Three ways that Congress can fix the food aid program

Today the Senate Agriculture Committee held its first hearing of the year on the 2012 US Farm Bill, a $288 billion behemoth best-known for setting farm subsidy and other agricultural policy. Although it rarely receives top billing, the Farm Bill is the central legislation that guides the US government’s global food aid programs.

Here’s the long and the short of it: the US Food Aid program is immensely important, but right now it is broken, seriously hampered by special interests who lobby Congress to impose regulations that protect their bottom-line at the expense of hungry people and taxpayers. These regulations cause less food to get to the hungry people who need it with up to 32 cents out of every $1 spent on food aid going to waste as a result. To put it succinctly, the regulations cost money and lives.

For years these rules have been protected by a group of well-heeled lobbying organizations representing the shipping industry and the major commodity trade groups including the American Cargo Transport Corporation, the National Corn Growers Association, and USA Rice Federation among several others.

Case in point, this letter sent to members of Congress in 2010 by DC lobbying firm Winston & Strawn on behalf of industry groups opposing reform. These groups have joined hands to fight against common sense changes that would make our food aid program more effective at saving lives and more cost efficient for US taxpayers.

But it’s time for the craziness to end. And the 2012 Farm Bill is the place to make that happen. That’s why Oxfam America and some of our friends and allies are standing up to take on the special interests that are getting in the way of life-saving reforms. We hope you’ll join us. For more detail on the issue, see the memo we put out this morning highlighting three ways that Congress can fix the food aid program.

And stay tuned to this space for more.
 
 
 
 
TO: Interested Parties
FR: Ben Grossman-Cohen, Oxfam America
RE: The Farm Bill and Food Aid

Helping hungry people during food crises is an essential part of US foreign policy; it reduces instability around the world and protects the most vulnerable communities from catastrophe. But under the current law, special interest lobbyists are having a field day with our food aid program, imposing rules and regulations that benefit themselves, cost lives, and waste taxpayer dollars. These regulations cause less food to get to the hungry people who need it with up to 32 cents out of every $1 spent on food aid going to waste.

For years, a group made up of well-heeled lobbying organizations representing the shipping industry and the major commodity trade groups including the American Cargo Transport Corporation, the National Corn Growers Association and USA Rice Federation, have joined hands to fight against efforts to make our food aid program more effective at saving lives and more cost efficient for US taxpayers.

(See the letter sent by DC lobbying firm Winston & Strawn on behalf of industry groups opposed to food aid reform.)

These groups push Congress to impose regulations which require that food be purchased from preferred growers and shipped from the US on preferred ships instead of finding the best prices and sources of food that will save the most lives and reduce dependence on aid in poor countries. This red-tape directly benefits the industries these lobbyists represent at the expense of hungry people and taxpayers.

Independent studies have shown that these rules cost taxpayers approximately $213 million a year, a massive chunk of the relatively small food aid budget. Shipping restrictions alone cost taxpayers on the order of $140 million in one recent year. Think of the lives that could have been saved if that $140 million could have been spent on food and agriculture programs instead of unnecessary overhead.

What’s worse, the regulations contribute to delays in food deliveries of up to four to six months, delays that can mean life or death for people in crisis. The rules also hurt small-scale farmers when US food aid is dumped on developing country markets. Rather than helping communities build a bridge out of poverty and hunger, these rules contribute to a cycle of poverty and dependence for small-farmers and hungry people.

America is better than this. It is time to put the interests of hungry people and American taxpayers ahead of industry lobbyists by reforming food aid’s wasteful and ineffective regulations in this year’s Farm Bill.

These reforms must allow for food aid to be purchased locally and regionally within developing countries and put an end to the use of life-saving aid doubling as corporate welfare. These fixes will save lives and ensure our aid helps build self-reliance, enabling local farmers to thrive and reducing the need for assistance over the long term.

How to fix food aid in the Farm Bill:

1. Expand the use of local and regional purchasing of food aid.
The 2008 Farm Bill created a small pilot program for local and regional purchase of food to prove that it can be done. Rigorous evaluation of this program has demonstrated that it can. Where appropriate, local and regional purchasing is a cost-efficient and effective model to save lives and enable communities to build pathways out of poverty. The current pilot should become a regular program and receive funding as part of the core food aid program.

2. Use food as food, not a source of fundraising.
Some organizations that deliver food aid are forced sell it to food traders to raise cash to fund their food aid programs. It’s perfectly legal, but totally inappropriate. This process, known as “monetization” is extremely inefficient and can damage local markets, hurting farmers and undermining food security. Food aid must be used to save lives not as an inefficient and wasteful way to generate funds for organizations providing food assistance. The US must eliminate the “monetization” of food aid. Congress must provide organizations delivering food aid with adequate funding so that they can deliver lifesaving programs without having to sell off food to keep the lights on.

3. End costly shipping restrictions.
By law, at least 75 percent of US food aid must be shipped on preferred US ships. This rule wastes money, costs lives and creates an unnecessary burden on USAID that hampers quick and effective response in times of crisis. It is wrong to use emergency food aid that is intended to save lives as corporate welfare for the shipping industry. Special set asides for the shipping industry should be stripped from the Farm Bill.