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Aiding Big Biz & Poor
by Mark Pickens Thursday August 29, 2002 at 02:29 PM

Mention food aid and most people imagine ships overstuffed with generous American assistance for hapless, starving countries. But layered beneath the aid is a different story of the U.S. government lining the pockets of multinational agro-companies and undercutting Africa’s own farmers.

The U.S. sent developing countries six million metric tons of grain and other food assistance in 2001. Most Americans would be chagrined to learn that just under half of American food aid is not donated but sold to developing countries, making it a major boon for the giant American agro-companies including Cargill (see p. 12). The U.S. government buys surplus American grain to resell at special prices to developing countries.

“The food-aid program represents a free government service designed to help grain-trading companies expand both their current and future sales,” according to a study published by the University of Nebraska Press.

A 1997 newsletter of the U.S. Agency for International Development (USAID), the government agency in charge of U.S. foreign assistance, acknowledges this. "The principal beneficiary of America's foreign assistance has always been the United States. . . . Foreign assistance programs have helped the United States by creating major markets for agricultural goods, new markets for industrial exports and hundreds of thousands of jobs for Americans."

When the U.S. isn’t selling grain, it's dumping it on poor countries and collapsing local agriculture. Paradoxically, in emergency situations free food can be one of the worst things. The sudden arrival of millions of tons of food aid can undercut the prices of locally produced food and drive local farmers out of business.

Somalia is one case in point. By the time Marines arrived to distribute food in December 1992, the country was already emerging from its famine and had just harvested a full crop. Nonetheless, food aid poured in, driving down the prices received by local farmers for their harvest by a whopping 75 percent. Many Somali farmers, unable to make a living by selling their produce, were forced to abandon their farms and join the lines for handouts of imported food.

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