Planet Aid grants from the U.S. Department of Agriculture came through a 67-year-old program known as food aid, which annually spreads about $2.5 billion around the world.
This cluster of programs has a quartet of complex goals: Help the needy abroad, boost U.S. commodity prices, expand markets for U.S. food and broaden U.S. influence. But it has been criticized widely for undermining humanitarian goals and leading to wastefulness.
When it comes to Planet Aid, the USDA has allocated more than $133 million. But the charity received less than two-thirds of that amount. Understanding that gap requires a tour through one of the more byzantine relief programs in the world.
Implemented in large part through the USDA’s Foreign Agricultural Service, the program begins with the U.S. government buying tons of commodities from domestic growers. That food is shipped to the country of a targeted humanitarian relief organization. Unless the relief organization feeds people directly, the food is sold by brokers, with the proceeds going to the charity.
The idea back in 1949, when the food aid program started, was to expand markets for U.S. farmers and prop up prices. But modern grain markets are international networks of shippers, brokers and commodities exchanges. Grain purchases – such as the 30,000 tons of hard winter wheat the government bought under a 2006 USDA-Planet Aid grant agreement to benefit Malawi – don’t cause much of a bump in global, or American, crop prices.
Government and private-sector critics long have assailed the program’s inefficiency. Before money becomes available in a country such as Malawi, it is whittled away by expenses including shipping, storage, insurance and grain lost or spoiled in transit. In addition, sales prices can be depressed when small developing countries receive large shipments of grain.
Between 2006 and 2012, for instance, the U.S. spent more than $102 million on commodities granted to Planet Aid. Factoring out shipping, warehousing, sales and other expenses, Planet Aid came away with a little more than $62 million, according to USDA records for projects in Malawi and Mozambique.
The program’s inefficiency, coupled with concerns about bad government oversight of nonprofit subcontractors, long has generated criticism. In 2006, one top recipient of U.S. food aid announced that it would turn down grain worth tens of millions of dollars because the resale programs did more harm than good.
This method of delivering aid can “be harmful to traders and local farmers, and can undermine the development of local markets, which is detrimental to longer-term food security,” according to a policy statement by CARE International.
“That has left a vacuum where agencies that weren’t necessarily as competitive for these grants might have become more so,” said Erin Lentz, assistant professor of public affairs at The University of Texas at Austin, who studies international food aid policies. “When CARE International walks away and leaves money on the table, it’s not like Congress takes the money away. There’s still money fewer organizations are competing for.”
U.S. government watchdog agencies stepped in with their own concerns.
“The current practice of using food aid to generate cash for development projects … is an inherently inefficient use of resources,” according to an April 2007 report from the Government Accountability Office.
Even after the money touches ground in developing countries, there is no guarantee that it will end up where policymakers intended, the report said, because “U.S. agencies do not adequately monitor food aid programs due to limited staff, competing priorities, and restrictions on the use of food aid resources.”
The USDA rejected the criticism. Michael Yost, then-administrator of the Foreign Agricultural Service, responded with a letter saying the report was based on misleading statements and flawed conclusions.
But four years later, the GAO again criticized management in an audit of one USDA food aid program, saying 42 percent of its food aid money was lost to sales, transport and other costs.
More recently, a 2014 audit by the USDA inspector general said the agency repeatedly promised to reform its flawed monitoring of nonprofit partners, yet “significant program management control weaknesses” persisted.
The administrations of Presidents George W. Bush and Barack Obama have sought to replace these programs with direct cash aid, echoing recommendations by CARE International and other top nongovernmental organizations such as Catholic Relief Services. But lobbyists have pushed back, according to a 2015 report by the Congressional Research Service.
Nonprofits that depend on food aid have formed a trade association called the Alliance for Global Food Security, which released a 2012 report saying, “Monetization can lead to benefits beyond those that would be created via direct program funding by addressing credit, hard currency, small volume, and other constraints to buying on the international market, thereby creating business opportunities and increasing the availability of the commodity in the recipient country.”
The alliance spends $20,000 a year on lobbying fees, according to publicly available records. Its website lists 10 member organizations, including Planet Aid.