Monday, February 16, 2009

Why is this preferable to direct provision of food?

Read about a new program for food vouchers at the UN website.

Why might this be better than simply giving food or cash?

4 comments:

  1. Food vouchers are a good solution because they will stimulate local economies, benefit local farmers, and may be less risky than giving cash because of curruption. The greater problem at hand, in my opinion, is the changing climate and increased oil prices which is destroying farming and increasing Africa’s needs for imported food and decreasing its opportunities to export food. At least food vouchers can increase the demand for local farmer's output who may have an abundance that they cannot afford to export.

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  2. One problem I see with this is the possibility of raising food prices. By increasing the demand for food (essentially through additional income-food vouchers), the price of food will increase. Although this could be good for farmers, if agriculture taxes are the primary source of governement revenue, then they may not see enough of the profit to stimulate the economy. A fine balancing act.

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  3. Vouchers would be better than giving food because free food takes away the incentive for many farmers to grow food; it also drives down prices if not makes it impossible for farmers to compete. This was tried in Sri Lanka and the farmers stopped growing their own food. Loss of agricultural production eventually led to food shortages and riots. On the other hand some studies have suggested that food vouchers induce recipients to consume more than they otherwise would have if paid for by cash, indicating that they are inefficient, but that may be desirable considering many suffer from malnutrition, plus there is the possibility of loss to corruption and people spending money on non food items(Whitmore, 2002). To add on to Drew's comment; higher prices from increased demand would mostly hurt those not receiving food vouchers and a guaranteed demand and payment for food, b/c of the vouchers, might lead to rent-seeking on the part of farmers and markets, where they would raise prices just because they can. It would be even worse if one store or market had government granted monopoly power over the vouchers.

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  4. Food vouchers are essentially a disbursement of credit towards the purchase of food. The voucher not only gives concrete evidence of the transaction making sure it was indeed food that was being purchased but additionally, it gives the person flexibility over purchasing food when in need versus being given food. Food vouchers are also a more cost-effective way for the United Nations World Food Programme to operate because transportation costs can essentailly be eliminated and the WFP's assitance of resources and time can be drastically reduced by not having to directly gather, store and distribute the food. The money saved could even very well be used towards increasing the amount of vouchers given out, thus being able to combat hunger to a further extent. Food vouchers allow a way for the markets to be manipulated in a way where it is seen to benefit all parties involved to the furthest degree possible. Local economies are also seen to be benefit because the money goes directly to the local markets and simply, it is more efficient and effective to have the food be available from markets that people can locally access.

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