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Article Excerpt
The current global agreement governing food aid--the Food Aid Convention (FAC)--has been subject to annual renewals since it expired in 2002. Critics have pointed to some serious limitations, but negotiations over a new FAC have become entangled in US-European agricultural trade disputes. Other issues in renegotiation include the patchwork quilt of food aid governance, in which the FAC's mandate overlaps with those of several other institutions; inadequate transparency; the nature of commitments--whether to express them in tonnage, value, or nutritional terms; the level of commitments and their distribution among donors; monitoring and enforcement of commitments; stakeholder representation on the FAC governing body; and the convention's institutional "home." Also problematic is whether the FAC should have an "instrument focus"--food aid--or a "problem focus," such as "food security." KEYWORDS: Food Aid Convention, World Trade Organization, food aid, local purchase, humanitarian assistance.
The governance of international food aid flows is a patchwork quilt of institutions and agreements that have emerged over the last fifty years. These are characterized by overlapping mandates, differing degrees of authority and legitimacy, varied levels of transparency in decision-making, and problematic stakeholder representation--so much so that one recent analysis described them as "dysfunctional and outdated" and thus "ineffective." (1) One component of this governance structure is the Food Aid Convention (FAC). First signed in 1967, and renewed five times since then, the FAC is unique in that it is the only treaty under which signatories have a legal obligation to provide international development assistance.
The current FAC dates from 1999. It was due to expire in 2002, but members have agreed to a series of ad hoc extensions that have kept it in operation since then. Given the dramatic changes in global food security since 1999, most notably the rise in global food prices, there is a good chance that negotiations on a new convention are likely to begin soon. The purpose of this article is to identify key issues surrounding FAC renegotiation. Understanding these issues requires familiarity with a considerable body of background information, including the origins of the FAC, its current objectives, and a description of the principal controversies that surround it. We therefore begin with a brief review of these topics, followed by a description of other important elements of food aid governance. Our final background component is a short discussion of the world food situation and outlook and the implications for food aid needs. We then examine the key questions that may arise in the FAC renegotiation: the objectives; the nature of commitments--tonnage, value, nutritional aspects; the level of commitments and their distribution; monitoring and enforcement of commitments; representation on the FAC governing body; and the FAC's home base.
Background
History and Current Status
The FAC is one component of the International Grains Agreement, along with the Grains Trade Convention. The London-based International Grains Council (IGC--formerly the International Wheat Council) has served as the FAC's host agency and secretariat since its inception in 1967. This intergovernmental organization provides a forum on world grain trade information. It monitors markets and ocean freight rates and also provides monthly and annual reports on production, consumption, stocks, and prices. The IGC compiles member reports on food aid shipments as well. (2) Its data are not publicly available; only signatory governments receive them.
In the years prior to the first FAC, the United States supplied most international food aid. In the mid-1960s, changes in domestic US farm policy and weather- and war-induced crop failures in developing countries led to a tightening of global grain stocks. The United States was also concerned about growing grain surpluses generated by the European Community's Common Agricultural Program, while the Europeans wanted to secure their newfound role as a significant grain exporter via a new international wheat agreement. In the context of the Kennedy Round world trade negotiations, these circumstances led to the emergence of the FAC and a new Wheat Trade Convention as the International Grains Agreement. The United States extracted European pledges to "share the burden" of food aid to poor countries as a quid pro quo for a commercial trade agreement. (3) The FAC has been subsequently renewed in 1971, 1980, 1986, 1995, and, most recently, in 1999. Signatories to the current version are Argentina, Australia, Canada, Japan, Norway, Switzerland, the United States, and the European Union (EU) and its member states.
The first FAC's stated objective was "to carry out a food aid program with the help of contributions for the benefit of developing countries." It set a minimum tonnage level of 4.06 million metric tons of grain, with signatories each agreeing to provide a fixed portion. It also established a Food Aid Committee to receive regular reports on the amount, content, channeling, and terms of members' food aid contributions; review the purchase of grains financed by cash contributions; examine the way in which obligations have been fulfilled; and exchange information on food aid functioning, including its effects on food production in recipient countries. (4).
Some aspects of the FAC have remained largely unchanged, while others have shifted significantly over time. Constant features include a minimum tonnage commitment, although its size has varied (see Figure 1); use of the IGC as host agency and secretariat; limited membership (donor governments only); and decisionmaking by consensus.
[FIGURE 1 OMITTED]
An important change is that humanitarian and development assistance policy concerns now play a much larger role. The objectives of the 1999 FAC, as outlined in Article I, are to
contribute to world food security and to improve the ability of the international community to respond to emergency food situations and other food needs of developing countries by: (a) making appropriate levels of food aid available on a predictable basis, as determined by the provisions of the Convention; (b) encouraging members to ensure that the food aid provided is aimed particularly at the alleviation of poverty and hunger of the most vulnerable groups, and is consistent with agricultural development in those countries; (c) including principles for maximizing the impact, the effectiveness and quality of the food aid provided as a tool in support of food security; and, (d) providing a framework for cooperation, coordination and information-sharing among members on food aid related matters to achieve greater efficiency in all aspects of food aid operations and better coherence between food aid and other policy instruments. (5)
Also, from an initial focus on grains, the FAC now includes pulses, root crops, edible oil, sugar, and skimmed milk powder among the commodities that can count toward fulfilling pledges. Although donor surplus disposal remains a factor (e.g., the dairy products), this change is partly a result of increased donor preference for procurement of food aid in developing countries, as it includes more foods regularly consumed by poor people in those countries. The current EU FAC pledge comprises [member of] 130 million in cash as well as a tonnage level, and several donors have agreed to cover the cost of transporting and delivering food, particularly in the case of emergencies and food aid provided to UN-classified Least Developed Countries. The FAC encourages members to provide food aid in grant form, rather than as concessional sales, and to decouple food aid from export promotion. The eligible commodities also include seeds, in recognition of the growing emergency character of food aid. There is as well a greater focus on nutrition, with vitamin - and mineral - fortified commodities now eligible.
Criticisms of the FAC: Level and Accounting of Commitments
The main focus of criticism of the FAC centers on accounting and the level of commitments.
Members' commitments are set out in Article III ("Quantities and Quality") of the convention. Under the article, members agree to provide food aid to developing countries or the cash equivalent; this promise is referred to as "the commitment." This is expressed in terms of either tons of wheat equivalent, the value of the wheat equivalent, or in a combination of tonnage and value. If a member expresses their commitment in value terms, they are required to also specify a guaranteed annual tonnage. Value can include transport and other operational costs associated with the provision of food aid, up to the acquisition cost...
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