The Government Accountability Office (GAO) last week released a study of cargo preference for food aid (CPFA) that reports that the law requiring a preference for U.S. ships increased the overall cost of shipping food aid by an average of 23 percent, or $107 million, over what the cost would have been had the requirements not been applied from April 2011 through fiscal year 2014. In addition, differences in the implementation of CPFA requirements by the U.S. Agency for International Development and the Agriculture Department contributed to a higher shipping rate for USDA.
According to the report, “Following the July 2012 reduction in the minimum percentage of food aid to be carried on U.S.-flag vessels, USAID was able to substantially increase the proportion of food aid awarded to foreign-flag vessels, which on average have lower rates, helping to reduce its average shipping rate. In contrast, USDA was able to increase the proportion of food aid awarded to foreign-flag vessels by only a relatively small amount because it is compelled by a court order to meet the minimum percentage of food aid carried on U.S.-flag vessels by individual country, a more narrow interpretation of the geographic area requirement than what USAID applies,” the report said.
“Despite GAO’s past recommendations, U.S. agencies have not fully updated guidance or agreed on a consistent method for agencies to implement CPFA, which would allow USDA to administer CPFA using a method other than country-by-country,” according to the report.
