Foreign Aid

In response to a congressional request, GAO examined Food for Peace Program issues, including: (1) self-help measures; (2) use of local currency; (3) multiyear commodity commitments; (4) shipments on a fiscal year basis; (5) commodity availability for multiyear commitments; and (6) private-sector participation in preparing guidelines for the local currency private-sector lending program.

GAO found that: (1) negotiations of self-help measures did not significantly delay or jeopardize concessional sales in the countries it examined; (2) there was no evidence that local governments used self-help measures to expand their involvement in agricultural markets; (3) neither Pakistan nor the Philippines used program funds to increase employment for general government functions or activities; (4) the Agency for International Development (AID) identified instances where countries either failed to deposit local currency into a special account, as agreed, or did not sell the commodities to generate local currency; (5) AID, recipient governments, and most of the responsible U.S. agencies viewed multiyear food aid commitments as a helpful tool for implementing policy reforms; (6) AID felt that an annual shipping requirement was generally detrimental and considerably reduced the program's leverage for policy reform; and (7) private-sector organizations were generally pleased with their role in preparing guidelines for the local currency private-sector lending program.