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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

(introduction...)


Food aid is changing
 
5.1 Food aid is not what is was. Its characteristics have changed significantly since food aid became a major form of global resource transfers in the 1950s. For example, the food aid regime of the 1950s and 1960s was one that used surplus food in a few industrialized countries to promote broad economic and foreign policy interests. Some care was taken to avoid displacement by food aid of commercial exports. The Committee on Surplus Disposal was established in 1954 to ensure that food aid was given as a resource that was additional to the "usual marketing requirements" of recipient countries.
5.2 The world food crisis of the early 1970s led to a shift of food aid towards development objectives. Highlighting the food needs of many poorest nations, the 1974 World Food Conference raised awareness of the need for greater attention to food supply and stability. As a result, the 1970s and 1980s saw increasing support for project food aid; its share of total food aid increased from 17 percent in 1976/77 to 28 percent in 1983/84 (Table 2). There was also a shift towards grant and multilateral channels for food aid, with greater emphasis being placed on continuity of supply (Uvin 1994; Clay and Singer 1985). During the 1980s the Food Aid Convention fixed the level of multi-annual donor commitments at its highest level yet--7.5 million tons (Table 3).
5.3 The 1990s have so far seen several breaks with the past. Four major changes in the food aid world can be characterized as: a) an increasingly narrow targeting of people facing immediate food insecurity and hunger; b) an increasing focus of resources on countries needing support in the form of food; c) a decline in food aid used as untargeted programme assistance in favour of targeted interventions; and d) a decline in food aid supplies during the mid-1990s. Each of these points is examined in more detail below.

A focus on hungry people, especially in emergencies

People are at the forefront of food aid concerns
5.4 First, there has been a shift of attention from national food issues to hungry people. People have come to the forefront of food aid concerns-balance sheets, tonnage figures and surplus disposal have become secondary. As part of this trend there is a new focus on actions against hunger, particularly in the context of humanitarian emergencies. This does not, of course, rule out development interventions, nor minimize their importance. The only lasting solution to hunger is sustainable food security based on investments of a developmental nature. However, development initiatives in vulnerable regions are increasingly linked to the requirements of relief, rehabilitation, disaster preparedness and preventive measures.
5.5 The surge in demand for emergency food aid, associated with the end of the Cold War, reached a record high of 35 percent of total food aid in 1994. During the 1970s, emergency food aid represented some 10 percent of the total; during the first half of the 1990s the share rose to almost 30 percent (WFP 1995).
5.6 So far most of the increased share of emergency resources has come at the expense of programme food aid (Figure 2). The share of programme aid, mostly bilateral donations for balance-of-payments support, has fallen from almost 75 percent of total food aid in the 1960s and 1970s to 43 percent in 1994 (WFP 1995b). Levels of project food aid, while also declining in recent years, have remained somewhat more stable. In 1986/87, when world cereal stocks had reached a historic high and real prices for cereals had fallen to a historic low, almost 30 percent of global food aid was provided for development projects. Since then, the share of project food aid has fallen to around 22 percent.

A focus on food-deficit countries

Food air must reach low-income food-deficit countries
5.7 The second trend of the 1990s (linked to the first) is a stronger articulation of a concern-as yet poorly reflected in actual food aid flows-to concentrate food aid on least developed and low-income food deficit countries. The share of global food aid for Low Income Food Deficit (LIFD) countries has fluctuated considerably over time (Table 4). During the 1980s, LIFD countries received between around 90 percent of total food aid. In the 1990s, however, their share has varied between 65 and 88 percent.
5.8 National food insecurity remains a minor determinant of donor food aid allocation decisions. A recent analysis shows that the food security status of recipient countries explains only 7 percent of cross-country variation in per capita food aid transfers (FAO 1994). As a result, the countries that receive the largest volumes of food aid are still not necessarily those inhabited by the largest numbers of hungry people.

Food aid for the needy is declining when it is needed most

5.9 Considered from another perspective, food aid accounted for 20 percent or more of the cereal food imports of LIFD countries during the mid-1980s. In 1995/96, a year of high cereal prices, reduced export subsidies and very low stock levels, food aid is expected to account for only 8 percent of the import requirements of such countries. Food aid for the countries who need it most is declining when they need it most.
5.10 Through the Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries, Ministers negotiating the Uruguay Round intended to avoid possible negative effects of such liberalization. Another international body, the Committee on Food Aid Policies and Programmes, also directed that the World Food Programme (WFP) should concentrate a larger share of its resources to countries in greatest need. More specifically, at least 90 percent of WFP development assistance is to be allocated to low-income food-deficit countries, and at least 50 percent of this to go to least developed countries by 1997 (WFP 1995a).

More targeted interventions

Food aid comes from many sources
 
5.11 The third major change is that food aid no longer necessarily represents a surplus commodity provided by a small number of countries, and is less used as bilateral programme assistance. It now derives from a more diverse range of donor sources and involves substantial quantities of cash for the procurement of food in developing countries for targeted uses (Table 3). By 1994, as trade liberalization began to take hold and food surpluses in developed countries declined, more than 1.5 million tons of food commodities were procured in developing countries (WFP 1995b). The Uruguay Round Agreement is likely to contribute to further reductions in structural surpluses of major foodstuffs in traditional donor countries.
5.12 The rising level of food aid procured in response to a specific need is also related to the rise in emergencies. Today's need for rapid responses to large-scale crises, often in situations where normal government channels have been weakened or destroyed, has led many donors to allocate increased responsibility for management of food aid to multilateral institutions and NGOs. In 1994, multilaterals and NGOs together handled 52 percent of global food aid, compared with 28 percent as recently as 1989. The fastest growth has been in the portion delivered through NGOs; the share of food aid handled by these organizations has risen from 10 percent in 1989 to 21 percent in 1994.
5.13 The relative shift out of programme aid and the increasing role of multilateral institutions and non-governmental organizations in handling food aid has brought with it the added benefit for poorest countries that an increasing share of food aid is offered on grant terms. In the 1960s, 75 percent of food aid was provided on a loan basis, whereas 80 to 90 percent of total food aid was offered on a grant basis by the early 1990s.

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.

Projections of food aid requirements

5.18 The debate surrounding future food aid requirements continues. Global requirements have often been computed by projecting recipient country food (and foreign exchange) balance sheets, with minimal consideration of requirements based on nutritional goals or of the political economy of donor allocation decisions. Nutritional improvement goals have more recently entered into methodologies for projecting requirements. For example, even if the record level of almost 15 million tons of food aid in 1992/93 had been fully targeted on needy individuals and those individuals consumed it all, it would have met less than 50 percent of their "nutritional need" assessed at minimum caloric norms (Ezekiel 1989; Missiaen et al. 1995). If food aid alone were used to bring the world's hundreds of millions of malnourished people up to a desired nutritional status (measured in terms of a Basal Metabolic Rate of 1.54), 55 million tons would be required for the purpose by the year 2010--more than 6 times the level of total food aid available during 1995.