The Guardian newspaper in England has discovered that
two-thirds of the $1 billion the U.S. spends on food aid goes to Cargill, ADM
and Bunge.
It may be a surprise to The Guardian’s staff and readers,
but not to those who are familiar with food aid and U.S. politics.
In fact, the U.S. is one of the very few holdouts on an
international gentlemen’s agreement on how to handle food aid.
The U.S. flouts that agreement by insisting that all its
grain donations go through unionized grain terminals and are shipped on U.S.
vessels. That greatly increases costs.
The U.S. also insists that its food aid be U.S.-grown crops,
including rice that is heavily subsidized – eg. $4 billion per year in
Louisianna alone.
Other countries, including Canada, buy as much as they can
as close as possible to the area of need. The aim is to encourage local
agriculture to meet local needs.
Other countries shop for transportation bargains.
If the World Trade Organization members could get their act
together and finalize a new deal, it would include an agreement already made to
convert the gentlemen’s agreement into a binding commitment complete with WTO
disciplines for infractions.
But in the meantime, U.S. food aid flows mainly to people
such as large-scale rice growers in the Southern United States, the largest
grain-handling companies, union members and U.S. shipping companies.
