International Food Aid Needs Reform
The Hill -- Op-Ed by ED ROYCE and ELIOT ENGEL
“I know that food aid often gets there after everyone’s dead.”
That stinging indictment of our international food aid programs was made by Andrew Natsios, former head of the U.S. Agency for International Development (USAID), who went on to point out that “people can’t eat shipping costs.”
Through the generosity and compassion of the American people, the U.S provides about $1.5 billion in international food aid every year to ward off famine, save lives and promote political stability worldwide. Regrettably, the Food for Peace program, which has its roots in the Eisenhower years, is badly showing its age, and is best described as slow, inefficient and wasteful. We believe reform of our international food aid is long overdue, and we commend
President Obama for proposing substantial reforms as part of his 2014 budget.
Food aid reform is not and should not be a partisan issue. Proposals to feed more desperate people faster, and at a lower cost to taxpayers, are simply common sense.
The inefficiency of the current food aid system becomes abundantly clear when you consider the practice known as “monetization,” in which Washington supplies American commodities to private charities, free of charge. These organizations then sell the donated grain overseas to finance other development programs. The Government Accountability Office, Congress’s investigative arm, called monetization “inherently inefficient,” and found that it resulted in a loss of $219 million over three years. That’s an average of 25 cents on every taxpayer dollar spent on overseas food aid.
To make matters worse, food aid often destroys agricultural markets in the countries we are trying to help, while increasing the aid dependency we want to end. After the devastating earthquake in Haiti, local rice farmers were put out of business when markets were flooded with cheap American rice, sold to help fund the recovery effort.
Another major problem with food aid is the “cargo preference,” a vestige of the Cold War that requires 50 percent — until recently 75 percent — of U.S. food aid be shipped on U.S. flagged vessels. This restriction on shipping, which drives up food aid costs by $140 million every year, was originally designed to ensure a reserve of ships and crew for the U.S. Navy in times of war. However, about 70 percent of the vessels approved for cargo preference reportedly don’t meet the U.S. Maritime Administration’s age-based criterion for being militarily useful — perhaps the reason why the Department of
Defense is not concerned by the loosening of the cargo preference requirements. What’s more, most of these so-called “American” vessels are actually owned by a series of foreign holding companies.
Experience shows that buying food closer to its distribution point is faster, cheaper and helps save lives. In recent years, a small government pilot program has experimented with “local and regional purchase” efforts. The result? Aid that costs 25-50 percent less and is delivered 11 to 14 weeks faster than under the current system.
The George W. Bush administration was the first to start chipping away at antiquated restrictions embodied in the food aid system. The Obama administration is proposing to go even further, dropping the U.S.-bought and -shipped requirement for nearly half of all U.S. food aid. Instead, USAID would have the ability to buy food closer to the crisis or even provide recipients with cash vouchers, and wasteful “monetization” would end. It is estimated that these changes alone would save approximately $500 million over the next decade. In short, more people could be helped for less money.
Still, this reform effort faces an uphill fight, being opposed by those with a stake in the current system, including some farmers — despite the fact that food aid accounts for less than 1 percent of total U.S. food exports. In recent congressional testimony, Agriculture Secretary Tom Vilsack rightly scoffed at the notion that reforming food aid would hurt American farm income.
As we continue to debate food aid reform, we hope that good policy will trump politics, and that the interests of U.S. taxpayers will prevail.
Royce is in his 11th term representing California’s 39th Congressional District. He is chairman of the House Committee on Foreign Affairs and also serves on the Financial Services Committee. Engel has represented New York congressional districts since 1993. He is ranking member of the House Committee on Foreign Affairs and also serves on the Energy and Commerce Committee.