Auditors criticise US food aid as bureaucratic and…

Once more, the Bush administration recently introduced a bill in Congress to relax the binding of food-aid deliveries from the US to domestic grain surpluses. The Department of Agriculture and USAID, the government agency, are in charge of food aid. Currently, they may only purchase supplies in their own country. The proposed reform would allow them to purchase a quarter of the supplies for the biggest programme in the recipient countries or their neighbours. Studies have shown that purchasing locally can significantly increase the efficiency of food aid, not least because transport costs go down.

In 2005 and 2006, Congress rejected identical proposals. Food aid from the USA has always been designed not only to help the hungry throughout the world, but also to support America’s agriculture and transport sector. At least 75 % of relief supplies must be transported to their destinations on US ships. Accordingly, the agricultural and transport lobbies formed a coalition against the push for change. They also won support from at least a dozen non-governmental aid organisations, which have joined forces in the Alliance for Food Aid. The NGOs have their own stake in the current practice. They receive relief supplies from the administration, which they may sell in developing countries in order to use the proceeds to fund their programmes. This practice is called “monetisation”.

This year, however, reform is being supported by another influential government body. In a report published in April, the US Government Accountability Office (GAO) criticised US food aid for being inefficient and ineffective. Although the reviewers do not directly side with the administration’s proposal, many of the shortfalls they identify can be attributed to the current practice of tied aid. According to the GAO, US food aid has dropped by about half since 2002, whereas the food-aid budget hardly decreased in this period.

Higher costs for transport and administration are the reason. Since more and more money needs to be spent on the tender process, allocating and shipping supplies, there is less and less money for buying food. According to the GAO, administration and transportation now devour 65 % of the food-aid budget. Domestic shipping companies charge the administration up to $ 170 per tonne of corn for ocean transportation. In comparison, the World Food Programme (WFP) pays only $ 100 on average for similar shipments.

The GAO report also points out that the preference for American carriers serves defence purposes. Contracts for food-aid deliveries contribute to keeping afloat a large transport fleet, which sometimes serves military purposes.

The reviewers recommend the US simplify and de-bureaucratise food aid in general. For example, the administration should conclude longer-term contracts with haulage firms instead of inviting tenders for each assignment. Moreover, the administration should not only procure relief supplies once a request has been made. Instead, it should continually observe the markets, and buy when prices are low. Expanding the capacity for temporarily storing food would also make sense, according to the GAO, which wants American supplies to become cheaper and reach their destinations faster. So far, between four and six months are said to pass from the time an international humanitarian appeal is made and US aid actually arrives in the area concerned.

The reviewers are especially critical of the practice of monetisation. Purchasing food in the USA, shipping it around the world, and selling it locally is an extremely inefficient way to support non-governmental organisations, particularly as the administration is not even in a position to check whether the income from this process even covers the costs. A number of NGOs such as CARE, Catholic Relief Services and Save the Children, which have profited from monetisation in the past, now argue against it, even supporting the administration’s reform proposals to some extent. CARE wants to opt out of monetisation by 2009. As John Powell, WFP deputy executive director, stated in an interview with E+Z/D+C, the World Food Programme would also welcome Congress agreeing to the reform (see p. 260 in this issue). (ell)