OECD/AID: Sending cash not food is the best way to help developing countries feed starving populations, according to a new report written for the Organisation for Economic Co-operation and Development.
Aid supplied as food often arrives late, disrupts local markets and costs on average a third more than providing financial support. Replacing food aid with cash would generate an additional $750 million (€624 million) in aid for poor countries, more than the debt relief package agreed by the G8 nations this year, said Dr Edward Clay of the Overseas Development Institute think tank in London, which compiled the study.
At present, much food aid comes from surpluses generated by western agriculture.
Dr Clay's survey shows that this food typically takes four to five months to arrive at an emergency. In contrast, cash can be used by relief organisations to buy food immediately from neighbouring countries. This has the added bonus of pushing cash into the local economy.
The proportion of development aid supplied as food has dropped considerably since the 1960s - now less than 5 per cent - but some countries deliver almost all aid in food.
Dr Clay said some big donors such as the US were often influenced by commercial considerations. "Most of it has to be grown by American farmers, the greater part of it has to be bagged, processed by American companies and at least three-quarters of it has to be shipped on vessels which are flag-carrying vessels, in other words they're registered in the United States."
This "tied aid" has become a major sticking point in the current Doha round of World Trade Organisation (WTO) talks. The WTO argues that tied food aid is a form of export support for the developed world's farmers.
Some countries have already responded to the report. Canada last week announced a change in policy, buying up to 50 per cent of food aid in developing countries, a fivefold increase over its previous limit.
Andy Mitchell, Canadian minister of agriculture, said: "It will help lower transportation costs, provide more culturally-appropriate food, and allow Canada's aid dollars to go further while supporting farmers in developing countries."
Susanne Jaspars, a nutrition expert with Oxfam, said imported food was often unsuitable for its recipients. Homegrown grains, pulses and cooking oil were often substituted with unfamiliar cereals that families were unable to prepare.