Politics of Poverty

Sailing in the wrong direction: Food aid as a Congressional tool for supporting the shipping industry

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Grain in the stores of the Jalala Women's Assocation in the Shashemene District of Ethiopia. The current US food aid program requires the purchase and shipment of US-sourced food to locations around the world. This is outdated and inefficient. Purchasing food locally is faster and less expensive, which is critical as more frequent natural disasters and humanitarian crises leave millions of families struggling to survive. Photo: Eva-Lotta Jansson / Oxfam America

Proposed changes to cargo preference requirements completely undermine hard-won, bipartisan food aid reforms.

Michael Helms is a Government Affairs Advisor at Oxfam America.

International food assistance is not a corporate welfare program, and it is not about subsidizing US jobs. Food aid is, quite literally, a lifeline for tens of millions of people.

But you wouldn’t know that from listening to the talk on international food aid in DC last week:

 “The secondary reason for food aid is food. The No. 1 reason is military readiness.” – Rep. Duncan Hunter (R-CA) describing international food aid programs in an interview

“If you’re going to use public resources to engage in humanitarian aid, you should do so while maximizing the use of US industries and to create good jobs in this country.” – Edward Wytkind, president of the Transportation Trades Department at the AFL-CIO, the country’s largest labor federation

At issue is an obscure provision tucked inside of Section 318 of the Coast Guard and Maritime Transportation Act of 2014, which passed the House this month. This provision mandates an increase from the currently mandated 50% “agricultural cargo preference” (ACP), or the amount of US food aid that must be shipped on US-flagged vessels, to 75%. This increase will cost USAID and USDA millions of dollars in extra shipping costs – money that would otherwise be spent getting food to those in need.

In a letter from the Department of Homeland Security to the Chair of the Senate Commerce, Science and Transportation Committee, the Administration described the devastating impacts this provision would have if it makes it into law:

“[This provision] would sharply increase the cost of shipping emergency food aid, potentially denying relief to more than 2 million persons in need annually…This requirement would increase costs of shipping food aid by about $75 million or more, funding that would otherwise allow more than 2 million people – mainly those in emergency food crises – to receive life-saving food each year.” 

This proposed change comes just two years after legislators made the decision to reduce ACP requirements from 75% to 50%, with no clear evidence that this had a negative impact on US-flagged vessels. In addition, as part of a broad budget agreement last year, Congress eliminated the Maritime Administration’s reimbursements to USAID and USDA – reimbursements meant to offset higher costs associated with ACP. The combined impact of the loss of reimbursement with the proposed increase in ACP would reduce the reach of US food aid by some 4 million people – all at a time when massive food insecurity threatens millions of people in places such as Syria, South Sudan, and the Central African Republic.

Thankfully, there is a diverse, robust, and bipartisan collection of actors pushing back against these efforts – voices from Capitol Hill, the Administration on multiple fronts, and from the development community.

“This requirement adds millions in extra transportation costs and delays delivery times by months. It puts lives in jeopardy.” – House Foreign Affairs Committee Chairman Ed Royce (R-CA)

 “As we work swiftly to reach hungry people and save lives, this bill would only increase the cost of shipping emergency food aid, potentially denying relief to more than 2 million persons in need annually.” – Rajiv Shah, Administrator, USAID

Keeping the policy as it is, or—gasp(!)—even eliminating ACP altogether, just makes common sense. So why has the provision made it through the House at all?

Arguments in favor of the bump in ACP generally cite two concerns: 1) maintenance of military-ready sealift capacity and 2) supporting the US shipping industry. But a comprehensive analysis of shipping data and shipping vessel ownership records conducted by Cornell University researchers called into question whether ACP was achieving these objectives. According to the study, “70 percent of ACP vessels did not satisfy criteria to be deemed militarily useful.”

Just last year, we saw real progress towards making our food aid programs more efficient. In both the Farm Bill and the FY14 Omnibus spending bill, Congress agreed on steps to improve the way food aid works. Specifically, they authorized a new $80 million per year program to buy food locally rather than shipping from the US, and $35 million to reduce monetization, or selling US food in local markets – an “inherently inefficient practice” according the Government’s own audit agency back in 2007. These efforts increase the efficiency and effectiveness of food aid programs, thereby protecting US taxpayers’ dollars and ensuring that as many hungry people are reached as possible. Proposed changes to cargo preference requirements completely undermine these hard-won food aid reforms.

US food aid saves millions of lives each year and supports efforts to reduce poverty and injustice. Considering US national security, areas facing famine and extreme poverty tend to be hotbeds of conflict, displacement, violence and potential extremism, so it is in our interest to deliver lifesaving food quickly and effectively.

Thus the strategic investments needed for our national interests are not found with the shipping industry’s vessels as tools of war.

Rather, our US interests – and perhaps more importantly – our US values are best served when people around the world don’t go hungry. It’s simply the right thing to do.

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