We employ a computable general equilibrium approach to examine the effects of alternative food aid distribution schemes for drought-response food aid to Mozambique. Alternative schemes have very distinct impacts on household welfare and prices. Compared with monetization of food aid by government, direct distribution to households (by population shares) strongly benefits rural households. Even assuming that government cannot target food aid strictly at drought-stricken rural people, our results indicate that, when improving household welfare is the primary goal of the food aid, direct distribution of food aid to households is preferred