Food aid, distortion, and the WTO
Summary :
Table of Contents
- Introduction
- Background of U.S. policy and food aid
- Agricultural trade development and assistance act
- PL 480
- Primary forums for food aid discussion
- Food Aid Convention (FAC)
- Definitions and terminology
- Export subsidy
- Indirect subsidy
- Export credits
- Domestic farm supports
- Countervailing duties
- Controversial elements to U.S. food aid
- Controversial issue within Title I
- In-kind transfers
- Monetization
- Economic impacts from food aid
- Distorting price effects
- Untargeted, normal good situation
- Targeted population, high demand elasticity
- Commercial sale displacement (market integration)
- Agricultural subsidies and trade
- Agricultural export subsidies in a large home country
- The World Trade Organization (WTO)
- Food aid alternatives
- Aid and trade flows
- Conclusion
- References
Abstract
The first of the United Nations Millennium Development Goals is to eradicate extreme poverty and hunger. Specifically, this goal aims to "halve the proportion of people who suffer from hunger. Yet, today 963 million people are hungry. To help fill the apparent void, the international community worked together establishing a forum for participation in food security dilemmas, as well as institutionalized mechanisms in which wealthier countries can assist starving populations around the world. food aid is one way in which wealthier countries assist poorer nations. The United States is the largest donor of food aid, thus this analysis will focus primarily on U.S. food aid implications. However, Canada and the European Union have their own food programs as well. food aid encompasses many vying interests and is seen to provoke competing economic thoughts. Though development micro economic concepts encapsulate issues of food aid and food security, this analysis emphasizes the trade related effects of food aid distribution and policy. This analysis recommends food aid remain coupled with trade policy, and that the World Trade Organization (wto) is the international body that will allow for fairer agricultural practices concerning food aid.
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