Canada could get a substantial boost in the effectiveness of its food aid dollars if it dropped the requirement that 90 percent of the donated food be purchased in Canada, said an international aid expert.
Edward Clay, of the Overseas Development Institute in London, England, said aid dollars used to buy food in the region where help is needed typically purchase 33 percent more food than if it is shipped from the donor country.
Transportation costs and higher domestic prices eat up a good portion of the aid budget.
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“Across the whole donor community, tied aid costs one-third more than if you were to source it in the affected region or tender it on world markets,” he said. “Tying aid to domestic economic interests on that level is just inefficient.”
He pointed to Canada’s aid spending last year to make the point.
Less than 10 percent of Canada’s food aid budget was not tied to sourcing the product in Canada and yet it purchased 18 percent of the food that actually was delivered as aid.
“That is a perfect illustration of the point,” he said. “Tied aid costs more. You get more bang for your buck purchasing in the affected region.”
Clay, considered one of the international leaders as an aid researcher and advocate, was in Ottawa to take part in a day-long seminar on foreign aid policies sponsored by the Winnipeg-based Canadian Foodgrains Bank and Oxfam. Both groups have been pushing Ottawa to end its requirement that 90 percent of food aid be sourced in Canada.
The proposal has divided the Canadian farm lobby community. The Liberal government has been unable to decide on the issue. Most of Canada’s foreign aid is untied from domestic procurement requirements but food aid is an exception.
Clay said Canada and the United States, which requires virtually all of its food aid to be sourced in the U.S., are the last countries to stick to the tied-aid rule.