By Norman Borlaug and Andrew Natsios
This op-ed was published in the May 2, 2008, edition of The Wall Street Journal.
Rapidly increasing world food prices have already led to political upheaval in poor countries. The crisis threatens to tear apart fragile states and become a humanitarian calamity unless countries get their agricultural systems moving.
Now, with conference committee negotiations over the final shape of the Farm Bill at a critical stage, Congress needs to change the foreign food-aid program and help avert this calamity. The Bush administration has urged, rightly, that the U.S. Agency for International Development (USAID) be allowed to buy food locally, particularly in Africa, instead of only American-grown food.
The U.S. government currently buys grain and other foodstuffs from American farmers for free distribution in poor countries where a disaster has occurred, or sells it in food-deficit nations to generate funds for food-security development programs. Under the law, the food must be shipped almost exclusively on American vessels.
Ocean shipping costs are 20%-30% of the food-aid budget; and it takes on average over four months to order, buy, ship, offload and transport food by ground. In a famine, people can die waiting for the food to arrive.
Other problems arise. One food shipment sunk in a storm off the coast of Asia in 1996. In 2006, two food shipments were hijacked by pirates off the coast of Somalia. Hurricane Katrina nearly shut down much of the foreign food-aid delivery system in the Mississippi Delta.
Purchasing food locally simplifies the process, cuts down the time delay in delivery, reduces the logistical risks, and saves transport costs. These savings can be used to buy more food. At the same time, higher prices will probably reduce the purchasing power of USAID's food-aid programs by at least $200 million this year. While President George W. Bush has released food aid from a reserve fund, it is not sufficient.
Direct food purchases in local countries could also help improve their agriculture. In Africa, for example, two-thirds of the 200 million people who suffer hunger are small-scale farmers, primarily engaged in subsistence production because they find too few buyers for any larger harvest.
In Ethiopia in 2003, for example, widespread drought occurred in the low-lying areas of the country and the very dry northern highlands. Some 12 million to 15 million people were at risk of hunger and starvation. But in the central and southern highlands of Ethiopia, farmers were producing a bumper crop of corn and other cereals. Yet with no market for the locally produced grains, prices collapsed.
If USAID could have purchased and helped distribute some of this excess, up to 500,000 small farmers would have benefited, as well as the millions at risk of starvation. But its only option was to import surplus food grain from the U.S.
Seventy-five percent of USAID food aid goes to Africa, the most food-deprived region of the world. More robust agricultural growth there will help in a period of rising food prices. More prosperous African nations will become better trading partners, expanding imports of U.S. agricultural commodities, machinery and technology. Any near-term losses will lead to longer-term gains for the American economy.
What we are advocating is already in place. The World Food Program, the food-aid agency of the United Nations, has been buying food in African agricultural markets successfully for years using European aid funding, while Canada announced this week they were moving to 100% untied food aid.
The Bush administration's reform would have little or no impact on U.S. grain markets. President Bush urged action on his reform before the General Assembly of the U.N. and in his State of the Union address. Even if this authority were exercised fully, it would equal 0.3% of U.S. agricultural exports and a much smaller fraction of U.S. agricultural production.
Congress should amend the Farm Bill to allow up to 25% of the appropriation for USAID's food-aid program to be used to purchase food locally, when the program's administrator deems it appropriate to do so. A great many people's lives depend on this reform.
Dr. Borlaug won the Nobel Peace Prize in 1970. Mr. Natsios, former administrator of USAID, teaches at Georgetown University.