Thursday, April 9, 2009

Sachs on Aid for Agriculture

Following the G-20 summit President Obama called on Congress to double agriculture aid to developing countries. Jeffrey Sachs likes the proposal but is concerned with how the the aid will be used and disbursed (NYT):
A crucial factor in determining the program’s success will be how Washington delivers aid to the farmers. The traditional approach, and the wrong one in this case, would be for Washington to try to decide what’s best for each country, and then spend considerable time and money on report-writing, site visits and professional advice. When aid programs are operated this way, they can end up spending half or more of their funds on United States-based travel, personnel and administration, and take years to get off the ground. The benefits for poor countries are then much too little and too late.
Sachs offers a solution:
Rather than have Washington decide the kind of aid each country will receive, the recipient countries should be invited to prepare plans and budgets that would be reviewed by independent experts. These plans would describe the inputs needed by the farmers, the expected increase in production, how the strategy would be put into place and how much money would be required. Such plans, if described with care, could then be closely monitored by the United States and other donors to gauge results and avoid corruption.
So if I understand his proposal properly he does not believe that top down planning from rich Westerners will do much good and will in fact result in much of the money being squandered on research, but instead believes that top down planning from recipient governments is the answer? Okay, I'm being cynical, but are governments, based in large, populated cities, really the best to recommend (force?) to farmers what inputs should be used for production? I do not understand the appeal of replacing one group of planners with another group of planners.

I do like the approach of using aid as a prize, but couldn't the money go directly to local farmers, i.e. the people who know what they need to do but are capital constrained? At best the research on government to government foreign aid shows that it only helps governments that are already pursuing sound economic policies. Can't we use innovative tools - perhaps business plan competitions - to get money directly to entrepreneurs?

No comments:

Post a Comment