Eric White: So let’s just get started with the landscape. Eighty-five percent of the programs, like you heard in my introduction there, a good bit of that was in the food aid distribution area. What is the food distribution look like now from an international, governmental effort standpoint?
Vincent Smith: Looking at purely at the United States and what the current administration is doing, the picture looked extremely bleak in April and May of this year and remains an extremely difficult-to-assess situation. The demise of USAID in what we can only describe as a very unfortunate approach to trying to deal with government programs that did not carefully account for the consequences for very important programs that have not only humanitarian aid issues but also national defense concerns was frankly shocking. It’s easy to be very rude about Elon Musk, but when you put someone in charge of trying to deal with government shrinkage, who has no concept of how programs work. No matter how bright and gifted they are, this is what happens. Poor choices are made, thoughtless choices are made. And international aid, both food aid and health aid, have been devastated over the past nine months because of, largely, really poorly considered actions in the first 60 to 80 days of the Trump administration. A major concern for the deliverers of food aid is whether or not the capacity of the in-country places that are needed to deliver aid to where it is needed, say in Ethiopia or Malawi or Mozambique, or you pick your country. It was not clear that those important human-based resources to manage aid in country would remain in place. It appears, at least for now, that some capacity to deliver aid has been sustained within the embassy framework to handle aid that is being delivered.
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But as I looked at the data and how much of the fiscal year 2025 budget had been spent by two days before the end of that fiscal year, really, astonishingly little of it had been spent. However, conversations with folks who are aware of whether or not U.S. government agencies, but agencies such as the food program and non-government organizations involved in delivering aid are able to meet commitments that have been made prior to January the 20th of this year, indicate that those commitments are being sustained. An issue is what new commitments have been made in the last nine months. And when we look at information coming out of the Department of State, which is now the organizing department for aid through a new office that has been created, we could only identify two new initiatives that had been announced. One was sending quite a lot of emergency food aid to a wide range of countries, nine or 10 different countries, targeted to helping feed children. And there was another initiative to, but those initiatives involve relatively small amounts of dollars and we saw no evidence of new aid beyond those two programs that were both initiated in August. Now an interesting question is what about fiscal 2026? And of course, nobody has a budget for 2026. But if I read the government accounts correctly, that looks like there’s a substantial amount of unspent money from fiscal 2025 that can be rolled over or could potentially be rolled over into 2026. And again, these conversations I’ve had with people aware of what is going on with the NGOs and the World Food Program in terms of delivering aid indicate that aid is going to continue to be delivered. How much aid is? I have no knowledge of. It is clear that it looks as though the House Appropriations Committee has set aside, wants to set aside.
This is a better way, not has, because nobody has done anything recently, but it has set aside around about $900 million for international emergency food aid. That’s about a billion short of what would have been appropriated in most prior years of the last two decades. But what is not clear is how much will there be available. According to some estimates, about $700 billion is available that has not been spent in this past fiscal year. So if you add the $900 million to the $700 million, that comes out at, even I can do that math, grumpy, though I may be, that’s about $1.6 billion, which is not far off what is normally appropriated. But that’s purely speculative. And if a major problem looking forward over the next three years is that the House Appropriations Committee’s $900 billion becomes the new base for funding in the budget, then that’s a really dramatic cut from the previous four or five years in terms of funding. And carryover funds don’t last forever. They they just don’t.
Eric White: If presidential impoundment is an issue in several areas where the money is allocated by Congress and the executive branch just doesn’t end up spending it. But this program is different. This isn’t some sort of initiative that the Trump campaign necessarily campaigned on was, ‘We’re going to cut food aid.’ I mean, this has bipartisan support across the board, even when you poll Americans. Are inefficiencies playing part of the blame here for why that money is just kind of sitting there still and not really doing anything?
Vincent Smith: Inefficiencies, in a recent article I wrote, I described the system as fractured by the DOGE operations and firing all of the staff without careful assessment of what really are mission-critical operations. I have the sense from the information sets that I’ve been given that the State Department is worried about that the bipartisan criticism is getting both in public and behind closed doors about not running this program effectively, not getting money out the door to places where there are genuine needs. We’re not talking about money that are spent frivolously here. So the real question is, is there an infrastructure? And does the State Department have enough clout within the cabinet to enable these emergency food aid programs to move forward.
Now what is really interesting is that in the last three weeks, we have seen a really important New York Times story by (Nicholas) Kristof talking about the damage that has been done to children and their mothers and so on in Ugandan refugee camps. We’ve seen another article, and I think it was the AP, about Myanmar hunger and devastation. And we’ve had Bill Gates announcing that his foundation experts have estimated that the number of children’s death, the child mortality rate, for the first time in maybe 20 years is going to increase this year. That’s not just because of the United States cutting back, but it’s in part an important part because the United States has cut back on international aid. There are other countries that have also not stepped up to the plate, if you like, this year in the way that perhaps they would have done two or three years ago. So these are really important issues. We’re talking about, in the humanitarian context, children dying, children who would have otherwise been saved.
Eric White: We’re speaking with Vincent Smith. He’s the director of agricultural policy studies at the American Enterprise Institute. Now you had mentioned that yeah, there were some issues with efficiency in the World Food Programs before all of this took place. And what were some of the areas that actually needed some improvement?
Vincent Smith: Historically, the International Food Aid Program has been hit by inefficiencies in the following sense. There are two groups, the Mercantile Shipping Lobby in particular, who have really pushed Congress to keep in place two mandates. But other countries do not use because they know they are so wasteful in terms of money. And this is not a Trump administration issue per se. It’s a congressional issue that spans back to 1954. The two mandates are to have sourcing of almost all food aid in the United States. And the other mandate is that at least a fairly substantial part of it be carried on U.S. ships. Now the research that we have done, that’s been published in leading economics journals, shows that freight rates charged by those few ships eligible to carry U.S. food aid under this cargo preference, as it’s called mandate, charged between 60 and 100% more for the same journey to get aid where it’s needed than if we had competitive bidding for those shipments. But in addition, many times, the money would be more efficiently used in terms of meeting needs if the agency managing that money were free to source the food from the best location. What do I mean by best location? The locations from which you can get the food at least total cost and get the food to the children and families that need it most efficiently.
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Chris Barrett at Cornell and some other researchers have estimated that this U.S. sourcing mandate delays the delivery of food by as much as four or five months to the places it is needed compared to if we did what almost every other aid-giving country does, which is to allow the most efficient, least cost way, most speedy ways of sourcing the food that is needed. That doesn’t mean say you wouldn’t source food in the United States. We have plenty of emergency food aid needs in the Caribbean. All you have to do is think about the Dominican Republic and Haiti in particular. And there are plenty of times when the U.S. is where you want to source the food because it’s the most efficient, quickest place to go. But putting these constraints has been estimated to waste, especially in the last 30 years, as much as 30% of Congress’ authorized funding for the program. Well, that translates into 2 to 4 to even 6 million folks that we’re not helping. Now, why do we care about this? Well, one, if you’re a decent human being, you do care about helping people in need that none of us in the United States really can even conceive of, unless we’re being white slave or something like that. I mean, you just can’t conceive of it. Two dollars a day to live is very difficult, but there’s also a self-interested purpose.
Almost all of military leadership, if you have them, most of them in public, perhaps not right now with the current challenges that any admiral or general or Air Force commander faces under the current secretary of, I think of it as the defense, I’m sorry, food aid and aid in terms of health, ways in which America has created wonderful goodwill in otherwise very difficult countries that face internal conflicts and so on. And so you have the situation where most leaders in the military, in public, under previous administrations and certainly in private now behind closed doors, would say the military implications, the national defense implications are very significant. Food aid reduces the risk of boots on the ground. And that’s been a consistent story, and it’s a real story. So if we’re spending $2 billion a year and generating goodwill throughout Sub-Saharan Africa and across the globe. That’s a big deal in terms of foreign policy and the reduction in the risk of conflict.
Eric White: Going forward in those conversations with the people that are now in charge of this massive undertaking, I characterized them as growing pains in my introduction. Is that what they feel? Do they feel as if things are moving in the right direction and they’re kind of learning on the go? Yeah, it’s not ideal and more needs to be done or is there just going to have to be some political will behind this to actually make this as efficient and as standing as it probably should be if we want to, I guess, what feel good about ourselves?
Vincent Smith: Well, I believe, now, I don’t interview senators and congressmen on a daily basis or very rarely do I have face-to-face interactions with those decision makers and that’s great. If they’re spending time talking to me, they’ve got to find better things to do with their time. But it’s clear that the Senate Foreign Relations Committee and the House Foreign Affairs Committee, Many of the members of those committees are deeply concerned about sustaining and, if anything, significantly expanding and when I say significantly expanding, we’re not talking about a measurable share of the federal budget but sustaining and expanding both emergency food aid and emergency health aid because they recognize the contributions that those actions make both in a humanitarian way and given their concerns about foreign policy and national security and foreign relations sustaining that world.
Within those committees, there’s a strong political will to continue, sustain the program, and many of the members over the years have indicated they would like to see it be more efficiently run, that is not having these mandates for sourcing and cargo preference. That’s not true of everybody. The cargo preference lobby claims that it creates hundreds and thousands of jobs in the mercantile sector and loss of that would be damaging. That’s probably not correct. They also claim that it’s helping the U.S. shipping industry. There’s no evidence of that at all. Those claims are really, I think, a front for a few shipping companies. So there lots of interesting twists to this story. This is a case of very small benefits being desperately sought by, particularly, the maritime lobby. But it’s also the case that there are some members of the House Agriculture Committee, in particular, but also the Senate Committee, who think that sourcing for food aid in the United States benefits directly their constituents, wheat farmers in Kansas, for example. But if benefit means raising the price of wheat or corn in Kansas or Iowa, that really is not the case. In 1954, 30% of all U.S. exports were international food aid. That’s 1954. That is 70 years ago.
Today, less than 1% of the U.S. corn crop and the U.S. wheat crop are shipped internationally. And that represents very little in the way of any impact on the price of wheat or the price of corn. Just as an aside, what matters for the price in Iowa or the price of wheat in Kansas is not domestic production and domestic demand, particularly for wheat. It’s certainly not domestic production. These are globally traded commodities. The U.S. right now produces less than 7% of total world wheat production. It’s a small fraction in a large market, changing the availability of the commercial wheat supply from the U.S. to the international market by diverting a very small amount into international food aid has zero effect on the price of wheat at the local country elevator. The same holds true for corn and most other commodities.
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