Food Aid: Positive or Negative Economic Effects in Somalia?

Abstract

The economic effects of food aid in recipient countries have been the subject of intense debate and deep controversy in the development literature almost since the implementation of the first food aid programs in Western Europe under the Marshall Plan and especially in India under PL480 during the period from 1955 to 1970. The conventional arguments on each side of this controversial issue have been comprehensively reviewed in Maxwell and Singer's classic survey of the food aid literature.' With the increasing concentration of food aid in sub-Saharan Africa in the last decade, the debate has been revived in recent years by several authors, among them Singer,2 Sinner, Wood, and Jennings, Clay and Singer,4 Clay, Stevens,6 Stewart, World Food Program (WFP),8 Schultz, Ezekiel,'0 Dearden and Ackroyd,1 and Schuftan.12 Succinctly put, food aid advocates have argued that food aid can benefit the recipient economy in many ways. Chiefly, and broadly stated, food aid can (1) augment available resources to foster growth and development; (2) improve the nutrition and health of disadvantaged groups (through supplementary feeding programs); (3) reduce inequality in income distribution by generating employment for the poor (through food-forwork programs) and granting them access to food at concessional prices; (4) provide food to vulnerable groups in emergency situations (emergency food aid); and more recently, (5) furnish multilateral lending organizations with an effective instrument (food-for-adjustment) to support economic policy reforms (structural adjustment programs, balance-ofpayments adjustment programs, and market restructuring programs) and to protect the poor from hardships imposed by such reforms.13 On the other side of the debate, critics have pointed out that food aid has the potential to harm the recipient economy. It can do so particularly through (1) having disincentive effects on local food producers and on the government's policy priority for increasing domestic food production;

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