I know this might sound insane but don't go deleting us from your bookmarks just yet.
How could giving food to starving people ever be a bad thing?!?! Well, that's what I'm going to try to explain with a few graphs and hopefully a little bit of rational thinking. Just stick with me and try to be open minded.
We as United States citizens have been blessed with an abundance of food. Many of us have never been, nor will we ever be hungry. Food is everywhere, so why not help out our fellow man by giving them what we have left over? That's why the Democratic Party pushed for P.L. 480 back in 1954 when Dwight D. Eisenhower was in office. When President John F. Kennedy was president, he renamed the project to "Food for Peace". This bill then became the "Federal Agriculture Improvement and Reform Act of 1996" (FAIR) during the Clinton administration (noticing a pattern evolving here?).
This program subsidizes domestic goods (buys food from U.S. farmers with your tax dollars) and gives that food to foreign governments as a low interest loan (2 to 4%) with many grace periods and leniency on repayments. These governments then turn around and sell the food to their citizens to raise cash for their governments. This is intended to help that particular country develop economically... but the road to hell is paved with good intentions.
Side Note: Isn't it interesting how our government makes all of these loans with our tax dollars and they don't repay us any of the interest they profit from them? Not just food, but when they bail out industries too... It just seems to me that I should get a check at the end of the year for that 2 to 4% profit off of the interest they made from the loan... maybe instead of it going back into some sort of pork project... Anywhoooooo…
Okay, now let's imagine that there are 1 million basket balls in the world and the price that unregulated markets are willing to pay for those basket balls is $1 each. Now let's imagine that 1 million more basket balls fall out of the sky one day. How much are all the basket balls worth now? Well, probably about half of what they were worth before right (in this example anyway)?
Let's see this in graph form:
S = Supply
D = Demand
P = Price
Q = Quantity Demanded
The first graph represents a standard supply and demand curve for an unregulated market. Supply and demand are inversely related so that when there is a large supply of something there is less demand for it and vice versa. The dot in the middle represents the equilibrium price and quantity demanded. In this example it's for basket balls.
The second graph illustrates what happens when you dump (and I use that word on purpose) basket balls into an economy. As you can see there is a shift in supply expanding it outward. In effect this decreases the price for basket balls and increases the quantity demanded at that price (in the short run).
Now I know some of you out there have put 2 and 2 together any you know we're not talking about basket balls here... we're really talking about corn, wheat, honey, cotton etc. and you might be thinking to yourself "Okay, we've doubled the amount of food they have and decreased the price that these poor people have to pay for it. I see no problem here... this Brandon guy is an idiot". Stick with me.
It's time to ask our selves what our goal is here. Do we want to these people to eat for a day, or eat for a lifetime? In the short term, this does combat world hunger. In the long run, we keep are keeping third world countries poor. I'll explain.
For the sake of math, let's keep this example simple with some made up imaginary numbers. Let's say that you're a farmer and you grow corn. Let's say that you can grow 100 cobs of corn every year and they cost you $0.75 each to grow. Let's also say that you are able to sell your corn for $1 each and make a profit of $.025 each (equilibrium price in an unregulated market). Now let's imagine that the United States government dumps an additional 100 cobs of corn into your economy. Now the price of corn is artificially deflated to be only worth $0.50 each to the consumer, but it still costs the farmer $0.75 each to produce. Now the farmer is losing $0.25 per cob of corn.
This is similar to when chicken farmers in the United States drowned all of their baby chickens because they couldn't afford to raise them and they couldn't afford to sell them. It seemed heartless to most people but what were they supposed to do? Let them starve to death slowly in a field somewhere?
This is the problem. Government intervention of free markets has now provided disincentives for the farmers in these countries to continue to grow corn. You have put them out of business and now the country relies only on the federal food relief that was given to the country. Now that these farmers are not making food anymore we're back to square one on the amount of food that's in the economy. No additional people have been fed, the price will find a newer and higher equilibrium again, and it doesn't make economic sense for local farmers to grow their own corn. Not to mention, we, the United States Tax Payers, footed the bill for this mess.
So what about the non farmers in these countries who have no understanding of how this works? Now they somehow feel entitled to these food programs. How are their governments (who are profiting from these programs) going to portray us when we withdraw these food programs? The point is we shouldn't have gotten involved in the first place. Government intervention in business = bad. Period.
So what am I suggesting here? Is it always a bad thing to give food to other countries? Well sometimes bad things happen to good people. Sometimes there are floods and hurricanes and food crops are completely wiped out. Sometimes people are in desperate need of short term help. Although I don't believe that it's necessarily the governments job to step in with tax payer dollars to help out, I do think it's okay to help out your fellow man every once in a while. Who knows? You might be down on your luck one day. Just seriously rethink the consequences before you act in the long run. These programs have been around for more than 50 years now.
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