• Inside Development

Will Obama fund Food for Peace next year?

By John Alliage Morales27 February 2013

Bags of fortified wheat from the Food for Peace program are distributed in Haiti. Photo by: USAID / CC BY-SA

The U.S. Food for Peace, a food aid program with an annual $2 billion price tag, is reportedly being considered to be replaced with a more direct cash donation system, angering senators and grass-roots organizations.

The saga whether to give U.S.-purchased food to the poor abroad or hand them out cash has again hogged news headlines as President Barack Obama, anytime soon, is about to unveil his 2014 budget proposal, which some sectors say might include a plan to replace Food for Peace.

No official announcement has come out yet, but at least 20 U.S. senators and 70 organizations have written to Obama, asking him to keep the system as it is. But another grouping of 12 NGOs wants to reform the outdated, inefficient and expensive means of providing food to the poor.

In the past five decades, the United States provides food aid to the world’s poor by shipping locally grown food via U.S. vessels to troubled nations and “monetizing” or selling these commodities to local markets so they can operate development programs. 

No matter what happens with the program, however, helping feed the world’s neediest remains Obama’s top priority with his flagship program Feed the Future. And he has made known he’d like to ”speed things up” when it comes to providing such assistance.

In 2012, about $1.46 billion was allotted to food aid under the Food for Peace program, according to USAID. From 2002 to 2011, about $20 billion was disbursed for Title II Food Aid program.

‘Destroying food aid pipeline’

The warnings from the Hill and NGOs foretell of a complete breakdown of the U.S. food aid pipeline once the White House adopts a new strategy for feeding the poor.

“The proposed budget will destroy the U.S. food aid pipeline, which is a reliable source of wholesome foods and commodities,” Joint Aid Management, a faith-based humanitarian group that feeds the hungry, told Devex in a written reply. “This proposal sends the message that something is wrong with current food aid programs; but this is not true…PL 480 (Food for Peace) provides a reliable pipeline of food, assuring it is available through pre-positioning and early warning to meet emergencies.”

In many cases, cash-strapped partner countries cannot produce and are unable to import enough food to meet their needs, the group argued.

“Cash for overseas programs or to buy commodities overseas cannot provide many essential benefits,” it added.

In a letter dated Feb. 20 to Obama, senators from both the red and blue spectra urged Obama to maintain Food for Peace funding in his 2014 budget proposal.

They said: “In addition to providing American commodities directly those without access to food, Food for Peace supports a variety of development programs implemented by U.S. faith-based organizations, designed to help the cycle of poverty.”

Organizations that have benefited from the program also oppose proposals to hand out cash directly to the hungry who can then buy food in local markets.

They noted that the food aid program is well-honed and dependable for identifying and procuring appropriate commodities, as well as shipping these to target beneficiaries.

“In addition to fighting global hunger and facilitating developmental programs to end the cycle of hunger, these programs are also some of our most effective, lowest-cost national security tools,” these organizations including Feed the Children said in a Feb. 21 letter addressed to Obama.

Food for Peace distributes food aid in two ways:

  1. Implementing partners like NGOs procure food from the U.S. Department of Agriculture, arrange shipment and distribute these commodities to beneficiaries in need of assistance. Many times, partners monetize or sell U.S.-purchased food to local markets so they can operate development programs.


  2. When U.S.-purchased food cannot arrive fast enough to respond to an emergency, the U.S. Agency for International Development can instead procure locally, transfer cash directly and give food vouchers immediately.

Costly food aid

For the implementing partners, the current system is a win-win: U.S. farmers earn, NGOs implement development programs, and the poor get to eat.

But that system is costly, others say.

At least 12 groups including Oxfam and CARE welcome any plan to reform the food aid program.

“It would be far more efficient to fund these activities directly, instead of through circuitous and inefficient route of monetizing food aid,” the groups said in a Feb. 16 statement.

A decade ago, the U.S. budget office suggested reducing funds allotted to monetized food aid, claiming the practice can hinder U.S. exports and thwart market development for the United States. That year, the White House said direct food distribution, rather than monetizing aid, should be the primary goal of U.S. food aid programs.

The Government Accountability Office noted in 2011 that “funding development projects through the purchase, shipment and sale of U.S. commodities is inefficient.”

GAO said U.S. food aid is procured at a slow pace and expensive to transport as well as arrives late to recipient countries. And in many occasions, the government lacks oversight once implementing partners sell produce to local markets in order to manage development projects.

GAO calculated that the inefficiency of monetizing food aid in exchange of implementing development programs under Food for Peace has reduced funding available to USAID by $91 million between 2008 and 2010.

Despite the government’s own admission, why the program hasn’t changed may have something to do with the political forces resisting reforms, said Blake Selzer, senior policy advocate of the humanitarian group CARE.

Under the program, a portion of the commodities should be shipped out of U.S. borders and then sold to local markets. Selzer said pro-reform groups urged the Obama administration “not to continue to tie out food aid system. We’re only the last country in the world that does that and it’s not efficient.”

At the time the Food for Peace program was approved, monetizing aid was a good idea, helping U.S. farmers make a decent living during the Cold War.

Fast forward to present, the decades-old practice may run counter with the way the United States thinks of aid delivery. For instance, USAID Forward, an ambitious reform program launched in 2010, tries to keep partner countries less dependent on the United States by “building local sustainability and partnership.”

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About the author

Alliage profile
John Alliage Morales

As a staff writer, John Alliage Morales covers the Americas, focusing on the world's top donor hub, Washington, and its aid community - from Capitol Hill to Dupont Circle, Foggy Bottom to the downtown headquarters of USAID, the World Bank and Millennium Challenge Corp. Prior to joining Devex, Alliage worked for a variety of news outlets including GMA, the Philippine TV network, where he conducted interviews, analyzed data and produced in-depth stories on development and other topics.


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