Chairman Royce, Subcommittee Ranking Member Bass Move to Reform U.S. Food Aid Delivery to Help More at Less Expense

May 15, 2013

Washington, D.C. Today, Rep. Ed Royce (R-CA), Chairman of the House Foreign Affairs Committee, and Rep. Karen Bass (D-CA), Ranking Member of the Subcommittee on Africa, Global Health, Human Rights and International Organizations, introduced bipartisan legislation to modernize U.S. international food assistance programs.   The bipartisan legislation, the “Food Aid Reform Act” (H.R. 1983), advances reforms, recommended by both Republican and Democratic administrations, that will enable U.S. food aid worldwide to reach more people, more quickly, at less expense.

A section-by-section summary of H.R. 1983 is available HERE.

Chairman Royce said: “The system through which the United States provides food aid those facing starvation is needlessly inefficient and ineffective.  Especially given the current fiscal environment, it is critical that we enable the U.S. to reach two million more people while reducing mandatory spending by $500 million over ten years.  The facts speak for themselves.”

Ranking Member Bass said: “This legislation provides commonsense reforms to our grossly inefficient system for delivering food aid.  American tax payers should have confidence that their government is doing its absolute best to make sure funds aren’t wasted as we seek to lend a helping hand to those who would otherwise face severe consequences due to food insecurity.  These are bipartisan reforms and it is my hope Congress will move quickly in getting this legislation to President Obama’s desk.”

The bill eliminates the grossly inefficient system of monetization, a process by which the U.S. Government buys agricultural commodities from domestic sources, ships them overseas on U.S.-flagged vessels, and donates them to nongovernmental or private voluntary organizations, which then sell the commodities in developing countries and use the proceeds to finance development programs.  According to the Government Accountability Office, monetization is “inefficient and can cause adverse market impacts.”  Eliminating monetization under Title II of the U.S. Food For Peace Program (FFP) is expected to save an estimated $30 million per year. 

The bill also eliminates the current requirement that U.S. food aid be purchased domestically, providing more flexibility to determine the most effective and cost-efficient means of providing aid.  With food aid currently comprising just 0.86% of total U.S. agricultural exports and 0.56% of net farm income, the impact of this shift will be negligible.   

Finally, the bill eliminates the current requirement that food aid be shipped aboard U.S. flagged vessels.  This change is expected to yield $50 million in efficiency savings annually.  Despite the rise in commodity and transportation costs and subsequent reduction in food aid volumes – from 5 million metric tons in 2002 to 1.8 million metric tons in 2011 – U.S. ports continue to thrive.  In fact, according to the Maritime Administration, five of the major ports utilized by the U.S. Government for food aid exports have experienced a boom in overall tonnage since 2003.                 

The text of the H.R. 1983 is available HERE.

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