Studies show that the US wasted millions on shipping food aid overseas; money that could have been better used for direct aid to feed the poor and create jobs at home.:

Helping the poor or the shipping industry

US taxpayers spend about US$140 million every year on non-emergency food aid in Africa, and roughly the same amount to ship food aid to global destinations on US vessels; money that could have been used to feed more people says a new study by researchers at Cornell University in the US.

The US Agency for International Development (USAID) has accounted for more than half of the world’s food aid every year for decades, but has been “the last and slowest donor to reform its food aid policies”, leading food aid expert Christopher Barrett and his colleagues, Elizabeth Bageant and Erin Lentz noted.

Their study, Food Aid and Agricultural Cargo Preference, has come up with the numbers to back a long-standing call for reforms, and goes a step further in showing that the policy designed to ‘nurture’ or subsidize the US shipping industry ‘under the guise of humanitarian assistance’ is not doing either effectively.

Most donors have moved towards cash transfers or vouchers to buy food, instead of providing food as aid, but the paper points out that most countries only had agribusiness and some NGO interests to contend with while reforming their food aid policy.

Reforms in the US have faced much tougher opposition from ‘a uniquely effective lobby’, referred to as the ‘iron triangle’, comprising agribusiness, the shipping sector and some NGOs.

Barrett and Daniel Maxwell, an associate professor at Tufts University, Boston, in the US, who wrote at length about the ‘iron triangle’ in their 2005 book, “Food Aid After Fifty Years: Recasting Its Role”, estimated that it cost more than two dollars of US taxpayers’ money to deliver one dollar’s worth of food procured as in-kind aid. Little Known Shipping Subsidy Little has been written about the costs and effects of a policy called the Agricultural Cargo Preference (ACP), which affects the shipping sector of the “iron triangle”, and USAID, the world’s largest food aid program.

The ACP requires that 75 percent of US food aid be shipped on privately owned, US registered vessels, even if they do not offer the most competitive rates. Some of these costs are reimbursed by the Department of Transportation’s Maritime Administration, but ultimately the US taxpayer foots the entire bill.

The Cornell researchers used data available for every USAID food aid shipment in 2006, when ACP cost US taxpayers $140 million, “The amount paid above the regular cost of ocean freight on the competitive market,” said Barrett.

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