U.S.-based NGOs Response to Food Aid Cargo Preference Hearing

November 19, 2015

NGO Response to the Joint Hearing of the Subcommittee on Livestock and Foreign Agriculture of the Committee on Agriculture and the Subcommittee on Coast Guard and Maritime Transportation of the Committee on Transportation and Infrastructure

As international development organizations addressing global hunger and malnutrition, we are deeply concerned by the misleading information presented in support of agriculture cargo preference (ACP) restrictions on U.S. food aid at the joint hearing entitled International Food Aid Programs: Transportation Perspectives.

As you know, U.S. international food aid supports the food and nutrition needs of 56 million children and families on average each year and, consequently, helps to stabilize situations that can become threats to our national security. We strongly believe that funding for humanitarian food assistance should be used for its intended purpose: to provide lifesaving emergency and development assistance to the most vulnerable.  Evidence shows that ACP restrictions on U.S. food aid are inefficient and costly, and result in considerable reductions in the volume of food aid provided to populations in need.

We therefore support efforts that reduce the burden of cargo preference on humanitarian food aid programs. Current ACP restrictions contribute to significant delays in delivering emergency food aid. The USDA Pilot study on Local and Regional Procurement showed that the combination of U.S. procurement and shipment on U.S. flag vessels increases the average delivery time by two-and-a-half months.[1] The impacts of delays can have severely adverse effects on children and other vulnerable populations.

Moreover, excess costs to U.S. food aid due to ACP restrictions range from $39 million to $50 million annually.[2] These costs divert humanitarian resources away from U.S. food aid that could otherwise assist as many as 1.4 million food insecure children and families. Three recent, detailed analyses of ACP restrictions on food aid demonstrate that the restrictions increase the costs to administer the U.S. international food aid program.[3] A robust econometric analysis found that ACP requirements “increased the total cost of shipping food aid by more than $200 million between January 2012 and May 2015 at an average of more than $50 million a year.”[4] Compounding the impact of these costs is the elimination of reimbursements to USAID to help offset ocean freight costs that was passed in the Bipartisan Budget Act of 2013.

The argument that ACP restrictions on food aid are needed to maintain the U.S. maritime fleet for national security purposes are unsupported. In fact, numerous studies conclude that ACP restrictions on food aid do not contribute to the overall stability of the U.S.-flagged fleet. Data shows that the size of the U.S.-flagged fleet is not correlated to the rise and fall of volumes of U.S. food aid. Nor is there evidence that the ACP restrictions on food aid support military capacity. From 2011 – 2013, only 34 of the 74 vessels that carried U.S. food aid were enrolled in the Military Security Program (MSP). However, those 34 ships carried only 18% of all U.S. international food aid during the same period. The vast majority of food aid – 82% – was transported on ships that are not registered in MSP and may not meet Department of Defense criteria as viable for military purposes.[5] Government Accountability Office (GAO) reports have long substantiated this general critique. In its most recent report on the subject, published in August 2015, GAO emphasized that agriculture cargo preference’s “contribution to sealift capacity is uncertain, and available mariner supply has not been fully assessed.”

Claims of negative impacts on the U.S. economy associated with removing ACP restrictions from U.S. food aid are often based on highly questionable methodology and “gross over estimations.”[6]  Potential impacts on jobs in the shipping and cargo industry are very low given that food aid transport is such a small part of the overall equation. U.S.-flagged preferences (including Jones Act trade) represent more than 1 billion metric tons of cargo annually compared to just 1.4 million metric tons from USAID (only half of which are subject to ACP requirements).[7] ,[8] Over the past decade, major ports that move food aid cargo have steadily increased their overall tonnage even while food aid tonnage has dropped by more than 70 percent.[9]

The U.S. government should no longer allow ACP restrictions to undermine the impact of U.S. food aid. Given the current number of global food security emergencies, it is more important than ever that U.S. food aid use taxpayer money responsibly by reaching as many people as possible. We urge Congress to reduce the burden of ACP on humanitarian food aid, and reject any actions that decrease the reach and effectiveness of international food aid programs.

Action Against Hunger
Action Aid USA
American Hindu World Service
American Jewish World Service
Bread for the World
CARE USA
Church World Service
Concern Worldwide
Faiths for Safe Water
Feed the Children
Global Poverty Project
Hellen Keller International
InterAction
Islamic Relief USA
Mercy Corps
Modernizing Foreign Assistance Network (MFAN)
Oxfam America
Presbyterian Church (USA)
Save the Children
The Borgen Project
The Hunger Project
World Food Program USA

 

[1] USDA. http://www.fas.usda.gov/sites/default/files/lrp_report_12-03-12_to_print.pdf.

[2] USAID Fact Sheet, “Food Aid Reform: Behind the Numbers” https://www.usaid.gov/sites/default/files/documents/1869/FoodAidReform_BehindtheNumbers.pdf; Mercier, Stephanie and Vincent H. Smith, “Military Readiness and Food Aid Cargo Preference: Many Costs and Few Benefits,” American Enterprise Institute. 2015.

[3] Bageant, Barrett and Lentz, 2010; George Mason University, 2015; Mercier, et al. 2015.

[4] Mercier, et al. 2015.

[5] Button, Kenneth, Wayne Ferris and Phillip Thomas, “The political economy of shipping US Food aid under the cargo preference regime,” George Mason University, 2015.

[6] Mercier, et al. 2015.

[7] U.S. Maritime Administration. “U.S.-Flag Waterborne Domestic Trade and Related Programs,” http://www.marad.dot.gov/ships_shipping_landing_page/domestic_shipping/Domestic_Shipping.htm.

[8] USAID. http://www.usaid.gov/foodaidreform/impact-on-ports.

[9] Ibid.

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