Food Aid
Experience of U.S. Programs Suggests Opportunities for Improvement Gao ID: GAO-02-801T June 4, 2002The United States spent $50 billion (2002 dollars) on food aid between 1979 and 2003. Notwithstanding these sizable donations and donations by other countries, the need for food aid in the developing world far exceeds available supply. U.S. food aid is provided through six programs administered by the Department of Agriculture and the U.S. Agency for International Development (USAID). These programs use various methods for providing resources and have different ways of delivering aid to the recipient nations. USAID manages the largest program--P.L. 480, Title II--using annual appropriations to purchase commodities that are then donated to recipient nations principally through private voluntary organizations and the World Food Program. The large fluctuations in U.S. food aid since 1990 are the result of three key factors: U.S. food aid policies, agricultural surpluses, and international events. The success of food aid programs in meeting their objectives is hampered by the competing objectives of the programs and by management weaknesses such as a lack of management attention to monitoring and accountability in food aid programs.
GAO-02-801T, Food Aid: Experience of U.S. Programs Suggests Opportunities for Improvement
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United States General Accounting Office:
GAO: Testimony:
Before the Subcommittee on Oversight of Government Management,
Restructuring and the District of Columbia, Committee on Governmental
Affairs, U.S. Senate:
For Release on Delivery Expected at 2:00 p.m. EST, Tuesdsay, June 4,
2002:
Food Aid: Experience of U.S. Programs Suggests Opportunities for
Improvement:
Statement of Loren Yager, Director, International Affairs and Trade:
GAO-02-801T:
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the management and operation
of U.S. food aid programs. The United States is by far the largest
provider of food aid in the world, [Footnote 1] and U.S. food aid
programs account for a considerable portion of U.S. development
assistance. Between 1979 and 2003, the United States spent nearly $50
billion (2002 dollars) on food aid, and U.S. food aid represented about
19 percent of U.S. official development assistance in 2000.
Notwithstanding these sizable donations by the United States, as well
as donations by other countries, the need for food aid in the
developing world far exceeds available supply. The United Nations Food
and Agriculture Organization estimates 777 million people are
chronically undernourished in the developing world. [Footnote 2]
According to its data, there has been limited progress in meeting the
1996 World Food Summit goal of halving the number of hungry people in
developing countries by the year 2015.
To contribute to a better understanding of food aid and how to maximize
its effectiveness, I will address the following key issues: (1) the
structure of U.S. food aid, (2) policies and events contributing to the
fluctuations in U.S. food aid, and (3) how well U.S. food aid
objectives are being met.
My observations are based on recent interviews with and documents from
U.S. Department of Agriculture (USDA), U.S. Agency for International
Development (USAID), U.S. Department of State, and Office of Management
and Budget officials, and from GAO‘s series of reports on food aid over
the last decade. (See app. I for related GAO products.):
Summary:
U.S. food aid is provided through six programs administered by two
different agencies. These programs use a variety of methods for
providing resources to the programs, and also have different ways of
delivering the aid to the recipient nations. The largest program is
P.L. 480 Title II, which is managed by USAID. This program uses
regular, annual appropriations to purchase commodities, and donates
these commodities to recipient nations principally through private
voluntary organizations (PVO) and the World Food Program.
The large fluctuations in U.S. food aid since 1990 are the result of
three key factors: U.S. food aid policies, U.S. agricultural surpluses,
and international events. Continuing previous food aid policies, the
current administration is reducing the use of food aid to promote U.S.
agricultural exports through sales at low interest rates with long
repayment periods. It also intends to significantly reduce the role of
surplus agricultural commodities in its food aid programs. The
availability of surplus commodities at various times during the last
decade has enabled the United States to sharply increase shipments.
International events can also impact U.S. food aid. For example, with
the Asian financial crisis, U.S. commercial agricultural exports did
not increase as expected, resulting in large surpluses that the
government purchased and made available as food aid. These surpluses
became a principal inducement for the United States to provide large
quantities of food aid to Russia in 1999 and 2000.
The success of food aid programs in meeting their objectives is
hampered by the competing objectives of the programs and by management
weaknesses. The food aid objectives include humanitarian goals of
feeding hungry people, economic development goals for the recipient
nations such as strengthening private enterprise, and a new goal of
reducing conflict. Certain programs also have foreign policy goals. In
one case, the United States continued to provide emergency food aid to
North Korea for humanitarian purposes even though the North Korean
government prevented the World Food Program (WFP) from effectively
monitoring whether the food aid reached the intended recipients. In
that situation, the United States weighed foreign policy considerations
against the assurance that food aid was achieving its humanitarian
purposes. [Footnote 3] At the same time, management weaknesses impede
efforts to assess the results of food aid programs. For example, the
USDA‘s implementation of the Global Food for Education pilot program
did not build on lessons learned from previous experience, which
prevented USDA from focusing on those populations most likely to
benefit from the program. As a result, our reviews and those of the
administration find many opportunities to improve the management of
food aid.
U.S. Food Aid Is Delivered:
Through Multiple Programs:
In the last decade, the United States has principally employed five
programs to deliver food aid: P.L. 480 Titles I, II, and III; Food for
Progress; and Section 416(b). [Footnote 4] The May 2002 Farm Bill
[Footnote 5] authorized creation of a sixth - the McGovern-Dole
International Food for Education and Child Nutrition Program. Table 1
provides a summary of the overall structure of the principal food aid
programs. (App. II provides additional information on the programs.):
Table 1. Structure of U.S. Food Aid Programs [A]:
Program; Managing agency; P.L. 480 Title I; USDA; P.L. 480 Title II;
USAID; P.L. 480 Title III; USAID; Food for Progress; USDA; Food for
Education & Child Nutrition[B]; President shall designate one or more
federal agencies; Section 416(b): USDA.
Program; Program structure; P.L. 480 Title I; Concessional sales of
agricultural commodities.; P.L. 480 Title II; Donation of commodities
to meet emergency and non-emergency needs. Commodities may be sold
in country for development purposes.; P.L. 480 Title III; Donation
of commodities to least developed country governments.; Food for
Progress; Sale on credit terms or donation of commodities to
developing countries and/or emerging democracies.; Food for Education
& Child Nutrition[B]; Donation of commodities and provision of
financial and technical assistance in foreign countries.; Section
416(b): Donations of CCC[C] surplus commodities to carry out
purposes of P.L. 480 Title II and Title III and Food for Progress
programs.
Program; Intermediaries; P.L. 480 Title I; Governments, private
entities.; P.L. 480 Title II; Governments, public or private entities,
PVOs, cooperatives, intergovernmental organizations (such as the World
Food Program).; P.L. 480 Title III; Governments.; Food for Progress;
Governments, agricultural trade organizations, intergovernmental
organizations, PVOs, cooperatives.; Food for Education & Child
Nutrition[B]; Governments, private entities, intergovernmental
organizations.; Section 416(b): See intermediaries for P.L. 480
Title II and Title III and Food for Progress programs.
Program; Total budget allocation, 1992-2001 (billions of 2002 dollars);
P.L. 480 Title I; $4.38; P.L. 480 Title II; $9.62; P.L. 480 Title III;
$1.34; Food for Progress; $1.33; Food for Education & Child
Nutrition[B];
NA; Section 416(b): $2.41.
Note: NA means not applicable.
[A] We do not include the Bill Emerson Humanitarian Trust. Information
on this trust is provided in appendix. II.
[B] This program was authorized by the May 2002 Farm Bill.
[C] Commodity Credit Corporation:
Source: GAO analysis of authorizing legislation for the various
programs and agency program documentation.
[End of table]
USAID and USDA have historically shared program management
responsibilities. USAID is responsible for managing P.L. 480 Titles II
and III programs. USDA currently has responsibility for P.L. 480 Title
I, Food for Progress, and the Section 416(b) program. When 416(b)
surplus commodities are used for P.L. 480 Title II and P.L. 480 Title
III type programs, this creates considerable duplication since USDA
becomes the managing agency rather than USAID. Regarding the new food
for education program, the President shall designate one or more
federal agencies to manage it.
The programs use different methods for securing commodities. For
example, P.L. 480 Titles I, II, and III and Food for Progress are
funded by annual and supplemental appropriations. Section 416(b),
however, is funded by U.S. surplus commodities when surpluses exist and
a decision is made to donate some of those surpluses overseas. USDA, as
manager of the Section 416(b) program, can use the donations to carry
out the purposes of P.L. 480 Title II, Title III, and Food for
Progress. For example, when USDA uses 416(b) commodities for a Title II
program, it does not provide the commodities to USAID but rather
implements the Title II-type program itself.
U.S. food aid programs also use different methods for providing aid to
recipient nations. Under P.L. 480 Title I, the United States sells the
commodities to the recipients under concessional terms. Financing is at
low interest rates, with payments made over periods of up to 30 years,
with maximum grace periods on payments of principal of up to 5 years.
The Title II program is based on the donation of commodities for
emergency or developmental purposes. In the latter case, the
commodities can be sold in the country to raise funds for other
developmental activities. Under the Food for Progress program, U.S.
commodities can be either donated or sold on credit terms.
USDA and USAID frequently rely on other entities, including private
voluntary organizations and international organizations, such as the
World Food Program, to deliver the food aid and, if called for in
agreements with USDA or USAID, to use the food in implementing
development programs.
Policy, Surpluses, and International:
Events Drive U.S. Food Aid:
The large fluctuations in U.S. food aid spending since 1990 can be
attributed to three key factors: the government‘s food aid policies,
agricultural surpluses, and international events. As figure 1
indicates, total food aid has generally decreased since the early
1990s, with average spending of $2.36 billion from 1990-1994, $1.63
billion from 1995-1999, and $1.65 billion from 2000-2003 (2002
dollars). The general trend toward reduced food aid occurred as the
U.S. government reduced Title I and III programs and more recently the
416(b) program. This policy shift was driven to some extent by concerns
over the absence of evidence supporting the success of Title I and
Title III. It was also fueled by criticisms that the Title I and III
programs created disincentives for agricultural and economic reform in
recipient countries. The current administration also plans to
dramatically cut back on the use of surplus commodities for food aid
and to partially offset the reduction by a $300 million increase in the
Title II appropriation. [Footnote 6] As a result, the Title II program
dominates the funding for food aid programs in 2003.
Figure 1: U.S. Food Aid Exports, 1990-2003:
[See PDF for image]
Source: GAO analysis of USDA data.
[End of Figure]
The level of U.S. surpluses has also contributed to the changing levels
of food aid over the past decade. For example, a high level of stocks
in the early 1990s contributed to high levels of food aid shipments
during this period. In contrast, stocks reached a 20-year low in 1996
as U.S. commercial exports hit record levels, and food aid levels at
this time dropped sharply. As figure 2 indicates, the volume of food
aid shipments fluctuates even more than the dollar volume, as lower
commodity prices during periods of surplus allow more to be purchased
with the same budgetary resources.
Figure 2: Food Aid Tonnage and Expenditures, 1992- 2001 A:
[See PDF for image]
Source: GAO analysis of USDA data.
[End of Figure]
International events also affected food aid shipments during this
period. For example, the Asian financial crisis of the late 1990s
reduced U.S. prospects for exports to that region and increased the
availability of U.S. stocks. The spread of the financial crisis to
Russia, combined with a poor Russian harvest in 1999, created the
demand for food aid in that country. These two conditions led the
United States to a make donation to Russia that was one of the largest
single food aid transfers in U.S. history.
Success of Food Aid Programs is Hampered by:
Multiple Objectives and Management Weaknesses:
The success of food aid programs in achieving their objectives is
limited by the challenges of meeting multiple objectives and the
weaknesses in program management.
Competing Objectives Complicate:
Program Implementation:
U.S. food aid programs contain a range of objectives, including
humanitarian and developmental goals for the recipient nations and
trade objectives for the United States. In addition, recent legislation
has added the prevention of conflict as an objective of the P.L. 480
food aid programs. Table 2 provides a list of the programs and their
associated objectives.
Table 2. Objectives of U.S. Food Aid Programs:
Program; Humanitarian objectives; P.L. 480 Title I[A]; Combat world
hunger and malnutrition and their causes.; P.L. 480 Title II[A];
Address famine or other urgent relief requirements, especially in
children and mothers.; P.L. 480 Title III[A]; Combat world hunger and
malnutrition and their causes.;Food for Progress; Food for Progress;
[Empty]; Food for Education & Child Nutrition; Carry out maternal,
infant, and child nutrition and preschool and school programs to
improve food security and reduce hunger.; Section 416(b): See
objectives for P.L. 480 Title II, P.L. 480 Title III, and Food for
Progress.
Program; Development objectives; P.L. 480 Title I[A]; Promote broad-
based sustainable development, including agricultural development.;
P.L. 480 Title II[A]; Promote economic and community development;
promote sound environmental policies.; P.L. 480 Title III[A]; Use
revenue generated by sale of donated commodities for economic
development.; Food for Progress; Support efforts to expand free
enterprise elements in agricultural economies.; Food for Progress;
Carry out preschool and school programs to improve literacy and
primary education, especially for girls.; Section 416(b): See
objectives for P.L. 480 Title II, P.L. 480 Title III, and Food for
Progress.
Program; Private enterprise and democracy; P.L. 480 Title I[A];
Foster and encourage development of private enterprise and democracy.;
P.L. 480 Title II[A]; Foster and encourage development of private
enterprise and democracy.; P.L. 480 Title III[A]; Foster and encourage
development of private enterprise and democracy.; Food for Progress;
Expand free enterprise elements in the agricultural economy.; Food for
Progress; [Empty]; Section 416(b): See objectives for P.L. 480 Title
III and Food for Progress.
Program; Market development objectives; P.L. 480 Title I[A]; Develop
and expand export markets for U.S. agricultural commodities.; P.L. 480
Title II[A]; Develop and expand export markets for U.S. agricultural
commodities.; P.L. 480 Title III[A]; Develop and expand export markets
for U.S. agricultural commodities.; Food for Progress; Strengthen
private enterprises.; Food for Progress; [Empty]; Section 416(b): See
objectives for P.L. 480 Title II.
Program; International trade objective; P.L. 480 Title I[A]; Expand
international trade.; P.L. 480 Title II[A]; Expand international
trade.;
P.L. 480 Title III[A]; Expand international trade.; Food for Progress;
[Empty]; Food for Progress; [Empty]; Section 416(b): See objective for
P.L. 480 Title III.
Program; Conflict objective[B]; P.L. 480 Title I[A]; Prevent conflict.;
P.L. 480 Title II[A]; Prevent conflict.; P.L. 480 Title III[A]; Prevent
conflict.; Food for Progress; [Empty]; Food for Progress; [Empty];
Section 416(b): [Empty].
[A] According to the Trade Development and Assistance Act of 1954, as
amended, the United States is to use its abundant agricultural
productivity to promote U.S. foreign policy by enhancing food security
in the developing world.
[B] This objective was established in the May 2002 Farm Bill.
Source: GAO analysis of authorizing legislation for the various
programs and agency program documentation.
[End of table]
The multiple objectives of food aid programs as well as the foreign
policy goals of particular programs can complicate effective program
management. While certain goals can be complementary and not impede
program effectiveness, in other situations, goals and objectives can
conflict or make it more difficult to determine the primary goals and
achieve them. Some examples of problems GAO has identified stemming
from multiple or conflicting objectives include the following:
* P.L. 480 loans to Honduras were backed by the State Department and
USAID to support foreign policy and economic development objectives.
However, USDA raised concerns about these sales displacing U.S.
commercial sales in those countries. [Footnote 7]
* Between 1996 and 1999, the United States provided emergency food aid
to
North Korea, valued at $365 million, that was intended primarily for
children, women, and the elderly at schools, hospitals, and other
institutions. State, USAID, and others reported that North Korea
prevented effective monitoring of food aid donations, but the food aid
continued in part because State believed the donations might improve
bilateral relations. [Footnote 8]
* Title I assistance to Pakistan was reinstated in fiscal year 1993
after
a 2- year suspension because of U.S. concerns over the country‘s
nuclear armament capabilities. While the on-again off-again nature of
Title I assistance in response to foreign policy considerations is
contrary to sustaining important components of a successful market
development strategy (i.e., demonstrate a long-term commitment and be a
consistent supplier), the over-arching goal of the 1990 act [Footnote
9]--to promote the U.S. foreign policy objective--was being fulfilled.
[Footnote 10]:
* One of the goals of P.L. 480 Title I assistance is to develop and
expand export markets for U.S. commodities. However, we found that
achieving this goal is hindered in part by requiring that the Title I
cargo be carried on U.S. flag ships (referred to as Cargo Preference),
which in some instances reduced the funds available to purchase
commodities and in other cases led to changes away from the most
desired commodity. [Footnote 11]:
Management Weaknesses Impede Monitoring and Accountability Efforts:
GAO has found a lack of management attention to issues such as
monitoring and accountability in the implementation of food aid
programs. Some examples of our findings are as follows:
* In a general review of the P.L. 480 Title I Program, we found that
USDA
had not evaluated the program‘s performance against its objectives. Our
analysis concluded that while Title I assistance could be making a
meaningful, short-term contribution to the food supply in some
recipient countries, its importance in helping develop long-term U.S.
agricultural markets had not been demonstrated. [Footnote 12]
* USDA‘s implementation of the Global Food for Education pilot program
did not incorporate many of the lessons learned from successful school
feeding programs in the design of its program. As a result, program
managers did not require interested applicants to provide information
that would enable program administrators to select programs with the
greatest chance of success. [Footnote 13]:
* USDA‘s lack of internal controls in providing food assistance to
Russia
in 1999 limited the agency‘s ability to effectively manage the
distribution process, identify discrepancies, and minimize the
potential for fraud and abuse. [Footnote 14] USDA stated that it has
not conducted a comprehensive evaluation of food aid programs that it
manages.
* In a 1993 GAO review of the P.L. 480 Title II and Title III programs,
we found that USAID had not systematically collected relevant data or
developed appropriate methodologies to assess the impact of its
programs on food security in recipient countries nor ensured
accountability for its food aid. [Footnote 15] Since that report,
USAID has placed a significantly greater emphasis on the evaluation of
its food aid programs, particularly P.L. 480 Title II. [Footnote 16]:
* GAO‘s 1999 review of U.S. food aid to North Korea found weaknesses in
USAID‘s oversight over the food aid delivered through the World Food
Program and private voluntary organizations. Notwithstanding the
constraints presented by the North Korean government, we concluded that
USAID could have done more to encourage the World Food Program to
provide timely reporting on food aid distributions in North Korea.
[Footnote 17]:
Observations on the President‘s Management Review of Food Aid:
In 2001 the President‘s management review identified U.S. food aid
programs as 1 of 14 of the government‘s areas most in need of reform. A
number of the problems it identified are consistent with the findings
mentioned in my testimony. For example, the management review commented
on the fact that six different programs are administered by two
government agencies with similar bureaucracies. In addition, the review
observes that humanitarian purposes were often eroded by other uses
having little to do with food aid. Finally, the report cited the lack
of management oversight in stating that food aid programs are affected
by waste and questionable spending.
Prior GAO studies have noted the importance of similar issues and have
suggested a number of actions.
* With regard to overlapping efforts of the two agencies, we noted in
our
report on GFEI that USDA did not have the expertise to implement the
program, and that Congress should ensure that the administering agency
has the expertise and staff resources to effectively administer GFEI.
* With regard to the challenges created by competing objectives in food
aid programs, we recommended better performance measurement and
evaluation, which may help to illustrate the difficulties and tradeoffs
associated with multiple objectives.
* With regard to the potential for fraud and abuse, we have frequently
emphasized the importance of monitoring and accountability of food aid
programs to ensure that the intended recipients receive the food.
We believe that increased attention to these issues by the Congress and
the administration will continue the improvement in food aid management
and help meet the immediate needs of hungry people as well as enhance
food security over the longer term.
Mr. Chairman and members of the Committee, this concludes my prepared
statement. I will be pleased to answer any questions you may have.
Contacts and Acknowledgments:
For future contacts regarding this testimony, please call Loren Yager
or Phillip Thomas at (202) 512-4128. Individuals making key
contributions to this testimony included Wayne Ferris, Bruce Kutnick,
and Janey Cohen.
(320119):
APPENDIX I: RELATED GAO PRODUCTS ON FOOD AID:
Foreign Assistance: Global Food for Education Initiative Faces
Challenges for Successful Implementation. GAO-02-328. Washington,
D.C.: February 28, 2002.
Foreign Assistance: U.S. Food Aid Program to Russia Had Weak Internal
Controls . GAO/NSIAD/AIMD-00-329. Washington, D.C.: September 29, 2000.
Foreign Assistance: U.S. Bilateral Food Assistance to North Korea Had
Mixed Results. GAO/NSIAD-00-175. Washington, D.C.: June 15, 2000.
Foreign Assistance: Donation of U.S. Planting Seed to Russia in 1999
Had Weaknesses. GAO/NSIAD-00-91. Washington, D.C.: March 9, 2000.
Foreign Assistance: North Korean Restricts Food Aid Monitoring. GAO/
NSIAD-00-35. Washington, D.C.: October 8, 1999.
Food Aid: Competing Goals and Requirements Hinder Title I Program
Results , GAO/GGD- 95-68. Washington, D.C.: June 26, 1995.
Foreign AID: Actions Taken to Improve Food Aid Management. GAO/NSIAD-
95-74. Washington, D.C.: March 23, 1995.
Cargo Preference Requirements: Objectives Not Significantly Advanced
When Used in U.S. Food Aid Programs, GAO/GGD-94-215 Washington, D.C.:
September 29, 1994.
Food Aid: Management Improvements Are Needed to Achieve Program
Objectives. GAO/NSIAD-93-168. Washington, D.C.: July 23, 1993.
[End of Section]
Appendix II: Summary of Food Aid Programs:
This appendix provides a brief description of the various U.S. food aid
programs.
P.L. 480 Title I--Concessional:
Sales of Commodities:
Title I, which is administered by USDA, has been characterized by the
government as a concessional sales program to promote exports of
agricultural commodities from the United States and to foster broad-
based sustainable development in recipient countries. Repayments for
agricultural commodities may be made either in U.S. dollars or in local
currencies on concessional credit terms. The program provides export
financing over payment periods of up to 30 years, low interest rates,
and maximum grace periods on payments of principal of up to 5 years.
Private entities such as the World Bank and agricultural trade
organizations, as well as developing country governments, are
authorized to participate in the program.
The program‘s market development focus is geared primarily toward
developing countries experiencing a shortage of foreign exchange
earnings and difficulty meeting all of their food needs through
commercial channels. The factors that determine priorities for country
allocations include food needs, potential for becoming a commercial
U.S. market, and the undertaking of economic development to improve
food security and agricultural development. The allocations take into
account changing economic and foreign policy situations, market
development opportunities, existence of adequate storage facilities,
and possible disincentives to local agricultural production.
Title I agreements also stipulate development activities the recipient
country will undertake. Local currencies received under Title I sales
agreements may be used for activities in the recipient country such as
developing new markets for U.S. agricultural commodities on a mutually
beneficial basis, paying U.S. obligations, and supporting agricultural
development or research. However, according to USDA, the local currency
provisions have not been implemented for budgetary reasons.
P.L. 480 Title II--Donation:
of Commodities for Emergency:
and Development Food Needs:
Title II programs, administered by USAID, have two main functions: food
aid to vulnerable groups in emergency situations and long-term
development for non-emergency aid. Emergency food aid is designed to
meet critical food needs of targeted vulnerable groups, such as
refugees, internally displaced families, or those who lose their land
or livelihoods because of natural or complex humanitarian emergencies.
USAID relies on the World Food Program (WFP) and U.S. PVOs to
distribute most of the aid, with most food going to women and children.
Commodities can be monetized (i.e., sold for cash) to generate local
currency for development activities or used as humanitarian assistance
in needy countries for direct feeding of individuals unable to take
advantage of development activities--orphans, the elderly, patients in
hospices and hospitals, and HIV/AIDS victims/families.
P.L. 480 Title III--Food:
Donations Through Government-:
to-Government Agreements:
The P.L. 480 Title III program, administered by USAID, seeks to enhance
food security in the least developed countries by supporting economic
development. Under Title III the U.S. government donates agricultural
commodities to the recipient country and arranges for and pays the
costs of purchasing, processing, and transporting the commodities to
the port or point of entry in the recipient country. The donated
commodities are sold on the domestic market, and revenue generated from
the sale in the recipient countries is used to support programs of
economic development.
Food for Progress--Food Donations:
for Developing Countries and:
Emerging Democracies Moving to:
Free Enterprise in Agriculture:
The Food for Progress (FFP) program, authorized under the Food for
Progress Act of 1985, as amended, allows the Commodity Credit
Corporation (CCC) to finance the sale and export of agricultural
commodities on credit terms, or on a grant basis, to support developing
countries and countries that are emerging democracies that have made
commitments to introduce or expand free enterprise elements into their
agricultural economies. Commodities may be provided under the authority
of P.L. 480 or Section 416(b). Under certain conditions, CCC may also
purchase commodities for use in Food for Progress programs if the
commodities are currently not held by CCC in stocks. For commodities
furnished on a grant basis, the CCC may pay, in addition to acquisition
costs and ocean transportation, such related commodity and delivery
charges. Food for Progress agreements can be signed with governments or
with PVOs, nonprofit agriculture organizations, cooperatives,
intergovernmental organizations, or other private entities.
Section 416(b)--Donations:
of Surplus Commodities to:
Developing and Friendly Countries:
The Agricultural Act of 1949, as amended, authorizes the donation of
surplus food and feed grain acquired by the CCC for carrying out
assistance programs in developing countries and friendly countries
under P.L. 480 Titles II and III and under the Food for Progress Act.
However, the act also authorizes USDA to manage all of the Section
416(b) food aid. As a result, in recent years, USDA has managed P.L.
480 Title II and Title III type programs, when surplus commodities are
involved, even though USAID manages such programs when they are
financed by regular appropriations. [Footnote 18]:
McGovern-Dole International:
Food for Education and:
Child Nutrition Program:
The May 2002 Farm Bill authorizes the President to establish a
permanent program to continue a food for education and preschool
nutrition pilot program that was established by USDA in 2000 using
Section 416(b) surplus commodities. The new program goes beyond the
pilot by authorizing maternal and infant nutrition programs for
pregnant women, nursing mothers, and infants. The law directs the
President to use $100 million of CCC funds for the new program for
fiscal year 2003. It authorizes appropriating such sums as are
necessary to carry out the program for fiscal years 2004 through 2007.
The law authorizes the President to designate one or more federal
agencies to implement the program and ensure that it is consistent with
U.S. foreign policy and development assistance objectives. Private
voluntary organizations, cooperatives, intergovernmental
organizations, governments of developing countries and their agencies,
and other organizations can be used to carry out the program.
Bill Emerson Humanitarian Trust:
The Emerson Trust [Footnote 19] is a food security commodity trust,
consisting of up to 4 million metric tons of grains. It exists to meet
emergency humanitarian food needs in developing countries. Authorized
commodities for the trust include wheat, corn, grain sorghum, and rice.
In any fiscal year, the Secretary of Agriculture is authorized to
release up to 500,000 metric tons of wheat or the equivalent value of
eligible commodities other than wheat, and up to 500,000 metric tons of
any eligible commodities that could have been released in prior fiscal
years, but were not. At this point, the reserve holds 2.5 million tons
of wheat.
FOOTNOTES
[1] During 1999 and 2000, the United States provided nearly two-thirds
of world food aid, according to USDA.
[2] Estimate for the period 1997-99.
[3] See U.S. General Accounting Office, Foreign Assistance: North Korea
Restricts Food Aid Monitoring, GAO/NSIAD-00-35 (Washington, D.C.: Oct.
8, 1999).
[4] U.S. international food assistance flows from programs authorized
by three major laws: P.L. 480 (the Agricultural Trade Development and
Assistance Act of 1954, as amended, 7 USC § 1701 et seq.); the Food for
Progress Act of 1985, as amended, 7 USC § 1736o; and Section 416(b) of
the Agricultural Act of 1949, as amended, 7 USC § 1431.
[5] Farm Security and Rural Investment Act of 2002 (PL 107-171).
[6] The administration intends to use the Bill Emerson Humanitarian
Trust (see app. II) for cases where there is an increased need for
emergency food aid. Large-scale use of the 416(b) surplus disposal food
aid program would occur only as a last resort.
[7] U.S. General Accounting Office, Food Aid: Competing Goals and
Requirements Hinder Title I Program Results, GAO/GGD-95-68 (Washington,
D.C.: June 26, 1995).
[8] GAO/NSIAD-00-35.
[9] Food, Agriculture, Conservation and Trade Act (PL 101-624).
[10] GAO/GGD-95-68.
[11] GAO/GGD-94-215.
[12] GAO/GGD-95-68.
[13] U.S. General Accounting Office, Foreign Assistance: Global
Food for Education Initiative Faces Challenges for Successful
Implementation, GAO-02-328 (Washington, D.C.: Feb. 28, 2002).
[14] U.S. General Accounting Office, Foreign Assistance: U.S. Food
Aid Program to Russia Had Weak Internal Controls, GAO/NSIAD/AIMD-00-329
(Washington, D.C.: September 29, 2000).
[15] U.S. General Accounting Office, Food Aid: Management
Improvements Are Needed to Achieve Program Objectives, GAO/NSIAD-93-168
(Washington, D.C.: July 23, 1993).
[16] USAID has conducted or commissioned several major studies on
the effectiveness of its Title II programs. These studies cite a
considerable number of positive accomplishments, but also identify
program weaknesses affecting the quality of individual programs as well
as USAID‘s overall ability to monitor and evaluate its programs.
[17] GAO/NSIAD-00-35.
[18] Under an interagency agreement, USDA used USAID to administer
its overseas Section 416(b) activities until 1992.
[19] The trust was formerly
known as the Food Security Wheat Reserve and the Food Security
Commodity Reserve (7USC § 1736f-1).
