By Brian Doherty
July 17, 2009
A Wall Street Journal reporter asks if western food aid policies are truly providing aid.
Although billions have been spent on foreign development and food aid to Africa in the decades since World War II, over half a billion people remain undernourished in Africa today according to the U.S. Department of Agriculture—a number that’s 53 percent higher than it was in 1992 when the government first began accumulating such figures.
While the reasons for continuing poverty are manifold, Western government programs such as food aid and agriculture and ethanol subsidies deserve their share of the blame. So argues the new book Enough: Why the World’s Poorest Starve in an Age of Plenty (PublicAffairs), written by Wall Street Journal reporters Roger Thurow and Scott Kilman, each of whom have years of experience writing page-one stories for the Journal on African matters, particularly African famine.
Unlike anti-aid analysts such as William Easterly and Dambisa Moyo, Thurow and Kilman see plenty of room for more (intelligent) action on the part of Western governments. In fact, Kilman argues that genuine agricultural development aid has yet to be sufficiently and intelligently attempted.
But their reporting in the Journal and in Enough provides vivid examples of the ways both aid policy and U.S. farm policy hurts, not helps, the long-term well-being of Africans as they struggle for self-sufficiency.
Senior Editor Brian Doherty spoke with Scott Kilman in July.
Reason: Why isn’t food aid an unalloyed good for an often-starving continent?
Scott Kilman: Western food aid to Africa started in the 1950s to serve two purposes, and only one was to fight hunger overseas. The second reason was that food aid had a lot of political support. The U.S. government was trying to get rid of excess crops. Politicians like Hubert Humphrey realized he could build a political coalition for fighting hunger overseas because there was something in it for us at home: to get rid of excess crops that were depressing prices.
The question wasn’t asked for decades: What’s the most effective way to help the hungry overseas? And our food aid program is not the best way to do it. It has unintended effects. Now, we spend roughly $1 to 2 billion a year on food aid—shipping actual food and grain across the ocean. And commodities sent over in these food ships has to be U.S.-grown. That in itself creates problems once you look at the logistics, taking wheat grown in Kansas under U.S. government specs, getting it shipped the way the U.S. government approves, on U.S.-owned ships which tend to charge the highest rates, put in big bags because that the only way that ports in poor countries can handle it, and by the time it gets unloaded there it’s half a year from when the government decided to send help. About 50 percent of the cost of food aid gets sucked up in the logistics.
We argue we should spend some of our food aid budget closer to the disaster. Africa might have famine in one country or two, but at the same time other parts of Africa have a glut. Part of the benefit [of using aid money to buy African food, not ship American surplus] is the food aid becomes economic stimulus and creates a market for poor farmers in Africa. But it flies in the face of political convention. You’ve had the Bush administration suggest trying this [buying some food for aid in Africa itself], and there will be some experimenting with it in the new farm bill.
Reason: Your book has an interesting set piece from Nazareth, Ethiopia, in 2003, in which U.S. food aid is driven by Ethiopian warehouses filled with the same food commodities, produced locally, rotting.
Kilman: By the time food aid arrives trundling down the road it’s usually after the worst of the calamity, and it often ends up disrupting food markets in Ethiopia. So in this case there was Ethiopian grain but farmers weren’t able to sell it because suddenly the U.S. government turns up as a competitor. Food aid swarmed in and depressed prices. It would have made more sense and been of more benefit if Western donors bought what was available in Ethiopia. African farmers describe it to us this way: it boils down to them scratching their heads and saying, it seems as if America needs hungry Africans to eat their surplus.
In the book we track down Sen. Dale Bumpers from Arkansas, he’s retired now, and ask him why [he insisted in 1986 that no U.S. aid could go toward studying, training, or helping other countries in any way to grow a crop that competes with any U.S. crop]. His first response was, he didn’t really remember it happened!
The way we award money to farmers for every bushel they produce of favored crops, like soybean and cotton, it spurs them to produce as much as they can to get more subsidies. This drives down prices in world markets, but the market signal to U.S. farmers to produce less doesn’t get through because of the subsidy. I don’t think until this decade that I as a reporter became aware of how subsidies have impact in the poorer parts of the world.
I was writing about spats between the U.S. and the European Union over their subsidies, and thought of it as just a trade war. I wasn’t thinking about, if our subsidy programs tend to depress prices, who else does that affect? Earlier this decade I woke up to the idea that it really affects farmers who don’t receive subsidies and only get what the market will bear. And oftentimes these farmers can grow crops cheaper than anyone else. The Doha round [of international trade talks] is comatose, and one of the big stumbling blocks is it could force the West to figure out how to change the way we run farm subsidy programs.
You have groups in the U.S. who have a very big interest in seeing the farm subsidy system continue the way it is, and it’s their first interest. You don’t have a political constituency organized around fighting hunger for hunger’s sake. It’s hard to find someone in the House or Senate who thinks of the hungry overseas as a constituency.
Reason: You also point the finger at an aspect of American energy policy in hurting the world’s hungry: our ethanol subsidies.
Kilman: The ethanol program creates a subsidy for demand on corn, which has a ripple effect on other crops. Farmers plant more corn, and plant less of something else. And what’s happened, I think unintentionally, is by creating a mandate for ethanol you tied the price of corn and indirectly the cost of a bunch of our food to the cost of oil.
Now one third of America’s biggest crop is used to make fuel, and that’s happened very rapidly. If you look at the price of corn today, it’s at a new plateau. Corn in the ‘90s and first half of this decade was usually $2 a bushel. Now a few weeks ago it was $4 a bushel, and now around $3.50, but it’s settling at a higher plateau. Soybeans have also settled at higher prices which means it’s more expensive to keep buying the same amount for food aid programs.
I was in Africa in 2007 when the price of corn first started going up. You are seeing food riots in the developing world, but I think it’s complicated. That run up in corn filters through other commodities, and what happens with the ethanol program and biofuel mandates is they have fed into a general environment where traders are willing to bid up prices. But in addition to ethanol, the developing middle class in emerging nations are eating better, want to eat more meat, and you need more grain to produce more meat.
There were many things going on in world food markets, I hate the cliché of "perfect storm" but it fits—a lot of bad things were coming together, and one was ethanol. I don’t blame ethanol solely for food riots. But demand for grain started rising faster than our ability to produce grain in this decade, and ethanol biofuels was one of the reasons.
Senior Editor Brian Doherty is author of This is Burning Man (BenBella), Radicals for Capitalism (PublicAffairs) and Gun Control on Trial (Cato Institute).