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House panel echoes Senate, rejects Obama's food aid reform

By Charles Abbott

WASHINGTON (Reuters) - The House of Representatives panel in charge of agricultural funding rejected on Wednesday the Obama administration's request for a sweeping change to food aid programs that have been in place since the Cold War.

It was the second defeat in three days for the White House budget proposal to use up to 45 percent of funding for "Food for Peace," the major U.S. food aid program, to buy food from nations near hunger zones instead of American-grown food.

The White House in April proposed shifting Food for Peace funding to an international affairs panel and to make large purchases of food from suppliers closer to famine areas, so-called local and regional purchasing. Funds also could be used for food vouchers.

Its plan ran into a buzz-saw of lobbying by farm groups, food processors, shippers and others who favor the continued purchase of food in the United States and shipping it to needy countries on U.S.-flagged vessels.

The House Appropriations subcommittee on agriculture on Wednesday opted to keep Food for Peace under its control, and at the same time cut the program by 20 percent to $1.15 billion for the next fiscal year. A staff worker said the cut was part of controlling the federal deficit.

Connecticut Democrat Rosa DeLauro lamented the "outright rejection" of a proposal that she said deserved consideration.

The administration says local purchases would mean faster delivery of aid and at lower cost than shipping U.S. food thousands of miles.

The Senate voted on Monday to allow a small increase - $20 million - in local food purchase by the Agency for International Development but otherwise rejected the administration package.

Although the farm bills pending in the House and Senate would also keep Food for Peace in its current form, the administration still has a few chances to win its way.

Congress is in the early stages of writing government funding bills for fiscal 2014, which can be a vehicle to remodel programs. Leaders of the House Foreign Affairs Committee also filed a bill on May 22 to implement the White House proposal. It was sent to four committees for consideration.

The House Appropriations Committee may vote next week on a $139.5 billion funding bill for the Agriculture Department, the Food and Drug Administration and two financial regulators. That would be another opportunity for food aid reformers.

Among other actions taken at Wednesday's panel, the proposed Commodity Futures Trading Commission budget was set at $195 million for 2014, down $10 million from this year and a hefty $120 million less than the White House requested.

California Democrat Sam Farr argued that the CFTC deserved a larger work force to police the $300 trillion futures and derivatives markets.

(Reporting by Charles Abbott, editing by Ros Krasny and Bob Burgdorfer)

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