Thursday, 6 September 2007

Care breaks ranks with NGOs, forgoes $45m in US food aid

Special Correspondent
Care International — one of the largest humanitarian agencies in East Africa, with operations in all countries in the region — will not take direct US food aid grants from 2009 but will buy from the open market through funds from philanthropic organisations and other donors.

The decision in the outcome of an internal discussion that has been going on in the organisation for nearly half a decade about the impact of the grants on local agriculture and food markets. By turning down food aid, Care will essentially lose $45 million in aid a year.

Under the current system, the US government buys relief food from the American market and donates it to aid groups as an indirect form of financing. The groups are authorised to sell the food in the local markets and use the money for their programmes.

As a result of the system, it is not unusual to see adverts in the East African media by international NGOs advertising huge consignments of foodstuffs such as wheat, maize and oils for sale locally. The system is said to raise $180 million each year for relief agencies.

According to Care, the Kenyan market has seen major incidents of “dumping” by relief organisations in recent years. For example, in 2003, a private Kenyan company bought almost 9,000 metric tonnes of crude US soybean oil from an international NGO for use in its edible oil production facility, bypassing local sources.

The move by Care is significant because it has been the largest beneficiary of the system over the years followed by Catholic Relief Services (CRS), which also has significant operations regionally. Both organisations say they recover just 70 to 80 per cent of the money used to buy the food by the US government from their sales in beneficiary countries.

A more efficient transfer of aid, critics say, would be a simple transfer of cash through the conventional banking systems to enable relief organisations to buy what they need locally, supporting local agriculture.

CRS and Save the Children, however say that they will not stop converting the American donations into money unless another system of accessing American aid is put in place.

Some NGO beneficiaries of the US system say that the move by Care was unwarranted, and that it did not take into cognisance all the variables in the matter.

World Vision and 14 organisations under the Alliance for Food Aid (AFA) oppose Care’s move, arguing that the aid system helps to prevent food demand spikes in affected countries due to donor buying. However, critics say that the system was crafted to favour America’s highly subsidised farming sector without due consideration to the recipient country’s agricultural sector.

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