U.S. Food Aid: We Pay for Shipping

In the midst of a worldwide hunger crisis, Congress signed on to a food aid program last month that sends hefty paychecks to agribusinesses and shipping companies, but an ever-shrinking supply of food to hungry people. Critics of the farm bill passed into law by Congress over President Bush's veto on June 18 say the inefficiencies in U.S. food aid will only exacerbate food shortages.

The U.S. earmarks about $2 billion per year on food for the world's hungry, more than any other country. Nearly two-thirds of that, however, is spent on items other than food. The $290 billion farm bill, like others before it, requires commodities be bought in the U.S. and shipped to needy countries. And as shipping and delivery costs have risen, the amount of actual food the U.S. sends overseas has fallen dramatically—by 52% between 2001 and 2006—according to one government report. The situation is even more dire this year, due to sky-high prices for commodities like wheat and corn, as well as for fuel.

President Bush asked Congress to modify the farm bill this year so that up to 25% of the food aid budget would be spent on food purchased in other countries, instead of shipping it from the U.S. He even mentioned the proposal in the State of the Union address in January, generating a round of applause. But when the clapping died down, Congress essentially passed the same food aid package it has in previous years.

Congress Opts to Go Slow

Granted, buying food in the U.S. and shipping it overseas has important advantages. There are undeniable political and diplomatic benefits of sending abroad food stamped with the letters USA. Supporters of the current way of doing things also say buying hundreds of millions of dollars' worth of food in developing countries could destabilize agricultural markets and lead to new problems.

Whether those benefits outweigh the inefficiencies of the U.S. program received little debate during consideration of the farm bill. In the House, a proposal to boost local and regional purchases died quietly in the Rules Committee. The Senate was willing to study the idea, but not to divert much money toward it. Eventually, the bill included $60 million over four years—less than 1% of the likely food aid budget over that period—to fund a study and pilot program for local-food purchases. A supplemental funding bill added $50 million more for local and regional purchases. Senator Tom Harkin (D-Iowa), the chairman of the Senate Agriculture Committee, said, "It is important that we act cautiously [and evaluate] the effectiveness, efficiency, and any potential consequences" before altering the food aid program.

Others were disappointed by the go-slow approach. "I was very upset that they did that in the middle of a crisis like this," said Andrew Natsios, the administrator of the U.S. Agency for International Development, or USAID, from 2001 to 2006 and now a professor at Georgetown University. "We don't need a pilot like this. It works. We know it works."

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Getting food to developing countries efficiently has taken on a new urgency this year. Hunger crises, brought on by record high commodity prices and droughts in Ethiopia and elsewhere, have led to rioting in more than 30 countries, and could help push an additional 100 million people into extreme poverty this year, according to the World Bank.

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