A/HRC/10/5 page 16 humanitarian crises resulting from a food-availability deficit and a market failure. Cash transfers allowing recipients to procure from local or regional markets may be an option where markets function adequately and where there exists an adequate local agricultural production, but where certain households are food insecure as a result of insufficient purchasing power. When in-kind food aid is the preferred option, it should comply with certain conditions. First, adequate targeting and appropriate timing should ensure that the provision of in-kind food aid does not have highly disruptive effects on local agricultural production. If food aid is effectively targeted towards the poor and the most vulnerable, which in any case may not have been able to afford buying locally produced commodities, and if it is delivered in a timely way, immediately after the needs have been identified - rather than, for instance, many weeks later, particularly after new harvests are brought on the markets - negative impact on local production may be entirely avoided. Second, local purchasing of commodities through food aid programmes which are cash-based rather than donor-country sourced and commodity-based may both assist those in need and support local producers and may be closer to local diets. This will be the case particularly if those responsible for these purchases make deliberate efforts to buy from smallholders, helping them to overcome the barriers they face, particularly as regards their ability to keep stocks, which may otherwise place them at a disadvantage in comparison to larger producers or commodity traders. At the same time, the local purchasing of food aid to be distributed to the poorest or most food insecure segments of the population may lead to price increases which will be detrimental to households which are not covered by the programme. It is for this reason that the FAC requires that Members “pay particular attention to avoiding harmful effects on low-income consumers due to price changes resulting from local purchases” (art. XII (d)). 32. In sum, while donor-country sourced commodities risk disrupting local production, cash-based food aid or vouchers or cash transfers both have price effects which risk making food less affordable for the poor. To avoid these negative effects, a number of conditions should be strictly adhered to. The monetization of food aid - i.e., the selling of donated products to raise funds for aid - has a particularly negative effect on local market prices and thus disruptive impacts on local production and should be avoided to the largest extent possible.44 As much as the commitments, the delivery of food aid needs to be based on careful assessments of the existing needs. Delivery needs to be timely and well targeted; and preferably in cash and untied from domestic production or shipping requirements, in order to allow it to be used in the most efficient way, for instance for local or regional purchases, depending on the conditions existing on the local markets. Tying constitutes a major impediment to the effectiveness of food aid: it is estimated that the cost of direct food-aid transfers from the donor country is on average 50 per cent higher than local food purchases, and 33 per cent higher than regional purchases.45 Yet, tying remains widespread, resulting in roughly a third of the global food aid budget, or some 44 The monetization of food aid is particularly disruptive since it is not targeted to specific food-insecure populations. In this respect, it is similar to programme aid which consists in transfers from Government to Government, with the recipient Government reselling the food aid received on the local markets. 45 E. Clay, B. Riley and J. Urey, The development effectiveness of food aid: Does tying matter? Report DCD/DAC/EFE(2004)9, OECD, Paris, 2005.