Wednesday, October 26, 2005

Feed the Hungry?

In the WSJ today, an article discussing potential plans to shift spending of the food-aid budget to overseas goods to feed starving foreigners. Today, food-aid programs are required to buy produce only from American farmers.

Charities and U.S. farmers (obviously) are opposed.

"Charities fear that slashing funds spent on U.S. commodities would erode the farm sector's interest in food aid. They doubt they could win as much congressional support for their efforts solely on the principle that fighting famines is important."

But it's shocking that they are...
" Andrew S. Natsios, administrator of the U.S. Agency for International Development, which oversees the food-aid program, calls the opposition "morally indefensible." He asks: "If you can get more food for the money, why not do it? Just to protect the cartel?" The opposition from religious-based charities is particularly galling to the administration, which had assumed their support."

Shipping food from the U.S. is expensive!
"75% of food aid must be shipped on vessels owned by U.S. companies -- a sop to that industry, which charges some of the steepest prices on the high seas."

"Most aid organizations acknowledge that buying food locally could help feed more people in times of emergency. But they're only willing to back Mr. Natsios's proposal if it's funded by additional spending, rather than a cut in the funds spent on U.S. commodities. To preserve funding for the food-aid program, the charities believe they must take into account the financial interests of farmers at home."

This is so stupid. Charitable organizations have no incentive to promote efficiency. Any efficiency gains result in budget cuts, and if you are an organization, why would you want free money to disappear? I understand the farmers' and shippers' interests, but it's sort of shocking that charitable organizations won't support the initiative.

"Distributing U.S. wheat, corn and beans is an important operation of their [charity] activities abroad. For Catholic Relief, donations of commodities and transport costs, which come largely from the U.S. government, totaled $281 million, or just over 50% of its fiscal 2004 budget."

So they spend our donations inefficiently to transport expensive food from the U.S. that could be purchased much more cheaply in Africa?