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They profit while the hungry die; U.S. agribusinesses and shippers reap a windfall from America's emergency food-aid policy. And Congress won't stop it.
Los Angeles Times - Los Angeles, Calif.
Subjects: Bureaucracy; Shipping industry; Nongovernmental organizations; NGOs; Hunger; Disaster relief; Agribusiness
Author: Christopher B. Barrett and Daniel G. Maxwell
Date: Oct 27, 2005
Start Page: B.13
Section: California Metro; Part B; Editorial Pages Desk
Abstract (Document Summary)

Congress nonetheless blocked the overdue reform. Why? The Iron Triangle -- the nickname given the coalition of big agribusinesses, shipping companies and nongovernmental development and relief organizations, or NGOs, that lobbies for food aid. Big agribusinesses and shippers earn above-market profits from selling food aid and transoceanic shipping services to the government. They don't want to sacrifice those windfalls, not even to save lives.

As reported by the New York Times, the food delivered by NGOs and the U.N.'s World Food Program last year cost only 40% of the U.S. food-aid budget. The rest was pocketed by suppliers. The NGOs provide big agribusinesses and shippers with political cover, putting an appealing humanitarian face on private profits, because they fear the bad deal they get -- less than half the resources intended for the disaster-affected populations they serve -- is the best they can muster in the current political environment.

THE IRON TRIANGLE prevails by hiding behind myths. One of the biggest is that food aid helps American farmers by supporting farm prices. Yet there is precious little evidence of this, with the possible exception of a couple of niche products such as lentils and raisins. The $654 million spent on food-aid commodities last year is a drop in the ocean of the nearly $1-trillion U.S. food economy. This food aid is a smaller share of the food economy than a family of seven's grocery bill is of food sales in a town of 10,000 people. Farmers don't benefit; only a few big agribusinesses and shippers do.

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