Ramachandran: Better Financial Risk Management can Improve WFP Operations

    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.

    About the author

    • Ivy Mungcal

      As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.