In spite of international food assistance over many years, large numbers of people in the world are hungry and many die from lack of food--as many as 40,000 each day!

A global food stamp program supported by high-income countries would facilitate the purchase of food by poor people in developing countries, and because of the increased economic demand for food, rural economies in both developed and less developed countries would be rejuvenated.

An international food stamp program, here proposed, could augment the purchasing power of world’s poorest nations while stimulating the demand for agricultural commodities in the high income, food surplus nations. Farm prices in the high-income countries and the world market would increase 30-35 percent, and commercial exports of agricultural commodities, 60 percent.

The program would virtually eliminate hunger and malnutrition in the third world, where 40,000 people, by some estimates, die each day from lack of food. In addition, the rejuvenation of rural economies in both developed and less developed countries would stimulate world economic growth. And this could be accomplished for about the same amount of money now being spent by the world's high-income nations on farm income support and foreign food aid programs. (Kuhn et al, p. 31-45)

A Global Food Stamp Program

This international food stamp program would be similar in setup to the U.S. food stamp program. Pieces of paper, food stamp vouchers, would be distributed to the poorest people in the world's poorest nations. The recipients would use the stamps to buy food. Food vendors in these countries would redeem the food stamps for domestic currency; they would also be allowed to exchange them for hard currency to pay for imported food. The food stamps themselves could be distributed through a variety of institutions--religious institutions, health care facilities, schools, local units of government, or new institutions set up for the purpose.

Administration of the overall program could fall to any one of a number of international institutions such as the United Nations, U.S. AID. The World Bank, the International Monetary Fund, or a combination of agencies working together. Program funding would come from the 12 to 15 high-income countries of the world, each contributing according to its population and per capita income.

The total cost for such a program would depend on how much the world's developed nations wish to support it. It has been calculated that to bring the average per capita food consumption of the world's poorest countries up to the level that exists in the lower middle-income countries, such as the Philippines and Morocco, the cost to the world economy would be about $75 billion per year in current prices.

That's a lot of money, but by coincidence, this is roughly what the world’s wealthier country to support farm incomes and food aid programs spend each year. If an international food stamp program were set up to operate at this level, traditional farm programs could be drastically cut back or even eliminated. (Gundersen, p. 13-23)

Open Markets, Boost Demand

Countries, which agree to receive the food stamps, also would have to agree to open their borders to food imports from the world market. They would have the foreign exchange to import food because donor countries would finance the food stamp program with hard currencies. For example, if a country received $100 million in food stamps, its central bank would receive $100 million U.S. dollars or the equivalent in one or more hard currencies earmarked for food purchases--a food account. This would allow food importers to purchase hard currencies from this account that could be used to buy food on the world market. It is important that food vendors have the freedom to purchase their supplies from the cheapest sources--domestic or foreign.

Because of low per capita incomes in the third world contributing to a low demand for food, food prices in these countries are lower than world market prices. As a result, farming is relatively unprofitable, and farmers have an incentive to produce crops for export rather than for the domestic market. The food stamp program, however, would increase the domestic demand for food, thereby increasing the price and profitability of food crops. As a result the quantity of food available from domestic sources would increase as well. (Dwyer, p. 756-786)

This increased food purchasing power of poor people in the world would also increase the world demand for food. It is calculated that this increase in demand would increase the world market prices of agricultural products by 30-35 percent. Farm price support programs would be unnecessary because farmers would receive higher market prices for their products. In fact, the food stamp program would be better for farmers than traditional farm programs because farmers would be free to expand output in response to higher prices rather than having to take land or other resources out of production. Farm programs that, pay farmers not to produce when millions of people in the world malnourished, in my opinion, leave much to be desired. (Wilde & Andrews, p. 24-31)

Direct Food Shipment Is Not Possible

Increased food aid would probably make matters worse for two reasons. Surplus commodities such as dried milk or wheat may not have been a part of the traditional diet of people in the recipient countries. They may survive on these commodities, but consuming one commodity doesn't make for a balanced diet. An even greater problem is the impact of free or cheap food on farmers in recipient countries. Free or subsidized food causes prices of domestically produced crops to fall, making them less profitable. Third world consumers end up with no more total food, with a less varied diet, and with the danger of even less food if the food shipments stop. This kind of dependency is undesirable. Direct food shipments of the magnitude that would eliminate hunger in recipient countries would virtually destroy local markets. This is not a solution to the hunger problem. This food stamp program would increase the demand for food, which would make domestic food production more profitable and result in more food produced domestically. (Allen, p. 18-25)

Food Stamp Recipients Can’t Sell Stamps

There is a need to bear in mind that the people receiving the food stamps would be extremely poor, so poor that they could not buy sufficient food to keep their families alive. One would expect these people to use the stamps to survive before anything else. Granted, there would be some people who would prefer to buy something other than food. They may try to sell the stamps to others who want to buy more food. There is nothing wrong with this; it would be a mistake for a government to try to stop this practice. The harder it is to sell stamps, the greater the discount at which they sell. The poor who originally owned the stamps would lose income in the process. People who are starving could use the money to buy food, while those who had sufficient food, say, small farmers, could use the money to buy other things for the farm or home. (Kuhn et al, p. 31-45)

When a nation's money supply increases more rapidly than its output of goods and services, inflation occurs, international food stamps would not increase a recipient nation's deficit and, therefore, would not cause inflation. In fact, the program could decrease third world inflation by decreasing the budgetary requirements of their governments. In the high-income donor countries, the food stamp program could be financed by the money saved from reducing traditional farm and food aid programs and other programs that have not increased incomes of poor people in the third world. Thus the program would not increase overall government spending by donor countries, and therefore would not be inflationary for them either.

Works Cited :

Kuhn, Betsey A., Michael LeBlanc, and Craig Gundersen. "The Food Stamp Program, Welfare Reform, and the Aggregate Economy," American Journal of Agricultural Economics, Vol. 79, No. 5, 1997.
Gundersen, Craig. Economic Growth, Welfare Reform, And The Food Stamp Program. Food Review, Jan-Apr98, Vol. 21 Issue 1, p13-23.
Dwyer, Johanna. Food For Thought On Food Stamps. American Journal of Public Health, Aug82, Vol. 72 Issue 8, p. 756-786.
Wilde, Parke E.; Andrews, Margaret S. The Food Stamp Program In An Era Of Welfare Reform: Electronic Benefits And Changing Sources Of Cash Income. Journal of Consumer Affairs, Summer2000, Vol. 34 Issue 1, p. 24-31.

Allen, Jodie T. The Food Stamp Program: Its History And Reform. Public Welfare, Winter93, Vol. 51 Issue 1, p. 18-25.