Advance Fellows Award: The WTO and Food Aid:Preserving Humanitarian and Developmental Benefits

Montana State University, Bozeman MT

Investigators

Abstract

The World Trade Organization is conducting negotiations to reduce barriers and subsidies for agricultural trade. A key proposal has emerged that could eliminate the ability of donors, particularly the United States, to give non-emergency food aid in-kind to less developed and developing countries. Currently, one-third of project food aid is sold on recipient country markets and the funds raised are used to finance a wide variety of development projects, including but not limited to projects designed to increase food security. However, the food aid sold can have a detrimental impact on local commodity prices, and the resulting price depression and instability can be a disincentive for agricultural production. Many recipient countries are trying to increase their agricultural production with the goal of enhancing their food security and increasing their export earnings. This research will evaluate (1) the impact of monetized food aid on developing country markets and possible disincentives to agricultural production and (2) the benefits from the projects sponsored by the funds raised from the monetized food aid. The PI will develop relevant models, collect price and market data in selected countries, and estimate the impact of monetization on case study markets and agricultural sectors. This analysis will be presented to decision makers in a tradeoffs framework, a highly intuitive graphical analysis. This will enable them to value the social benefits of the market impacts and the development projects and make corresponding choices. This analysis will be a critical input to the development of WTO rules that preserve the humanitarian and developmental benefits valued by affected countries. This research will extend the PI's empirical evaluation of food aid in the 1990s. The models of food aid the PI developed and empirically tested analyze the relationship between food aid donations and need. Separate models portray the relationship between food aid and (1) need due to production shortfalls and (2) need as embodied in chronic hunger due to lack of access to food. The PI's research focus is on issues inherent in economic integration. The PI's research program explores the tension between the realization of domestic policy goals and trade liberalization and has investigated the impact of policies and institutions on markets and the resulting welfare consequences. The PI's goal with this ADVANCE Fellow Award is to obtain a tenure track position at Montana State University. In this position, she can more effectively participate in the teaching and research mission of the University and engage in the public debate and policy discussion focused on issues due to economic integration. She has developed and taught a pilot class on "Issues of Economic Globalization" and proposes to further develop a web-based platform for this course. This curriculum is one of the broader impacts, as it will provide a basis for the PI to outreach to the many government and non-government entities seeking an enhanced understanding of these issues. The research results will be presented to both academic audiences and to researchers and decision makers in multilateral institutions. Working in developing countries will enhance the PI's ability to form research collaborations with colleagues in these countries. It will also increase her ability to contribute to international research efforts at MSU, many of which involve multiple disciplines. A tenure track position is vital for the PI to be influential in her discipline's leading research forum and to mentor female graduate students and academics.