Strategies to Improve the World Food Programme's Revenue Mobilisation and Procurement Practices

21 Pages Posted: 13 Apr 2013

See all articles by Vijaya Ramachandran

Vijaya Ramachandran

Center for Global Development

Benjamin Leo

Center for Global Development; Georgetown University

Owen McCarthy

Center for Global Development

Date Written: May 2013

Abstract

Currently, a vast majority of WFP food procurement is executed through spot markets, which exposes it to substantial commodity and transport price risk as well as significant delays in delivery. The WFP also has limited flexibility owing to unpredictable revenue mobilisation, partly driven by restricted donor contributions. However, a significant portion of its operations are fairly predictable – both in terms of countries and delivery volumes. There are several types of derivatives contracts available at commodities exchanges that can facilitate strategic hedging. Greater commitments of untied cash donations from the US and other major donors can give the WFP significant operational flexibility to execute prudent financial management operations without damaging local food markets.

Keywords: Food aid, World Food Programme, hedging, derivatives

Suggested Citation

Ramachandran, Vijaya and Leo, Benjamin and McCarthy, Owen, Strategies to Improve the World Food Programme's Revenue Mobilisation and Procurement Practices (May 2013). Development Policy Review, Vol. 31, Issue 3, pp. 321-341, 2013. Available at SSRN: https://ssrn.com/abstract=2250227 or http://dx.doi.org/10.1111/dpr.12009

Vijaya Ramachandran (Contact Author)

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

Benjamin Leo

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

Georgetown University

Washington, DC 20057
United States

Owen McCarthy

Center for Global Development ( email )

2055 L St. NW
5th floor
Washington, DC 20036
United States

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