Obama administration to U.S. merchant marine: Drop dead.
That’s the clear message from a reported plan to replace U.S. food aid and its U.S.-flag shipping requirements with a new program of cash payments for purchasing food overseas.
This plan, which anti-hunger activists lobbied to include in the administration’s budget bill, would effectively sink much of what’s left of the U.S.-flag international fleet.
The fleet’s core is 60 ships that receive annual subsidies of $3.1 million each under the Maritime Security Program. The MSP was created in 1997 to support U.S.-flag ships and crews that operate commercially but are available for military emergencies. These ships don’t operate in the U.S. domestic trades covered by the Jones Act.
MSP has been authorized through 2025, but the program isn’t without controversy. Most operators are U.S.-citizen units of overseas companies. Liberty Maritime, which has one ship in the MSP, has sued the Maritime Administration, claiming Marad gave subsidies to ineligible foreign-owned companies.
Subsidies are a nice bonus, but the real reason most carriers fly the Stars and Stripes is that it qualifies them to carry food aid and military shipments under cargo preference laws. U.S.-flag operation is more expensive, but cargo preference and MSP subsidies support U.S. jobs at far less cost than building and operating a fleet of naval cargo vessels.
U.S.-flag carriers took a hit in last year’s surface transportation reauthorization bill. An 11th-hour amendment slashed the U.S.-flag requirement for food aid shipments from 75 percent to 50 percent.
Now the administration’s budget bill proposes even more radical changes. Instead of using U.S.-flag ships to export American-grown products, the U.S. would provide nongovernmental organizations with money to purchase food in or near recipient countries.
Congressional opposition has surfaced. Twenty-two senators signed a letter opposing the plan to substitute cash for food. Agriculture and U.S.-flag maritime interests have mobilized against the change, but the issue isn’t going away.
Proponents of change insist sending cash would deliver aid more effectively. Oxfam America, an anti-hunger activist group, claims on its Web site that permitting local and regional purchases and eliminating U.S.-flag requirements “will save time, millions of lives and millions of tax dollars — while reducing dependence on aid over the long term.”
That’s hard to believe.
Buying locally sounds good, but cash-for-food’s benefits to needy nations are questionable. If these countries could feed themselves, why would they need U.S. aid? Could local sources produce as efficiently as highly mechanized U.S. farms? Would corrupt officials in recipient countries find cash easier to misappropriate or steal? Answers: No, no, and yes.
Nongovernmental organizations would benefit. They’d enjoy a bonanza of new funding while effectively taking over food aid, some of which would support producers in countries that compete with American farmers.
Losers would be U.S. agriculture, the U.S.-flag maritime industry, and American taxpayers.