The USA needs to seriously rethink the way it does food aid
Food saves lives - more food, equals more lives saved. Less food, less lives saved.
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Food saves lives. The math on how this works is pretty simple, more food equals more lives saved. Less food, equals more deaths.
If you’re reading this and going “well, duh,” then that officially makes you smarter than some policy makers in the US.
Before I get into that, here’s some facts on the United States and food aid.
1 - The United States is the largest national donor of food in the world. This aid is overseen by the US Agency for International Aid (USAID) and the US Department of Agriculture (USDA)
2 - The largest program in the United States is called “Food for Peace,” which alone distributes $1.5 billion USD in aid.
That’s a pretty good deal, but here’s the catch. If the US Government did this more efficiently, it could feed 8-12 million more people.
Yes, you read that right. 8-12 million people could be receiving food aid they desperately need at no additional cost with minimal, to no impact on the US economy.
Ok, the US government (and pretty much all governments) could be a lot more efficient across the board, but beyond the image of lazy government workers (side note, that’s not really true), and corruption (admittedly an issue for another piece on food aid, but not the focus here), what I am referencing now is structural choices imposed by the US Congress on international food aid that choose to make it more expensive to deliver food aid and thus leads to less lives being saved.
Luckily there are at least some leaders in the US Congress willing to solve this problem.
Well said Mr. Senator. Now, if you are a global citizen looking to go pro, here is the full text of the proposed bill. And if you’re like me and just want the important stuff, then read on.
Important part 1: Cost-Effective Procurement
Basically paying less for stuff so you can eventually buy more-let’s call this solution the “Walmart” approach to international aid.
The Problem: Current US law requires 100 percent of food aid distributed by the United States to be initially bought in the United States. That means it has to be bought in the United States (where food isn’t particularly cheap) and then shipped all the way from the US to its destination country. That can add a LOT of cost.
THE SOLUTION: Allow the US Agency for International Development (USAID-you know, the experts on this) decide how and where to buy the food that needs to be distributed. Giving USAID options, means they can distribute the aid in a variety of forms with an eye on what is the most cost-effective. This can still include food bought in the US, and it adds options to buy the food nearer its intended destination (for pro users, that’s called using LRPs-Locally and Regionally Procured food) or even vouchers or cash transfers to recipient nations.
What’s the Catch? Critics worry this will mean US farmers will lose out on an important customer. The truth: US food aid accounted for only 1.41 percent of the money farms made between 2002-2011. So, in reality we’re not talking about them missing out on that much. Not when this change helps feed 8-12 million more people.
Important Part 2: Cargo Flexibility
This is very similar to the last important part, as it deals with enabling experts to make cost effective decisions.
The problem: Current US law requires 50 percent of food aid to be shipped on American-flagged vessels. There are not that many US flagged vessels left in the world and they are almost uniformly more expensive than their global competitors. This means that currently US law requires all food aid be bought and shipped from the US and it requires that half of that shipping be on the expensive option. Let’s call this the “luxury shipping tax.” That should make it clearer.
THE SOLUTION: Allow US Food aid agencies to ship on the cheapest, most readily available ship. Sounds pretty simple, right? That’s because it is.
What’s the catch? US flagged cargo vessels will undoubtedly lose some business- an estimated 0.86 of business. That’s not a huge hit for a group of multi-million dollar industries that are costing the American tax payer-and more importantly the people in need of this aid-an estimated 46 percent more than market competitors (That’s according to a study by Cornell University, USAID and the Government Accountability Office-some pretty reliable folks).
And just for completeness, I’ll touch on the other “major concern” critics have. Apparently, some people think that taking less than one percent of US flagged shipping vessels business will undermine the nation’s “maritime readiness,” (if you’re confused, you’re not alone, that term is broad). To shut this critique down, The US Departments of Defense and Transportation have sent separate letters to Congress saying changing these “cargo preferences” will not undermine US maritime readiness. That feels like case closed on that critique for me.
Important Part 3: Eliminate Monetization:
This one is admittedly complex, so stay with me.
The Problem: Current law requires 15 percent of all US donated food aid must be first sold by aid organizations. Wait, what? Yes, the US government requires aid agencies to sell food aid. They do this so that the aid agencies can make enough money to fund local development projects. If you’re saying “um, what??” you’re not alone.
This process called “monetization” (a word likely to scare off most non-economists from asking questions) is incredibly inefficient. For one, it undermines a lot of the concept of food aid. For two (is that a phrase?), it is estimated by the Government Accountability Office (GAO) that aid agencies are losing money doing. It’s estimated that aid agencies receive 25 percent less money when forced to sell this food to fund themselves.
THE SOLUTION: Stop it. Seriously, that’s it. Stop. THAT. The new bill ends this practice. I don’t have a clever name for this solution, I just have common sense- STOP LOSING MONEY.
What’s the catch? Aid agencies are required to fund some of their activities through this selling of aid. So if we stop this process, they could lose out on some funding. That’s bad. But if we really think what they do is important, how about we make sure US tax payers’ money is actually being utilized, instead of sending 25 cents for every dollar out the window.
Just to review, the new Food For Peace Reform Act of 2015 can feed and save the lives of 8-12 Million people. It does this by (say it with me): Embracing the Walmart buying solution, ending the luxury shipping tax, and simply stopping inefficient “monetization.” (Again, apologies for the lack of fun name on that last one).
You can support this important bill by writing to your member of Congress and encouraging them to sign onto the Food for Peace Reform Act of 2015. Take action in the box alongside this content, to make the US government more efficient and save lives.
As a closing thought, take it away Senator Coons: