Examining the u. S. Agency for International Developments food for peace program, as well as ways to distribute food more effectively around the world. The Foreign Relations committee will come to order. We are currently facing an historic a humanitarian crisis. The United States continues to be a world leader in providing more than a third of all emergency food today, over 2 billion annually. Sadly, despite our generosity, there are shortfalls due to other nations not meeting the challenge. In that years deliberations, we have the opportunity to do more without having to in more money having to spend more money. A little more than half of our food date is provided by the farm bill, saddling our fees a program with u. S. Commodity and cargo preference requirements. Requires aid to be sourced almost entirely from u. S. Farmers, half of which must be shipped on u. S. Flagged vessels. These restrictions result in spending as little as . 35 to . 40 on a dollar on food. Let me say this one more time. ,ecause of these ridiculous utterly ridiculous requirements, each dollar . 40 of is actually used to provide food to people who are starving. If we relaxed the commodity preference to match the needs overseas, the overhead cost. Ould drop dramatically u. S. Farmers would still play a vital role in the program, and we would free up over 400 million in taxes to be used to feed up to 9. 5 million more starving people each year. One of the major obstacles to modernizing food for peace are those who continue to support and profit from cargo preference. Ules representatives of the shipping industry claim that food aid has a Significant Impact on u. S. Maritime jobs and our militarys sealift capacity to move Defense Materials overseas. I have asked our witnesses to provide the committee with facts , analysis, and sound resources to determine whether this is true. For example, the industry argues that 40 ships i and 2000 mariners are needed. Data shows usaid that in 2016, only five u. S. 175 ships out of a fleet of rely on food aid shipments to stay afloat. Let me say this only one of which is even capable of. Arrying military cargo, one some have even questioned why we only have cargo preference at all, since there is little supporting evidence that the requirement effectively should enable sealift capacity. For example, the vast majority of food aid is moved on ships and capable of moving military and the ones that can already received a 5 million a year subsidy. According to Navy Officials briefing our committee, we maintain a strategic sealift thater reserved program can meet virtually all of our mobile sealift requirements. Millions of people go hungry each year unnecessarily because of these two ridiculous requirements that congress places on food aid. One of our witnesses will testify later that Research Suggests at least 40,000 children die annually to what who wouldsaved otherwise be saved if we reformed this system. There are a few areas in government where we can have more impact on lives without Additional Resources than by modernizing the food for peace program. Iron ridge all my colleagues to listen to the days testimony, work with us i urge all my colleagues to listen to the days testimony, work with us. I spoke to the tennessee farm bureau. The audience was aghast at the fact that here in washington, those people who represent all u. S. Act1 of exports going to this. They were aghast at the fact that congress had people appear in the name of protecting them had people up here in the name of protecting them. These are good people. They were aghast at the fact that congress had these ridiculous requirements in place, and that people were starving because of these ridiculous requirements, when their goal is to feed america and feed the world. With that, Ranking Member clark. Mr. Chairman, first, thank you for conducting this hearing. I think every member of this committee admires your passion on this issue, and your leadership on this issue, so that america can more effectively deal with world hunger issues. We are proud to be part of your team to figure out a better way to get this done. I think we need to understand the die mentions of this problem the dimensions of this problem. I dont think any of us have expressed the real fear of hunger, maybe because of our schedules that we might miss a meal, but we dont understand what it hundred 15 Million People globally face, which is a real fear of whether they will get the nutrition they need in order to survive. Our world produces enough to feed all of its inhabitants. However, as we sit here, over 20 Million People in four countries alone south sudan, nigeria, somalia, and yemen, are threatened by famine. Of famine means people, especially women and children, are dying of hunger. Dying of hunger. The u. N. Has called this the largest humanitarian crisis since 1945. , this isman is right an urgent issue and needs to be with. Ith dealt mr. Chairman, i appreciate that you have traveled to some of these countries to learn how the u. S. Can best help those in need. You have gone there, and they are not easy places to get to. We appreciate you very much taking the time to better understand by seeing circumstances on the ground. I agree with you that our values as americans and our place as leaders in the Global Community means the United States must improve how the world is committing to this crisis, and that means taking a look at how our positive our policies toward global Food Security can be most impactful, in terms of ensuring Adequate Funding for these programs. Adequate funding is important. Yes, you can reform and get better use of our funds, but it does require that we put up the resources. For more than 60 years, the United States has played a leading role in tackling hunger. We are the Worlds Largest food aid donor in cases of disaster, natural or manmade, the American People are the most generous in the world. Food look to modernize the aid programs, we should not only look at the shipping requirements, but also address issues relating to prepositioning food aid in the region, concerns about monetization practices, options for increasing cashbased locals, and result purchasing programs. We should also be sure to adequately fund our food markets,efforts in such as speed the future such as feed the future. Our Agriculture Development programs require Adequate Funding. As we embark on this effort to reform our food aid program, i want to point out that there will always be a place for food growth in the United States. Possibes it is not in sometimes it is not possible to address the needs in the local markets. A tailored approach with a tailored approach, we can feed more people and save more lives. I look forward to all of our witnesses, but i want to particularly acknowledge the Vice President for Government Relations for the Catholic Police services. We take great pride on their presence in baltimore. We admire the work they do globally. Thank you very much. Our first witness is math demands. He manages both of our International Food assistance programs. We thank you for being here and. We thank you for being here. Begin, weld appreciate it. Thank you for being here. Thank you for your service to our country. Chairman corker, Ranking Member cardin, and members of the community, thank you for the invitation to speak with you today on how to increase the Cost Effectiveness of the food for peace program. We are grateful for your support of humanitarian efforts. We are facing unprecedented levels of global Food Security, echoing some of the comments on the Opening Statement of Ranking Member cardin. , more than 20nes Million People are at risk of severe hunger or starvation. The United States has provided lifesaving humanitarian systems. Four countries represent only a small part of global Food Insecurity. Global hunger increased in 2017 the first time in more than a decade. Food insecurity now affects 11 of the worlds population. That is 815 Million People going to bed hungry each night, or more than twice the population of the United States. Of food for peace has provided lifesaving assistance to people in need in 50 countries this year, providing assistance to the worlds most Vulnerable People reflects americas compassion and generosity. It is also critical to our national security. U. S. Food assistance in all of its forms contributes to a more stable world where people have the chance to lead healthy, productive lives. Given these challenges and the need for us to improve the efficiency of food for peace programs, they were just ask is incredibly important. I will focus on one challenge to improving efficiency, how we ship u. S. Commodities through the title ii program. Under title ii, we receive funds to purchase commodities and certain specialty Nutritional Products to meet emergency food news. Working closely with our partners, we identify when and where u. S. Commodities are arrange forwe these commodities to be shipped from u. S. Ports to our destination. The food is sorted in various ways, always prioritizing the most vulnerable, usually children under five and other vulnerable populations. Step in theitical title to process. The cargo preferences act requires that at least 52 of the gross tonnage must be transported on u. S. Flagged, privately owned commercial vessels, given they are available at reasonable rates. However, the u. S. Flag feet is not always available to provide the services needed. For example, in 2017, we did not receive a single offer from u. S. Flag vessels. The majority of our boat cargoes is carried by only four u. S. Flag ships, which can contribute to challenge is to respond. Another obstacle is a lack of direct shipping services to some regions. Food for peace destinations and u. S. Flag vessel routes are not always well matched. Services do not exist to most of our destination ports directly, particularly to western and southern africa. Finally, there is the matter of cost. In fiscal year 2016, it cost food for peace substantially more per metric ton for u. S. Flag vessels compared to foreign flagged vessels. This cost differential has Significant Impacts on our programs. Cargo preference requirements mean that we paid millions more each year. Now more than ever, every dollar counts. Our primary concern at food for peace is to stabilize relief suffering and reach people in need. To do this the best we can, we are constantly looking to improve our performance and an sure wed make the most Cost Effective use of american tax dollars. Thank you for your invitation today. I am happy to take your questions. Senator corker i typically dont ask questions first. I will try to be brief. The u. S. Maritime industry claims that 40 u. S. Flag shipments military would see that capacity. According to your data last year, i want to reiterate some of the things youre saying. Five ships carried 66 of all food aid on u. S. Flag ships under the cargo preference law that you are unfortunately having to adhere to. Aid weref such food spread amongst 19 ships, so thats just 24 total ships with only five that rely on arguably food aid to stay afloat. Is it simple for u. S. Flagged vessels to carry such a large percentage . Thank you for that question, senator. In the last two years, that has been the norm, where a very small number of ships carry the majority of our bulk cargo. To be clear, 2016, we had five ships that carried the majority. In the middle of the year, one of those was scrapped by industry. It has become four ships they carry over 60 of our cargo. Senator corker and why is that . He case because we are having to rely on u. S. Flagged ships, that is the concentration, is that correct . And it is Just Two Companies that provide those four ships . Those four ships are owned by two companies. The appropriate ships to carry u. S. Cargo, i am youre not receiving offers from other shipping lines available. Senator corker if they were not u. S. Flagged, would you receive other offers from other companies . Yes. To put into perspective, we had 26 ships that were u. S. Flagged, 90 ships that were foreign flagged. Five orcorker of the four, how many are capable of ofrying sealift capacity military cargo . To myill do for that colleagues. I will say what is useful or the bulk carriers. Senator corker let me answer that for you. Its one. How much more does it cost you to ship on u. S. Flagged vessels than foreign flagged vessels . Paid on 2016, we average per ton 135 for u. S. Ships. On foreign flagged ships, we gave 65 per ton. Paid 65 per ton. Senator corker i think i will stop. I cant imagine why we call people around the world to start to serve two Companies Based in new york. Somebody else they have a rational reason, but i will defer to the Ranking Member. Senator cardin it is one of the areas of reform that we had in the 2014 farm bill, that allowed additional flexibility in regards to commoditybased food at, and allowed the use of International DisasterAssistance Council for emergency Food Security programs. On those just comment changes, how they have impacted our ability to respond to the global needs . Mr. Nims thank you for the question, senator. The addition or emergence of International DisasterAssistance Funds through food for peace has been instrumental for us to combat Food Insecurity around the world. There are several areas where in time u. S. Food assistance is not the appropriate tool to use to fulfill our mission. Primary amongst those would be syria. Both inside and outside syria, title ii Food Assistance would not have the impact that our voucher and cashbased systems have allowed. In addition, we are also able to lead innovation. For voucher programs set up outside of syria, we have developed retinal scans to ensure the people identified are those people and are receiving those vouchers. In addition, it has allowed us to buy food locally and regionally to be able to respond much more quickly. And the emergency fear of being in ato move the commodity certain amount of time is crucial to save lives. Idea a has given us the flexibility for that. Senator cardin our goal is to have selfsustaining countries on our own food supply, resiliency. On their own food supply, resiliency. Could you tell us how the use of these funds are they being to achieve we do and the resiliency so the local communities can one day be able to handle their own food needs . Mr. Nims most definitely, yes. When we use the idea a the ida funds, we ensure the markets are able to support this, and sometimes by incentivizing the market, we are making it stronger to allow the area affected by the crisis to recover. Instead of bringing in, where wheret inappropriate, foreign commodities, we are actually incentivizing the market. Most definitely, these programs gives usd the ida the flexibility, where appropriate, and our teams do the studies where this is the case. We are getting that group back on their feet more quickly. Senator cardin i think i understand why we do monetization. You cant get funds unless you use this method. Toseems terribly inefficient ship food overseas and sell it in order to get money. Isnt there a better way . Monetization is part of the farm bill at this time. It states we do 50 to do monetization. It has been a way to generate crucial funds. We are losing . 75 on the dollar, if not more, when we have done traditional monetization programs in the past. Right now, we have one program in bangladesh that the fills our requirements, and that is not the most efficient way to generate the funds necessary. I understand the requirements and the third party needs of funds. This is one of the ways we can get they can get funds. This is not the most efficient way to get resources to deal with the problem. Mostims this is not the efficient way to do that, yes, and i believe i am hopeful that as we go forward, we can develop more efficient ways to provide that necessary aspect. Im going to use your remaining 39 seconds to embellish and say, look, we in our own country have issues with china dumping steel or dumping panels or whatever. Its a big issue to us. With our program, where we would like for usaid to help countries be self sustainable, that is our goal. ,ver time, these countries through our programs can we take our commodities, ship them overseas, lose . 75 on the dollar, and sell them at submarket prices in the market and destabilize the very farmers in those areas that we are hoping can hold the capacity to feed their own people. It is the most idiotic requirement one could possibly come up with. Again, the entire program is whole u. S. Actr output is, which means it has no effect on our agriculture community. Mr. Nims reserve my seven seconds. [laughter] are absolutely right. If we are appropriate of the money, so they had the money, this is done, yes, because of local agricultural interests, but supported by thirdparty groups because it is the source of funds they cannot always get. Need to maker we sure this is appropriated in another part and allow you