Reforming U.S. Food Aid Can Feed Millions More at the Same Cost

People wait to receive food provided by the World Food Program in southern Sudan, December 2010. (Goran Tomasevic/Reuters)
Outdated requirements meant to help American companies are needlessly wasting money.

The U.S. has done more than any other nation to help the hungry around the world. We are by far the largest donor to the World Food Program. Additionally, we provide more than $2 billion in food assistance through programs such as Food for Peace and the International Disaster Assistance account. Indeed, since President Eisenhower established America’s first food-assistance program in 1954, U.S. taxpayers have fed over 3 billion hungry people in 150 countries.

This generosity is saving lives, and the need is growing. The Food and Agriculture Organization estimates that the number of undernourished people in the world increased from 777 million in 2015 to 815 million (about 11 percent of the world’s population) in 2016.

The impact is particularly severe in countries experiencing conflict or instability. The Global Report on Food Crises 2018 estimates that more than half of the 120 million people facing serious food insecurity or famine live in conflict-riddled countries, such as South Sudan and Yemen.

Americans can be justifiably proud of saving people from starvation every day. Unfortunately, outdated U.S. government policies undermine our generosity.

The first of these policies is a requirement for U.S. food aid to be purchased in the U.S., instead of from countries or regions closer to the crisis. In most instances, this requirement increases the cost of aid and the time it takes to reach target populations.

This policy dates to the 1950s, when food assistance was a significant share of U.S. agricultural exports. The program was seen as a twofer: Hungry people got fed while American farmers gained subsidized access to foreign markets and stabilized commodity prices at a time when U.S. farm production outstripped demand.

Today, however, food aid accounts for less than 1 percent of U.S. agricultural exports and less than 0.1 percent of all U.S. food production. Eliminating this requirement would have minimal impact on U.S farmers. Even the American Farm Bureau Federation acknowledges the marginal impact of food aid on U.S. farmers and supports reducing this wasteful requirement.

Another misguided policy requires that 50 percent of food aid be shipped on U.S.-flagged vessels. Ostensibly, this requirement helps ensure that a minimum number of merchant-marine ships will be available to transport military equipment if an emergency arises.

U.S. farmers on the whole do not significantly benefit from the commodity-purchase requirements, and U.S. security interests are not served by the shipping requirements. Yet the cost to hungry people around the world is severe.

In reality, most of the ships getting business from this requirement fail to meet the minimum standards for usefulness in such circumstances. The Department of Defense informed Congress in 2013 that removing the shipping requirement “will not impact U.S. maritime readiness and national security. The department’s ability to crew the surge fleet and deploy forces and sustainment cargo will not be affected.” Moreover, this policy doesn’t always end up helping American shippers. As noted by former USAID administrator Andrew Natsios, “between 2012 and 2015, nearly half of food aid was shipped on U.S. subsidiaries of three foreign companies from Denmark, Germany, and Singapore.” Also quite real are the excessive costs of this requirement. According to American Enterprise Institute scholars, freight rates on U.S.-flagged vessels are “often 40% higher than internationally competitive rates.”

To recap, U.S. farmers on the whole do not significantly benefit from the commodity-purchase requirements, and U.S. security interests are not served by the shipping requirements. Yet the cost to hungry people around the world is severe.

According to Erin C. Lentz of the University of Texas, these two policies significantly increase the cost and reduce the efficacy of U.S. food assistance:

For every tax dollar spent on US food aid, a number of studies estimate that only $0.35–$0.40 is actually spent on food commodities that feed hungry people. . . . A colleague has estimated that roughly 40,000 children’s lives are lost annually due to outdated policies, including meeting cargo preference requirements, monetization, and reliance on in-kind shipments sourced from the US.

The focus of U.S. food aid should be to feed the maximum number of people as quickly and efficiently as possible. The purchase and shipping requirements waste between 30 percent and 50 percent of every food-aid dollar.

Eliminating these requirements would allow U.S. food aid to feed millions more people around the world. Unfortunately, eliminating these requirements, particularly the shipping requirement, faces opposition in Congress.

The Trump administration has proposed eliminating the P.L. 480 Title II account (which was established under the Agricultural Trade, Development and Assistance Act of 1954 and is subject to shipping and purchase requirements) and shifting its funding to the International Disaster Account and the Emergency Food Security Program — neither of which is subject to those wasteful restrictions. That shift also faces congressional opposition.

Another, less sweeping option is on the table as well. The Food for Peace Modernization Act (H.R. 5276) would reduce the requirement for U.S. purchase of food aid to 25 percent of the total. Although the shipping requirements would remain, this one change would free up $300 million each year currently lost to inefficiencies — a sum that would enable the U.S. to feed an additional 9 million people.

No one can deny the compassion and generosity of the American people and our commitment to combating hunger. In the coming weeks Congress will have an opportunity to modernize our food-assistance programs. We could do so much more with the same level of funding — in fact, we could do more with even less funding — if only a few small changes are made. All Americans should be able to get behind this goal of feeding the hungry as efficiently and effectively as possible.

Brett D. SchaeferBrett D. Schaefer is The Heritage Foundation’s Jay Kingham Fellow in International Regulatory Affairs.

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