U.S. Food Aid Reform Opposed by Aid’s Intended Recipients: U.S. Special Interests

April 05, 2013

The New York Times reported yesterday that the Obama administration plans to change the way U.S. food assistance to other countries is conducted. The reforms, according to the Times’ Ron Nixon, would notably focus on local procurement of food rather than shipping U.S.-grown crops overseas. This is something we and other groups have proposed be done to both assist Haitian farmers and food insecure people in Haiti after the 2010 earthquake. Despite some interest from some congressional offices, the proposal never went anywhere.

Nixon notes that current U.S. food aid practices are unique: “The United States spends about $1.4 billion a year on food aid and is the only major donor country that continues to send food to humanitarian crisis spots, rather than buying food produced locally.” A recent op-ed by the Center for Global Development’s Charles Kenny in Bloomberg Businessweek noted additionally that “The U.S. food aid program… spends roughly an additional $1 billion transporting the crops overseas, in most cases using U.S.-flagged ships.”

U.S. food aid to Haiti is emblematic of the program as a whole. As we have previously noted, in roughly the first year after the 2010 earthquake, USAID signed nine contracts with three shipping companies to send 73,000 metric tons of rice and other commodities in Title II emergency food aid to Haiti, at a cost to U.S. taxpayers of over $18 million dollars.

The Associated Press’ Mary Clare Jalonick reports on other controversial aspects of the U.S. food aid regime:

Particularly controversial is the process of what is called “monetization,” or selling the food once it arrives overseas to finance development projects. A 2011 report by the Government Accountability Office found monetization cost the U.S. an extra $219 million over a three years, money that could have been used for other development projects.

Aid groups are split on the point, since some finance their activities through monetization. But major aid groups like Oxfam and CARE say the process can destroy local agriculture by dumping cheap crops on the market at a price too low for local farmers to compete.

Nixon noted that “A 2011 report by the Government Accountability Office, Congress’s investigative arm, also concluded that the system of supplying food to charities to sell for cash was “inherently inefficient.” The G.A.O found that nearly $300 million was lost because of inefficiencies in the program.”

The Obama administration’s proposed changes, however, could greatly increase the number of people helped by U.S. food assistance overseas, while also supporting local farmers in recipient countries. Jalonick reports that “Gawain Kripke of Oxfam says his group estimates that by spending the same amount of money [as the U.S. currently spends on food aid], the United States could provide assistance for 17 million more poor people by changing the way the aid is distributed.”

Food insecurity in Haiti is currently a significant and growing concern. The U.N. reported this week that “that more than more than 1.5 million of Haiti’s people are at risk of malnutrition because of crops lost in [Hurricane Sandy,” AP noted. This means that “At least one in five households faces a serious food deficit and acute malnutrition despite efforts to reduce hunger.”

But as with past efforts to reform U.S. food assistance, the proposed changes are strongly opposed by vested interests. Nixon writes:

In a letter to members of Congress and the Obama administration, more than 60 organizations like the USA Rice Federation and the American Maritime Congress defended the way the program is currently run and called on lawmakers and the Obama administration to resist changing it.

“Growing, manufacturing, bagging, shipping and transportation of nutritious U.S. food creates jobs and economic activity here at home, provides support for our U.S. Merchant Marine, essential to our national defense sealift capability, and sustains a robust domestic constituency for these programs not easily replicated in foreign aid programs,” the groups wrote. [That full letter is available here.]

AP describes the opposition to food aid reform within the U.S. Senate:

Worried that an overhaul of the Food for Peace program could come in Obama’s budget, a bipartisan group of 21 senators wrote a letter to the president in February asking him not to make changes.

“American agriculture is one of the few U.S. business sectors to produce a trade surplus, exporting $108 billion in farm goods in 2010,” the senators wrote. “During this time of economic distress, we should maintain support for the areas of our economy that are growing.”

The letter was signed by Michigan Sen. Debbie Stabenow, the chairwoman of the Senate Agriculture Committee, and Arkansas Sen. Mark Pryor, the Democratic chairman of the Senate subcommittee that controls agriculture spending. The top Republicans on both of those panels signed the letter as well, as did Senate Appropriations Chairwoman Barbara Mikulski of Maryland. [The full letter is available here.]

Some farmers’ organizations were candid about other goals currently served by traditional U.S. food aid practices. As Jalonick reported:

Farm groups say the program is also a public relations tool for the United States.

“Bags of U.S.-grown food bearing the U.S. flag and stamped as “From the American People” serve as ambassadors of our nation’s goodwill, which can help to address the root causes of instability,” several farm and shipping groups wrote in a February letter to Obama.

“These are the kinds of things you don’t want to make dramatic quick changes to,” says Roger Johnson, president of the National Farmers Union, one of the groups that signed the letter.

But it is questionable what sort of positive PR is achieved when Haitian farmers lose their livelihoods because they are undermined by cheap imported rice “bearing the U.S. flag.”

Considering that 1.5 million people in Haiti are at risk of malnutrition, according to the U.N., the U.S. Senators, farmers’ organizations and agribusinesses that oppose food aid reform may want to reconsider their priorities. Should the U.S. help to end hunger, malnutrition and food insecurity in Haiti and other countries, or will it continue to put the interests of big agribusinesses, food producers and shipping contractors first?

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