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New US Farm Bill Provides Hope for Food Aid Reform

April 14, 2014

NEW YORK, 14 April 2014 (IRIN) - Efforts to improve the way the US government distributes roughly US$2 billion in international food aid each year achieved some successes in the recently enacted Agriculture Act of 2014 - commonly referred to as the Farm Bill - but the food aid mechanism used by the world’s largest donor continues to prioritize the needs of US commercial interests.

The positives are: a pilot project in the 2008 Farm Bill that tested the feasibility of local and regional procurement of food aid during emergencies has been transformed into a regularized programme that will provide $80 million for local and regional procurement (LRP) each year. In addition, the new Farm Bill increases from 13 to 20 percent the percentage of funding in the largest food aid programme, Food for Peace (or Title II), that can be spent on non-emergency programmes with cash-based resources or commodities rather than through the much-criticized vehicle of monetized food aid. 

Monetization is a major flaw in the US food aid system, in which US grain is donated to NGOs and other “cooperating sponsors”, who then sell the food in recipient countries to raise money for their programmes. Almost all other major aid agencies have given up the practice because selling the donated food distorts local markets, and is detrimental to long-term food security.

“The main favourable developments [in the new Farm Bill] were the authorization of a permanent (if modest) LRP programme and a significant increase in the cap on funding cooperating sponsors, which effectively allows USAID [the US Agency for International Development] to end open monetization of food aid,” said Chris Barrett of Cornell University, a leading food aid analyst. 

“These are important developments. But the Farm Bill still fell well short of providing USAID with flexibility to use cash, vouchers or LRP where those would be the most appropriate food assistance tools, as the main US food aid programme (Title II of PL480) remains legislatively restricted to buy commodities in the US and to ship from the US, at least half of the cargo on US flag vessels. This causes needless waste and delay without generating any significant benefit to the US economy. So the 2014 Farm Bill can be reasonably assessed as modest progress.”

“Unprecedented” debate

Yet reform advocates have emerged from the legislative process hopeful for the future. “I’ve been working on this issue for 10 years,” said Eric Munoz, senior policy adviser for Oxfam America. “I’ve been through two Farm Bills. And this is the first time in my experience when there has been a serious debate and where real proposals were put on the table and where there was a real demand for the special interests who are supporting the status quo to defend the programme in its current form. This is unprecedented. I don’t think that the conversation is over yet and certainly from our perspective we will continue to press to see that inefficiencies in the programme are addressed.”

Among the most noteworthy developments was an amendment to the Farm Bill (jointly offered by a Republican, Ed Royce of California, and a Democrat, Eliot Engel of New York) that proposed giving USAID the flexibility to use up to 45 percent of food aid funds for LRP, cash transfers or food vouchers. During a hearing convened by the House Committee on Foreign Affairs, some Congress members expressed worry that the increased reliance on transfers or vouchers would deny the US the public relations benefit of commodity donations. (See video of hearing.)

“This is what food aid looks like,” said Congressman Adam Kinzinger, a Republican from Illinois, holding up a photograph of a large bag with US markings. “It says, `From the American people. USAID.’ It makes it very clear that this is an American product.” If food aid comes in the form of a voucher, he said, the generosity of the US will not be properly advertised. “I think we are losing a very impactful thing that we do, which is that we put right in front of the people of Afghanistan or Darfur or wherever that this is a gift grown in and from the American people,” he said.

“Congressman, if you could put up the picture of the food voucher,” said Andrew Natsios, administrator of USAID from 2001 to 2006, a hearing witness, referring to a second photograph. “It says on it, `US aid from the American people’ on the right side.” 

“Yeah, it’s not quite the same as a bag with food,” said Congressman Kinzinger. 

Powerful shipping interests

But it wasn’t concerns over losing the PR benefit of commodity food aid that defeated the amendment. It was a powerful lobbying campaign by shipping companies and maritime unions. The Royce-Engel amendment lost by a vote of 220 to 203. According to an analysis by the Center for Public Integrity, Congress members who received contributions for the two leading maritime unions voted 83 to 29 in opposition to the measure. 

“I am not aware of one single source other than special interest groups who are effected financially by these reforms who thinks the current system works well and works to our advantage,” said Natsios.

Frederic Mousseau, policy director of the Oakland Institute, noted that both President Bush and President Obama have sought to reform US food aid over the last decade. “The US Congress has each time resisted changes because of the combined influence of the US agribusiness firms and the shipping industry, which both highly benefit from this form of hidden subsidy and pocket every year hundreds of millions of dollars of public money through this business,” he said. 

Yet perhaps the most powerful sign that greater change is in the offing was the broadcast of a satirical segment on the food aid debate on the Daily Showwith Jon Stewart, the Comedy Central programme that represents one of the most powerful progressive voices in American culture. During a report that featured interviews with Chris Barrett and a maritime industry magazine editor, correspondent Jessica Williams mockingly demanded that the needs of “most vulnerable among us” - “international shipping conglomerates” - be “balanced against the needs of the hungry.” 

Nora O’Connell, associate vice-president of public policy and advocacy for Save the Children, emphasized that the modest reforms of the Farm Bill are hopeful intimations of things to come. “This,” she said, “is actually the beginning of a reform conversation.”