 Canada provides food aid through four channels;  Emergency aid ($44 million in 2002)  Food Aid in Development Context Bi-lateral ($330 million ) Multi-lateral ($285 million in 2010) NGOs ($38 million in ) ( CIDA, 2011).

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 When a natural disaster strikes a developing country, developed countries have often sent food aid. This food aid, however, can disrupt the local economy. The price of locally grown food drops because free food is available, and farmers lose their income as a result. How should donor countries like Canada deal with such situations?

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Foreign aid is considered “ tied ” when it comes with conditions that the goods and services funded must come from suppliers in the donor country. For example, currently, 75 percent of U.S. food aid must be shipped on U.S.-flagged vessels (Bread for the World, 2011). Untied food aid, frees up cash to be used for supporting the purchase of food in unaffected areas of the recipient nation or in other nearby countries (CIDA, 2011).

The U.N. states that tied aid can reduce the value of donations by percent. Highly processed foods reduce the value of every dollar spent. Higher-cost suppliers are sometimes chosen because others are legally prohibited from competing for contracts. Shipping to recipient nations uses aid funds and adds time to the delivery process. (Bread for the World, 2011)

In the early 1980s, tied aid accounted for 70 percent of all bilateral aid from the major donor countries. By 2006 it was less than 20 percent. The European Union has untied 100 percent of their bilateral aid. In 2008, Canada untied 100 percent of its bilateral aid. The United States still ties more than half of its bilateral aid. (Bread for the World, 2011) (CIDA, 2011)

When food aid is provided in cash recipient nations can; -source food locally or regionally at lower cost and more rapidly. -purchase food from producers in areas of the country with surpluses to distribute in areas of scarcity. -strengthen local and regional agricultural sectors and markets, by increasing incomes for smallholder farmers and poor rural communities. - choose culturally appropriate foods. Rather than surplus food stocks from the donor nation. (Bread for the World, 2011) (CIDA, 2011)

Bread for the World Institute. (2011). Tied Aid is Not Cost-Effective and Undermines Capacity-building. Retrieved November 23, 2011 from CIDA - Canadian International Development Agency. ( ). Food Aid: Reducing World Hunger. Retrieved from PQL PQL