Farm Bill 2013: 4 Million Reasons Why Monday's Vote Was an Awful Mistake
In a rare show of bipartisanship, last night the U.S. Senate voted 66-27 to approve a "Farm Bill" that leaves food aid policy stuck in the 1950s. It's a decision that will unnecessarily keep an estimated four million people from receiving American food aid while harmfully distorting local markets.
The omnibus "Agriculture Reform, Food, and Jobs Act of 2013," passed 66 to 27, with support from Republicans and Democrats. The majority of its 10-year, $955 billion cost is spent on food stamps, but $1.4 billion is allocated to food aid; under the bill, food aid policy would be basically unchanged, leaving a sclerotic, inefficient system intact.
It didn't have to be this way. President Obama's 2014 budget substantially altered American food aid policy, bringing it more in line with every other donor country in the world; it would have allowed 45% of emergency funds ($330 million) and $250 million of non-emergency funds to be used more efficiently, given as cash or vouchers in local markets.
Instead, except for a $60 million provision to buy food in local markets, the old, "Food for Peace" program is still in place: the United States government buys up surplus crops from American farmers, then donates it to NGOs to sell in developing countries, a process known as "monetization." A report by the Government Accountability Office estimated that monetization alone costs U.S. taxpayers tens of millions of dollars every year in waste.
Ending the Food for Peace program and stopping monetization would have substantially increased the number of beneficiaries reached, and begun to unravel the market-distorting effects of American crops being sold in local markets.
Right now, about 50 million people benefit from American food aid; for the same cost to American taxpayers, an estimated four million additional people would benefit under President Obama's plan, according to USAID Administrator Rajiv Shah. The Center for Global Development believes that to be a conservative estimate, and persuasively makes the case that the real number is between 4 million and 10 million.
Harder to measure, but arguably more harmful, is the effect that outside supply has on the local market. I discuss this more in-depth elsewhere, but suffice it to say that air-dropping staple crops into an established market will reduce the price of the local supply, which has a negative effect on the subsistence farmers who rely on their sales to feed, clothe, and educate their families.
None of this has been contested by the bipartisan opposition which formed once President Obama's plan was rumored and subsequently announced. Instead, it argues that American farmers and shipping companies would be negatively affected by the proposed changed, and refers to to President Eisenhower's original goals for the program:
"When President Eisenhower signed into law legislation authorizing the program, he explained that the purpose was to 'lay the foundation for a permanent expansion of our exports of agricultural products with lasting benefits to ourselves and peoples of other lands.'"
Notice who comes first in that explanation.
Members of the House, such as Eleanor Holmes Norton (D-D.C.) and Gerald Connolly (D-Va.), are a bit more honest about their opposition to modernizing the program:
"Ms. Norton's spokesman said she 'thinks the president's policy is correct,' but signed the letter as a courtesy to Mr. Cummings and because of a collateral concern that food stamps might be affected. Mr. Connolly, too, said that Mr. Obama's plan would make sense in 'an ideal world,' but that political realities are such that foreign aid cannot get funding unless domestic U.S. constituencies also benefit."
It's "just politics," in other words. Unfortunately, "just politics" is keeping a sclerotic, inefficient, and harmful system in place that fails to assist millions of people and succeeds in distorting local markets.