How USAID cuts hurt American farmers

Summary

Summary of "How USAID Cuts Hurt American Farmers"

Podcast: The Indicator from Planet Money
Host: Waylon Wong & Erica Barras
Release Date: February 19, 2025

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Introduction

In the episode titled "How USAID Cuts Hurt American Farmers," hosts Waylon Wong and Erica Barras delve into the intricate relationship between the U.S. Agency for International Development (USAID) and American agriculture. The discussion centers on the repercussions of the Trump administration's decision to halt foreign aid, leading to significant layoffs within USAID and the broader implications for U.S. farmers.

USAID and the Trump Administration's Aid Freeze

The episode opens with the sudden termination of USAID by the Trump administration, resulting in the layoff of over 10,000 employees and contractors. Jordan Schimmerhorn, a former USAID contractor, shares her immediate response to the layoffs and her subsequent research into the agency's impact on American agriculture.

Jordan Schimmerhorn [00:38]: "I think it was a real choice to lay off 10,000 mission driven workaholics."

Without the agency’s support, approximately $500 million worth of U.S. crops were left unused, leading to significant waste as these commodities deteriorated in ports and warehouses globally.

Impact on American Farmers

Jordan Schimmerhorn embarked on a comprehensive research project to assess how USAID funding supports American farmers. Her findings reveal that USAID plays a pivotal role in purchasing vast quantities of U.S. crops for international aid and funding agricultural research across state universities.

Jordan Schimmerhorn [00:56]: "I've just been spending time trying to help build the evidence base for why USAID matters to the American people and why people throughout the country should care about it."

Despite the $2 billion annual expenditure on food aid—primarily involving rice from Louisiana and wheat from Kansas—this represents less than one percent of farmers' income from their crops. However, for specific sectors like sorghum (milo), government purchases are essential.

Michelle Erickson Jones [03:25]: "It's not like we're just giving this aid for the sake of giving dollars. We're also building those relationships because all of those bags say USAID. All of them say product of the United States."

Michelle Erickson Jones, a fourth-generation farmer from Montana, emphasizes the critical role USAID's food assistance programs play in her state's agricultural economy and international market presence.

The Food for Peace Program

A significant portion of the discussion focuses on the Food for Peace program, USAID's longest-running food assistance initiative, established post-World War II to address American grain surpluses and foster international goodwill.

President Eisenhower [04:08]: "Of food in the interest of reinforcing peace and well being of free peoples throughout the world."

Originally, the program aimed not only to alleviate hunger but also to open new markets for American agriculture and counteract the spread of communism by winning over allied nations through food aid.

Michelle Erickson Jones cites Japan and South Korea as success stories, where initial aid recipients transitioned into paying customers, thereby expanding U.S. agricultural exports.

Michelle Erickson Jones [05:41]: "Japan is one of our biggest customers. South Korea is one of the next biggest. And they are former USAID customers, one of the originals."

Legislative and Industry Responses

In response to USAID's abrupt shutdown, lawmakers from agriculture-heavy states, led by Senator Jerry Moran of Kansas, are advocating to transfer the Food for Peace program to the U.S. Department of Agriculture (USDA).

Senator Jerry Moran [07:03]: "USDA has boots on the ground and the infrastructure already in place to support the logistics for food assistance."

Moran argues that USDA possesses the necessary infrastructure to manage food aid logistics more effectively. However, Jordan Schimmerhorn expresses doubt about USDA's capacity to handle the nuanced, country-specific operations that USAID managed.

Jordan Schimmerhorn [07:48]: "Every senator wants to protect USAID's investments in their state. Turns out USAID funds a bunch of different things in a bunch of different states."

State Department's Stance and Legal Challenges

The State Department, now overseeing USAID, has indicated that it will continue programs aligned with national interests while discontinuing those that do not.

State Department Spokesperson [08:26]: "Programs that serve our nation's interests will continue. However, programs that aren't aligned with our national interest will not."

Amid these changes, a federal judge has intervened, ordering the Trump administration to temporarily lift the freeze on USAID funding pending a status report.

Waylon Wong [08:42]: "Last week, a federal judge ordered the Trump administration to temporarily lift its freeze on USAID funding."

As of the episode recording, there were no updates on the court's status report, leaving the future of USAID's funding and its impact on American agriculture uncertain.

Conclusion

The episode underscores the multifaceted role USAID plays not only in international aid but also in supporting American farmers by creating and maintaining export markets. The abrupt halt of USAID funding has ignited debates on the best way to manage food aid and support domestic agriculture, with significant implications for both national security and the agricultural economy. As legislative efforts and legal challenges unfold, the episode leaves listeners contemplating the delicate balance between foreign aid and domestic agricultural support.

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Notable Quotes:

• Jordan Schimmerhorn [00:38]: "I think it was a real choice to lay off 10,000 mission driven workaholics."
• Michelle Erickson Jones [05:41]: "Japan is one of our biggest customers. South Korea is one of the next biggest. And they are former USAID customers, one of the originals."
• Senator Jerry Moran [07:03]: "USDA has boots on the ground and the infrastructure already in place to support the logistics for food assistance."
• State Department Spokesperson [08:26]: "Programs that serve our nation's interests will continue. However, programs that aren't aligned with our national interest will not."

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This episode, produced by Julia Ricci with engineering by Jimmy Keeley and fact-checked by Corey Bridges, offers an insightful exploration into the intertwined destinies of USAID and American farmers, highlighting the broader economic and geopolitical ramifications of foreign aid policies.

Transcript

[NPR]

Npr.

[Waylon Wong]

This is the Indicator from Planet Money. I'm Waylon Wong.

[Erica Barras]

And I'm Erica Barras. From Planet Money, Jordan Skimmerhorn was one of the many federal contractors who was thrown out of work last week. Her job was with USAID, the U.S. agency for International Development, which distributes foreign aid.

[Waylon Wong]

As we covered last week, the Trump administration has halted foreign aid and it's gutting the agency, which had 10,000 employees plus contractors like Jordan.

[Jordan Schimmerhorn]

I think it was a real choice to lay off 10,000 mission driven workaholics.

[Waylon Wong]

Jordan, fortified with her newfound spare time and a pile of Girl Scout cookies, embarked on a research project. She decided to look into how USAID money supports American agriculture.

[Jordan Schimmerhorn]

I haven't even applied for unemployment yet. I've just been spending 247 trying to help build the evidence base for why USAID matters to the American people and why people throughout the country should care about it.

[Erica Barras]

Jordan compiled data for all 50 states plus a handful of US territories. She looked into how the government buys huge amounts of crops to send overseas, plus how it funds agricultural research at state universities.

[Waylon Wong]

Today on the show, we look at how foreign aid benefits American farmers and what might happen to these programs under a dramatically reduced usaid.

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[Waylon Wong]

The abrupt closure of USAID meant there was no time to wind down programs in an orderly way. Caught in the chaos was some $500 million worth of wheat, soybeans and other commodities. This food was left a molder at ports and warehouses around the world.

[Erica Barras]

At a recent hearing on the Hill, Republican Senator Jerry Moran of Kansas had a question for the agricultural industry. Officials who'd been called to testify.

[Senator Jerry Moran]

While there is certainly a moral component to food aid, I thought it might be valuable for you to remind me if there's a value to farmers.

[Waylon Wong]

Here's one way to measure that value. In 2020, the federal government bought around $2 billion worth of food aid from American farmers. We're talking rice from Louisiana and wheat from Kansas. These commodities were then distributed internationally.

[Erica Barras]

That $2 billion represents less than a percent of the income farmers make from their crops. Still, for some industries, the government purchases are crucial. One executive at a Kansas agricultural co op told NPR News that the government is a key customer for sorghum, also known as milo. It's a kind of cereal grain.

[Michelle Erickson Jones]

Well, the last milo that was sold of any value was Food for Peace, and that was in the month of December. Otherwise, there is no market.

[Waylon Wong]

Food for Peace, that's the government's longest running permanent program for food assistance. It's administered by usaid. And it goes all the way back to the post World War II period When American farmers found themselves with a surplus of grain.

[Erica Barras]

President Eisenhower signed a law that would channel this excess to countries in need.

[President Eisenhower]

Of food in the interest of reinforcing peace and well being of free peoples throughout the world. In short, using food for peace.

[Erica Barras]

The new policy wasn't just a way to offload the grain surplus. The government also believed it would develop new customers for American farm products and win over countries that might otherwise turn to communism. Food for Peace was eventually moved under USAID, which was started in 1961.

[Waylon Wong]

Michelle Erickson Jones is a fourth generation farmer in Montana. She and her family grow wheat, barley and alfalfa. She's also the former president of the Montana Grain Growers Association Association, a job she got by writing in her own name on the ballot.

[Michelle Erickson Jones]

No one was running. And so I looked at it and I thought, well, that seems fun. Literally, that's what I thought. That seems fun.

[Waylon Wong]

Michelle says USAID food assistance programs are vital to her state.

[Michelle Erickson Jones]

It's not like we're just giving this aid for the sake of giving dollars. We're also building those relationships because all of those bags say usaid. All of them say product of the United States.

[Waylon Wong]

Last week on the show we talked about the economic and national security rationales that underpin usaid. And when, when it comes to American agriculture. Michelle cites Japan and South Korea as examples of this policy working.

[Erica Barras]

Well, these countries were some of the earliest recipients of food aid. They got shipments of US Grown wheat. Then as their economies grew, they went from being recipients of Donated food to being paying customers.

[Michelle Erickson Jones]

Japan is one of our biggest customers. South Korea is one of the next biggest. And they are former USAID customers, one of the originals. And so the root of the program allows Montana to successfully essentially export as much wheat as we do.

[Waylon Wong]

American wheat farmers encouraged the shift by aggressively marketing their crops overseas with the financial support of the government. This deliberate effort to cultivate new markets was like a large scale international trade version of when you get a free sample of something at the grocery store and then decide to buy it.

[Erica Barras]

The national security rationale for food aid is that people who get this American sponsored assistance are less likely to develop anti US sentiment. And Michelle says to all also think of food aid as a border strategy. If people don't have to worry about going hungry, they're less likely to leave their home country and migrate to the.

[Michelle Erickson Jones]

U.S. you know, there's this saying like you have 99 problems until like your one problem is food and then you have one.

[Waylon Wong]

Michelle says it can be hard to make the case to farmers to support programs like usaid. One reason for this is the supply chain that connects growers with the ultimate recipients of food assistance.

[Erica Barras]

Typically, farms don't sell their crops directly to usaid. Instead they sell to a grain elevator, a big company like Cargill or Bungee. So farmers might not even know that they're participating in a program like Food for Peace.

[Waylon Wong]

As we said earlier, food aid accounts for less than 1% of farmers income from crops. Michelle says loss of that revenue from the closure of USAID might not be immediately felt.

[Erica Barras]

But lawmakers in agriculture heavy states are moving with urgency. Kansas Senator Jerry Moran, along with several other lawmakers, has proposed a bill to move Food for Peace from USAID to the U.S. department of Agriculture.

[Senator Jerry Moran]

USDA has boots on the ground and the infrastructure already in place to support the logistics for food assistance.

[Waylon Wong]

Moran says that under the current system, foreign aid was being mismanaged. He pointed to an example of a Syrian national who was accused of selling USAID food kits on the black market to leaders of a terrorist organization.

[Erica Barras]

Jordan Schimmerhorn, the former USAID contractor, says she's skeptical whether USDA has the right expertise in staffing in each country to distribute food aid. Still, she believes some USAID programs will survive.

[Jordan Schimmerhorn]

Every senator wants to protect USAID's investments in their state. Turns out USAID funds a bunch of different things in a bunch of different states.

[Waylon Wong]

We contacted the State Department which is now running usaid. We asked about the department's long range plans for the agency. We also asked what roles Secretary of State Marco Rubio believes American agriculture should play in food security and US Foreign policy.

[Erica Barras]

A spokesperson told us via email that the State Department is reviewing foreign aid and that, quote, programs that serve our nation's interests will continue. However, programs that aren't aligned with our national interest will not, end quote.

[Waylon Wong]

Last week, a federal judge ordered the Trump administration to temporarily lift its freeze on USAID funding. The court asked the Trump administration to file a status report by Tuesday. As of this recording, there was no update. This episode was produced by Julia Ricci with engineering by Jimmy Keeley. It was fact checked by Corey Bridges. Cake and Cannon is our show's editor and the indicator is a production of npr.

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