Food aid and economic policy reform

This study, produced by A.I.D."s Agricultural Policy Analysis Project (APAP), examines the use of U.S. food aid programs in supporting policy change and describes some recent experiences with such programs. Part One discusses the advantages and disadvantages of several P.L. 480 program structures (e.g., multi-year agreements, multi-donor programs, creation of buffer stocks, programming the use of local currency generations, and financing the implementation costs of reform) in encouraging agricultural policy reforms. It also reviews food aid"s potential to promote food security, and provides a summary of lessons learned by APAP on the role of food aid in supporting agricultural price reforms. Part Two presents case studies of the effectiveness of food aid in encouraging macroeconomic policy reform in Guinea, restructuring cereals markets in Mali, and promoting food security in Bangladesh. A general finding is that while food aid can be used to support broad macroeconomic policy reform and structural adjustment, it is most effective when used to support agricultural price reform or to promote increased food security.