* US should study how it could buy more food locally - GAO * Cheaper, faster to buy food aid locally for Africa, Asia * US aid is mainly US-grown food sent on on US ships * But buying locally can create shortages, drive up prices By Roberta Rampton WASHINGTON, June 4 (Reuters) - Buying food aid closer to where it's needed is usually cheaper and faster, a U.S. government watchdog said in a report on Thursday, but aid donors must be careful not to overwhelm local markets with demand. The United States, the world's largest food aid donor, should study how to avoid some of the constraints of buying aid locally and regionally and use that to improve its food aid, the Government Accountability Office said. Local and regional purchases of aid can "better meet the needs of hungry people by providing food aid in both a more timely and less costly manner," said Thomas Melito, director of the GAO's international affairs and trade team, in prepared remarks for a Congressional hearing on food aid. The United Nations' World Food Program estimates that more than 1 billion people will be chronically hungry this year, up from 963 million in 2008, with most of the growth coming from people who can't afford food or get access to it. Most food aid donors from other parts of the world have stopped shipping domestically grown food to countries facing food shortages, instead giving cash to the WFP to buy food. But the bulk of U.S. food aid is bought from American farmers and shipped on American ships, which adds cost and delays, Melito said in the remarks prepared for testimony to the House Foreign Affairs Subcommittee on Africa and Global Health. The World Food Program spent 34 percent less on average in buying aid for Africa locally and regionally from 2001 to 2008, compared to the cost of comparable food aid shipped from the United States, the GAO found in its study. It took a little more than a month to deliver food aid sourced nearby, but traditional internationally sourced food aid averaged 147 days to deliver, the GAO said. For Asia, the WFP's costs were 29 percent less. But for Latin America, the costs were comparable, the report said. But the GAO noted its comparison should not be interpreted to suggest that the United States could have achieved the same costs if it had bought its aid locally, noting the extra demand may have created shortages or pushed up prices. Traditional food aid has often drawn criticism for flooding local markets and depressing prices, but buying locally and regionally can have an opposite deleterious effect, Melito said in his testimony. "The most significant challenge to avoiding potential adverse market impacts ... is unreliable market intelligence," he said. In 2007, the Malawi government found itself short of food after it exported maize to Zimbabwe and sold some to the WFP for aid in African nations based on crop production estimates that were too high. Buying locally also presents the challenges of finding reliable suppliers, dealing with limited rail and port capacity for shipping aid, and enforcing contracts and preventing defaults, Melito said. (Reporting by Roberta Rampton: editing by Jim Marshall)
A Somali refugee girl stands in front of a restaurant sign board at Hagadera camp in Dadaab in Kenya's northeastern province, June 4, 2009. Somalis fleeing war and hunger at home ...
