Food aid and famine

It is a well-known fact that food aid can destroy agriculture in poor countries. But food aid not only removes incentives for farming, it also destroys the distribution system. The small trader with a pickup truck buying and selling grain can’t compete with food delivered and dumped free of charge on the market. Most famines are local shortages that become famines because of distribution problems. Once the local traders have been forced out of business, chances are that the next local shortage will become a famine.

BBC has this story (via Mahalanobis),

Ethiopia is locked into a vicious downward spiral of food aid dependency, a crop monitoring agency has warned.

The Famine Early Warning System says 10.4 million people are dependent on aid and Ethiopia has a chronically high level of food insecurity.

Its report says government measures to reduce this number are failing and the number of people unable to feed themselves will go on rising.

Imported food aid is running at more than 700,000 tonnes a year.

This aid is successful at helping people overcome their immediate needs, Fews says, but it undermines local markets.

Imported food, donated mainly by the United States, depresses the price paid to local farmers, reducing their incentives to invest in better agriculture.

Even in years of good harvests the outlook is bleak, with Ethiopia’s food production stagnant, and the country’s birth-rate pushing up the current population of 77 million by two million a year.

It says the current harvest outlook is good, but comes on the back of recent poor harvests.

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