Food Aid Program Helps U.S. Farms, Hobbles Anti-Hunger Efforts

United States food aid headed for Lebanon in 2006 (usaid.gov)

A federal requirement that most international food aid be grown domestically — a boon for America’s farmers — is also hobbling efforts to feed the world’s hungry, according to a new government report released Thursday.

International aid programs that purchased food close to those in need not only spent much less, in many cases, but also delivered the assistance much faster than comparable programs like that of the United States, where the food was shipped from abroad, the non-partisan Government Accountability Office found. GAO is recommending that the White House take a closer look at whether local-purchase programs can create efficiencies without harming local markets or sacrificing quality and nutrition.

Illustration by: Matt Mahurin

The report has added fuel to the argument from many relief groups that Washington should re-tailor its multi-billion-dollar food aid program to allow for greater in-cash contributions, which grant aid organizations more power to tackle emergencies than the mandatory in-kind program currently in place.

“The way the United States does in-kind food aid is particularly costly and inefficient,” said Kimberly Elliot, a senior fellow at the Center for Global Development. “The key is flexibility, and cash offers that better than anything else.”

Elliot’s is not a new argument, but it is one that hasn’t gotten very far on Capitol Hill. That’s because the nation’s largest food aid program, called Food for Peace, requires that the crops be purchased from U.S. growers, processed through U.S. companies, and shipped using U.S.-flagged vessels — an enormous prize for America’s farmers, millers and shippers, who continually lobby Congress to keep the program exactly as it is.

And Congress continuously listens.

Each year during the second half of his tenure in the White House, President George W. Bush proposed that up to 25 percent of the Food for Peace funding — roughly $2 billion a year for the last half of the decade — go to buy food closer to those who need it. In each case, the proposal went exactly nowhere in Congress.

Not that Food for Peace was ever designed to be a humanitarian endeavor. Created in 1954, the program’s aim was to help farmers get rid of surplus crops without sinking local food markets. Elliot said that, in the decades since, the design might have changed, but the intent has not. “We no longer have the government buying up surplus stocks,” Elliot said. “Instead they’re just writing checks … But it’s still a way of subsidizing farmers.”

While that might be good for the homeland, it doesn’t make for the best system to address global hunger, the GAO report suggests. The United Nations World Food Program, purchasing food locally in Africa between 2001 and 2008, spent 34 percent less than comparable aid provided to the same region by the U.S. Agency for International Development, which was required to purchase, package and ship the food from the United States, GAO found. For aid to Asia, the cost difference was 29 percent, again favoring local purchases.

Delivery times also suffer when food is shipped in-kind, GAO found. Analyzing WFP aid to 10 African nations between 2004 and 2008, GAO reported that it took an average of 147 days for in-kind international deliveries to arrive, while local and regional purchases took just 35 and 41 days, respectively.

The report arrives as the number of poor and malnourished people has topped 1 billion, a problem exacerbated by spikes in food and fuel prices going back several years. And while the need has grown, the food-aid dollar, under the in-kind system, isn’t going nearly as far. Another GAO report, released in 2007, found that the jump in business and shipping costs consumed roughly 65 percent of America’s emergency food aid budget — a trend resulting in a 52 percent decline in the amount of food delivered in the five years previous.

Jennifer Parmalee, spokeswoman for the WFP, said that each emergency is unique, and for that reason it’s best to have all donation options — in-cash and in-kind — on the table. In the Darfur region of Sudan, for example, where WFP is currently feeding about 4 million people, little food is available and the agency is happy to have the in-kind contributions, Parmalee said.

In Burkina Faso, she said, the situation is different entirely. There, the food is available, but a spike in costs has put it out of reach for many residents. In February, WFP launched its first voucher program, which provides cash to roughly 120,000 residents for food they simply can’t afford.

“Cash is just a more flexible instrument,” she said.

The European Union and Canada have both adopted all-cash models, reserving the option to buy the food at home or closer to the emergency — whatever the situation demands.

A shift to cash aid in Washington could have dramatic effects on the WFP, which is the largest food aid distributor in the world, feeding roughly 100 million people in almost 80 countries, Parmalee said. That’s because about 40 percent of WFP’s budget comes from the United States, and about 90 percent of that comes from the in-kind-only Food for Peace program.

But such a shift would also affect America’s farmers and shippers, who benefit handsomely from the $2 billion a year program. Many lawmakers have suggested that moving Food for Peace toward a cash-aid system would erode congressional support for the program altogether, threatening its very existence.

Not that local procurement isn’t without its pitfalls. Relief groups and federal officials alike are quick to warn that dumping cash aid on local markets can spike food prices, making those commodities suddenly inaccessible to other residents.

Officials are also warning that they simply don’t have much data about what the longer-term effects of cash aid are.

Testifying Thursday before the House Foreign Affairs subpanel on Africa and global health, Thomas Melito, director of GAO’s international affairs and trade team, said that there’s good chance a local-purchase approach could alleviate hunger while also helping local farmers. But he cautioned that there’s no clear indication that the boost would be sustainable after the emergency subsides.

Bud Philbrook, deputy under secretary of the Agriculture Department’s Farm and Foreign Agricultural Services, echoed that message, telling lawmakers that the dearth of data is reason to approach the local purchase concept carefully. “Market intelligence is crucial,” he said.

The 2008 farm bill takes steps to provide some of that missing data, allocating $60 million over the next four years for a pilot program testing the efficacy of the local-purchase food aid model. The idea is to have the in-cash model studied, with a report presented to Congress, before debate on the next farm bill begins. The current bill expires at the end of 2012.

Meanwhile, relief groups aren’t holding their breath for any changes to the Food for Peace program, hoping instead that President Obama will make good on vows, made earlier this year, to double funding for foreign agriculture assistance through other programs in an effort to alleviate rising global hunger.

America, Obama said during the G-20 economic summit in April, should help the hungry with “the tools they need to lift themselves out of poverty.”