“There are no surpluses”

In the past 40 years, the importance of food aid, measured as share of total international development assistance, has gone down continuously. However, food aid is still one of the most controversial forms of aid. Why is that so?
I suspect the reason is that food aid had its origin in surplus disposal. Those were the beginnings, but the world has fundamentally changed since then. Similarly, some of the forms in which food aid was given have changed fundamentally over time. Some of the most controversial varieties hardly exist anymore, or at least their share is declining fast. Programme food-aid, which is provided on a government-to-government basis and essentially serves as balance-of-payments support, is an example. Today, it is only a fraction of what it was a decade or so ago. Now, food aid is overwhelmingly delivered as a response to humanitarian emergencies. However, policy discussions today still tend to revolve around old data and outdated alternatives.

What are the important issues to be discussed today?
The real challenge is to move on from the rather sterile and stereotypical debate on cash versus in-kind aid. We must talk about what hungry people need. Very often, the answer is nutritionally-focused food assistance. And this kind of assistance may indeed come in a variety of ways. It can come in the form of commodities, perhaps bought overseas, or purchased locally or regionally. It can come in the form of cash transfers, food stamps, coupons, or, prospectively, ATM cards. We really need to focus more on who are the hungry, what kind of assistance do they need, and how do we best provide that
assistance.

Some experts say that cash transfers are almost always more adequate than in-kind supplies, and should therefore be preferred generally. Do you agree?
The truth is that we don’t have enough of either. There is not enough cash, and there is not enough in-kind aid. People talk about either-or, when the answer, in fact, is both. Instead, we should be discussing a far more daunting challenge: timing. Consider Sudan, for example. We need about 75 % of the resources for our operations there, and particularly for Darfur, to be distributed in quite remote places, which are difficult to access, before June, because that opportunity is lost when the rains come. If we don’t accomplish that, then the issue will become one of very expensive airdrops. So timing is much more important than whether food is purchased locally, regionally or internationally.

But aren’t local or regional supplies more quickly available than are in-kind shipments from some far-away country?
The short answer is most often yes. This is one of the main reasons why WFP is such a strong proponent of local and regional purchases providing, of course, that cash is available in time for us to make the purchases in a way that is helpful, not harmful, to markets. There are, of course, other ways to achieve a rapid response: for example, the pre-positioning of food stocks, either within a country or regionally, and borrowing from national stocks with repayment when the imported commodities arrive. WFP remains open to a variety of ways getting the right food to the right people at the right time.

It is said that purchasing supplies locally or regionally is less likely to distort local food markets than is the case for imported supplies. What is your experience?
We very strongly favour local and regional purchases. However, we need to be careful about buying at the right time, because substantial purchases can generate price increases, which result in a larger number of people than before not having access to food. Whether we bring in food from outside thanks to regional or international procurement or whether we are buying food locally, we always have to assess carefully what impact our action will have. In other words, the issue is working carefully with markets in a way that supports market growth and development.

Some big food-aid donors, above all the United States, still ship their own surpluses rather than transferring cash, or purchasing food locally or regionally. Should these countries reconsider their policies?
There was a clear consensus among the conference participants in Berlin that we need to get rid of some of the old baggage in discussions over food aid. And one of the things that have changed is that we are living in a post-surplus regime today. There are no surpluses anymore. Why is that so? First, we have a dramatically increased demand for food, particularly generated in Asia, mainly China. This is manifest for example in the prices for wheat and maize; both are going through the roof. Second, we are at a historical threshold, there is a shift underway from agriculture for food production to agriculture for fuel production. This means that competition is intensifying between agriculture for food and for fuel. Third, there are clear signs that climate change and natural disasters will make agriculture for food much more difficult than it was in the past. All summed up, there are no surpluses anymore.

Do you mean that there is nothing wrong with US food-aid policy?
What I am saying, in practical terms, is that the United States prefers to purchase food at home rather than purchasing it on international markets or purchasing it in developing countries. That’s the choice the United States made.

The Bush administration has proposed to Congress to relax the requirement of only using domestically-produced food for aid purposes. The idea is to make US food aid more efficient, and to become able to supply it more quickly. Do you support the proposal?
The answer is yes. What we would actually like to see is the US make the cash for local and regional purchases additional. In other words, when you don’t have enough to go around, you need more of everything, and to make better use of what you have.

Statistics show that food aid is to a large extent supply-driven, not demand-driven. That means it is available when world-market prices are low, but not necessarily when food is most needed. Can you confirm that from WFP’s work?
The general proposition is absolutely correct. When donor budgets are fixed in dollars or euros your money simply buys less food in times of higher prices. This, however, is not the old debate of supply-driven versus demand-driven. It simply means donors must pay more in times of higher prices to get the food assistance to those who need it. We have found that donors understand that we are not only facing food-price increases, but fuel-price increases too. In other words, it is becoming more and more expensive to get food to the beneficiaries, no matter where those beneficiaries may be. Many donors return to their Parliaments to secure additional funds; and we are very grateful that they do.

But doesn’t supply volatility also result from the use of food aid as an instrument to dispose of surpluses?
As I said before, we agreed in Berlin that there are no longer surpluses. Rather, what we are facing are sharply increased prices and greater numbers of people needing food assistance. So we look to a situation where we will potentially be paying more to reach a beneficiary with the same quantity of food, because both food and fuel have increased in price.

Negotiations to revise the Food Aid Convention will start soon. What kind of overarching agreement do we need for international food aid?
First, we must recognize that we live in a post-surplus regime. The current FAC neither reflects today’s reality of higher costs for food as well as fuel nor the likelihood of tight supply continuing. The second point is to focus more on people in need rather than on the instrument of food aid, in terms of commodities. For example, nutritional requirements deserve much greater attention. In 1999, when the FAC was last updated, negotiators focused on food security. Today we still have the problem of not enough food being available in many parts of the world. Moreover, we also have a kind of silent hunger crisis, caused by vitamin and micronutrient deficiencies. A Convention focussing on individuals’ food and nutritional security would be supportive of micronutrient- and vitamin-fortified foods. The current Convention is not. Third, a revised Convention must not only define food-supply commitments. We also have to find a better way of dealing with transport costs. Otherwise we’d run the risk of food assistance going to the nearest needy people, not to the most needy people. In sum, we need a Convention for this millennium. What we have is a Convention for the last millennium. It was built on what are now old data and old debates.

Questions by Tillmann Elliesen.