U.S. should send cash, not food, abroad, aid groups say

Washington • After the 2010 earthquake in Haiti, former President Bill Clinton apologized for long championing food aid policies that helped Arkansas rice growers but made it harder for the impoverished country to grow its own crop.

Floods of imports of U.S. rice had put many of the country's growers out of business, and Clinton called his policies a "mistake."

Three years later, aid groups are pushing President Barack Obama to make the kind of change Clinton argued was needed and send cash in lieu of crops.

The White House won't say whether Obama's budget proposal, scheduled to come out next week, will suggest changing the way foreign food aid is distributed. But food aid groups, farm groups and their allies in Congress are preparing for the possibility Obama will tackle the issue in his second term.

At issue is whether the government should ship U.S.-grown food overseas to aid developing countries and starving people or simply help those countries with cash to buy food. Currently, the United States is shipping food abroad under the "Food for Peace" program started almost six decades ago by President Dwight Eisenhower to help farmers get rid of food surpluses and boost the country's image during the Cold War.

This approach has long been a profitable enterprise for American farmers and shippers, and those groups are strongly opposing any changes to the program.

But several food aid groups say times have changed and argue that shipping bulk food abroad is inefficient and expensive when government budgets are tight and developing countries need every dollar. Particularly controversial is the process of what is called "monetization," or selling the food once it arrives overseas to finance development projects. A 2011 report by the Government Accountability Office found monetization cost the U.S. an extra $219 million over a three years, money that could have been used for other development projects.

Aid groups are split on the point, since some finance their activities through monetization. But major aid groups like Oxfam and CARE say the process can destroy local agriculture by dumping cheap crops on the market at a price too low for local farmers to compete.

The food aid groups are pushing Obama to shift all or part of the average $1.8 billion spent on the program annually to other cash development accounts. If the administration does propose change, it could be in for a tough political battle.

Worried that an overhaul of the Food for Peace program could come in Obama's budget, a bipartisan group of 21 senators wrote a letter to the president in February asking him not to make changes.

"American agriculture is one of the few U.S. business sectors to produce a trade surplus, exporting $108 billion in farm goods in 2010," the senators wrote. "During this time of economic distress, we should maintain support for the areas of our economy that are growing."

The letter was signed by Michigan Sen. Debbie Stabenow, the chairwoman of the Senate Agriculture Committee, and Arkansas Sen. Mark Pryor, the Democratic chairman of the Senate subcommittee that controls agriculture spending. The top Republicans on both of those panels signed the letter as well, as did Senate Appropriations Chairwoman Barbara Mikulski of Maryland.

Farm groups say the program is also a public relations tool for the United States.

"Bags of U.S.-grown food bearing the U.S. flag and stamped as "From the American People" serve as ambassadors of our nation's goodwill, which can help to address the root causes of instability," several farm and shipping groups wrote in a February letter to Obama.

"These are the kinds of things you don't want to make dramatic quick changes to," says Roger Johnson, president of the National Farmers Union, one of the groups that signed the letter.

But aid groups say change is a long time coming. Gawain Kripke of Oxfam says his group estimates that by spending the same amount of money, the United States could provide assistance for 17 million more poor people by changing the way the aid is distributed.

Blake Selzer of CARE says he is encouraged that food aid is being discussed.

"A lot of people don't understand our food aid program," he says. "The more daylight this is given the more people will say to themselves, is this the best way to use our tax dollars?"