Saturday, May 3, 2008

The US Food Aid and the Farm Lobby

The US Congress is expected to approve an additional $770m in international food aid to alleviate the food crisis arising out of an unprecedented inflation in world food prices. With the prices of various food staples for the poor doubling and tripling in about a year, it is not clear if this increased amount would help avert widespread hunger feared in parts of Africa and Asia.

In addition to the actual amount of US aid, the other key aspect is how this aid is delivered. If the aid is intended to be tied to purchases from US farmers to provide short-term relief to the poor, it will do nothing to solve the long-term issue of the poor nations' ability to feed themselves by increasing their domestic food production.

With food prices soaring, U.S. farmers are enjoying robust demand, and have less need for the government to buy some of their crop for use in overseas aid. And the U.S. increasingly has come under pressure from other developed countries to change the design of its food aid. Canada recently announced it would move toward more untied aid, and European countries made the switch in the 1990s, according to the Wall Street Journal.

The Journal goes on, "Attempts to shift a percentage to cash have met with aggressive opposition from the U.S. agriculture industry". The farm lobby in the US continues to flex its muscle and enrich itself, without regard for the severity of the hunger crisis in the poor nations. Three years ago, farmers and their allies in Congress effectively destroyed an effort by the Bush administration to begin this switch to untied food aid.

European governments switched to giving all-cash donations in the mid-1990s, arguing that cash allows more flexibility in responding to crises and that the U.S. uses its food aid as a form of farm subsidy. The Europeans understand that these subsidies run counter to the spirit of free trade and globalization being championed by the developed world as a way to open the emerging markets for their multi-nationals. The backlash from the hungry against global markets will be a commercial setback as well as a security issue for the entire world.

The outdated Public Law 480, signed in the 1950s by President Eisenhower, governing US food aid motivated by domestic politics and objectives has continued to live in various garbs. It has distorted the whole idea of helping end hunger and primarily served the interests of the farm lobby and re-election of the congressmen from farm states. It has also not helped in promoting better nutrition, health and fitness of the American people by subsidizing unhealthy dairy, meats and cereals while penalizing healthy options such as growing fruits and vegetables. It is one of the worst examples of the "special-interests" politics that dominates the American democracy.

As long as the US farmers and politicians continue to play selfish games with US aid to the poor, all of the US efforts will amount to nothing more than a superficial PR campaign disguised as generosity toward the poor. A little more sincerity may actually help feed the poor for more than just brief periods of acute crises and simultaneously address the fundamental issues of self-sufficiency. Unless there is fundamental change in the attitudes of the Midwest legislators, this will be another missed opportunity to help improve the battered US image abroad and contribute to stability and security of the US and the world.


Anonymous said...

Selfish? Yeah, we Americans are selfish to the tune of a TRILLION, (you know trillion?)US Dollars of FOREIGN aid/year. Thank You so much for showing how miserable we let's see, what does Pakistan provide?

Riaz Haq said...

Dear Anonymous,
First, let me assure you that I am an American, an American by choice, not by the accident of birth. I am as patriotic as any other American and I don't have to prove it to you or anyone else.
Second, read my blog post carefully. The adjective "selfish" in my post applies specifically to the farmers and politicians involved in special interest politics, not to the American nation. The actions of this special interest group are designed to help themselves at the expense of American taxpayers and the poor/hungry citizens of this world who have the potential to derail America's efforts toward a peaceful,secure and globalized world.
Third, your patronizing tone is totally off the mark in talking about "trillion US $" per year in US foreign aid. This shows your ignorance of the facts. The US foreign aid is one of the smallest in the world: Only .07% of the GDP, ahead only of New Zealand among the industrialized world. Please refer to this link:
Fourth, your comparison of the US with Pakistan is irrelevant and just ludicrous.

Riaz Haq said...

US and EU farm subsidies to their cotton growers are hurting Africa's poor. Here's a report on it:

West Africa rises up to end $31.4 bn rich world cotton subsidies

Dakar, 10 February 2011 – High-level West African political leaders are joining forces with a broad coalition of African and South American smallholder and global farmer organisations to launch a huge new offensive demanding the phasing out and elimination of rich world trade distorting subsidies in cotton.

The release this week (Wednesday 9th February) at the World Social Forum of a new updated version of the Great Cotton Stitch-Up report by Fairtrade reveals that in the nine years since the Doha Development Round was launched in 2001, the United States and the European Union paid out a staggering USD 31.4 BILLION in subsidies to its farmers so squeezing out 10 million West African cotton farmers from trading their way out of poverty.

In addition, the West African Economic and Monetary Union (UEMOA) is also prioritising and upgrading the cotton subsidy issue and will shortly be unveiling its own offensive in Brussels as the European Parliament prepare to vote on the €55 billion Common Agricultural Policy reform in June.

2011 is a crucial year for the global trading system. This summer the European Parliament will begin reform of the €55 billion Common Agricultural Policy subsidy regime, the US Congress begin work in framing a new Farm Bill while attempts to revive the stalled Doha Development Round culminate in a World Trade Organisation Ministerial, expected in November.

Kwame Banson, Fairtrade Africa Regional Coordinator for West Africa, comments:

‘This is the crunch year for rich-world subsidies, with the EU and US at a genuine crossroad. One way leads to more misery for African farmers, the other to fairer way of doing trade. This coalition demands that they take the right path because African farmers can no longer be the casualties of the politics of the North.’

Moussa Doubia, Small-hold Malian Cotton Farmer, speaking of the impact of competing against subsidised cotton, adds:

‘Sometimes I can’t sleep. Sometimes it’s hard and unbearable… The cotton price is not enough for farmers to cover our needs including school fees and health.’

The report’s launch comes as Mali Minister of Industry, Investment and Commerce, Ahmadou Abdoulaye Diallo confirmed his country is seriously considering taking the US to the WTO Disputes Panel Settlement over its USD 24.45 billion subsidies, potentially leading to retaliatory action against the US by suspending protection of US intellectual property. He also states Mali will veto the entire Doha Trade deal over the issue so further reigniting what is the most vivid example of trade injustice.