Last year the U.S. government spent $1.2 billion on food aid for more than 50 countries, under six programs involving four federal departments and an independent agency. But not all that activity translates into help for the hungry. According to an April report from the Government Accountability Office, “multiple challenges hinder the efficiency of food aid programs,” including several created by Congress.
By law, all U.S. food aid must be in the form of food, as opposed to money for purchasing food. That requirement, coupled with inaccurate predictions of how much food will be needed in a particular place at a particular time, has led to the practice of “monetization”: the sale of U.S.-provided food by aid groups to raise money for their other functions. Since such sales typically occur when local food supplies are at their peak and prices are low, the food presumably is sold for less than it cost taxpayers, although no one knows for sure because no one keeps track. “The current use of food aid as a means to raise cash to fund development projects,” the reports notes, isn’t just “inherently inefficient”; it hurts local food producers by depressing prices.
To make matters worse, the cost of sending unneeded food across the ocean so it can be sold at a loss is higher than it should be. The report found that shipping costs are inflated by requirements imposed on carriers, such as the government’s insistence that they bear risks associated with loading and unloading cargo over which they have no control. Furthermore, federal law requires that 75 percent of food aid be carried by U.S.-flag vessels, which are more expensive than foreign ships, and that up to 25 percent of the food be sent from ports in the Great Lakes. Given the costly protectionism built into the system, foreign aid may be something of a misnomer.