Expert says Obama's food aid reform has good ideas, bad chance for passage

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Q&A with FSE visiting scholar and food aid expert Barry Riley.

President Barack Obama’s 2014 budget proposal promises significant food aid reform that will enable the United States to feed about 4 million more people without a significant increase of the current $1.8 billion spent on feeding the world's most hungry. Since the food aid program's inception in 1954, the U.S. has helped feed more than 1 billion people in more than 150 countries, and remains the largest provider of international food aid.

The intention of the reform is to make food aid more efficient, cost effective, and flexible. It aims to use local and regional markets to lower the cost of food and speed its delivery, and calls for the use of cash transfers and electronic food vouchers.

The proposed reforms would also end monetization—the sale of U.S. food abroad to be sold by local NGOs for cash. This practice has been criticized for hurting vulnerable communities by depriving local farmers of the incentives and opportunities to develop their own livelihoods. Several studies, including one by the Government Accountability Office, found monetization to be costly and inefficient—an average of 25 cents per taxpayer dollar spent on food aid is lost.

Barry Riley, a food aid expert and visiting fellow at the Center on Food Security and the Environment, discusses his perspective on the importance of these new reforms, their chances of passage, and the country's current role in international food aid.

Why is local procurement such an important addition to food aid reform?

An increase of funding for local and regional procurement is the most important programmatic element of the proposed reforms. It would help managers working in food security-related development programs to determine for each emergency what commodities are most appropriate and where they can be procured most quickly and inexpensively. Some studies have shown local and regional procurement of food and other cash-based programs can get food to people in critical need 11 to 15 weeks faster at a savings of 25-50 percent. Equally important, local procurement is less likely to disrupt local economic conditions, but rather promote self-sufficiency by increasing demand (often for preferred local staples) and incomes of local producers. The move to 45 percent local (and 55 percent tied) procurement is a BIG step, and one to face strong opposition from American commodity interests and U.S.-flag shippers. 

How difficult is it to ensure vouchers and electronic cash transfers are getting into the hands of people that really need the aid?

Vouchers (and similar urban coupon shops) have been used many times over the past decades as a food transfer mechanism (also sometimes used in food for work programs) enabling the recipient to trade the voucher(s) for foodstuffs when it is most convenient or when they are most needed. Electronic vouchers are new, and how well they work depends on local situations. In places like urban Latin America, Africa and India, it probably could be made to work quite well; the technology is evolving quickly that would enable this sort of transfer mechanism.  

Rural Ethiopia, Burkina Faso, Central African Republic, Malawi – probably not so well. I’m admittedly skeptical that electronic transfers of purchasing power to remote areas would be sufficient in most cases to motivate traders to move food to these hungry areas. Their risks are extremely high and, in my experience in Africa, traders will only deliver food to remote rural areas (inevitably over very bad roads) if they can command prices considerably higher than costs plus a high risk premium.

Why aren’t international food aid organizations more in favor of direct dollar support for local operating costs?

There is (and has long been) opposition among many of the NGOs to the President’s proposal to replace “monetization” with a promise of on-going direct dollar support for the local operating costs of NGO food security-related projects. They believe it will continue to be easier to get Congress to approve money to buy American food commodities to ship overseas than to get approval for dollars to ship overseas, particularly in light of tightening budgets. These NGOs have tended, over the years, to receive a sympathetic ear from Congress.

The proposal shifts oversight of the food aid program from the Agriculture Committees within the U.S. Department of Agriculture (USDA) to the Foreign Affairs/Relations Committees of the State Department’s U.S. Agency for International Development (USAID). What is the likelihood of Congress approving this transfer?

The chance of that happening, in this of all Congresses, is about the same as winning the Power Ball Lottery. Crusty committee chair-people are extremely sensitive to reductions in their empires and the agriculture committees – especially in the Senate – are powerful committees. On top of that, there are so many elements in the overall 2014 federal budget creating heartburn on the Hill that food aid considerations are far, far, far down the line. The best the President is likely to get in the present divided Congress are hearings and a continuing resolution of some sort.

What did you wish to see in the food aid reform proposal that was not addressed in this budget?

Change, if it ever comes, will likely be incremental and halting. I’ll be happy to see any step, however small, in the right direction. The total end of tied procurement would be at the top of my wish list. Even more important, perhaps, iron-clad, multi-year commitments of funding to food security programs intended to overcome long-term institutional impediments to achieving enduring food security in low income food deficit situations…and sticking with such commitments for 15 years.

What role does food aid play in advancing American foreign policy goals?

Most importantly, by being the single largest source of food commodities to the World Food Program in confronting disaster and emergency situations. Food support to American NGOs has been under-evaluated over the past 40 years. I’ll be talking about this later in the book I am writing, but these small projects were all that kept agricultural development (and early food security efforts) going in many small countries during the “dark decades” when international finance institutions and bilateral donors were not financing agricultural development. There are valuable on-the-ground lessons in that NGO food-assisted experience still waiting to be assessed.

Let me add, given what we know about the onset of serious climate change in the decades to come, the need to supply large amounts of food to populations suffering severe food deprivation will probably grow in the future. Where will the food come from and who will pay for those future transfers?

While the U.S. remains the largest provider of food aid, what can the EU and Canada teach the U.S. about food aid policy?

Donors hate to think that other donors have something to teach them. But, of course, they always do. The Canadian and European experience with food aid is best summed up in the way their objective has come to be restated over the past 15 or so years: not “food aid” but “aid for food.” The purpose of assistance intended to improve food security is to improve either, or both, availability and access over the long term (leave nutrition aside for a moment).

European and Canadian assistance can be much more flexible in choosing the instruments – food, cash, technical assistance, training, institutional strengthening, public policy, public-private cooperation, etc. – required to achieve a realistic food security goal which I would describe as pretty good assurance that most people can get their hands on the food they need most of the time. Commodity food aid, in some form – or the promise of its ready availability when needed – will probably need to be part of the total array of inputs required for the several years needed in particular food insecure countries to achieve that “pretty good assurance.” Europe and Canada are closer to understanding this and have become appropriately flexible in concerting resources to get it done. That’s the lesson.