London, June 6 : The world might soon see a revolution in food aid, with rich nations preferring to give money to the people in poor countries to purchase food.
According to a report in New Scientist, there has been a shift against giving food aid because when there a lot of free donated flour about, grain prices sink, and local farmers can't earn enough selling their own crops.
To make it worthwhile to invest extra in the fertilizer or irrigation or labour, they need to grow more, which means the food crisis will just continue and even worsen.
Therefore, these days rich countries give the UN's WFP (World Food Programme) money to buy food, whereas 10 years ago the WFP was a way for rich countries to give their surplus grain away.
It isn't only the WFP that's being given money to buy food.
According to Josette Sheeran, head of the WFP, when famine is a matter of market failure rather than crop failure, it makes more sense to give people money to buy food than to give them food that just undercuts local farmers.
Taking the example of cyclone-ravaged Burma, Sheeran said, "There is food in markets near Rangoon, but people have lost their livelihoods. So, they can't buy it."
Now, WFP is giving them 50 US cents a day.
With money from the Gates Foundation, WFP is looking at ways to improve the system.
"We want to go to farmers and say, if you can produce 10,000 tonnes this year, we will give you this price. Then they can organise around that," said Sheeran. "The farmers will get credit for the fertilizer and other inputs they need, knowing they'll be able to make a profit," she added.
Donald Kaberuka, head of the African Development Bank (AfDB), told journalists in Rome that it might be time to reconsider subsidies for fuel for African farmers.
The AfDB already has a 3.8-billion dollar stake in African agriculture.
"But this year, we will be committing another 1 billion dollars in support of agricultural infrastructure, rural finance and support to research and extension," said Kaberuka. "Extension services make new agricultural technology available to farmers," he added.