The long hoe of agribusiness
THE CHARITABLE group CARE is famous for its passionate appeals on behalf of the world's poor, so its decision to reject $45 million in US food aid might seem peculiar. Yet the group has good reason to ask whether the way the United States hands out some aid is actually harming countries that receive it.
The more important question American taxpayers should ask is whether the domestic farm industry's political muscle, which has distorted the nation's trade policies, is damaging international hunger-relief efforts as well.
Most of the $1.6 billion that the United States Agency for International Development spends annually on food aid goes toward emergency shipments to places such as Darfur. But about $280 million in aid is distributed in a more indirect way: the United States buys American-grown food, ships it to charitable organizations that operate in needy countries, and those groups sell the food to generate money for their own programs. In May, the Government Accountability Office described this approach, known as monetization, as "an inherently inefficient use of resources."
CARE's objection runs even deeper: By flooding the markets in some countries with American food, US food aid programs undermine small farmers in recipient countries -- the same farmers who could form the backbone of a stable economy if they were allowed to prosper. In other words, while the program offers short-term relief to poor countries, the only clear beneficiaries in the long term are the US agribusinesses that supply the food.
James Kunder, acting deputy administrator of USAID, said in an interview Thursday that the agency respects CARE's point of view, but disagrees with it. While it's possible that the influx of US-produced food is distorting markets in poor countries, he said, the agency seeks to avoid sales that might have that effect. The net value of the monetization program, he said, is "very clearly positive."
To the extent that a US aid policy does injure farmers in poor countries, it is only a tiny part of a much larger problem. Like other rich industrial nations, the United States props up its agricultural sector with an elaborate system of farm supports. Billions of dollars a year in subsidies encourage US farmers to produce more of certain crops, such as cotton, than they otherwise would, thereby pushing world prices down and keeping farmers in poor countries from gaining a foothold. Quotas on other crops, such as sugar, keep out imports from the developing world.
These policies capitalize on Americans' warm, fuzzy feelings about the ever more mythical family farm, while in fact rewarding large agriculture companies that produce foodstuffs on an industrial scale. To its credit, the Bush administration has sought to cut down on farm subsidies by capping payments at $360,000 per farmer and denying them to farmers with incomes above $200,000. But prospects for major reforms are slim.
In recent years, a major goal of US aid policy has been to squeeze corruption out of the foreign aid process -- to keep kleptocrats in starving countries from siphoning off money that should be used to help their people. This approach is entirely warranted. If only American officials cared as much about wasteful and counterproductive policies in the United States.
US policy toward poor countries can help them build the capacity to feed themselves, or it can help prop up the overindulged American agribusiness sector. But the two goals are contradictory, and it is all too clear which is more important to policy makers here.
