Saturday, May 04, 2013

The "Aid" that Isn't

That could cynically cover a lot of projects that are intended to help the poor I suppose but it requires a special level of cynicism to support US Food Aid which is designed specifically to help well connected, wealth American farmers (TheEconomist via Instapundit):

It is the sad fate of American overseas food aid to occupy a policy “sweet spot”, says Chris Barrett, an expert in the subject at Cornell University. Its budget, the largest of any country’s, is big enough to attract rapacious special interests, but still sufficiently small and complex that its scandalous inefficiencies rarely make headlines.

Scandalous barely covers it. Since America began donating surplus wheat, corn meal, vegetable oil and other farm commodities to the world’s hungry six decades ago, the programme has been captured by an “iron triangle” of farm interests, shippers and voluntary organisations, with plenty of help from Congress. Rules state that most food aid must be bought from American farmers and processed in America. At least half must then be carried on American-flag ships. With competition severely curbed, ocean shipping eats up 16% of the budget for the largest food-aid programme, Food for Peace.

In a related scandal called “monetisation”, involving non-emergency aid (which represents about 30% of Food for Peace), charities and non-governmental outfits receive American produce, sell it on local markets abroad and then use the proceeds for good works. Compared to directly funding projects, “inherently inefficient” monetisation on average wastes 25% of the money sent, according to the Government Accountability Office. And the food supplied often floods fragile markets, hurting local farmers.

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