Foreign Aid

Corruption biting the hand that feeds: food aid industry facing tough questions

Brady Yauch
Probe International
April 5, 2010

The food aid industry is facing a number of scandals and criticisms that are providing fresh evidence that not only does food aid hurt Third World farmers, it is also a revenue source for corrupt politicians and terrorists.

In Haiti, as the relief efforts continue to percolate through the country, President Rene Preval is urging international food aid donors to scale back their contributions [PDF] , saying now that the “first phase of the emergency is over” Haitians need to be weaned off some of the food aid so they can begin to develop the necessary means to meet their own needs.

“If food and water continues to be sent from abroad, that will undermine Haitian national production and Haitian trade,” he said.

His plea comes after decades of food aid have already undermined Haiti’s agricultural sector [PDF] , according to a number of analysts. Haiti relies on the outside world for much of its sustenance—with the most recent statistics showing that 51 percent of the food consumed in the country is imported, including 80 percent of all rice eaten. In the 1970s agricultural production accounted for almost half of the GDP, but has since fallen to less than a third.

Jean Andre Victor, a Haitian agronomist, agrees with the president, saying the country needs to implement drastic agricultural reforms, not increase its shipments of food aid.

“There’s a long history in Haiti of groups like USAID flooding the market with rice and other imports,” he told the Associated Press. “This is not what we need. We need real help and that means completely changing the agricultural system.”

But food aid, while being criticized for creating dependency in the country it is supposed to be helping, also often falls under the political control of corrupt government officials and criminal elements. Haiti is no exception.

Haitian National Assembly deputy Steven Benoit says that gangs are intercepting aid convoys with the help of information from corrupt government officials, selling the food on the black market, and lining their pockets [PDF] .

“They (government officials) have their little gangs on the side and those gangs are operating with immunity because they know they are covered by high-ranking officials,” he said.

Other workers on the ground are also noticing that food aid is increasingly feeding the country’s black market. One Canadian pastor and his wife, working in Haiti to rebuild an orphanage destroyed in January’s earthquake, say they have to buy food aid from the black market.

“They [residents] have to buy rice donated by Canada because it is available only on the black market. When you see a helicopter dropping food, men fight over it and then sell it in the market,” says Louise Noel, the pastor’s wife. She added that everything for sale in the local market was first donated.

Somalia too

The problems in Haiti are just the tip of the iceberg facing the global food aid industry. A recent internal report from the United Nations Security Council says that as much as half of the food aid to Somalia [PDF] is lining the pockets of corrupt contractors, radical Islamic militants and local United Nations Staff. The report writes that the World Food Program—currently the largest aid agency in the country—is particularly problematic.

“Some humanitarian resources, notably food aid, have been diverted to military uses,” the report said. “A handful of Somali contractors for aid agencies have formed a cartel and have become important power brokers—some of whom channel their profits, or the aid itself, directly to armed opposition groups.”

While the allegations of problems of food aid diversions first surfaced last year, the World Food Program denied the allegations and stated that its own internal audit found no widespread abuse. But the authors of the recent damning report have, according to the New York Times, questioned how independent the internal audit was and are now calling for a new outside investigation of the United Nations agency.

Food aid in Somalia is big business. Transport contracts alone are worth $200-million and are the most important source of revenue in Somalia—with 80 percent of those contracts going to three Somali businessmen who are suspected of connections to Islamist insurgents. These three contractors have dominated the transportation of food aid in the country for the past 12 years [PDF] .

“On account of their contracts with WFP, these men have become some of the wealthiest in Somalia,” the report was quoted as saying.

The investigation concludes that, in the end, only about half of the food it ships to the country actually makes it to starving Somalis.

Food aid from days gone by is also facing tough allegations after the BBC reported that millions of dollars of international aid for victims of the mid-1980s famine in Ethiopia was used by rebels to buy weapons. Using CIA documents and interviews with former rebels, the BBC says militant leaders posed as merchants when they met with aid groups that poured into the country after the Live Aid charity concert in 1985.

“The aid workers were fooled,” said the former commander of the rebel group Tigray People’s Liberation Front (TPLF), Aregawi Berhe.

Patricia Adams, the executive director of Probe International, who has monitored the aid industry since the 1980s and written books about the problems of foreign aid, says the recent revelations prove that state-sponsored foreign aid is perhaps the most corruptible of all government handouts and should be phased out.

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