What Consolidation in Food Aid Delivery May Mean for USA Rice

Planning ahead
Jun 12, 2020
ARLINGTON, VA -- COVID-19 aside, 2020 was already shaping-up to be one of the worst years on record for food insecure nations before adding more instability into the mix.  Experts are projecting that poor weather, historically high demand for shelf stable commodities, and increased purchases of commodities for domestic food aid will all have significant impacts to the world of food assistance this year.  

"While the global food assistance supply chain has remained mostly intact, we are keeping our eye on some of the trends that will define our work in the coming year, some of them even favorable for the commodity world," said Jesica Kincaid, USA Rice manager of International Trade Policy.  

In years with good weather and growing economies overseas, the U.S. Agency for International Development (USAID) would focus much of their $1.1 billion Food For Peace Program budget on development projects, investing in infrastructure overseas.  However, due to the extreme situation right now, USAID is spending more and more of that budget on Title II "PL480" programs, providing emergency assistance through food purchases, concentrated in four countries:  Sudan, South Sudan, Ethiopia, and Yemen.  The nature of emergency programs coupled with limited destinations that may not prefer rice in the diet obviously limits the amount of rice going into those programs.

PL480 projects that provide U.S. food assistance in response to emergencies and disasters around the world make up 90 percent of all food aid programming.  More than 50 percent of those projects consist of vouchers, local and regional purchase, and cash transfers; and 42 percent is in-kind assistance.

"The U.S. Department of Agriculture (USDA) continues to utilize in-kind food aid, spending almost $350 million on commodity purchases," said Kincaid.  "Half of all Food For Progress and McGovern-Dole school feeding programs, both run by USDA, utilize U.S-grown rice.  USA Rice can be a strong contributor to these efforts, especially with fortified rice being a critical component for emergency feeding programs."

Implementation of these programs, particularly when providing in-kind food donations rather than development funding, does not go without challenges.  The universe of food assistance program implementers has shrunk considerably over the years, with 64 percent of PL480 projects and 45 percent of McGovern-Dole projects implemented by the World Food Programme (WFP).  Where there were once dozens of players, each with different goals and different alliances, there's now closer to just one dozen organizations responsible for distributing billions in federal aid every year.

"Consolidation among the array of implementers is not necessarily bad, but knowing WFP is the agency with the best infrastructure system to accommodate emergency response and challenging situations helps USA Rice focus our outreach," Kincaid added.  "In addition to building relationships with the team at WFP, we are also handling outreach to the other food aid implementers and evaluating what needs to be improved to make U.S.-grown rice a more important tool in battling hunger.  We're looking at creative ways to extend shelf-life when stored overseas in difficult climates as well as packaging improvements to keep food aid shipments a sustainable part of our industry's business model."