WASHINGTON, July 8, 2015 – Leaders of the House Agriculture Committee are raising concerns with the Obama administration about its effort to win support from the shipping industry for converting more food aid to cash assistance.

In letters to the Agriculture Department, U.S. Agency for International Development and Transportation Department, the lawmakers suggested the plan could increase the risk of fraud in the Food for Peace program while forcing shipping companies to scrap vessels that could be needed later for military use.

In talks with the shippers, the administration has offered them direct subsidies in return for their support for allowing as much as 45 percent of Food for Peace funding to be used for purchases of food overseas rather than for buying and shipping U.S.-grown commodities.

“This appears to be another attempt on the part of USAID to shift from U.S. in-kind commodity-based food aid to cash vouchers,” say the letters signed by House Agriculture Chairman Mike Conaway, R-Texas, and the chairman of the Livestock and Foreign Agriculture Subcommittee, David Rouzer, R-N.C.

The letters seek documents related to the negotiations.

Rouzer’s subcommittee on Thursday is holding its second hearing in three weeks on food aid issues. Representatives of the Government Accountability Office and USAID’s inspector general will be among the witnesses. 

Officials with the American Farm Bureau Federation groups representing corn, rice, wheat, soybeans, dry beans and seafood were briefed on the talks just ahead of a House Agriculture subcommittee hearing on the issue June 24.

The negotiations could have far-reaching political implications because support for the existing system has long depended on mutual support from three sectors – the shipping industry that carry the food, development organizations that distribute it and agribusiness, which produces it.

Conaway and Rouzer argue that cash assistance is vulnerable to fraud, waste and abuse and that a cutback in shipping U.S. commodities could lead companies to take vessels out of service, reducing the number that might be available for military needs.

“In an effort to avoid these harms, the Committee is embarking on a methodical and sequential review of all international food assistance programs to determine an appropriate balance of cash-based assistance and in-kind food aid,” the letters say. 

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