Food Aid Monetisation Monetisation is assumed by some to be an advantageous way to use food aid, while others see it as an aberration to be avoided. Theoretically, in a dream-world of reasonably competitive and open markets complemented by stable and convertible currencies, it would make little sense to bring food from a donor country to sell in a recipient country, in order to raise funds to support projects or programmes benefiting the poor. For food to be used most efficiently to relieve hunger and promote development, it would usually be more cost-effective for the donor to provide a portion of its food aid in cash. On the other hand, in such a utopian world, there would be little extreme poverty or need for food aid.
Markets are mostly neither open nor competitive.
Currencies may not be convertible, and inflation may be rampant. Political pressures and corruption may make monetisation less advisable in some circumstances than in others. These and many other factors have to be considered each time a decision is made concerning monetisation. Obviously, in the real world there can be no general principle dictating that monetisation is always bad, or always good, for improving efficiency in food aid. It could be either, depending on the time and place.