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The debate over international food aid reform

Tuesday, March 3, 2015

The U.S. government has been providing humanitarian assistance in the form of food in a systematic way since the passage of the Agricultural Trade Development Assistance Act (also known as PL-480) in 1954.

The main program now operated under that legislation, the Title II “Food for Peace” program, has functioned in much the same way over its lifetime, donating U.S.-sourced commodities for direct feeding in emergencies, and to make available resources for agricultural development activities. It is estimated that the Title II program has helped more than three billion people over its 60-year history, cementing the U.S. position as the world’s largest donor of humanitarian aid.

As initially conceived, the Title II program used surplus commodities, often held as government stocks, to donate overseas to feed hungry people. By removing food from the commercial market, it also served to boost crop prices for U.S. farmers. In its early years, food aid was a major driver of U.S. agricultural exports, accounting for more than 30% of the total in 1957.

Food aid’s role within U.S. agriculture has changed radically over time. In the 1990s the structure of U.S. farm programs changed. Farmers no longer forfeit their crops to government stocks, so commodities destined for food aid are procured on the open market. Tonnage for food aid shipments has declined while overall U.S. agricultural exports have increased, so food aid now accounts for less than 1% of total agricultural exports.

How U.S. food aid is utilized internationally has also changed over time. For most of the program’s history, the majority of assistance provided under Title II was for multi-year, agricultural development projects. The other programs authorized under PL-480, known as Title I (food sold under concessional credit terms) and Title III (government-to-government support) were providing food primarily as a form of financial support, though neither program has received funding for several years. For such shipments, the typical 4-6 months between when an order was placed for commodities and when the food was delivered to recipients was not a major concern.

However, over the last dozen years or so, the frequency and severity of humanitarian emergencies around the world—the result of natural disasters or displacements due to armed conflicts—has increased, making the timeliness of delivery of U.S. food aid critical to saving lives. Thus far, this need has been partially addressed through stopgap measures. One example is what is known as prepositioning—establishing overseas supply facilities for food aid commodities. A 2014 GAO report found this practice cut delivery time in half but cost more. Another option is allowing some portion of funds allocated for International Disaster Assistance to be used for local or regional procurement (LRP) of food, in addition to such non-food items as tents and medical supplies purchased during previous disaster responses.

In his fiscal year 2014 budget released in April 2013, President Obama proposed allowing USAID to use up to 45% of Title II resources designated for emergency assistance to buy food locally or to be distributed to beneficiaries in the form of food vouchers, with the remainder still devoted to purchasing U.S. commodities. During the farm bill debate, proponents of food aid reform touted the greater efficiency associated with enhanced programming flexibility. An LRP pilot program established in the 2008 farm bill found that food procured locally for emergency use was delivered in 56 days—less than half the time as U.S.-sourced food to the same destinations—and on average cost one-third less. Opponents maintained that such changes would cost U.S. jobs in agriculture and shipping. The 2014 farm bill undertook modest changes that will improve the efficiency of Title II development programs, but did not adopt the President’s main proposal of improving flexibility for Title II emergency aid.

The United States is alone among major developed countries in insisting that the bulk of its humanitarian aid continue to be given in the form of in-kind commodities. Despite the farm bill’s completion, the debate over how the United States provides humanitarian food aid is expected to continue. No doubt, the need for such aid will continue, as well.


Stephanie Mercier Stephanie Mercier (smercier@farmjournalfoundation.org)
Farm Journal Foundation @samara333

View more posts by Stephanie Mercier

The views and opinions expressed in AgChllenge2050 blog posts are solely the opinions of the authors, and not those of Farm Foundation, NFP.