USAID. BUR. FOR PROGRAM AND POLICY COORDINATION. OFC. OF POLICY DEVELOPMENT AND ANALYSIS
Food aid : disincentive effects and their policy implications
A REVIEW OF THE ISSUES AND LITERATURE CONCERNING THE DISADVANTAGES OF FOOD AID, WITH INDIA AS A MODEL.
Isenman, Paul J.; Singer, Hans W. · 1970
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Abstract
THE PRINCIPAL ARGUMENT AGAINST IT IS THAT FOOD AID LOWERS DOMESTIC FOOD PRICES, DOES NOT ENCOURAGE ADEQUATE AGRICULTURAL POLICIES AND THUS, DECREASES DOMESTIC FOOD PRODUCTION. THOSE ARGUMENTS IN FAVOR OF FOOD AID ARE THAT IT: 1) FEEDS THE HUNGRY AND HELPS TO RESTRAIN PRICE INCREASES; 2) PROVIDES FINANCING FOR VARIOUS GOVERNMENTAL DEVELOPMENT PROJECTS; 3) BUILDS UP FOOD STOCKS; AND 4) EASES RESTRAINED GROWTH OF PRODUCTION AND EMPLOYMENT. CONCLUSIONS DRAWN FROM THIS DISCUSSION ARE THAT FINANCIAL AID IS PREFERABLE TO FOOD AID, BUT THAT PARTICULAR NEED SHOULD BE DETERMINED ON AN INDIVIDUAL BASIS.
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