By Danielle May, Institute for Cultural Diplomacy. The US food aid program has long been controversial. Deep divides exist over present policies in the area, and disputes over how the system should best operate to combat famine in poverty stricken areas are widespread. The US is the world’s largest food aid donor and currently adopts an ‘in-kind’ food policy tied to rules from the 1950s, whereby the majority of food delivered for aid purposes must be grown in the US.
This approach has been criticized as being outdated and ineffective, as it not only raises prices for goods that could be bought far cheaper locally, but delays delivery and hinders growth in developing countries’ markets. Selling American food in developing communities discourages local farmers from producing their own food, further crippling economic growth. The in-kind policy hinders efforts to reduce foreign dependence on US aid and to promote sustainable food and agricultural policies in developing countries. Currently, nearly two-thirds of the US food aid budget is spent on transportation and other non-food related costs, drastically impeding the amount of food that reaches famine-stricken people.
President Barack Obama is proposing a reduction of in-kind food aid to only 55% of the food aid budget, considerably less than it is now, in order to allow humanitarian groups to respond to food crises flexibly and quickly, without being restricted by the requirement to wait for (and pay more for) food shipped in from the US. Under the new reforms, the remaining 45% of the food aid budget could be used far more efficiently – for example in the form of cash or vouchers to allow individuals and NGOs to buy locally grown produce – and monetization would be ended entirely.
Proponents of the reforms call for an even more extreme reduction of in-kind food aid, advocating removing the policy entirely to allow for significant savings in both costs and delivery time. The current policy has led to aid workers finding themselves in direct competition with local farmers during relief missions, and in communities where people are dying from hunger despite food being available because they are waiting on food shipments from the US, rather than having cash vouchers to purchase the food locally.
The EU switched to cash donations as long ago as 1996, and Canada has also untied their food aid budgets in recent years. Although USAid, the US agency for international development, revised its rules to allow more purchasing of goods and services from developing countries, the majority of the US food budget falls under ‘agriculture’ rather than development, so is not subject to the same changes. These movements from leading Western nations as well as USAID itself demonstrate acceptance of the fact that the in-kind food policy is in need of restructuring or eliminating altogether, and a confidence in the strength of new policies. It would seem that the reforms are an obvious solution to an important problem, so why the hesitation?
Resistance is coming from the so-called ‘iron-triangle’ of special interest groups: agribusinesses, shipping firms and NGOs who benefit from the current policy and are against a reduction in US grown food aid. Some companies benefit enormously from the current system, leading to the US food aid program being criticized as ‘corporate welfare’ for the three large multinational agriculture companies that sell produce to the US government, providing two-thirds of the entire US food aid requirements.
As regulations stipulate that most food must not only be grown in the US but three-quarters must also be shipped on US flagged ships, the shipping industry has also been fiercely defending the current policy. In addition, NGOs benefit from monetization policies whereby the US government gives them food to sell locally to fund their humanitarian work; this well-intentioned process can often negatively impact the very communities they are trying to help by distorting local economies and increasing dependence on aid.
Despite these strong voices of discontent in the debate, the attitude towards US food aid policy is certainly changing. Increasingly, individuals, businesses and NGOs are seeing the benefits of adapting the aid budget to ensure as much food as possible is effectively delivered to those who need it most. The decision to support the reforms now lies with Congress in what is expected to be an uphill battle. It is hoped that policy-makers will be receptive to international public opinion and see the merit in the reforms, potentially leading to food reaching hundreds of thousands of people suffering needlessly from hunger in developing countries.