The Multinational Monitor


F O R E I G N   A I D

U.S. Food Aid: Beneficence or Blackmail?

by Vincent Wilber

For over 25 years, the U. S. has offered a "Food for Peace" program to other countries, ostensibly to help feed starving people. Critics suggest, however, that "Food for Peace" has not had its desired effect, and have drafted a proposal to reorient U.S. food policy.

The Reagan administration may soon address American policy toward the world's approximately one billion poor and starving people. Reagan's answer, whatever it may be, will have a huge impact on the Third World--for perhaps no issue is as basic as that of food.

Currently, the U.S. government approach is codified in the "Food for Peace" program, PL-480, one of "big agriculture's" most sacred cows. However, a number of public interest groups are challenging PL-480, advocating massive surgery on U.S. food policy.

Since its inauguration in 1955, "Food for Peace" has either given away (or marketed on long and easy credit terms) over $27 billion worth of American farm products to 148 countries.

Over the years, about 25-30 percent of Food for Peace shipments has been in outright donations' and the balance has been sold for dollars on concessional terms representing about 40 to 50- percent of the real cost of comparable commercial shipments.

Up until the "world hunger crisis" of the early 1970's, when grain became scarce, PL-480 shipments were utilized by U.S. agribusiness as an important outlet (at taxpayer expense) for otherwise-unmarketable surpluses.

But in current times of scarcity,. soaring grain prices have caused the program to be cut back despite widespread famine in the less-developed countries, and PL-480 aid has declined in recent years in proportion to total U.S. agricultural exports. Since 1970, the yearly value of such shipments has been about one billion dollars.

In short, "food aid," as legislated and administered throughout its history, has been a valuable prop for U.S. agricultural exporters while supplying considerable amounts of U.S. farm produce to the governments (if not always to the most needy people) of many poor countries.

Two major questions which public interest and humanitarian organizations have been asking for many years are: Who benefits most from this ostensible largesse, and has it been a blessing or a curse to the one-fourth of the world's population which is either starving or undernourished?

The answers to both questions are necessarily ambiguous. On the positive side, there is little doubt that over the years quite a few people who badly need it have benefited from the food aid component of U.S. foreign assistance. But from the . viewpoint of well-qualified critics, these benefits have been outweighed by abuses of the program, both on the giving and the receiving ends. The , examples available range from the criminal to the crassly political to the merely embarrassing:

  • Tongsun Park, the Korean wheeler-dealer commission agent who handled PL-480 financed rice exports, converted American taxpayer dollars into a personal fortune.

  • The U.S. Justice Department in 1975 indicted the "Big Five" grain dealing companies - Cargill, Garnac, Continental Grain, Bunge and Born, and Dreyfus - for defrauding foreign buyers, especially poor countries. According to a paper published by the Washington-based Center for Development Policy, "one company was caught shortweighing shipments to Bangladesh-while 25 million people faced famine there. That company and others were adding trash to 'Food for Peace' shipments to cover up false weights... Some of these companies pled no contest and paid fines."

  • An American-financed poultry-raising operation in Colombia diverted PL-480 grain from direct consumption by the poor to the production of meat which only the rich could afford.

  • According to a report by the staff of the recently-disbanded 20-member Presidential Commission on World Hunger, even free food shipped to victims of natural disasters may not reach them, and may be sold rather than given away by recipient governments. Large amounts have also been reported lost through corruption and looting.

  • The U.S. government supplied massive amounts of PL-480 funds to South Vietnam, Laos, and Cambodia during the Vietnam war years.

These illustrations point quite clearly to the conclusion that U.S. "Food for Peace" operations have been influenced to an unhealthy extent by commercialism and self-interest on the donor end, and by corruption and mal-administration within the recipient governments.

In addition, and even more seriously from a long-range viewpoint, the assistance may actually be hindering food production within the poorest countries. A recent study by the Presbyterian Church concludes that while food aid has done some good, "it has also helped unpopular governments to remain in power,. .. discouraged local food production, and increased the dependence of some developing nations on imported foodstuffs."

There are fortunately quite a few individuals and groups who, even in the current unpropitious Washington political climate, are prepared to try to do something about this situation, through the introduction in the new Congress of various foreign aid reform proposals.

Several draft bills crafted to cure the commercialism and self-interest which has long afflicted subsidized American agricultural exports to the poor countries of the world are in the works. A particularly strong draft now being circulated in search of Congressional sponsors is that prepared by the Washington-based Food Policy Center and its New York affiliate World Hunger Year, publishers of Food Monitor magazine.

This draft will go into the Congressional hopper in a considerably less favorable political climate than have similar efforts by the widely-respected public interest groups Bread for the World and New Directions, which helped prepare "The Self-Reliant Development and International Food Assistance Act of 1979" introduced in the Congress by Rep. Stephen Solarz (D-NY).

Many of that bill's provisions ultimately became law, and the new legislation's authors hope to build on that success by , taking its reforms a step further.

Perhaps the most useful, and potentially most controversial, action proposed in the draft is the outright repeal of PL-480 as now written, and the phasing out over a two-year period of all so-called "concessional" sales of foodstuffs for dollars to the less-developed countries.

The sections of this bill dealing with food aid are, however, only a part of broader, omnibus legislation which would require that in future all American foreign assistance focus on meeting the "basic human needs" of poor populations. Foreign aid, including (but not limited to) the provision of agricultural products, could no longer be used to achieve short-term foreign policy goals, nor to promote U.S. market development, nor to dispose of surplus American products.

In the case of "Food for Peace" there would remain, after dollar sales are ended, provision for emergency grants in times of famine or natural disasters, plus some sales for local currencies in accordance with tightly-defined and closely monitored bilateral agreements with recipient countries.

These conditions would require LDC governments to use the food to raise the living standards of their poor, promote land reform and increased employment, and stimulate the growth of local food production, all toward the end of making further U.S. contributions ultimately unnecessary.

The proposed new law also contains some pointed admonitions addressed to American farm interests in general. "The Secretary of Agriculture should provide leadership in the necessary reorientation of United States agricultural policies by establishing priorities which recognize the demands of world-wide agricultural interdependence, and by changing current programs and establishing new programs (emphasizing the) interdependence between U.-S. agricultural policy and less developed countries' attempts to achieve self-reliant economic and agricultural development."

This language reflects in part the drafters' concern over one particularly disturbing practice of agribusiness corporations: producing crops for export in the LDC's at the cost of production for local consumption. Richard Barnet, coauthor of Global Reach, has pointed out that in Brazil the poor often cannot afford to buy imported black beans to eat, but commercial farms in the country are exporting soybeans. And in Mexico, strawberries are produced for consumption in the U.S. on land needed by peasant farmers to grow subsistence crops.

Non-humanitarian motives at the American end of the PL-480 pipeline are also addressed in the provisions making surplus disposal, U.S. market development or the achievement of short-term foreign policy goals unacceptable justifications for extending food aid.

There will undoubtedly by special difficulties in obtaining a favorable hearing for such reforms in the new Senate Agriculture Committee chaired by arch-conservative Sen. Jesse A. Helms (R-N.C.), and equally formidable opposition can be expected from President Reagan's Secretary of Agriculture John R. Block. Washington reporters recently were told bluntly by Mr. Block that, "Food is a weapon, but the way we use that weapon is to tie countries to us. That way they'll be reluctant to upset us."

It would be interesting to hear the new Secretary's views on the situation existing at the time of the 1972-74 world food crisis, when U.S. grain was being sold on commercial terms to feed European cattle, while food aid shipments to desperate people in the poorest countries were being trimmed back.

There is hope that some of these political pitfalls can be avoided, or at least made less treacherous, if the Congress can be persuaded to give expanded jurisdiction over food aid to its foreign relations committees. This would reduce the traditional preeminence of the agriculture committees in both the House and the Senate.

The handling of most agricultural issues, foreign or domestic, has long been dominated by an "iron triangle" consisting of the foreign relations committees, the Department of Agriculture, and lobbyists for the food industry. Although the effects of U.S. food policy are felt in many other sectors than these groups oversee, it is nearly impossible for their mandates to be overruled.

The new legislation provides that the Director of the International Development Cooperation Agency (which prepares and submits food aid recommendations to the Congress) be given Cabinet rank to increase that agency's relative influence, and that he "submit in writing information demonstrating that an agreement (on food aid) will directly benefit the needy people in a country." The Director's statement would be addressed to Congressional foreign relations committees, although presumably the agriculture panels would get copies.

Some advocates of the reshaping of this country's long-lived, commercially-profitable and much-abused "Food for Peace" programs think that the long-range impact of the proposed modifications would be to reduce the cost of U.S. foreign assistance programs as a whole, because of the food production that would be generated in the poor countries.

There is more than enough actual agricultural output available in the world now to feed everyone, many experts believe, if it were only more equitably distributed.

The Congress, for its part, may appreciate the ultimate -money saving opportunities which could result from the reforms proposed (it has never cared much for "foreign aid," excepting the military variety). PL-480 reforms alone, of course, will not accomplish this, but they can provide a start. Moreover, even if this latest effort fails, its introduction and debate will serve a most useful purpose in raising the level of public discourse on this important issue.

Vincent Wilber is a former Public Affairs Director for the U.S. Agency for International Development (AID) and is now Washington-based correspondent for the New Yorkbased magazine, Food Monitor.

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