The impact of locally purchased food aid on recipient country agriculture markets
Reed Fritts, Elizabeth.
Thesis (M.P.P.)--Georgetown University, 2010.; Includes bibliographical references.; Text (Electronic thesis) in PDF format. The World Food Programme estimates that 1 billion people worldwide do not get enough food to eat. The major causes of hunger include natural disasters, conflict, poverty, and poor agriculture infrastructure. Developed nations have largely relied on food aid to meet the need for food in developing nations. While food aid has an obvious short term goal of meeting hunger needs, it may also have long term impacts on the development of agriculture production in developing nations. While previous studies have examined the relationship between food aid and agriculture production, these studies do not take in to account the different types of delivery mode in which food aid is distributed; direct transfers, local purchase, and triangle purchase. This study seeks to fill this gap by conducting a vector autoregression analysis of the relationship between locally purchased food aid and recipient country agriculture production and prices. This study finds that increases in the proportion of cereal food aid that is locally purchased Granger causes decreases in cereal production, primarily for African recipients. Additionally, the study finds that higher levels of agriculture production in the case of an emergency Granger causes increases in the proportion of locally purchased cereal food aid. The analysis does not show a statistically significant relationship between price and locally purchased food aid. While the analysis shows a negative relationship between locally purchased cereal food aid and cereal production in Africa, there is possible bias due to omitted variables and aggregation of data. Despite the consequences of this potential bias, the results provide no evidence of a true positive causal relationship between locally purchased food aid and agriculture production in recipient countries.
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