Food Banks Win in Trump Trade War

SILVER SPRING, Md. — The shelves at your local food bank are likely stocked. Give credit to President Donald Trump’s trade war with China.

Food banks have been the beneficiaries of a U.S. Department of Agriculture program crafted last year and recently extended to support farmers affected by China’s retaliatory tariffs. Part of the farmer bailout includes a $1.4 billion program to buy surplus commodities affected by the trade tariffs and distribute them to food banks, schools and other outlets that serve low-income people. The purchases include beef, grapes, lentils, oranges, pistachios, pork, strawberries and tomatoes.

Leaders at food banks say the program has helped them provide their clients with healthy food, though maintaining and distributing perishable goods has come with unexpected costs. But critics say donating food to the needy is merely a beneficial side effect of the aid program and won’t put a substantial dent in food waste or hunger.

“That combination of trade war and additional food for food banks is not the policy mix I would have recommended,” said Parke Wilde, a food economist at the Friedman School of Nutrition Science and Policy at Tufts University in Boston. “It’s better to have a fairly well functioning trade policy and less need for mitigation for food banks.”

Still, food banks are happy to have the additional items, even if it means adding freezers and storage space to accommodate it.

“This food is certainly very valuable to us as an organization and specifically the fresh items have been a huge benefit,” said Molly McGlinchy, senior director of procurement and direct programs for Capital Area Food Bank in Washington, D.C. “This past winter, we had a pretty tough growing season, so the fresh items that the trade mitigation offered procured a large variety of fruits and vegetables we wouldn’t otherwise have been able to provide to the community.”

As part of the farmer bailout, the USDA is increasing the volume of goods it distributes through its nutrition assistance programs, such as The Emergency Food Assistance Program, or TEFAP, which helps supplement the diets of low-income Americans.

Food waste occurs at every stage of the supply chain, from farmer to retailer to consumer, but most waste happens in homes, grocery stores and food service facilities. Several states distribute blemished produce, which can be difficult to sell, from farms to food banks.

But Christopher Barrett, an agricultural and development economist at the SC Johnson College of Business at Cornell University, emphasized that the food bank component of the trade aid “isn’t a food waste reduction program,” but rather “a farm support payments program.”

Leaders of farm groups such as the American Soybean Association and the American Farm Bureau Federation, who met with Trump following the trade aid announcement, say they’re pleased the administration is supporting farmers and ranchers, but that the program is only a Band-Aid. They would prefer open markets on which to sell their products.

For its part, the USDA has been clear that the trade mitigation programs are designed to help farmers, not food banks. In its first announcement of aid July 24, USDA explained that Trump directed Agriculture Secretary Sonny Perdue “to craft a relief strategy to protect agricultural producers,” while the Trump administration continues to work out a trade policy that it says will help American farmers compete globally in the long run.

On May 23, the Trump administration announced a second aid package to farmers, with the bulk of the funds going to direct payments to producers. The $16 billion bailout includes a $1.4 billion “Food Purchase and Distribution Program” of surplus commodities such as fruit, vegetables, some processed foods, beef, pork, lamb, poultry and milk, that go to food banks. An initial $12 billion farmer bailout announced last July sent 10% to the program.

As of May 20, $8.54 billion has been paid to farmers, and the Food Purchase and Distribution Program had bought $703 million of commodities, according to an email sent from the USDA press office in response to Stateline questions. The program is expected to continue through January 2020.

“This is a case where the administration should be praised for doing something like this,” said Craig Gundersen, professor of agricultural and consumer economics at the University of Illinois at Urbana-Champaign. “I don’t think it’s going to have a big impact. It’s a nice bonus, but when it goes away, it goes away.”

Farmer Philanthropy

Meanwhile, the 2018 farm bill allocates $20 million over the next five years to establishing a farm-to-food bank initiative.

Feeding hungry people by donating extra food to food banks is high on the Environmental Protection Agency’s food recovery hierarchy to prevent and divert wasted food.

About 11.8% of U.S. households were food insecure, without the resources to obtain enough food to meet their needs, in 2017, according to the USDA Economic Research Service. The proportion of food insecure households increases to 15.7% when considering only households with children. Consuming food donations is known to improve the food security status of clients by increasing their intake of fruit, vegetables and proteins.

Some states incentivize farmers to give. In 2017, after two consecutive vetoes from Democratic Gov. Andrew Cuomo, New York state enacted a tax credit for donations of agricultural products to the food recovery system. The law took effect in January 2018.

At least seven other states, (California, Colorado, Iowa, Kentucky, Missouri, Oregon and Virginia) as well as the District of Columbia offer similar credits.

It’s unclear what effect the president’s trade mitigation program will have on state tax incentive programs, though it might compete with programs such as the one in New York, according to David Just, behavioral economist at the SC Johnson College of Business at Cornell University.

“Farmers are very sensitive to prices and to taxes,” Just said. “But my guess is that the price incentive is going to make a bigger difference to them.”

Giving to the Needy

Some argue that it doesn’t matter that the president’s trade mitigation program wasn’t created with the poor in mind. Initially, food stamps weren’t created to feed the poor either, but to support the price of food during the Great Depression after a decline in crop prices created a crisis in rural America.

After World War II, American farmers created surpluses that were distributed to feed the hungry in Europe. As food aid increased, so did support for feeding the hungry at home, according to a piece in JSTOR Daily.

“This does tend to be a direct benefit for farmers in that it raises prices for their goods,” Just said, “and it can dull the shock and the pain from the tariffs that are out there.”

In the meantime, the food pantries are receiving a wider variety of foods that are relatively high in demand. For example, prior to trade mitigation, Food Bank for the Heartland, based in Omaha, Nebraska, was receiving between eight and 15 different products from USDA each month. Now, it gets between 20 and 25, including pulled pork, pork patties, pistachios and various nuts, said Brian Barks, president and CEO.

“We are grateful for the product we’re receiving,” Barks said. “It’s good product and it comes with some associated cost, but quite frankly, we’re in the business of helping people in need in Nebraska and western Iowa.”

Among those extra costs for food banks are the logistical challenges of preserving perishable goods that China won’t buy. For Food Bank for the Heartland and others, that’s meant increasing freezer capacity and storage space. Holding on to perishable goods longer gives their resource-limited food pantry partners time to make space for the additional items.

Lafayette, Indiana’s Food Finders Food Bank has saved on expenses like meat and produce, but it’s also doubled its transportation costs to accommodate larger deliveries, said Jack Warner, director of operations.

“No matter where you save one place,” Warner said, “it seems like something else picks up in cost.”

Patrons line up outside a discreet entrance at Shepherd’s Table, a soup kitchen here in Silver Spring, Maryland, before hourlong meal times. Organizers say nonperishable TEFAP items help to supplement the menu when goods run low.

A veteran with shoulder length gray hair who lives in subsidized housing above the kitchen said he thanked God for the hearty meals, which on a recent Monday morning included hard-boiled eggs, corn beef hash, leftover casserole, bagels, donuts, cream of wheat and apple crisp crumble. But there are certain foods you’ll never get.

“You can’t get steak and cheese here,” said Alan, a chatty regular who declined to give his age.

Last fall, Food Finders received an unusually large delivery of shredded cheese, as in 30,000 pounds. Since then, its 33,000-square-foot warehouse — roughly three-quarters of an acre — is packed with oranges, apples and potatoes, sometimes stored anywhere organizers can find space for it.

“There are times when all my rack space is full in the cooler and all I have is space on the floor and even my floor space is full,” Warner said. “I’d have to sometimes leave the potatoes out in the main area and turn my AC down to 65 degrees, so they don’t spoil on me.”

While it doesn’t hurt to have more food in the food bank network, there already are proven programs in place, such as SNAP, or the Supplemental Nutrition Assistance Program, to address hunger in low-income populations. People often consider food banks as tools for preventing hunger, but it’s also important to have a steady, well-functioning food and agricultural economy, said Wilde, the Tufts professor.

“If you wanted to remedy harm by helping low-income Americans, a strong safety net broadly would be my first recommendation, and good wage policies,” Wilde said. “Additional commodities for food banks are nice, but they’re fairly far down the list.”