America is a generous country. Taxpayers can take pride in the fact that, under the terms of the 2014 Farm Bill, they will send more than $2 billion worth of food to needy countries this year. Thanks to these aid programs, more than 50 million people in 51 countries will be fed by U.S. foreign aid. That’s the good news.
The bad news is that these programs are rife with cronyism that make them more expensive and less effective than they should be.
Just how much cronyism is there? Enough that another 8 to 10 million people could be fed at no added cost just by removing two unnecessary regulations.
What do these regulations do? The first requires that nearly all U.S. food aid be sourced from American farmers. The logic is that American food aid can combine generosity with national self-interest, stabilizing U.S. agricultural markets while providing aid.
But that self-interest has a cost, and a significant one. Namely, there is often more than enough food nearby that could be purchased and transported at a far lower cost and with far less waste than by shipping American food across the ocean. Even Africa, the continent most commonly associated with hunger crises, produces more than enough food to feed itself — as does the world as a whole, for that matter. In light of this fact, requiring that food aid be sourced in the United States no longer makes sense.
It’s a bizarre case where the costs of cronyism so outweigh the benefits that even one of the primary beneficiaries, the American Farm Bureau Federation, supports reform. The problem is that this regulation is a relic of a different era, one in which food aid was a meaningful portion of American agricultural exports and in which local food production in hunger-stricken areas was rarely sufficient to meet local demand. That is no longer the case — food aid today accounts for less than 1 percent of agricultural exports and less than 0.1 percent of food production in the country. The times have changed, but our rules have not.
The other regulation mandates that at least half of all U.S. food aid be carried on U.S.-flag vessels, known as the Cargo Preference for Food Aid (CPFA). The Government Accountability Office (GAO) studied the effects of the CPFA, and found that the costs were significant. Overall, the GAO estimated that the CFPA increased costs of shipping by 23 percent between 2011 and 2014, making up over $107 million of the total $456 million cost.
This time, the original intent behind the rule was based on national security concerns rather than economic ones. Lawmakers intended to use the food aid program to subsidize a merchant marine that could be called upon in times of war. Yet again, the organization that the regulation is intended to benefit, the Department of Defense, supports reform. The vast majority of U.S. vessels carrying food aid do not meet minimum standards for reform, and the DoD has stated that elimination of the regulation would not impact America’s maritime readiness in the case of war.
It is an unfortunate fact that as much as 60 percent of the food aid budget is spent on items that have nothing to do with food — such as transportation costs for the American food that we’re sending halfway around the world on more expensive American ships. And it’s why simple reform, such as the bipartisan Food for Peace Reform Act of 2018, would free up nearly $300 million simply by reducing the requirement for U.S.-sourced food to 25 percent.
It’s rare that cronyism is so egregious and outdated that its beneficiaries support reform. When they do, lawmakers should take the hint, and support reform as well.
