The Horn of Africa is experiencing its worst drought in 60 years. The impact is so serious that the United Nations has declared a famine in parts of southern Somalia. Several million people face starvation and the UN has called for an additional $300 million in emergency aid to avert an even bigger disaster in the region. The magnitude of the situation reminds us that the renegotiation of the Food Aid Convention (FAC) could not come soon enough.
The FAC is an international agreement among eight major donors (Australia, Argentina, Canada, European Union, Japan, Norway, Switzerland and the United States) that sets out rules for food aid. Its signatories agree to provide a minimum amount of food aid each year to meet the needs of the world’s hungry. The intention of a guaranteed amount of aid is to reduce the UN’s need to rely on special aid appeals to address crises.
Canada has played a leading role in the renegotiation the FAC as chair of the Food Aid Committee, the body that oversees the treaty, since the discussions began in June 2010. Negotiators aspire to have a revised agreement in place by the end of 2011. The current talks are especially challenging given the major changes that have taken place in the negotiating context since the treaty was last updated in 1999.
To start, a number of donors have “untied” their food aid in recent years, meaning they no longer require the food aid they provide to be sourced within the donor country. The European Union, Canada and Australia now provide financial resources that enable the purchase of food in developing countries. This kind of food assistance can reach those in need more quickly, especially in emergency situations.
A second significant change since the late-1990s is that a higher proportion of food aid is now allocated to emergencies, reflecting the growing number of man-made and natural disasters. Because of this rise, more food aid is now channelled through multilateral agencies, primarily the UN World Food Program (WFP).
A third key difference today is the uncertain world food situation, characterized by a tight food supply accompanied by rising and volatile food prices, which makes food aid provision more expensive and difficult to plan. Because donors budget for their donations in financial terms, higher food prices directly translate into fewer tonnes of food aid, illustrated by the dramatic drop in the volume of food aid since the late 1990s.
These changes in the broader context have influenced donors’ views on what a new FAC should look like. The part of the treaty most likely to see change is the way donors’ commitments of food aid are counted, and at what level they will be set. Until now, the FAC has counted donor pledges in tonnes of wheat equivalent. The level of overall commitment since 1999 has been 5.4 million tonnes.
Many see tonnes of wheat equivalent as a clumsy and outdated measure. Some donors have proposed counting food aid in cash terms, which is easier to measure and plan, especially for donors that have untied their aid. Cash is also easier to use in emergencies where local purchases can mean faster response times as well as lower costs. The downside of counting commitments in cash is that it transfers the risk of fluctuating food prices onto recipients — an important consideration given the high and volatile food prices projected for the next decade.
Some NGOs have proposed that donors should commit to feed a minimum number of people rather than simply provide tonnes of food or a set amount of cash. Such an approach could more accurately measure the impact of food aid, not just in terms of calories provided, but also in terms of nutrition and access. It also puts the focus on the needs of the recipient rather than the needs of the donor. Donors may not like the uncertain costs associated with aid commitments counted in this way, but NGOs argue that donors are more able than recipients to absorb the risk of fluctuating food prices.
Also unclear is the overall amount of aid likely to be provided collectively by donors under a new FAC. Continued uncertainty about the future world food supply combined with tight aid budgets have made donors wary of increasing their pledges. Recent proposals to drastically cut the food aid budget in the U.S., the world’s largest donor of food aid, are a sign that the most likely direction of overall food aid commitment under the FAC is downward. And if the donors cannot agree on a common measure for their donations, a collective guarantee of a minimum amount of aid may well be impossible for donors to provide.
Canada pledged an additional $50 million in aid for the Horn of Africa, a gesture that perhaps will set an example for other donors as the FAC negotiations continue. How members will address the thorny issues that are still on the table is as yet unclear. Donors must consider the broad impact of their decisions not just for their own aid budgets, but also for the world’s hungriest people.