To Address Ukraine’s Humanitarian Needs, Suspend Outdated Food Aid Restrictions

By Christopher B. Barrett and Vincent H. Smith

Congress and the Biden administration are working hard to put a humanitarian aid package together for Ukraine of between $6.9 and $10 billion. Reportedly, close to $3 billion is slated for the State Department, and in particular for humanitarian aid programs managed by the US Agency for International Development (USAID), including emergency food assistance. USAID’s core emergency food aid program, the aptly-named Food for Peace program, is bedeviled, however, by two mandates that date back 1954: a requirement that almost all food aid shipments be sourced in the United States and that US flagged ships served by US crews must carry at least half of such aid.

Two decades of research has found that these two mandates substantially increase the costs of getting the aid to where it is needed by increasing shipping costs for individual cargoes by between 60 and 100 percent.[i] The mandates also significantly slow down aid delivery to folks who need help, by as much as four months.[ii]

The situation for Ukrainians in the war-torn areas of their country and for the more than 600,000 Ukrainian refugees streaming to Poland and other European countries is dire and needs to be addressed as efficiently and immediately as possible. Moreover, Ukraine is typically a major agricultural exporter but the war has shut down port, road and rail infrastructure necessary to export. Furthermore, supply chain bottlenecks at US ports are already fueling domestic inflation. It’s simply common sense to use supplemental Food for Peace appropriations to buy surpluses that Ukraine has in stock to accelerate delivery, reduce costs, and help support Ukrainian farmers and agribusinesses when their livelihoods have been trammeled by the Russian invasion, and not further burden America’s overstretched trade transport infrastructure.

No one but Ukrainians should benefit from Congressional appropriations to help in this time of acute need. To prevent further supply chain problems in the US and war profiteering, and do right by both suffering Ukrainians and American taxpayers, Congress should immediately suspend all food aid sourcing and cargo preference mandates, for now and the foreseeable future.

Christopher B. Barrett is the Stephen B. and Janice G. Ashley Professor of Applied Economics and Management, an international professor of agriculture at the Charles H. Dyson School of Applied Economics and Management, a professor in the Jeb E. Brooks School of Public Policy and the Departments of Economics and Global Development, and a fellow of the Cornell Atkinson Center for Sustainability, all at Cornell University.

Vincent H. Smith is a nonresident senior fellow at the American Enterprise Institute and director of the AEI agricultural studies program. He is professor of economics in the Department of Agricultural Economics and Economics codirector of the Agricultural Marketing Policy Center at Montana State University.

[i] See Philip G. Hoxie, Stephanie Mercier, and Vincent H. Smith. “Food aid cargo preference: Impacts on the efficiency and effectiveness of emergency food aid programs,” Journal of Law and Economics, forthcoming. Hoxie-Mercier-Smith-Food-aid-cargo-preference-WP.pdf (aei.org); Bageant, Elizabeth R., Christopher B. Barrett, and Erin C. Lentz. 2010. “Food Aid and Agricultural Cargo Preference.” Applied Economic Perspectives and Policy, 32(4): 624–641.

[ii] Lentz, Erin C., Simone Passarelli, and Christopher B. Barrett. “The timeliness and cost-effectiveness of the local and regional procurement of food aid.” World Development 49 (2013): 9-18. https://doi.org/10.1016/j.worlddev.2013.01.017; Barrett, Christopher B., and Dan Maxwell. Food Aid After Fifty Years: Recasting Its Role. Routledge, 2007.