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Final farm bill keeps Food for Peace Title II largely intact

House-Senate conference report avoids radical restructuring, but may bring some reductions in U.S. food-aid cargoes

The Senate and House of Representatives have approved five-year authorization legislation known as the farm bill that keeps Food for Peace Title II largely intact, but contains provisions that could draw resources from the program and may lead to some future reductions in U.S. food-aid cargoes.

The legislation was produced by a House-Senate conference committee convened to reconcile the Federal Agriculture Reform and Risk Management Act of 2013, which was approved by the House, and the Agriculture Reform, Food, and Jobs Act of 2013, which was approved by the Senate. The House approved the compromise measure Jan. 29 and the Senate passed the bill Feb. 4. It is expected the President will sign the legislation.

The farm bill, H.R. 2642, does not authorize moving the Food for Peace program out of the Department of Agriculture, nor does it authorize the use of as much as 45 percent of the program's funding for cash transfers, vouchers and the purchase of commodities from foreign producers - radical restructuring sought by the Obama administration and congressional allies that, if enacted, would end the domestic purchase of U.S. food-aid for shipment overseas and have a devastating impact on the U.S. merchant fleet and the seagoing job base supported by these cargoes.

Under current cargo preference requirements, 50 percent of U.S. food-aid shipments must be carried by U.S.-flagged vessels.

"The conference report is not what we had hoped for, but it would have been much worse without the efforts of senators and representatives on both sides of the aisle who recognize the crucial roles of the U.S. merchant marine and the importance of the Food for Peace program," said American Maritime Officers National President Tom Bethel.

"The one-third cut to the cargo preference requirement under MAP-21, combined with Food for Peace budget reductions in excess of 40 percent in recent years, have caused severe setbacks for the U.S.-flag fleet and continue to threaten defense sealift capabilities that depend upon the U.S. merchant marine," Bethel said. "AMO will continue working with all of maritime labor, our contracted employers and members of Congress to keep the Food for Peace program intact and to restore the U.S.-flag share of U.S. food-aid shipments."

H.R. 2642 makes permanent a 'local and regional purchase' pilot program for the purchase of commodities from foreign producers and for other purposes. The LRP program is authorized at $80 million and the funding will not be drawn from Food for Peace Title II; however, congressional appropriators will need to find a source for the funding.

H.R. 2642 increases the diversion of program assets to agencies and purposes other than commodities supplied in connection with the Food for Peace Act from the current level of 13 percent to 20 percent each year, and provides for authorized expenses to include transportation, storage and distribution of food aid, among other things. The legislation also includes a number of other provisions, as well as evaluation and reporting requirements, involving Food for Peace Title II - the section of the Food for Peace Act that provides for the purchase and shipment of U.S. commodities.

Separate legislation - the Bipartisan Budget Act of 2013, which was approved by Congress and signed into law in December - may also factor into the Food for Peace equation in the future. The budget act eliminates reimbursements from the Maritime Administration to the U.S. Department of Agriculture and the U.S. Agency for International Development. Prior to enactment of the budget act, when shipping expenses for food aid exceeded 20 percent of total program cost (the value of commodities plus shipping expenses) in a given fiscal year, MARAD reimbursed USDA and USAID for the dollar amount above 20 percent.

Although the elimination of this requirement is not expected to have an immediate impact, if the prices of commodities comprising U.S. food-aid shipments decline and transportation becomes a larger percentage of the total program cost, the absence of reimbursement from MARAD could result in less money being available for the program.
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