Peter Bauer, a prominent developmental economist, argued “there would be no concept of the Third World at all were it not for the invention of foreign aid” (The Economist). He opposed the idea that development aid could provide the capital needed to kick-start economic growth and fight poverty (Kristof). Aid, he argued, politicized economies and more often than not ended up in the hands of government officials. Contrary to Bauer’s beliefs, foreign aid is not fundamentally ineffective. While in its current form it has little effect on economic growth and may even hamper a country, foreign aid can be effective in certain situations if reformed and managed correctly.

Recent studies suggest that foreign aid may hamper a recipient nation in the long run by weakening local institutions and adversely affecting the country’s competitiveness. In a paper published in 2005, Raghuram G. Rajan, former chief economist at the International Monetary Fund (IMF), and Arvind Subramanian, a former IMF researcher, offer compelling evidence that aid appreciates the real exchange rate of a country thereby decreasing competiveness (Rajan and Subramanian). This appreciation has two root causes. Aid increases the price of resources in short supply such as skilled labor and land, raising costs for local business owners and increasing unemployment (Ibid). An inflow of foreign capital appreciates the nominal exchange rate, making the currency (and in turn the nation’s exports) more expensive. The appreciation of the real exchange rate pushes countries away from “export oriented labor intensive manufacturing.” An export oriented economy encourages sensible government policy by providing the incentive of significant economic growth; foreign aid could potentially eliminate this incentive (Rajan and Subramanian). Therefore, governments must spend foreign aid very effectively in order to offset the fall in competitiveness.

In the case of countries like Somalia, current foreign aid provides temporary relief but does not tackle the root causes of the country’s problems: establishing security, providing food and encouraging business (The Economist). The government must limit the influence of jihadists and secure the Kenya-Somalia border, the site of much terrorist activity. Somalia is a hungry country; according to the U.N., 80,000 Somalis may have perished in last year’s famine (Ibid). Efforts must be made to stabilize food production by making it safe again for displaced farmers to return to their farms. In order to encourage local businesses, foreign donors must invest in industrial equipment, telecommunications, and livestock by supplying capital for loans to medium sized companies. Only then does Somalia have a good shot at success.

While most of academia has concluded that development aid is usually ineffective, there remains much discussion over humanitarian aid. In an editorial published in the New York Times, Carol Giacomo, a member of the Council of Foreign Relations, argues that humanitarian aid helps advance stability abroad by providing food and medicine (Giacomo). For example, U.S. foreign aid was cut by $6 billion, or roughly 11%, in 2011, with further cuts looming due to recent efforts by Republicans to trim our budget (Ibid). Giacomo warns that such budget cuts, which represent a tiny portion of our multi-trillion dollar federal budget, would be “hugely damaging.” Indeed, there is evidence that humanitarian aid has had an effect: in the past 50 years, the number of children who die annually has gone down by 60% (Gates). Furthermore in the last decade the cost of fighting HIV and AIDS has gone down significantly (Emanuel). Nicholas Kristof, a Pulitzer Prize winning columnist for the New York Times, tentatively concluded that one-time interventions such as bed-nets and vaccinations are more likely to be effective than sustained efforts (Kristof). Rajan and Subramanian, however, challenge the notion that humanitarian aid is as beneficial as it is purported to be (Raghuram and Subramanian). In fact, it’s just as ineffective as bilateral or multilateral aid because governments “seem to view all forms of aid as going to a common pot and act accordingly” (Ibid).

Perhaps the way foreign aid is administered is at fault. The Center for Global Development, a Washington think tank, put forth a scheme called “Cash on Delivery” (Rosenberg). The idea is simple: donor countries only pay for projects when something good comes out. For example, the United States and Malawi would draw up a five-year plan to improve primary schooling that specifies a set of payments and what must happen for Malawi to get them (Ibid). After the contract is drawn up, the funder takes a “hands-off approach” which allows the recipient nation the freedom to accomplish the requirements on its own (Center for Global Development). Theoretically, “Cash on Delivery” should garner more political support at home for foreign aid than traditional aid would and also create a sense of accountability in aid-dependent countries (Rosenburg). This method is still untried so we cannot know how successful it can be. And, at the risk of sounding cynical, the entire premise of the “Cash on Delivery” is contingent upon the fact that the foreign government (organization, business, etc) is organized enough to accomplish the set goals in a legitimate manner. Back to the Malawi example, if test scores were used to determine the effectiveness of an education program, it would not be impossible for interested parties to alter test scores and escape the scrutiny of foreign auditors. Yet despite skepticism about the effectiveness of “Cash on Delivery” and foreign aid in general, it’s encouraging to know that we have not abandoned the desire to alleviate poverty worldwide.

Ever since the 2008 global food crisis put agriculture back in the spotlight, the international development community seems to have zeroed in on three key themes—smallholder farmers, higher investment in agriculture, and increasing productivity.

Hardly is this approach more evident than Pepsi Co.’s involvement in chickpea production in Ethiopia, a project focused on increasing chickpea yields and helping smallholders get access to markets.

“What’s exciting about this is that in order to manufacture the product, they will buy from smallholders,” said Ertharin Cousin, the U.S. ambassador to the UN Food and Agriculture agencies in Rome.

“In those same places you have jobs being created that are off farm jobs that exist for unskilled labor that was previously unemployed. Those are the kinds of collective partnerships that smallholders benefit from and that the private sector helps drive.”

Yet if the Pepsi project is evidence of the increased attention to African agriculture, it also points to a fundamental problem: multinational corporations are able to legitimize their role in agricultural development by devoting their resources to boosting smallholders’ yields. But all this really does is perpetuate the myth that increasing yields will reduce hunger.

In fact, it is the large seed and agrochemical companies that benefit from the narrative that higher yields will solve world hunger—precisely because they can use that narrative to justify their highly technical approaches. These actors are able to gain acceptance by framing their initiatives as “development,” which inherently becomes associated with “goodwill” and “compassion.”

Yet despite the huge gains in productivity throughout the 20th century, there are nearly one billion hungry people in the world today—stark evidence that enhancing yields and ending hunger are not so closely correlated.

To me, this suggests the need for a fundamentally different vision for global agriculture. Most important, food systems must center on the multi-functionality of agriculture: nutrition objectives, rural livelihoods, climate change mitigation, and adaptation.

This vision was precisely emphasized by the International Assessment of Agriculture Knowledge, Science and Technology for Development (IAASTD) — considered the most comprehensive review of the current global agriculture situation. Altogether, IAASTD represents a stark rebuttal to the highly reductionist approaches that assume yields to be the sole factor in improving food security.

However, the U.S. government refused to endorse IAASTD, largely, I suspect, on the basis that the strategies embraced by IAASTD may pose a threat to U.S. economic interests—namely the large seed and agrochemical companies that the U.S. government believes should be beneficiaries of U.S. international development policies.

Thus the U.S. government’s failure to endorse IAASTD essentially says something more broadly about agricultural development: corporations’ agricultural approaches are incompatible with the equitable model of agriculture espoused by IAASTD.

The agricultural transformation needed today should be anchored by “food sovereignty”—the idea that local communities have control over their markets, their farming practices, and their nutritional adequacy. Locally-led agricultural innovations—relying on agro-ecology—should be at the forefront, rather than the technical approaches often propagated by multinationa corporations and the U.S. government. Beyond their inherent environmental sustainability, these local knowledge-based practices are more socially inclusive and pro-poor, in the sense that farmers aren’t dependent on external inputs. One recent effort to spotlight such small farmer-centered food systems can be seen in the Worldwatch Institute’s Nourishing the Planet Project, focused on sun-Saharan Africa.

“Part of my job with Nourishing the Planet has been to highlight the things that funders and donors don’t know about—the innovations that farmer organizations without fancy websites are doing to prevent soil erosion in Mali, the work being done by Prolinnova in Ethiopia to make sure water gets to crops, the market garden projects in Niger that have helped women boost their incomes from $300 per year to more than $1,500,” Danielle Nierenberg, co-director of the project, told me. “These innovations are overlooked and they have a lot of potential to be replicated and scaled up all over Africa and beyond into Asia, Latin America, and even the United States.”

The challenge now is to redirect agricultural investment away from merely increasing yields and toward the IAASTD report’s idea that agriculture has a wide array of objectives.

“One of the biggest things I learned is that agriculture and farmers are often blamed for things [such as] deforestation and climate change,” Nierenberg said. “I think we’re seeing this shift that agriculture is emerging as a solution to the world’s most pressing environmental and social challenges.”

The shift toward more pro-poor agriculture requires a fundamental rethinking of the neoliberal free market agenda that for decades has dominated the global food system. The result is that food systems are in some cases tailored more toward commodity production than toward guaranteeing food as a human right (this explains why some communities in Africa may export cocoa when they themselves are food insecure). Free market advocates assume that income generation will enable Africans to purchase food produced anywhere, and largely neglect the importance of food self-sufficiency. The fallacy inherent in this ideology came into sharp relief when the 2008 food price spike triggered riots in over 30 countries.

Indeed, the overemphasis on free market agriculture was embedded in European powers’ colonial structures in Africa, according to Macalester College geography professor Bill Moseley.

“The colonial powers in a sense changed local economies from ones largely based on subsistence or engaged in local regional trade, to ones that move away from subsistence production and start producing crops useful to the core powers,” Moseley said. “Related to this was the notion that colonies should be not a burden on imperial powers but be generating enough revenue to be self-sustaining. There was a big push for them to be more export-oriented.”

It appears that African countries’ subordination to Western powers, however, didn’t necessarily come to an end despite the dawn of independence. In response to the debt crisis plaguing many African countries in the 1980s, the World Bank and International Monetary Fund implemented structural adjustment programs, forcing African governments to slash their investments in the agriculture sector. “In theory governments had a choice, but if you wanted any access to international credit you had to adhere to this set of reforms—cutting back on government civil service, cuts to social services, and freer trade,” Moseley said.

The pitfalls of the structural adjustment programs have been acknowledged even by the World Bank itself. But at the same time, the ability for corporations such as Pepsi to legitimize their role in agricultural development suggests that the free market agenda underlying structural adjustment is still very much prevalent today.

That’s why we have to embrace a type of agriculture that suits the needs of the world’s poorest. This movement is going to have be bottom-up, led by African smallholder farmers who push their governments to make food a human right.