One of the world's biggest charities, CARE has taken a bold and huge step in a positive direction by announcing that they're walking away from $45 million a year in US food aid money.

Since much of the federal funding for Africa comes from selling tons of American farm products in African countries, the thinking is that the system actually hurts many of the people it is supposed to help, and that it's plagued with inefficiencies.

Here's how it works in a process called "monetization":

Under the system, the U.S. government buys the goods from American agribusiness, ships them overseas on mostly American-flagged carriers and then donates the goods to the aid groups. The groups sell the products in poor countries and use the money to fund their anti-poverty programs there.

Not all charities operating in Africa agree with CARE's take, but the thought that all was not kosher ... that "converting American commodities into cash for development was a case of 'the tail wagging the dog,' with domestic farm policies in the United States shaping hunger-fighting methods abroad" ... is gaining strength and winning over converts.

Since even the US Government Accountability Office (GAO) has concluded that the system is "Inherently inefficient", CARE must be on to something.

As CARE spells out in its "White Paper on Food Aid Policy", it would make a heck of a lot more sense to buy food locally or regionally in the developing world rather than continue to go about doing it the backwards way it's being done to, "... (i) to reduce costs, delays and market distortions brought about by “tying” food aid to domestic procurement programs in the donor country and (ii) to increase procurement flexibility while providing economic opportunities for small farmers in countries where purchases are made."

Good thinking!

Announcing that the organization will "transition out of monetization" ... the sale of food aid as a way to generate cash for humanitarian programs in countries where people are often starving ... by the end of September, 2009, CARE insists it will employ the concept ONLY when it can be sure that the food being exchanged for cash will actually reach the people who need it.

Their reasoning for backing out of monetization?

1. Experience has shown that monetization requires intensive management and is fraught with risks. Procurement, shipping, commodity management, and commercial transactions are management intensive and costly. Experience has shown that these transactions are also fraught with legal and financial risks.

2. Monetization is economically inefficient. Purchasing food in the US, shipping it overseas, and then selling it to generate funds for food security programs is far less cost-effective than the logical alternative – simply providing cash to fund food security programs.

3. When monetization involves open-market sale of commodities to generate cash, which is almost always the case, it inevitably causes commercial displacement. It can therefore be harmful to traders and local farmers, and can undermine the development of local markets, which is detrimental to longer-term food security objectives.

Or, at least that's the polite and official answer to the question: Why rock this boat?

One of my favorite lines in the White Paper is: CARE takes the position that food aid should not be used to enable a donor to establish an unfair commercial advantage and must not create disincentives to local production and markets.

Well, amen to that.

Having reform for food aid to Africa fronted by an organization like CARE is a huge step in the right direction, and I applaud them for taking this greedy, pushy bull by the horns and doing its part to put it out of other peoples' misery.

It is so far beyond the time when good hard looks have needed to be taken at the flash that so often never gets to substance in the aid world ... or that has so many bites taken out of it on the way that there's far too little left for those who are touted to be the raison d'etre for the flash in the first place.

Contrary to popular understanding, groups like CARE ... and the UN ... are not supposed to be about cushy jobs, First Class flights, big offices, chauffeured Town Cars and Armani suits, and if those who have all that stuff can't manage to fulfill their real mandate to feed, shelter and otherwise care for the poorest on our planet, there is no reason for them to exist at all.

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