In a time when food prices are rising, applications for food assistance are on the increase, and transportation costs show no sign of abating — the Stocks for Food Program is proving its merit.
One of the program's architects, Under Secretary for Farm and Foreign Agricultural Services Mark Keenum, was recently recognized with an award for his exceptional innovation. The Hunger's Hope Award for distinguished public service was presented to Keenum by America's Second Harvest, the nation's largest charitable hunger/relief organization.
“I was honored by America's Second Harvest. America's Second Harvest is the largest network of food banks and food pantries across the country,” said Keenum.
The Stocks for Food Program, initiated in July 2007, is essentially a barter system that allows forfeited agricultural commodities to be traded for finished food products. The food products are then given to food banks and distributed nationally.
“What we did last year was take surplus Commodities Credit Corporation (CCC) stocks that we owned in our inventory and we converted those stocks of bulk commodities such as cotton, corn, wheat, peanuts, rice, and soybeans — into processed foods.
“Simply, we take these commodities and swap them through an exchange for a processed food. We can take a bale of cotton and exchange it for canned vegetables or canned meat. Those canned products will be delivered at a point of distribution, working with our food bank partners, such as America's Second Harvest.”
The stocks are acquired through forfeiture. As an ag producer takes out a loan under the Marketing Loan Program, a crop is often put up for collateral. Later, the farmer may elect to forfeit the collateral, rather than pay or settle the loan.
Traditionally, these forfeited crop commodities would have been sold on the market and the income given directly to the Federal Treasury. Ironically, the Department of Agriculture has had no access to the proceeds.
“We have a responsibility to manage those stocks. When we acquire them, we have to start paying storage costs. Again, to address high prices of fuel, high prices of food, and the pressures placed on our feeding programs — we devised this innovative program so that rather than sell them, we barter them. Then the proceeds, or value of the commodities, can be swapped for a like value of processed food, and donated to our feeding programs.”
The processed foods are domestically distributed primarily through The Emergency Food Assistance Program (TEFAP). However, a great deal of the Stocks for Food Program resources are directed toward international food relief as well, particularly through the McGovern-Dole International Food for Education and Child Nutrition Program. The McGovern-Dole effort serves malnourished children in severely impoverished nations.
Since its inception in 2007, the Stocks for Food Program has exchanged approximately $120 million in bulk commodities for food products — $100 million for TEFAP and $20 million for McGovern-Dole.
“To put it in perspective, within the span of less than a year, we're going to provide about a $100 million to TEFAP. TEFAP's annual budget is only $120 million. So you can see we've substantially increased their budget outlays. The McGovern-Dole program has an annual budget of $100 million, and we'll have provided an additional $20 million to them.”
Keenum acknowledges that higher commodity prices have been placing a great strain on domestic and international food programs. Higher fuel prices have heightened the strain on programs that are limited by fixed budgets. As the cost of the relief process escalates, it has a direct impact on the end of the relief chain and an inescapable result — fewer recipients.
With market signs already appearing dim, the Congressional Budget Office (CBO) projects that by Oct. 28, 28 million Americans will depend on food stamps — the highest number since the Food Stamp Program began in the 1960s. In addition, the Bureau of Labor Statistics indicates that the cost of basic foods has risen 5.8 percent in the last year.
Appearing on the market stage at an opportune moment, Keenum notes that the Stocks for Food Program has been well received, and recognized as providing assistance that would have otherwise been nonviable.
“It's been a real positive and been well received. Again, the department and myself personally were recognized for our initiative to create this opportunity to provide these additional funds. This provides added assistance that otherwise would not have been made available without the creation of this new program.
“It's a very innovative program. It's something that we're very excited about here in the department. These are dollars that would not have gone to domestic feeding or to international food aid, had we not created the new Stocks for Food initiative.”
Regarding the program's long-term status, the future is uncertain. Initiated through administrative action, sustainability of the Stocks for Food Program will be tempered by two factors:
- Availability of surplus commodities
- Internal administrative budgets.
Regarding surplus commodities, Keenum noted, “We no longer own any surplus commodities. We have bartered all of them that we had in storage. Now we will have a few commodities that come in, and we will obviously continue as long as we can.”
Concerning administrative budgets, Keenum is hopeful funds will be adequate. “It just so happens that we've taken administrative actions over the years that have generated savings. We were able to use the savings on actions that we've taken, and applied those savings to help pay for the cost of this new Stocks for Food program.
“As long as we have, in working with the OMB, adequate funds in our administrative account to help pay for this — because there are no appropriated dollars from Congress — then we'll have the ability to do it. Also, as long as we have surplus stocks.”
Keenum remains optimistic that the Stocks for Food program will be prolonged. “Personally I would love to see the program continue for years to come.”