Institute for Agriculture and Trade Policy (IATP): WTO Doha Negotiations Threaten to Encourage Inefficient Food Aid Delivery
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FOR IMMEDIATE RELEASE
July 18, 2008
2:17 PM
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CONTACT: Institute for Agriculture and Trade Policy (IATP)
Carin Smaller, Geneva, 41 22 789 0734
Ben Lilliston, Minneapolis, 612 870 3416 |
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WTO Doha Negotiations Threaten to Encourage
Inefficient Food Aid Delivery
Proposed Rules Would Continue Wasteful U.S. System,
Maintain Trade Distortions
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MINNEAPOLIS/GENEVA - July 18 - Revised rules on food aid in the latest negotiating text at
the World Trade Organization fail to reduce adequately the scope for the sale of
food aid and encourage a highly wasteful, trade distorting system, according to
a letter sent to trade ministers today from the Institute for Agriculture and Trade
Policy, Canadian Foodgrains Bank and Oxfam International.
The WTO will hold a mini-ministerial beginning July 21 in Geneva, in a last ditch
attempt to conclude the Doha Round of negotiations. The latest agriculture text,
released on July 10, includes language that would continue to permit a broad scope
for food aid monetization – a practice primarily used by the U.S. food aid program.
Monetization is the sale of food aid in developing countries to generate cash, often
for non-food activities. The recipients are generally NGOs, not governments.
Monetization encourages a very inefficient system – where U.S. food is shipped
to the recipient country at great cost. The sale of food aid often displaces commercial
sales of local or regional production, thereby undermining farmers in
recipient countries. The sales frequently cause prices to drop temporarily in local
markets, creating volatility and depressing prices overall in situations where
production needs urgently to be encouraged.
“During this food crisis, we should be improving rules to ensure much-needed
food gets to as many people as possible, not allowing a highly inefficient and
trade distorting system to continue, ” said IATP’s Sophia Murphy. “Nearly all
other food aid donor countries agree, an untied, cash-based system would make
the best use of scarce and expensive food aid resources.”
The letter also points out that the principle framework for food aid was established
by the Food Aid Convention, which is due for renegotiation. WTO rules
supporting monetization would threaten the viability of the Food Aid Convention,
which is better equipped to set a framework for all aspects of food aid.
You can read the full letter to trade ministers at: www.tradeobservatory.org
IATP works locally and globally at the intersection of policy and practice to ensure fair
and sustainable food, farm and trade systems.
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