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Golden Hammer: U.S. squandered $34 million on failed Afghan soybean project

Studies showing conditions inappropriate for crop ignored, taxpayer money wasted

- The Washington Times - Thursday, July 24, 2014

Call it the great American soybean heist, the latest tale of U.S. taxpayer abuse to emanate from Afghanistan.

Despite clear evidence that Afghanistan's arid soil was a bad place to grow soybeans, the U.S. Department of Agriculture spent $34.4 million trying to establish the crop in that country, according to the Special Inspector General for Afghanistan Reconstruction.

The money was routed to a trade group, the American Soybean Association, as part of a humanitarian effort to improve food security and reduce dependence on food imports, but federal watchdogs found the idea was poorly conceived however well-intentioned.

Of most concern, the federal agency apparently ignored studies by the United Kingdom's Department for International Development that concluded soybeans were inappropriate for conditions and farming practices in Afghanistan.

"I understand that Afghanistan's operating environment poses daunting challenges for reconstruction and development programs, and that any project in the country is bound to meet its fair share of difficulties," Inspector General John F. Sopko wrote in a letter to Agriculture Secretary Thomas J. Vilsack made public Thursday.

"However, what is troubling about this particular project is that it appears that many of these problems could reasonably have been foreseen and, therefore, possibly avoided," Mr. Sopko added.

The studies proved to be true. Afghan farmers produced negligible amounts of soy, and the sustainability of the major soybean processing facility is in serious doubt because there is not enough product for the facility to be economically viable, investigators found.

Furthermore, there isn't a significant demand for soybean products in Afghanistan, according to SIGAR's analysis.

In its response to Mr. Sopko's letter, the USDA acknowledged that the program's success was uncertain.

"To date, positive outcomes for soybean production and the long-term operation of the soy processing plant have not occurred," agency officials wrote, adding that the USDA and the soybean lobby were negotiating plan modifications to address those issues.

For ignoring scientific evidence and spending humanitarian dollars on a project with a high risk of failure, the USDA and the American Soybean Association win this week's Golden Hammer, a distinction from The Washington Times highlighting examples of federal misspending, waste, fraud or abuse.

"This is a good example of what happens when we have an agency like the USDA that's pushing a policy that's wanting to plant for K Street instead of Main Street," said Joshua Sewell, a senior policy analyst at the nonpartisan Taxpayers for Common Sense.

"It's amazing that they would do that, the fact that they didn't do a feasibility study before embarking on this large project is just indicative of a problem in planning," Mr. Sewell said. "We see that a lot in USDA. If you're going to undertake these kinds of projects, you need to do your research to see if there is even a chance of succeeding."

In an email statement to The Times, the USDA said it would continue with the program and wait for final analysis to determine the project's actual profitability.

"USDA believes that this is a premature judgment on the American Soybean Association's program. There have been varying studies concerning the viability of soybean production in Northern Afghanistan. The project's activities will end in December 2014, and USDA will make a final evaluation on the project after all results are received."

According to the SIGAR report, the program's main processing plant could produce soy products such as animal feed, oil and flour. The plant needed to produce mostly soy flour to remain economically profitable, the report said.

For the main soybean processing facility to operate at full capacity, farmers need to harvest 5,000 to 5,500 tons of soybeans. In the 2013 harvest season, farmers were able to produce only 177 tons, according to the American Soybean Association's midterm report released in February.

To make up for the deficiency in Afghan soy, 4,400 tons of American soy were flown to Afghanistan at a cost of $2 million.

Farmers were given inadequate training, with short and inconvenient hours, before they were sent to sow their crops, according to the report. They received an instruction manual at the end of the session, even though many are illiterate.

Many of the farmers simply ate the seeds and used the fertilizer on other crops. Those who did plant soy experienced such low crop yields that they were discouraged from trying again.

Additionally, there isn't enough evidence to prove that domestically produced soybeans are any cheaper than imported ones, according to the midterm report.

"Production data from reliable sources do not demonstrate that locally produced soy can be more profitable than alternative crops, or that soy can be locally sourced at contract prices that are cheaper than importation."

After all these efforts, it turns out that Afghanistan has little demand for soy.

"Afghans don't like the taste of bread made with soybean flour," program managers told SIGAR.

The project did make significant strides in its humanitarian efforts, however.

During the winter of the first year of the project, the American Soy Association distributed 88 tons of defatted soy flour to 5,000 vulnerable, pregnant or lactating women and their families, USDA officials said.

Each family received 8.8 pounds of soy flour per month for four months, an average of three-quarters of an ounce of soy flour per person per day. The humanitarian benefits fall significantly short of the taxpayer costs, which continue to pile up in the effort to reconstruct war-torn Afghanistan.

As of March 2013, the U.S. had spent about $92 billion on reconstruction, agriculture and other development projects, according to SIGAR.

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