We can spend a lot of time (and I do) on the politics of the defense budget and the Iron Triangle that binds the Pentagon, the defense industry, and key members of Congress, making reform in the defense world difficult to execute. But there are a lot of other triangles that close around pieces of the federal budget. One of them comes up this week as the Senate marks up the Farm Bill and addresses the administration's proposed reform of the U.S. food aid program.
Budget discipline notwithstanding, elected officials have strong incentives to support wasteful or unnecessary spending as long as it takes place in their states and districts. Beneficiaries out in the private sector thrive off the proceeds. And federal agencies fiercely defend the turf around their programs. This phenomenon gives birth to the kind of casual budgetary hypocrisy that gives members of Congress a bad name. So it is with food aid.
Congress has always loved food aid. It looks like the quintessence of American generosity: share the fecundity of American agriculture with the poor and the starving overseas. Nothing warms the cockles of American politicians' hearts like that "gift from the American people" stamped on the side of a bag of wheat being delivered to the starving people of [insert the name of your favorite "poor" country here].
Food aid costs American taxpayers roughly $2 billion every year, and, unlike most foreign aid, Congress often adds funding to the president's budget request. But it is also expensive, an inefficient way to help the starving, and an obstacle to economic development -- things the president's new proposal would begin to change.
The suggested reforms are technical, but they make sense. The budget for food aid would move from the Department of Agriculture to the U.S. Agency for International Development, which has actually implemented the program for decades. (On the way, the jurisdiction for food aid funding would pass from the Agriculture subcommittee of Appropriations to the State and Foreign Operations subcommittee).
About $1.1 billion of this funding would become part of the disaster assistance program at USAID, which deals with known food crises and humanitarian needs. Another piece would go to a new fund to address chronic poverty and programs to prevent food crises from occurring. And a third piece would support a contingency fund for unanticipated food emergencies.
Budgetary and implementing responsibility for food aid would be housed in the same organization, doing the job it is doing today and creating new, flexible capabilities. Under the proposal, USAID would have greater freedom to pick and choose the commodities being provided, depending on the specific needs of recipient countries.
An even more important reform would allow the agency to buy some of the food provided (perhaps 45 percent) in other countries, particularly those where starvation could be met by local agricultural production, stimulating development. And the reform would end the requirement that 75 percent of U.S. food aid be shipped on American carriers, thus reducing the cost of the program and allowing more of the funding to go to the food itself.
Finally, the proposal would end the current practice of "monetization," by which food shipments are sent to recipient countries where U.S. and international nonprofit organizations sell them on the local market and use the proceeds to finance their local assistance work and administrative costs. The U.S. Government Accountability Office believes this is an inefficient way to deliver development assistance and, perversely, discourages local agricultural production.