The case for food aid reform

The case for food aid reform
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Today, because of man-made tragedies and severe drought, more people face food shortages and famine than at any time in the past 40 years. In just the four countries of Syria, Yemen, South Sudan and Nigeria, over 20 million men, women and children face acute hunger and malnutrition. In Somalia, more than one million people have already fled their homes because of civil conflict and lack of food.

A bipartisan group of members of the Senate Foreign Relations Committee and the House Foreign Affairs Committee, including both chairmen, is seeking new ways to use U.S. aid dollars efficiently to address these humanitarian and strategic concerns. Strategic concerns include the need to reduce the influence of terrorist organizations like the Islamic State among displaced populations, and the problems that increased flows of refugees create in communities ill-equipped and sometimes unwilling to deal with them.

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America and many other developed countries use emergency aid resources to meet as many of these needs as possible. U.S. food aid programs, however, continue to be hamstrung by long-standing restrictions on how scarce federal emergency food aid program dollars can be used. The solution: three simple reforms to the emergency food aid legislation at no additional cost to U.S. taxpayers. These changes would allow the United States to feed up to an additional 10 million people in these countries, improve peace and stability, and stem the flow of new refugees.

The first reform would end the “food sourcing” mandate requiring the U.S. Agency for International Development (USAID) and the U.S. Department of Agriculture (USDA) to obtain almost all food aid from the United States, instead of procuring food from the least expensive source of supply, whether in the United States, or most often from regions and countries much closer to where the aid is needed.

The second reform would end the “cargo preference” mandate, which requires that at least half of all food aid be shipped on U.S. flagged vessels, at freight rates often 40 percent higher than internationally competitive rates. Combined, these two changes would reduce the costs of delivering aid by over $300 million a year, enabling USAID and USDA to help millions of people in dire circumstances.

An additional $70 million a year could be saved by ending the bizarre practice known as “monetization.” Monetization involves giving food commodities to non-government organizations to resell. The food is shipped from the United States to a low-income country, sold in local markets, and the proceeds are then used for longer term development projects. The process wastes between 30 cents and 50 cents of every monetization dollar, substantively restricting the ability of the United States to help starving refugees and broken communities rife for Islamic State recruitment efforts in Somalia, Syria and Yemen.

Ending these three restrictions could be accomplished by Congress overnight. One stumbling block remains: the intensive lobbying of a few U.S. shipping companies that profit from both restrictions and claim that their ships are essential to national security. No credible evidence exists to support such claims. Over 80 percent of all food aid is carried on ships deemed by the Department of Defense as unfit for shipping military equipment. In fact, the United States has not used a single food aid ship for military purposes in the last four decades, even in the mid-2000s at the height of the Iraq war.

A second argument for sourcing food aid from the United States is that American farmers benefit from the sourcing requirement. However, as Sen. Bob CorkerRobert (Bob) Phillips CorkerThe Hill's Morning Report — Trump and Congress at odds over Russia Senate GOP attempts to wave Trump off second Putin summit Senate approves resolution warning Trump not to hand over US officials MORE (R-Tenn.) recently noted, food aid represents less than 0.1 percent of U.S. food production. Moreover, most of the commodities used for aid, including corn and wheat, are traded globally. As a result, sourcing food aid domestically has no impact on the prices that U.S. farmers receive.

Most American farmers would be horrified to learn that, at no observable benefit to them, these regulations result in the loss of thousands of children’s lives every year. Is it then time to reform our current food aid program? Practical and charitable Americans would surely say yes.

Vincent Smith is a visiting scholar and director of agricultural studies at the American Enterprise Institute. He is also a professor of economics and director of the Agricultural Marketing Policy Center at Montana State University.

Ryan Nabil is an economic and agricultural policy researcher at the American Enterprise Institute.