What government-sponsored development aid supports, and what’s at stake with recent cuts
One of President Trump’s first executive orders in January 2025 was to dramatically cut funding and staffing of the US Agency for International Development (USAID). This provoked a debate about the benefits vs. cost of the U.S. government spending taxpayers’ money on helping less economically developed countries to strengthen democracy and grow their economies, broadly in line with the UN’s Sustainable Development Goals. As of May 2025, the fate of USAID is still hazy. Elements of its emergency aid programs will survive in some form but much of its work in support of sustainable civic development likely will not.
As is true for many government agencies, few Americans are familiar with the work scope and budget of USAID. It was founded by President John F. Kennedy in 1961. His administration thought it humanistic and politically wise to support the economic and social development of underdeveloped countries in the global South. Many of them, notably in Africa, had just become independent from colonial rule and were also being courted by the Soviet Union. The logic: better to offer a U.S.-led alternative than leave it all to the Soviets!
What does USAID do and spend our taxes on?
By 2024 the USAID’s annual budget was $21.7 B, or about 0.3% of the federal budget. Some 4.6% and 21.7% of that budget have been used to deliver the most visible form of aid: emergency food and medical aid – during famines and disease outbreaks, often in collaboration with other industrial nations. Cuts to these programs are causing the most obvious and painful impacts. While such “lifesaving” programs were supposed to continue under a waiver program, the implementation of the waiver program has been chaotic, leading to reduced disbursements and increased casualties. The only reason there haven’t been more deaths so far is because USAID contractors and grantees have continued providing services by covering costs that USAID and the State Department should have paid. Though such programs may eventually resurface, it’s unlikely that the administration’s chainsaw approach to cutting programs will achieve their stated goal of improving efficiency.
Many of these emergency aid programs, such as exporting wheat into areas short on food, were not entirely altruistic. They created markets for U.S. farmers and kept commodity prices stable. This is no different from EU development aid which uses home-grown or home-built materials to aid other countries. In theory this a win-win situation—but in practice, the supply of free or inexpensive emergency food has often suppressed local food production. Citing the old, slightly paternalistic development adage, you can give a person a fish and feed them for a day, but teach them to fish, and they will eat for a lifetime.
Much less known is that USAID has, during its tenure, developed and operated a large menu of programs to foster economic, social, and civic development across less economically developed countries. In this way it has acted as a “fishing instructor” by setting up and operating programs that have helped over 150 countries develop promising sectors of their society and economy through training, technology, and societal development. They emphasize general education and improved health care. They also develop business infrastructure as an essential tool in building civil societies that prosper, socially and ecologically—with a focus on rural areas. This angle of governmental development work practiced notably by the USAID and several aid agencies from Europe and Japan—primarily rural development through agroecological farming and social development—aligned with and supported Dr. Bronner’s work as we built our organic, fair trade, and regenerative agricultural supply chains across the global South.
Since my adolescence in Germany, I had enjoyed visiting other countries, some more economically developed than others. Seeing the reality and impact of poverty first-hand made me a believer in governmental support of global fairness and development—for the benefit of all. Once I moved to the U.S., I held on to that belief and liked that some of my tax dollars were used for it. But I worked as a scientific/technical consultant mostly in environmental/technical R&D, and so I only had a vague idea of what governmental development programs such as USAID do in practice. Then, in 2001 a U.S. consulting firm contacted me from Sri Lanka, a small island nation off the southern tip of India.
On behalf of USAID, the firm managed The Competitiveness Project (TCP). Its goal was to create clusters of several traditional and emerging industries in Sri Lanka: tea, rubber, spices, apparel, ceramics, tourism, IT. The formation of industry associations and joint pre-competitive R&D projects aimed to professionalize industries by creating clusters—seeking to replicate the benefits seen in other countries from collaborative efforts in research, supply chain improvements, and government engagement. Because of my prior engagement with naturalfibers from flax and hemp, I became the technical and strategy consultant for the Coconut Fiber, or Coir, cluster. Coir is a traditional Sri Lankan industry producing twine, rope, mats, and rugs from the husks of the coconut. The challenge was to improve efficiency and working conditions at the primary fiber mills, make fiber quality more consistent, and develop new products that utilize the unusually high durability of coir.
What did The Competitiveness Project achieve?
On my last visit to Sri Lanka I caught up with a few industry leaders. We discussed which industry clusters worked, and which ones failed to meet their targets. In general all clusters have created value to their respective sectors. However, tea and coir didn’t do so well—the industries were old and set in their ways (tea) or too fragmented (coir). Rubber, ceramics, gems and jewelery, IT and tourism on the other hand did very well through collaboration on sourcing, research & development, and marketing. Those industries managed to improve competitiveness and grow over the last twenty years.
Yet even the coir cluster showed inspiring collaboration between R&D, fiber millers, larger processors, and exporters. One of the unintended benefits of my work with the TCP project was that I met Gordon de Silva, then Managing Director of a large coir producer and exporter. He was different than other Sri Lankan coir executives that I had met. I found him very direct, pragmatic, curious, yet impatient with people who only talked but didn’t act. We became fast friends, and initiated SECOND AID, an impromptu relief project after the devastating tsunami in late 2004.
In 2005, when David Bronner, whose family had suggested SECOND AID, suggested we set up a dedicated organic and fair trade coconut oil project for Dr. Bronner’s supply needs, I could not think of a better location and partner than Sri Lanka and Gordon, and his daughter Sonali. We started Serendipol in Kuliyapitiya—that became a large producer of virgin coconut oil (VCO)—demonstrating that governmental development aid can foster collaboration between like-minded entrepreneurs across the global South and North.
With such pedigree, Serendipol and several others of our supply chainprojects have successfully worked with and received financial and technical support from international aid programs, notably the German GIZ and DEG. Funded by the German Federal Ministry for Cooperation and Development (BMZ), their develoPPP program supports private-sector projects where entrepreneurial opportunities and development policy meet. Companies that want to invest sustainably in a developing and emerging country and expand their local operations can apply for financial and technical support. This aid support allowed Dr. Bronner’s to make our growing number of partner projects into stellar examples of organic and fair trade suppliers of raw materials. Indeed, they helped us implement agroecological and social projects that were risky and beyond Dr. Bronner’s already considerable financial support to our producer partners.
How do these aid programs work?
Usually, the donor agency may contribute up to 50% of total project cost for a well-designed high impact project, but the balance must be paid by the private sector partner, to ensure they are invested in the success of the project.
The following outlines a selection of major projects Dr. Bronner’s and our partners have conducted with the aid of develoPPP:
- The initial setup of our sister company Serendipalm in 2007-08 in Ghana, as a novel organic and fair trade approach to producing palm oil—working with small holder farmers and creating jobs notably for local women.
- Other projects in Ghana included: implementation of our first planting of dynamic agroforestry (DAF) with 430 smallholders in Ghana, combined with the construction of a preschool and an elementary school, the setup of a plastic waste collection program, and the design and construction of a mill to produce regenerative cassava flour.
- The production of clean compost from manure and plant waste for subsidized distribution to farmers in Sri Lanka.
- The introduction of regenerative agriculture at our organic and fair trade mint partner Pavitramenthe in India, through large scale production and subsidized distribution of compost, implementation of low impact tillage, and impromptu emergency food distribution and medical aid during the first year of Covid-19.
We received other support from USAID, Danish, Dutch, and UK development agencies on projects in Ghana, Kenya, and Ivory Coast. All were helping us implement novel concepts in rural development by supporting the use of agroecological production in farming, and social development in health care and education. We used our business presence in these countries as a means to engage with farmers and their communities, and couldn’t have done it without government development aid. To be clear: the grant funds exclusively went to fund projects. Dr. Bronner’s did not receive a cent as compensation for its contributions. That’s how it should be!
Our supply chain projects were not the only ones funded in part by governmental development aid. Great examples were provided by my friends Susan Wright and Dale Rachmeler in Oakland. They have spent virtually their entire careers of more than thirty years working in development, mostly in Africa—directly for USAID or one of its contractors.
Here are a few examples of their projects. Susan managed many public health programs with a focus on maternal and child health, family planning and nutrition. In Madagascar, her collaboration with government and NGOs achieved distribution of modern contraceptives. Training in their use and intentional family planning contributed to a significant reduction in Madagascar’s birth rate.
A similar program in Morocco helped increase the use of contraceptives by married women from 20% to 50% over a thirty year period, infant mortality was reduced from 91 to 24 deaths per 1,000 births between 1980 and 2010. These successes were the result of collaboration between the host government agencies, local partners, and multiple donor agencies.
As with many U.S. development aid professionals, Dale started out as a Peace Corps volunteer, teaching English in a middle school in Ivory Coast focusing on conversational skills, rather than reading or grammar. A very successful approach! Over the next thirty years he worked with smaller industries on the development of a common advocacy voice, i.e. a trade association that could lobby government transparently to address basic business obstacles and needs. This kind of societal development has been lacking in many developing countries. A graphic example of the 600 advocacy grants to business associations during his tenure in Ghana is his collaboration with the fishermen of Lake Volta, the largest reservoir in Ghana used for hydropower and irrigation. When damming the Volta River, the government had not felled and removed the tens of thousands of trees covering the Volta river banks and the extensive land area flooded by the new reservoir. The small scale fishermen on the lake were soon hampered as their fishing nets got tangled up in the dead yet durable trees under the lake surface. With Dale’s project support, the fishermen appealed to the Central and Regional governments to find a solution. The government was persuaded to give commercial companies concessions to log and remove submerged hardwood trees. These companies were able to sell the high value timber, while the fishermen’s association was able to reduce losses from tangled nets.
Post retirement Dale then inspired Dr. Bronner’s work in our use of vetiver, a permanent deep-rooting grass for land protection, erosion control, and agriculture. Dale’s contact in Ghana now helps us incorporate vetiver into a growing number of agricultural and land development projects. Susan and Dale’s projects exemplify what USAID’s development aid has done for economic and social development worldwide: identify and prioritize target groups—often small to medium size actors—develop institutional and/or technical solutions and always include training and monitor progress. Note that some of our fair trade community development projects have pursued the same goals as USAID’s programs: providing emergency food supplies during early Covid-19 days in India, distribution of mosquito nets for malaria prevention in Ghana, sex education in Ghana to address teenage pregnancies, and offer inspiring pre-school and elementary school education at our Montessori campus in rural Ghana.
Dr. Bronner’s work was not spared the chainsaw
In late 2024 Dr. Bronner’s was invited to submit a proposal to the USAID Climate Finance for Development Accelerator (CFDA). It addressed the question of how investors may be enticed to invest in “natural and climate-friendly projects.” A CFDA grant would have helped us accelerate the planting of a commercial-scale dynamic agroforestry project at Serendipalm in Ghana and more closely evaluate its impact on yields, sequestration of atmospheric carbon, and potential co-benefits, such as increased resilience of soil and communities. Our project proposal apparently fit the program’s objectives, and we advanced to the third round. In early February the program contractor then emailed us to inform us that the program had been suspended.
Considering the scale of damage to other federal programs, we are pursuing alternative project financing and will soon start planting on the first 200 acres of the 2000-acre project. Other regenerative development projects fared much worse. At the 2025 Natural Products Expo West in Anaheim this past March, we spoke with several groups that had started regenerative projects in Latin America but had seen USAID’s co-funding evaporate. The disruption of projects with positive commercial, social, and ecological potential is an especially concerning outcome of the current administration’s slash and burn approach.
Our first-hand experience with focused, strategic support from government development programs in the U.S. and Europe demonstrates the power of commercial cooperation among visionary companies like Dr. Bronner’s, combined with targeted aid and engagement from people in both the global South and North. Having seen and experienced the positive impact on communities and the land, Dr. Bronner’s remains committed to this work and hopes that the U.S. will eventually resume its contributions. Meanwhile, China is well-positioned to step into the soft power vacuum that America’s disengagement with the Global South will leave behind. It’s a good time to remember one reason why President Kennedy’s administration founded USAID back in 1961.