How can we fix food aid?

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Rich nations are gathering behind closed doors to redraw the outdated and highly political Food Aid Convention, the Globe's Jessica Leeder reported Monday, and the timing is critical.

"The food-aid sector is suffering from chronic fragmentation - the responsibility for feeding the world's hungry is shared by a handful of overlapping humanitarian organizations with varying degrees of effectiveness - and panic is escalating over how to feed the one-billion-plus people in need of more food; unrelenting volatility has seized commodity markets; and food security is looming ever-larger on the global agenda, including that of the G20, as its connection to climate change, development and political instability grows clearer," she wrote.

And as Paul Waldie reported Tuesday, the bulk of food assistance comes in the form of emergency relief instead of investment in long-term agricultural projects.

"It is increasingly recognized that tackling an emergency by solely covering immediate humanitarian needs will not provide a sustainable solution," the United Nations' Food and Agriculture Organization said in a recent report. "Interventions should instead have a longer-term horizon and address the underlying reasons for food insecurity."

How can food aid be effective as prices rise?

What can Canada do to take a leadership role in feeding the hungry?

In Wednesday's Globe and Mail Stuart Clark argued that Canada could take the reigns in pushing for international food reserves to cushion aid from volatile markets, calm donors' nerves and ultimately feed more mouths.

Mr. Clark, a senior policy adviser for the Winnipeg-based Canadian Foodgrains Bank, a partnership of 15 churches and church-based agencies working to end hunger in developing countries took reader questions in a live discussion on globeandmail.com.

Here's a transcript of that discussion:

Ann Hui: Hi everyone. I'm an editor at globeandmail.com. Our discussion with Stuart Clark will begin shortly. In the meantime, please feel free to leave your questions and comments for him.

Ann Hui: Okay - so Stuart's just joined us. Welcome, Stuart. For those of you who don't know, Stuart Clark is a senior policy adviser for the Winnipeg-based Canadian Foodgrains Bank, a partnership of 15 churches and church-based agencies working to end hunger in developing countries.

Stuart Clark: Thanks for the introduction. I look forward to trying to untangle any misunderstandings.

Ann Hui: I'm going to jump right in with the first question. There's been a lot of talk recently of a 'food crisis', and in Jessica Leeder's story Monday, she wrote that the food-aid sector is suffering from 'chronic fragmentation'. In your view, is this an accurate take on what's happening?

Ann Hui: Here's a quote from Jessica's story: "The responsibility for feeding the world's hungry is shared by a handful of overlapping humanitarian organizations with varying degrees of effectiveness - and panic is escalating over how to feed the one-billion-plus people in need of more food; unrelenting volatility has seized commodity markets; and food security is looming ever-larger on the global agenda, including that of the G20, as its connection to climate change, development and political instability grows clearer."

Stuart Clark: Food aid has always been a bit of an 'orphan', largely due to the fact that the world's largest donor, the US, has continued to use it to dispose of agricultural surpluses. Whether or not that was what was needed.

Stuart Clark: Now we have reached a historic change. Now biofuels in the US use 120 million tonnes of corn each year. The entire US food aid program is only 5 million tonnes.

Ann Hui: In your opinion piece in today's Globe and Mail, you argue that food being used for biofuels is one contributing factor to the 'food crisis.' What are some other reasons?

Stuart Clark: With climate change threatening food supplies in many tropical countries, the ability to share food with those who can't just buy it becomes even more important even as some countries cut back their food aid.

Stuart Clark: Along with the development of biofuels as a major use for food crops, the expanding population and its desire for meat and other animal products is driving consumption closer and closer to production. We are getting short of agricultural commodities and this is driving up prices.

Ann Hui: In your opinion piece, you also wrote that 50 years ago, the most popular form of food aid was simply to deliver surpluses from developed countries to those who needed it most - what Paul Waldie describes as a 'food Band-aid' in Tuesday's Globe and Mail. But 50 years later, you argue, the way countries deal with food aid "is changing - and getting a lot harder." Can you begin by providing a brief explanation of this statement?

Stuart Clark: The most widespread change is the source of food aid. Countries like Canada now buy food as close as possible to the need - reducing transportation time and cost and stimulating the local economy.

Stuart Clark: The other change is the way that food is provided. While it still make sense to provide food directly in some situations, more and more we use 'vouchers' that allow people to get their food from the local market. We are starting also to use straight gifts of cash where there is food locally available.

Ann Hui: And what are your thoughts on this? (Providing cash and vouchers, I mean) Is this an effective and sustainable method of providing food aid?

Stuart Clark: It is getting harder to provide food aid for several reasons - first the competition from biofuels, then there is the increased insecurity for agencies trying to deliver food and finally there is the price issue - food prices swing so wildly now it is hard to budget for food aid projects

Stuart Clark: Cash and vouchers make sense where there is food available in the local market and adding more buyers won't simply drive the price out of reach for other people. This applies particularly to those countries that have decent road systems so that more food can be brought in. Where areas are isolated, it is better to bring in food and distribute it.

Ann Hui: Your last comment actually relates to this reader question here:

[Comment From J Lindsay: ]I've heard that food aid can be disastrous for the agricultural industry of the recipient country, in that people stop buying food from their farmers once they can get it for free. Is this true?

Ann Hui: Thoughts on J. Lindsay's question?

Stuart Clark: A great question. If you distribute food to people who have the money to buy their own, Lindsay is correct. That is where it becomes very important to make sure that the food reaches those who CAN'T buy on the market.

Stuart Clark: Perhaps I can insert some recent news here. the US Congress has proposed to cut US food aid by 40%. If this is passed, it means that about 15 million people and 2.5 million school children will not receive the food they would have otherwise. it shows how vulnerable food aid is now.

Ann Hui: You've already mentioned cash and vouchers, but here's another reader question, this one from Christina de Jong:

[Comment From Christina de Jong: ]/b> What are some alternatives to just supplying food... could developed countries work with developing countries to develop their agricultural "prowess" - although with climate change, perhaps their abilities to grow their own food is severely challenged - by droughts or conversely, floods... it's difficult not to despair over the situation.

Ann Hui: Are there other alternatives, Stuart?

Stuart Clark: It is not so much a question of alternatives as complements. When people are in acute hunger situations - and these will always happen due to civil unrest (Libya) or natural disasters (Haiti) - then getting them food somehow is an absolute priority. However, it is just as important to restore and improve local food production - if possible making it resistant to climate change, etc. This is actually being done - Canada contributed $600 million over the past three years for such work and it has made a huge difference in countries like Ghana, Mozambique and Ethiopia.

Ann Hui: You also mentioned in your piece the idea of creating an international food reserve and regional emergency food reserves. Can you describe how you see such reserves working?

Stuart Clark: Despair is an understandable reaction given that most of the news is about problems. Check out reports on 'conservation agriculture' on the Foodgrains website - its an inspiring story of local innovations.

Ann Hui: (Here's a link to the Foodgrains website, everybody)

Stuart Clark: Right now one of the main reasons why food prices are so up and down is because there is no certainty of supply in the international market. If we had an international reserve for such things as wheat, the market would be reassured and prices would be more stable.

Stuart Clark: As for the idea of emergency reserves, these would allow donors to buy food when the prices are down so that they can respond from the reserves when prices are high. It is a way of getting increased supply without waiting for farmers to plant more acres next season.

Ann Hui: The Globe's Paul Waldie's story from Tuesday's paper gave the impression that there's been a shift (or that there should be a shift) in emphasis between food aid for 'emergencies' and food aid for 'development.' What are your thoughts on this? And here's the link to Paul's story again.

Stuart Clark: As I indicated earlier, food, cash and vouchers are good ways to get food to people suffering from acute or chronic hunger. However, for projects such as providing irrigation or new ways to market agricultural products it is cash that is needed, not food. For quite a while, agencies especially from the US have only been given food by their governments to pay for such agricultural development. This is a poor use of food - a dollar's worth of food often yielded only 50 cents of cash in the local market and hurt local farmers at the same time. The Obama Administration is trying to find more money to support these activities so that these agencies don't have to rely on selling food aid.

Stuart Clark: In short, food should be used for emergencies and for 'food safety nets' in places threatened by hunger. Agricultural development, which is extremely important in the long run, should be funded by cash, not food.

Ann Hui: So if I'm understanding you correctly, you're saying that instead of shifting from one to the other, that both approaches - 'development' and 'emergency' - should be used together?

Stuart Clark: Yes, and they rely on each other. Emergency assistance needs development activities to follow on so that we are not right back into an emergency. But development needs safety nets so that when hunger threatens help can be right there to allow the development activities to continue and not be undermined by a food crisis.

Ann Hui: Let's move onto another reader question. This one comes from David McLaren:

[Comment From David McLaren: ]/b> What role are speculators playing in the price of food and food shortage? Is there a food "bubble" in the market?

Stuart Clark: Just for information, in recent years Canada has provided about $250 million towards food assistance and the same amount (roughly) for agricultural development.

Ann Hui: (Here's an infographic from Monday's paper that breaks down what Canada gives, and where that aid goes to)

Stuart Clark: Speculators go where there is 'price volatility' (big swings in prices). They started to get interested in food commodities when the real estate market collapsed. The food market is tiny compared to real estate or oil so they had a dramatic effect in amplifying the price swings. But they didn't cause the prices to go up - that we supply and demand.

Stuart Clark: Last week, many of the speculators in the food market rushed to the oil market with the news from Libya. The food prices dropped like a stone - not that far but very quickly.

Stuart Clark: Since then the markets have gyrated wildly - not a great reassurance for the government officials trying to figure out what they can promise at the Food Aid Convention negotiations in London this week.

Ann Hui: Another reader question for you, Stuart:

[Comment From Guest: ]/b> You mentioned in the piece in the globe that no one wanted to invest in agriculture - is this changing now? Why?

Stuart Clark: Agriculture is similar to other economic activities - if there's money to be made then people will get active. The problem for the past thirty years is that the price of agricultural commodities has been often less than what it costs to produce it. Our farmers were left spending the value of their farms to keep on farming. Since 2005 the prices of agricultural commodities have been steadily (and not so steadily recently) rising. As a result, developing country governments are now budgeting to support their agricultural development - which they didn't do before. But there is also a lot of investors starting to buy land in developing countries too.

Ann Hui: This question comes to you from reader "Annie":

[Comment From Annie: ]We often hear of x amount of dollars given in aid but how effective is the aid money in reaching the developing countries?

Ann Hui: In fact, Stuart, Annie's question seems to reflect a general disillusionment among many Globe commenters on our food aid stories about the effectiveness of aid money.

Ann Hui: Here's a sample of one of those comments:

"Poverty and starvation are caused by corrupt governments... I'd like to see a 'tough love' approach. We'll give you food, money and support but we'll also implement a new government" (Again, this is from our reader comments)

Ann Hui: Thoughts?

Stuart Clark: Well, in the case of food assistance, the percentage of the aid that 'gets there' is generally very high (95%+) but the question then becomes what impact does it have? In the case of other development activities it is more complicated because the money is rarely given directly to people but used to build and develop infrastructure that will benefit them.

Stuart Clark: Good governance makes a huge difference. Canada supports Ghana with a lot of our aid and Ghana has made huge strides in ending hunger, poverty, illiteracy, etc. Our dollars together with Ghana's government have been very effective. There are other good stories too such as Mozambique.

Stuart Clark: The problem with 'tough love' and developing country governments is that our sticks are not very effective. 'Carrots' work much better in promoting long term development.

Ann Hui: Another question from reader "Annie":

Ann Hui: Annie writes: "What can we (regular folk over here in North America) do to help fix food aid? "

Stuart Clark: This time Canada can (and I hope is) making a difference. Canada is leading the negotiations for a new Food Assistance Convention this week in London. Canada is still effective at helping other broker good compromises and is in favour of such things as improving the food aid 'toolbox' I spoke about earlier.

Stuart Clark: There is a big question whether or not Canada will continue to promise an amount of food or resort to the 'safer' promise of money. I hope that we can find a good middle way there too.

Ann Hui: I'll make this the last question: You've already mentioned a number of things that you think need to be done, but what do you think are the most important things Canada and the rest of the international community needs to do now (both at the Food Assistance Convention and after) to help 'fix' food aid?

Stuart Clark: Perhaps the most important thing is to carefully look first at the situation where food aid seems to be needed and decide on the local situation what is the best response. Far too often we have relied on what we have rather than what is needed. "Needs Assessment" with substantial local input is very important. And we need to make sure that we still have the flexible resources to do the right thing. I hope Canada will continue to provide leadership in this.

Stuart Clark: Good bye.

Ann Hui: Here's a link again to Stuart's article, everyone.