Wasted: Time, Money & Food
WASHINGTON — Because most U.S. emergency food aid has to be processed in America and transported thousands of miles to hungry mouths overseas, the system is full of waste. Wasted money, wasted food and wasted time.
Every year, the U.S. Agency for International Development spends an average of $455 million paying U.S.-flagged shipping companies to transport the products, out of a total budget of roughly $1.4 billion for the Food for Peace program. On average, 6,000 metric tons of food aid is literally lost every year, enough to feed many thousands of malnourished people overseas. But the most painful losses can be measured in the amount of time it takes for the emergency food aid to arrive to those desperately waiting for it – sometimes seven months from the start of the journey to finish.
“People [have] died waiting for the food to arrive because of the very long logistics chain that’s required to get the food all the way from the United States to the location,” Andrew Natsios, former USAID administrator, said in an interview. “And it’s very expensive to move food over that distance.”
Eating up time
International food aid spends a significant amount of time in the United States, according to a database analysis of USAID and U.S. Department of Agriculture records obtained by Medill/USA Today. The journey of one particular shipment of corn soy blend (CSB) headed for starving children in Niger traveled from the fields of Wisconsin to ports in Chicago and then Norfolk, Va., before arriving at its destination.
That shipment, which left the United States on Nov. 20, 2013, spent 29 days being gathered, processed and fortified in Wisconsin, a month in transit from Cambria, Wis., to Chicago and then Norfolk, Va. It spent 40 days crossing the Atlantic before arriving in Port Cotonou, Niger. Then it took about 18 hours to travel via truck to the village of Maradi, where it was distributed for pregnant women and children under the age of five.
“If you take and count the number of times a bag of [corn soy blend] is handled in this program manually, it’s a miracle that it gets to where it can be eaten at all,” said Nelson Randall, former chief of the international procurement division at the USDA’s Kansas City Commodity Office, which handles buying products for U.S. food aid. “A bag of CSB, if it’s shipped in a bulk vessel, it’s handled 17 different times before it actually arrives at its final destination.”
That’s why critics for years have lobbied Congress to move to a more efficient system that allows USAID to purchase more food from local or regional farmers near a crisis zone and save much of the transport time and cost. They also want to give USAID the flexibility to give aid recipients vouchers or cash transfers to buy their own food.
Under current U.S. law, most food aid must come from domestic growers and be sent overseas on U.S.-flagged ships. Virtually all other countries – and the United Nations – long ago eliminated that kind of costly and time-consuming system in favor of local and regional purchase.
According to USAID, about half of the Food for Peace budget was spent on transportation costs last year – and over the past decades. And a third of those costs were for shipping by sea.
Sending U.S. food aid can only occur after an appeal for help is sent, a U.S. embassy in a country issues a disaster declaration or when USAID identifies the need itself. Then the U.S. works with the World Food Program and other United Nations agencies to assess the country’s needs, and then chooses a private volunteer organization to carry out the food aid mission.
Once the calls are put out for specific types of food, providers have about two weeks to bid on aid contracts. The winning bid is chosen by a computer system.
According to an analysis of 10 years of data provided by the USDA, food aid shipments take an average of 69 days to reach a U.S. port after the contract is awarded to a food processor.
The food, which is either in bags or bulk containers, sits in a warehouse at the port for the arrival of the massive cargo ship that will carry it overseas. The average wait time for a ship, according to industry professionals, is about two weeks.
Once aboard the ship, overseas journeys can take as long as a month. For example, a common route from Norfolk, Va., to Djibouti averages 30 days. If problems arise, it can take much longer. Then it takes a few days – or weeks — to travel by truck or rail to its distribution point.
USAID has long recognized that this often-tortuous journey is too long for starving people to wait for food.
“In the last decade, more than 30 different studies—from Cornell University to Lancet medical journal to the Government Accountability Office—have revealed the inefficiencies of the current system,” USAID Administrator Rajiv Shah said in an April 2013 speech at the Center for Strategic and International Studies in Washington. In the lengthy address, he unveiled an Obama administration proposal for an ambitious series of changes, including more local and regional purchase and other initiatives aimed at to eliminating waste in the system.
A bipartisan coalition agreed, and introduced reform legislation – but it died in Congress in June 2013. USAID, the administration and some lawmakers pushed for similar reforms when Congress took up the massive Farm Bill earlier this year. No changes were made to shipping or prepositioning procedures in the approved legislation, but a relatively incremental amount — $80 million – was approved for buying food locally to cut down on wasted time and money. USAID also has put in place some workarounds, including ways of expediting the delivery process in a handful of emergency situations.
When needed, some ships already in transit – if there are any – can be rerouted to the site of a developing emergency, as was the case recently for victims of the Typhoon Haiyan in the Philippines.
“We had a shipment of 1,000 tons of rice that was scheduled to sail from Colombo, Sri Lanka, to Pakistan for Afghanistan,’’ said John Roberts, program coordinator of operations at Geodis Wilson, a freight management company hired by USAID. “By Monday, when we all came back to work, we had managed to have that cargo rebooked for the Philippines.”
USAID has also spent more than $50 million establishing prepositioning warehouses. The fully stocked storage sites are strategically positioned around the globe to save time spent gathering, processing and transporting food. But there have been problems with prepositioning, including securing valuable food in conflict zones and adhering to shelf life conditions to prevent spoilage, mold and insect infestation, according to documents and interviews.
Prepositioning is also expensive, with questionable effectiveness. A January 2013 audit by USAID’s inspector general found that despite a huge recent shift toward prepositioning, especially for food headed to Africa, USAID “did not determine whether the benefits of prepositioning overseas outweigh costs.”
“To reduce delivery times for food shipments, more have been prepositioned overseas. Despite this effort, some food prepositioned in the United States reached the Horn sooner than food prepositioned overseas,” the audit said. “USAID lacked comprehensive analysis showing that prepositioning commodities overseas resulted in timelier delivery than domestically, although a 2008 cost-benefit analysis found prepositioning commodities overseas was about seven times more expensive than doing so in the United States.”
But perhaps the biggest waste of taxpayer dollars comes in the form of increased shipping costs, according to a review of documents and interviews with critics, including current and former USAID officials.+
Special interests at sea
According to an analysis of USAID data, transportation costs have averaged $910 million a year over the last decade. That’s about $689 per metric ton food. According to a Department of Transportation report in 2011, U.S.-flagged ships cost 2.7 times more to operate. That’s important because U.S. law requires half of food aid shipments to be transported on American vessels, unnecessarily increasing the price, according to the Department of Transportation and other critics. (The law required 75 percent until a recent legislative change in 2012, and lobbyists more recently have been trying to get it back to that number.)
Most experts think the requirement should be a fraction of that, if anything.
“People cannot eat transport costs,” said Natsios, the former USAID administrator, in an interview. “If we had bought food locally we could have gotten it in with a much lower level of transport costs and we could have bought more food as a result.”
That issue is at the forefront of food aid reform. USAID estimates that it could feed 2 to 4 million additional people a year – with the same budget – if it had more flexibility.
Powerful shipping interests have fought to keep the current system, asserting that it’s worth it when you factor in American jobs. They say keeping a fleet of U.S.-flagged ships active is also an issue of national security.
“There will always be somewhat of a difference [in cost] because the requirement for American mariners and all of the safety and other regulations that we, in our society, require,” said Clint Eisenhauer, representative of USA Maritime, a coalition of maritime businesses. “But again, the value that we get in terms of national defense readiness offsets that.”
Some critics reject that argument, saying that maritime interests are fighting for profits as well as jobs.
“This is entirely affecting the profits of a few, either people who own kind of old rust buckets that we shouldn’t be using any longer, or foreign corporations that are milking the U.S. taxpayer for windfall profits,” said Christopher B. Barrett, a Cornell University professor and author of “Food Aid After Fifty Years: Recasting its Role.”
“In exchange,” Barrett says, “kids are going hungry in Syria. It’s crazy.”
So close, yet so far
Sometimes the food is lost, stolen or goes bad during the transit process. That only happens to a small fraction of the cargo – often less than 1 percent – but it can be especially tragic when a big shipment of food is so close to the mouths it is meant to feed.
In 2008, the Taliban attacked three trucks carrying food aid in Afghanistan, killing the drivers and stealing more than 120,000 pounds of milled rice. One shipment headed for North Korea in the mid 1990s sank off the coast of Taiwan, Natsios said. In cases such as these, it’s all but impossible to send replacement shipments in a timely manner.
And in 2009, the Maersk Alabama was carrying food aid off the coast of Somalia and was captured by pirates, an event made famous by the recent Tom Hanks movie, Captain Phillips.
In the late 1990s, riots broke out as one shipment of food aid was being unloaded from a cargo ship in Sierra Leone.
“People were so desperate they were storming the vessel,” said Steve Searcy, chief of the marine liability branch at the USDA office that monitors food aid losses. “[The workers unloading cargo] couldn’t keep the people beat back – there were people on the ship throwing things over the side, shots going off. These are the things that these guys have to deal with. They do deal with some very desperate and volatile situations.”
Disposing of food that goes bad is also a major challenge.
About four years ago, the USDA worked with Kenyan authorities to dispose of 1,500 tons of cornmeal that had been stained with vegetable oil.
“We had a hard time figuring out a way to destroy it without it getting into the hands of people who were so desperate [for food],” Searcy said.
Fearing that people would dig up buried food, officials ended up burning the food at a nearby cement factory.
The most common reason for lost food is much less dramatic than highjacking or riots. It’s called “shortlanding,” which is when the amount of food taken off a ship is less than records indicate should be there. Sixty percent of losses recorded in 2010 – the most recent data available – were due to shortlanding from container ships, according to a report from USAID and the USDA. It described such losses as “excessive” and “cause for concern,” adding, “It is our belief the largest percentage of loss is unexplained.”
After shortlanding, the most common causes of loss are slackage, or food that is lost through damaged packaging, and water damage.
However, USAID doesn’t know the true extent of food aid losses because 70 percent of American food aid is handled by the United Nations’ World Food Programme, which distributes it overseas. The WFP doesn’t report losses to the United States, and won’t say why, according to USDA’s Searcy.
“The only reason I’ve gotten is, ‘That we’re not willing to share that info with you,’” Searcy said.
Though the U.S. government is able to recover such losses, the food never makes it to its intended recipients.
“It takes far too long to get food aid to starving people, [and] wastes tens of millions of taxpayer dollars,” Rep. Eliot Engel of New York, the senior Democrat on the House Committee on Foreign Affairs, said in a committee hearing last year. “We need to find a better, more efficient way to distribute aid.”