Food Aid

Competing Goals and Requirements Hinder Title I Program Results Gao ID: GGD-95-68 June 26, 1995

During the past 40 years, the United States has allocated more than $88 billion in food assistance to developing countries under title I of the 1954 Agricultural Trade Development and Assistance Act. Under the title I program, run by the Agriculture Department, U.S. agricultural commodities are sold on long-term credit terms at below-market-rate interest. Although the United States remains a world leader in providing food aid, title I's share of both U.S. food aid and overall U.S. agricultural exports has declined dramatically since the program's inception. This report evaluates the impact of title I assistance on (1) broad-based, sustainable economic development in recipient countries and (2) long-term market development for U.S. agricultural goods in those countries. GAO also reviews the effect of 1990 legislation on restructuring title I program management and the program's ability to sustain economic and market development.

GAO found that: (1) U.S. agricultural exports and world food aid have decreased because there are other donor countries and new programs such as the Department of Agriculture's (USDA) market development program; (2) title I has had minimal effect on sustainable economic development in recipient countries; (3) the primary way in which title I food aid can contribute to broad-based sustainable development in the recipient country is to give the country the foreign exchange savings it needs to invest in long-term economic development projects; (4) the link between title I and market development is uncertain, since USDA and other agency studies have not shown a link between title I assistance and the establishment of a long-term commercial market share for U.S. agricultural products; (5) price-sensitive exports restrict title I market development opportunities; (6) Title I program management has been streamlined by assigning title I programs to USDA and titles II and III to the Agency for International Development (AID); and (7) while the objectives of P.L. 480 legislation can support U.S. foreign policy and trade interests, they can also impede the development of an effective program strategy.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone:


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.