U.S. Food Aid Reform through Alternative Dispute Resolution

Author:Delilah J. Griswold
Position:Masters in Environmental Law & Policy Candidate 2013, Vermont Law School
Pages:47-57
 
CONTENT
46 SUSTAINABLE DEVELOPMENT LAW & POLICY
ARTICLE XX: PROTECTOR OF PUBLIC HEALTH,
THE ENVIRONMENT, AND THE NEW PROVISIONS OF
EUROPEAN UNIONS FUEL QUALITY DIRECTIVE
By Joy Marie Virga*
After some controversy in the 1990s, the World Trade
Organization (“WTO”)1 adopted a provision in the Gen-
eral Agreement on Tariffs and Trade (“GATT”) that cre-
ated exceptions to the GATT’s free trade rules.2 These exceptions,
codified at Article XX, allow nations to impose trade restrictions
relating to, inter alia, the conservation of the environment, the pro-
motion of human health, and the protection of national treasures.3
Since then, various countries have adopted regulations aimed at
protecting the environment with challenges to those regulations
moving through the WTO Dispute Settlement Body (“DSB”).4
Recently, controversy has erupted following the European
Union’s (“EU”) announcement of new implementing provi-
sions in the EU Fuel Quality Directive (“FQD”).5 The Canadian
Government6 and U.S. oil producers have expressed their strong
objections to the provisions.7 Their concern specifically regards a
provision that may be adopted in the near future8 requiring EU
member states to reduce life cycle greenhouse gas (“GHG”) emis-
sions of fuels used in “road-vehicles and non-road machinery”
by 6% by 2020.9 The provision assigns a default value to various
sources of crude oil, including crude oil derived from tar sands.10
In May 2013, Karen Harbert of the U.S. Chamber of Commerce,
alongside U.S. oil executives, wrote a letter to the Directorate-
General for Climate Action of the European Commission express-
ing their discontent with the FQD.11 In this letter, the oil executives
state that if the provisions are adopted, they will request that the
U.S. government seek resolution of the matter at the WTO.12 They
believe the new provisions are a clear violation of core WTO prin-
ciples of free and open trade and equal treatment among nations.13
However, Article XX of the GATT likely protects the new
provision. If the EU formally adopts the provision and Canada and
the United States seek to challenge it at the WTO, Canada and the
United States must show that tar sands oil is a “like product”14
and that it is being treated “less favorably” than other “like prod-
ucts.”15 Moreover, if the United States and Canada can prove tar
sands oil is a “like product” (to other crude oil feedstocks) being
treated “less favorably” (than those feedstocks), they still have to
prove that the Article XX exception does not apply. Previous DSB
decisions, along with the language of Article XX, suggest that any
resolution on this matter will likely uphold the EU’s adoption of
the FQD implementing provisions.
Article XX allows for trade restrictions “relating to the conser-
vation of exhaustible natural resources if such measures are made
effective in conjunction with restrictions on domestic production
or consumption.”16 In 2009, the Environmental Protection Agency
found that GHG emissions present a risk to public health.17 This
finding lends support to the view that the EU provision easily falls
into this exception. The provision is essentially a regulation to
prevent an increase in GHG emissions. It safeguards clean air and
a climate fit for human habitation, both of which are “exhaustible
natural resources.”18 Further, a reduction in GHG emissions will
promote human health and environmental conservation.19
The DSB has already ruled that clean air constitutes an
exhaustible natural resource.20 In 1996, Brazil and Venezuela filed
a complaint against the United States for imposing air quality stan-
dards on gasoline imports.21 The purpose of these standards was to
achieve cleaner air.22 The DSB ruled that because these standards
were intended to preserve clean air, they could be “appropriately
regarded as ‘primarily aimed at’ the conservation of natural
resources for the purposes of Article XX(g).”23 However, under
the U.S. fuel quality standards as promulgated, stricter standards
were placed on foreign producers compared to domestic produc-
ers.24 The DSB concluded that the United States had the power
to impose standards to achieve environmental objectives, but that
such standards must be consistently applied to both domestic and
foreign producers.25
Additionally, the new provisions must not violate the “cha-
peau” of Article XX.26 When determining if a trade regulation vio-
lates the chapeau, the DSB considers whether the regulation would
arbitrarily treat WTO member nations differently27 and if there
was a good-faith effort to negotiate an international agreement.28
The DSB will likely find that the provisions do not violate the cha-
peau, as the provision does not create an “arbitrary discrimination”
based on national origin. 29 Moreover, the EU actively engaged
with WTO member nations to mitigate disputes for several years.30
If enacted, the DSB will likely uphold the EU’s new FQD
implementing provisions. The purpose of the provision is “to
achieve levels of air quality that do not give rise to significant neg-
ative impacts on, or risks to, human health and the environment.31
These objectives fall directly under the exceptions of Article XX32
and by reducing GHGs, the EU will be able to achieve these objec-
tives. Nations have the right to protect the environment and the
health of their people. This right is protected under the GATT’s
Article XX exceptions. Thus, the WTO has no power, nor will it
likely attempt, to overturn the potential new implementing provi-
sion of the EU FQD.
* J.D. Candidate 2016, American University Washington College of Law
continued on page 75
47WINTER 2014
U.S. FOOD AID REFORM THROUGH ALTERNATIVE
DISPUTE RESOLUTION
By Delilah J. Griswold*
I. INTRODUCTION
“Don’t worry about what I feed my family. You just
give me some money and I will take care of it. You
don’t have to assume that I don’t know what to feed
my family. The problem is that I happen to be poor
and if you can’t do anything about that then get out
of here. Don’t waste my time.~ Female Farmer,
Bangladesh, 1980s1
The opening sentence of Amartya Sen’s Poverty and Fam-
ines states succinctly, “[s]tarvation is the characteristic
of some people not having enough food to eat. It is not
the characteristic of there being not enough food to eat.”2 The
idea and the details of its substantiation caused a paradigm shift
in academic and political discourse concerning famine and hun-
ger.3 Those concerned with the plagues of malnutrition and star-
vation began to conceptualize their causes in intricate relation to
economics and markets as opposed to considering them solely in
relation to the supply of food.4
In addition to positing the notion of entitlements and access
as the foundation of food security, Sen also highlighted the sig-
nificant role government plays in stabilizing and ensuring the
necessary entitlements and access, thus quelling the potential
or severity of hunger and famine.5 Consequently, hunger is no
longer perceived solely as an inevitable consequence of natural
systems, but instead as a malevolent event, largely preventable
and ameliorable through appropriate governmental interven-
tion.6 Although impacted by controllable policy, Sen was quick
to add that the cause of malnourishment is complex and very
often a result of sudden, uncontrollable natural events or pro-
longed developments which gradually erode food security.7 The
theory thus followed that flexible and locally-aware food aid and
famine-prevention efforts, which are unrestricted by rigid con-
trols, provide the best potential for effective relief.
Despite Sen’s foundational theories and the expanse of
academic acumen that his insights spurred, both malnourish-
ment and hunger persist while a bulk of food aid policy remains
unchanged and outdated. Based on modest calculations,8 recent
estimates find that there are 36 million annual hunger-related
deaths.9 Moreover, the recent trend is one of disquieting growth:
Reports from the United Nations (“UN”) state that between 1992
and 2007, the number of undernourished people in the world
increased by 80 million.10 Furthermore, the global food-price
spike in 2007 meant that, by 2008, another 40 million individu-
als had inadequate access to food, bringing the total number of
those undernourished to 936 million–1 in every 6 people.11
The persistence of outdated food aid policy, despite an
improved understanding of causal mechanisms and prevention
tactics for reducing both hunger and famine, highlights a main
thesis of this article:12 Policy is rarely empirical and frequently
imperfect, and although academic expertise offers significant
insight, it is not always easily converted into appropriate law
and policy. As the largest single source of international food aid,
lamentably with some of the most outdated food aid policies,
the structure and controversy surrounding U.S. food assistance
serve as important case studies to this argument. The failure to
improve U.S. food aid helps to illustrate how and why public
policy often lags behind academic and empirical understanding
on key issues. The legislative process, which dictates the for-
mation of U.S. policy, is often over-burdened with competing
interests and divergent stakeholders that aggravate both strategic
and institutional barriers to the cooperation and negotiation nec-
essary for effective decision-making.13
In the case of U.S. food aid, conflicting stakeholder interests
have been a key impediment to reform.14 Furthermore, efforts
for reform have largely ignored the importance and power of the
key oppositional groups, failing entirely to include them in con-
versations about how food aid policy might be improved.15 The
lack of facilitated and inclusive negotiation preceding reform
attempts has continually worked against change, in part by
assuring fervent opposition from the powerful excluded parties
and further minimizing the limited voice of those most impacted
by the controversial policies.
To this end, this article proposes that improving legislative
negotiations through two specific alternative dispute resolution
(“ADR”) tactics—private, multiparty negotiation and mediation
by a politician—could have improved the success of various food
aid reform efforts in the past by working to balance stakeholder
power and quell detrimental opposition tactics. The field of ADR
has tremendous potential to aid the legislative process in both
the specific area of food aid reform as well as more generally by
improving cooperative action toward the beneficial resolution of
disputes. Negotiations between diverse stakeholders with diver-
gent interests are often contentious, yet are also the foundation of
developing current policy and legislation. Consequently, a focus
on improving the level of cooperative action within negotiations
is invaluable to forging effective governance through appropriate
policy.
* Masters in Environmental Law & Policy Candidate 2013, Vermont Law School.
Ms. Griswold earned a B.A. magna cum laude in Anthropology from Wheaton
College. She wishes to thank Professor Laurie Beyranevand for her invaluable
insight and guidance in the production of this article.
48 SUSTAINABLE DEVELOPMENT LAW & POLICY
To contextualize the contemporary controversy over U.S.
food aid reform, Part II of this article begins with a brief his-
tory and description of the practical and political elements of
international food aid policy, thus elucidating the roots of the
current controversy. This Part finishes by analyzing the specific
institutional components of U.S. food aid, providing an overview
of the Food for Peace Act (“P.L. 480”),16 the specific legislation
to be reformed, and the associated statutes impacting the imple-
mentation of the Act. Part III introduces the key stakeholders in
the food aid reform debate, highlighting their interests, goals,
and influence in the contemporary food aid controversy. Part IV
introduces the concept of ADR and the theoretical underpinnings
that make it a valuable tool for improving the potential outcome
for food aid reform efforts. Through an implementation of ADR
theory, Part IV examines the recent attempts to achieve food aid
reform, highlighting the key tactical failings and concluding that
the usage of multi-stakeholder negotiations mediated by a key
facilitative mediator could have improved the likely success of
food aid reform.
II. INTERNATIONAL FOOD AID IN PRACTICE AND
POLITICS: FROM THE ROOTS OF THE PRESENT
CONTROVERSY TO THE STRUCTURE
OF CONTEMPORARY AID
For the past six decades, the United States has played a
principal role in international food aid, spending roughly $2 bil-
lion annually since the mid-1950s,17 and contributing 55% of
all global donations since 2000.18 Despite its unquestionably
large scale, U.S. food aid policy has been both historically and
contemporarily questioned for its efficiency and appropriate-
ness.19 From the 1950s to the 1970s, critics lamented U.S. food
aid policy “as a classic example of donor self-interest.20 They
protested that food aid programs were structured primarily to
benefit domestic agricultural and foreign policy interests of the
donor state.21 Specifically, aid programs served U.S. and other
donor countries’22 economic interests by creating outlets for
surplus agricultural commodities, and as leverage to influence
political and economic policies of recipient states—an important
diplomatic strategy for gaining political power during the Cold
War. 23
Removed from the primary aim of serving those in need,
donor-centric food aid strategies often had unfortunate con-
sequences,24 which spurred rising criticism in the 1970s and
1980s.25 This criticism prompted an effort by the United States
and other donor states to amend aspects of the donor-oriented
policies in international food aid, and by the 1980s and 1990s
public opinion saw these efforts as a success.26 As a result,
global public and political interest in evaluating international
food aid policy waned.27
Key academic publications in the early part of the twenty-
first century, coupled with the 2007-2008 global food crisis,
reawakened both public and political interest in the contempo-
rary policies of food aid, specifically focusing attention on U.S.
policies.28 Although the intensity of twenty-first century food
aid discussions matched previous levels, the context and content
of the controversy was markedly changed, as aid had become
increasingly linked to a mix of international and domestic
institutions with various agendas. The expanded complexity of
interests involved in food aid policy increased the number of key
stakeholders involved and complicated the dialogue concerning
reform.29
Instead of focusing on the geopolitical and commodity
surplus motivations of donor-states, contemporary concerns
emphasized the mechanisms of food aid distribution and their
problematic character.30 Specifically, the dilemma of whether
food aid should be in-kind and tied to the donor country became
central to an animated debate among various governmental and
nongovernmental institutions.31 Previously, the tying of aid was
seen as a given and an intrinsic component of the aid programs
of grain-surplus producing countries such as the United States,
Canada, and Australia.32 As agricultural commodity surpluses
declined and disappeared due to a restructuring of agricultural
policies among donor states, the mechanisms of tying food aid
changed, with donor countries sourcing food from the com-
mercial market instead of governmentally controlled domestic
surplus stores.33 This requirement for commercial sourcing
and the concomitant fiscal strains, combined with growing
academic, public, and political disapproval towards tied aid,
prompted many donor countries to abandon the practice.34 Most
notably, the European Union (“EU”) began to untie its aid begin-
ning in 1996, with Australia and Canada following suit within
the decade. “The United States, however, as the world’s largest
donor of food aid, continued with a nearly 100[%] tied food aid
policy.35 Consequently, twenty-first century food aid critique is
directed specifically at the United States.
The unique entrenchment of a controversial tied-aid policy
within U.S. aid programs highlights the powerful economic
interests of key stakeholders who assert influential authority
over the direction of aid policy.36 The key stakeholders include
the agricultural industry, nongovernmental food aid organiza-
tions reliant upon monetization of in-kind donations for program
funding, and the shipping and maritime industry that benefit
from the transport contracts for tied food aid.37 These powerful
and entrenched interests reduce the potential for cooperation or
compromise in efforts for reform. Understanding the specific
nature of U.S. food aid policy, and the associated interests built
by that structure is essential to illuminating potential areas for
improved cooperation toward reform.
A. U.S. International Food Aid in Institution & Policy
The Marshall Plan,38 launched in 1949, was the first U.S.
institutionalized food aid program, laying the foundation for the
United States’ primacy in the amount of international food assis-
tance provided.39 The United States has since become the largest
single donor of international food aid in the world.40
The United States Farm Bill,41 generally renewed on a
five-year basis, is the primary legislation addressing a variety
of agricultural programs, including international food aid.42
Fundamentally, the Farm Bill delineates the specific tonnage of
aid to be donated through the United States’ food aid programs
49WINTER 2014
and outlines the portions allotted to either emergency or non-
emergency aid, while additionally proposing program funding
levels—although the final funding levels are ultimately approved
through the federal budget process.43 Thus, funding for most food
aid programs is discretionary—determined through the annual
Agricultural Appropriations Bill—and requires Congressional
approval.44
Of the numerous U.S. food aid programs, the Food for
Peace program45 is the largest.46 Both the U.S. Department
of Agriculture (“USDA”) and U.S. Agency for International
Development (“USAID”) administer the program, which
accounts for 50 to 90% of the total food aid budget,47 a total
contribution of nearly 75% of all U.S. international food assis-
tance.48 In recent times, Title II under P.L. 480 has received
the largest amount of funding, averaging $1.8 billion in annual
appropriations since 2008, with a current authorized maximum
level of $2.5 billion per annum.49
At the height of the Cold War, the U.S. Congress passed
P.L. 480, the “Agricultural Trade and Development Act,” which
authorized the Food for Peace program to “increase the con-
sumption of United States agricultural commodities in foreign
countries, [and] to improve the foreign relations of the United
States.”50 While signing P.L. 480 into law on July 10, 1954, then
President Dwight D. Eisenhower echoed this objective, noting
that the purpose of the legislation was to “lay the basis for a
permanent expansion of [U.S.] exports of agricultural products
with lasting benefits to [the United States] and the peoples of
other lands.”51 President Eisenhower’s statement makes plain
the dual intentions of P.L. 480: expand markets for U.S. agri-
cultural export with the added benefit of providing international
food assistance. P.L. 480 allowed for the provision of surplus
agricultural products to developing nations either through emer-
gency aid or on concessionary terms.52 In the decade following
the law’s passage, 27% of all agricultural exports ($12.3 billion
worth) were shipped through P.L. 480.53
P.L. 480 is composed of four parts, each listed under a
separate title with distinct objectives. Each title works to meet
one of several overarching goals, “including combating world
hunger and malnutrition and [its] causes; promoting sustainable
development; and preventing conflicts.54 The most utilized and
significant section, Title II, Emergency and Private Assistance,
is specifically directed “to minimize hunger in the world . . . to
ensure that one day no one needs food aid” and is currently the
largest single program source of U.S. food aid.55 Between P.L.
480’s inception and 2004, the Title II program provided 106
million metric tons of food assistance.56 From 2002 to 2011
the program accounted for between 50 and 90% of total annual
international food aid spending.57 Unsurprisingly, a tenfold
rise in the annual dollar value of U.S. agricultural exports since
1954 has accompanied the passage of P.L. 480.58 Furthermore,
the value of annual Title II programs has increased more than
threefold since P.L. 480’s inception.59
Title II of P.L. 480 functions through partnerships with non-
governmental and private voluntary organizations (“NGOs” and
“PVOs”) that assist with distribution.60 The U.N. World Food
Program (“WFP”) is the largest partner, and the Title II program
is the largest donor among all 82 WFP partner programs. The
celebrated successes of Title II include the development of
“self-sufficiency,” or net-food export, in previously aid-receiving
countries such as France, Germany, Belgium, Austria, Italy,
the United Kingdom, Spain, Greece, Portugal, Cyprus, Turkey,
Poland, and former Czechoslovakia.61
Despite these accomplishments, Title II is the target of
major critiques of U.S. international food aid policy. Distilling
the essence of these critiques, Seventh Circuit Judge Frank
Easterbrook has sardonically stated that “[Public Law] 480 has
three beneficiaries: the starving, American Farmers, and the
Owners of American Ships.”62 The most contentious compo-
nents include U.S. commodity preferences, which are directly
authorized under the P.L. 480 program and U.S.-flagged cargo
preferences; and monetization, authorized under the Cargo
Preference Act63 and both the Food Security Act of 1985 and
Title III of P.L. 480.
B. Tying Aid: Title II’s Domestic Commodity
Mandates64
As highlighted by President Eisenhower’s statement,65 Title
II’s original goal was twofold: (1) to expand U.S. agricultural
export markets, and (2) to provide assistance for international
populations in need of aid.66 Consequently, the primary form of
Title II aid to receiving organizations has always been domesti-
cally sourced and in-kind, tied aid. By law, 100% of the food aid
must be sourced from U.S. agricultural producers.67 At the out-
set, aid covered under Title II was sourced from surplus agricul-
tural commodities purchased directly from U.S. farmers by the
former Commodity Credit Corporation.68 Because the United
States has ceased to maintain significant stockpiles of agricul-
tural commodity surplus, the food aid provided under Title II is
now produced explicitly for the purpose of the program.69
Currently, USDA’s Kansas City Commodity Office
(“KCCO”) purchases the food required for the Title II program.
The purchases occur through a sealed-bid, fixed-price process:
“USAID formulates a request for a specific commodity and
tonnage based on their needs and the domestic preferencing
requirements, and the KCCO creates an invitation for bids.”70
Invitations to bid are sent only to contractors who fulfill the
qualification requirements established by the KCCO.71
The dual objectives of benefiting U.S. agricultural produc-
ers and the hungry, and the aid structure their mutual fulfillment
requires is at the root of organizational, political, and public
critique of the program. Contemporary concern stems primarily
from the reality that meeting the first objective, prioritizing and
benefiting U.S. agricultural producers, fundamentally impedes
the program’s efficacy in meeting its second objective of hunger
and famine relief.72
C. Transporting Aid: The Cargo Preference Act
In addition to 100% U.S. commodity procurement require-
ments for Title II food aid, 75% of the total tonnage of all aid
distributed under the program must be transported via U.S.-
flag vessels.73 The Cargo Preference Act (P.L 83-644) governs
50 SUSTAINABLE DEVELOPMENT LAW & POLICY
this transportation mandate for all U.S. government generated
shipments.74 Congress passed the Act in 1954, amending the
Merchant Marine Act of 1936 by adding “a new section 901(b),
to ensure U.S.-flag vessel participation in the carriage of U.S.
government sponsored cargos.75 An additional mandate, entitled
the Great Lakes Set-Aside, “requires that up to 25[%] of Title
II bagged food aid tonnage be allocated to Great Lakes ports
each month.”76 These legislative requirements were primarily
intended to ensure the security and stability of the U.S. merchant
maritime fleet.77
A 2011 report from the U.S. Government Accountability
Office (“GAO”) noted that “[t]hese legal requirements limit
competition and potentially reduce food aid shipping capac-
ity, leading to higher freight rates.78 For monetized food aid
alone, ocean shipping between 2008 and 2010 cost $235 mil-
lion, roughly one-third of the total aid costs.79 Furthermore, for
certain commodities the cost of U.S.-flag ocean transport is fre-
quently higher than the initial commodity purchase cost: “[f]or
example, while it cost[s] $3.9 million to purchase the shipment
of 10,000 metric tons of wheat to be sent to Malawi in 2008
for monetization, it cost[s] $4.5 million in ocean shipping.”80
Overall, the cost to ship aid commodities is roughly $25 per ton
less on foreign flagged vessels than for U.S.-flag vessels.81
Further aggravating the cost disadvantage of U.S.-flag trans-
port is the requirement that foreign built vessels wait three years
after reflagging into the U.S. registry to transport food aid.82
Like the general cargo preference requirements, this additional
requirement sought to secure U.S. shipyard employment and
the general security and stability of the U.S. merchant maritime
fleet.83 Alternatively, this restriction works to further reduce
competition for U.S. government-generated cargo, consequently
increasing overall freight rates for U.S. international food aid
shipments.84 Specifically, this limiting of competition “contrib-
utes to fewer ships winning the majority of the food aid shipping
contracts” and thus gives more leverage to the existing fleets to
demand higher freight costs.85
D. Monetizing Aid: The Food Security Act of 1985
The selling of food aid commodities in local or regional
markets in order to fund nonemergency food assistance pro-
grams in those areas, referred to as monetization, is arguably
one of the most contentious components of current food aid
policy and its proposed reform.86 Monetization was originally
authorized by the Food Security Act of 1985,87 allowing “imple-
menting partners that received nonemergency food aid under
USAID’s Food for Peace program and USDAs Food for Progress
program to monetize some of the food in recipient countries and
use the proceeds to cover associated shipping costs.88 Funds
generated through monetization are typically used for develop-
ment projects such as those that “[provide] assistance to improve
agricultural production, provide health and nutrition activities,
and support education and humanitarian needs.”89
Of the $2.5 billion spent to provide 2.5 million metric tons
of food aid commodities in 2010, the United States shipped a
total of 540,000 metric tons specifically for monetization; the
procurement and transport of this monetized freight cost more
than $300 million.90 In the same year, 63% of the total food aid
tonnage under the Food for Peace program, more than 313,000
metric tons, was destined for monetization.91
Monetization is carried out by food aid partner organiza-
tions, primarily NGOs, who have received grants from either
USAID or the USDA “to monetize agreed upon commodities
in certain countries.”92 When submitting a grant application,
the implementing partner must have secured a buyer in the
recipient country; if the organization has met this requirement,
the agency “approves or disapproves the request, which is then
routed to KCCO. KCCO purchases the requested commodities
from U.S. producers in the United States and ships them to the
implementing partner in the recipient country.”93 This shipment
must comply with the cargo preference requirements, which the
U.S. Department of Transportation (“USDOT”) aids KCCO in
meeting.94 Ultimately, the process of monetization consists of at
least seven major steps, with as many as 50 sub-steps, “including
steps to complete the application, conduct market assessments,
coordinate requests and shipment, identify bidders and obtain
bids, deliver commodities, and collect payment.95
Like domestic procurement mandates for food aid, mon-
etization originated in part from surpluses in U.S. agricultural
commodities—a phenomenon largely resulting from U.S.
government farm subsidies.96 Those critical of monetization
frequently note that “the U.S. government no longer has surplus
agricultural commodities[;]”97 consequently, the current mainte-
nance of the program depends on U.S. government purchases of
agricultural commodities from the commercial market.
While proponents of monetization laud its facilitation of
necessary development programs for the food insecure, critics
deride the program as inefficient and potentially detrimental
to the stability of markets in recipient countries.98 Although
the programs funded through monetization provide essential
services, 2007 and 2011 reports from the GAO make it clear
that monetization is inefficient:99 “The inefficiencies stem from
the process of using U.S. government funds to procure food aid
commodities in the United States which are then shipped to the
recipient country and sold.”100
Moreover, following a 2002 Farm Bill amendment to the
Food for Peace Act, neither USAID in its administration of the
Food for Peace programs, nor USDA in its administration of
Food for Progress is obligated to achieve a specific level of cost
recovery: instead each agency is simply required to achieve “rea-
sonable market price,” a standard left undefined by the statute.101
Thus, the only steadfast condition on monetization is that the
sale be “an amount not less than 15% of the aggregate amounts
of all commodities distributed under Title II nonemergency pro-
grams for each fiscal year,”102 a condition which is continually
met at rates above the minimum requirement.103
Taken together, these policies compose the structure of tied
U.S. food aid—aid that mandates spending in the donor country
as opposed to providing direct monetary assistance to recipient
nations. Despite widespread opposition to tied aid, shifts away
from tied aid among other donor countries, and multiple pushes
51WINTER 2014
for the reform of U.S. aid, the United States has yet to transition
away from a “nearly 100[%] tied food aid policy.”104
The United States’ ostensible inability to modernize its food
aid policies is directly linked to the strong economic interests of
powerful stakeholders pulling in the opposite direction. It is tell-
ing that a significant portion of the U.S. food aid budget is spent
domestically: “[I]n 2004, for example, it was estimated that some
90[%] of the aid budget was spent inside the country.105 The
primary beneficiaries of this spending include domestic agricul-
tural and maritime industries, as well as food aid NGOs.106 Each
of these groups has formed large and influential lobbies, tasked
with quelling any effort to alter the structure of food aid in a way
that would limit the direct support these organizations receive
under the current order. Consequently, as will be highlighted in
Part III, the asserted efforts of these institutions have been the
primary obstacle to food aid reform in the United States.
The argument of this article, taken up in Part V, is that this
is not an inevitable fate for food aid reform but a precedent that
is largely ameliorable through the use of specific alternative dis-
pute resolution tactics. Before making this argument, it is first
important to clearly understand the interests and influences of
the stakeholders involved.
III. FOOD AID REFORM & DIVERGENT
STAKEHOLDER INTERESTS
A. Reform-Supporting Stakeholders
Sen’s 1981 analysis of famines made clear that “[f]amine
was not caused by a slump in the overall availability of food, but
by the loss of entitlements to that food.107 Thus, social scientists
adopted a focus on “demand failure” as opposed to “supply fail-
ure” as the appropriate means to evaluate the cause of famines.108
Focusing on demand failure resituated famines as “predictable
consequences of normal market processes given that markets
respond to purchasing power rather than to need.109 This shift
to a focus on entitlements has also altered the way relief and aid
are academically conceptualized: “[A]consensus has emerged
from famine ethnographies that famines are preventable and that
relief initiatives must focus on restoring lost entitlements and not
simply “throw grain at famines.”110
The United States’ Title II hunger and famine aid policy,
which functions by effectively prohibiting any other tactic than
the “throwing of grain”—specifically U.S.-produced grain—has
been the focus of numerous public and political critiques. These
critiques have come from a variety of individuals, institutions,
and organizations, representing both sides of the U.S. political
party divide. Notably, appeals for Title II reform have created
such uncharacteristic bedfellows as The Heritage Foundation111
and Oxfam America.112 These unexpected partnerships are most
clearly explained by two theoretical categories of critique, which
underpin most arguments against the current food aid policies.
Specifically, there are those concerned with fiscal efficiency and
those that focus on humanitarian efficiency. Unsurprisingly, the
supporting stakeholders motivated by fiscal concerns include the
conservative organizations such as The Heritage Foundation and
Republican legislators.
On the other hand, reform supporting aid organizations,
federal agencies, and agency administrators, most notably
Andrew Natsios, Administrator of USAID from 2001 to 2005,
are primarily motivated by humanitarian concerns. While this
divide helps contextualize the uncharacteristic partnerships, it
is not a hardline division. Overlap exists with many humani-
tarian organizations making appeals premised on fiscal effi-
ciency, while food-aid reform supporting fiscal conservatives
also make humanitarian-minded arguments for policy change.
Consequently, instead of exploring the strict divisions, it is more
relevant to highlight the principal arguments motivating pushes
for reform.
The primary arguments of food aid reform supporters
include the critique that too much of the aid budget is wasted
on U.S. mandated procurement and consequent transport, which
can also delay aid, making it less effective.113 Furthermore, those
in support of reform note that domestic procurement preferences
increase costs to agencies and aid recipients and reduce the
amount available for the provision of actual aid.114 Finally, sup-
porters critique U.S. commodity distribution and monetization
as having a detrimental effect on local markets in the areas in
need of aid, consequently exacerbating future need, and failing
to meet the program’s goal of increasing food security.115
Concerted efforts to reform U.S. food aid did not emerge
on the political scene until the start of the 21st century, when a
number of key publications awakened public and political con-
sciousness to the issues of U.S. food assistance policy.116 In a
2005 statement supporting a move away from domestic procure-
ment requirements and other tied aid measures, Andrew Natsios,
then USAID Administrator, commented: “The primary purpose
of the Title II program is to save lives and having more flexibility
in our programs to use cash to buy food locally will save lives;”
adding that “[t]he fact that United States farmers and shippers
are able to benefit from the Food for Peace program is an impor-
tant, but secondary benefit.”117
Natsios’ comments convey the typical humanitarian appeal
for food aid reform. These ethical arguments are frequently
coupled with economic arguments concerning efficiency, as
those supporting food aid reform are quick to highlight the
inefficiencies of domestic commodity and U.S.-flagged cargo
preferencing.118 Most argue that by allowing for local procure-
ment119—as opposed to the current laws that require domestic
food purchases—U.S. food aid funding could provide more
food at lower cost and a faster pace.120 Furthermore, support-
ers of reform also critique the practice of monetization both for
the efficiency issues addressed above and because the practice
hampers the development and long-term resilience of local agri-
cultural markets in aid-receiving regions.121
Despite bipartisan, multi-institutional and academic sup-
port, reform efforts have been largely unsuccessful primarily
because of the influence of key oppositional groups motivated
by strong economic interests in maintaining the food aid status
quo. These groups—the agricultural lobby, the shipping lobby,
and food aid NGOs—have exerted powerful pressure within the
52 SUSTAINABLE DEVELOPMENT LAW & POLICY
U.S. Congress, successfully swaying the most important institu-
tional body in food aid policy.
B. Opposing-Stakeholders
Often swayed by the aggressive lobbying efforts of reform-
opposing groups, many lawmakers voice skepticism about
the lauded efficacy of cash aid versus in-kind—or tied—food
aid.122 Most note the potential loss of important U.S. industry
and jobs if the proposed reforms to food aid are implemented.
Furthermore, many lawmakers are simply not impressed by
the predictions of savings in the realm of “$500 million over a
decade,” a comparatively small sum, “when stacked against the
vocal complaints about the potential loss of jobs and markets for
U.S.-grown food.123
Furthermore, there are cynical concerns about the ability of
international food aid to maintain its robust funding if it loses
the support of powerful agricultural lobbyists. Critics note that
“allowing non-U.S. commodities to be purchased with U.S. funds
would result in undermining the coalition of commodity groups,
PVOs, and shippers that support the program, and in reductions
in U.S. food aid.124 Further fueling opposition are concerns
regarding the ability of the United States to receive public credit
for aid purchased locally in the area of need as opposed to being
U.S. sourced and shipped. American Farm Bureau economist
Veronica Night has stated “[e]xports via food aid are a small
drop in the market. . . . Our concern is less about decreasing an
important revenue stream for U.S. agriculture. It’s more about
the loss of a sense of pride.”125
These general sentiments, shared by many reform-opposing
lawmakers, are an overall reflection of steadfast lobbying efforts
on the part of three key oppositional stakeholders—the agricul-
tural industry, the shipping industry, and some food aid NGOs.
1. AGRICULTURAL INTERESTS & LOBBIES
The interest of U.S. agricultural producers, processors, and
handlers in maintaining domestic procurement mandates for
food aid is readily apparent. The depth and power of this interest
is largely galvanized by the corporatization of the agricultural
industry. The majority of the global grain trade is controlled
by just four firms—Archer Daniels Midland (“ADM”), Bunge,
Cargill, and Louis Dryfus.126 Consequently, the purchase of
U.S. aid commodities through the commercial market provides
direct and substantial benefit to the handful of private grain
companies.127 Furthermore, the domestic procurement mandates
restricting food aid commodity sourcing “mean[] that there are
a limited number of potential providers bidding on contracts.”128
Unsurprisingly, “more than half of food aid in the Food for Peace
program was purchased from just four large transnational agri-
food companies and their subsidiaries: ADM, Cargill, Bunge,
and Cal Western Packaging.”129
This low level of competition has resulted in a price pre-
mium for food aid commodities.130 Estimates show that wheat
is now sourced at roughly 3.2% above market rates, while
maize procured for aid has on average a more than 70% price
premium.131 Consequently, “domestically sourced food aid
costs the U.S. government on average 11[%] more than market
prices.”132 Accordingly, domestic procurement mandates serve
to assure both a market and a bloated profit for the handful of
companies controlling the global grain trade.
A quote from a wheat industry lobby group, the U.S.
Wheat Associates, conveys the entrenched interests: “Losing
in-kind donations and monetization would be a difficult blow
for the U.S. wheat industry.”133 The U.S. wheat industry is the
agricultural sector most supported by food aid, as “23[%] of all
hard white wheat exports for 2001-[0]2 and 17[%] of hard red
wheat exports in 2002-[0]3 were sold to the government for food
aid programs.”134 Other key agricultural lobby groups fighting
against food aid reform include the National Association of
Wheat Growers and the North American Millers Association.135
2. SHIPPING INTERESTS & LOBBIES
The shipping industry’s interest in maintaining the status
quo for food aid policy is also huge: “[F]or U.S.-flag vessel
operators, their bread and butter remains in the transportation
of food aid.”136 For a number of shipping firms, this declara-
tion is unequivocally true. For shipping lines such as Waterman
Steamship Corporation and Liberty Maritime, contracts for
food aid shipment are responsible for the vast bulk of their
income.137 Moreover, between 2003 and 2006 the U.S. food
aid programs have funneled nearly $1.3 billion in government
money toward the shipping industry in the form of food aid
contracts.138 However, support also flows in the reverse, as the
shipping industry is responsible for substantial amount of politi-
cal campaign donations,139 giving the shipping lobby consider-
able weight in U.S. politics. Industry representatives that have
been active congressional lobbyists on the issue of food aid,
include the American Maritime Congress, American Maritime
Officers, and the Maritime Trades Department of the American
Federation of Labor and Congress of Industrial Organizations
(“AFL-CIO”). Overall, the combination of their significant stake
in maintaining the food aid status quo and their political might
makes the shipping industry a powerful player in preventing U.S.
food aid policy reform.
Like the grain industry, the U.S. shipping industry is char-
acterized by large scale concentration—over half of the $300
million spent on the transport of food aid in 2004 went toward
contracts with just five shipping firms.140 Such mandates under
the Cargo Preference Act work to benefit a small portion of U.S.-
flagged shippers through stringent policies that prevent contracts
from going to newly flagged vessels.141 Consequently, “[i]n the
1990s there were only eighteen shipping companies that were
qualified to bid on food aid contracts, and by the early 2000s this
number had dropped to just thirteen.”142 Moreover, as explained
in Part II, “[t]his lack of competition at the shipping and freight
end of food aid has led to inflated prices for transportation.”143
A fundamental argument made by the shipping and maritime
industries is that U.S.-flagged aid shipments are important for
national security because they ensure that the United States “is
able to maintain vital sealift capabilities during peacetime.”144
Those making the argument note that in 1975 the United States
had over 850 U.S.-flagged ocean vessels but that by 2012 the
53WINTER 2014
number had dropped to 109. Predictably, there has been a
concomitant drop in the percentage of U.S. commercial cargo
transported on U.S. vessels, falling from 10% in 1959 to 4% by
2012.145 These statistics evidence shippers’ appeal that cargo
preference laws mandating the transport of food aid on U.S.-
flag vessels provide a critical source of cargo for the dwindling
U.S. fleet and thus offer an essential assurance that the United
States “[maintains] adequate sealift capacity, both to support
[the] military and to ensure . . . the retention of . . . at least a
core of skilled merchant mariners and commercial vessels of all
types.”146 Ultimately, this appeal cautions that a loss of U.S. food
aid cargo for U.S.-flag vessels would expedite the decline of an
already diminishing fleet, making the Nation’s sealift “objectives
. . . dependent on foreign-flagged vessels operated by foreign
mariners.”147
The protection of a U.S. merchant maritime fleet is also
praised as providing essential jobs and economic stability for a
number of U.S. citizens.148 Industry representatives warn that an
exemption of food aid from cargo preferences would put U.S.
jobs on the line by compromising the economic stability of
already struggling shipping fleets.149
3. FOOD AID NONGOVERNMENTAL ORGANIZATIONS
As noted in Part III, the U.S. policy of providing in-kind
food aid, coupled with authorization for the monetization of
nonemergency aid, serves as an essential source of funds for U.S.
based food-aid NGOs. The vast majority of nonemergency Title
II aid is funneled through NGOs charged with delivery and sale
of the donated commodity, achieved primarily through moneti-
zation.150 Unsurprisingly, the practice of monetization provides
a significant funding source for these NGOs.151 For certain orga-
nizations, the total funds provided through the monetization of
in-kind aid have been more than $100 million.152
The capital generated by NGOs through monetization
works to fund non-emergency development projects that lack an
alternative source of concerted funding. Since the practice was
first authorized in 1985, the overall percentage of nonemergency
Title II aid that becomes monetized has continued to grow: In
1996, 28% of nonemergency aid was monetized, by 2001 the
share had risen to 70%, and in more recent years the portion has
been as high as 74% on average.153 Furthermore, “[f]or some
food aid operations, NGOs monetized the entire amount, as it is
a major source of their development finance.”154
Accordingly, the food aid NGOs reliant on the monetization
of in-kind aid institutionalized in U.S. food assistance policy
are markedly opposed to reform efforts that would disallow this
practice. The Alliance for Global Food Security has served as the
primary voice of NGOs lobbying against reform to U.S. interna-
tional food aid.155 Importantly, the presence of food-aid NGOs
in the group opposing reform has given a “degree of legitimacy”
to the industry position, “and together they form[] a powerful
bloc fighting against food aid reform.”156 This block of powerful
stakeholders has unquestionable influence in the debate about
food aid reform.157 They have, and will undoubtedly continue
to have, a significant impact on the success, failure, and overall
composition of any changes to U.S. food aid policy.
C. The Voiceless Stakeholders
Often forgotten in the midst of heated debates about food
aid reform are the people who depend on food aid for their daily
survival, the stakeholders for whom the debate and the outcomes
are the most crucial; yet, they have the smallest voice in the dis-
pute over food aid reform. Logistically, it would be impossible to
include the opinions and perceptions of each potential recipient
in every dialog concerning reform. However, there are key repre-
sentative bodies, such as the recipient country governments and
country-specific hunger relief NGOs that are acutely aware of
the potential consequences of food aid policies for the ultimate
recipients.158 Yet, these representatives are largely voiceless in
the determinant conversations over food aid issues in the United
States.
Food aid policy has significant impacts on the lives of
people in the global South. Between 1994 and 2003 food aid
served as the source of 15-20% of all food imports for the least
developed countries, a large portion of which are in sub-Saharan
Africa.159 In certain circumstances and in certain locations the
level of dependence is even more extreme—for example, from
2001 to 2003 food aid contributed 46% of Ethiopia’s total food
supply.160
The trend in modern food aid need has been one of increas-
ing emergency aid and decreasing need for non-emergency
assistance; by 2007 more than three-quarters of aid was deliv-
ered as emergency support.161 Returning again to Sen’s work on
the appropriate mechanisms for famine and hunger reduction,
the academic understanding is that aid should be flexible and
adaptable to the specific circumstances of the area in need, espe-
cially in emergency circumstances.162 Food systems anthropolo-
gist, Johan Pottier, explains the basic rationale, noting that given
the “diversity of famine situations” and the conflicting opinions
about the best mode of assistance, “the more reasonable solution
is to examine the merits and drawbacks of either option within
highly specific situations and to ensure that potential famine vic-
tims have some choice regarding the kind of patronage system
they wish to have.163
Pottier acknowledges the political realities that determine
the structure of food aid policy, especially for key nations such
as the United States. However, this does not dissuade him from
making the appeal that “relief and prevention work, like devel-
opment aid generally, can only be truly effective if potential
recipients have the power to determine what is used and how . . .
[s]uch a dialogue must never be considered a luxury.”164
Given the numerous stakeholders involved in U.S. food aid
policy as well their disparate levels of power, voice and influ-
ence, it is important to find mechanisms that will facilitate an
equitably weighted dialogue—where parties that are the most
impacted are also given a say and those with the least to lose
but with the strongest influence are prevented from overpow-
ering the less advantaged. This is where the use of alternative
dispute resolution mechanisms becomes important. As this
54 SUSTAINABLE DEVELOPMENT LAW & POLICY
article argues, contemporary attempts for food aid reform have
neglected to limit this divide in influence and consequence
between the various stakeholders. In fact, the inverse has been
true, namely, that the attempts for reform have aggravated this
imbalance. The following section highlights the important
underlying theories of ADR and how they might be applied to
attempts for food aid reform. This is followed by an examina-
tion of the specific attempts for reform, with an analysis of key
barriers to cooperative action and an evaluation of the potential
for multi-stakeholder negotiations, mediated by a key meditative
figure to reconcile these barriers.
IV. THE ROLE OF ALTERNATIVE DISPUTE RESOLUTION
The structure of U.S. food aid under Title II of P.L. 480
creates a system of multiple, often unbalanced and conflicting
stakeholders with antagonistic interests. Consequently, ADR,
which seeks to resolve conflict between multiple parties through
cooperative action, is a useful tool for improving the outcomes
of contentious debates about reform.165 Although the theories
and tools of ADR are most commonly used to avoid litigation,
and not within the legislative process, this is not to say that
ADR has no role in legislative disputes, particularly those that
involve multiple stakeholders with varying degrees of power and
influence.166 Quite conversely, as the legislative process is often
fraught with conflict between divergent stakeholders yet pro-
cedurally flexible and quite amenable to the tools of ADR, the
limited application of ADR theories and tactics is an unfortunate
oversight.167
In the case of food aid reform, there are additional impedi-
ments to a perfect application of ADR tools. The process of ADR
seeks to ask the fundamental question: Why is it that under cir-
cumstances where there are resolutions that better serve dispu-
tants, negotiations often fail to achieve efficient resolutions?”168
In the situation of food aid reform, opposing stakeholders ben-
efit primarily from maintaining the status quo and consequently
have limited potential for achieving tangible gains from any
cooperation for change. This is an important consideration, but
not a steadfast roadblock; the use of basic dispute resolution tac-
tics—facilitated, private, multiparty negotiation—can decrease
the level of opposition by giving opposing stakeholders a stake
in the reform proposal, thus increasing the likelihood of less
diluted reform measures and greatly improving the balance of
stakeholder power.169
Recognizing and mediating the inherent power imbalance
within food aid reform disputes is essential to constructing
effective negotiations. Although some scholars have questioned
the efficacy of mediated negotiations to reduce imbalances in
power, three key aspects of the mediation process—the voluntary
nature, the “empowerment function,” and the “non-adversarial
approach”—explicitly work to “prevent power abuses by a more
powerful party.”170 In negotiations including all food aid reform
stakeholders, a negotiation would be refereed by a facilitative
mediator171 equipped to reduce both power imbalance and main-
tain focus on cooperative action toward mutual goals.
The process of alternative dispute resolution begins by
pinpointing the key barriers to cooperation and only then deter-
mining the appropriate use of specific ADR tools to improve
cooperative action toward a favorable outcome.172 Following this
process, the subsequent section examines key strategic barriers
that inhibit cooperation such as the aggravation of the stake-
holder power imbalance through the use of both “outside strate-
gies,”173 use of the media as a position-promoting strategy, and
the dilemma of the “principal agent barrier,” a barrier primar-
ily of representation.174 In this context, the subsequent section
highlights how facilitated, multi-stakeholder negotiations could
work to mediate these barriers and improve the likely passage of
favorable food aid reform measures.
A. Attempts to Reform Food Aid & the Barriers to
Cooperative Action
Efforts to reform food aid since 2006 have shared both fun-
damental tactics and fundamental flaws that have substantially
and unnecessarily hindered actual food aid reform. Attempts at
reform, while including bipartisan and multi-institutional sup-
port, neglected to give the key oppositional parties a chance to
negotiate the mechanisms of reform prior to their congressional
introduction.175 This tactic ignored the influential weight and
substantial interests of key oppositional parties and overlooked
the necessity of inclusive negotiations for the success of contro-
versial legislation.
These tactical oversights manifest as specific categorical
barriers to cooperative action: (1) bargaining through the mass
media or an “outside-strategy;” and (2) the “principal agent bar-
rier,” where final decisions are filtered through representatives
that do not often share the same interests or motivations as their
constituents.176 In the case of food aid reform efforts, this out-
side strategy was employed not only in the political and legisla-
tive arena but also by key stakeholder interest groups (both the
pro-reform agencies and NGOs as well as the oppositional lobby
groups representing the agricultural, shipping, and food-aid
NGO interests).177 The issue with this bargaining strategy is that
it aggravates differences by diluting the arguments and inter-
est of each side into oppositional positions.178 This ultimately
reduces the likelihood of cooperative action by decreasing the
parties’ abilities to identify mutually beneficial solutions, as
Tom Melling explains: “Conflict encourages the media to create
a story by exaggerating differences and by polarizing parties’
positions. . . . Reporters dislike tentativeness, which discourages
the flexibility that politicians need to make compromises during
long negotiations.179
While Melling’s analysis focuses specifically on the issues
an outside strategy creates for cooperation, this article argues
that in the case of food aid reform the same barriers are created
by the outside strategies of key stakeholder groups in addition to
those used by the congressional figures—consequently creating
a “stakeholder dilemma” in addition to the commonly occurring
“politicians’ dilemma.
The issue of the principal agent barrier in food aid reform
results from the role of Congress in determining the ultimate
55WINTER 2014
fate of food aid policy. Legislators, who arguably hold a stake in
the food aid debate as a consequence of effects on their constitu-
ents, are nevertheless primarily indirect stakeholders; while key
groups like the NGOs, food aid administering agencies, lobby
groups, and food-aid recipients make up the direct stakeholders.
While these groups face the most direct impact from the com-
position of food aid reform, their interests and opinions must
filter through Congress, creating the representation issue often
referred to as the “principal agent barrier.”180
To illustrate these barriers, the following three sections
provide an overview of three contemporary attempts at food aid
reform, beginning first with a series of attempts made by the
Bush administration, then moving to the 2013 attempt by the
Obama administration, and concluding with the attempt origi-
nating by two legislators, Representative Ed Royce (R-CA), and
Representative Karen Bass (D-CA).
B. Bush Administration & Food Aid Reform
In the 2002 “President’s Management Agenda,” former
President George W. Bush acknowledged the fundamental need
for food aid reform.181 The specific critiques highlighted by
the report included the common laments regarding the overly
complex administration of the programs, the associated inef-
ficiencies and cost increases, and the wasteful and counterpro-
ductive nature of tied aid and monetization with their potential
to negatively impact the local agricultural markets of recipient
countries.182 Acting on these critiques, “[i]n early 2005, just as
the food aid issue was heating up at the WTO, President Bush
included in his 2006 budget proposal a request for authority to
allow 25[%] of the food aid budget for that year to be provided
in the form of cash for local and regional purchase.”183
Bush’s efforts at reform were supported most notably by
then-USAID Administrator Natsios, who strongly favored the
proposed reforms to food aid policy.184 Natsios specifically
championed efforts to increase the flexibility of aid, allowing
for increased cash assistance for local and regional procure-
ment.185 Despite the robust efforts by both President Bush and
Natsios, the 2006 budgetary reforms to food aid were defeated
by Congress.186 A key factor leading to this rejection was the
vocal opposition by the agricultural, shipping, and NGO groups
who asserted robust pressure on legislators, convincing them
that the proposed reform was unnecessary and harmful to both
the United States and food-aid recipients.
Concomitantly to renewed White House efforts in the 2007
budget, efforts were made to pass a new 2007 Farm Bill in the
legislature. The new Farm Bill legislation included a request for
the allotment of 25% of P.L. 480 Title II funds toward cash assis-
tance for the procurement of local and regionally purchased food
aid.187 This was intended to increase efficiency through a reduc-
tion in food aid delivery times and savings on transportation and
commodity costs.188 However, Congress was more amenable to
the lobbying of influential agricultural, maritime, and food aid
NGO interests, and the bill was ultimately defeated.189
Final efforts in 2008 again attempted to move a fraction
of U.S. food aid into cash allocations for local and regional
purchase of aid commodities.190 President Bush’s 2008 proposals
followed largely from policy proposals drafted by The Heritage
Foundation, most notably allowing for local sourcing of food aid
by discontinuing domestic commodity mandates and exempting
food aid from cargo preferences—in other words, implement-
ing partially untied aid.191 Furthermore, the proposal eliminated
funding for Title I of P.L. 480, which authorizes the untargeted
monetization of aid after 2001.192 However, the heavy-handed
agricultural lobby, shipping lobby, and certain NGOs reliant
upon monetization, significantly diminished reform efforts;
“[t]hese groups were [again] able to exert influence over a pow-
erful part of the domestic institutional setting where important
decisions regarding food aid policy are made: U.S. Congress.193
In sum, despite executive level, institutional, and bipartisan sup-
port, the Bush Administration’s attempts for reform had, at best,
limited success, as unsurprisingly, Congress’ reception of the
bill largely paralleled this initial reception by important industry
leaders.194
In total, the food aid reform efforts made between 2004 and
2008 were successfully opposed by an alliance of agricultural,
maritime, and food-aid NGO industry lobbyists asserting tre-
mendous pressure over Congress and “shap[ing] public discourse
by posting news items and press releases on their websites and
testifying at numerous congressional hearings that touched on
food aid.”195 They also worked on the international platform,
lobbying at the Geneva Convention, targeting key trade negotia-
tors.196 Ultimately, the reform attempts achieved no change to
the present structure of U.S. food aid policy.197
C. Obama Administration & Food Aid Reform
Relying on tactics almost indistinguishable from those
proven unsuccessful by the Bush administration, President
Obama aimed to implement even more drastic food aid reform
measures in his 2014 budget proposal. In equal fashion,
Obama’s budgetary reform to food aid, which attempted to com-
pletely replace in-kind aid with cash aid, was largely eroded by
Congress as the same strong oppositional interests fought fer-
vently against it.
Yet again the primary opponents were the agricultural
industry, the shipping industry, and aid organizations that rely
on monetization for nonemergency program funding. These
fierce lobby groups worked quickly to gather significant sup-
port within Congress and oppositional efforts began as soon as
February 2013, when information about the budget proposal was
leaked.198 After months of fierce lobbying, “only a few lawmak-
ers [were] prepared to publically support the effort to send cash
abroad to make distribution of aid faster and more efficient.
They [were] outnumbered by lawmakers from both parties who
[wanted] to kill the initiative or water it down substantially.”199 A
combination of major aid organizations, including the Alliance
for Global Food Security, and various commodity groups headed
the effort. Those opposed to reform used a range of tactics to
influence key lawmakers, including meetings, letters, and fuel-
ing support from constituents.200 The major catalyst for inspiring
56 SUSTAINABLE DEVELOPMENT LAW & POLICY
opposition was a continual reference to the U.S. jobs at stake if
the reform went through.201
Some of the most notable efforts to generate congressional
opposition to the proposed reform included a letter sent directly
to President Obama with 70 signatories from various institutions
and organizations against the proposed changes to aid.202 This
letter was followed in March by a similar letter sent to nine con-
gressional committees.203 The letters argued for the significance
of the “transparency, accountability and reliability” provided by
the current food aid system of in-kind contributions; further cau-
tioning the potential for corruption that comes with cash-based
aid; and citing the importance of the system for domestic job
security.204 In addition to letters, there were also direct inter-
actions between oppositional interest groups and legislators,
including a meeting in March between congressional aides and
the soybean farmers opposed to aid reform.205 These efforts
generated significant congressional opposition, and President
Obama’s original proposal—a 100% re-appropriation of funds
typically provided for in-kind aid to cash transfers and untied
flexible food aid programs—was whittled down to a redistribu-
tion of just 45%.206
D. Congress & the Food Aid Reform Act
Wary of the failure for the food aid reform proposed in
the Obama budget, Republican Representative Ed Royce,
Chairman of the House Foreign Affairs Committee, and
Democratic Representative Karen Bass; Ranking Member of the
Subcommittee on Africa, Global Health, Global Human Rights
and International Organizations; introduced bipartisan legisla-
tion to reform major components of U.S. international food aid.
The legislation introduced in the 113th Congress, and entitled
the Food Aid Reform Act207 specifically targeted the Food for
Peace Program, calling for modernization and increased effi-
ciency in an effort to “reach more people, more quickly, at less
expense.”208
In endorsing the Food Aid Reform Act both Chairman
Royce and Ranking Member Bass explicitly referenced the
importance of food aid policy that benefits the hungry and food
insecure peoples in the most efficient and expedient way pos-
sible. Chairman Royce noted that, “[t]he system through which
the United States provides food aid [to] those facing starvation is
needlessly inefficient and ineffective. Especially given the cur-
rent fiscal environment . . . .”209 Ranking Member Bass echoed
Royce’s appeal for efficiency by stating, “[t]his legislation pro-
vides commonsense reforms to our grossly inefficient system for
delivering food aid. . . [ensuring that] . . . funds aren’t wasted as
we seek to lend a helping hand to those who would otherwise
face severe consequences due to food insecurity.210
With the underlying goal of improving the efficiency and
effectiveness of the Title II food aid program, the Food Aid
Reform Act specifically addresses U.S. commodity sourcing
requirements, U.S. cargo preferences, and food aid monetization.
The Food Aid Reform Act focuses on improving the efficiency
and effectiveness of international food aid by: (1) eliminating
U.S. procurement requirements for agricultural commodities, (2)
eliminating the costly and inefficient practice of “monetization”
(selling food aid commodities in recipient countries to finance
development projects), (3) aligning nonemergency food aid with
the Foreign Assistance Act of 1961, and (4) exempting U.S. food
aid provided from cargo preference requirements.211 Supporters
of the reform bill were motivated largely by what they see as an
outdated, inefficient, and often ineffective way of meeting the
primary goal of food assistance.212 Such changes would move
policy in a direction more in line with current academic under-
standing of appropriate hunger-relief efforts; namely, by provid-
ing cash assistance, and increasing aid flexibility, the proposed
reforms would work to stabilize and augment what Sen termed
the necessary “entitlements” for adequate food access.213 Most
concretely, the bill is estimated to save the U.S. government $500
million over ten years while also increasing the human value of
the aid administered.214
Although using a stand-alone bill is a novel tactic for reform,
the negotiations process preceding the construction of the act,
like previous attempts, neglected to include dialogue with the
expected opponents.215 Consequently, and unsurprisingly, robust
opposition from the “iron triangle” lobbing groups has severely
limited the likely passage of the act.216
E. Options for Cooperative Action: The Value of
Obama’s Budget Proposal
Despite what appears to be mutually exclusive positions
and interests on the part of each stakeholder group, a closer
look at Obama’s 2014 budget proposal reveals key options for
mutual benefit—or at least areas for concession between the
divergent groups. The budget specifically proposes to reallocate
the $1.47 billion annual appropriations for Title II of P.L. 480
to three USAID assistance accounts.217 This reallocation would
essentially cease tied aid provided under Title II, and shift funds
to USAID programs that are unrestricted by commodity prefer-
ences and subsequently unencumbered by cargo preferences.218
The specific USAID programs that would receive additional
funding under the proposal include: International Disaster
Assistance (“IDA”), Development Assistance (“DA”) for a
Community Development and Resilience Fund (“CDRF”), and a
new Emergency Food Assistance Contingency Fund (“EFAC”)—
all of which would add “gains of flexibility, timeliness, and effi-
ciency in the provision of emergency food aid,” by expanding
the aid options available to USAID.219 Instead of restricting aid
mechanisms to “a commodity-only response,” USAID could
choose from a variety of options, including: “local or regional
procurement in countries or regions where food aid emergencies
are occurring and other forms of cash-based assistance like food
vouchers or cash transfers.”220 The increase in funding toward
more flexible aid options would ultimately result in significant
efficiency savings as well as increasing the ability of USAID
to provide more need-appropriate aid, enabling the Agency and
partnering organizations to adapt assistance methods to the local
circumstances of the recipient regions.221
Furthermore, the proposal reallocates a portion of the “effi-
ciency savings” from the transfer of Title II funds directly toward
57WINTER 2014
increases to the Maritime Security Program (“MSP”) equal to
$25 million and to the CDRF equal to $330 million for food
aid NGOs.222 Given the cumbersome and inefficient structure
of the indirect benefits received through both cargo preferences
and monetization, there is potential for the shipping industry
or NGOs to support reform. Despite these seemingly concilia-
tory fund reallocations, steadfast opponents highlight another
reason why facilitated negotiations between all parties could
benefit reform. The efficiency savings allocations in the Obama
budget make apparent that the administration is sensitive to the
concerns of reform opposition groups; consequently, they are
likely amenable to compromise. The resistance on the part of
both the shipping industry and food aid NGOs is most likely a
consequence of their lack of participation in the proposal.223 In
the case of food aid reform, failure to include key stakeholders
causes fervent opposition from powerful and influential parties,
invariably limiting the success of reform. Thus, if the key oppo-
sitional stakeholders were able to participate in the preceding
negotiations for reform proposals, thereby giving them a stake in
the proposal, opposition efforts would be significantly reduced
and reform success significantly increased.
Moreover, as the public and political discourse heats up on
global food security issues, inaction on increasing the efficacy of
food assistance will become harder to accept.224 Consequently, it
is likely that reform attempts will continue as food issues remain
in the forefront of public consciousness. Accordingly, it might
behoove the iron triangle members to participate in early nego-
tiations in an effort to prevent future reform proposals that offer
little conciliatory measures to ameliorate their potential financial
losses. The Food Aid Reform Act foreshadowed the potential for
this as it emerged on the heels of the unsuccessful budgetary
reform efforts and offered a fervent effort to advance food aid
policy changes with far less iron triangle appeal.225 While mir-
roring the Obama budget in its elimination of Title II funding,
the Food Aid Reform Act lacked comparable reallocations to
either food aid NGOs or the shipping industry.226
Even if divergent parties were brought together, multi-stake-
holder negotiations alone would not be enough to guarantee suc-
cessful reform efforts. Given the contentious nature of U.S. food
aid policy and the power imbalances between key stakeholders,
the structure of any negotiation will be an important consider-
ation. While an exhaustive evaluation of the necessary negotia-
tion structure is outside the scope of this article, it is important
to recognize the fundamental need for an effective facilitator or a
facilitative mediator, to be present in any successful negotiation.
Used in concert with multi-stakeholder negotiations, facilitation
between the conflicting stakeholders by an effective mediator
would help balance the disparate power and influence of stake-
holders participating in the negotiation.227
As mentioned above, three key aspects of the mediation pro-
cess—its voluntary nature, the “empowerment function,” and the
“non-adversarial approach”—explicitly work to “prevent power
abuses by a more powerful party.”228 Most basically, a facilita-
tive mediator would work to establish ground rules and a process
for the overall discussion, ensuring that all parties understood
the importance of reaching a mutually acceptable settlement.229
Additionally, “by focusing on specific issues and the parties’
interests and needs, the mediator can prevent the dialectic of
adversarial opposition and encourage the parties to engage in a
common search for a mutually satisfactory, or at least bearable,
solution for both sides.”230
In sum, a fatal flaw of the recent attempts for food aid
reform was the failure to use the key ADR tool of facilitated,
multi-stakeholder negotiations preceding food aid reform pro-
posals. While legislative negotiations followed the introduction
of each reform proposal, legislative negotiations failed in every
instance to convene all of the impacted stakeholder groups prior
to the structuring of the proposed reforms. Consequently, each
proposal was met with instant opposition from the iron triangle
groups.231 Conversely, inviting the key oppositional groups to
engage in a private dialogue or negotiation about proposals for
reform might have worked to quell the fierce opposition or helped
to construct a reform proposal that was more likely to generate
the requisite Congressional support. Furthermore, these nego-
tiations could have included representatives of the aid recipient
countries, who were decidedly absent in the final debate about all
reform proposals. Finally, the presence of a facilitative mediator
could work to balance the convergent stakeholder interests and
power imbalances, ensuring a mutually amenable outcome.
V. CONCLUSION
As the pressures of population growth, increasing affluence,
and climate change strain the stability of global food supplies,
fringe populations are increasingly susceptible to hunger and
malnourishment.232 Consequently, the demand for effective food
aid and food assistance programs is likely to rise. Efforts to limit
the dissonance between food aid logic and policy must not be
disused by avoidable barriers in the legislative process. Specific
tactics of alternative dispute resolution—including facilitated,
multi-party negotiations and the use of a facilitative media-
tor—could beneficially advance efforts to modernize food aid by
enabling cooperative action and balanced negotiations between
divergent stakeholders.
Current reform efforts have detrimentally overlooked key
concepts and tactics of alternative dispute resolution. By incor-
porating basic efforts for cooperative negotiation through the
inclusion of both reform-critics and reform-supporters in the
conversations about reform proposals, the chance of passing U.S.
food aid reform legislation could be greatly increased. Efforts
on the part of both the Bush administration and the Obama
administration, although bipartisanly inclusive, were exclusive
in stakeholder representation. With such a complex and conten-
tious issue, efforts to push through legislative change without
the full participation of all powerful stakeholders will likely fail.
As was the case in past efforts for U.S. food aid reform, failure
stems primarily from the guarantee of fervent opposition by
powerful, but excluded stakeholders. Efforts for food aid reform
have ignored this key concept and have consequently achieved
only limited success.