Food Aid: Feeding Bellies, Starving Markets?

Ryan Cummings | KF 17 | Liberia

It’s no secret that microfinance institutions provide a variety of beneficial services to communities beyond just loans. In addition to micro-credit services, BRAC Liberia also runs a community health program and an agricultural program to improve the quality of life for its borrowers and the community as a whole.

The agriculture program provides entrepreneurial farmers with both technical assistance and funding for seeds and other inputs. Having a background in agricultural business, I am always fascinated by international agriculture and its relationship to development. One of my first observations in Liberia was the notable lack of small farms. In my past experience and travels in the developing world, small farms have always been a mainstay of family income and subsistence.

With further research, I discovered that prior to the civil war Liberia had a well-developed agriculture system utilizing its large land base, fertile soil, and abundant water resources. But after decades of conflict, many of the fields were overgrown by jungle and irrigation systems fell into disrepair. Several years after the war, the Liberian agriculture system remains in disarray. Armed with questions, I set off with a BRAC agriculture specialist to examine the puzzle that is Liberian agriculture.

King has worked with BRAC for 3 years and studied agriculture production extensively in and out of school. In fact, King grew up on a diversified farm growing vegetables, palm, corn, peppers, and rice. I was excited to go into the field with such a qualified guide.

Our first stop, on our exploratory adventure, was a school growing small seedlings as a social business. BRAC Liberia partnered with this school to help produce vegetable seedlings for two reasons: to provide the school with income to offset operation costs, and to provide local farmers with much-needed seedling transplants to grow on their farms — a true win-win situation. While the program was successful, it hasn’t expanded as fast as King would like. He explained that a combination of factors has slowed agriculture development in Liberia. One clear theme emerged: a misalignment of incentives for farmers.

First, profits from farming cassava and rice are low. Both are staple crops, widely produced throughout the world and easily stored and transported. Cheap imports depress Liberian food prices and two-thirds of Liberia’s food is imported. One of the main sources of these imports is food aid. Tens of millions of dollars in food aid is imported to Liberia, providing millions of people with food security, but deflating market prices for local farmers.

Farmers are rational actors. King explained that, “it’s hard to convince people to farm when they get low market prices and can get food for free from food aid [programs].” King has been struggling to shift farmers away from staple crops so that they can focus on high-value fruits and vegetables. BRAC has developed a model small farm program dubbed the “kitchen farm.” King works with community members to build individual plots loaded with fruits and vegetables like potatoes, eggplant, corn, and mangos.

Through these kitchen farms, families can not only slash their personal food costs (a major expenditure in Liberia), but also earn additional income by selling their products at market. One of the challenges faced by agriculture development organizations are Liberians’ expectations.

“In the past, aid organizations provided work programs to Liberians which paid individuals a daily wage to work on community infrastructure projects,” King says. BRAC Liberia’s program will only provide technical support and inputs to help the farmers. The organization’s model is to train and equip farmers to run their own farms and reap their own profits at the end of the season. On more than one occasion King has helped set up a farm with community members only to have it fall to the wayside because the members didn’t want to wait for the harvest to reap the bounties of their work. It’s the classic paradigm of a dollar today is worth more than a dollar tomorrow.

Talking with King about agriculture development was akin to reading an international agriculture development journal, only less stuffy. I was amazed to see that King’s experience on the ground accurately summed up the dilemmas in Liberia much more efficiently than many think tanks, journals, and NGOs.

I found it especially interesting that King has a much more challenging time finding clients for his agriculture program than for its sister micro-credit program even though its free. To me, one of the compelling dynamics of micro-credit is that the money is allocated to those who are motivated to receive it. So why are people streaming to micro-credit services but away from traditional agricultural development services? And how can we satisfy the need for food aid without damaging the market for local farmers? Unfortunately, that is where my personal expertise ends.

Thankfully, the Kiva community is comprised of an educated and worldly base of supporters with a wide range of experiences and expertise that could shed more light on this problem. So what do you think? Has food aid been a much needed safety net in the developing world, or has it hampered sustainable agriculture development, economic growth and independence? And, finally, what role can micro-credit play in promoting food security and stability?

Ryan Cummings is a Kiva Fellow working closely with BRAC in Monrovia, Liberia.