2003 GLOBAL FOOD AID: BARELY COPING WITH

UNCLAS ROME 002331

SIPDIS


FROM U.S. MISSION IN ROME

STATE FOR PRM/P, EUR/WE, EUR/NE, AF, EAP/K, EUR/CACEN, NEA,
EB/TPP/ABT, WHA, WHA/USOAS AND IO/EDA BEHREND/KOTOK
USAID FOR DA/USAID SCHIECK, AA/DCHA WINTER, AA/AFR, DCHA/FFP
LANDIS, PPC/DP, PPC/DC
USDA/FAS FOR U/S PENN, CHAMBLISS/TILSWORTH/GAINOR
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USUN FOR MLUTZ
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OMB FOR TSTOLL
E.O. 12958: N/A
TAGS: EAID EAGR AORC PREF KUNR WFP UN
SUBJECT: 2003 GLOBAL FOOD AID: BARELY COPING WITH
EXTRAORDINARY NEEDS - EVEN LESS SANGUINE FORECAST FOR 2004

REF: (A) ROME 002196

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SUMMARY
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1. WFP has released its annual Global Food Aid report
entitled "2003 Food Aid Flows," which highlights, despite a
year of extraordinary emergencies, the steady downward trend
in total food aid tonnages, particularly since 1999. For
2004, international prices for food aid commodities continue
their steady climb upwards, and ocean freight rates are at a
record high. High prices for food aid commodities and
transport mean plainly and simply reduced tonnage for
beneficiaries, and food aid pipelines for a number of major
operations are increasingly precarious, as per WFP. When a
comparable price spike occurred in 1996 and 1997, donor food
aid contributions dropped to their lowest level since the
start of international food aid programs in the 1950s. As
WFP's Jim Morris (ref A) told the Annual Session of the WFP
Executive Board last month, "a donation to WFP (in 2004)
will buy markedly less food today than any time since the
mid 1990s." Population growth, declining land and water
resources, nutrition needs associated with HIV/AIDS, and the
high incidence of natural and man-made disasters, will this
year almost certainly create a number of unpalatable choices
for donors, implementing agencies, and recipient countries
alike.


2. "2003 Food Aid Flows" records that deliveries worldwide
this past year totaled 10.2 million tons, 830,000 tons under
the average annual tonnage delivered over the decade 1993-

2002. Over the past five years, tonnage levels are as
follows: 1999, 15.0 million tons; 2000, 11.3 million tons;
2001, 10.9 million tons; 2002, 9.7 million tons. The small
increase in 2003, 10.2 million tons, factors in the
extraordinary international efforts associated with Iraq.
Deliveries by the United States decreased by 8 percent, from
6.2 million tons in 2002 to 5.7 million tons in 2003. The EC
and its member states provided 2.2 million tons of food
assistance in 2003, compared with 1.4 million tons in 2002.


3. Eight countries - Ethiopia, Iraq, North Korea, Sudan,
Bangladesh, Eritrea, Angola and Zimbabwe - received over
half of all global food aid. The remaining 50 percent was
divided among 91 recipients. In 2003, food aid channeled
multilaterally reached a record level of 49 percent of
global food assistance, making WFP the world's predominant
food aid handler. End summary.

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Regional analysis - Sub-Saharan Africa
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4. Driven by extraordinary emergency requirements in both
the Horn and southern Africa, sub-Saharan Africa received
some 5.2 million tons of food aid in 2003, 51 percent of
world-wide deliveries. Seventy-eight percent of the food
assistance to the region (4.1 million tons) was emergency
food aid. Eleven percent was sold on the market. All food
aid was provided to sub-Saharan Africa on a fully grant
basis. Fourteen percent was procured through local

purchases, 16 percent provided through triangular
transactions (i.e., food aid purchased in one developing
country for use in another developing country),and the
remaining 70 percent was transferred directly from the donor
countries. Main recipients in 2003 were: Ethiopia, almost 2
million metric tons (19 percent of 2003 world-wide
deliveries and 38 percent of the deliveries to sub-Saharan
Africa); Angola, 280,000 mts; Zimbabwe, 280,000 mts; and
Sudan, 250,000 mts. Malawi, Kenya, Mozambique, Uganda,
Zambia and Tanzania each received more than 100,000 mts.
The main donors were the United States (55 percent),the
European Union (Commission and Member States) (30 percent),
Japan (5 percent) and Canada (2 percent). WFP delivered 62
percent of the emergency food aid and 33 percent of the
project (i.e., targeted, grant, development) food aid
provided to sub-Saharan Africa in 2003. Food aid flows to
sub-Saharan Africa (1999-2002) are as follows: 1999, 2.8
million tons; 2000, 4.0 million tons; 2001, 3.6 million
tons; and 2002, 3.0 million tons.

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Asia
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5. Food aid deliveries to Asia amounted to 2.4 million tons
in 2003, 24 percent of global deliveries, of which 57
percent was emergency relief. DPR Korea was the main
recipient country (965,000 mts),followed by: Bangladesh,
450,000 mts; Indonesia, 240,000 mts; Afghanistan, 230,000
mts; and Philippines, 100,000 mts. The major donors were:
the United States (36 percent); the Republic of Korea (22
percent); EU Commission and member states (13 percent);
China (10 percent); Canada (6 percent); and Japan (5
percent). WFP delivered 50 percent of the emergency food aid
and 28 percent of the project food assistance. Food aid
flows to Asia (1999-2002) are as follows: 1999, 5.0 million
tons; 2000, 3.2 million tons; 2001, 4.1 million tons; 2002,
3.8 million tons.

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Middle East and North Africa
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6. Food aid deliveries to the countries of the Middle East
and North Africa in 2003 amounted to 1.4 million metric
tons, 14 percent of global deliveries. Emergency and project
food aid together represented 90 percent of deliveries.
Seventy-three percent of the food assistance to the region
was provided through multilateral channels, 17 percent
through NGOs and 10 percent bilaterally. The major donors
were the United States (78 percent); Japan (4 percent);
United Kingdom (3 percent); European Commission (3 percent);
and Germany (2 percent). The main recipient countries were:
Iraq, 1.3 million tons; Jordan, 150,000 mts; and the
Palestinian Territories, 68,000 mts. WFP provided 81 percent
of the emergency food aid and 60 percent of the project food
assistance. Note. The Iraq numbers (and the overall global
food aid numbers) do not include the food commodities
purchased commercially through the UN Oil-for-Food (OFF)
operations. End note. Food aid flows to this region 1999-
2002 are as follows: 1999, 500,000 tons; 2000, one million
tons; 2001, 900,000 tons; 2002, 700,000 tons.

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Eastern Europe and Commonwealth of Independent States (CIS)
countries
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7. The deliveries to Eastern Europe and Commonwealth of
Independent States (CIS) countries in 2003 amounted to
750,000 mts, 7 percent of global food deliveries. Emergency
and project food assistance together accounted for 56
percent of overall deliveries. Thirty-two percent of the
food aid was channeled through NGOs, 23 percent was provided
multilaterally and 45 percent bilaterally. The main
recipient countries were: Ukraine, 200,000 mts; Tajikistan,
100,000 mts; Serbia and Montenegro, 80,000 mts; the Russian
Federation, 80,000 mts; and Georgia, 60,000 mts. The major
donors were the United States (57 percent),the Russian
Federation (27 percent),and the EU Commission and member
states (12 percent). WFP delivered 87 percent of the
emergency food aid, but was not involved in project
assistance. Food aid flows to this region 1999-2002 are as
follows: 1999, 5.4 million tons; 2000, 2.3 million tons;
2001, 1.3 million tons; and 2002, 1.0 million tons.

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Latin America and Caribbean region
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8. Latin America and the Caribbean received 470,000 metric
tons of food assistance in 2003, 5 percent of global
deliveries. 67 percent was channeled through NGOs, 19
percent was provided multilaterally and 14 percent
bilaterally. Half the food aid delivered was sold on the
market; all food aid to the region in 2003 was provided on a
fully grant basis. The main recipient countries were:
Bolivia 130,000 mts; Peru, 70,000 mts; Honduras, 70,000 mts;
Haiti, 60,000 mts; Guatemala, 60,000 mts; and Nicaragua,
50,000 mts. The major donors were the United States (91
percent); EU Commission and member states (3 percent); and
Japan (2 percent). WFP delivered 77 percent of the emergency
food aid and 17 percent of the project food assistance. Food
aid flows to Latin America and the Caribbean 1999-2002 are
as follows: 1999, 1.2 million tons; 2000, 828,000 tons;
2001, one million tons; and 2002, 1.2 million tons.

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Other salient food aid facts in 2003
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9. Other highlights of the report are as follows:

- The United States provided 56 percent of all global
food aid. However, deliveries by the United States (all
programs) decreased by 8 percent, from 6.2 million tons in
2002 to 5.7 million tons in 2003. U.S. food aid levels 1999-
2001 are as follows: 1999, 9.5 million tons; 2000, 7.0
million tons; 2001, 6.8 million tons;
- The EC and its member states provided 2.2 million tons
of food assistance in 2003, compared with 1.4 million tons
in 2002. EC and its member states food aid levels 1999-2001
are as follows: 1999, 3.7 million tons; 2000, 2.2 million
tons; 2001, 2.1 million tons;
- In 2003, emergency food aid deliveries (all spigots)
reached a record level of 6.8 million tons, or 67 percent of
the global deliveries;
- Relative to 2002, deliveries funded by the European

Commission (not including the member states) increased by 90
percent (from 585,875 tons in 2002 to 1.1 million tons in
2002),those by the Republic of Korea by 26 percent and
those of Japan by 39 percent. Deliveries by Canada increased
by 52 percent; deliveries by the United Kingdom rose by more
than threefold. The deliveries of Norway went up by a factor
of four, and food aid deliveries by Italy increased by 7
percent. However, food aid from China decreased by more than
30 percent, (i.e., from 200,000 mts to 100,000 mts),and
Australia's donations by two-thirds (from 300,000 mts to
100,000 mts);
- Eight countries - Ethiopia, Iraq, North Korea, Sudan,
Bangladesh, Eritrea, Angola and Zimbabwe - received over
half of all global food aid. The remaining 50 percent was
divided among 91 recipient countries;
- 932,000 metric tons of food aid provided in 2003 was
procured through local purchases;
- 94 percent of global food aid in 2003 was on full grant
terms (9.6 million tons),while only 6 percent (600,000 tons
were provided on concessional terms;
- Of the 10.2 million tons of commodities constituting
food assistance in 2003, 1.9 million tons were sold
(monetized) and 8.3 million tons directly distributed to
final beneficiaries;
- 96 percent of global food assistance (some 9.9 million
tons) in 2003 went to developing countries, of which 5.3
million tons (52 percent) went to least developed countries
(LDCs); and finally,
- In 2003, food aid channeled multilaterally reached a
record level of 49 percent of global food assistance (nearly
5 million tons against an overall total 10.2 million tons
delivered - all spigots),making WFP (at 4.6 million tons)
the world's predominant food aid handler.

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Comment
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10. Globally, there is an increasing trend to use food aid
to target people rather than providing import substitutions.
Food aid procurements in developing countries are on the
increase. Targeted food aid flows in both emergency and
development settings are now driven more by case-by-case
assessment of the urgency of human problems and are
increasingly provided on a multilateral basis or through
NGOs. WFP is the dominant player in the delivery of
worldwide emergency food aid, handling 63 percent in 2003.


11. For 2004, international prices for food aid commodities
continue their steady climb upwards, and ocean freight rates
are a record high. High prices for food aid commodities and
transport mean plainly and simply reduced tonnage for
beneficiaries, and food aid pipelines for a number of major
operations are increasingly precarious, as per WFP. When a
comparable price spike occurred in 1996 and 1997, donor food
aid contributions dropped to their lowest level since the
start of international food aid programs in the 1950s. As
WFP's Jim Morris told the Annual Session of the WFP
Executive Board last month, "a donation to WFP (in 2004)
will buy markedly less food today than any time since the
mid 1990s." Population growth, declining land and water
resources, nutrition needs associated with HIV/AIDS, and the
high incidence of natural and man-made disasters, will this
year almost certainly create a number of unpalatable choices

for donors, implementing agencies, and recipient countries
alike. Hall


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2004ROME02331 - Classification: UNCLASSIFIED