Renegotiating the Food Aid Convention: Background, Context, and Issues

Abstract

The current global agreement governing aid--the Food Aid Convention (FAC)--has been subject to annual renewals since it expired in 2002. Critics have pointed to some serious limitations, but negotiations over a new FAC have become entangled in US-European agricultural trade disputes. Other issues in renegotiation include the patchwork quilt of aid governance, in which the FAC's mandate overlaps with those of several other institutions; inadequate transparency; the nature of commitments--whether to express them in tonnage, value, or nutritional terms; the level of commitments and their distribution among donors; monitoring and enforcement of commitments; stakeholder representation on the FAC governing body; and the convention's institutional home. Also problematic is whether the FAC should have an instrument focus--food aid--or a problem focus, such as food security. KEYWORDS: Food Aid Convention, World Trade Organization, aid, local purchase, humanitarian assistance. The governance of international aid flows is a patchwork quilt of institutions and agreements that have emerged over the last fifty years. These are characterized by overlapping mandates, differing degrees of authority and legitimacy, varied levels of transparency in decision-making, and problematic stakeholder representation--so much so that one recent analysis described them as dysfunctional and outdated and thus ineffective. (1) One component of this governance structure is the Food Aid Convention (FAC). First signed in 1967, and renewed five times since then, the FAC is unique in that it is the only treaty under which signatories have a legal obligation to provide international development assistance. The current FAC dates from 1999. It was due to expire in 2002, but members have agreed to a series of ad hoc extensions that have kept it in operation since then. Given the dramatic changes in global security since 1999, most notably the rise in global prices, there is a good chance that negotiations on a new convention are likely to begin soon. The purpose of this article is to identify key issues surrounding FAC renegotiation. Understanding these issues requires familiarity with a considerable body of background information, including the origins of the FAC, its current objectives, and a description of the principal controversies that surround it. We therefore begin with a brief review of these topics, followed by a description of other important elements of aid governance. Our final background component is a short discussion of the world situation and outlook and the implications for aid needs. We then examine the key questions that may arise in the FAC renegotiation: the objectives; the nature of commitments--tonnage, value, nutritional aspects; the level of commitments and their distribution; monitoring and enforcement of commitments; representation on the FAC governing body; and the FAC's home base. Background History and Current Status The FAC is one component of the International Grains Agreement, along with the Grains Trade Convention. The London-based International Grains Council (IGC--formerly the International Wheat Council) has served as the FAC's host agency and secretariat since its inception in 1967. This intergovernmental organization provides a forum on world grain trade information. It monitors markets and ocean freight rates and also provides monthly and annual reports on production, consumption, stocks, and prices. The IGC compiles member reports on aid shipments as well. (2) Its data are not publicly available; only signatory governments receive them. In the years prior to the first FAC, the United States supplied most international aid. In the mid-1960s, changes in domestic US farm policy and weather- and war-induced crop failures in developing countries led to a tightening of global grain stocks. The United States was also concerned about growing grain surpluses generated by the European Community's Common Agricultural Program, while the Europeans wanted to secure their newfound role as a significant grain exporter via a new international wheat agreement. …