Food for Peace Program Remains in Forefront of U.S. Maritime Issues

Captain Lee A. Kincaid, President, American Maritime Congress discusses PL-480 in the latest 'On Watch in Washington'

The Food for Peace Program (PL-480) has been in the forefront of Washington, DC maritime issues for the past 6 months and will most likely continue to be a main concern in the near future.

At the end of January, the maritime industry received a tip that the Administration’s proposed FY 2014 budget would completely change the current Food for Peace Program from a U.S. produced commodity program to a cash, voucher, and local and regional procurement (LRP) program. LRP allows the U.S. Agency for International Development (USAID) the ability to purchase grain and commodities from foreign sources that are often in direct competition with U.S. agriculture. The current U.S. Food for Peace Program has been in place since 1954 and supports U.S. agriculture, shipping, and maritime jobs while at the same time providing international assistance to starving masses and sending good will from the American people.

The U.S. maritime industry quickly rallied and responded to this tip by engaging several members of the Senate and House from both political parties. When the budget was finally released in early spring, the Administration’s proposal would scale back the U.S. commodity portion of the program to 55% of the current level. The Transportation Bill (MAP-21) that passed last summer had already rolled back the U.S. cargo preference portion of the program from 75% to 50% so the President’s proposed budget would only allow for 50% of the 55% program cargo for transport on U.S. flag vessels.

Last summer, when MAP-21 was passed, the U.S. flag international fleet was just under 100 ships. As a direct result of the food aid cargo preference reduction under MAP-21, 4 ships left the U.S. flag. Estimates of the impact of the proposed Administration’s change to the food aid program would result in the loss of an additional 8 to 10 U.S. flag vessels and at least 500 mariner jobs. It is important to note that not all these ships would be bulk carriers as 40% of the U.S. food aid cargo is currently being carried by U.S. container vessels.

With the efforts of some good maritime friends in Congress and especially those of Senator Barbara Mikulski of Maryland, who is chair of the Senate Appropriations Committee, the proposed food aid changes in the FY 14 budget were not accepted by the Senate. However, shortly after the Senate acted, Congressman Ed Royce (R-CA), chairman of the House Foreign Relations Committee and Congresswoman Karen Bass (D-CA) introduced HR 1983 (Food Aid Reform Act) which would accomplish the same changes to food aid as requested by the President.

Both sponsoring members most likely realize that as a stand-alone piece of legislation, HR 1983 would never gain enough support for passage so on June 18 during the debate of the House Farm Bill, this same legislative language to change the U.S. food aid program was offered up by Congressman Royce as an amendment. We had prior warning of the Royce amendment and the maritime industry went all out in a unified effort with our labor, agriculture, ports, and facilities allies to prevent passage. At the end of the day, the Royce amendment was defeated 220 to 203 however, 46% of Republicans and 51% of Democrats did vote against us.

Be assured, the continuing struggle to maintain the U.S. Food for Peace Program and the U.S. flag cargo preference portion of the program is far from over. One check of the Oxfam America website concerning the Royce amendment vote indicates that they see the vote as only a small bump in the road. Oxfam America is a non-government organization (NGO) based in Boston that works with USAID throughout the world in the distribution of U.S. foreign assistance. Oxfam has spent and continues to spend thousands on DC based lobbyists in its attempt to remove U.S. cargo preference from U.S. foreign aid assistance.

At the same time, USAID has for years ignored U.S. maritime industry and other government authorities input and advice as to how to make the program more efficient and effective. USAID sees the U.S. flag industry as a direct impediment to their overall program operation and administration. USAID unfairly blames the U.S. maritime industry for high transportation costs and excessive delays in getting relief cargoes to the people in need. However, they fail to mention that USAID maintains five international food aid storage warehouses for quick response. Meanwhile, the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR) just released a report on June 27 that found “poor coordination, waste, and mismanagement” of USAID’s agricultural programs in the region.

Transparency, accountability and reliability are strong arguments for maintaining the U.S. commodity and cargo preference food aid program. American farmer grown crops in bags proudly displaying the U.S. flag and delivered on U.S. flag ships by U.S. mariner crews sends the message that America does care.

Currently, the U.S. food aid portion for cargo preference is approximately 11% with military cargoes making up about 85% and civilian agency cargo (such as Export-Import Bank financed cargoes) coming in at 4%. With the continual draw-down of U.S. war efforts throughout the world, military cargo is steadily decreasing thus putting even more pressure on the other components of cargo preference. Many of these ships and crews are the very same that the Department of Defense depends upon for wartime and emergency sealift capabilities. AMC continues to press forward to make the case and coordinate maritime industry efforts to keep our U.S. food aid program and all other cargo preference programs in place.