T
he world now has an estimated one billion hungry
people—more than 100 million more than in 2007.
The primary reason? The global demand for food
has increased more rapidly than the supply, driving up prices
rapidly. Even in the midst of a global recession, food prices
have not fallen far from their 2008 peaks.
Since the world’s poorest people spend 70 to 80 percent
of their incomes on food, they are forced to buy less when
prices rise. There is nothing else in the household budget
to cut. The simple truth is that when there is an inadequate
global supply of food, it is poor people who must eat less.
U.S. foreign aid in general, and USAID programs in
particular, have lost focus in four key areas:
1. A shift away from projects and programs aimed at
national impact to small, self-contained projects
that are much less ambitious in scope.
2. A shift away from efforts to build national
institutions, particularly the public institutions that
are essential to self-sustaining progress towards a
country’s development objectives.
3. An underestimation of the role of technical expertise
in development efforts today.
4. The de-emphasis of broad-based economic growth
in favor of social sector interventions—including the
virtual elimination of support for agriculture.
Todd Post
For low-income countries, the key to achieving any other
development objective is long-term, self-sustaining growth
that includes rapid reductions in food insecurity and
poverty. This paper focuses on assistance to these countries.
The importance of agriculture stems from the reality that,
in low-income countries, anywhere from 60 to 90 percent
of the population lives in rural areas and is dependent on
agriculture—directly or indirectly—for nearly all income.
Many grain producers in Ethiopia bring their crops to the Ethiopia
Commodity Exchange in Addis Ababa for traders and individuals
to purchase.
Today’s hunger crisis is a failure of agricultural production.
Shortcomings in foreign assistance have played a role in the
problem; thus, foreign assistance reform must play a key role
in the solution.
The foreign assistance reforms that are needed are
extensive: a complete restructuring of what is now a
largely uncoordinated foreign aid effort spread over many
agencies, combined with a redefinition of U.S. short-term
and long-term objectives for development and foreign policy.
However, if foreign assistance is to be successful in assuring
food security, poverty reduction, women’s participation, and
sustainable growth that will eventually enable countries to
function without foreign aid, there must also be fundamental
changes in its operational priorities and delivery systems.
This paper addresses these essential first steps in effective
foreign assistance reform.
2 Briefing Paper, November 2009
1. A shift away from projects and programs aimed at
national impact to small, self-contained projects that are much
less ambitious in scope. Smaller projects lend themselves to
easy-to-measure quantitative “results”—the nu mber of people
vaccinated, the number of children enrolled in school—and
are often carried out in historically underserved areas.
The problem arises when these projects are undertaken
outside a larger strategic context and without rigorous
economic analysis. Economic analysis is necessary to
determine the relative costs and benefits of a project,
particularly the opportunity costs (what else could have
been done with the funding instead?) and to what degree
the practice of investing in a variety of separate projects will
contribute to the country’s broader agenda for growth and
poverty alleviation.2
A further complication, as noted in a 2006 DAC peer
review3, is created by the fragmentation of development
funding and responsibilities among numerous donor
government departments and agencies. Each pursues its own
set of small interventions without reference to host country
priorities or an overarching development strategy. The result
of all this is no overall impact on national development
objectives.
2. A shift away from efforts to build national institutions,
particularly the public institutions that are essential to selfsustaining progress towards a country’s objectives. This shift hit
agriculture particularly hard, because small farmers depend