By Missy Ryan
WASHINGTON (Reuters) - Aid groups were divided on Thursday over a leading charity's steps to wean itself from U.S. government funding for food aid programs that critics charge can wound the very poor nations they aim to help.
"We came to the realization that if we wanted to do what was in the best interest of poor people and efficiency in aid, that this wasn't it," said Helene Gayle, president of CARE, a leading U.S. aid group.
CARE's policy shift, originally made public in 2005, created a splash this week after media reports highlighted a deep schism within the U.S. aid community about the optimal way to use food aid to help the world's poor and hungry.
In recent years, CARE has sold an average of about $60 million worth of U.S. crops on markets in a dozen countries, largely in Africa, using the proceeds to fund long-term development projects that seek, for example, to bolster local farming practices or improve nutrition.
That process, known as monetization, is one of several methods charities use to deliver aid from the U.S. government, the world's biggest food aid donor.
But the U.S. system has come under wide attack as wasteful, largely because it ties aid to purchase of high-priced U.S. crops and requires shipping commodities halfway around the world on U.S. vessels, which eats up a huge share of funding.
Critics also believe that selling U.S. crops in poor countries can retard farming and distort local crop prices.
That last worry prompted CARE, which has been the largest recipient of U.S. monetization aid, to announce it would phase out monetized aid by the fall of 2009.
"If we are trying to look at having a long-run impact on chronic hunger and reducing poverty, this was counter-productive," Gayle said. The group will still take part in U.S.-funded emergency food aid programs.
Lawmakers are taking a fine-tooth comb to food aid policies as Congress prepares to pass the 2007 farm bill, the umbrella law that will set food and farm policy for five years.
FILLING THE FUNDING VOID
On the other side of the debate are charities like World Vision, which sells $30 million to $50 million a year worth of U.S. crops to fund its development work.
"We say, look, you need all the tools in the toolbox to fight hunger," said Bob Zachritz, a World Vision official.
The Alliance for Food Aid, which groups charities that support monetization, doesn't see proof monetization sales depress prices for developing country farmers.
The aid community is divided on that point.
Julie Howard, executive director of the Partnership to Cut Hunger and Poverty in Africa, said studies conducted before crops are sold in poor countries can avoid market distortions. The problem, she said, is that they're sometimes poorly done.
"We are really on the fence about it. We see the problem not as monetization per se, but how we get money to fund these important programs," Howard said.
While Gayle is confident CARE will be able to find funds for its development work without monetization (from other pots of U.S. government money or from private donors), smaller groups might have problems.
It's unclear, too, if other charities will follow suit. "It is a lot of money to walk away from," said Sophia Murphy, who follows aid at the Institute for Agriculture and Trade Policy.
The farm bill may provide a chance for politicians to look closely at aid, but monetization has not previously played a major role in debate to now. The House has passed its version already.
"The responsibility of reforming the inefficiencies of the food aid system rests on the shoulders of the Congress," said Laura Rusu, a spokeswoman for aid and advocacy group Oxfam.
"As a result of special-interest lobbying, America's generosity is undermined by legal restrictions and bureaucracy that create waste, delay and added expense," she said.
