NCPA - National Center for Policy Analysis


May 16, 2007

The United States is the world's largest food donor, handing out 4 million metric tons, or more than half the world's total.  Whenever and wherever there's famine, we help.  But as a new Government Accountability Office report shows, we don't do it very efficiently.


  • Fully 65 percent of our food aid budget goes to overhead, leaving just 35 percent to directly help the poor in famine areas.
  • High overhead exists in foreign aid because laws favor special interests; for instance, U.S. aid must come solely from U.S. farm sources, and 75 percent of shipping must be done on U.S.-flagged carriers -- both drive up costs.
  • Even the United Nations looks efficient by comparison; it manages to squander "only" 50 percent of its own food budget on overhead.
  • Private organizations like Save the Children spend less than 10 percent on overhead.

As a result, President Bush is trying to push Congress to reform U.S. aid ahead of this year's Farm Bill.  The changes he seeks are few and small, but they would help, says Investor's Business Daily (IBD).  Among them:

  • Persuading Congress to allow 25 percent of U.S. aid to be sourced locally, aiming to feed more people faster in emergencies.
  • Allowing cash aid -- as opposed to food aid -- which would reduce overhead.

The reforms could help stop future famines, says IBD.  Vast tons of aid dumped from abroad can harm fragile economies, as local farmers are driven out of business by the free largesse.  And private organizations like Oxfam are already showing that cash aid can help the poor and keep local farmers producing.  Overall, Both the Democrats and Republicans could stand to show more leadership on what's a perfectly fixable waste of resources.

Source: Editorial, "Feasting On Famine," Investor's Business Daily, May 16, 2007; based upon: GAO Report to the Committee on Agriculture, Nutrition, and Forestry, U.S. Senate, "Foreign Assistance: Various Challenges Impede the Efficiency and Effectiveness of U.S. Food Aid," United States Government Accountability Office, April 13, 2007.

For GAO report: 


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