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Lend a Hand! Or a Dollar?

Photo by Flickr user Bfishadow
Photo by Flickr user Bfishadow

In April of 2013 Obama administration proposed a change to the US’s Food Aid program, which has for the past 50 years delivered American grown and packaged products to countries in need of humanitarian aid. The change would switch the form of the aid to cash; the Alliance for Global Food Security cites “greater flexibility for local procurement commodities for emergencies” as a the primary result of the proposed reforms.

Studies say this change would decrease the cost and increase the effectiveness of the food aid program. Aid in the form of cash is usually cheaper, especially in terms of procuring raw grain locally. According to a study by Cornell University, cash aid would cut costs by 50%. However, there are a few cases when cost-effectiveness isn’t higher when cash is used, but even so, the timeliness of cash aid is always superior, meaning, cash aid always arrives at its intended destination faster than physical food aid.

It makes far more sense to send monetary aid, which is faster, and feeds into the local economy of the region. Paying to ship bulky food packages across the ocean is more expensive and wastes time.

There are opponents to this proposed policy: several senators and agricultural trade organizations argue that the US will be scrapping a portion of American agricultural exports, further damaging the US economy.