FOOD AID CHARADE

If the purpose of international food aid is to ease famine, which it of course should be, it simply makes sense to ensure that as much food as possible reaches needy recipients as quickly as possible. The purpose of the 50-year-old Food for Peace program, it turns out, is to keep American agribusiness and shipping companies profitable. How else to explain their opposition to a common-sense proposal from the Bush administration to allow up to a quarter of the U.S. food aid budget to be spent buying locally-grown commodities.

The proposal is tied up in Congress because lawmakers fear offending the powerful farming and agribusiness lobby. The next chance to move the proposal forward comes in December when the World Trade Organization meets. Its ministers are likely to pressure U.S. representatives to send money to buy local commodities, something Canada recently agreed to do.

Current rules require that all food distributed by the U.S. Agency for International Development be grown by American farmers and largely handled by American shipping companies, which charge among the highest rates in the world. This allows large companies to earn government money while dumping surplus crops in countries that supposedly need them.

Worse, several large charities have in effect become grain traders, selling donated food in local markets to generate tens of millions of dollars for other programs. Not only is this disingenuous, it harms local farms and economies.

John Magnay, the chief executive of Uganda Grain Traders, gave this example to The Wall Street Journal. In 2003, the United States sent about 100,000 tons of American-grown grain to northern Uganda at a cost of $57 million. At the time, Ugandan farmers were producing surplus crops that the government couldn’t afford to buy and transport. The United States spent $447 per ton of corn delivered to Uganda when the cost of Ugandan corn was $180 a ton. Worse, it often takes six months for food to be transported from the United States when locally grown food can be gotten much quicker.

A bumper crop of wheat in Ethiopia in 2002 depressed prices and discouraged local farmers from planting more wheat. The next year a drought hit and production fell further. A famine resulted and the United States spent $500 million on American-grown food that was trucked past warehouses full of Ethiopian wheat from the 2002 harvest. If the U.S. money had been spent to buy the Ethiopian grain, it would have stabilized prices and helped the local economy with longer lasting benefits that shipments of American food.

This overdue change in policy will do much more to address international famine and economic development than preserving the existing system that puts preserving American business interests ahead of those facing a deadly crisis.