Food aid should be more about feeding hungry people and less about subsidizing U.S. business.
This is one of the Obama administration's most sensible ideas. The Bush administration agreed. But this summer, the reformers -- the people who want food aid to feed hungry people -- might be defeated by a coalition of Big Business and Big Labor that thinks food aid should be a gravy train for the politically connected.
Subsidy recipients willingly taking a haircut? It seemed like a rare moment of cooperation.
Congress and Dwight Eisenhower in 1954 created a federal program to ship U.S. food overseas to countries suffering famines or general malnourishment. The program was supposed to be a win-win: U.S. farmers get to sell their excess crops to Uncle Sam, and hungry foreigners get food.
It became something of a Cold War tool a decade later, and President Kennedy named it the “Food for Peace” program.
But then the Cold War ended. Other farm subsidies were born, grew and multiplied. The popularity of agricultural subsidies fell, and today they are one of the first bits of wasteful spending Americans cite. Also, studies came out suggesting that growing food in America and shipping it to places like Africa is very inefficient way to feed hungry Africans. It may even hurt Africans by stunting their own agriculture industry.
In the administration of George W. Bush, there was talk of changing U.S. food aid. Instead of buying and shipping American crops overseas, why not buy food overseas, closer to the hungry people? This has the twin benefits of getting people more food for less money, and encouraging — rather than stunting — agriculture among and near malnourished and impoverished populations.
Wasteful spending, however, is often a feature, not a bug, of federal policy. Waste in federal food aid means profits for domestic industry. Domestic industry has clout in Congress.
Cheeringly, however, the U.S. agricultural industry had come to terms with the problems of the Food for Peace program. This gave President Obama room to propose a reform that would allow half of the Food for Peace money to help buy food closer to the people who would use it. And the industry didn’t balk.
“At a time of such urgent human need and budget constraint,” Roger Johnson, president of the National Farmers Union wrote in the trade publication AgriPulse in 2013, “reforms that enable us to reach more hungry people while saving taxpayer dollars, and continue to engage the talent and generosity of American agriculture, are the right choice.”
Agribusiness giant Cargill said it was OK with the change.
The 2014 farm bill, otherwise a foul stew of corporate welfare and waste, included a reform of Food for Peace: Instead of 100 percent of the food needing to be shipped from the U.S., only 50 percent would have to come from here.
Subsidy recipients willingly taking a haircut? Economists Left and Right agreeing that direct aid is more efficient? It seemed like a rare moment of cooperation.
Until the shipping industry struck back.
Maersk is the world’s largest shipping company, and it’s Denmark’s largest company. The company’s U.S. subsidiary dominates freight shipping in the U.S., making it a top beneficiary of the Food for Peace Program — the U.S.-grown food traveled on Maersk ships. The reforms meant Maersk would lose half of its Food for Peace business.
Maersk pressed lawmakers to undo the reforms, lobbying filings show. The 2014 bill reauthorizing the Coast Guard included a provision dialing back up to 75 percent the amount of Food for Peace food to be shipped from the U.S. The shipping labor unions have fought alongside Maersk on the issue.
The author of the 75-percent provision, Rep. Duncan Hunter of San Diego, cited the need to prop up the U.S. shipping industry. “The secondary reason for food aid is food,” Hunter told the Wall Street Journal. "The No. 1 reason is military readiness."
The idea is that we subsidize the shipping industry to keep more U.S. ships afloat so they can be recruited for military purposes in case a future war requires them. But most ships that we subsidize with Food for Peace wouldn’t be useful.
The Senate hasn't passed a Coast Guard bill yet. Maersk will lobby to get their 75-percent provision put in that bill. A few senators, including Sen. John Thune, R-S.D., oppose the 75-percent rule and will fight to keep the 50-percent rule.
It was a special occasion earlier this year when Congress slashed a special-interest boondoggle. In the coming weeks, we'll see if this small victory can even last through the summer.