New GAO Report Finds Food Aid Monetization is Inefficient

Last week the U.S. Government Accountability Office (GAO) released a report, which found that the sale of U.S. food aid products to raise money for development projects is inefficient and can negatively impact local economies in those countries. Since the Food Security Act of 1985, Congress has authorized the sale of U.S. food aid commodities in developing countries to fund development, referred to as monetization. Following interviews with agency officials, data analysis, and fieldwork, the GAO reported that the U.S. lost nearly $219 million of the $722 million expended on this program over three years due to inefficiency of the monetization process. Additionally, the GAO stated that the process has negative effects on the developing countries’ local markets. The report suggested that increasing competition for transportation would be an effective way to reduce the costs of the monetization process, but the USDA has argued that such a change could be harmful for the U.S. maritime industry.

In a recent op-ed MFAN Principal John Norris, executive director of the Sustainable Security and Peacebuilding Initiative at the Center for American Progress, argues that the monetization of food aid is wasteful, citing the heavy influence of agribusiness on Congress’ decision to fund the practice. Additionally, Oxfam America has called for more timely delivery of food aid and increased transparency in food aid programs, as well as reforms in the way that food aid is delivered to developing nations. Another MFAN Partner, ONE, has made similar calls for reforms, specifically for the use of locally and regionally procured aid.

These concerns go hand in hand with MFAN’s goal of maximizing efficiencies in U.S. policy by eliminating wasteful regulations and consistently evaluating the effectiveness of U.S. global development programs. More specifically, MFAN has called for the elimination of restrictions on the use of regional and local food procurement in order to improve the delivery of U.S. food assistance and to cut spending. GAO’s report provides backing for this goal by drawing attention to the inefficiency of food aid monetization, as well as by providing an evaluation of the practice’s adverse effects on local markets. The report raises the alarm on this issue and will hopefully lead to increased attention, if not support for reforming U.S. foreign assistance.


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