I recently attended a hearing held by the House Sub-Committee on Africa and Global Health on the effectiveness of US food aid, specifically the use of locally and regionally-procured aid (LRP) as opposed to traditional in-kind aid.

Sub-committee members Rep. Diane Watson (D-CA) and Rep. Lynn Woolsey (D-CA) joined Chairman Donald Payne (D-NJ) to hear testimonies from senior officials from relevant US government offices, including the Government Accountability Office (GAO), United States Agency for International Development (USAID), Department of Agriculture (USDA) and Department of Transportation (DoT).

Prior to the testimonies, Payne, Watson, and Woolsey re-iterated the “monumental nature of world hunger,” reflected in the large portion of international aid designated to food assistance. This food aid is largely in the form of US-grown and shipped commodities, or in-kind aid – $2.1 million in 2008. In recent years, however, many are looking to the possibility of local or regionally-procured food aid. The World Food Program (WFP), for example, now almost exclusively employs LRP methods. The sub-committee asked: how effective is LRP and what are its potential challenges?

The hearing coincided with the release of a GAO report on the effectiveness of LRP, which much of the discussion centered around. It found that:

• LRP can be a less expensive method of food assistance: the average cost of WFP’s local procurements in sub-Saharan Africa was 34% lower than the food aid shipped from the United States.
• LRP also arrives more promptly: whereas in-kind food assistance took an average of 147 days to reach its destination, local and regional procurements took 35 and 41 days, respectively.
• Challenges do exist for LRP implementation, including the lack of reliable suppliers, weak legal systems in receiving countries, restrictions on donor funding, and limited infrastructure.

The report also noted the possibility of rising prices due to increasing demand in those regions where food is locally procured – making food more costly to families who already cannot afford it. This lack of reliable market intelligence – when and how to purchase in local markets – could curtail LRP’s success.

It’s important to ask as well, if LRP would stimulate or depress local and regional economies. Bud Philbrook, Deputy Undersecretary at the USDA noted that, “poorly targeted local and regional purchases have the potential to lead to price spikes and shortages of staple foods in source countries.” Too much demand in local markets can overwhelm the market and cause shortages that could harm more than help. The USDA noted that this risk exists for in-kind food aid as well and suggests that, “the best way to mitigate these potential adverse affects is through improved market intelligence.”

Most of the testimonies agreed that LRP could be an effective complement to in-kind aid, rather than a complete substitute. Jon Brause, Deputy Assistant Administrator at USAID explained, “Our U.S.-grown food will continue to play the primary role in meeting global emergency needs. The objective of alternative procurement methods…is to increase the number of tools at our disposal to ensure the greater effectiveness, efficiency, and impact of the U.S. Government humanitarian response – not to overhaul the current in-kind program.”

For more information, check out this Guardian article on the GAO findings.

-Pooja Gupta