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Location: What is local procurement? Local procurement, or “buying locally”, refers to when WFP buys food in one part of a developing country where there is an abundance and transports it to another region where there is a shortage of food because of droughts, floods or crop failure.
What are the advantages of buying locally?• Buying locally helps support local markets.
• It can be cheaper and quicker than buying from other countries.
• Food bought locally will generally already be familiar to WFP beneficiaries because it is grown in their home country.
Which countries are involved?The greatest quantity of food purchased in developing countries in 2007 was bought in Uganda, Ethiopia and Pakistan. WFP bought 80 percent of its food in 2007 in 69 developing countries.
Which foods are bought and sold?WFP buys a range of food and distributes according to what is grown and eaten in the country. For example, in some parts of Africa white maize and beans are favoured, whereas in Afghanistan WFP might buy wheat. In emergencies, WFP initially distributes High Energy Biscuits.
How does WFP decide to buy locally?Wherever WFP provides food assistance, it tries to ensure that the most appropriate food is available to beneficiaries in the most timely and cost efficient manner.
When assessing whether to buy locally, WFP has to be sure a large enough quantity of food is available. WFP then compares the price of buying a ton of food locally to buying a ton from another country, taking into consideration the additional transport costs.
Is there any form of regulation or quality control?WFP ensures that the food it buys meets quality standards. The Codex Alimentarius determines international food quality standards for moisture level, insect damage and hygiene, among other things.
WFP collaborates with NGOs and other UN agencies (the Food and Agriculture Organization - FAO- and the International Fund for Agricultural Development - IFAD)) to train farmers in meeting quality standards and in using machinery to clean the food.
Why does WFP still give these countries food assistance if they’ve already got enough food to sell?People in parts of these countries may have little money to buy food themselves or very poor crops. In addition these countries may not have a developed market or transport system. This means that farmers who want to sell food may not be in contact with buyers in areas where food needs to be bought.
What are the challenges to buying locally?• In countries where there has been war or little development, it may be difficult to transport food over long distances where the roads have been damaged. However, WFP takes part in road-building projects to help join up markets and facilitate trade.
• WFP buys large quantities and sometimes there may be food availability in one part of a country, but not large enough to fill a WFP order.
• In the event of a food crisis, WFP may prefer to ship from abroad because a)It can be quicker and cheaper (crises generally drive up food prices as demand outstrips supply) b)There is a risk that a large player like WFP can buy up the limited food available and further drive up prices in the crisis-hit region.
How does WFP avoid distorting local markets?WFP is very careful not to upset the delicate balance of demand and supply in the country where it buys.
In general, WFP tends to buy in beneficiary countries when prices are low – usually well below import prices. At times of national grain shortages, when prices are highest, WFP avoids buying.
WFP always factors in transport costs and delays, plus the benefits to the markets in recipient countries, when assessing whether to buy locally. A ton of wheat may be cheaper at market price if shipped from abroad, but not necessarily once transport costs have been taken into account.
In addition, the longer-term benefits to local farmers and economies from purchasing locally are considered a great advantage.
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