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A Long-Overdue Change to US Food Aid

April 15, 2013
US Food Aid Distribution in Zimbabwe in 2007

US Food Aid Distribution in Zimbabwe in 2007

President Barack Obama last week proposed a radical change to U.S. food aid programming. For decades, the United States has operated on an in-kind basis, buying American agricultural commodities, loading them on U.S.-flagged ships, and transporting them to regions where food aid is needed. This practice led to higher costs for food delivered as aid. Indeed, according the New York Times, this practice added an estimated $300 million to the cost of U.S. food aid deliveries. Once in country, food aid is either delivered to governments for emergency relief (and often paid for with long-term loans), or monetized (given to American charities working in the country, who can then sell the food to finance other developed projects). Not surprisingly, critics of the practice have long called for reforms, but the entrenched agricultural and transportation interests have long resisted any substantial changes to the program.  A report by Oxfam suggested that eliminating the requirement to purchase food aid in the United States and to ship it on U.S.-flagged vessels would allow food aid to reach up to 17 million more people at no additional cost.

U.S. food aid policy has long been viewed by many critics as an informal price support for American farmers. Indeed, the United States is the only major donor country that structures its aid policies in this way.

This is why President Obama’s call for a restructuring of U.S. food aid programming  is so important. Remarks by USAID Administrator Rajiv Shah last week outlined the scope of the proposed changes.

The President’s proposal commits to a more rapid, cost-effective, and life-saving food aid program that pairs the continued purchase of American food aid with a diverse set of tools, including local procurement and food vouchers.

As we ask for this increased flexibility, we commit to maintaining our purchase of American food—and increasing our focus on the higher value, more nutritious products that are so critical to improving child nutrition and saving lives.

We commit to supporting our NGO partners, especially faith-based organizations, through a Community Development and Resilience Fund.

The truth is that for years our practice in food assistance has lagged behind our knowledge. In the last decade, more than 30 different studies—from Cornell University to Lancet medical journal to the Government Accountability Office—have revealed the inefficiencies of the current system.

They’ve shown that buying food locally—instead of in the United States costs—much less—as much as 50 percent for cereals and as much as 31 percent for pulses. That’s because the average prices of buying and delivering American food across an ocean has increased from $390 per metric ton in 2001 to $1,180 today.

These costs eat into precious resources designed to feed hungry people—causing more than 16 percent of Title II funds to be spent on ocean shipping.

Buying food locally can also speed the arrival of life-saving aid by as many as 14 weeks. Those 98 days take on an entirely new meaning when you consider that waiting every additional day—every additional hour—can mean the difference between life and death.

Buying food locally is not only faster. It can also be a more effective approach to achieving our ultimate goal of replacing aid with self-sufficiency. In Bangladesh, we worked with Land o’ Lakes to buy cereal bars locally, helping create a commercially viable and nutritious product for the local market, while supporting U.S. jobs at home.

President Obama’s proposal would permit food to be purchased in country (though over half would still be required to be purchased in the United States) and would end the practice of monetizing food aid. In the current context of U.S. domestic politics, though, it is not clear that Obama’s proposals will pass Congress. Republican Ed Royce, Chair of the House Foreign Affairs Committee, and Democrat Eliot Engel, ranking Democrat on the Committee, issued a joint statement supporting Obama’s proposed reforms. But domestic agricultural interests have already mobilized against the proposals. The Farm Bill negotiations are likely to be particularly contentious this time around.

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  1. Reforming US Food Aid | Global Food Politics

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