WASHINGTON, July 15, 2015 - The House Agriculture Committee is raising questions about whether the Obama administration is prepared to carry out a key part of its strategy to reform the Food for Peace program by shifting more aid from U.S.-grown commodities to cash assistance.

“Rather than rushing ahead with efforts to transform a time-tested food-aid program into cash assistance, it is imperative that we monitor effects of the programs and flexibilities already in place,” says the chairman of the Livestock and Foreign Agriculture Subcommittee, David Rouzer, R-N.C.

Rep. Jim Costa, D-Calif., said providing cash assistance is a “poor substitute” for distributing U.S. food.

As Agri-Pulse has been reporting, the administration has been in negotiations for several months to get the shipping industry’s support for a plan to allow up to 45 percent of Food for Peace funding for cash assistance or for purchasing food near the areas where it is to be distributed. An aide to the Senate Foreign Relations Committee attended the latest in an ongoing series of House Agriculture hearings July 9. The committee’s chairman, Bob Corker, R-Tenn., introduced the Food for Peace Reform Act (S 525) , which tracks the administration’s proposed reforms.

The latest hearing indirectly highlighted the fact that the administration has already sharply boosted the use of cash assistance without the reforms to Food for Peace it is seeking. Much of the funding is now coming through a funding source, called the Overseas Contingency Operations (OCO), which is primarily used by the Pentagon to pay for the wars in Iraq and Afghanistan. OCO funding is exempt from sequestration cuts.

USAID has been using $300 million in OCO funding for cash assistance through what’s known as the Emergency Food Security Program. Eric Munoz, a food-aid policy specialist with Oxfam America, which supports the administration reform plans, says that the use of OCO funding isn’t “stable or sustainable.”

Since it’s relatively new, the use of cash assistance hasn’t received the level of scrutiny from auditors as the use of commodities. However, the Government Accountability Office has called on USAID to make a number of changes to improve its oversight of the cash aid.

But Catherine Trujillo, USAID’s acting deputy inspector general, told the subcommittee that “there’s a risk that’s inherent in everything USAID does.” She also said “all points along the supply and distribution chains for food aid are vulnerable to waste and inefficiency and may also be subject to fraudulent activity.”


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