The U.S.-flag maritime industry fears foreign food aid in the form of grain shipments could be reduced or scrapped entirely through the looming federal sequestration.
There is talk that the nearly $1.5 billion worth of annual emergency food aid could be reduced if $85 billion in federal spending cuts take effect Friday, said James Caponiti executive director of the American Maritime Congress. If Congress fails to blunt or push back the sequestration, the U.S.-flag industry would be dealt a second blown from the federal government in less than a year.
Through the passage of the surface transportation bill, known as MAP-21, the share of aid cargoes guaranteed to U.S.-flag carriers was cut from 75 percent to 50 percent. The provision aimed at reducing annual U.S. shipping costs by $15 million is expected to ultimately cost the industry 500,000 tons a year, the need for 16 vessels and 650 seafarer jobs, according to the Maritime Administration.
Caponiti said there is growing pressure to give recipient countries monetary aid directly, but such a move hurts U.S farmers and seafarers. He also argues that giving a lump sum of cash to recipients also increases the chances of fraud.
A group of 21 U.S. senators urged President Obama in a letter last week to maintain funding for the Department of Agriculture’s Food for Peace program in his fiscal 2014 budget. The Obama administration budgeted about $1.4 billion worth of food shipments through the program for fiscal 2013, a $97,000 reduction from what was spent in fiscal 2011. Foreign food aid shipped via U.S.-flag carriers comes though other programs, but the Food for Peace program is the largest by far.
“American agriculture is one of the few U.S business sectors to produce a trade surplus, exporting $108 billion in farm goods in 2010. During this time of economic distress, we should maintain support for the areas of our economy that are growing,” the senators wrote in a Feb. 20 letter.
Although Reps. Elijah Cummings, D-Md., and Jeff Landry, R-La., introduced legislation that would restore the share of food aid lost through MAP-21 to U.S.-flag carriers, the legislation didn’t progress to a House floor vote, Caponiti said. He said Cummings plans to introduce similar legislation this year.