GAO Report Highlights Costs of U.S. Food Aid Restrictions

Congressional restrictions on U.S. food aid raise the costs of delivering it by as much as a third and delay it reaching hungry people by up to 100 days.
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According to a testimony before congress yesterday and a new Government Accountability Office report, congressional restrictions on U.S. food aid raise the costs of delivering it by as much as a third and delay it reaching hungry people by up to 100 days. When donors purchase food locally or regionally, it not only gets to needy people faster and more cheaply, it may also better match local preferences and nutrition needs. Yet, in the midst of last year's global food price crisis, Congress passed a farm bill that continued the long-standing practice of requiring that food aid be purchased in the United States and that 75 percent of it be delivered by U.S.-flagged ships.

The madness of this system has been clear for some time. But in the congressional testimony yesterday, the GAO's Thomas Melito quantified the costs, noting that, delivering in-kind U.S. food aid costs, on average, 34 percent more in Africa and 29 percent more in Asia, compared to World Food Program projects that purchased food locally or regionally.

The GAO report does not suggest that local or regional purchases are a panacea. Like my colleague Jenny Aker, the GAO noted that such purchases can disrupt local markets and create shortages if not done carefully and under appropriate circumstances. The GAO's research also interviewed World Food Program officials who noted problems in identifying reliable suppliers and enforcing contracts for local purchase (particularly during last year's price spikes). GAO researchers also noted that insufficient evidence exists to assess whether locally purchased food reliably meets quality and nutritional standards. In a blog and paper from last Fall, Aker suggests some guidelines for ensuring that local purchase is a good idea in a given situation.

But the key conclusions from the GAO's research that we should draw are:

1. U.S. food aid dollars are feeding far fewer people than they could.

2. Flexibility is key.

If the United States provided food aid as cash, as both the European Union and Canada now do, it could be used to buy food wherever it makes the most sense in terms of price and timeliness. Some times that will be locally or regionally, and sometimes it will be in the United States, Canada, or Australia.

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