9 February

US Farm Bill: farm lobby interests preserved, food aid to poor US citizens cut; limited improvement in the US food aid policy abroad.

President Obama signed the US Farm Bill on Friday 7 February.

The bill, which had been delayed for more than two years because of a fight over cuts to the food stamp programme had finally been passed by the House of Representatives on 5 February. After long negotiations with the Democrat-controlled Senate, which was in favour of a reduction of only $4 billion, the House finally passed a bill that contains a $9 billion cut of the food stamp programmme over 5 years.

In addition to this cut, another $11 billion are being cut as stimulus funding for the program expires: $5 billion already expired in October - and consequences have been felt in the ongoing food assistance programmes; the rest will go by 2016. This is the first time a Democrat-controlled Senate has ever proposed cuts in this programme and illustrate, according to observers, a political shift to the right. Restrictions could have been much worse if Republicans had had their way:

1. •Imposition of new work requirements on food stamp recipients
   

2. •Allowing states to require drug testing for beneficiaries
   

3. •Banning of ex-felons from ever receiving nutrition aid
   

4. •Awarding states financial incentives to kick people off the program.
   

Let us recall here that the Supplemental Nutrition Assistance Program (SNAP), benefits to around 47 million people in the US, 80% of which are below the poverty line, but that, despite this programme, it is estimated that around 17 million people did not eat sufficiently in 2010 in the US.

Agribusiness associations - who represent the 800,000 US farmers and the farm and food industry - on their side, have demonstrated satisfaction with the new bill as crop insurance and ‘‘other vital programs’’ have been left untouched. For example the bill will :

1. •Provide retroactive disaster assistance for specialty crop and livestock producers that were hit by droughts, early freezes and other disasters in the two years following expiration of the 2008 farm bill disaster programmes. The big winners of the bill will be the 18 insurance companies that insure agriculture.
   

2. •Pay subsidies that will allow US agriculture to continue exporting its surplus on the world market
   

3. •Support the development of a more sustainable agriculture, and particularly of organic farming, for healthier food and the protection of the environment.
   

Let us recall that the average support provided to individual farmers by the US agricultural policy was estimated to be approximately USD38,000 per farm in 2012,with great disparities depending on size and type of production (OECD estimates).

Regarding food aid, as had been promised by the Obama Administration in 2013, some flexibility has been introduced in the US food aid policy which hitherto had been characterised by an overwhelming reliance on in-kind shipping of food aid commodities produced in the US. The new bill includes:

1. •An increase from 13 to 20% of the percentage of Food for Peace funding that can be spent in cash on non-emergency food aid programmes. This will reduce monetised food aid which consisted in shipping US produced food to beneficiary countries and selling it on the local market to use the proceeds to fund development activities. This method has been widely criticised to depress prices on local markets and act as disincentives for local producers in beneficiary countries. With the change introduced, sources say that Bangladesh might remain the only country where the US Food for Peace programme will continue to monetise food aid.
   

2. •A modest provision of $80 million to the U.S. Department of Agriculture to implement local and regional procurement programs whereby the US will purchase food in other countries for use in food aid programmes.
   

To refresh memories: the US have distributed more than 530 million tons of food since the launching of its PL480 programme (Food for Peace) in 1954 and have been much slower than other major donors, in particular the EU, in replacing food aid in kind by food aid in cash.

To summarise, the bill preserves the interests of the US farm lobby, cuts food aid to poor US citizens and improves to some limited extent the US food aid policy abroad.

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For more details:

1. -Agricultural Act 2014, US House of Representatives
   

2. -The New US Farm Bill: more for the favoured, less for the poor? hungerexplained.org
   

3. -Website of the National Sustainable Agriculture Coalition
   

4. -E. Eichelberger, Republicans Just Won the Food Stamp War, Mother Jones, 29 January 2014
   

5. -R. Tarsitano, Michigan’s agriculture leaders applaud passage of farm bill, abc10, 5 February 2014
   

6. -M. Igoe, Rajiv Shah: farm bill to bring more flexibility, greater impact for USAID, devex,5 February 2014
   

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Last update:    February 2014

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