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close this bookTackling Hunger in a World Full of Food: Tasks Ahead for Food Aid (WFP)
close this folder4. Chronic hunger and weak markets
View the document(introduction...)
View the documentThe case for food aid
View the documentFood aid in support of agriculture and income generation
View the documentMarket-friendly food aid

(introduction...)


The hungry are by-passed by mainstream development
4.1 The chronically hungry are typically by-passed by mainstream development initiatives and unable to benefit fully from the market. To attain sustainable food security they require better access to productive resources, credit, social services, market outlets, and decision-making authority. But, before they can reach that point their current hunger has to be tackled.

The case for food aid

Hungry people find it hard to compete
 
4.2 Hungry people are not usually good competitors in the market place, and they are not best placed to respond to improved market incentives in the short term. They have limited resources to raise their productivity even if they wanted to sell a surplus of crops or livestock on the market tomorrow. Their persistent hunger compromises the potential benefits of investments and actions meant to stimulate economic growth. Thus, the removal of hunger is the first threshold to be crossed in the eradication of poverty.
4.3 That said, food aid is not necessarily the best or only way to help all 800 million people suffering chronic undernutrition in the 1990s. Where chronic undernutrition coexists with well-supplied markets offering food at accessible and stable prices, a better solution may lie with improved health and sanitation interventions, greater investments in literacy and nutrition education, and ration systems or cash transfers that successfully raise the purchasing power of households with the worst hunger.
4.4 By contrast, the case for food aid is strongest where chronic undernutrition co-exists with weak markets that are characterized by erratic supply and wide price fluctuations. The case for bringing food aid to complement markets depends largely on local market performance. The rationale is weak if markets function well and non-food interventions can effectively raise access to food among the hungry. But the case for food aid targeted to the most hungry is strong if there is insufficient food in the market and prices are volatile. Food aid can complement markets and offset their weaknesses in several ways:

Food aid in support of agriculture and income generation

4.5 On the one hand, it can be provided to hungry people through labour-intensive works programmes (including food-for-work). Such activities simultaneously address weaknesses in household productivity and deficiencies in purchasing power. Productivity and purchasing power can both be enhanced by food-aided works programmes which support a transfer of resource management techniques, the stabilization of shifting dunes, the establishment of tree and shrub nurseries, the building of small-scale irrigation infrastructure, or the creation of village-level grain and seed banks. The marketing of food produce can also be improved by the construction of feeder roads and bridges. The long-term impact of such assets complement the short-term gains in hunger-alleviation; both enhance local productivity and lead to a reduction in the need for external assistance. There is little risk of such food aid disrupting markets, or causing dependency or disincentives, since food delivered is additional to normal, typically inadequate, consumption.

Market-friendly food aid

More food aid is purchased in developing countries than ever before
4.6 On the other hand, food aid can help to strengthen existing markets by localized actions in the marketing of food, such as local purchases and monetization. Important quantities of food aid is purchased in developing countries, either for use in a deficit region of the same country or in another country. The share of global food aid purchased in developing countries doubled between 1990 and 1994, rising from 6 to almost 12 percent. In 1994, the World Food Programme alone purchased close to 1 million tons of food commodities in developing countries. Such purchases can give a significant boost to local production, trade, the local transport sector and infrastructure development, as well as reducing costs. Furthermore, food transfers based on local purchase are often more firmly grounded in local dietary preferences than food aid based on long-distance shipments.
4.7 Moreover, some food aid can be fully or partially monetized. Monetization can encourage more efficient market performance by promoting private sector participation in marketing rather than channelling food through parastatal companies (Riely 1995). Eritrea is one example of a country where nascent private sector engagement in the marketing of food can benefit from a judicious channelling of monetized food resources through local businesses, when cost efficiency can be assured. In other cases, monetization of food aid could offer some potential for challenging a constraining influence on markets of monopolies or cartels. And monetization during emergencies also deserves careful consideration where scope exists for stabilizing local prices and for protecting markets that can be kept functioning.
4.8 A last area in which there may be scope for stimulating local production and marketing lies in micronutrient-enriched or blended foods. While experience with such initiatives is limited so far, preliminary signs are that increased attention to micronutrient issues will result in demand for locally processed, fortified, and enriched foods for use in projects that have specific nutrition goals. Products of this nature (blended foods for therapeutic and supplementary feeding) are already produced in countries such as Senegal and Malawi.