Reducing taxes for food

from IRIN

This subject was debated during the food summit last month. Past calls to cut taxes for chartable food purchases has met a lot of resistance. - Kale

The World Food Programme (WFP) has welcomed a call by the World Bank for a UN resolution to scrap taxes and export controls on food aid purchases, but experts say there is little chance of such a resolution being effected.

Robert Zoellick, president of the World Bank Group, called on the UN General Assembly's 63rd session, coming up in September, to vote for a resolution to exempt humanitarian purchases from export restrictions and taxes.

A global food and fuel price crisis has not only pushed up the cost of food aid but made finding adequate quantities to purchase and transporting them even more problematic, as governments attempt to control food supplies to ensure that their people have enough to eat. Some have even imposed export bans or taxes.

Nicole Menage, WFP's head of Procurement, told IRIN that "the world is really riddled with export control measures now, which makes the already difficult task of buying food in the present highly volatile and thin markets even more of a challenge." WFP usually requires US$3 billion a year in voluntary contributions but needs $5 to $6 billion this year, and a similar sum next year.

More donors are giving cash instead of food. In an attempt to widen the sources of food supply, in 2007 WFP purchased in 82 countries, of which 69 were developing. The food aid agency's choice has become even "more restricted now" as a result of the export controls, "at a moment when, again, globally the availability of food is so much more limited," said Menage.

Besides the new export control measures, the cost and the process of getting export and import permits were also barriers to providing timely aid, said Richard Lee, WFP spokesman for Southern Africa.

But will it happen?

"The problem is that the UN General Assembly can pass a resolution to this effect, but it cannot enforce it if passed," said Christopher Barrett, who teaches development economics at Cornell University, New York, and is the co-author of the book, Food Aid After Fifty Years: Recasting Its Role.

"The sharp domestic political pressures that lead politicians to adopt such short-sighted and ultimately ineffective policies as export restrictions and export taxes will likely trump the gentle diplomatic pressure of UN member states," he commented.

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