The Obama admin wants to reform food aid and the agribusiness lobby is not okay with it

posted at 3:21 pm on April 4, 2013 by Erika Johnsen

Iiinteresting. The NYT reports that the Obama administration is looking to revamp the way the U.S. government distributes international food aid; it’s a recurring effort that’s been pretty much dead-on-arrival for years because of the powerful agricultural lobby’s intense support for the way the program is currently run, and predictably, they are one royally ticked off lobby right about now.

According to people briefed on the soon-to-be released fiscal year 2014 budget, the administration is expected to propose ending the nearly 60-year practice of buying food from American farmers and then shipping it abroad.

The administration is proposing that the government buy food in developing countries instead of shipping food from American farmers overseas, a process that typically takes months. The proposed change to the international food aid program is expected to save millions in shipping costs and get food more quickly to areas that need it. …

The United States spends about $1.4 billion a year on food aid and is the only major donor country that continues to send food to humanitarian crisis spots, rather than buying food produced locally.

In a letter to members of Congress and the Obama administration, more than 60 organizations like the USA Rice Federation and the American Maritime Congress defended the way the program is currently run and called on lawmakers and the Obama administration to resist changing it.

I’m going to hold off on the wisdom of spending taxpayer dollars on international food aid and the often accompanying “soft power” tactics — whether or not it’s a good idea, let’s accept for a moment that the United States is going to spend a couple of billion on food aid in some form every year no matter what.

As our food aid program functions now, it’s more of a roundabout export subsidy for American agribusiness than anything else — the humanitarian aid might be the stated goal, but it’s kind of incidental. The law requires that most international food aid much be purchased from American farmers, and the federal government resells and ships U.S. crops to poverty-, disaster-, and/or famine-stricken areas overseas. Sure, it’s a convenient way for farmers to unload some of their excess production, but it also floods these overseas markets with subsidized American food that can displace sales from local producers and neighboring countries, contributing to market instability in these regions.

Critics of the food aid program argue that it would be more cost effective to eliminate the American-grown requirement and instead allow the U.S. to send help to impoverished areas via purchasing food from abroad, too, helping to get rid of some of the shipping costs and red tape.

Advocates maintain that the program supports U.S. agriculture and shipping jobs (albeit because the federal government is helping to subsidize and artificially inflate a particular market), but if the end goal of the program is really to stretch our dollars the farthest in helping the needy, then reform that would instead allow the cash to perhaps be directed overseas would probably be a more cost-effective route.

If Obama’s proposal is geared toward the U.S directing those aid dollars toward wherever they can be spent most cost-effectively (though I’ll wait until I actually see it to judge), then I am actually for it. Both Republicans and Democrats never seem to find a shortage of excuses for the farm lobby’s market-distorting practices, and if our goal is to get the most bang for our buck in delivering humanitarian aid, then it’s a pretty good idea.

This reform would speed up the delivery of aid to people facing starvation while maximizing our use of taxpayer dollars. Multiple studies by the GAO, leading academics and others suggest that purchasing food nearer to hunger crisis areas would cut in half or more the seven months it now takes to buy food here and ship it half way around the world. And the cost savings would be enormous. The U.S. Agency for International Development estimates that up to half of its spending on food aid now goes to ocean transportation costs.

Our agricultural, foreign policy and national security objectives would be better served by focusing our efforts more precisely toward getting food aid as quickly as possible to the people who desperately need it.


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AND the reduced demand for American farm products will tend to lower prices here. Win-win

deadrody on April 4, 2013 at 3:27 PM

A Chinese fire drill except that no one is willing to get back behind the wheel.

Bishop on April 4, 2013 at 3:27 PM

As our food aid program functions now, it’s more of a roundabout export subsidy for American agribusiness than anything else — the humanitarian aid might be the states goal, but it’s kind of incidental.

And isn’t the effort to justify illegal aliens and a “guest worker program” due to agribusiness’ demands for ongoing “cheap labor” (otherwise known as illegal aliens at present)?

We’re importing poverty to justify exporting cheap food to employ expensive and welfare-needy people? So we can have cheap lettuce? And send more potatoes to Cuba?

Lourdes on April 4, 2013 at 3:28 PM

the agribusiness lobby is not okay with it

So what. Shut up and submit to our Imperial President.

hawkeye54 on April 4, 2013 at 3:28 PM

People everywhere have to learn the primary lesson of survival: if you can’t find resources necessary to survive even a few days in one location, you go to another location, then repeat that process until you find the location where you can support yourself and your dependents and if possible, have more left over to assist and profit from others.

What we’re doing at this stage of our human existence is, we’re rewarding human failure to thrive: they can’t and continue not to, because someone’s ushering in what they need to survive.

There was a routine once by Sam Kineson where he screamed, people in Africa or someplace were starving because they lived where there wasn’t any food. So instead of giving them food, we should give them Volkswagens so they could get to where the food was. Like that,, funny but true.

Lourdes on April 4, 2013 at 3:32 PM

Why the eff do we send food aid anywhere? Is our budget so deep in black that we have money to waste? Let socialists eat their socialism.

Archivarix on April 4, 2013 at 3:34 PM

http://youtu.be/VKNoJ2BzSRU

Sam Kinison about world hunger (1st Letterman appearance)

Lourdes on April 4, 2013 at 3:35 PM

Reforming food aid starts at home by reforming the food aid to food stamp recipients. Food stamp recipients can only purchase farm fresh foods and meats from US farmers, thereby increasing production of these commodities. WIN/WIN. Also creates jobs. Purchasing foods from around the world and feeding the starving creates the types of jobs needed professionally, growing the economy. It also saves the govt the massive shipping costs. WIN/WIN in decreasing the deficit. It is a shame that the guv does not look at the win/win situation in this light

skeeterbite on April 4, 2013 at 3:36 PM

continues to send food to humanitarian crisis spots, rather than buying food produced locally.

While I am fine with ending Agri-business cronyism I see one problem with the above statement. If the local area has the food to take care of their humanitarian crisis then let them w/o our money.

chemman on April 4, 2013 at 3:39 PM

Lourdes on April 4, 2013 at 3:35 PM

Argh…Argh….AAAARRRRRGGGGGHHHHHH!

skeeterbite on April 4, 2013 at 3:39 PM

but it also floods these overseas markets with subsidized American food that can displace sales from local producers and neighboring countries, contributing to market instability in these regions.

1. If there was a food market to disrupt, we wouldn’t be sending the aid there.

2. In a disaster area, food production is halted temporarily (refer to point 1 above).

Bolded point above: Whats worse: starving to death or free food?

BobMbx on April 4, 2013 at 3:43 PM

Why the eff do we send food aid anywhere? Is our budget so deep in black that we have money to waste? Let socialists eat their socialism.

Archivarix on April 4, 2013 at 3:34 PM

Shut up and eat your peas.

BobMbx on April 4, 2013 at 3:44 PM

It is tough for local farmers to compete with food that is distributed for free; so sometimes our system discourages local production. Raising the amount of money to buy local produce could spur local production and help solve a problem on a longer term basis. Also, when one must pay for something, it tends to ration itself rather than require armed guards to keep people from taking more than their allotment. Give the aid recipients the money and then they will buy only what they need.

KW64 on April 4, 2013 at 3:48 PM

Two questions:

1. If food is bought from foreigners, then how can the government be sure it’s raised according to their strict guidelines and under their strict controls? That would be like anarchy!!!!!

2. Why does Obama hate brown people?

There Goes The Neighborhood on April 4, 2013 at 3:51 PM

but it also floods these overseas markets with subsidized American food that can displace sales from local producers and neighboring countries, contributing to market instability in these regions.

1. If there was a food market to disrupt, we wouldn’t be sending the aid there.

2. In a disaster area, food production is halted temporarily (refer to point 1 above).

Bolded point above: Whats worse: starving to death or free food?

BobMbx on April 4, 2013 at 3:43 PM

Yes, understood.

But it’s interesting how those “interruptions in food production” seem to continue to happen to the same populations, year in, year out, generation after generation…

Eventually, people have to learn how to provide for themselves. I realize we must be charitable — I’d never deny someone food or other helps if they were starving, floundering, their survival was at risk and I had anything they needed to make it through — and I also realize that we benefit here in the U.S. by these food-provisionals sent to other nations…but I do think we should smarten up about how all this is produced and delivered, to whom and why.

Especially since this agribusiness area of US industry is being cited nearly explicitly by people promoting amnesty for illegal aliens (which doesn’t make economic sense since once amnestied, those same illegal aliens multiply their economic demands on the US and are no longer “cheap labor”).

Lourdes on April 4, 2013 at 3:51 PM

1. If there was a food market to disrupt, we wouldn’t be sending the aid there.
BobMbx on April 4, 2013 at 3:43 PM

That was my reaction. All over the world people are starving but next door they aren’t and farming is flourishing? I find this scenario unlikely. And who would coordinate all this? If the answer is, “American bureaucrats”, it should be dead on arrival.

Buy Danish on April 4, 2013 at 3:53 PM

fwiw, Here’s some data.

Buy Danish on April 4, 2013 at 4:01 PM

But it’s interesting how those “interruptions in food production” seem to continue to happen to the same populations, year in, year out, generation after generation…

No doubt, but we sell excess production which would either spoil in the field or just not be planted to start with. Both of those options don’t feed anyone, and raise the cost of food everywhere.

I’m not a big supporter of foreign aid as matter of routine, but I’ll drive the boat myself in a disaster (like Fukajima) so people can eat. Thats called charity, and it starts at home.

Providing victuals to a populace like, oh, Somalia is counter-productive because once you start, you can’t stop. As you feed a population that can’t feed itself, they now have sustenance to thrive and grow in numbers, which requires even more aid. If they can’t feed themselves at the start, how can they be expected to feed a growing population by themselves? They can’t. So if and when you stop, many more will die than would have if you hadn’t started feeding them.

Just like cockroaches. The more food you drop, the more of’em there are.

BobMbx on April 4, 2013 at 4:09 PM

North vs. South Korea.

North – millions starve.

South – food is plentiful.

Solution – Re-unification thereby everyone will have some food.

What we do – Give money and food to North. We are idiots plain and simple.

D-fusit on April 4, 2013 at 4:10 PM

I am in the agriculture business as a cow/calf producer.
Subsidies of ALL kinds: that is, money physically given to someone that is not paid back-not tax breaks, must be eliminated in all forms.
Since we do not farm & do not want the govt in our lives, we o not play this subsidy game.
And a game, it is.
You now have to ‘pay to play’ the agricultural subsidy game by buying into ‘insurance’, which is federally backed.
It’s a perverse game & the Feds have tied having insurance to receiving disaster aid now.
So bcs we do not buy their insurance, we cannot receive any disaster aid bcs of floods, tornadoes, etc.
Which is fine by me. F@ck these people.

In regards to international food aid,while it makes more sense to buy locally to distribute, in reality this means the Fed is becoming a consumer of foreign goods & is therefore allowing them to compete with American farmers & companies at an unfair advantage.
Free trade’s a lie, I know. But seriously, you want to aid people, either send what you make directly of give them $$ to let the locals buy their own food if available.

Badger40 on April 4, 2013 at 4:13 PM

And obviously when you have such chaos, distributing aid can really only be done by powers that are not part of that govt, unless it was a disaster that hit & the local govt is competent.

Badger40 on April 4, 2013 at 4:15 PM

Actually, buying the food locally would ALSO jack up the price of locally grown food, likely pricing out the marginal people living there. Would the additional wealth to and development of the local producers be worth it? Hard to say. But there ARE huge efforts to feed people where there simply is not enough local food to start with.

michaelo on April 4, 2013 at 4:21 PM

People everywhere have to learn the primary lesson of survival: if you can’t find resources necessary to survive even a few days in one location, you go to another location, then repeat that process until you find the location where you can support yourself and your dependents and if possible, have more left over to assist and profit from others.

What we’re doing at this stage of our human existence is, we’re rewarding human failure to thrive: they can’t and continue not to, because someone’s ushering in what they need to survive.

There was a routine once by Sam Kineson where he screamed, people in Africa or someplace were starving because they lived where there wasn’t any food. So instead of giving them food, we should give them Volkswagens so they could get to where the food was. Like that,, funny but true.

Lourdes on April 4, 2013 at 3:32 PM

My first thought was the comedian that said “It’s a desert. There isn’t any food there! Hop in the back, let’s go!” Was that what you are talking about?

cptacek on April 4, 2013 at 4:46 PM

I’m not a big supporter of foreign aid as matter of routine, but I’ll drive the boat myself in a disaster (like Fukajima) so people can eat. Thats called charity, and it starts at home.

Providing victuals to a populace like, oh, Somalia is counter-productive because once you start, you can’t stop. As you feed a population that can’t feed itself, they now have sustenance to thrive and grow in numbers, which requires even more aid. If they can’t feed themselves at the start, how can they be expected to feed a growing population by themselves? They can’t. So if and when you stop, many more will die than would have if you hadn’t started feeding them.
BobMbx on April 4, 2013 at 4:09 PM

I agree with this. Sudden disasters are one thing, perpetual disasters are another.

cptacek on April 4, 2013 at 4:48 PM

AND the reduced demand for American farm products will tend to lower prices here. Win-win

deadrody on April 4, 2013 at 3:27 PM

The price you pay for food and the price the commodity farmer gets for selling it is just barely related. There is probably $.05 worth of corn in a box of Corn Flakes.

cptacek on April 4, 2013 at 4:50 PM

I’m not a big supporter of foreign aid as matter of routine, but I’ll drive the boat myself in a disaster (like Fukajima) so people can eat. Thats called charity, and it starts at home.

Providing victuals to a populace like, oh, Somalia is counter-productive because once you start, you can’t stop. As you feed a population that can’t feed itself, they now have sustenance to thrive and grow in numbers, which requires even more aid. If they can’t feed themselves at the start, how can they be expected to feed a growing population by themselves? They can’t. So if and when you stop, many more will die than would have if you hadn’t started feeding them.

BobMbx on April 4, 2013 at 4:09 PM

Yes, agreed.

Lourdes on April 4, 2013 at 5:00 PM

Providing victuals to a populace like, oh, Somalia is counter-productive because once you start, you can’t stop. As you feed a population that can’t feed itself, they now have sustenance to thrive and grow in numbers, which requires even more aid. If they can’t feed themselves at the start, how can they be expected to feed a growing population by themselves? They can’t. So if and when you stop, many more will die than would have if you hadn’t started feeding them.

BobMbx on April 4, 2013 at 4:09 PM

I’ve tried to argue IRL that throwing food at African nations without requiring anything in return is setting them up for famine…and got only insults.

Even my fellow Christians seem to have no bloody concept of what will happen when we are someday UNABLE to feed Starvin Marvin and his nine children when they’ve all depended on US-grown food their entire bloody lives.

We have in effect created an artificial population ‘floor’ that is inevitably going to collapse.
And that will, sadly, be the first time that most people finally get that family planning might not be a blasphemous offense to God and nature itself when your nation has been on the border of disaster for the last several freaking centuries.

MelonCollie on April 4, 2013 at 5:13 PM

So, taking American taxpayer dollars and buying foodstuffs from local vendors isn’t going to be an immediate source of bribery, corruption, kickbacks, and pocket-lining?

No thanks.

Even if it is subsidizing American agribusiness, better ours than corruptocrats elsewhere.

Now, if you want to invest in food PRODUCTION in needy areas, that might be worthwhile, without nearly the potential for abuse.

heldmyw on April 4, 2013 at 5:14 PM

Aside from the egregious practice of the national government playing philanthropist with our tax dollars (and Chinese loans), I think the proposal is a bad idea.

First, if our government is going to send food aid somewhere, I want them spending as much as possible of that money back here in the good old USA. This is just simple self-interest. If you’re going to waste my money (and I’d rather you didn’t, at all, of course, but that has never stopped you before), I’d rather you did it by giving it to fellow Americans than by giving it away overseas. (Especially since a lot of those places don’t really like us – despite the aid.)

Second, if sending the food aid overseas distorts the “local” markets*, then buying it there will ALSO distort the local markets. Only, now it will raise prices there, making even more people unable to purchase adequate food.

*Third, how in the heck is it distorting markets “locally” when there isn’t enough food to go around in the first place? If we’re sending bags of rice to Java after a tsunami, how is it distorting local markets when the reason we’re sending it is because the markets all got wiped out in the big wave? I think their definition of “local” doesn’t match mine.

Fourth, one of the “distorting” local effects is how this stuff ends up in the hands of the local crime lords or warlords, and the poor serfs end up paying through the nose for aid that is supposed to be free to them. So, now the idea is to buy it through the local mafia organization, then give it to another organization, also controlled by the local mafia (same or different branch, doesn’t matter), so the poor people can buy our free aid? Only a progressive government person or a 10th-year grad student could come up with that idea.

GWB on April 4, 2013 at 5:17 PM

The price you pay for food and the price the commodity farmer gets for selling it is just barely related. There is probably $.05 worth of corn in a box of Corn Flakes.

cptacek on April 4, 2013 at 4:50 PM

That was before the ethanol mandate. Now it’s about $1.50 worth of corn. (Same amount of corn, of course.)

GWB on April 4, 2013 at 5:19 PM

Argh…Argh….AAAARRRRRGGGGGHHHHHH!

[skeeterbite on April 4, 2013 at 3:39 PM]

America Or Bust!

Dusty on April 4, 2013 at 5:20 PM

I suppose one might be able to do this if it was phased in somehow. But one can’t just switch over from one to the other.

One also has to take into account the seasonal fluctuations. There’s a reason we get strawberries, grapes or watermelons all year ’round. It’s because we get them from Chile or elsewhere in the Southern Hemisphere when it is in season there and not here. The same applies to if the food is provided via aid and in that case I’d like it to come from here.

Lastly, I’m not inclined to want to jack up the price of wheat, corn, or rice by buying locally where cocoa and coffee are produced thus artificially causing switchover from cocoa and coffee production to those crops because it pays better now. The most important commodities used for food aid are grains and we’ve always delivered ours not only because it helped our agribusinesses, but because our that is our growing specialty.

Dusty on April 4, 2013 at 5:45 PM

As usual, Obama can only get things half right.
We should just ax this whole program immediately. Let private charities buy their food.

Count to 10 on April 4, 2013 at 5:54 PM

I suppose one might be able to do this if it was phased in somehow. But one can’t just switch over from one to the other.

One also has to take into account the seasonal fluctuations. There’s a reason we get strawberries, grapes or watermelons all year ’round. It’s because we get them from Chile or elsewhere in the Southern Hemisphere when it is in season there and not here. The same applies to if the food is provided via aid and in that case I’d like it to come from here.

Lastly, I’m not inclined to want to jack up the price of wheat, corn, or rice by buying locally where cocoa and coffee are produced thus artificially causing switchover from cocoa and coffee production to those crops because it pays better now. The most important commodities used for food aid are grains and we’ve always delivered ours not only because it helped our agribusinesses, but because our that is our growing specialty.

Dusty on April 4, 2013 at 5:45 PM

Macroeconomics fail. Let the market sort out comparative advantage, don’t put your thumb on the scale.

Count to 10 on April 4, 2013 at 5:56 PM

I’ve tried to argue IRL that throwing food at African nations without requiring anything in return is setting them up for famine…and got only insults.

Even my fellow Christians seem to have no bloody concept of what will happen when we are someday UNABLE to feed Starvin Marvin and his nine children when they’ve all depended on US-grown food their entire bloody lives.

MelonCollie on April 4, 2013 at 5:13 PM

Maybe not the Christians you know. But my church is a little different. We’ve adopted a village in Nicaragua for 10 years (we’re halfway through). In addition to the charity, and building we’ve conducted there, we also provide MICRO-LOANS to farmers… and they’re paying off. We’ve setup the loans as a pay-it-forward approach, so that once the pump is primed, the repayments of the micro-loans go out as new micro-loans. It’s been a very successful project and is paying off huge in the village! What used to be a completely illiterate, disconnected village is now connected, with new church and medical facility, with productive farmers, and fully literate children, and adults now learning to read!

dominigan on April 5, 2013 at 12:35 AM