TCS Daily

Farm "Aid"

By Tim Worstall - October 12, 2005 12:00 AM

Nicholas Kristof's column in the New York Times Tuesday (not, as we know, online) comes from Niger and touches on a number of points I made here a couple of weeks ago. Yes, Niger's problems come from endemic poverty meaning that any slight interruption in food supplies leads to starvation and in the long term Africa needs development, wealth and a Green Revolution. Kristof is also spot on with his criticism of the way in which US food aid is handled:

        Instead, we ship tons of food in emergency aid after people have already started 

But this is an allegation, as I pointed out before, that can be made of many in the international bureaucracies. He further mentions an attempt to change this system, which is the point I find most interesting:

        One problem is that U.S. law generally requires our food aid to be purchased in 
        American markets and transported on American ships. The upshot is that much of 
        the donation is wasted on shipping costs, the aid is delayed, and when it arrives 
        our grain risks depressing local prices and long-term production incentives. To his 
        credit, President Bush has pushed to ease this requirement, but members of Congress 
        are blocking him, because they value farmers' votes more than African lives

You can, if you wish, follow the budget request through the system here and here (page 169) or perhaps this summary will be enough (page 1030):

        "The 2006 request includes $300 million for emergency food assistance. This funding 
        will permit USAID to provide food assistance in the most timely and efficient manner 
        to the most critical emergency food crises. This assistance will be used in those 
        instances where the rapid use of cash assistance is critical to saving lives."

Or, if you prefer, this from the New York Times on the 22nd of September (also not online. Wow, these guys are really trying to reach the masses and influence the debate aren't they?):

        The administration asked for authority to use a quarter of the $1.2 billion food aid budget 
        provided to the Agency for International Development to buy corn, wheat and other 
        commodities in the developing countries facing hunger crises, or in neighboring 
        countries, rather than from American producers.


        Officials at the Agency for International Development said that having the flexibility 
        to buy the food for an African crisis in Africa would make it possible to respond 
        in some cases in weeks instead of months, feed more people with the same amount 
        of money and potentially save thousands of lives.

        Andrew S. Natsios, administrator of the agency, said the government would be able 
        to buy twice as much food for the same money in some situations because of the 
        savings on transportation. "You can't eat transportation," he said.

        But the change was dropped from the Senate's version of the agriculture appropriations 
        bill expected to be voted on this week, though there is a chance part of the proposal 
        will be restored. The provision was not in the House version, passed in June.

        The measure ran into fierce opposition from an array of agricultural and shipping 
        interests with stakes in the program. And an alliance of nonprofit groups that receive 
        food aid money also opposed using the program's core financing to buy food in 
        developing countries. Rather, they favored a $100 million pilot program that would 
        only go forward if Congress appropriated extra money for food aid, which they say is 
        indefensibly short of money.

Now I quite clearly think this change in the way the budget is spent is a good idea. Twice as much food reaching the starving faster (and locally sourced so as not to destroy future production) without increasing the burden on the hard pressed taxpayer. I mean, who could be against it?

Which is, alas and alack, where the grubby reality of politics comes in. Just about everyone in the process seems to be against it and I think this is the lesson that Porkbusters and the other such groups working on cutting the fat to pay for Katrina reconstruction need to realize. (Of course, some do and the outcry that is being raised may well be the only way to get to a solution.)

So let's just go over the proposal again shall we, after we've recovered from the shock of such a decent and sensible idea being present anywhere in the system at all? We will stop increasing future food problems by feeding the starving with locally bought produce. Good, this is what the Nobel winning economist on the subject, Amartya Sen would say is better than the current system. We will get the food there faster, saving more people. Good. We will get twice as much food for the same money. This is also good. So why isn't it simply passed through on the nod? Why haven't all the actors slapped their foreheads, shouted "Of course! I should have thought of that!" and simply got on with it?

Because, unfortunately, the system doesn't work that way. No system of shoveling out tax money does. For once there is the flow there are the supplicants and the interested community, what we normally call special interests.

In this case we appear to have some of the non profit groups themselves who see a new idea as a time and method to get the budget itself raised. It doesn't matter that more good will be done as a result of the change, whatever leverage can be used to increase the money flowing through the system must be good. Then we have the shipping companies and the agricultural interests who have "stakes in the program". They, of course, would lose from this diversion of money. To finish the process we have the Congress Critters themselves. They listen a lot harder to someone standing in front of them, someone with perhaps a drink, a lunch invitation or, if this is not simply too, too, cynical, a campaign contribution, than they do to the average citizen whose money they are spending. Or, of course, to those children who will die with swollen bellies and fly infested eyes.

It is sometimes possible to short circuit this process, to raise such a hue and cry that the system is shamed into acting responsibly and I do hope that the current screams of rage from the fiscal conservatives are heard and acted upon. But the majority of government, of Government, will always be this way, will always benefit those on the inside track, those in the process of governing and providing government services, rather than those who pay for it or, the last group ever to be thought of, those who the program is, on the face of it, purported to be helping.

You can, if you wish, look at this from the perspective of another Nobel winner, James Buchanan and his work on Public Choice Theory. The incentives faced by those who make the decisions are such that they take those decisions in such a manner to benefit them, not the poor or disabled or discriminated against or homeless or starving who are supposed to gain.

I've said it before here that I am simply a pragmatic rather than ideological libertarian. Government doesn't do many things very well, as the above shows us, they'll squabble, kow-tow to those who benefit from the provision of services rather than those who actually need them, so therefore we should ask government to do a great deal less for us, provide a much smaller number of such services. For they're just not very good at it, even when presented with an obviously good and decent plan.

Tim Worstall is a TCS contributing writer living in Europe. Find more of his writing here. He recently published a book about the Best British Blogging.


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