The Department of Defense has been blunt in saying that it doesn't need cargo preference to keep a stand-by fleet at the ready. A 1994 GAO report concluded, "The application of cargo preference to food aid programs does not contribute to meeting the intended objectives of helping to maintain US-flag ships as a naval and military auxiliary." Congress, never one to avoid foisting things on the Pentagon it doesn't need, (see the long battle to kill the second F-35 engine), left the cargo preference programs in place.
Yet, as Chris Barrett of Cornell has pointed out, this is an incredibly inefficient subsidy."The cost of maintaining this untapped pool of roughly 1,400 mariners on agricultural cargo preference vessels in fiscal year 2006 amounted to approximately $99,300 per mariner," he writes. In short, the United States is paying for a ghost navy of sailors it has never needed, and never will. In supporting the administration's reform proposal, the Pentagon has noted that the only ships affected would be "non-militarily useful."
The other argument from the maritime industry against food-aid reform has been that the food-aid program is vital to the health of the American shipping industry, and that carrying the overwhelming majority of food on U.S. ships helps keep American ships afloat and foreign competition at bay. This would be all well and good if it were not for the farce that is "American flagging." Yes, companies available for favorable treatment under the cargo preference program have to be owned and operated as American vessels by American citizens. But there is one enormous loophole in the law: "American" companies can be subsidiaries of foreign corporations.
Thus, one of the fiercest advocates against food aid reform has been Danish shipping giant Maesrk, which has done a masterful job of bending cargo preferences rules to its favor. By Barrett's estimates, at least 40 percent of the cargo shipped through the cargo preference program is being sent on ships whose companies are owned by a foreign entity, rather than an American one, and the actual total may be much higher since the data around what constitutes a U.S.-flagged vessel is so deliberately opaque. The fact that a Danish company is leading the charge to defend rules designed to protect U.S. shippers is really all you know to need about the relative effectiveness of cargo preference.
The actual number of U.S. maritime jobs affected by reforming food aid would be small, in the range of several hundred according to both DoD and USAID. Given that cargo preference adds more than $100 million to food-aid shipping costs annually, this is a very expensive jobs program indeed.
Congress has all the evidence it needs to do the right thing on food aid. Whether it has sufficient spine is another question entirely.