FOOD AID AND FOOD MARKETS - LESSONS FROM MOZAMBIQUE

A consensus has emerged on food aid policy, acknowledging the importan ce of short-run relief considerations, while emphasizing that such pol icy must be driven by a long-run, developmental perspective. This requ ires explicit attention to the effects of food aid on food markets, Ye t it has long been clear that short-and long-run objectives of food ai d may conflict, This tension stands in high relief in Mozambique, one of the most food aid-dependent countries in the world, This paper exam ines the factors determining the effects of yellow maize food aid on m arkets for yellow maize and white maize (the staple crop) in Mozambiqu e. The paper finds that: (a) food aid has helped fuel the growth of a competitive small scale milling industry and informal marketing system ; (b) yellow and white maize are substitutes in consumption; and (c) c ontinued availability of yellow maize food aid at prices well below im port parity will depress incentives for producers and traders to inves t in the white maize production and marketing system. This paper prese nts recommendations for reforming the monetized food aid program and c oordinating it more effectively with emergency aid. Copyright (C) 1996 Elsevier Science Ltd.