Influence of USAID policies on food aid: time for reform?

Summary of published paper¹

A paper has recently been published which describes the food commodities that are used in U.S emergency food aid programmes, and outlines issues in their distribution, selection and formulation that may limit their ability to meet the nutritional needs of recipients. This paper has proved timely since the U.S Congress plans to renew the authorising legislation by the end of 2002.

Current U.S international food assistance programmes began after World War II, in an environment of agricultural surpluses and a looming Cold War challenge to win over emerging nations. Two specific programmes started during that period and continue to provide much of the world's emergency food aid. These are Title II of Public Law 480 of 1954, administered by the USAID (commonly known as the Food for Peace Programme) and Section 416(b) of the Agricultural Act of 1949, administered by the U.S department of Agriculture (USDA). Despite the declining global contribution of food aid to overall development assistance, the U.S continues to be the largest donor of both emergency and non-emergency food aid. Although the PL480 programme procures its food with an annual congressional appropriation, the quantity of emergency food aid available through the Section 416 authority is totally dependent on U.S agricultural surpluses. For instance, after a period of abundant surpluses during the1980's, subsidies to U.S farmers dropped and Section 416 assistance fell to zero. Surpluses did not revive until price supports were introduced in 1999.

Overall, there were 16 foods provided by the U.S for foreign emergencies in fiscal 1999. These foods reflect abundant U.S cereal and soy production that have dominated food aid programmes for 50 years, including the fortified and blended foods that were introduced in 1966. The foods most frequently provided in emergency situations are unprocessed grains, although processed foods are provided for meeting micronutrient needs and helping in situations where local processing capability is absent. Processed foods distributed in substantial quantities were wheat flour, bulgur wheat, cornmeal, vegetable oil and various forms of soy-fortified cereal and cereal blends.

USDA and USAID developed blended foods (CSM and WSM) to complement the supply and acceptance of dried milk as a protein source. The nutrient profile of these blends was designed for growing children to provide a high protein diet and reflected a prevalent view of child nutritional deficiency at that time. Since the protein-fortified and blended foods were introduced, formulation and fortification of processed foods have been changed infrequently and only slightly to reflect new scientific knowledge. There has been limited incorporation of new technical knowledge concerning efficient production processes, nutrient absorbability and responses to the special requirements and diets of disaster victims. In general the formulation and variety of foods provided is more dependent on U.S agricultural food supply policy and food supplier interests.

In the 1990 PL 480 legislation, the US government mandated the current policy "to use abundant agricultural productivity to promote the foreign policy of the US by enhancing the food security of the developing world through use of agricultural commodities". This is related to several issues influencing the selection and distribution of US emergency food aid.

Delays and gaps in shipment resulting from the need to procure foods from U.S suppliers
Delays and pipeline breaks in delivery of foods from US suppliers to distant emergency sites have been common problems faced by USAID programmes. Private voluntary organisations (PVOs) are often told to allow for a 4-5 month lead time before shipments reach the field. However, for rapid onset emergencies, diversion of foods already in the pipeline for development purposes can substantially shorten this lead time. Also, in recent years, delays have been offset by greater pre-positioning of food aid stocks at US ports. Furthermore, USAID can purchase from foreign sources and deliver small quantities of foods for a short time with cash resources provided to OFDA.

Uncertainties since the overall availability of foods depends on US agricultural surplus policies
This affects the Section 416 (b) programme (USDA) more than PL 480 (Food for Peace). The former provides for overseas donations of surpluses owned by the US government's purchaser of farm commodities, Commodity Credit Corporation (CCC). However, surplus commodities acquired by the CCC may only be made available if these surplus commodities cannot be sold or otherwise disposed of without disruption of price-support programmes or sold at competitive world prices. Eligible commodities include dairy products, rice, feed grains and products, oilseeds and other commodities acquired by the CCC through price support operations. On the other hand, food aid under PL 480 is better orientated towards emergency demand (when unanticipated emergency demand is great, it is possible to borrow from other legislative authorities).

Vested interests
Along with NGOs, domestic food commodity interests are a formidable constituency supporting the continuation of a substantial US global food aid commitment. However, the pursuit of self interest by US producers and food processors, the ingredient industries, shippers and other interests represents a major influence on the commodities and conduct of the programme. Two legal requirements are especially illustrative of commercial interests that influence the programmes, namely the Value Added Mandate and the Cargo Preference Act.

Value Added Mandate: Under Title II non-emergency, the PL 480 law mandates that 75% of all foods shipped are to be value added, that is they must be processed, fortified or bagged. Although this mandate does not explicitly apply to emergency food aid, it has a bearing on the commodity mix in emergencies since donors and field agencies are accustomed to requesting them, know how to handle them and US suppliers are likely to have them available.

The Cargo Preference Act: Under the Merchant Marine act of 1936, 75% of all food aid must be shipped under US flag carriers, a generous subsidy to the US Merchant Marine. Regulations do provide exceptions to minimise the effect of timeliness. Shipping costs on US carriers are 20-50% higher than foreign-flag carriers.

Conclusions

Non-nutritional priorities stemming from US food aid policies and customs have been the dominant influence on formulation, selection and distribution of food aid. Although further research is needed to establish whether the nutrition of disaster victims is systematically being compromised by these policies, inquiry could begin by sorting through the issues and options for policy change along the following lines:

1. Strengthening of mechanisms now available to shorten lead-time, such as more pre-positioning of food stocks at US or foreign ports, using a portion of the emergency food aid budget to purchase foods from local sources near emergency events or bolstering the undesignated cash budget of OFDA.
2. If reliance on the vagaries of food surpluses was reduced, could a regular humanitarian budget appropriation be generated to meet worldwide emergency food aid contingencies? Could the next round of talks on world trade be approached with a proposition that a proportion of food surpluses could be marketed internationally, on condition that the cash resources generated must be contributed to a multi-lateral reserve for emergencies?
3. What would happen if food aid were uncoupled from domestic purchase requirements and interests? For example, could the value added list of foods be reconsidered and expanded in terms of recipient cultural preferences and nutrition requirements rather than domestic food and ingredient company interests? Can the budget be increased for operational research and nutrition studies to identify the best foods for disaster victims in a variety of natural and complex emergencies in different ecological and cultural areas of the world? Could support for fortification and processing near areas prone to emergencies receive legislative support?

The author considers whether simply unlinking the food aid programmes from current legislation would free up the programmes to satisfy the nutritional needs of recipients, eliminating many cumbersome and expensive policies and programme practices. At the same time he cautions that such a step could lose an influential part of the constituency for the food aid programme. Congressional support for the programme would rapidly diminish along with the budget for Title II food aid. A replacement may not be impossible but would have to be thought through. Nevertheless, although risky to attempt reform of policy, the paper concludes that the effort is a worthy one. For if policies and customs constrain the mode and mix of commodities distributed in emergencies, the programmes and commodities should, and could, be reinvented with a nutrition imperative uppermost in mind.

¹Marchione T (2002): Foods provided through US government emergency food aid programmes: policies and customs governing their formulation, selection and distribution. Journal of Nutrition, vol 132, pp 2104S- 2II1S