Ag Policy Blog

Despite push back from farm groups and U.S. shippers, the White House put another spotlight on food-aid reforms with a fact sheet on the impact of changing the $2 billion in programs used for international food aid.

On Thursday, the White House sent out text of a speech by USAID Administrator Rajiv Shah in which Shah described how al Qaeda blocked shipments of U.S. food last year from reaching Somalians struggling with drought. U.S. food aid couldn't save lives, Shah said, "But cash transfers could."

Using some flexibility, Shah said the U.S. was able to buy food for families in some areas where it could not get shipments through.

"In an increasingly complex world—where extreme ideology, extreme climate, and extreme poverty routinely pushes millions to the edge of survival and threatens our own homeland—we have to be both agile and creative," Shah said.

The food-aid proposal in last month's budget offered by the administration has caused a firestorm from coalition of groups that benefit from the current food-aid programs. Yet, sending out a speech and fact sheet reflects the White House is continuing to make its case.

The Obama administration argues that food-aid reform would save an estimated $105-$165 million annually while reaching anywhere from 2 million to 4 million in need.

The plan would save $50 million a year effectively in reduced shipping costs. Of course, from the U.S.-flag vessels, that translates into $50 million in less business.

The administration's plan doesn't go full bore in dropping U.S. commodities. About 55% of food aid would remain as it still operates.

Another argument raised in a Bloomberg report last week pointed out that shipping actual food over is not only less efficient, but also depresses markets for local farmers in those regions.

Presidents Bill Clinton and George W. Bush also made similar proposals, but failed to get any traction.

The administration is championing its proposal as the House and Senate Agriculture Committees are searching for added cuts to meet a sufficient level of savings in the budget score. If the numbers are correct, then the plan would boost the projected cost savings in either the House or Senate farm bill proposals by as much as $1.6 billion over 10 years.

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