This is a joint post with Will McKitterick.
On NPR this morning, Dan Charles told Morning Edition Host Renee Montagne that the Philippines is fortunate that the typhoon struck early in the US government’s fiscal year, when “there's plenty of cash available to spend” for food aid. That means that the US Agency for International Development (USAID) was able to immediately provide $8 million for World Food Programme (WFP) relief operations, with a promise of $10 million to $15 million more later. Had the typhoon struck a few months earlier, however, cash for such crises would have been exhausted by relief operations in Syria.
Without the ability to draw on the emergency cash fund, typhoon victims would not have seen significant US food aid until next month when a shipment of American rice prepositioned in Sri Lanka arrives. And, down the road, since Congress requires most US food aid to be in-kind and transported on US-flagged ships, additional assistance would take even longer and cost far more than buying rice locally or regionally.
The map illustrates just how crazy this is. Thailand and Vietnam are major rice exporters that are far closer than the American West Coast, or Sri Lanka. Even Cambodia, one of the poorest countries in the world, has become a net rice exporter in recent years. And, since most Philippine farmers had completed this season’s harvest, local stocks are a potential source of food aid that would save time and US taxpayer dollars, and support development in a country desperately in need of help. Hopefully the remaining US funds pledged for the WFP in the Philippines will also be in dollars, rather than in-kind.
But the portion of the emergency food aid budget that can be used flexibly for cash transfers, food vouchers, or for purchasing food locally or regionally is only around $300 million, out of a total budget of around $1.5 billion. In FY 2013, all of that, and more, was used to address the huge humanitarian crisis in Syria. So, if USAID needs to use significant amounts of the emergency cash fund for the Philippines, will there be enough for Syria? And what if another earthquake, typhoon or some other disaster strikes next year?
Last spring, the Obama administration unsuccessfully proposed a reform to shift just under half of the emergency budget from in-kind to cash. Shortly after, the House of Representatives just narrowly rejected an amendment to do something similar. We estimated that the administration’s reform (which included other elements as well) could allow food aid to reach as many as 10 million more needy people without increasing the budget. The evidence on the value of food aid reform keeps growing, as does the momentum behind it. Something good could come of the tragedy in the Philippines if it gives reform that final push to the top of the hill.