FAO/GIEWS - Food Outlook No.4 - September 1999 p. 8

FOOD AID^1/

• Cereal food aid shipments expanded significantly in 1998/99
• Shipments of non-cereal food aid in 1998 fell for the fifth consecutive year
• New Food Aid Convention has come into effect
• Contributions to IEFR and PRROs rose in 1998

Cereal food aid shipments expanded significantly in 1998/99

Latest estimates for 1998/99 (1 July through 30 June) put cereal food aid shipments, under the programme, project and emergency categories at nearly 9.5 million tonnes, up more than 3 million tonnes, or 52 percent, from the revised estimate for 1997/98 and the highest since 1993/94 (Table A.10). Shipments from the United States more than doubled to 5.6 million tonnes while those from the EC also rose, by over 30 percent, to 2.4 million tonnes. Among the other countries, larger donations were also registered for Japan, whereas, those from Australia and Canada declined slightly. The increase in cereal food aid shipments is accounted for mostly by wheat, rice and rye.

FOOD AID SHIPMENTS - CEREALS (July/June)

On the recipient side, the bulk of the increase in food aid shipments went to the Russian Federation, in the form of cereals, which rose from only 42 000 tonnes in 1997/98 to around 2 million tonnes in 1998/99. Shipments to Bangladesh also rose substantially, by more than 1 million tonnes to roughly 1.6 million tonnes. Cereal food aid to Indonesia exceeded 700 000 tonnes, compared to only 9 000 tonnes in the previous year. Larger shipments were also registered to the hurricane-ravaged countries of Central America, especially Honduras, Guatemala and Nicaragua. In Africa, cereal food aid to most countries fell; the exceptions were mainly Eritrea, Guinea Bissau, Sierra Leone, Sudan and Zimbabwe. In Asia, beside Bangladesh and Indonesia, mentioned earlier, larger food aid shipments were also registered to Mongolia and Nepal, while cereal donations to many other countries fell drastically, including to the Democratic Republic of Korea, one of the largest food aid recipients in recent years. Similarly smaller shipments were registered to Armenia, Sri Lanka, Azerbaijan, Georgia, Kyrgyzstan and Tajikistan.

FOOD AID SHIPMENTS - NONCEREALS

Shipments of non-cereal food aid in 1998 fell for the fifth consecutive year

Food aid shipments of non-cereals contracted for the fifth consecutive year and registered a low of around 871 000 tonnes in 1998, down 4 percent from their already reduced volume in 1997 (January-December). (While cereal shipments are monitored on a July/June basis, shipments of non-cereals are monitored on a calendar year basis and the year 1999 is not yet complete.) Most of the reduction was due to smaller shipments of sugar, butter oil, fish and meat products as well as dried fruits. By contrast, shipments of pulses, which currently represent nearly 50 percent of the total non-cereal donations, showed an increase of about 5 percent over the previous year to 435 000 tonnes. Food aid of vegetable oil, another major non-cereal category, also increased by about 11 percent to 318 000 tonnes. On a regional basis, the bulk of the decline occurred in Africa and Europe while higher shipments were registered to Asia as well as to Latin America and the Caribbean.

New Food Aid Convention has come into effect

In June 1999 major donors approved the new Food Aid Convention (FAC) and confirmed their intention to implement it for an initial period of three years starting in July 1999. The new convention calls for a more flexible approach to food aid by expanding the list of eligible commodities and the method of contributions. The commodity list has been expanded to include edible oils, root crops (cassava, potatoes, etc.), skimmed milk powder, seeds for eligible crops, sugar, products which are part of the traditional diet of vulnerable groups or a component of supplementary feeding programmes, and micro-nutrients and fortified food products. These food items, in aggregate, will be limited to no more than 20 percent of any donor's commitment, with individual commodities limited to 3-7 percent of the total donation, excluding transportation and other operating expenses. Overall, the total volume of commitments under the 1999 Convention is 4.895 million tonnes, in wheat equivalent, compared to 5.35 million tonnes under the 1995 Convention. The difference is accounted for by the pledge by the EC to provide 130 million ecus in cash, or about 588 000 tonnes of wheat, which includes transportation costs. At current prices and transportation costs, the food aid volume commitment under the new Convention is roughly equivalent to the previous one.

Contributions to IEFR and PRROs rose in 1998

As of August 1999, cereal contributions to the WFP administrated International Emergency Food Reserve (IEFR) registered more than a two-fold gain, approaching 2 million tonnes (Table A.11). The increase in non-cereal contributions of about 40 000 tonnes to 206 000 tonnes was less significant. Pledges to the 1999 IEFR have exceeded 1 million tonnes for cereals and 170 000 tonnes for non-cereals, which are in line with the pace of pledges for the corresponding period in 1998. Contributions to the 1998 Protracted Relief and Refugee Operations (PRROs), also directed by the WFP, amounted to about 539 000 tonnes for cereals and 101 000 tonnes for other food commodities, almost the same as in 1997. However, by August 1999, some 203 000 tonnes of cereals and 100 000 tonnes of non-cereals have already been pledged under the 1999 PRROs, thus increasing the possibility that contributions in 1999 may exceed those in 1998.