[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5234 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 5234

 To amend the Agricultural, Trade, Development, and Assistance Act of 
1954 to authorize the use of agricultural commodities to promote market 
                              development.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 6, 1994

Mr. Penny introduced the following bill; which was referred jointly to 
           the Committees on Agriculture and Foreign Affairs

_______________________________________________________________________

                                 A BILL


 
 To amend the Agricultural, Trade, Development, and Assistance Act of 
1954 to authorize the use of agricultural commodities to promote market 
                              development.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SEC. 101. SHORT TITLE.

    This Act may be cited as the ``Food for Trade Act of 1994''.

SEC. 102. ESTABLISHMENT OF PROGRAM.

    Title I of the Agricultural Trade Development and Assistance Act of 
1954 (7 U.S.C. 1701 et seq.) is amended by adding at the end the 
following new section:

``SEC. 106. FOOD FOR TRADE PROGRAM.

    ``(a) Establishment.--
            ``(1) In general.-The Secretary shall carry out a pilot 
        program under this title to establish permanent, self-
        sustaining organizations in eligible recipient countries to 
        promote and provide financing for broad-based economic 
        development activities in the countries.
            ``(2) Cooperation.--The Secretary shall carry out this 
        section by entering into contracts with non-profit 
        organizations or entities (referred to in this section as 
        ``facilitators'') to facilitate the establishment and operation 
        of approved pilot projects in eligible recipient countries 
        utilizing agricultural commodities provided under this section.
    ``(b) Eligible Projects.--
            ``(1) In general.--An organization or other entity may 
        participate in this program by submitting a complete proposal 
        for the operation of a project in an eligible recipient 
        country, according to guidelines developed by the Secretary.
            ``(2) Project funding.--Upon approval of a project proposed 
        under this section, the Secretary shall make available 
        agricultural commodities under this title to the facilitator on 
        a grant basis for the purpose of funding and carrying out the 
        project. The Secretary shall cover the costs of transporting 
        the commodities to the recipient country under paragraph (4).
            ``(3) Duration of assistance.--Assistance may be provided 
        under this section in annual installments for up to 5 years per 
        individual approved project, or such longer period of time as 
        deemed appropriate by the Secretary.
            ``(4) Monetization.--The facilitator shall transport the 
        agricultural commodities received under this section for sale 
        in the recipient country. After deduction of any associated 
        expenses, the proceeds generated from the sale shall be used to 
        establish a permanent, self-sustaining investment fund in the 
        recipient country according to guidelines established under 
        subsection (h).
            ``(5) Role of the facilitator.--A facilitator participating 
        in this program shall--
                    ``(A) be responsible for the storage, transport, 
                and monetization of agricultural commodities in 
                eligible recipient countries pursuant to guidelines 
                established by the Secretary under subsection (h);
                    ``(B) establish and manage an investment fund in 
                the recipient country using the proceeds from the 
                monetization of the agricultural commodities, until 
                such time as the facilitator transfers control of the 
                project to the joint commission under subsection (g);
                    ``(C) establish and operate an advisory board to 
                advise in the management of the investment fund; and
                    ``(D) coordinate the eventual transfer of the 
                advisory board and the investment fund to the joint 
                commission in the participating recipient country.
            ``(6) Expense projections.--Each project proposal submitted 
        under this section shall contain a projection of the estimated 
        expenses necessary to carry out the project, including the 
        monetization of the agricultural commodities and the 
        establishment and operation of the investment fund.
    ``(c) Investment Fund.--
            ``(1) Establishment.--The facilitator shall establish a 
        permanent, self-sustaining investment fund in the participating 
        recipient country from the proceeds of the sales of the 
        agricultural commodities provided under this section.
            ``(2) Use of fund.--Monies in the investment fund shall be 
        invested and managed in a manner that provides the best 
        possible return for the fund, without posing an undue risk to 
        the principal balance used to establish the fund.
            ``(3) Restriction on investment of funds.--Monies from the 
        fund may be invested in any appropriate investments as 
        determined by the Secretary pursuant to regulation.
            ``(4) Investment proceeds.--Profits generated by the 
        investments shall be made available to the joint commission to 
        carry out development activities under subsection (f). The 
        facilitator shall be reimbursed for any administrative costs 
        associated with the operation of the investment fund.
    ``(d) Advisory Boards.--
            ``(1) Establishment.--The facilitator shall operate an 
        advisory board (referred to in this section as the ``board'') 
        in each participating recipient country to advise the 
        facilitator on the management of the investment fund and other 
        investment issues.
            ``(2) Membership.--The members of the board shall be 
        selected by the facilitator from the local and international 
        business and investment community. Members of the board shall 
        serve without pay.
            ``(3) Transfer of authority.--After control of the project 
        is transferred to the joint commission under subsection (g), 
        the advisory board shall provide advice to the joint commission 
        on investment fund issues.
    ``(e) Joint Commission.--
            ``(1) Establishment.--The Government of the United States 
        shall enter into an agreement with the government of each 
        recipient country that participates in this program, along with 
        the facilitator organization that oversees the project in that 
        country, for the establishment in the country of a Food for 
        Trade Joint Commission (referred to in this section as the 
        ``joint commission'').
            ``(2) Membership.--The joint commission shall be composed 
        of representatives of--
                    ``(A) the participating recipient country;
                    ``(B) local nongovernmental entities;
                    ``(C) international nongovernmental entities; and
                    ``(D) the United States diplomatic mission in the 
                recipient country, which may include a representative 
                of the Foreign Agricultural Service.
            ``(3) Board of directors.--The joint commission shall elect 
        a board of directors that provides equal representation for 
        each of the 4 entities specified in paragraph (2). The 
        directors shall serve without pay.
            ``(4) Secretariat.--The joint commission may hire 
        administrative personnel to handle the day-to-day activities of 
        the joint commission.
            ``(5) Duties.--The joint commission shall be responsible 
        for--
                    ``(A) the selection and approval of recipients for 
                loans and grants for eligible activities under this 
                section;
                    ``(B) the dispersal of funds to approved applicants 
                from investment fund profits;
                    ``(C) monitoring of activities funded under this 
                section; and
                    ``(D) overall operation and maintenance of the 
                program including the investment fund, upon the final 
                transfer of control under subsection (g).
    ``(f) Eligible Activities.--The joint commission may make available 
funds from the profits generated by the investment fund for 
developmental activities including:
            ``(1) Credit.--Loans may be made under this section to--
                    ``(A) local private co-operative banks,
                    ``(B) credit unions,
                    ``(C) non-profit venture capital investment 
                organizations,
                    ``(D) eligible organizations for the purpose of 
                providing micro-credit, and
                    ``(E) approved local entrepreneurs.
            ``(2) Technical assistance.--Grants may be awarded under 
        this section to--
                    ``(A) cover in-country costs for farmer-to-farmer 
                program implementors, or
                    ``(B) eligible organizations working in 
                agribusiness development.
            ``(3) Research, education and extension endowments.--
        Research grants, scholarships and sabbaticals may be awarded 
        under this section to individuals working in local agricultural 
        research and education institutions.
            ``(4) Humanitarian and infrastructure development grants.--
        Grants may be provided under this section to finance--
                    ``(A) infrastructure development projects, and
                    ``(B) humanitarian efforts.
        All grants made under this paragraph shall be from the 
        repayment proceeds for loans under paragraph (1).
    ``(g) Transfer of Project Control.--After a period of 5 years of 
operation of the project in a recipient country, or such other period 
of time deemed appropriate by the Secretary, the responsibility for the 
management and oversight of the investment fund shall be transferred, 
according to terms established by the Secretary, to the joint 
commission. Upon the transfer of authority under this subsection, the 
authority and responsibility of the facilitator with respect to the 
project shall be terminated.
    ``(h) Guidelines.--The Secretary shall develop guidelines and 
procedures for the establishment and operation of the program under 
this section and shall provide for the following:
            ``(1) Application procedures for proposals for projects 
        under this section.
            ``(2) Criteria for the selection of recipient countries, 
        including--
                    ``(A) demonstrated interest in privatizing a 
                significant percentage of the agricultural sector;
                    ``(B) demonstrated interest in privatizing land 
                ownership;
                    ``(C) legal and judicial structures that allow for 
                private banking;
                    ``(D) tax laws that do not overly inhibit small 
                business development;
                    ``(E) limited or no restriction on foreign 
                investment;
                    ``(F) demonstrated interest in freeing wages and 
                prices from government control;
                    ``(G) economic situation that allows the 
                establishment of profitable tax-exempt foundations and 
                non-prohibitive use of these profits for development 
                purposes;
                    ``(H) judicial infrastructure that allows for legal 
                enforcement of contracts.
            ``(3) Procedures for the monetization of agricultural 
        commodities provided under this section.
            ``(4) Establishment and operation of investment fund, 
        including any restrictions on investments deemed necessary by 
        the Secretary.
            ``(5) Procedures for the eventual transfer of operational 
        control, including oversight of the investment fund and 
        advisory board of the program to the joint commission.
            ``(6) Procedures for evaluation of the program.
            ``(7) Procedures for the termination of the project and 
        dissolution of the investment fund in the event the Secretary 
        determines that the project is being mismanaged or otherwise 
        should not be continued.
            ``(8) Other guidelines deemed appropriate by the Secretary 
        for the operation or oversight of the program.
    ``(i) Report.--The facilitator shall submit an annual progress 
report to the Secretary on the operation of the project in the 
recipient country.
    ``(j) Evaluation and Audit.--
            ``(1) Evaluation of the program.--Not later than 5 years 
        after the establishment of this program and every 4 years 
        thereafter, the Secretary shall evaluate the effectiveness of 
        the program and shall report the findings to the Committee on 
        Agriculture of the House of Representatives and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate.
            ``(2) GAO audit.--The Comptroller General of the United 
        States shall conduct periodic audits of the operation of the 
        program.
    ``(k) Definitions.--For the purpose of this section:
            ``(1) Facilitator.--The term ``facilitator'' means a 
        nonprofit organization or entity with experience or 
        demonstrated capability for the storage, transport, and sale of 
        agricultural commodities in recipient countries.
            ``(2) Eligible recipient country.--The term ``eligible 
        recipient country'' means a country that meets one or more of 
        the criteria specified in subsection (h)(2), as determined by 
        the Secretary.
            ``(3) Eligible organization.--The term ``eligible 
        organization'' means an international private voluntary 
        organization or a local nongovernmental organization.
    ``(l) Program Funding.--The Secretary shall make available at least 
20 percent of the amount of funds made available to carry out this 
title for the purpose of carrying out this section.''.
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