The time for food aid reform is now

The time for food aid reform is now
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Congress first authorized permanent international food aid programs in 1954. Since then, the U.S. government has been the leading provider of humanitarian assistance, and America has helped more than four billion hungry people around the world.

This an accomplishment truly to be celebrated, but unfortunately, the basic system through which that assistance is delivered has changed very little over the past 70 years. Worst of all, it still includes wasteful mandates that prevent current levels of food aid funding from feeding millions more desperately poor people suffering from hunger because of calamitous events over which they have no control.

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The most commonsense reforms to the U.S. food aid system would rid us of wasteful mandates that now exist almost solely to protect the interests of U.S. mercantile shipping companies. As in 1954, these require almost 100 percent of all food aid to be sourced in the United States, and that American ships carry at least half of our food aid.

The objective of the sourcing mandate was to increase demand and prices received by farmers for U.S. agricultural commodities. This was understandable in the 1950s, when international food aid accounted for 30 percent of all U.S. agricultural exports. Today, that rationale makes no sense as food aid is less than 1 percent of U.S. agricultural exports, and a far smaller and negligible proportion of all U.S. agricultural production. This is why meaningful reforms to the food aid system can be achieved with little or no impact on U.S. farmers.

For example, in fiscal year 2015, the roughly 490,000 metric tons of U.S. wheat and wheat product food aid shipments under all U.S. programs accounted for only 2.3 percent of all U.S. wheat exports, and only 0.9 percent of all U.S. wheat production. Vegetable oil is another popular food aid commodity, but in 2015, food aid shipments for vegetable oil were less than 9,000 metric tons, less than half a percent of U.S. exports and less than 0.1 percent of total U.S. vegetable oil production.

Moreover, since most staple crops are traded globally, the prices U.S. farmers receive for products like corn and soybeans are determined on the world market. In 2013, the volume of U.S. food aid accounted for less than one-tenth of 1 percent of all total grains and oilseed traded on global markets, which is a microscopically small drop in the world market bucket that could not possibly have any measurable impact on the price of corn in Iowa or wheat in Kansas.

Reforms that relax U.S. sourcing and cargo preference requirements should be pursued, since they will save as much as $400 million a year by reducing administrative and transportation costs. These funds would enable the United States annually to help several million more people in need and quite literally save the lives of tens of thousands of children.

Erin Lentz, Chris Barrett and Miguel Gomez recently examined a USDA pilot program in nine countries authorized by the 2008 farm bill that allowed U.S. food aid to be procured in or near the countries where help was needed. The study found that local and regional sourcing on average generated savings of 53 percent on grains, and 25 percent on pulse and legumes, compared to U.S. sourcing. Locally and regionally procured aid reached beneficiaries on average 14 weeks faster than comparable assistance sourced from the United States, a critical advantage.

Maintaining the 100 percent U.S. sourcing requirement clearly no longer increases the prices U.S. farmers receive for their produce, but costs the program hundreds of millions of dollars annually in unnecessary shipping and handling expenses that could otherwise be used to help even more hungry people. Shipping aid only on American vessels increases transportation costs by about one-third.

Advocates for the requirement that American ships carry at least half of all U.S. food aid have consistently claimed that the program enhances military readiness in times of conflict. There is no evidence for that claim. Of the 25 American ships which carried more than 936,400 metric tons of U.S. food aid shipments in fiscal year 2016, only five were largely or partially dependent on U.S. food aid for their cargo.

Only two of those ships even qualified for inclusion in the Maritime Security Program, which accepts vessels deemed suitable for military purposes in the event of an extended or widespread conflict, but have never been used for such purposes. Thus, the tens of millions spent every year on higher freight costs under this requirement provide very little in the way of improved readiness benefits for the U.S. military.

The good news is that some sensible reforms are finding their way into legislation. The draft farm bill, which is the usual instrument for managing the U.S. food aid system, proposed by House Committee on Agriculture Chairman Michael Conaway (R-Texas) includes one such provision to reform a 30-year monetization program that has wasted millions of dollars each year. However, several important reforms not in the current farm bill draft have been proposed in separate legislation.

This month, the House Foreign Affairs Committee will be marking up the Food for Peace Modernization Act, which reduces the U.S. sourcing requirement from 100 percent to 25 percent. That change will also substantially reduce the higher shipping costs associated with cargo preference rules. A similar bill has been introduced in the Senate.

This bill offers a new vision for modifying U.S. food aid programs and brings them more in line with the humanitarian needs of the 21st century, in which civil wars and other forms of armed conflict have put millions of hungry people at risk in locations where it is expensive and time-consuming, if not physically impossible, to ship U.S. commodities. We urge Congress to take on this challenge, and act boldly by taking up and passing comprehensive food aid reform legislation this year.

Stephanie Mercier, Ph.D., is an independent agricultural policy consultant and a former chief economist for the Democratic staff of the Senate Committee on Agriculture. Vincent Smith, Ph.D., is director of the agricultural studies program at the American Enterprise Institute and a professor of agricultural economics at Montana State University.