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Briefing: New food treaty thin on substance*

 HIGHLIGHTS
• New food treaty aims for “assistance” over “aid”
• Does not stipulate amount or cost of assistance
• Lacks response to high food prices
JOHANNESBURG, 4 October 2012 (IRIN) - After years of negotiations, a long-awaited legal treaty sets new rules for donors on food assistance, but experts say it fails to address the growing food insecurity facing many poor countries as global food costs rise.

The new Food Assistance Convention replaces the Food Aid Convention of 1999 (both known as FAC), which expired in 2002 but was repeatedly extended over the past decade.

Below, IRIN explores the purpose of the FAC and how experts believe the new agreement falls short.

What is the FAC?

The first Food Aid Convention was established in 1967 to prompt rich grain exporters to provide food aid to developing countries at a time when China, India and West African countries faced war- and weather-induced crop failures.

Prior to that, most of the world’s food aid had been supplied by the US, which, in the 1960s, watched the growth of European grain industries and surpluses with concern, according to a paper from the International Food Policy Research Institute. Europeans, meanwhile, wanted to assert themselves in a market dominated by the US.

The FAC was created, alongside the Wheat Trade Convention, as part of the International Grains Agreement. In these documents, the US “extracted pledges to ‘share the burden’" of providing food aid while entering into a commercial trade agreement with the Europeans that, among other things, set a minimum for export prices.

The FAC signatories - Argentina, Australia, Canada, Denmark, Finland, Japan, Norway, Sweden, Switzerland, the United Kingdom, the United States, and the members of the European Economic Community - pledged to provide 4.5 million metric tons of grain each year to developing countries, guaranteeing minimum food aid levels even if scarcity pushed up world grain prices.

The agreement, which left donors were free to decide how to distribute their aid, has since been an important resource for the UN World Food Programme (WFP).

The FAC was renewed in 1971 with little change,reports the International Grains Council. But after massive, unexpected purchases by the Soviet Union and widespread drought in Asia and North America led to a food price crisis in 1974, countries acknowledged the need to increase their food aid pledge to at least 10 million metric tons annually. Donors' minimum commitments under the FAC, however, were never formally raised to a combined total of 10 million metric tons.

The FAC was again renewed in 1980, 1986, 1995, and most recently in 1999. Although the total amounts that donors committed in the 1980 FAC rose to 7.6 million metric tons, by 1999 donor commitments under the FAC had fallen to around 5 million metric tons. Over the years, the commodities donors could count toward their pledge was broadened to include vegetable oil, root crops, skimmed milk power, sugar and even seeds.

How is the new FAC different?

The new FAC is far better than the 1999 version, says activist Jose Luis Vivero, who has spent years championing FAC reform. It has “broadened the scope of food aid" - which meant only in-kind food donations - to cover "food assistance", reflecting the different kinds of interventions now used to help the food insecure, such as cash transfers.

Vivero was also encouraged by the new FAC’s reference to the “right to food” and Voluntary Guidelines sponsored by the UN Food and Agriculture Organization (FAO), which set out the role of food assistance in achieving this right.

''Donors just will not sign on to any more commitments or conditions or controls than they have agreed to already. To try for that seems to me like a lost cause''
The new FAC also accepts that donors can provide cash to purchase food aid locally, and says food assistance should be "untied", meaning it should not be linked to conditions compelling recipients to purchase goods or services from donor countries. It also prioritizes providing food aid as grants rather than loans to developing countries.

The FAC has "gone in the right direction", said Panos Konandreas, a retired FAO trade policy official. "The treaty is of value as it provides a broader framework for the types of food assistance," which can include livestock and agricultural implements.

It goes "beyond saving lives (the major purpose of the FAC 1999) and it aims at reducing hunger, improving food security and nutritional status", Vivero said.

What's not to like? 

Donor countries never got around to implementing the annual 10 million metric ton contribution, and the 1999 FAC even removed a reference to this target. But in the new FAC, minimum requirements are not included at all; commitments will be determined after the fact.

"The US will continue to donate food aid largely in-kind under the provisions of its Farm Bill that set a minimum 2.5 million tonnage," Edward Clay, of the Overseas Development Institute, notes on his blog. Similarly, the EU has committed only to exploring a wider variety of interventions, he writes. "So if signatories are going to do what they would have done anyway, what is the additional value of international treaty commitments...?"

In-kind food aid, Vivero observed, “is closely tied to staple food prices (the higher the prices, the less food aid and the more staples [go to] biofuels).” But countries easily meet their minimum requirements, so there is no point in regulating what countries do anyway, he reckons.

He argues the text contains "exit doors" giving donors ample opportunities to circumvent the agreement. For instance, it says donors should "provide food assistance in a way that does not adversely affect local production and market conditions."

"Will there be preliminary assessments conducted by third parties in a neutral and scientific way?” Vivero asked. “Who will decide?"

Clay also criticizes the new FAC for allowing up to 20 percent of assistance to take the form of loans instead of grants. "In narrowly economic terms, what distinguishes a concessional in-kind food-aid loan from an agricultural export credit? How will it be helpful for a recipient of food assistance to become further indebted to meet short-term food needs?"

What about today’s rising food prices?

While many approve of donors moving towards more flexible "food assistance", experts say the current spike in food prices warrants in-kind food aid, especially for the food-importing Least Developed Countries (LCDs). This is not reflected in the new FAC.

Stuart Clark, an aid expert with the Canadian Foodgrains Bank, says donors recognized the problem but were unable to agree on a way to guarantee an amount of food aid. “However, by embedding various rules for converting cash contributions to quantitative equivalents, the treaty provides a way to monitor the significance of the problem and highlight this, should our fears be borne out."

But Clay notes that during the 2007-2008 food-price spike, food aid from FAC donors “collapsed to a 50-year low, causing agencies to scramble to avoid cutting emergency rations and school feeding programmes… Minimum commitments under the Convention, whether in cash or kind, are to be determined and announced afterwards, and not set out in the treaty, as previously. The text fails to explain: how can donors withstand another price spike?"

In response, Jens Schulthes, a retired WFP official, said, "FAC always seemed to me an accounting device more than a guarantee of an additional volume of resources in times of crisis... So I don't think that the wording of the new FAC, if compared to the old, makes a lot of difference - donors just will not sign on to any more commitments or conditions or controls than they have agreed to already. To try for that seems to me like a lost cause."

Read more on food aid
EU raises the bar on food assistance
Obama administration wants to stretch the food basket
Millions wasted on shipping food aid
Improved farming rather than more food aid?
Calls to reform Food Aid Convention
Food price crisis in-depth
Grain in Haiti
What should have happened?

The donors should have directly responded to the crisis caused by rising food prices, Clay says. During the 1974 food price crisis, the US “passed legislation to focus food aid largely on LDCs and programme aid on grant terms... The EU also revamped its food aid policies," he told IRIN. But no similar measures followed the 2007-2008 crisis, when the number of food insecure people crossed the one billion mark. "Is there now a problem of leadership or a lack of genuine collective commitment to join action?" he asked.

Vivero sees the issue in stark moral terms. "We are living in an ethically poor age, where countries are more than reluctant to enter into multilateral agreements, least to say binding agreements."

Accountability and legal enforcement would be improved if an intergovernmental body were set up to assess the FAC assistance donors provide, he said.

Clark suggests the FAC be integrated into a larger food security framework, such as the Committee on Food Security (CFS), an intergovernmental body that reviews food security policies. "Food assistance is now recognized as a set of tools, not a strategy, and it should be embedded into strategies like social protection and emergency response.”

Significantly, FAC recipients have never been involved in the discussion, nor have donors such as China, Saudi Arabia and South Korea, which were among the non-FAC members that provided 20 percent of food aid in 2009, Clay noted in a recent paper.

FAC is still a closed club. "The negotiations on the future of the FAC, which began in December 2010, have been conducted entirely in private, and there is no substantive publicly available documentation," Clay said.

jk/rz

*Changes were made to the story on 7 October 2012, correcting the fact that donors countries acknowledged the need to commit 10 million mt but never made a legal commitment to do so.

Theme(s): Economy, Food Security, Governance, Health & Nutrition, Natural Disasters, Aid Policy, Sahel Crisis,

[This report does not necessarily reflect the views of the United Nations]