Food Aid and Structural Adjustment Lending

Abstract

The use of food aid in structural adjustment lending (SAL), developed largely under World Bank/IMF auspices, has attracted recent attention both on the part of those concerned with SAL and with food aid. This is not difficult to understand: SAL needs food aid; and food aid needs SAL. Those administering SAL are increasingly ready to concede that the sacrifices involved in adjustment programmes require more oiling of the wheels in the form of additional external resources, to make adjustment more ‘growth orientated’ and/or to give it a more ‘human face’. Those administering food aid are increasingly aware of a need to link food aid with ‘food strategies’ and efficient macroeconomic policies to avoid disincentive effects — the same objectives as adjustment programmes — and to combine food aid with financial aid to maintain demand for food out of increased incomes, to make up for the leakage of food-aid-generated income transfers into non-food expenditure. It is not surprising that in their search for additional resources the eye of adjustment lenders and of debtor countries should have fallen on food aid; nor that in their search for uses of additional food aid and acceptable policy frameworks the eye of food aid donors should have fallen on SAL. If there is any surprise it is that it should have taken so long for the two sides to get together — in the case of such multilateral sources as the World Bank and the World Food Programme, a tribute to the strength of the bureaucratic separatism of agencies within the UN system.¹