More than 60 years after the US Food for Peace program was launched, vested interests continue to hinder reforms to allow for more local sourcing of food aid.

by Tamara Leigh

The owners of US ships responsible for delivering food aid are now in line to receive millions of dollars in new subsidies as a result of proposed reform, news reports say. Under current law, almost all American food aid – worth around $1.8 billion in 2014 – must be purchased in the United States, and at least half of it must be transported on US-flagged vessels, a combination that costs 25-50 percent more than on the open market.  

US shipowners are seeking compensation for a decline in revenue due to the proposed changes, according to a trade publication, American Shipper. The US government’s  Maritime Security Program (MSP) pays $186 million annually to shipowners to ensure a viable sea transport capacity in time of war. According to the report, shipowners are looking for an increase in the MSP “stipend” to $300 million.   

US shipping and agribusiness have for a long time been the beneficiaries of US food aid policy, and, not to be left out, the congressional agriculture committee has demanded to know what’s going on behind closed doors between industry leaders and aid officials.  

The latest revelations illustrate how hard it is to reform a food aid system that critics say is not only inefficient, but also counterproductive.  

“We need to support local (agricultural) producers and markets, or at a minimum, not undermine them,” explained Daniel Maxwell, professor and research director at the Feinstein International Center at Tufts University in Massachusetts.   

“People need markets to recover from disaster, and if the (aid) response to the disaster undermines markets, it takes that much longer to recover," he told IRIN. 

The US Agency for International Development (USAID), which manages American aid programmes, supports reform, but has not yet managed to push through all the changes that would free it to deliver its assistance more effectively.  

(Source:  Oxfam America )

(Source: Oxfam America)

"In USAID's experience, implementing food assistance programmes using locally and regionally purchased food (LRP) has shown both cost and time savings, compared to programmes using US-purchased food aid, and research from a variety of institutions, both public and private, supports this experience," USAID told IRIN in a written statement. 

In spite of this, USAID only has access to what it calls a "modest" amount of resources for LRP, food vouchers and cash transfers under its so-called Title II programme, which mostly covers emergency assistance. 

What do reformers want? 

Senators Bob Corker and Chris Coons, who are sponsoring pending US legislation, have estimated that reforming food aid could allow the United States to reach up to 12 million more people annually with the same amount of money, and more quickly, by freeing up as much as $440 million through greater efficiencies. 

"At a time when almost 60 million people around the world are displaced by conflict – the largest amount ever recorded – rising costs have dramatically decreased the amount of food that a dollar of Title II funding buys. These reforms are needed more than ever," said USAID.  

Breakdown of Food For Peace Costs

For Title II Programs (FY2004 - 2013), 88% of funding goes towards the procurement and transport of food. Source: USAID

Between 2004 and 2013, at least 88 percent of funding for Title II was spent on the procurement and transport of US-procured food (see graph). The high cost of shipping commodities from the United States means the amount of food aid shipped by USAID has decreased by 64 percent over the last decade. 

“There have been reforms, yes, but really they have been too small to have had any major impact,” said Solomon Muchina Munyua, acting director of the Nairobi-based Centre for Pastoral and Livestock Development, part of the Intergovernmental Authority on Development (IGAD), a grouping of East African states. 

“The US is supporting basic production, agriculture and livestock, but when you have a sudden injection of food from outside, that works against those efforts and interests,” he said. “It’s a total contradiction.” 

For Munyua, such reforms would have other significant benefits. 

“If you were to inject the resources that you spend on sending food aid into (local) food production it means you can create gainful employment of young people,” he told IRIN. 

Timeline: The long fight for reform 

Lengthy efforts by NGOs and some legislators to reform US food aid policy continue.  

“The optimist in me says that we have made tremendous progress in getting people to realise that this programme, a 1960s programme operating in the 21st century, is not appropriate," said Eric Munoz, policy advisor at Oxfam America. 

"The Obama administration has put a lot of muscle in the fight. We are much further along now in terms of the conversation and attention from Congress and the administration, but what we haven’t done yet is to get over the finish line and change the law.”  

But reformers from both sides of the US political divide continue to face robust resistance from what has been referred to as an “iron triangle of special interests”: shipping firms, agribusiness and, in some cases, the NGOs themselves. 

“There is a common perception in the US that if they’re sending food aid, American farmers should benefit, and if food aid is reformed, then they will lose out,” said Munoz.  

“But food aid amounts to less than one percent of US agricultural exports, so even if we went to a system in which we did not purchase any commodities from the US at all, you would not impact exports.”   

According to the Food for Peace Reform Act 2015 – Corker’s and Coons’s legislation, which is currently before the Senate Foreign Relations Committee – between 2002 and 2011, food aid accounted for less than one percent of US shipping income and just 1.41 percent of farm income. 

Farmers and shippers, Munoz noted, believe they ought to benefit from any food aid programme. 

“That’s an inappropriate way of viewing the rationale of providing emergency assistance and foreign assistance, particularly assistance that is meant to address food insecurity in complex crises like Syria or South Sudan,” he said. 

Corker’s and Coons’s Food for Peace Reform Act is due to be debated in September. 


Report by Tamara Leigh

Timeline by Dimple Vijaykumar