The problem with cash grants is something that does not show up when there is a Columbia professor watching things. And that is that the money gets stolen.<p>Many poor countries suffer from corrupt callous and cruel leadership. And this means that the people in power tend to steal from the poor. Thus, if some organization tries to
give cash to the poor there is a high likelihood that the money will be stolen and sent to a swiss bank.<p>It is much more difficult to steal bags of grain with "US AID" printed on them. They are heavy transport is expensive and no-one will pay full price for bags of grains that say US AID on them because they will know it is stolen. If you want to re-bag the grain, it will be a lot of work, and you will have to hire many workers some of which may inform the US embassy. Thus, once the US government dumps a bunch of grain in a poor place, even the evil corrupt warlords tend to leave most of it to the poor because it is too difficult to steal it and sell it.<p>There is a similar problem with cash crops. Initially when I heard activists complain about cash crops, I said "what is the problem? Farmers should farm cash crops in order to get the maximum amount of money for their land and labor." Well the problem is that if you plant cash crops (such as coffee, cocoa, etc.) you have to sell them to get some money out of them. But the local corrupt official and/or warlord will take control of all the merchants and make sure the farmers receive very little and take most of the money for himself. If, on the other hand the farmers plant ordinary food, it is very difficult for warlord to steal it. He will have to make his troops do actual agriculture work to steal the food, and they hate that.<p>So this will only work for countries with relatively strong civil society and there are very few of those among the poor countries.