April 9: Income vs Access Gap Policies: political Econ of US Food Aid Flashcards
(29 cards)
Political economy of USDA’s Programs
- more subsidies for farmers pushed by a wheat state Senator
- Updates on WIC (children program) to better align with “latest” in nutri sci
Key Issues of Food SEcurity
- Availabiltiy: Ensuring adequate food supply to provide for nutri needs of population
- Access: ensuring that incomes and food prices gt maintain real purchasing power to ensure getting nutritionally satisfactory diet
- Utilization - ensuring food within household is used to effectively maintain health of all members
How big of an impact does food aid account for in terms of annual food flows?
Little
- In metric tons per person graph over years
a. Production = 0.1
b. Trade = 0.5
c: Aid = 0.01
Define proggram refarding food aid
Subsidized food deliveries to a central gov that sells the food
- Provides budgetary and balance of payments relief for recipient govs
Define project in terms of food aid
Provides support to field-based projects in areas of chronic need through fod deliveries to gov or NGO that either:
- use it directly
- or monetizes it, via proceeds for project activities
Define emergency/Humanitarian in terms of food aid
deliveries of
free food to GO/NGO agencies responding to
crisis due to natural disaster or conflict.
Rank geography of food aid flows
- # 1 = US
- # 2 = EC
- The rest (10% ish) = Austrailia, Canada, JP, etc…
US Food Aid remains largely driven by what?
Domestic farm and foreign policy
Myths of Food Aid: A Donor-Driven Resource
- American food aid = feeding hungry
- effective form of support for American farmers
- not driven by self-interest
- is wholly additional
- Builds long-term commercial export markets
- Cargo preference laws effectively support US maritime industry
- NGOs = force for change in food aid
Who does the benefit in food aid?
- Some food vendors
- Very few shippers
- NGOs
5 Key Issues with Food Aid Management
- Targeting
- Timing
- Disincentive effects
- Procurement Modalities
- Monetization
Food Aid Management: Targeting
Leakage to nontargeted ppl + missing intended beneficiaries
Consequence:
a. Inclusion: 35% added consumption
b. Exclusion
Food Aid Management: Timing
Aid should flow counter-cyclically to stabilize food availability … IT DOESNT
- food aid flows budgeted on monetary not physical bases
- Delivery lags are great
Consequences:
- Late/low deliveries = exclusion error
- High pro-cyclical deliveries = inclusion error
What are exclusion errors of timing (food aid management)?
Late/low deliveries
What are inclusion errors in timing (food aid management)?
High pro-cyclical deliveries
Food aid flows budgeted on ____ and not on ______.
On monetary
not on: physical basis
Food Aid Management: Disincentive effects
What is it
- Product price effects
- Labor supply disincentives
- Gov policy effects given persistence
Positive Incentives:
- Factor prices/avail. (seeds, fertilizers, assets)
- Risk effects
- Labor supply/availability
Positive incentive effects include what
- Factor prices/avail. (seeds, fertilizers, assets)
- Risk effects
- Labor supply/availability
Food Aid Management: Procurement Modalities
Role for local purchases/triangular transactions
- Efficiency of US Procurement: $1.00 food costs $2.13
What is the efficiency of US procurement?
$1.00 food costs $2.13
Food Aid Management: Monetization
Food given to NGO’s (Save the Children ,CARE, etc.) that they then sell in a developing country and use the money
- Generates more cash resources for NGOs, much like program food aid did for govs but…
- Efficiency problems:
a. $1 cash costs US gov $2.66
b. plus NGO staff time/hassle/cost of capital
No targeting of food distribution
- disincentive effects maximized, reduces local prices on market
- additionality minimized
- timing more complicated -> when does food get sold
what generates more cash resrouces for NGOs (like how program food aid did for govs), but had efficiency problems
Monetization
What are the efficiency problems with monetization
a. $1 cash costs US gov $2.66
b. plus NGO staff time/hassle/cost of capital
Which food aid management doesn’t target food distribution?
Describe:
Monetization
- disincentive effects maximized, reduces local prices on the market
- additionality minimized
- timing becomes more complicated, when does the food get sold?
