The 2014 farm bill, passed by the House on Jan. 29, authorizes an $80 million annual program over five years to make local and regional purchases of U.S. food aid.
The size of the program is a far cry from what the Obama Administration asked for last year, when it proposed spending up to 40% of its $1.5 billion foreign aid budget locally. The newly authorized program is designed to build on a pilot program that was authorized by the previous farm bill in 2008.
House and Senate conferees, in a report that accompanied the compromise bill, wrote that the pilot programs, which were carried out in part by the UN World Food Program and studied by economists at Cornell University, found that buying food locally—instead of shipping it from the United States—was a cheaper and faster way to deliver foreign aid.
"However, the [conferees] note the absence of any comparison to prepositioned commodities when reviewing timeliness of deliveries," said the report. Moreover, the report says that one statutorily required report concluded that local and regional purchasing "may pose risks for local markets and vulnerable households."
Cornell University professor Christopher Barrett, in a blog published last year at CNN.com, lambasted the current system of foreign food aid, arguing that only 40 cents out of every taxpayer dollar actually goes to feed hungry, needy people. He noted that all other major food assistance donors in the world—Australians, Canadians, and Europeans—"made these changes years ago and enthusiastically endorse their effectiveness."
In making its proposal last year, the Obama administration cited studies showing that buying food locally with cash instead of shipping it from the United States could get food to people in critical need three months faster, at a savings of 25-50%. The proposal, it said, would help feed an additional 800,000 undernourished men, women and children.
Chandler Goule, vice president of government relations for the National Farmers Union, supported a shift to more cash-based foreign aid in a debate at the 2013 Farm Journal Forum. He said that local cash purchases help support farm economies in developing countries, which is key to addressing world hunger.
"You can’t make one program to fit every situation," he said, noting that it’s often more appropriate to ship food from the United States, especially when it’s not available locally. But large U.S. shipments can also set back foreign farm economies.
Mary Kay Thatcher, director of public policy for the American Farm Bureau Federation, opposed the change. She said her organization "feels really strongly about continuing to ship the products from here. If the assistance is from the [U.S.], it ought to say that. We are not for moving toward a cash system."
The farm bill would make several other notable changes in foreign food aid. It:
- Calls for a greater emphasis in building "resiliency" among recipient populations in places where food and shortfalls and droughts are common. The goal is to "prompt USAID to require measurable outcomes...to reduce dependency on foreign aid."
- Increases to 20% of total funds available how much money may be used for administrative costs. The increase was made to give USAID more flexibility.
- Requires more oversight over the sale of foreign food aid, including an explanation when rates of return fall below 70%.In so-called "monitization," free U.S food aid is sold in a foreign country by sponsors, typically non-governmental organizations. The proceeds may be used to support technical assistance or public infrastructure investments.
- Calls for an annual report on the Food for Peace Act, including information on actual beneficiaries of the programs.
- Retains an authorization level of $2.5 billion for the Food for Peace Act. The House bill had cut the authorization to $2 billion.
- Provides at least $15 million to continue the farmer-to-farmer program.