Giving food surpluses without undermining local farmers

Dr David Chapman

One way for the EC and America to distribute their food surpluses is simply to transport the food to the areas of food shortage and to distribute it free to those in need. But this tends to disrupt what local food production there is, causing food prices to collapse and putting local farmers out of business.

However, it seems possible to design a method of distributing surplus food so as not to undermine local agriculture:

The donor country or agency transferring the surplus food, should not give it away but should sell it, and do this through whatever market channels the recipient country has been using already. But before the donor does this, it should estimate:

- How much in local currency it is likely to receive for the food; and
- By how much this release of foreign food on to the local market is likely to reduce the price received by the local farmers for their produce.

'The donor would pay, preferably in advance of the sale of the food, a compensation to the farmers of at least as much as they were expected to lose'

The donor would then pay, preferably in advance of the sale of the food, a compensation to the farmers of at least as much as they were expected to lose. This could perhaps be given as a payment of so much per hectare of cultivated land, with perhaps a ceiling amount per holding, in order not unduly to benefit large farmers.

The rest of the expected revenue from sale of the food could be distributed as:

- Cash aid (or perhaps wages to do public works, etc) to destitute or poor people, whether farmers or not;
- Special aid to farmers whose food production had collapsed, to enable them to get production going again; and
- Conditional aid to farmers, paying them to adopt more ecologically sustainable methods, such as tree-planting, anti-erosion contour walls, or whatever was appropriate to the area.

The local currency for this would be purchased with the donor's currency on the currency exchange market. The revenue from the sale of the food could then be used either to finance the next cycle of food aid (if there was to be one) or to change back into the donor's currency so that the donor could then be partly recouped for its original expenditure.

Thus it seems that a scheme such as this could immediately benefit the hungry people, and also, far from undermining the local agriculture, could actually enable it to increase its food production - and not only in the short term, but on a sustainable basis.

Dr David Chapman, Democracy Design Forum, Coles Centre, Buxhall, Stowmarket, Suffolk, IP14 3EB (tel 0449 736 223).

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