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The United States is by far the largest donor of food aid in the world. It is also notorious for being the most wasteful — the only major donor that still regularly sends food to humanitarian crises instead of buying it locally or just sending cash, practices consistently shown to be more effective.
It has long been an open secret in Washington that many of these programs continue because not all the money the U.S. budgets for “food aid” is actually meant for the hungry. A variety of subsidies, giveaways and protections encoded in federal law guarantee that some portion of funds ostensibly intended to help those suffering from famine or war in places like South Sudan will instead benefit agriculture interests and other industries at home.
But an effort this year by the shipping industry to carve out an even bigger slice of the pie may, ironically, bring one of the most controversial of those legal arrangements to an effective end.
The regulation in question is known as “cargo preference,” a 60-year-old provision that says a certain percentage of U.S. food aid must get transported aboard U.S. vessels, even if foreign carriers offer a lower price. Researchers say the law has cost the U.S. government at least $140 million a year on unnecessarily expensive transportation — money that could have been spent on food for millions of people or used elsewhere entirely.
The requirement stood at 50 percent until 1985, when, as compensation for eliminating other shipping-industry protections, Congress increased the requirement to 75 percent. Ship owners and unions said the law was essential for maintaining the U.S. merchant marine for future wars. Critics and congressional advisers disagreed, arguing that the regulation had no measurable benefit for national security, while hurting food aid’s effectiveness.
In 2012, Congress restored the requirement to 50 percent. Soon after, the issue was reduced to a maritime trade-journal editor’s grumbling on “The Daily Show,” where correspondent Jessica Williams crooned, “We Are the World”-style, “International shipping conglomerates have economic needs that must be balanced against the needs of the hungry, yeah….”
Farmers still defend [the law], but not as fiercely … and [aid groups] have been shamed into some sort of reform. That’s why they tried to sneak it into this bill, I think. It’s really getting indefensible.
Senior fellow, Center for Global Development
The shipping industry struck back this spring. Following a lobbying effort by maritime executives and labor representatives from the AFL-CIO, Rep. Duncan Hunter (R-Calif.) attempted to restore the cargo-preference requirement to 75 percent. Likely anticipating that the provision would face resistance, the congressman — whose district borders the major port city of San Diego — tucked it into a 22-page package of amendments that was part of a 81-page bill authorizing the Coast Guard’s annual budget.
The Coast Guard authorization bill generally sails through the House without debate. This one was no exception. Even as it reached the Senate in late March, few were aware it contained any provisions related to humanitarian aid.
Sneaking the provision into an unrelated bill was necessary because the maritime industry can no longer count on the once-robust support of aid groups and the agriculture industry, said Kim Elliott, a senior fellow at the Center for Global Development who specializes in food policy. “Farmers still defend [the law], but not as fiercely, because they’re doing great … and [aid groups] have been shamed into some sort of reform. That’s why they tried to sneak it into this bill, I think. It’s really getting indefensible.”
Hunter’s office and advocates for the shipping provision did not respond to requests for comment.At a maritime conference in January, the congressman told industry executives that, while the number of U.S. vessels in international trade was in decline, costing “tens of thousands of jobs,” increasing cargo-preference requirements would ensure that taxpayer dollars will buy “goods [that] are going to be shipped on American vessels, plain and simple.”
In April, someone finally noticed the gambit. The Department of Homeland Security, which oversees the Coast Guard, asked the Senate to strike the provision in its version of the bill. The sentiment was immediately echoed by a leading consortium of aid groups. DHS estimated that the resulting increase in transportation spending, $75 million, would be a drop in the bucket for the maritime industry, while reducing the number of people who could potentially receive U.S. food aid by 2 million a year. The Pentagon was already on record reasserting that guaranteeing food-aid contracts for U.S. shipping companies would have no impact on national security.
American food aid is changing in a very dramatic way. The only question is the pace of change.
Economics professor, Cornell University
The provision seems to have stalled for now. The Senate Commerce, Science and Transportation Committee has no plans to hold hearings or a vote, a committee spokeswoman said last week. Unlike appropriations bills, which directly fund government agencies, authorization bills are not strictly necessary and do not always become law. A Senate version of the Coast Guard bill, introduced in June, does not contain the provision.
The ultimate irony is that, even if the cargo-preference provision were somehow signed into law, it could end up having the opposite effect from the one the maritime industry is hoping for. That’s because the philosophy that necessitates the use of cargo ships to deliver food aid is becoming a thing of the past. The United States, particularly under the Obama administration, has been moving toward abandoning surplus-food programs in favor of reforms that help hungry people buy or grow their own. In 2013, the U.S. Agency for International Development spent more than a quarter of its primary $1.9 billion food-aid budget on cash transfers, food vouchers and purchases made in or near beneficiary countries such as Haiti, Mali, Pakistan, Syria, Yemen and Zimbabwe.
If the cost of transporting food becomes even more expensive as a result of the provision, officials may simply shift funding more quickly to other programs, said Christopher Barrett, an economics professor at Cornell University who studies global food security. “If the maritime interests were successful with this rather audacious resource grab, they might accelerate the pace of change rather than slow it,” he said. “American food aid is changing in a very dramatic way. The only question is the pace of change.”