21 May 2013

US Food Aid Reform Train is Slowing Down

Food aid reforms came under the spotlight last month when the Obama Administration announced its Fiscal Year 2014 budget.

The changes are important to humanitarian response. Oxfam America estimates that reforms to food aid procurement laws could speed up crisis response by 14 weeks and reach an additional 17.1 million people. For a crisis like the 2010 drought in the Horn of Africa, that improved response time could have saved thousands of lives.

“The current approach to food aid can become, at times, an impediment to its very own mission,” said USAID Administrator Raj Shah.

Humanitarian groups were mostly supportive in response and contractors were unhappy that changes would affect their business. What looked like positive momentum for reform is starting to slow down as both houses of Congress take a look at the Farm Bill and food aid reform both in and out of the United States.

“The agriculture industry in the Midwest sees this as a threat to exports, which is ridiculous,” said former USAID Administrator Andrew Natsios to Businessweek, a supporter of food aid reform during his tenure with the Bush Administration.

The red pen continues to make it through the US federal budget debate and the Farm Bill will see a few billion trimmed from its roughly $100 billion annual budget. The Republican dominated House and the Democrat led Senate do not see eye to eye on all of the cuts and changes, but they are on the same page when it comes to subsidies, says the Washington Post.
Both bills would eliminate the roughly $5 billion in annual subsidies known as “direct payments,” which automatically support certain types of farmers regardless of their crop prices or yield. The Senate version would terminate the program immediately, while the House measure would wean cotton farmers off it during the next two years. 
The two measures would also increase subsidies for federally subsidized crop insurance and create a new program to cover small losses on planted crops such as corn and soybeans.
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