CARE Turns Down Federal Funds for Food Aid

In Foreign Policy, International Development, Philanthropy, Sustainable Development on August 27, 2007 at 4:05 am

I know I’m a little behind the pack in blogging, but I had to give some due respect to CARE’s decision, as highlighted in this article in the NY Times recently:
CARE Turns Down Federal Funds for Food Aid – New York Times

I’ve been thinking about this since I was in Peace Corps and saw this first hand. The short of it is, the US Government buys surplus grain or other mostly raw commodities from American farmers and then distributes it to various NGO’s and aid organizations working abroad, mostly in Africa. These NGO’s then sell the grain locally and fund their projects with the proceeds. I’ve never agreed with this practice, for two reasons, economical and environmental:

Economically speaking: It provides no new foreign exchange reserves for the host country. Let’s say you are running an NGO in a country and you’ve got several projects going on, to a budget of $1 Million. If your funds come from America or Europe where the headquarters are located, then all of that $1 million enters the country as valuable foreign exchange, which then has the potential, in a country with a functioning banking system, to create more value by being loaned out again and again. In essence, you’re adding totally new money to the country that didn’t exist before. With the Food for Peace program that CARE is rejecting, the money that the NGO is using to operate comes entirely from within the country, and you have not expanded the country’s money supply at all. Even $1 million is a significant amount to countries with smaller GDP’s than a mid-cap American corporation.
This also distorts the market of the country, essentially allowing the US Government to dump our excess agricultural capacity onto the poorest countries in the world, which, I believe, is against WTO regulations. It also depresses the price of locally grown commodities, as local farmers are forced to compete with the American grain.

I personally struggle with this – since I believe that it’s more important to save people from starving, if that is the situation. So, giving grain where there was none is a good idea, and allowing people to pay for it in some way, whether through trading their services or with a food for work program, gives them a sense of pride. However, these programs have reached the status quo and should not be as regular a part of NGO funding as they are.

Environmentally speaking: It perpetuates a consumptive and predatory system which enriches the Agribusiness industrial complex. Corporations like Dow, Monsanto, and ADM, make millions selling genetically modified seeds and fertilizer to farmers who then grow way more food than Americans can consume. This totally inefficient system distorts the market. The Food for Peace system is a way for the US Government to subsidize big agribusiness. This perpetuates non-natural, non-organic, highly genetically modified and fertilized crops throughout the Midwest, especially in the Missouri and Mississippi river basins. All the runoff from these fields eventually finds it’s way into the Gulf Coast, where we are seeing huge “dead zones” where all the fertilizer and chemicals kill off the ecologically sensitive organisms that support the food chain.

There are better ways for NGO’s to be funded. I completely understand the idea that there are always trade-offs; these aid organizations are in a competitive industry where funds are scarce – they will take anything they can get. But there are new, more efficient and effective ways to bring about a positive change in the human condition, and not just solely advance the interests of corporate America.

Notably, the article talks about aid programs making themselves profitable – there is a ton more evidence and literature on this, and hopefully I’ll have more to write about this as I get back into school for my final semester at MIIS.


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