* Can food aid play a role in agricultural development?
* Some critics say food aid inefficient, cash is better
* Administration says seeking flexibility
* Strong political support seen for funding food aid
By Roberta Rampton
WASHINGTON, Oct 21 (Reuters) - In the old debate on whether you should give a poor man a basket of fish or a fishing pole, the United States wants to move to help impoverished nations expand agriculture at home and ease dependence on handouts from U.S. farmers.
But don't expect food aid to stop. The politically powerful lobby of farmers, shippers and processors who profit from the shipments -- as well as the aid groups who distribute the food -- are prepared to defend that use of U.S.-grown commodities overseas.
Some experts say that the United States should buy as much of its aid as possible from developing countries to support those farmers while helping reduce hunger.
But American interests involved in the food aid chain say that argument ignores the benefit of food aid, including its political support, which guarantees funding year in, year out.
"It is important that U.S. food aid is also used for development -- that is, in ways that help people help themselves," said Ellen Levinson, who represents a coalition of nonprofits that run programs in developing countries.
Through the 1980s, the United States had strong funding for agricultural development. But that support dwindled, replaced by an increase in food aid.
"We've relied on food aid to fill our gap in support for agriculture, and most importantly, to reach the poorest people," Secretary of State Hillary Clinton said last week.
"We're seeking to close that gap between development and humanitarian assistance by dedicating development resources to engage the poorest in the growth process and to support community development," she told reporters, emphasizing that food aid would continue to be deployed in emergencies.
Clinton is leading the Obama administration's three-year, $3.5 billion food security plan -- part of a pledge by the world's richest countries to spend more than $22 billion addressing the root causes of hunger.
If that funding means aid groups can get grants, rather than commodities, to pay for projects, that may reduce political opposition to an overhaul of food aid, said Christopher Barrett, an economist at Cornell University.
"Most NGOs would rather have the cash if it's being made available. I think politically this is very doable," he said.
FLEXIBILITY SOUGHT IN FOOD AID: VILSACK
On top of the food security funding, the United States is slated to spend almost $1.7 billion in 2010 on the main U.S. food aid program.
About $400 million of that will go to "nonemergency food aid," of which a little less than 40 percent may be spent on buying and shipping commodities which aid groups then resell.
Critics charge that it takes too long and costs too much to move U.S. crops to places where food is needed.
"Most hunger and malnutrition occurs in places where there's plenty of food: it's just that some people don't have access to it," said Per Pinstrup-Andersen, an economist who won the World Food Prize in 2001 for his work on food policy.
"I think that we should to the fullest extent possible give money," Pinstrup-Andersen said.
The harshest criticism is leveled at "monetized" aid -- food donated to aid groups which then sell it overseas to fund development projects. Critics say those sales can displace locally grown products, hurting struggling regional markets.
Agriculture Secretary Tom Vilsack said last week that the government wouldn't "rule out" monetized aid, but might seek to use more locally grown commodities instead of U.S. crops. [ID:nN16369181]
FOOD AID AS DEVELOPMENT TOOL
Organizations that use food aid say they agree with the administration's new focus on helping poor farmers boost production, but hope leaders don't overlook the positive impact that food aid and monetized aid can play.
"We'd like to move on to feeding hungry people and stop fighting old arguments," said Buzz Guroff of humanitarian group ACDI/VOCA.
Shipping companies are working with the government on ways to make food aid transportation more efficient, said Gloria Tosi, who represents the maritime industry.
"We have no reason ... to be uncomfortable. Everything we see is there's a strong desire to keep a very robust American food aid program," Tosi said.
The strong political alliance of farm groups, shippers and processors helps ensure a predictable flow of resources for humanitarian groups that use food aid in their overseas work, Guroff said -- political support that could dry up if the United States turned to cash instead of food aid.
"These people aren't going to go up and lobby on the Hill for (cash aid) -- it's just a political reality," Guroff said.
Congressional funding could wane without the backing of the farm lobby for aid, said Rebecca Bratter, policy director for U.S. Wheat Associates, a trade group.
"If you take U.S. agriculture out of the picture, it takes a huge constituent group out of the process," Bratter said.