Nancy Lindborg is the Assistant Administrator for the Bureau for Democracy, Conflict and Humanitarian Assistance. 

I just came back from hearing Administrator Shah’s speech at  Center for Strategic and International Studies (CSIS), where he outlined the bold vision for Food Aid Reform that was included in President Obama’s 2014 Budget Proposal. I sat  next to the Director of USAID’s Office of Food for Peace, Dina Esposito. We were both seized by the historic opportunity this proposal presents to upgrade, streamline, and recommit to our global food assistance programs—a goal that that has dangled before many of us for the last decade.

As noted by Senator Lugar, who opened today’s event, the current food aid system was created at a time of significant food surplus; at a time when shipping food around the globe made sense as a means of manifesting American generosity. But that was 60 years ago. Since then, surplus has turned to shortages, and the costs of shipping have risen exponentially. The time has come to shift our practices so we can reach four million additional children in need of food and eliminate the inefficient workaround of monetization that is currently used to convert our agricultural commodities into cash for development programs.

In President Barack Obama’s Budget, the food aid reform proposal envisions a more efficient, effective, and timely program that will reach 4 million more hungry people each year. Photo Credit: USAID

Having spent many years as part of the NGO community, I am keenly aware of the challenges presented by the monetization of Food for Peace commodities and am particularly energized by the potential to eliminate this practice.

Currently, it works like this: USAID purchases and ships Title II in-kind food aid commodities to our NGO partners overseas, who then sell them in local markets to earn the cash needed to support some of our most important development and resilience programs. Unfortunately, as Government Accountability Office studies have shown, this process on average results in a loss of 25 cents to the dollar. Moreover, it requires NGO partners to spend precious time and energy on navigating local commodity markets and negotiating sales, often in very tough environments like the DRC or Mozambique. Too often, market uncertainty leads to diminished returns, requiring additional resources to meet program goals.

The new budget reform will create a dedicated Community Development and Resilience Fund (PDF) within our Development Assistance account that will provide cash directly to our PVO/NGO partners, so they can focus instead on doing the multi-year, multi-sector development programs that are so critical to reaching and helping the most vulnerable.

In the last two years I have had a chance to visit a number of these programs, implemented by partners such as CRS, World Vision, ADRA, and Mercy Corps. In fact I visited one of these programs by CRS two years after the funding ended. In an affirming validation of the power of Food for Peace programs to transform lives, I saw firsthand how it enabled Safieta, a widow in Burkina Faso with seven children, to thrive during yet another tough dry season in the Sahel.

Above all, the Food Aid Reform proposal (PDF) is a re-commitment to USAID food assistance with greater efficiency and effectiveness. In addition to eliminating monetization, the proposal also moves Title II emergency food aid funds into the United States’ International Disaster Assistance cash account. While this change still includes an initial 55% floor for purchasing U.S. commodities, it also gives us the flexibility we need to use the right tools for the emergency at hand, whether cash, vouchers, or critically needed American food.

For full details on the U.S. government’s food aid reform, visit http://www.usaid.gov/foodaidreform.