What to do with extra crops…

Foreign aid, though a small portion of the U.S. federal budget, is one of the most cost-effective tools of foreign diplomacy. As I have traveled to see Food for the Hungry projects accomplished through the financial support of the U.S. government, I’ve been inspired to see the signs that proclaim: “From the American people.”

Public opinion polls in Africa, for example, testify to the positive impressions those people have of President Obama and, before him, President Bush.

So it’s disappointing to learn that the Obama administration is proposing to change one part of this successful program – food aid – or more specifically the Food for Peace program.

To understand the program requires knowing that the food program marries two very different governmental concerns.

The U.S. government, like many countries, supports our country’s farmers by acting as the buyer of last resort for agricultural commodities. To provide farmers with reliable incomes, the Department of Agriculture sets price minimums for food commodities. If crop prices fall to that level, the U.S. government buys the crop. The multiple programs under which this occurs are varied and more complicated, but this is the net effect of them.

So the U.S. government owns crops bought from farmers. And that’s a problem. Economics teaches us that if the U.S. government sells them back into this same depressed market, prices will fall further still. The problem is too much supply.

What to do with the excess food?

Here’s where the desire to use the food as a tool of foreign diplomacy comes in. Those same crops can be sold or given away in foreign markets to help vulnerable people. And selling or distributing those crops overseas is how organizations like Food for the Hungry can help.

Why is the practice criticized? Some oppose this practice for three reasons (followed by FH’s response to the critique):

1) The cost of shipping crops overseas wastes funds that could otherwise go toward antipoverty efforts.

In fact, in fiscal year 2012, the cost per metric ton (MT) for USAID’s International Disaster Assistant Account local/regional purchase program was $2,836 MT, while the cost per metric ton of shipped emergency U.S. food aid was $1,188 MT.

2) Increasing supply of crops overseas harms local markets in other countries.

FH and many other organizations that implement food aid programs use a strategic market analysis (the Bellmon Analysis) before introducing food aid into the local market. All market environments are complex, but this helps protect the local market while ensuring the food insecurity can be addressed.

3) If the same amount of money were sent overseas, it could boost the demand for crops from local farmers, making them more self-sufficient.

Demand is not the only issue in view. Local farmers need to also be able to meet the demand. Pulling food aid before they are ready to do that will put lives at risk. A resulting scenario could be that food will be purchased from regional markets versus local markets. For Africa, the region goes as far as the Black Sea area in Europe. Right now, food aid is set up to also help farmers boost local crop productivity through food-for-work programs as indicated in this news release. So current food aid programs are seeking to increase supply while caring for the most vulnerable today.

French philosopher Voltaire wrote that “the best is the enemy of the good.” Along those lines, I would add that hypothetical ideas about the best that have not been tested are the enemy of the good. Idealistic alternatives to the current food aid programs can put lives at risk. Additionally the proposed alternatives are not taking seriously enough the importance of support of politicians from agricultural states for keeping foreign aid funding at current levels. Current successful programs that accomplish much good are being endangered by chasing after a hypothetical new arrangements that are not tested and disenfranchise a large base of Americans from foreign aid.

Food for the Hungry is on record in support of the current programs. David Evans, FH U.S. President, is quoted in The New York Times explaining why FH supports the current programs. A more extensive interview with David is also available from Mission Network News.

Otto Von Bismarck, the brilliant politician who created the modern German state in the 19th century, said, “Politics is the art of the possible.” The alliance of farmers, shippers and development agencies supporting U.S.-sourced food aid is an unlikely coalition of interests that builds political support to solve poverty overseas.

And that’s why U.S.-sourced food aid program truly is a gift “From the American people.”

If you’d like to voice your opinion to Congress, you can find your representatives and write them a letter explaining how you would like extra crops in the U.S. to be used.

About Barry Gardner

Barry Gardner is the Chief Financial Officer at FH. He joined FH in 2010 after a 20 year career as a financial consultant to non-profit organizations. He and his wife Susan live in Phoenix, where Barry enjoys year-round cycling weather.

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