Here is an LA Times editorial that eloquently and entertainingly explains why a major poverty-relief org would turn down major federal food aid. It comes down to subsidies again...
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No thanks, and keep your farm aid
Taking a stand against U.S. subsidies that help cripple Third World economies.
August 24, 2007
If a charity stops taking your money, you've got to be doing something pretty shady. Historically, you could invent dynamite, beat up striking workers, build defective Xboxes, write a column about hating dogs -- and your check would still get cashed. So when CARE, the giant poverty-relief organization, stops taking $45 million a year in indirect food aid from the U.S. government, it is a strong indicator of some impressive sleaziness going down in D.C.
One of the smartest ways to get away with sleaze is to involve farmers. Now, I like farmers, mostly because they make food, of which I am a huge fan. But they're not, as is often claimed, a cornerstone of democracy, national security or morality. They're the remnants of a job field that, because of technology, has been shrinking since its inception. Farmers are just a half-step up from fire starters and cave painters.
But the U.S. government uses our irrational, Mellencampian love of farmers to kick back taxpayer money to the giant agribusinesses, such as Archer Daniels Midland Co., that fund political campaigns. So the $45 million CARE got isn't sent to poor people in the form of something useful, like cash. Instead, it'sused to fund a complicated scheme that only a huge bureaucracy or a really dumb money launderer would concoct.
The $45 million is used to buy food from American agribusinesses, which is then given to CARE and sent to impoverished nations by way of U.S. shipping companies. This food is not delivered to poor people. Instead, it is sold on the open local market for the highest price possible.
The resulting revenue -- which is about 75% of the original aid money -- is used to fund programs for the poor and hungry. I would not be surprised if at some point the food also has to be driven back and forth across that bridge-to-nowhere in Alaska.
But that waste isn't the main reason CARE made its difficult decision, which could allow more human suffering in the near term. Neither is the fact that shipping Nebraskan corn and reselling it in Micronesia, which typically takes five months, isn't the fastest way to help people whose village has been swept away by a tsunami.
The real problem is that we're going commie all over the Third World, and it's having Soviet-style results. Every U.S.-subsidized bag of soybeans we sell to a vegetable oil company in Kenya means less demand for oil-producing crops from a local sunflower farmer. And even if that soy money builds a cool medical clinic, it's going to be a little less cool to the unemployed sunflower farmer.
This scenario is a microcosm of how U.S. corn, soy, cotton, rice and sugar subsidies drive Third World workers out of one of the few businesses available to them. Farm-subsidy rules are to capitalism what Abu Ghraib is to democracy -- only in addition to infuriating foreigners, subsidy rules also bore them.
So CARE is betting that its decision will push Congress to rethink its "buy American" aid policies. "I think people are becoming more sophisticated and understand that if we don't make economies more self-sufficient, we're just perpetuating these cycles of poverty," said Helene Gayle, CARE president and chief executive. "They're starting to understand that this doesn't help in the long run."
She may be right. CARE actually started rejecting indirect food aid more than a year ago, but it was only reported on now that the increasingly controversial farm bill is before Congress.
While Europe, Canada and the U.N. have gotten out of monetizing food aid, the U.S. has amped its program: In 1990, less than 4% of food aid shipments were put through the laundering scheme -- now almost 20% is, which has reduced the actual dollar amount of aid poor people get by 43% over the last five years. Dumping even a small amount of underpriced food can really mess up a small local market, says Cornell University economist Christopher Barrett. "A Kenyan trader told me, 'I don't mind that these guys are competing with me in the market. I just mind that they compete so stupidly. They make the markets so volatile.' " Asking aid workers to run global commodity markets makes about as much sense as letting them talk about what they do at a party.
So until the Democratic Congress gets some guts and, at the very least, approves President Bush's plan to require that 25% or more of food aid be bought locally, I'm giving money to CARE, starting with my pre-tax earnings from this column. If the government isn't willing to save Africa, I'm betting journalism money will.
jstein@latimescolumnists.com
