Ottawa bolsters food donations

from the Globe and Mail

No strings attached to 28-per-cent increase

KEVIN CARMICHAEL AND SHAWN MCCARTHY

OTTAWA — The federal government has responded to the growing global food crisis by increasing this year's international donation by 28 per cent to $230-million, and by forcing Canadian farmers to compete with foreign growers to supply the aid.

Amid record prices for wheat, rice and other farm commodities, the Harper government added $50-million to its food aid budget, which supports efforts by the United Nations to feed 73 million of the world's poorest and hungriest people.

In a major departure from the decades-old policy of requiring much of the aid budget to be spent on Canadian foodstuffs, International Co-operation Minister Beverley Oda said the money would go to the Rome-based World Food Programme with no strings attached.

In recent years, half of Ottawa's food aid was sourced in Canada. Prior to that, all of the food donations were bought in Canada and delivered to the world's poor.

The "tying" of food donations has been slammed by economists as inefficient and self-serving because it prevents humanitarian organizations from buying grain and other goods at the lowest price, increases transportation costs and diverts money to farmers in richer countries when it could be used to buy goods from local producers.

"The untying part is very important," said Louise Fréchette, the former deputy secretary-general at the UN and a distinguished fellow at the Centre for International Governance Innovation.

"Procurement in the country of the donor is not necessarily the cheapest way. It certainly limits the flexibility of the agencies that receive the contribution because they can't go to the lowest-priced item at the moment it needs it."

But agricultural groups argue that government aid should be used to support domestic farmers, or that the untied aid should be aimed at poor farmers in the developing world.

A spokesman for the Canadian Wheat Board said the aid program accounts for only a small fraction of its international sales, and wheat producers likely won't notice a drop in demand or price.

"But our preference would be that, in using taxpayers' dollars for food aid, some of that supply should be met by Canadians," said Dustin Gosnell, director of corporate policy for the Winnipeg-based wheat board.

Robert Friesen, president of the Canadian Federation of Agriculture, said his group is not opposed to untying the aid, so long as the money is spent in recipient countries, rather than buying product from heavily subsidized competitors like the U.S., where 100 per cent of food aid is purchased domestically.

Food prices have increased about 50 per cent since the end of 2006, a surge that threatens to shove tens of millions of people deeper into poverty, according to the International Monetary Fund.

The World Food Programme estimated in February that it would need emergency assistance of $500-million (U.S.) to meet its plan to feed 73 million people in 78 countries this year. The organization was forced to boost its cash call to $755-million last month as agricultural commodities continued to skyrocket.

Ms. Oda, who oversees the Canadian International Development Agency, said the Conservative government will give an extra $45-million to the World Food Programme and $5-million to the Canadian Foodgrains Bank.

Canada's decision to untie its food donations leaves the U.S. as the only major donor that continues to make aid contingent on buying from its farmers and food processors.

"Our food aid support must go further and must be used more efficiently," Ms. Oda said at a news conference. "Tied aid erodes Canada's global reputation because it suggests we are as concerned about helping ourselves as we are about helping others."

But Kevin McCort, president of CARE Canada, said the increased food aid budget was money that was diverted from other development programs, and complained the government of Prime Minister Stephen Harper is taking a short-sighted approach to the growing problem of world hunger.