July 27, 2012
A review of publicly available reports and recently released documents obtained via an Associated Press (AP) Freedom of Information Act request reveal that the U.S. Agency for International Development (USAID) has spent over $200 million on Title II food aid in Haiti since the earthquake. Title II food aid, administered by USAID and implemented by NGOs and intergovernmental organizations (primarily the World Food Program – WFP), is “the main avenue for U.S. food assistance.” As can be seen in Figure 1, in fiscal years 2010 and 2011, USAID obligated over $200 million and distributed over 174,000 metric tons of food aid in Haiti. Although most of this came in the form of emergency food aid following the earthquake, food distributions have continued in 2011 as well.
Source: USAID, Author’s Calculations
According to a report prepared for USAID’s Office of Food for Peace, in fiscal year 2010, USAID Title II food aid totaled 153,000 metric tons (MT), of which over 115,000 came in the form of emergency food aid. In 2011, these totals decreased drastically to 21,430 MT, of which 5,950 MT was emergency aid. According to the report, emergency food aid was distributed through two avenues: Single-Year Assistance Programs and the World Food Program. Based on documents obtained by the AP, USAID obligated over $21 million to World Vision, Catholic Relief Services (CRS) and Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance (ACDI/VOCA) for program costs associated with these emergency distributions. Additionally, USAID, which covers the cost of commodities and shipping, valued these services at over $100 million.
Non-emergency food aid takes the form of food distribution, but also often incorporates agricultural productivity, natural resource management as well as other issues related to food security. The majority of non-emergency food aid, which totaled over 50,000 MT in FY 2010 and 2011, came through Multi-Year Assistance Programs implemented by the same partners as the above-mentioned emergency, single-year programs: ACDI/VOCA, World Vision and CRS. These three programs all began prior to the earthquake and are ongoing until at least September 2012. A recent audit conducted by the USAID Inspector General (IG) reveals that, since the programs began in 2008, these partners have spent $46 million dollars in program costs. According to the AP documents most of this came after the earthquake. Together, the three organizations distributed nearly $70 million in commodities.
The Inspector General, in its audit of these multi-year programs, noted that “assistance generally has improved conditions for targeted beneficiaries…However, we could not determine whether the effects will last well into the future.” Nevertheless, the IG found a number of problems in the management of these programs, including overlapping with other USAID projects; lack of data management; the use of duplicative, excessive and uncoordinated indicators; uneven and poorly tracked integration of key activities; and other problems.
Overall, the documents obtained by the Associated Press show that World Vision, ACDI/VOCA and CRS have received $57 million since the earthquake from USAID for program costs related to Title II food aid, as can be seen in Figure 2. As will be discussed in more detail later, while this data shows program costs, the provision of the actual commodities for distribution and the shipping of those commodities are paid for directly by USAID, and so do not show up in Figure 2.
Source: USAID, Associated Press
One of the more controversial aspects of food aid is the practice of monetization, organizations selling food aid in local markets to fund their work. The Haiti Justice Alliance has discussed this in detail:
Aid experts agree that monetization harms “beneficiary” populations for a range of reasons. Even the US Government Accountability Office urged Congress to stop giving NGOs food aid for monetization.
Even the NGOs who monetize aid admit it’s a bad practice. The two biggest NGO recipients of post-earthquake Title II food aid were World Vision and Catholic Relief Services (CRS). World Vision is regularly criticized for its extreme lack of transparency (and here), so it’s difficult to determine their stance on monetization. CRS, however, has this disclaimer on the FAQ section of its website:
CRS recognizes that selling commodities, also referred to as monetization, is an inefficient method of obtaining funding.
Historically, World Vision, CRS and ACDI/VOCA have taken part in large scale monetization of food aid, though USAID, at least temporarily, halted this practice in 2011, perhaps heeding the advice of both the GAO and their implementing partners. Yet, as of January 2012, a total of $32 million in food aid had been monetized, according to the IG. Although no current monetization efforts are underway, in 2010 about half (19,000 MT) of the non-emergency food aid was monetized. There are some smaller scale monetization projects scheduled for 2012, most of which rely on third-party monetization which would entail selling the commodities in, say, the Dominican Republic to fund work in Haiti.
Barriers to Reform
As the IG notes, USAID food aid programs can be helpful, at least in the short-term, yet the sustainability of food aid is often questioned. Timothy Schwartz, who has written extensively on the topic, posted a chapter of his book “Travesty in Haiti” on his blog last year:
Food assistance to Haiti during the 1980s tripled reaching a yearly average of over $50 million in gratuitous U.S. surplus beans, corn, rice, and cracked wheat. Put in simpler terms, that was enough food to meet the calorific needs of over 15 percent of the Haitian population.
The large and persistent flows of food aid have done little to increase the self-sufficiency of Haitian agriculture and as Schwartz later describes, have in many cases undermined local production, something for which former President Bill Clinton publicly apologized for in 2010. Additionally, because of byzantine regulations, U.S. food aid is not often delivered in the most efficient and sustainable manner. The result is that a recently released food security index from the Economist Intelligence Unit ranks Haiti in the bottom five out of 105 countries analyzed.
While agreements with the implementing partners discussed above cover the costs of internal distribution in Haiti, as well as management and input costs, the procurement of the commodities themselves as well as their shipment to Haiti are separate costs borne directly by USAID. As we have previously reported, according to public contractor databases, USAID spent at least $18 million between January 14, 2010 and February 26, 2011 on shipping emergency food aid. Additionally, the IG report notes that for the Multi-Year programs over $23 million was spent on ocean freight to deliver $67 million worth of commodities. Because of U.S. regulations, the vast majority of food aid must be shipped on U.S.-flagged carriers. The shipping industry has been cited by researchers as one of the barriers to reform of the U.S. food aid system. A 2010 report from Cornell University explains:
The sheer size and history of US food aid programs obviously create inertia that differentiates it from most donors. But in political economy terms, arguably the most distinctive feature of US food aid programs is the intimate involvement of ocean carriers, who benefit from little?known agricultural cargo preference (ACP) requirements absent in other donor countries. While food aid policy reforms have had to overcome resistance from agribusiness and some nongovernmental organization (NGO) interests in every donor nation, the “iron triangle” of interests formed by agribusiness, some NGOs and ocean carriers has been a uniquely effective lobby for the status quo in US food aid policy.
U.S. procurement regulations also prohibit the procurement of food aid locally, although some recent efforts have resulted in pilot local procurement programs on a small scale. Although these pilot programs have had positive results, they have come under scrutiny in the latest versions of the U.S. Farm Bill that are currently being discussed in the House and Senate. According to The Guardian:
The Senate version of the farm bill would extend the pilot. However, the House version doesn’t even mention it. Now the two chambers of Congress have to reconcile their differences, and with big farm bill fights over farm subsidies and domestic food stamps, it’s anyone’s guess what happens next.
Trade groups are clear in their opposition to local and regional purchasing. In letters to Congress earlier this year 31 agribusiness and shipping groups wrote: “US food aid programmes not only further our humanitarian and security goals by allowing Americans to share their bounty with the needy, but these programmes also provide stable jobs for hundreds of thousands of Americans.”
Previous research has shown the possible benefits of local procurement, and a recent study by the Local and Regional Procurement Learning Alliance points to other potential positive impacts. Surveys showed that “poorer individual recipients were significantly more likely to report maximal overall satisfaction with locally procured food aid than with transoceanic food aid.” Nevertheless, as The Guardian points out, agribusinesses continue to dominate the food aid game:
It is not surprising ADM, Cargill and Bunge dominate food aid, since they dominate global grain trade too. They are also powerful political players; in the first three months of 2012 alone, ADM and Cargill reported lobbying expenses of $360,000 and $340,000 respectively; Bunge reported spending $230,000 over the same period, lobbying Congress on a range of largely agricultural issues, including “support for US in-kind food aid programmes”.
Patrick Woodall, research director at Food and Water Watch, pointed out the inherent contradiction in current policy. The companies that benefit from the US food aid business are the very companies that encourage poor countries to cultivate non-food crops for export rather than food to feed their people. “In terms of global food security, it seems like a double-edged sword,” he said.
The U.S. government has clearly taken steps in the right direction by curbing the use of monetization and beginning pilot local procurement projects, yet even these modest reforms are under threat from the so-called “iron triangle”. The purpose of food aid is supposed to be to sustainably promote food security in developing countries, not to subsidize agribusinesses, the shipping industry or large NGOs. In order to successfully reform USAID’s food aid policies, they must confront these entrenched interests head on.