Food aid debate shows turf battles
By Larry Dreiling
While the farm bill debate has once again become the focus in agricultural discussions both in Washington and in coffee shops across small-town America, a second debate looms over U.S. food assistance programs to poor countries.
President Barack Obama’s budget proposes overhauling the nation’s $1.5 billion-a-year food aid program. The debate centers over the long-held philosophy, backed by farm state lawmakers, that the government should continue buying U.S.-grown food and ship it abroad.
Proponents of reform agree with the Obama administration that the current system is a waste of taxpayer money that only harms poor countries’ ability to grow their own food and that those nations should instead be handed cash payments so they can buy food from local producers.
“This is a continuation of the administration’s commitment to advancing food security globally. We are recommitting in a way that expands our ability to reach people who are in the gravest need and to do so with greater efficiency,” said an administration official.
The change comes under the Title II of the PL 480 Food for Peace program included in the current farm bill that is administered by the U.S. Agency for International Development. The official explained the proposal would take that $1.5 billion and redistribute it into three cash accounts.
Fewer U.S. commodities would be shipped overseas for food aid, and they would be replaced with more local, regional purchases, cash and vouchers.
The official explained that the goal of the changes is to create “greater flexibility” and “get the right kind of food to the area that needs it faster.”
First, $1.1 billion would be transferred to the International Disaster Assistance account. There is already $300 million in that account available for flexible response to food crisis situations by using local and regional purchases and cash and voucher purchases.
Most notably, the change establishes a 55 percent floor on funds to still be used to purchase American commodities, “which recognizes the central role U.S. commodities have and continue to play in global hunger needs,” the official said.
Second, monetizing aid has historically used a portion of Title II funds. That is, selling U.S. commodities in the region and then using the money to provide the assistance. The Government Accountability Office estimates this costs 25 cents for every $1 generated, which the official said is an “inefficient way” to generate development assistance funds.
Instead, $330 million in funds would go directly to a Community Resilience and Assistance Fund, in which non-governmental organizations and private voluntary organizations would provide the same kind of multi-year community development assistance now being utilized.
“The goal is to reach more people with our development funding not going through the monetized process,” the official said. “The goal is for (positive) development outcomes.”
Last, the change would create a new Emergency Assistance Contingency Fund of $75 million to enable emergency food assistance.
The official estimates that $500 million in savings would result, predominantly from the reduction in the amount of shipping costs. The official noted that 3 million to 4 million additional people could be serviced with the change in the emergency food aid and 800,000 more families with the change in how development food aid is administered.
“At this time of shrinking budgets and increasing global need, this is an important opportunity to truly be able to do more within the budget constraints,” the official said. “This will allow the U.S. to continue its global commitment to food aid and be the world’s leader in providing a helping hand and doing so with greater effectiveness and efficiency.”
Where the turf battles heat up is over the Food for Progress program, administered by the U.S. Department of Agriculture’s Foreign Agricultural Service. Many ag groups had feared the administration would change or eliminate the program, but the administration did not make changes.
The main source of Food for Progress funds is the USDA’s Commodity Credit Corporation, which is authorized to provide commodities and up to $40 million each fiscal year to ship those commodities overseas.
Agriculture groups, however, remain opposed to the change of purchasing U.S. commodities. In recent weeks ag groups along with other involved parties sent a letter to the president explaining the importance of the Food for Peace and Food for Progress programs.
Also, 21 senators sent a letter urging Obama to maintain the current funding for the Food for Peace program.
Senate Agriculture Appropriations Subcommittee Chairman Mark Pryor of Arkansas, Ranking Member Roy Blunt of Missouri, Senate Agriculture Committee Chairman Debbie Stabenow of Michigan, and Ranking Member Thad Cochran of Mississippi lead the group.
“We write to request that you maintain funding for the U.S. Department of Agriculture Food for Peace Program, also known as Public Law 480, in your fiscal year 2014 budget request to Congress,” the senators wrote Obama.
“As you know, Title II of Public Law 480 provides for the donation of U.S. agricultural commodities by the U.S. government to meet humanitarian food needs in foreign countries. We are supportive of USDA’s work in this area.”
The letter continues: “When President Eisenhower signed into law legislation authorizing the program, he explained that the purpose was to ‘lay the foundation for a permanent expansion of our exports of agricultural products with lasting benefits to ourselves and peoples of other lands.’
“This program has been instrumental in linking rural America and the U.S. agriculture and transportation industries to communities in the developing world, while building greater awareness and support at home for the needs of the poor, hungry and disenfranchised around the world.”
Proponents of the current program say it supports three vital U.S. interests:
Farmers, who can sell their surplus to the government and keep prices high;
U.S. ships and their crews that are guaranteed the traffic and have an incentive to remain under the U.S. flag, providing the U.S. Navy with potential equipment and manpower; and
NGOs that sell excess U.S. food on foreign markets and use the proceeds to fund development projects.
That didn’t stop Secretary of Agriculture Tom Vilsack from testifying in favor of the changes. Speaking May 9 before the Pryor Committee, Vilsack said: “What is being proposed will feed 4 million more people but probably shave 11 or 12 weeks off the time of getting food aid to people.”
Critics say the program is a Cold War relic that’s only harming poor countries by flooding their markets with artificially cheap U.S. food. They point to a 2011 GAO report that found that the government could save $219 million over three years by giving NGOs cash instead of food to sell.
“After nearly 60 years of experience, we are encouraged by the president’s proposal to fundamentally alter our food aid program to reach more people, more quickly, at less cost,” Reps. Ed Royce, R-CA, and Eliot Engel, D-NY, the chairman and ranking member of the House Foreign Affairs Committee, said in a joint statement. “Several recent studies have highlighted the need for reform. We look forward to working with the administration and our colleagues in Congress to modernize U.S. food aid programs while ensuring maximum impact and efficiency.”
The budget is expected to be debated some time in early fall.
Larry Dreiling can be reached by phone at 785-628-1117, or by email at email@example.com.