How shipping unions sunk food aid reform

Introduction

As members of the U.S. House and Senate meet this week to hammer out a farm bill, they are likely to consider changes to the way the United States delivers food aid to hungry and impoverished nations. The debate will reprise an intense legislative battle that flared in June when food aid reforms were proposed in the House.

That struggle had a startling and little-noticed result: a plan to reshape the way in which the U.S. delivers half of the world’s food aid was dealt a decisive blow by a small but determined group of maritime unions.

Unlike other developed nations, which purchase most food aid in the regions that receive it, the U.S. buys food from American farms, ships it on American vessels, and gives away much of the goods free of cost for humanitarian groups to distribute. Although the Government Accountability Office has concluded that this system is “inherently inefficient” and can be harmful to farmers in recipient nations, for decades the setup has been politically untouchable. A powerful coalition including agriculture companies, the military, the shipping industry and humanitarian aid groups ensured that any changes were dead on arrival in Congress.

But when an amendment to the farm bill seeking to shift up to half of U.S. food aid to local and regional purchases emerged in Congress in June, the tide appeared to be turning.

The Obama Administration estimated it could reach up to four million more people for the same price by purchasing half of its food aid locally. Big agriculture was mostly indifferent, with Cargill and the National Farmers Union endorsing the broad strokes of reform. The Pentagon gave its blessing, saying maritime readiness would not be harmed. Humanitarian groups had turned en masse against the current system, saying flooding poor countries with cheap foods was harmful to local farmers.

“It felt different,” said Gawain Kripke, policy director for the aid group Oxfam America, which advocated in favor of the amendment. “We never really had a piece of legislation to rally around.”

There was one remaining sector that stood squarely in the path of the reform: the shipping industry and maritime unions. With fewer allies but undiminished resolve, maritime groups sent letters, organized phone calls and lobbied vigorously with their allies in Congress.

“We did a lot of aggressive advocacy,” said Ed Wytkind, the president of the Transportation Trades Department of the AFL-CIO, an umbrella group that represents 32 transport worker unions. “We’ve spoken very, very forcefully to some of our friends on Capitol Hill who don’t seem to understand the issue as well as we wish they did.”

As the vote approached, the shipping unions told Congress that the reform would destroy American jobs and gut the nation’s military sealift capacity. Their message was repeated among House members as they prepared on June 19 to cast their votes.

“When I was on the floor the chatter among members was ‘You know, unions oppose this,’” said a Democratic congressional staffer, who asked to remain anonymous.

When the votes were counted, the amendment had been defeated by a slim margin of 220 to 203. But unlike Congress’s frequent party-line showdowns, these results reflected an unlikely set of opposing coalitions. Both Republicans and Democrats split nearly evenly on the reform. The top-ranking members of each party to cast votes, Eric Cantor and Nancy Pelosi, supported the proposal and went down in defeat. The 94 Democrats that opposed the measure included leading liberals such as George Miller and James Clyburn.

While more Republicans voted against the measure than Democrats, Kripke of Oxfam America said it was the Democratic votes that provided the crucial margin.

“Where we lost the thing is that we really underperformed among labor Democrats, among progressive Democrats,” Kripke said. “I think that when the unions and the AFL affiliates came in was really influential.”

The maritime unions’ success in persuading nearly half of Democrats to oppose a measure expanding the reach of food aid was not only a product of phone calls and effective lobbying. (A send-up by Jon Stewart on the plight of “the most vulnerable among us” focused on the role of shipping companies.)

According to an analysis by the Center for Public Integrity, two leading maritime unions, the Marine Engineers Beneficial Association and the AFL Transportation Trades Department, and a maritime group backed by both unions and shipping companies, USAMaritime, contributed a total of more than three quarters of a million dollars to members of the current House of Representatives in the 2012 election cycle. Members who received contributions from these groups voted 83 to 29 in opposition to the measure, along with five who did not vote.

Members who received more than $10,000 from these groups opposed the amendment at a rate of seven to one: the vote among these top beneficiaries of shipping unions’ contributions was 28 to 4, with three not voting.

Shipping dollars and congressional votes

Current members of the U.S. House of Representatives who received at least $10,000 in contributions in the 2012 election cycle from two leading maritime unions and a lobby group backed by both unions and shipping companies, along with their votes on the Royce-Engel amendment to reform U.S. food aid policy.

Source: Center for Responsive Politics

The Center for Public Integrity reached out to ten House members, both Republicans and Democrats, who were among the top recipients of maritime unions’ contributions. Only the office of Elijah Cummings, D-MD, a vocal opponent of the reform, agreed to discuss his views. Staffers for Cummings said the changes would deplete American sealift capacity in the event of a military or trade war, and that Cummings listened closely to maritime unions as he did to all constituencies affected by Congressional policies.

‘One of the worst ways to give food aid’

As war raged in Syria and Somalia earlier this year, local populations began to suffer from hunger. The violence made it impossible for U.S. food aid administrators to ship American foods into their communities.

Under the current system, only about 20 percent of overall food aid may be delivered as cash vouchers or purchased locally, according to the U.S. Agency for International Development. When those funds ran out, USAID had to make a painful choice. Cash aid to Somalia was scaled back to help address the explosion of need in Syria.

“We are having to make choices between those,” said Nancy Lindborg, the assistant administrator for USAID in charge of food aid programs.

Lindborg said the current hard limits on cash aid force USAID to choose between regions where security and logistics make it impossible to deliver food: Syria, Somalia, the Democratic Republic of Congo and the Sahelian region of Africa.

Humanitarian aid groups say that distributing American foods in poor countries can also undercut the market for local agriculture and harm long-term sustainability. Massive deliveries of American crops in the wake of Haiti’s 2010 earthquake undermined local farmers, the Center for Public Integrity reported, and a 2013 study in Malawi found that commoditized food aid was a disincentive for local agriculture.

A third major concern is that the system’s inefficiency leads fewer hungry or disaster-stricken communities to receive aid. A 2007 report by the GAO found that 65 percent of funds allocated to America’s largest food aid program were being spent on shipping and business costs rather than food, and described the practice of allowing humanitarian groups to sell food aid to generate cash as “an inherently inefficient use of resources.”

Dirk Salomons, the director of the Program for Humanitarian Affairs at Columbia University’s School of International and Public Affairs, said that the most important factor in effective food aid delivery is having flexibility to respond to the circumstances. “You should have the freedom to make an assessment and do the best response for the situation,” Salomons said. “That assessment is really what’s at the heart of it.”

Currently, 80 percent of American food aid must be shipped from the United States. The proposed reform would have allowed the U.S.’s largest food aid program, called Food for Peace, to procure up to 45 percent of aid in affected regions, but did not create a minimum requirement.

Supporters of the current system question whether local food purchases would be vulnerable to corruption or logistically unfeasible.

“I’m trying to figure out where the regional food purchasing is available,” said Rep. John Garamendi at a Congressional hearing in April. “Presumably, there’s a shortage of food in that area, so what is the region?”

Reformers say that regional procurement can draw from a wider area than a specific locality, and that hunger is frequently caused not by an absence of food but by the inability of significant segments of the population to access that food.

This debate was partially addressed in a 2009 GAO study, which compared the results of a small local procurement program within USAID with the majority of aid that is shipped from America. It found that local procurement in sub-Saharan Africa cost 34 percent less than in-kind food aid, while aid in Latin America cost roughly the same with each approach.

A shift toward more local procurement has been endorsed by both George W. Bush and Barack Obama, as well as by advocates on both sides of the political spectrum.

“If U.S. taxpayers are going to provide funding for food aid for poor and hungry people around the world, then those taxpayer dollars should be spent in the most efficient way possible,” said Brett Schaefer, a senior research fellow at the Heritage Foundation.

Raj Patel, a food activist and scholar at the University of California, Berkeley who helped organize the 1999 protests in Seattle, said that food purchases are needed more by farmers in the developing world than in America’s grain belt.

“Everyone can agree that one of the worst ways to give food aid is to buy the food in the U.S. and ship it in U.S. carriers and then give it away for free [to aid groups],” Patel said. “But when you get the U.S. farmers and shippers to the table that consensus vanishes.”

The jobs and security debate

The loudest debate about food aid reform in Congress focuses on its impact at home. Opponents of the reform emphasize American jobs and military readiness.

“You can’t look at this thing as if you’re just debating the Food for Peace program,” said Wytkind of the AFL Transportation Trades Department. “The debate has to be more comprehensive.”

A statement by USAMaritime, an industry group that represents shipping companies and unions, states that “over 33,000 Americans’ jobs depend upon the transportation of U.S. food aid alone.”

This figure has been called into question. When congressional supporters of food aid reform asked the Pentagon how many shipping jobs would be lost, it estimated that only 360 to 495 mariners on a total of eight to 11 ships would be affected. Wytkind noted that this figure does not consider the multiplier effects of the initial jobs being lost, nor the broader threat posed to the U.S. shipping industry as a whole.

The other main argument against the changes is that they would reduce military sealift capacity by driving U.S.-flagged commercial ships known as the merchant marine out of business. Advocates say that in Iraq and Afghanistan, 90 percent of shipping supplies were carried by the merchant marine.

“If you start hollowing out the U.S. merchant marine, and you start with eight to 10 ships, its going to call into question whether merchant marine operators have a viable future in the U.S.,” Wytkind said.

This contention is also disputed. Since 1996, the U.S. has had a Maritime Security Program that funds U.S.-flagged commercial ships to remain militarily viable, funded at $186 million in FY 2012. A 2010 study by Christopher Barrett of Cornell University found that 70 percent of ships that benefited from food aid subsidies called agricultural cargo preference were not militarily useful, and the ones that were militarily useful were already subsidized by the Maritime Support Program.

“They basically double dip,” Barrett said of the ships that are qualified for activation by the military. “They’re able to collect the premium you get for hauling cargo under cargo preference and they collect payment under Maritime Security Program.”

The Pentagon’s letter to Congress stated that the reform “will not impact U.S. maritime readiness and national security.”

This debate reopened last week, as the House and Senate began to conference on the farm bill, the original vehicle for the proposed reforms. President Obama has declared the farm bill a top priority and urged Congress to move past the rancor of the government shutdown to approve it, while House Republicans are calling for further reductions in government spending.

Food aid reform advocates are trying to get part of the changes that were rejected in June back into the farm bill or the FY 2014 budget. Their current goal is for USAID to have the option of spending up to 20 percent of the Food for Peace program, in addition to 20 percent of overall food aid that is already in more flexible programs, on cash aid or local purchases. Shipping unions and their allies question why the struggling merchant marines should be a target for reductions, and are gathering their strength to ensure that enough liberal Democrats line up once again to sink the proposal.

“We’re not shy,” Wytkind said. “All these battles are all about the same issue, when you start getting into reform debates like this. They’re about whether we’re going to have a viable US transportation industry that supports good middle-class jobs.”