Malnutrition And Food Aid Programs: A Case Study From Guatemala Page: 54
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international debts--i.e. 'balance of payments' (Lappe and Collins 1977,
1980). One negative effect of this currency transfer on the recipient's
balance of payments is that it drains off foreign currency needed for
purchases of foreign (non-agricultural) commodities, as well as other
agricultural products (not provided by PL-480). More specifically, this
aspect of currency transfer in PL-480 is especially valid under Title I,
since it is directly written into the legislation. However, whether the
effect of food aid has a positive or negative consequence on the recip-
ient's balance of payments, with respect to the transfer of currency,
will depend on the terms of the individual agreement.
On the other hand, this transfer aspect of Title I is particularly
beneficial to the United States (as is the case in similar instances
for all donors). Bard (1972) points out that, first, PL-480 is a means
of supporting the U. S. agricultural system by relieving a potential
glut of American agricultural commodities, avoiding storage problems,
and generating a nominal return on investment. He notes that the U. S.
government can purchase local agricultural commodities at well below
the going world market price. Then, it can provide them at a very
attractive price to recipient nations, and, still pay off overhead
costs. Witt (1977: 82) states:
Shipping the grain to another country in exchange tor
local currency could realize 20 to 60 cents on the
dollar, under Title I, the largest component of P.L.
480 shipments. (The terms were stiffer after 1967, so
that more return was realized on each dollar).
However, emergency relief, which is administered under Title II,
demonstrates a different "transfer" problem; that is, the "transfer of
payments." Wiseberg (1976) in her evaluation of the relief effort in
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Rodeheaver, Daniel Gilbert, 1954-; Bates, Frederick L. & Murphy, Arthur D. Malnutrition And Food Aid Programs: A Case Study From Guatemala, report, May 1982; (digital.library.unt.edu/ark:/67531/metadc84342/m1/67/: accessed March 26, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT College of Public Affairs and Community Service.