US Food Aid Benefits Big Corporations, Lets Down the Poor, Say Critics

by Gopalan on Sep 21 2007 11:26 AM

Last month, in a move that shocked observers, CARE, one of the world's largest humanitarian organizations, rejected $45 million in U.S. food aid, complaining that the country’s food aid policy is inefficient, unsustainable and perhaps even detrimental to combating food insecurity.

CARE belives "enough is enough," said Bob Bell, director for CARE's Food Resource Coordination Team. The decision comes at a time when other humanitarian and food advocacy organizations are calling on members of Congress to rewrite food aid policy that puts starving populations first when they authorize this month's 2007 Farm Bill.

The United States is the world's largest provider of international food aid, supplying more than half of all food aid designated to alleviate hunger, about four million metric tons of food per year. As currently implemented, U.S. food aid lines the pockets of American agribusiness and the shipping industry, critics say.

Under existing rules, at least 75 percent of food aid has to be grown and packaged in the United States, and shipped using U.S. flag-bearing vessels. Unlike most countries that donate food, the United States sells a portion of its food aid, either by selling it to recipient governments, or allowing it to be monetized, a process where food aid is sold to generate cash for development projects. And while most donor countries provide cash as food aid, the United States insists on giving in-kind donations.

Food experts say the international community tends to be far too quick to respond to disasters with food. They argue that what people need isn't food handouts but hard cash or vouchers to use in local shops. This buying power can be used to get food, soap, kerosene or whatever else people need most, even if they've lost their means of making a living. Even in the worst food crises, it's unusual for food to be unavailable -it's just that people can't afford the food that's there. Many say the only circumstances when food aid is appropriate are when it's an absolute emergency, the food arrives at the right time, comes from nearby, is the kind of food that local people eat and goes to the people who need it most.

CARE has said it will totally phase out the program by 2009, and seek to replace the lost funds by seeking more cash donors.

"This is a crucial time, it will set policy for the next five years," Alina Labrada, a CARE spokespersons said. She argued that agribusiness and the maritime industry, which has lucrative contracts transporting the grain for sale, were lobbying to preserve an inefficient and unfair system.

An investigation by the U.S. Government Accountability Office published in April found U.S. emergency food aid takes an average of 4.5 months to arrive, and legal requirements mean two-thirds of the money spent by government on food aid goes on packing and shipping in the U.S.

The U.S. has spent an average of US$2 billion (€1.49 billion) on food aid programs per year, mostly delivered through the United Nations World Food Program. According to some aid organizations, if the aid was in cash, rather than food, it could support about twice as many people.

Back in 2002, Richard Lee, a spokesman for the United Nation's World Food Programme, told Greenpeace that the best way to confront famine is through cash donations, rather than food. "We prefer cash donations as they offer us greater flexibility -- with cash donations we can purchase locally, enjoy greater flexibility and also speed things up," Lee told Greenpeace. "We can get more for the money if we have cash. We can do the job faster as cash lets us buy the right food we need at the right time."

The small-farmer advocacy organization Institute for Agriculture and Trade Policy (IATP) says U.S. food aid policy is fraught with problems. Sophia Murphy, senior advisor for IATP, charges that large agricultural companies like Cargill get the bulk of the benefits. Because of the ways the laws are written, and certain purchasing requirements, there are only a handful of agricultural companies that can source these foods. And because of these requirements and specific requests—like this food must be able to leave from this port on this day—the government usually pays a bit more than market price to buy them.

Farm groups often line up with the agricultural lobby when it comes to votes on food aid. But the money is not going to farmers; it's going to agricultural conglomerates. Food aid purchases are such a small percentage of total U.S. agricultural output that they don't make any appreciable difference in prices. Now, there are a small handful of crops that are grown pretty much solely to send abroad as food aid—like some kinds of lentils. And farmers who grew them might be in trouble if the sourcing requirements were lifted. But it’s a very small amount.

Ironically, U.S. food aid policy may even be creating starving customers through the environmental costs of the program, it is felt. The policy props up industrial agriculture and factory farms, which are a huge source of pollution that contributes to climate change.

Yifat Susskind, communications director of the human rights group Madre, believes the present form US food aid is is extremely harmful. "The result, on a very large scale, has been bankruptcies, economic dislocation and physical displacement of literally millions of farmers throughout the world," she says.

Susskind says this harm is "in very sharp contrast to what would happen if food was purchased from farmers who were very near or in the place where food aid was needed."

Madre, IATP and other organizations are advocating for food aid to come from local producers or from locations closest to the population in crisis.

"We tend to think of food aid as humanitarian assistance, but food aid is structured to meet the broader foreign policy objectives of the U.S.," she says. "One of the things that happens is that food aid as humanitarian assistance works at cross-purposes with the larger economic trends so that the framework of neoliberal policies and trade rules as we know them now forces countries to stop growing food for consumption and to switch over to growing cash crops for exports."

And, as Susskind notes, the first effects of climate change are "happening in the places where people have the least resources to adapt. Those are the same countries that become candidates for food aid."

As if environmental instability did not pack a big enough punch, U.S. food aid policy is toying with people's physical health by including genetically-modified food in its donations. The World Food Programme announced in 2002 that it had secretly been delivering GM food from the United States to countries in need for seven years.

As U.S. corporations rake in money off starving populations, the NGOs serving these populations also benefit under U.S. policy. The money made selling U.S. food aid is used as income for NGOs.

"There's a very clear conflict-of-interest embedded in the policy," Susskind notes.

In the last two farm bills, the U.S. administration called for a partial shift to cash instead of grain, but that was voted down by farm supporters.

According to the International Center for Trade and Sustainable Development, the U.S. administration's proposals for future farm spending call for 25 percent of the food aid budget to be in cash.

The European Union (EU) has spoken out strongly against US food aid policy in the Word Trade Organization, accusing the U.S. of skirting agriculture subsidy rules.

Christian Rasmussen, of the European Commission's agriculture directorate in Brussels, said the EU had replaced food aid with cash to ensure help gets to poor countries more quickly.

Tom Getman, World Vision's executive director for international relations, said he shared CARE's concerns but didn't want to turn down any kind of aid.

"We're all ... pushing very hard for less shipment of food ... because we've all gotten more and more anxious about how much it costs to do the shipping and the mixed results on the ground."

"But there is going to be a continuing need, like in Korea right now, where we've got to have food available for emergency situations. So it's just finding the balance that is so tough."