The World Food Program can make its feeding programs more efficient and effective by adopting better financial risk management tools, Vijaya Ramachandran writes on her blog on CGDev.org. At present, WFP’s capacity to manage financial risk is very limited even as its logistical capability is in top form, she says.
Ramachandran says this limitation can be addressed by transitioning WFP’s procurement process from the spot markets it currently uses to financial markets. Unrestricted contributions from donors can also make the program more flexible, Ramachandran adds.
To complement the shift, Ramachandran says WFP should implement a hedging pilot targeting chronically food-insecure countries. Also, donor countries should provide untied cash donations to improve WFP’s operational flexibility. The U.S. should also procure some of its in-kind contribution to the program through forward purchases.