The WTO is out of step on a lot of fronts. The latest proposal on food aid shows yet again how disconnected the Doha negotiations are from what is needed on the ground - particularly as we face the current global food crisis.
The latest food aid proposal fails to reduce the scope of food aid sales, also known as monetization, practiced primarily by the U.S. Monetization encourages a very inefficient system - where U.S. food is shipped to the recipient country at great cost and over a lengthy period of time. The sale of food aid often displaces commercial sales of local or regional production, thereby undermining farmers in recipient countries. The sales frequently cause prices to drop temporarily in local markets, creating volatility and depressing prices overall in situations where production needs urgently to be encouraged.
There is a near global consensus that an untied, cash-based system of food aid that allows for local and regional purchases is less costly, more timely and helps to ensure that food reaches the people most in need.
IATP, the Canadian Foodgrains Bank, and Oxfam International wrote trade ministers in Geneva on Friday, calling for an immediate revision to the WTO food aid text. The revised language would place strict limits on monetization. And as the letter points out, the Food Aid Convention, due for renegotiation, is much better equipped to set a food aid framework than the WTO.
We've written about the urgent need to reform U.S. food aid. Let's not compound the problems of U.S. food aid by allowing these practices to continue within WTO trade rules.
