The Bellmon Amendment
In 1977, Congress passed the Bellmon Amendment to Public Law 480 (P.L. 480 was renamed the Food for Peace Act in 2008). The Bellmon Amendment requires that before US food aid can be supplied, the Secretary of Agriculture or the USAID Administrator, as appropriate, must determine that:
- adequate storage facilities will be available in the recipient country at the time of the arrival of the commodity to prevent the spoilage or waste of the commodity;
- the distribution of the commodity in the recipient country will not result in a substantial disincentive to or interference with domestic production or marketing in that country.
In August 2008, USAID Office of Food for Peace launched a pilot project to help USAID comply with the Bellmon Amendment. The Bellmon Estimation Studies for Title II (USAID-BEST) project conducts independent market analyses to ensure that the Bellmon Amendment requirements are met for USAID-administered Title II programming.
Thus far, the USAID-BEST project has conducted studies in: Bangladesh, Burundi, Burkina Faso, Cambodia, Democratic Republic of the Congo, Dominican Republic, Ethiopia, Guatemala, Haiti, Honduras, Liberia, Madagascar, Malawi, Mali, Nepal, Niger, Peru, Sierra Leone, South Sudan (formerly, Southern Sudan), Uganda, Zambia, and Zimbabwe.
Donors and implementing partners can address food insecurity with the use of food aid programs that may include distributed food aid, monetized food aid, locally and/or regionally procured food aid, and distribution of cash and/or vouchers. Program implementers select food aid beneficiaries based on factors such as poverty, nutritional status, health, age, and/or exposure to shock.
USAID/Food for Peace Title II development programs rely on distributed and monetized food aid to address food insecurity in vulnerable communities.
Direct distribution is the distribution of in-kind food aid rations to vulnerable individuals and households. In the case of Title II food aid, commodities are procured from the US for distribution to targeted groups in recipient countries under both Title II emergency and development programs. Within development programs, direct distribution of Title II commodities is often used as an incentive for beneficiaries to build infrastructure, attend school or skills trainings, and build or restore productive assets such as wells, irrigation canals, sanitation facilities and schools. 1
Monetization is an activity in which commodities purchased in donor countries are sold on local or regional markets to generate cash resources for program implementation and/or to develop local markets. In doing so, Title II monetization must 'do no harm' to producers' incentives, fragile local food markets, and low-income consumers. Proceeds from the sale of Title II commodities are used to implement a number of activities, including growth monitoring and behavior change, community capacity building, and agricultural extension services. 2
Food Aid and Local Markets
Food aid can impact local markets. The scope of this impact, however, varies according to a number of factors including: whether food aid is monetized or distributed, commodity type and volume, timing of delivery, and distribution activity type. Market impact also varies according to the number and type of targeted beneficiaries. Importantly, the impact of food aid on local markets can be either positive or negative. For example, monetized food aid may positively increase market competition, generate local currency, and/or provide food during supply shortages. Distributed food aid can improve household nutrition, and can provide a critical safety net for households who lack sufficient purchasing power to meet their basic foods needs through market purchases. On the other hand, food aid may serve as a disincentive to local production or local marketing. The USAID-BEST project makes recommendations to minimize negative impacts food aid may have on local markets.
Monetized Food Aid and Local Markets. The extent to which monetized food aid has the potential to introduce a production disincentive or market disruption rests primarily on whether the monetized commodity is sold at a fair market price, and in a volume that would not be expected to cause disruption of normal trade patterns.
For details on how the USAID-BEST project measures market impact of monetized food aid, see the
USAID-BEST monetized food aid methodology.
Distributed Food Aid and Local Markets. The extent to which distributed food aid has the potential to introduce a disincentive to production or disruption of markets rests fundamentally on whether proposed food aid will represent "additional consumption" for beneficiary households, i.e., food consumption which would not have occurred in the absence of the food aid distribution program. By targeting distributed food aid towards households with extremely limited ability to access sufficient food to meet its basic food needs (either because of limited availability of food in the markets, or insufficient purchasing power to buy the food that is available), distributed food aid program will minimize any negative impact on the market.
For details on how the USAID-BEST project measures market impact of distributed food aid, see the USAID-BEST distributed food aid methodology.