Impact of U.S. Government Food Aid Reforms on the U.S. Shipping Industry: Preliminary Results

Abstract

George Mason University (GMU), School of Policy, Government and International Affairs (SPGIA), is conducting a study of the impact of proposed reforms of USAID and USDA food aid programs on the U.S. shipping industry. Preliminary results suggest that food aid reforms will not significantly impact the shipping industry, the U.S. agricultural economy, or the economy more generally. Some U.S.-flag oceangoing merchant ships and the mariners who crew them might be affected. The Maritime Administration and the Department of Defense have raised concerns that any reduction in the number of mariners could affect the effectiveness of the Navy's surge fleet in the event of a war. We found that data on available mariners is inadequate. Preliminary results also indicate that the current policy of food aid cargo preference has hampered the ability of food assistance programs to deliver needed aid, has not benefited industry substantially, and has failed to erase setbacks experienced by the shipping industry in recent years. Therefore, this report recommends that Congress eliminate food aid cargo preference. It further recommends that the Maritime Administration and Department of Defense provide adequate data and analysis on whether there are sufficient mariners to help man the Navy's surge fleet. And, it recommends that the Maritime Administration's development of a National Maritime Strategy include cost benefit analyses of any proposals to subsidize the addition of more U.S.-flag oceangoing merchant vessels to the U.S. flag foreign trade fleet.

Keywords: cargo preference, international food aid, international shipping competitiveness, merchant marine, mariners, naval surge fleet, national security