Agricultural Policies

Paper

Emergency Needs Assessments and the Impact

MSU International Development Working Paper n.87 (2006)

The debate on the potential negative effects of food aid on local commodity markets, the “disincentive effects” of lower producer prices in recipient countries since the 1960s. Researchers have developed increasingly sophisticated quantitative methods to assess potential commodity market disincentives. This research indicates that large amounts of food aid delivered into markets or for free distribution without any targeting of households were the main sources of disincentive effects, particularly when the food aid commodity chosen was also produced locally and the delivery coincided with local harvests. Even where negative market effects were identified, however, longer term effects were often found to be beneficial. Thus the ex-post analysis suggests that targeting, particularly the timing of shipments into markets, has tended to be the problem, not necessarily a poorly done emergency needs assessment (ENA). This report reviews current methods to conduct ENA with the aim of improving them. While using the WFP ENA as the main case to evaluate, the report seeks to be useful for other agencies in their assessments after an emergency. The market component in existing ENA frequently focuses on prices, price changes, and household purchasing power, ignoring the aspects related to market structure that would identify the potential of the market to meet needs. There is an underlying assumption that households without effective demand (purchasing power) will need to receive free food distributions to meet their needs. The report presents a brief summary of the fundamentals of demand and supply related to food aid distributions and their potential effects on the prices. The relationships between shocks, markets, and responses are then drawn.

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