2Center or American Progress | Five Steps to Make Our Aid More Eective and Save More Than $2 Billion
End cargo preference for U.S. food aid
Cargo preerence is he poser child or a se o regulaions ha are old, ineecive, and very dicul o ge rid o inside he belway because o radiional pork barrel poliicsand well-conneced lobbyiss.In a nushell, cargo preerence mandaes ha 75 percen o all U.S. ood aid commodi-ies be shipped aboard U.S. agged vessels, or ships regisered in he Unied Saes. Teoriginal legislaion ha creaed cargo preerence was passed in 1936, wih he ood-aidspecic provisions added in 1954.Cargo preerence was originally esablished because he U.S. miliary waned o ensure hacargo ships and crews were available o serve as an adequae naval reserve in imes o war.Bu i has been apparen or decades ha cargo preerence or ood aid no longer servesis original purpose. I also makes i signicanly more dicul o deliver ood assisancein a imely, cos-eecive ashion o people in need. As early as 1994 he Governmen Accouning Oce, or GAO, noed ha he Penagonno longer saw any real purpose in he ships carrying ood aid and heir crews servingas some kind o marine reserve.
Simply pu, here is no miliary purpose whasoeverserved by he curren cargo preerence regulaions.Furher, his same GAO repor noed ha hese regulaions added an esimaed$200 million annually o he cos o delivering ood assisance abroad. A more recenacademic sudy concluded ha cargo preerence cos American axpayers $140 millionin 2006 in unnecessary ransporaion coss.
Cargo preerence rules are really a massive, ongoing subsidy o a well-conneced elieo U.S. shipping companies. Te primary deense o mainaining his cargo preerencepracice comes rom repors prepared by lobbyiss and conracors wih direc ies ohe rms ha reap correlaing benes. Virually every independen analysis has calledor a major overhaul o he program or is complee eliminaion.Eliminaing he pracice would lead o greaer eciency in ood aid programs. Due ocurren pracices only abou one-hird o ederal ood aid spending acually buys ood.Te res goes oward shipping and oher logisical and adminisraive coss.
Te logisi-cal cos o U.S. ood aid shipmens is 60 percen higher han our European counerpars,primarily due o cargo preerence regulaions.
Te curren regulaions are so ineecive ha here have been repeaed insances wherehe U.S. governmen has been unable o buy he bes-priced agriculural commodiiesor he mos appropriae ones or a paricular humaniarian siuaion simply because U.S.agged ships were no available a he por where hese commodiies were locaed.