The Political Economy of Shipping US Food Aid Under the Cargo Preference Regime
18 Pages Posted: 20 Feb 2015 Last revised: 23 Apr 2015
Date Written: February 19, 2015
We are concerned with the way in which US agricultural cargo preference that regulates the international transportation of US Government generated goods may affect food aid provision. It considers specifically the efficiency of the current arrangements whereby 50 percent of food aid has to be moved by US registered ships, and the potential implications of changing this. It does this within a much broader critique of the ways in which such policies tend to be evaluated. The findings are that, when its opportunity costs are netted out, there are likely to be fewer quantifiable benefits to the US economy of the cargo preference structure than are often posited. In particular, many of the estimates of the economic gains to the US found in prior studies often involve those of vested interests and are frequently gross calculations based on not only a weak underlying methodology, but also a distorted use of that methodology.
Keywords: cargo preference, food aid, ship registration
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