IT IS the sad fate of American overseas food aid to occupy a policy “sweet spot”, says Chris Barratt, an expert in the subject at Cornell University.
Its budget, the largest of any country’s, is big enough to attract rapacious special interests, but still sufficiently small and complex that its scandalous inefficiencies rarely make headlines.
Scandalous barely covers it. Since America began donating surplus wheat, corn meal, vegetable oil and other farm commodities to the world’s hungry six decades ago, the programme has been captured by an “iron triangle” of farm interests, shippers and voluntary organisations, with plenty of help from Congress. Rules state that most food aid must be bought from American farmers and processed in America. At least half must then be carried on American-flag ships. With competition severely curbed, ocean shipping eats up 16% of the budget for the largest food-aid programme, Food for Peace.
In a related scandal called “monetisation”, involving non-emergency aid (which represents about 30% of Food for Peace), charities and non-governmental outfits receive American produce, sell it on local markets abroad and then use the proceeds for good works. Compared to directly funding projects, “inherently inefficient” monetisation on average wastes 25% of the money sent, according to the Government Accountability Office. And the food supplied often floods fragile markets, hurting local farmers.
The White House proposed big changes in its recent budget plan, but these fall short of an end to rules tying aid to American interests. About $1.4 billion in Food for Peace money would move into US Agency for International Development (USAID) accounts that operate under more flexible rules, allowing for local procurement or for funds to be sent directly to the hungry through vouchers or even mobile-phone transfers. That could cut delivery times by as much as 11-14 weeks, says USAID, and at the same time save enough money to feed 4m more children each year.
Monetisation within Food for Peace would be scrapped. In a sop to domestic farmers, at least 55% of funds would still be used for the purchase and transport of American produce. A shift towards high-nutrition foods, such as enriched peanut butter or biscuits, will require fewer shipments for the same amount of calories. Grumpy shippers will get $25m in transitional aid to help them adjust.
Now Congress, which approves budgets, must decide what to do. USAID’s head, Rajiv Shah, is optimistic that the reformers will win this argument, pointing to a fiscal environment in which every dollar must be made to count. Modern food aid is part of the fight against extreme ideologies, he adds: America needs intelligent ways to help in global trouble-spots.
But this would not be America if congressional turf fights did not loom, pitting farm-committee members against colleagues who oversee foreign affairs. Reforms have failed before; one can only hope that it will not happen again.
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