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January 13, 2022
International Food Assistance and Agricultural Cargo 
Preference
The United States is the largest provider of international 
Cargo Preference Legislative Authority 
food assistance globally. Approximately 40% of funding for 
The Cargo Preference Act of 1954 (P.L. 83-664), as 
such assistance in FY2020 (the most recent year for which 
amended, mandates that at least 50% of the gross tonnage 
comprehensive data are available) was used for the 
of U.S. government-financed cargoes must ship on U.S.-
provision of food grown in the United States, referred to as 
flag vessels. Since its passage, Congress has amended the 
“U.S. in-kind assistance,” to countries in need. Such 
Cargo Preference Act numerous times. The 1961 
commodities are subject to U.S.-flag shipping requirements 
amendment to the Merchant Marine Act (P.L. 87-266) 
in the Cargo Preference Act of 1954 (P.L. 83-664), as 
required that ships eligible to transport government food-
amended. Cargo preference requirements long have been 
aid cargoes either must be built in the United States or, if 
controversial and the subject of considerable debate, both in 
built abroad, must have sailed under the U.S. flag for the 
Congress and throughout the food assistance stakeholder 
previous three years. Congress wanted to discourage 
community. 
foreign-flag ships from entering the U.S. cargo preference 
trade only temporarily during periods when the world 
International Food Assistance 
shipping market was oversupplied. 
U.S. international food assistance programs are 
administered by the U.S. Department of Agriculture’s 
In the Food Security Act of 1985 (P.L. 99-198), Congress 
(USDA’s) Foreign Agricultural Service (FAS) or the U.S. 
increased the requirement for the share of food-aid tonnage 
Agency for International Development (USAID). Programs 
shipped on U.S.-flag vessels from 50% to 75%. In 2012, 
that provide U.S. in-kind food assistance include Food for 
Congress reversed its action of 1985, lowering the required 
Peace (FFP) Title II, Bill Emerson Humanitarian Trust, 
share of food aid that must be carried on U.S.-flag vessels 
Food for Progress, and McGovern-Dole International Food 
from 75% back to 50% in the Moving Ahead for Progress 
for Education and Child Nutrition. Table 1 lists each in-
in the 21st Century Act (P.L. 112-141). 
kind international food assistance program, the statutory 
authority, and the administering agency. USDA’s 
The Merchant Marine Act of 1970 (P.L. 91-469) 
Commodity Credit Corporation (CCC) procures 
empowered the Maritime Administration (MARAD) to 
commodities for all U.S. in-kind food assistance programs, 
regulate how other federal agencies are to comply with the 
regardless of which agency administers the program. 
1954 Act in response to allegations that other agencies 
intentionally did not fully comply with the law or 
Table 1. In-Kind U.S. International Food Assistance 
interpreted the law differently than MARAD.  
Programs 
U.S.-Flag International Fleet 
Statutory 
Administering 
Cargo preference applies to government-impelled cargoes, 
Program 
Authority 
Agency 
including in-kind aid under international food assistance 
Food For Peace 
Food for Peace 
USAID 
programs transported via ocean freight. Qualifying U.S.-
Title II 
Act (P.L. 83-
flag ships must be privately owned and employ a crew 
480) 
consisting of at least 75% U.S. citizens. The remaining 
crew must be U.S. residents. 
Bil  Emerson 
Agricultural 
USDA 
Humanitarian 
Act of 1980 
As of October 2021, there were 84 privately owned U.S.-
Trust (BEHT) 
(P.L. 96-494) 
flag ships. U.S. entities owned by foreign shipping lines 
Food for Progress  Food Security 
USDA 
control about 45 of the 84 ships in the fleet. Under U.S. 
Act of 1985 
shipping law, those entities qualify as “documentation 
citizens,” which are companies located in the United States 
(P.L. 99-198)  
and operated by U.S. citizens but with a “foreign parent.” 
McGovern-Dole 
Farm Security 
USDA 
Obtaining status as a U.S. business entity gives carriers 
International 
and Rural 
with foreign parents access to the Maritime Security 
Food for 
Investment Act 
Program (MSP), which provides a flat per-ship operating 
Education and 
of 2002 (P.L. 
subsidy intended to offset the higher cost of registering 
Child Nutrition 
107-171)  
under the U.S. flag. In return for the subsidies, the MSP 
Source: Compiled by CRS. 
vessels are to be made available to the Department of 
Defense (DOD) in times of war or national emergency. 
These vessels are designated as “militarily useful” by 
MARAD in consultation with DOD and are funded from 
https://crsreports.congress.gov 
International Food Assistance and Agricultural Cargo Preference 
MARAD’s budget. Foreign parent companies own about 63 
requires food safety measures, such as regular fumigation to 
vessels of the U.S.-flag fleet participating in the MSP.  
prevent contamination from pests, mold, or other forms of 
spoilage. Although prepositioning in-kind aid shortens 
Potential Issues for Congress 
delivery times, the Government Accountability Office 
From its origins in the 1950s, U.S. international food 
concluded in 2014 that doing this could involve additional 
assistance relied predominantly on in-kind aid, but over the 
costs due to increased storage and shipping expenses.  
past decade, the United States has diversified its food 
assistance to include what USAID refers to as “market-
In some instances, to meet cargo preference requirements, 
based assistance” (e.g., locally and regionally procured 
USDA and USAID have shipped food aid on vessels that 
commodities, cash assistance, and food vouchers). As of 
are not meant to carry bulk food cargo and are not 
FY2020, in-kind aid accounted for approximately 40% of 
compatible with equipment typically used to load and 
U.S. funding for international food assistance, with market-
unload bulk grains. According to USDA, this results in 
based assistance making up about 60%. Many other major 
increased costs and delays in delivering food assistance.  
donors—such as Canada, the United Kingdom, and the 
European Union—have converted primarily to cash-based 
National Security Considerations 
assistance. The U.S. decision to continue to provide in-kind 
According to MARAD, cargo preference laws serve to 
aid remains a subject of debate due to its generally higher 
protect U.S. ocean commerce from foreign control by 
cost compared with market-based approaches. Some 
sustaining a privately owned U.S.-flag merchant marine. In 
Members of Congress, MARAD, and certain interest 
wartime and during national emergencies, the U.S.-flag 
groups contend that cargo preference requirements facilitate 
merchant marine provides additional sealift capability to the 
U.S. military readiness by supporting the U.S.-flag fleet. 
Military Sealift Command (MSC). USA Maritime—an 
Other Members, USDA, USAID, and many 
organization representing carriers and maritime unions—
nongovernmental organizations assert that cargo preference 
asserts that maintaining a U.S.-flag fleet and availability of 
requirements reduce purchases of U.S. commodities due to 
U.S. mariners through cargo preference is a cost-effective 
higher shipping costs and contribute to delayed shipments, 
alternative to the U.S. government building ships and hiring 
among other challenges.  
employees to maintain sealift capacity. Some opponents of 
cargo preference question its contributions to U.S. sealift 
Cost 
capacity. They assert that few U.S.-flag ships depend on 
Shipping on U.S.-flag vessels typically costs more than 
food aid shipments, and only some of those ships are 
shipping on foreign-flag vessels. A 2011 study by MARAD 
capable of carrying military cargo. They also argue that 
(the most recent available) found that average daily 
cargo preference often benefits foreign shipping companies 
operating costs for U.S.-flag vessels were 2.7 times higher 
with U.S. subsidiaries rather than shipping companies with 
than for foreign-flag vessels. Higher shipping costs on U.S.-
parent organizations based in the United States. 
flag ships raise the cost of providing in-kind food aid. The 
2019 USAID International Food Assistance Report to 
MARAD’s 2017 Maritime Workforce Working Group 
Congress states that 11% of Title II funding was used to 
stated that the number of qualified U.S. mariners was 
ship commodities from the United States to a foreign port.  
sufficient to crew the fleet of government and privately 
owned U.S.-flag ships necessary during an initial activation 
The higher cost of shipping on U.S.-flag vessels reduces the 
(for example, during wartime or a national emergency). 
volume of food aid that can be provided, the number of 
However, it concluded the number of U.S. mariners was 
people who receive the aid, and the amount of food 
insufficient to support a sustained activation of this fleet for 
purchased from American farmers and food processors. In a 
more than 180 days. 
2019 hearing, the administrator of FAS stated that 
competition for U.S. vessels is limited, and shipping food 
More Information 
aid on U.S.-flag ships costs roughly 200% more than on 
For more information, see CRS Report R45422, U.S. 
foreign-flag ships, reducing the amount of food aid 
International Food Assistance: An Overview; CRS Report 
commodities USDA is able to supply and the amount of 
R44254, Cargo Preferences for U.S.-Flag Shipping; and 
commodities purchased from American farmers.  
CRS Report R41072, U.S. International Food Aid 
Programs: Background and Issues.   
Timeliness of Delivery and Appropriateness of 
Vessels 
Amber D. Nair, Analyst in Agricultural Policy   
In-kind food shipments take an average of four to six 
months to reach their destination. Transporting food aid 
IF12018
 
 
https://crsreports.congress.gov 
International Food Assistance and Agricultural Cargo Preference 
 
 
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