or through food aid has to be assessed in each case. Where and when food aid is not the ideal solution, alternative (albeit equally urgent) interventions are to be sought.