Obama proposes end of monetized food aid

courtesy- USDA NRCS

courtesy- USDA NRCS

(IRIN) – In a major development, President Barack Obama has proposed an end to the sale of US food aid in developing countries, with options for buying food locally and cash transfers, among other radical reforms to the system. USAID has accounted for more than half of the world’s food aid every year for decades.

The President’s budget, tabled on Wednesday 10 April, ends years of US reliance for food aid on its agriculture surpluses. However, NGOs have been asking for removing the requirement to buy most of the emergency food aid in the US and transporting it on US vehicles to reduce costs and save time.

This has been met with stiff resistance from various interest groups. In a compromise move to ensure the proposals garner much-needed support in Congress and improve efficiency, the Obama administration has proposed allowing around 45 percent of emergency aid to be bought locally, and using the funds for cash transfers or food vouchers. But 55 percent of emergency food aid would still be bought in the US.

Emergency food aid – US$1.4 billion – forms a substantial chunk of the total food aid assistance package of $1.8 billion.

The changes make the food aid system more efficient and flexible, and will help feed four million more people every year, said Rajiv Shah, the administrator of the US Agency for International Development (USAID) in an address to a forum at the Centre for Strategic and International Studies (CSIS), webcast live on Wednesday evening.

Of the $1.4 billion for emergency assistance, $1.1 billion will be provided to International Disaster Assistance (IDA) for emergency food response in times of crises, which could be ongoing.

The 2014 budget also creates a new Emergency Food Assistance Contingency Fund worth US$75 million – roughly five percent of the total emergency food aid allocation of $1.4 billion – allowing USAID to provide emergency food assistance for “unexpected and urgent food needs worldwide”. It will also have various aid options – cash assistance, purchasing food locally, or food vouchers – according to details posted on the USAID website.

The remainder of the funds goes towards development assistance to address chronic food insecurity.

Shah said existing food aid restrictions denied the US government the flexibility to provide cash transfers that could have prevented Somali children from slipping into severe malnutrition. “Inefficiency was inexcusable“ in the country’s efforts to “accomplish something so profound [as helping people in need],” he noted.

Various studies – from the US Government Accountability Office (GAO), an independent investigative arm of Congress, to Cornell University – have pointed out that millions of US taxpayers’ dollars are wasted because of inefficiencies in the existing food aid system.

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