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$500 Million in U.S. Food Aid is Wasted Annually Due to Red Tape and Subsidies
A report issued yesterday charges that $500 million of American food assistance — a large part of our foreign policy — is wasted annually due to red tape and American agribusiness profit. According to Oxfam America and the American Jewish World Service (AJWS), an additional 17 million hungry people could have been fed by U.S. food assistance programs in 2010, alone. This is aid that would have been offered at no extra cost to taxpayers.
Because the U.S government is barred from purchasing food for aid programs anywhere except the United States, program administrators are denied the option of buying commodities close to the country or region in need. The ability to source more food locally would reduce transportation costs, decrease farming subsidies, strengthen local economies, save energy, and cut the time needed to provide aid to recipients. Sourcing more local food would also increase local self-sufficiency and reduce the need for foreign aid in the long run.
Moreover, $300 million worth of U.S. food in 2010 was sold within developing countries in order to finance development projects, further reducing the effectiveness of food aid programs. While undercutting local farmers, this practice also cost $90 million that same year due to the requirement to both purchase and then haul food products from the U.S. overseas.
A more efficient program, according to Oxfam’s Eric Munoz, would be to fund developments and send cash directly instead of through the current circuitous route, which favors U.S. agribusiness and not local economies. Munoz also pointed out that 40 percent of food aid was bought from three American companies, and since federal regulations require that 75 percent of food assistance is transported on vessels carrying the American flag, the policy in effect also subsidizes the shipping industry.
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