What is food dumping, and how does it contribute to the cycle of poverty and dependence among the world’s poorest people? – also, offer a solution to the problem…

One way that developed countries ‘help’ the less fortunate nations of the world is by offering aid in the form of food.  This approach to aid has been criticized by some as ineffective at best, and criminal at worst. 

As I mentioned in Blog Post # 8, food aid can be destructive on the economy of a recipient nation and can contribute to a cycle of more hunger and poverty in the long run.  Food dumping (free or subsidized food) below market prices hurts small local farmers, who cannot compete and are driven out of jobs and into poverty again and again. Wealthy countries that provide foreign aid (not emergency relief) contribute to underdevelopment by encouraging a dependent culture – this does not give local communities motivation to find sustainable solutions.

The U.S. Congress has been under attack by the World Trade Organization (WTO) because the U.S. has been dumping agricultural surpluses (disguised as food aid) in an attempt to create new markets for its exports. Below is a quote from an Oxfam Briefing Paper that illustrates the plight of a small rice farmer in Indonesia:

‘I harvest my rice usually two times per year, but it depends on rain because my land is rain-fed. Last year I sold my rice at Rp 2,600–Rp 2,700 [approx. $0.25] per kg. This year, however, its price was only Rp 1,500–1,700 [$0.15] per kg due to the flooding of rice from the social safety net programme to the local market.... Some people said that rice came from the US.’

—Wagino, 42, farmer and father of four children, Boyolali Regency, Central Java Province, Indonesia, June 2001

‘Meaningful and immediate increases in food aid now could mean the difference between survival and financial disaster for rice mills in this region.’

— Thomas Ferrara of Greenville, Mississippi, USA, Chairman of the Rice Millers’ Association, July 2001

It appears that food aid is not driven by need.  There are three types of food aid:  program (sold on recipient country markets to generate cash), project (promotes agricultural/economic development, nutrition, food security – mother/child nutrition centres) and emergency (war and famine). 

We need new rules for agricultural trade with the goal of reducing agricultural dumping and fostering economic development. In many instances where food aid is desirable, cash donations may be better than food donations, as they allow food aid to be purchased locally and delivered more quickly and cheaply.