A proposal by the Obama administration to partially overhaul the U.S. food aid program will only affect about 300 employees in the shipping industry and 0.2 percent of American agricultural exports, according to USAID Administrator Rajiv Shah.
Shah faced once more on Tuesday the Senate Appropriations Committee to defend the controversial food aid reform, a budget agenda that has set off a lobbying war and jurisdictional infighting in Congress.
The six-decade old food aid program is designed primarily to help American farmers by purchasing their surplus, and American shipping companies by requiring at least 75 percent of the goods to be transported to countries in need on U.S.-flagged vessels.
Under Obama’s proposal for fiscal year 2014, the government will still buy food from farmers, but only up to 55 percent of the total, allowing the U.S. Agency for International Development to source the remaining 45 percent from local or regional markets closer to the crisis areas. USAID estimates that the $1.8-billion new program can reach an additional four million people simply by freeing up money spent on shipping and other costs.
Reform’s true impact
Responding to queries from senators on the reform’s impact to local agriculture, Shah said: “We think the net change would be close to 0.2 percent of total value of U.S. agriculture export.”
“There are other sources of market demand,” added the USAID chief, who stressed that it is “inaccurate” to say that no one will buy the agricultural produce that would no longer be purchased by the government.
Ten years ago, USAID bought and shipped 5.5 million metric tons of food, but today this figure is down to 1.8 million metric tons. In addition, shipping costs has tripled over the same period of time, eating away about 25 percent of the budget, which could have been used to buy more food.
Shah noted that if the reform is approved by Congress, only about eight to ten ships or about 300 employees of the shipping industry will no longer benefit from the food aid program. That accounts for 0.2 percent of the total 15,000 workers in the American maritime shipping sector, he added.
“Of course, we expect that those ships will have other business activities, some of which will come from Department of Defense, some of which will come from elsewhere that they can pursue,” the official said.
As the USAID chief outlined the advantages of the proposal during the hearing, Republican senators argued that passing the reforms in their current version will be a tough sell to Congress.
Sen. Mike Johanns of Nebraska told Shah: “I think this proposal going as far as it does, it’s just going to be impossible to get don (…) I don’t want to cut farmers out. I don’t want to cut the producers out of this.”
Johanns — a former agriculture secretary under President George W. Bush — suggested that the government can still be flexible under the present program by improving food aid pre-positioning to crisis areas. “Of course, you’re going to have some transportation cost, but transportation cost may be part of what we bear to ensure that this doesn’t come just another cash program,” he said.
Sen. Dan Coats of Indiana shared Johanns’ reservations and predicted it will be hard to pass such a reform amid the budget constraints.
“It has received a bipartisan support in the past, but as you know, we’re living in a different time right now. We’re having to use our scalpel more in terms of dealing with our budget issue,” Coats told Shah.
As budget hearings continue on Capitol Hill, a brewing battle over which congressional committee will supervise food aid threatens to derail the passage of the proposed reforms.
The program’s budget is currently under the Department of Agriculture, which buys the produce from U.S. farmers. Obama’s proposal wants to move the budget to USAID, as part of a broad reorganization which also implies transferring oversight from the Senate and House appropriations subcommittees on agriculture to foreign relations.
Rep. Sam Farr (D-CA) two weeks ago expressed his concern over the agriculture subcommittee losing oversight.
“I’m not endorsing the transfer — the realignment — yet until there are assurances the program will stay intact and not be raided by other Foreign Ops interests,” he said, and added that the proposal will probably be turned down by Congress: “I don’t think it will happen this year. That’s the politics.”
Last February, senators from both red and blue farmer states wrote a letter to President Barack Obama asking him to back off on food aid reforms.
The battle over the program is also being fought behind closed doors on Capitol Hill. As public officials are busy attending hearings to defend their budgets, lobbyists representing dozens of public-interest groups and companies are trying to influence congressmen and senators to defend their interests.
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