[Senate Hearing 107-556]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-556
 
HALF A LOAF--THE IMPACT OF EXCLUDING SURPLUS COMMODITIES FROM AMERICA'S 
                       RESPONSE TO GLOBAL HUNGER
=======================================================================

                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
              RESTRUCTURING, AND THE DISTRICT OF COLUMBIA
                              SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 4, 2002

                               __________

      Printed for the use of the Committee on Governmental Affairs







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                   COMMITTEE ON GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia                 THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware           ROBERT F. BENNETT, Utah
JEAN CARNAHAN, Missouri              JIM BUNNING, Kentucky
MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois
           Joyce A. Rechtschaffen, Staff Director and Counsel
              Richard A. Hertling, Minority Staff Director
                     Darla D. Cassell, Chief Clerk

                                 ------                                

OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND THE DISTRICT OF 
                         COLUMBIA SUBCOMMITTEE

                 RICHARD J. DURBIN, Illinois, Chairman
DANIEL K. AKAKA, Hawaii              GEORGE V. VOINOVICH, Ohio
ROBERT G. TORRICELLI, New Jersey     TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           SUSAN M. COLLINS, Maine
JEAN CARNAHAN, Missouri              THAD COCHRAN, Mississippi
MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois
       Marianne Clifford Upton, Staff Director and Chief Counsel
                Charles F. Hunter, Congressional Fellow
               Andrew Richardson, Minority Staff Director
           John Salamone, Minority Professional Staff Member
             Brian McLaughlin, Staff Assistant/Acting Clerk







                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Durbin...............................................     1

                               WITNESSES
                         Tuesday, June 4, 2002

Hon. George McGovern, former U.S. Senator, and former U.S. 
  Ambassador to the Food and Agriculture Organization............     4
Hon. James P. McGovern, a Representative in Congress from the 
  State of Massachusetts.........................................     6
Loren Yager, Director, International Affairs and Trade Group, 
  U.S. General Accounting Office.................................    11
Hon. A. Ellen Terpstra, Administrator, Foreign Agricultural 
  Service, U.S. Department of Agriculture........................    13
Hon. Roger Winter, Assistant Administrator, Bureau of Democracy, 
  Conflict and Humanitarian Assistance, U.S. Agency for 
  International Development......................................    15
Ellen S. Levinson, Government Relations Director, Cadwalader, 
  Wickersham and Taft, and Executive Director, Coaliton for Food 
  Aid............................................................    17
Jason Phillips, Country Director, International Rescue Committee, 
  Kenya..........................................................    19

                     Alphabetical List of Witnesses

Levinson, Ellen S.:
    Testimony....................................................    17
    Prepared statement...........................................    85
McGovern, Hon. George:
    Testimony....................................................     4
    Prepared statement...........................................    33
McGovern, Hon. James P.:
    Testimony....................................................     6
    Prepared statement...........................................    39
Phillips, Jason:
    Testimony....................................................    19
    Prepared statement...........................................    99
Terpstra, Hon. A. Ellen:
    Testimony....................................................    13
    Prepared statement...........................................    66
Winter, Hon. Roger:
    Testimony....................................................    15
    Prepared statement...........................................    78
Yager, Loren:
    Testimony....................................................    11
    Prepared statement...........................................    45

                                Appendix

``Indonesia School Feeding Conference Trip Report--May 13-17, 
  2002,'' submitted by James P. McGovern.........................   108
Article entitled, ``Shaping Young Islamic Hearts and Hatreds,'' 
  The New York Times, October 14, 2001, submitted by James P. 
  McGovern.......................................................   113
Article entitled, ``In Pakistan's Squalor, Cradles of 
  Terrorism,'' The Washington Post, March 14, 2002, submitted by 
  James P. McGovern..............................................   115
``Afghanistan Food Aid,'' submitted by Roger Winter..............   117



HALF A LOAF--THE IMPACT OF EXCLUDING SURPLUS COMMODITIES FROM AMERICA'S 
                       RESPONSE TO GLOBAL HUNGER

                              ----------                              


                         TUESDAY, JUNE 4, 2002

                                       U.S. Senate,
         Oversight of Government Management, Restructuring,
                 and the District of Columbia Subcommittee,
                  of the Committee on Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:27 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Richard J. 
Durbin, Chairman of the Subcommittee, presiding.
    Present: Senator Durbin.

              OPENING STATEMENT OF CHAIRMAN DURBIN

    Senator Durbin. Good afternoon, and welcome to this 
hearing. I apologize for the tardiness in starting. 
Occasionally, the leadership just does not call me to 
coordinate these votes with our planned Subcommittee hearings, 
but I am sure that both Senator and Congressman McGovern are 
aware of that problem from their public service.
    I am pleased to welcome you today to this hearing before 
the Senate Subcommittee on Oversight of Government Management, 
focusing on ``Half a Loaf--The Impact of Excluding Surplus 
Commodities from America's Response to Global Hunger.''
    Where is my next meal coming from? It is a question that 
not many people in this room have ever had to ask, but for 
hundreds of millions of people around the world, it is a 
reality of everyday life. Today, Tuesday, June 4, 2002, over 
20,000 people will die from hunger and related causes. Most of 
them will be children under the age of 5. The same will be true 
tomorrow, and the day after that and every day for the 
foreseeable future, 20,000 victims a day.
    Out on the margins, the scourges of poverty, natural 
disaster, armed conflict, lack of education, and poor 
infrastructure keep great numbers on the edge of starvation. 
The cruel irony is that the world's farmers produce more than 
enough food to nourish every man, woman and child on the 
planet. It is impossible not to be moved by images and stories 
of malnourished children and despairing parents, and it is very 
natural to want to help them, and help them we do, as a 
government and as individuals.
    Many people remember collecting coins for themselves and 
their kids for UNICEF with Halloween candy. Washington's 
response is on a considerably larger scale, roughly $2 billion 
worth of food aid this year alone. We provide about half of the 
world's humanitarian food donations, but hunger is not going 
away.
    Next week's review conference on the 1996 world food summit 
is likely to conclude that progress toward the target of 
reducing by half the number of hungry people in the world by 
the year 2015 is woefully behind the pace needed to reach that 
goal. There is no easy answer to this challenge. What is 
certain is that America's values and our bounty compel us to 
lead the way in trying to meet it.
    The food aid programs we have developed over the years have 
lengthened and improved the lives of countless numbers of 
people in every region of the world. A daily ration as small as 
this can mean the difference between life and death, and our 
farmers produce enough to fill millions of these a day. U.S. 
farmers work hand-in-hand with nongovernmental organizations 
like those represented here today and with the U.S. Department 
of Agriculture and the U.S. Agency for International 
Development to channel grains, and dairy products, oilseeds, 
and other products to food aid recipients around the world. But 
even the best-run and most effective programs can benefit from 
regular oversight.
    The Bush Administration's review of U.S. food aid policy 
and activities provides an opportunity to step back for a 
moment and ask important questions about our objectives, our 
organizational structure and the impact of our current 
programs. We should start by asking what our ultimate goal is 
in providing food aid and the degree to which food aid should 
be integrated with other programs we are using in pursuit of 
development goals. If we do not know our goal, it is difficult 
to know how to reach it.
    The ideal, I think everyone would agree, is achieving a 
state of food security in which everyone has enough to eat so 
they can live a healthy and productive life. In the post-
September 11 world, it is not too difficult to see how food 
security would contribute to America's homeland security if 
more people around the world saw the United States as a 
compassionate helper of the less fortunate.
    Well, we are not quite there yet, either in terms of having 
the goal of food security in our grasp or receiving credit for 
the good things we do. It is also true that our commitment to 
fighting global hunger does not necessarily translate into 
reliable, overall levels of assistance on a year-to-year basis.
    Part of the fluctuation is beyond our control. Surpluses 
are simply larger in some years than others. But another part 
of the unpredictability of our program comes from conscious 
decisions here in Washington. We need to seriously address the 
management side of that challenge. For example, when the 
quantity of food provided through the Section 416(b) program, 
which relies on surplus commodities, goes from more than 3.5 
million metric tons in 1993 to zero in 1996, 1997, and 1998, 
and it mushrooms to over 6 million tons in 1999, that is a 
problem.
    When the global school lunch program we will hear about 
shortly begins raising the hopes and the nutritional levels of 
students, especially young girls, around the world and their 
parents in dozens of countries, but then faces a steep cut in 
funding, that is a problem.
    Our witnesses will give us their views on solutions that 
are within reach for our food aid programs. Our dialogue today 
may touch on policy decisions, organizational diagrams, but 
ultimately our goal is to have more people every day know the 
answer to the question, where is my next meal coming from?
    I would like to welcome, as our first panel, two witnesses 
that have at least three things in common: Their surnames, 
their outstanding service as elected officials, and their 
strong dedication to ensuring that America does the right thing 
by sharing its bounty with hungry people around the world.
    First, the distinguished former Senator from South Dakota, 
and former Ambassador to the Food and Agricultural Organization 
in Rome, the Hon. George McGovern. Senator McGovern, you may 
want people to believe that you are retired and living quietly 
in Montana, but we know better. [Laughter.]
    Whether you are advocating support for the Global Food for 
Education Initiative that Congress has renamed for you and your 
former colleague, Senator Robert Dole, serving with me on the 
board of the Friends of the World Food Program or continuing to 
write and speak on a variety of subjects, you are an 
inspirational example of how a life can be lived in service to 
others.
    Your involvement with food aid dates back to the beginning, 
more than 4 decades ago, as President Kennedy's choice to 
direct the Food for Peace Program, and from that time forward 
you have been a tireless advocate for adequate nutrition, both 
in the United States and around the world. We are honored to 
have you here today.
    Representative Jim McGovern of Massachusetts and I both 
look back happily on 1996 as the year when we moved up in the 
world, he to the House and I to the Senate. Since coming to 
Washington, he has followed his namesake's example in urging 
fellow House members to recognize the importance of giving food 
aid programs the resources they need to carry out their vital 
work.
    I want to thank you both for coming, and I am looking 
forward to your testimony. I will just recount to you one 
experience, and I am sure each of you have similar ones in your 
private and public life, of visiting a dusty little village 
outside of Calcutta in India, and it was a time when the 
children were gathering for lunch. And lunch for these kids was 
some sort of a mixture of grains, with a little bit of water 
added to it, which there is not a kid in America who would look 
at with a smile. You would have to force them to eat it. These 
kids were jumping at it like it was Baskin-Robbins' ice cream 
because this was basically what they had to eat for the day.
    Two things about that I remember in particular. When I went 
to look at the bag of grain sent by U.S. AID to this little 
village in India, I realized it had been packaged in Peoria, 
Illinois, from my home State. The second thing I remember is 
that before they could reach down and start eating, and they 
did voraciously, they had to pause and for a moment say a Hindu 
prayer in thanksgiving for whoever it was that was kind enough 
to send them that day's food. I will never forget that as long 
as I live: That our bounty out of the Midwest made its way 
halfway around the world to a little village and kept children 
alive.
    Senator McGovern, more than anyone I can think of, you are 
responsible for our Nation's consciousness of that 
responsibility. I welcome you here today, and I invite your 
testimony.

TESTIMONY OF HON. GEORGE McGOVERN,\1\ FORMER U.S. SENATOR, AND 
FORMER U.S. AMBASSADOR TO THE FOOD AND AGRICULTURE ORGANIZATION

    Senator McGovern. Well, thank you very much, Chairman 
Durbin, for your very generous words and for your own 
leadership on this effort to combat hunger. When I first 
started talking in Rome about a universal school lunch program 
some 2 years ago, you were the first member of Congress who 
called my office and told me that you wanted to do everything 
you could to move that program along, and that is precisely 
what you have done in helping to bring about the passage this 
year of the McGovern-Dole International Food for Education and 
Child Nutrition bill.
---------------------------------------------------------------------------
    \1\ The prepared statement of Senator McGovern appears in the 
Appendix on page 33.
---------------------------------------------------------------------------
    When I was here as a Senator, Senator Durbin, I had trouble 
getting bills through with my name on it, but now that I have 
left---- [Laughter.]
    Senator McGovern [continuing]. People who are more 
effective, like yourself, get these bills through. So I am 
grateful for that. I think it helps being teamed up with Bob 
Dole, who is a great champion of feeding the hungry, both in 
this country and abroad.
    I am glad to be here with Congressman Jim McGovern. I wish 
I could tell you he is my son, but I can tell you that we have 
been colleagues in this effort from the very beginning. He has 
been the obvious leader in the House of Representatives in 
carrying forward this legislation.
    Like you, I have had these experiences with children in 
dusty villages around the world and even in this country. I 
never tire of telling about a little youngster in South 
Carolina that I saw on television in a school lunch room at a 
time when the American Federal School Lunch Program did not 
provide for free or reduced-price lunches for poor kids. If you 
did not have the money to pay, you did not eat. And in this 
particular incident, the television camera zeroed in on this 
one little guy standing over along the edge of the cafeteria 
wall, and they asked him what he thought when he had nothing to 
eat and had to watch the other children eat. I thought he would 
say that he was angry or that he was disgusted. He said, ``I am 
ashamed.''
    And the reporter said, ``Why is that?''
    And he said, ``Because I have not got any money.''
    Well, that is the problem in so many parts of the world 
today. We have straightened that out in the United States with 
the free or reduced-price lunches that Senator Dole and I 
sponsored here many years ago, but it is not straightened out 
in most of the countries of the Third World, where youngsters 
do not have enough to eat.
    Three hundred million school-age kids, by school age I mean 
the first grade through the sixth grade--we will have to worry 
about the middle school and the high school people later--three 
million of those little folks, ages 6 to 12, that go to school 
that have nothing to eat. Actually, 130 million of them do not 
go to school, and most of those are girls because of the 
favoritism towards males.
    But this program that we are considering here today, and 
that you co-sponsored, Senator Durbin, addresses that problem. 
It would provide, under U.N. sponsorship, with the United 
States taking the lead, for school lunches for these youngsters 
who are not now being fed. That has an immediate result in 
increasing enrollment. It brings the girls in, as well as the 
boys, and why should it not? Once parents hear that their 
children can get a good nutritious meal every day just by 
showing up at the village school, they are going to see to it 
that more children come to school. The grades are going to go 
up, the academic performance, the athletic performance, the 
overall health of these youngsters.
    Girls who do not go to school, many as early as 10 or 12 
years of age, and have an average, according to United Nation's 
studies, of 6 children. Whereas, the ones that go to school 
even for 6 years, have a better understanding of what life is 
all about, marry later and delay marriage for several years, 
and have an average of 2.9 children. Education cuts the birth 
rate in half, without abortions or surgical procedures of any 
kind--the power of education. It is facts like that that keep 
me awake nights trying to figure out how we can advance this 
program more swiftly.
    Now I appreciate, as does Senator Dole, the fact that 
Congress authorized an initial $100 million for this program. 
Even if they had only authorized $1, it would have been 
worthwhile because it means that Congress has said it is OK for 
the United States to go ahead with this program within the 
United Nations.
    We previously received $300 million for this current year 
that was decided on by President Clinton before he left office. 
The Congress has now come forward with an additional $100 
million. I wish, with all my heart, that had been $500 million, 
but I am glad we got $100 million.
    I know that one of the reasons why we are told that money 
is tight is because of the so-called ``war on terrorism,'' and 
I am not against going after the terrorists. I do not criticize 
the administration and the Congress for this, but I would say 
that we need to be asking ourselves why is it that so many of 
these young men in the Third World are so angry at us? What is 
it about us that makes people want to blow down our buildings. 
I wonder if there is not some relationship to that problem from 
the fact that half the people around the world are in poverty?
    We are told that these young followers of Osama bin Laden, 
a wealthy misguided zealot, that the reason impoverished young 
men, by the tens of thousands, sign up for his cause is because 
they are told they can fly into the arms of Allah. I do not 
believe that. I think that people that have a decent life are 
not all that eager to fly into the arms of Allah or into heaven 
or anywhere else. I would like to go to heaven someday, but not 
now. I am having too good a time here on this earth, but a lot 
of people are not having a good time. They are miserable. They 
are hungry. They are homeless. They cannot find a sanitary 
glass of water, and so when a zealot like Osama bin Laden comes 
along and says, ``follow me,'' they are vulnerable to that kind 
of appeal.
    The President says he thinks that they are attacking us 
because they hate our freedom. In all due respect to the 
President, whom I want to be successful, I would like to see 
him be a great President, as I would every President, I do not 
think he is right about that. I do not think the people that 
flew those airplanes into the World Trade Center did that 
because they hate our freedom. I think there is something else 
behind it that is not that simple. It is a more complicated 
matter of anger, and resentment and feeling of helplessness and 
powerlessness.
    Is it just possible that some young guy sitting out there 
in Calcutta or Saudi Arabia or Afghanistan heard of this 
murderous attack on the Trade Center in New York, and instead 
of being horrified as were all Americans and much of the 
world's people, said to himself, ``we showed these rich people, 
we showed these people with all of the military power that we 
are not to be ignored? ''
    I can only tell you that it is my own deep-held conviction 
that if this country would take the lead at the United Nations, 
with the help of our friends there, to provide a good 
nutritious lunch every day for every school child in the world, 
I cannot help but think that that would help us, in terms of 
our dealing with these Third World countries around the globe.
    So I hope and pray that the Congress will take this $100 
million and add to it, from time to time, to keep this program 
going. I think it is a good investment for us.
    Thanks ever so much.
    Senator Durbin. Thank you very much, Senator.
    Congressman Jim McGovern, you have been a great ally. You 
called me during one of our breaks when the farm bill was being 
considered in conference, and we were both on the phone begging 
the conferees not to kill this program. We kept it alive. I am 
sure you feel, as Senator McGovern does, that it is a great 
idea. I wish it had more funding, but at least we are going to 
proceed from this point forward, and I thank you for your 
support in joining us today.

  TESTIMONY OF HON. JAMES P. McGOVERN,\1\ A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. McGovern. Why thank you, Mr. Chairman. Before I begin 
my remarks, I ask that my entire written testimony be in the 
record.
---------------------------------------------------------------------------
    \1\ The prepared statement of James P. McGovern appears in the 
Appendix on page 39.
---------------------------------------------------------------------------
    Senator Durbin. Without objection.
    Senator McGovern. And I would ask the same, Mr. Chairman.
    Senator Durbin. Without objection.
    Mr. McGovern. I also ask that an attachment by Land O'Lakes 
describing a recent conference in Indonesia on U.S.-funded food 
feeding programs and two articles about what happened in 
Pakistan during the 1990's, when the United States and other 
donors cut off food aid and development aid, be included in the 
record as well.\1\
---------------------------------------------------------------------------
    \1\ The information provided by James P. McGovern with articles 
appear in the Appendix on pages 108, 113, and 115 respectively.
---------------------------------------------------------------------------
    Senator Durbin. Without objection.
    Mr. McGovern. Mr. Chairman, I thank you very much for 
holding this hearing. I thank you for inviting me here today. 
It is an honor to appear on a panel next to Senator George 
McGovern, whose leadership to end world hunger is legendary. I 
am proud to work with him, and you, and Senator Dole, on the 
House side, in trying to see that the Global Food for Education 
Initiative becomes a reality. I think it is an incredibly 
important bill that has added significance in the aftermath of 
September 11.
    I should add one thing. In addition to George McGovern and 
I sharing a passion about ending hunger and sharing the same 
last name, we do have another thing in common, and that is that 
we both carried Massachusetts. [Laughter.]
    So I would add that to the list.
    I should say that my knowledge of agriculture and food aid 
issues are nowhere near what yours are or Senator McGovern's or 
some of the PVOs and other experts that are going to be 
testifying here today. But as you know, because we have worked 
closely together on these matters, I have taken a special 
interest in ending hunger among the world's children. This is 
not a simple matter, but I strongly believe that our failure 
thus far is mainly a failure of political will and a failure to 
dedicate the resources required to achieve success. This is a 
failure not just of the United States, but of the international 
community.
    Mr. Chairman, I believe that this is a moment when the 
United States should be expanding and not constricting food and 
development aid abroad. I believe doing so promotes and 
protects our national interests, including our national 
security. I believe such aid is a tangible demonstration of 
America's values, character and priorities. I believe that the 
programs supported by our surplus commodities are not only 
needed to combat global hunger, they are an integral part of a 
strategy to defeat global terrorism, as Senator McGovern has 
outlined.
    We have no problem finding money to increase our defense 
budget. We have no problem finding money for homeland security. 
We have no problem finding money for increased border security 
or for our intelligence budget. But when we talk about using 
surplus commodities to support programs that reduce hunger and 
attack the root causes of hunger, poverty, illiteracy, the lack 
of economic opportunity, we are told we simply cannot afford 
it.
    Well, Mr. Chairman, hunger, poverty, illiteracy, and the 
lack of economic opportunity may not be the root causes of 
terrorism, but they certainly provide the fertile ground that 
terrorists use to exploit and justify their actions.
    President Bush just signed the new farm bill into law. 
Under that bill, our hardworking farmers are likely to continue 
to produce surplus commodities. Yet the White House recommends 
that we eliminate surplus commodity donations abroad, reduce 
our overall outlays for food aid and sharply reduce 
monetization of commodities. The President's budget provided no 
new funding for the Global Food for Education Initiative, which 
is a program that, as you know, is designed to make sure that 
every child in this world gets one nutritious meal a day in a 
school setting, not only promoting the cause of ending hunger, 
but also promoting the cause of universal education.
    But I was very pleased that in the farm bill, in that 
reauthorization, there is $100 million in fiscal year 2003 to 
help bridge the gap during the transition of the GFEI from a 
pilot program to a permanent program. However, substantially 
greater funds will be required in the President's fiscal year 
2004 budget to continue, let alone expand this program. This 
$100 million we are all grateful for, but it is nowhere near 
what we need to do the kind of job that all of us know needs to 
be done.
    The President's budget also shifted commodity, supported 
food and development programs carried out by private voluntary 
organizations and the World Food Program, from USDA's 
jurisdiction over to USAID. This shift alone creates a 
substantial shortfall in resources for development and 
emergency food aid programs.
    At a time when the United Nations is predicting that 18 
million metric tons of food aid will need to be imported by the 
poorest countries just to meet basic needs, a significant 
increase, Mr. Chairman, we are cutting back on the very 
programs that have proven effective in addressing those needs.
    In Monterrey, Mexico, the President announced that he 
intends to provide an additional $5 billion in development aid 
over the next few years. I welcome the President's 
announcement, but these funds genuinely need to be in addition 
to our existing emergency humanitarian development and food aid 
programs. I do not want to have to draw upon those ostensibly 
new monies to make up for cutbacks that are mainly the result 
of a prejudice against off-budget commodity surplus programs.
    Mr. Chairman, I want to bring to the Subcommittee's 
attention just one set of programs currently funded through 
USDA's Section 416(b) surplus commodity allocations, one of the 
programs the administration recommends be eliminated.
    In Indonesia, over 900,000 needy school children receive 
nutritious food through school feeding programs carried out by 
Land O'Lakes, ACDI/VOCA, Mercy Corps International and 
International Relief and Development. You have samples of 
fortified milk and wheat biscuits provided to these children, 
these little containers here with the American flag, and the 
Indonesian flag, and these little biscuits here, the same 
thing. A soy beverage and wheat and soy noodles are provided in 
other schools.
    I have pictures over there of some children who benefit 
from these Section 416 programs. These children, Mr. Chairman, 
are the future of Indonesia, and we have a role to play in what 
kind of future that will be. If reducing hunger were the only 
accomplishment of these programs, I would find that sufficient 
reason for continuing them. But USDA, and the U.S. PVOs, and 
cooperatives do a great deal more. These groups work with PTAs, 
school administrators and elected officials to build local 
capacity and involvement in the programs.
    Workshops are held on nutrition and health. All of the 
products are processed locally, developing a more viable 
commercial dairy and food-processing sector and creating jobs 
and income from more families.
    The beverage packets can be recycled, and teachers and 
students are actually involved in an environmental awareness 
program. These programs have also created interest in U.S. 
agricultural products, increasing our commercial exports to 
Indonesia, and there is more detail about some of these 
programs, and their many impacts in my written testimony. It 
takes a great deal of time, work and personal capital to get 
these programs up and running.
    What are we supposed to tell these children when this 
program ends because we have eliminated Section 416(b) and no 
longer provide surplus commodity donations abroad? What are we 
to say to their parents and their teachers? How will the local 
dairy and food processors judge us as partners? Will the 
Indonesian Government see us as a reliable partner in reducing 
hunger and malnutrition when we stop our programs at the very 
point in time when Indonesia hopes to expand them to several of 
the outer islands? What do you say to the U.S. PVOs and 
cooperatives that have put their reputations on the line for 
us?
    Mr. Chairman, other witnesses will be providing the 
Subcommittee with concrete facts and figures about how these 
changes in policy and funding will affect our food and 
development programs in the field, but I would like, however, 
for you to remember the faces of these children while I end on 
a cautionary note.
    What kind of future do we court if we reduce our efforts to 
end global hunger? This is not the time, Mr. Chairman, to 
abandon programs that have done us good service for many, many 
years. How can we possibly make up the shortfall if they are 
eliminated? Improve them? Yes. Strengthen them? Yes. We need to 
exploit every available tool to meet the challenges posed by 
global hunger and poverty. As you rightly put it, Mr. Chairman, 
we cannot do that by providing a half a loaf.
    I would just say, in conclusion, that there are differences 
on some of these issues between the Congress, and the 
administration, and some of the PVOs, and other organizations 
that are trying to combat hunger. We need to work these issues 
out. We need to work our differences out without reducing the 
amount of resources that are available to deal with this 
problem. This is a huge problem, and I worry that what the 
administration has put forth, you know, makes less resources 
available and makes this challenge that we are all committed to 
of trying to end hunger in the world much more difficult.
    Thank you, Mr. Chairman.
    Senator Durbin. Thank you, Congressman McGovern.
    Let me ask only one question of both of you, if you have 
the time. You may have a vote or something you have to go to, 
Congressman, but if you can.
    Senator McGovern, when you first wrote the article for the 
Washington Post, one of the things that intrigued me was not 
just the idea of a new approach, the idea of an initiative from 
the United States, but also kind of an invitation or challenge 
to the rest of the word to come join us. We are not going to do 
this alone. There are a lot of children out there. We can all 
do a little bit of it and come together in a global effort from 
the developed countries to the Third World and underdeveloped 
countries with this kind of approach.
    Now you were in a position, as an ambassador in Rome, to 
see it in terms of other participants and nations getting 
involved. I want to commend President Bush for naming, as your 
successor, our great friend, Congressman Tony Hall, who has 
devoted his career to fighting world hunger. But tell me about 
this involvement of other nations so that we can even expand on 
a small investment, like $100 million, considering the global 
challenge, to make it stretch even further.
    Senator McGovern. Mr. Chairman, when I learned that 
Congress had authorized $100 million for this coming year, the 
thought went through my mind that it is going to be very 
painful to see this program cut back that far from the $300 
million we have been operating on in the current year and that 
there might be two alternatives to building that up. No. 1 
would be to go to other countries and make clear to them that 
Congress has authorized this program for a forward period of a 
number of years and that we have to have the help of other 
countries, either in the form of commodities or cash. A country 
like Japan presumably would offer cash, rather than 
commodities. Canada and Australia might come forward with 
commodities. Other countries might be the source, I would 
think, of $100 million.
    And it may be possible to raise another $100 million from 
private corporations and foundations in this country. In a 
sense, that makes the United States contribute more than its 
share. The usual U.N. formula is one-fourth from the United 
States, three-fourths from the rest of the world. But to get 
this program rolling, I think the United States is going to 
have to be out in front in a bold way.
    I have not yet had the opportunity to go to work on the 
foundations and corporations, but I know some of them that may 
be favorable to this, and it is just possible that we could 
raise another $100 million there, which if we got that much 
from other countries, that gets us back up to the $300 million 
that we are operating on in the current year.
    Countries have all kinds of excuses for not wanting to do 
this, and they suspect, some of them, that we are doing this to 
get rid of our farm surpluses. I have tried to explain to every 
ambassador in Rome and every head of state I could reach that 
we do not dump surpluses on international markets. We will 
operate this program with great care. We are the leading 
commercial exporter in the world. We have a self-interest in 
not disrupting commercial markets. We do not want to disrupt 
the markets of local producers in the receiving countries, and 
we take care not to do that.
    Senator Durbin. Congressman McGovern.
    Mr. McGovern. If I could just build on that. I agree with 
Senator McGovern that we, in the United States, need to 
demonstrate the leadership that we are serious about this 
program, and we need to be out front asking other countries to 
participate. At G-8 summits, at other kinds of international 
conferences, I think the President of the United States needs 
to raise this issue and say this is a priority of the United 
States of America, and we want you to be a partner in this. 
Every foreign leader I meet with I raise the issue, but I do 
not have the persuasive powers of the President of the United 
States, none of us do. I mean, we need it to be at that level.
    It is frustrating to me that we have not demonstrated more 
leadership because, as Senator McGovern pointed out, this 
concept that all of us are behind, and it is a bipartisan 
effort, not only deals with issues of hunger, but also 
addresses a whole bunch of other social challenges around the 
world. You cannot talk about real economic development, you 
cannot talk about empowering women, you cannot talk about 
tolerance or dealing with some of these dreaded diseases 
without education. This is a way to get kids into school.
    In the pilot program that is going on, all of the evidence 
is that when we do this, we introduce food in these school 
settings, two things happen: Class attendance increases, 
attendance among girls, in particular, increases. I regret 
that, well, because one of the pilot programs that we had is in 
Pakistan, aimed at getting more women into school. I think our 
U.S. ambassador should have been there for the opening of this 
program. I think we should have sent out whoever we could to 
say that this is what we are about. The Pakistani Government 
now is talking about a school lunch program throughout the 
country because they understand, as we all now know, is that 
one of the reasons why a lot of young children go to schools 
that are run by extremist groups is because they feed them. I 
mean, something as simple as a meal can make the difference 
here.
    So I think we need to persuade the administration to join 
with the rest of us and to get out there and to fight for us, 
not just say they are sympathetic, but to put some real money 
behind this and to get out there and talk about it when they 
are at these international settings.
    Senator Durbin. I think that is good advice, and I think we 
all want to take on a task of calling our friend, Tony Hall, 
and asking for his help, and guidance, and advice, and counsel, 
in terms of expanding the reach of this and involving other 
nations in this effort.
    Thank you both for joining us. I appreciate it, and your 
testimony is going to be part of our record as we proceed.
    I want to welcome our second panel. It includes Dr. Loren 
Yager, Director of the International Affairs and Trade Group 
with the U.S. General Accounting Office; the Hon. Ellen 
Terpstra, Administrator of the U.S. Department of Agriculture's 
Foreign Agricultural Service; the Hon. Roger Winter, Assistant 
Administrator of the U.S. Agency for International Development 
in the Bureau of Democracy, Conflict and Humanitarian 
Assistance; Ellen Levinson, Executive Director of the Coalition 
for Food Aid; and from Highland Park, Illinois, Jason Phillips, 
who is the Country Director for Kenya Programs with the 
International Rescue Committee.
    Before you all get comfortable, I will tell you that the 
custom of the Subcommittee is to swear you in as witnesses. So, 
if you would not mind rising and raising your right hand.
    [Witnesses sworn en masse.]
    Senator Durbin. Thank you very much.
    Let the record note that the witnesses answered in the 
affirmative, and I will ask you now if you would please be kind 
enough to make your oral statements. If you could keep them 
around 5 minutes, that will give me a chance to ask a few 
questions after you have completed your testimony.
    Dr. Yager, would you please proceed.

 TESTIMONY OF LOREN YAGER,\1\ DIRECTOR, INTERNATIONAL AFFAIRS 
           AND TRADE GROUP, GENERAL ACCOUNTING OFFICE

    Mr. Yager. Thank you, Mr. Chairman.
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    \1\ The prepared statement of Mr. Yager appears in the Appendix on 
page 45.
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    Mr. Chairman, I am pleased to appear again before the 
Subcommittee at this time 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, and U.S. 
food aid programs account for a considerable portion----
    The United Nations Food and Agriculture Organization 
estimates that about 800 million people are chronically 
undernourished in the developing world and that there has been 
limited progress in meeting the 1996 World Food Summit goal.
    My written statement covers the full set of food aid 
programs, but in my testimony this afternoon, I will 
concentrate on food aid surplus programs. My observations are 
based on recent interviews with and documents from 
administration officials and from GAO's series of reports on 
food aid over the last 10 years.
    Specifically, I will discuss three topics:
    First, the structure of surplus-related food aid programs; 
second, the contribution of surpluses to the fluctuations in 
U.S. food aid; and, finally, observations on the management of 
surplus programs.
    In terms of the structure, U.S. food aid is provided 
through six programs administered by two different agencies. 
These programs are summarized in the large poster that I have 
provided in the front of the room. This poster is also included 
as Table 1 in my written testimony.
    However, the program of the six shown that has historically 
been used to provide food aid through surplus commodities is 
Section 416(b). This program is administered by the Agriculture 
Department and can use these commodities to fund Food for 
Progress, as well as Title II and Title III-type programs. Even 
though Title II and Title III are typically run by USAID, when 
they are funded by Section 416(b) commodities, the programs are 
managed by USDA.
    The other program that exists to fund food aid through 
surpluses is the Emerson Reserve, which was formally known as 
the Food Security Humanitarian Reserve. It exists to meet 
humanitarian food needs in developing countries and can hold up 
to 4 million metric tons of grains. In any fiscal year, up to 
500,000 tons can be used for urgent humanitarian relief.
    The second issue I will discuss is the role of surpluses in 
the fluctuations in U.S. food aid since 1990. I have also 
brought a graph of these expenditures, but it is also included 
as Figure 1 in my written testimony.
    As I mentioned in my written statement, these fluctuations 
or the fluctuations in these shipments have been the result of 
three factors: U.S. food aid policies, U.S. agricultural 
surpluses, and international events.
    As you mentioned in your opening statement, Mr. Chairman, 
surpluses were particularly important during two periods since 
1990, the years 1990 to 1993 and from 1999 through 2002. It is 
shown by the medium-gray box labeled Section 416(b). It 
disappears, as you also mention in your opening statement, from 
the years 1996 through 1998. Over this entire period, the 
Section 416(b) program contributed $2.4 billion, which made it 
the third-largest of the six food aid programs funded by the 
U.S. Government.
    An additional observation on the use of surpluses in food 
aid relates to the volume of commodities rather than the level 
of food aid funding. As shown in Figure 2 of my written 
testimony, the volume of food aid shipments fluctuates even 
more sharply than the spending itself. The reason is that 
commodity prices tend to be lower during periods of surplus so 
that the quantity of grain that can be purchased with the same 
dollars increases.
    Finally, I will address two policy implications of the use 
of surpluses in food aid programs. One is that the effective 
use of surpluses creates significant management challenges due 
to the highly variable nature of the shipments from year to 
year. For example, our recent study of the Global Food for 
Education Initiative suggests that surpluses are not well-
suited to programs that are designed to achieve long-term 
goals.
    On the other hand, the existence of surpluses presents a 
difficult trade-off. In surplus years, it is possible to 
purchase and distribute significantly more food aid because of 
the lower prices.
    However, it raises particular challenges because of the on-
again/off-again nature of these surpluses, and there is also no 
guarantee that the surpluses will be available in those 
situations when the needs are the greatest around the world.
    Mr. Chairman, thank you for the opportunity to appear 
before the Subcommittee to address this important topic. As you 
have mentioned, it is particularly timely, given that the Food 
Summit: Plus Five Years, is scheduled to begin in Rome next 
week.
    This concludes my statement. I would be happy to answer any 
questions that you might have.
    Senator Durbin. Thank you. I will have some questions after 
the panel is completed.
    Ms. Terpstra, thank you for joining us.

TESTIMONY OF HON. A. ELLEN TERPSTRA,\1\ ADMINISTRATOR, FOREIGN 
      AGRICULTURAL SERVICE, U.S. DEPARTMENT OF AGRICULTURE

    Ms. Terpstra. Thank you very much, Mr. Chairman. I am 
pleased to be here with you this afternoon to discuss the food 
aid programs operated by the U.S. Department of Agriculture.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Terpstra appears in the Appendix 
on page 66.
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    As a leader in agricultural production, the United States 
has long recognized its responsibility to assist in alleviating 
world hunger through food donations, financial aid, and 
technical assistance. The United States began providing food 
aid in the 1920's. It was not until 1954 that legislative 
authority created the P.L. 480 or Food for Peace Program.
    Over the years, the goals of our programs have changed in 
response to varying economic, financial, political, and 
agricultural conditions at home and abroad. Today's recipients 
include countries that did not exist in the 1950's, countries 
that have been struggling after major upheavals.
    Other more traditional developing countries, such as 
Bangladesh and Ethiopia, also continue to see their people 
benefit from P.L. 480 and two other food aid authorities--the 
Food for Progress Act and Section 416(b) of the Agricultural 
Act of 1949. The United States continues to be the world's 
chief provider of food aid, although other developed countries 
now play a more active role. We are actively encouraging other 
countries to join us in this effort.
    We are always seeking to improve the effectiveness and 
efficiency of our programs. To that end, in 2001, the 
administration undertook a comprehensive review of U.S. foreign 
food aid programs. The review reemphasized that the broad 
objective of U.S. food aid is to use the agricultural abundance 
of the United States to meet humanitarian and foreign policy 
objectives related to global food security, while enhancing 
global agricultural trade.
    In addition, U.S. food assistance programs should 
increasingly target the most food-insecure populations. The 
administration supports increased direct distribution and 
continues to support development programs.
    The review identified several areas of concern:
    First, the number of U.S. food aid programs and the 
agencies involved in administering them has inevitably resulted 
in inefficiencies.
    Second, expanded use of surplus commodities has led to 
uncertainties about future food aid availability on the part of 
both recipient countries and distributing agencies.
    As a result of the review, the administration developed a 
series of recommendations:
    First, end the use of the CCC Charter Act to purchase 
commodities that are then donated through Section 416(b);
    Second, increase the funding requested for Title II;
    Third, increase reliance on the Bill Emerson Humanitarian 
Trust;
    Fourth, improve the focus of our food aid programs; and,
    Fifth, provide better service to our partners.
    With that background, let me now turn to some of your 
specific questions. The administration believes that the food 
aid review proposals I outlined will increase food aid 
reliability and allow for a greater focus on direct feeding of 
needy people, an administration priority. The administration 
plans to increase the amount of food available under Title II 
for emergencies and for direct feeding.
    The administration also hopes to increase nonfood 
development assistance to make up for part of the decrease in 
development programs from monetized food aid. Based on these 
shifts, U.S. food aid will focus more on direct distribution to 
needy people and on U.S. Government funding for development 
programs.
    In addition, the administration plans to eliminate 
redundant functions of USDA and AID to allow each agency to 
focus its efforts. Overall, I think we can be proud of our 
record on providing food aid to the most needy citizens of the 
world. The United States has, and continues to be, the largest 
donor of food aid, providing more than half of all global food 
aid. We have a history of stepping forward to respond to crises 
wherever they exist.
    Our infrastructure is the envy of the world. We can procure 
and ship our products in a timely way so that private voluntary 
organizations and the World Food Program know they can count on 
us. Today, USDA and AID together are providing food assistance 
to help meet food needs in about 80 countries around the world.
    You also asked about whether the USDA will be retaining 
oversight of the McGovern-Dole International Food for Education 
and Child Nutrition program. The Farm Security and Rural 
Investment Act of 2002 gives the President the authority to 
designate one or more Federal agencies to implement the 
program.
    USDA appreciates the opportunity to have implemented the 
Global Food for Education pilot program and is currently 
evaluating the initial projects. This evaluation will be used 
to assist in developing a recommendation for the President on 
how the program should be structured in the future.
    Mr. Chairman, we recognize the magnitude of the problems we 
face in our efforts to alleviate hunger and suffering around 
the world. The Food and Agriculture Organization recently 
estimated that about 800 million people in the world are 
suffering from hunger and that number is not declining as 
hoped.
    Every year, in addition to chronic problems related to 
poverty, the world faces new hunger emergencies. Yet, in 
relation to the current needs, the resources available are 
limited. In this era of tight national budgets, the United 
States and other food donor nations all face difficult 
decisions about where to allocate our precious resources.
    Next week, Secretary Veneman will be leading the U.S. 
delegation to the World Food Summit: Five Years Later. There 
she will be reaffirming the continuing U.S. commitment to 
reducing the number of people suffering from chronic hunger. 
But food aid is just one part of achieving world food security. 
Food aid efforts must work hand in hand with development 
efforts, sharing technology, expanding trade, and promoting 
economic reform. These factors all help produce growth and 
reduce poverty, the keys to food security.
    Mr. Chairman, that concludes my statement, and I would be 
happy to answer any questions.
    Senator Durbin. Thank you. Mr. Winter.

  TESTIMONY OF HON. ROGER WINTER,\1\ ASSISTANT ADMINISTRATOR, 
BUREAU OF DEMOCRACY, CONFLICT AND HUMANITARIAN ASSISTANCE, U.S. 
              AGENCY FOR INTERNATIONAL DEVELOPMENT

    Mr. Winter. Chairman Durbin, thank you for having me here. 
I appreciate it.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Winter appears in the Appendix on 
page 78.
---------------------------------------------------------------------------
    I am going to make comments, particularly focusing on the 
perspective of USAID. Let me just reiterate, though, what my 
colleague just indicated, and that is the United States 
provides about 50 percent of food aid worldwide, and that is 
far more than any other country. The administration is 
committed to maintaining this leadership position and affirms 
the World Food Summit's goal of cutting in half by 2015 the 
number of undernourished people.
    We spoke a moment ago about the food aid review conducted 
by the administration. USAID was an active participant in that 
food aid review and agrees with its results. The food aid 
review's principal aspect of replacing reliance on Section 
416(b) with a sustained increase in Title II budget levels for 
food aid will provide us, at USAID, a more dependable source of 
funding and enable USAID programs to be managed more 
rationally.
    USAID also agrees with the realignment of responsibilities 
between USAID and USDA. This realignment will allow both 
agencies to specialize, will streamline the process and will 
improve management of U.S. Government food aid programs.
    The increase requested in the USAID budget of $335 million 
in Title II resources will, if appropriated by the Congress, 
position us well to respond to food needs in fiscal year 2003, 
as compared to the average response levels over the last 
decade. I will come back to that point.
    If for some unforeseen reason, the appropriation proves 
inadequate, we would seek additional resources from the Bill 
Emerson Humanitarian Trust. Our requested increase of $335 
million in Title II funds will establish a new floor for Title 
II food aid, but will undoubtedly require adjustments in future 
years based on our actual experience in implementing the new 
approach.
    You asked the question, ``what impact would phasing out of 
surplus commodities have on USAID's food programs.'' As I 
indicated, USAID was an active participant in the 
administration's food aid review, and we agree with the 
results. These results, when taken together, will, when fully 
implemented, we believe, strengthen our food aid and food 
security programs.
    Specifically, however, to the question, we believe these 
changes will improve feeding effectiveness by ensuring more 
dependable levels of food aid. Assuming congressional approval 
of at least the $335 million bump-up that we requested for 
fiscal year 2003, our appropriation would actually slightly 
exceed the resources we have had available on the average over 
the last 10 years for food aid, if you combine the availability 
of Section 416(b) and Title II appropriations.
    In addition, the changes in the program, we believe, will 
improve our ability to manage these programs. Our resources 
will be known to us as we begin a fiscal year. The process will 
be more transparent as we seek to plan our programs and, in 
fact, we will be able to plan them better, we will be able to 
target them better, and we will be able to evaluate them 
better.
    If, in fact, the appropriation, even with these benefits of 
the changes, proves, to some degree, inadequate, the surge 
capacity continues to exist. The Bill Emerson Humanitarian 
Trust is available. In fact, we are seeking, given the lateness 
in the fiscal year, to draw down on the Bill Emerson 
Humanitarian Trust for the emerging situation in Southern 
Africa right now.
    Of course, the Section 416(b) authority remains if, for 
some reason, the President wished to consider its utilization. 
On balance, this administration is not out of touch with the 
humanitarian realities of the world, and the increasing 
commitments that we are making to humanitarian assistance, as 
well as development assistance, I think, are an indication of 
that. However, this new approach to food aid is a work in 
progress. The commitment this administration has to the 
underlying goal of reaching food security globally is a real 
commitment, and it is, to some degree, a story we will continue 
to tell for the next couple of years. Thank you.
    Senator Durbin. Thanks, Mr. Winter. Ms. Levinson.

    TESTIMONY OF ELLEN S. LEVINSON,\1\ GOVERNMENT RELATIONS 
   DIRECTOR, CADWALADER, WICKERSHAM AND TAFT, AND EXECUTIVE 
                DIRECTOR, COALITION FOR FOOD AID

    Ms. Levinson. Thank you very much, Mr. Chairman. I am Ellen 
Levinson, Government Relations Director at the firm Cadwalader, 
Wickersham and Taft. I also am Executive Director of the 
Coalition for Food Aid, which is comprised of private voluntary 
organizations and cooperatives--I guess we always call them 
PVOs--that conduct overseas food aid programs.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Levinson appears in the Appendix 
on page 85.
---------------------------------------------------------------------------
    We have a very fundamental disagreement with the gentleman 
and the woman to my right, both of whom I adore and think 
highly of. I think we have a good administration team on food 
aid and development. But we have fundamental differences.
    We are very disappointed in the administration's food aid 
review and its conclusions. We feel very strongly that it is 
somewhat superficial and also does not look at the basic types 
of needs that food aid is supposed to be addressing.
    First of all, what GAO was saying earlier, and we agree 
with this, is that Section 416 is a source of surplus 
commodities and is not a reliable mechanism for food aid. You 
cannot get the right types, and you cannot get the adequate 
amounts when you need them. So, in that sense, we all agree, I 
think, that Section 416 should not be relied upon for either 
chronic needs, meaning Food for Education, mother-child health 
care, agriculture development, nor for emergencies. What if we 
do not have surpluses, like in 1996 and 1997, when we have 
emergency needs? So, we are all in agreement on that, I 
believe.
    However, when you break down to the next level, what do we 
do then as a fundamental way to deal with food aid needs? There 
are two types: Chronic needs--there are about 800 million 
people in the world who are hungry and do not have enough food 
day in and day out. The people you see when you go to the 
field, these are not emergencies. They live like that.
    Those people can be helped with American food aid, and have 
been over the years. It is not just through direct feeding. For 
example, Food for Education programs often have a take-home 
ration because it is the reward mechanism, in a sense. You send 
your kid to school, we will give you something to take home for 
the betterment of the whole family.
    Food for Work programs, those are take-home rations. The 
same with agriculture development. Oftentimes, there is 
monetization, the sale of the commodity. What do we end up with 
at the end of that? We end up not just with food delivered, but 
rather a household that only had 3 months' worth of food during 
the year now has 9 months of food during the year. I call that 
progress and success. That happens under P.L. 480 Title II. It 
is not ``feeding,'' but these are programs that work.
    What we are trying to say is do not forget we are working 
with local communities. We have to adapt programs to meet local 
needs. Just food handouts or what the administration calls 
``feeding'' does not do it. However, it is very important to 
have emergency feeding and to have access to commodities above 
the amount of food aid that is provided for P.L. 480. Just 
funding P.L. 480 is not adequate.
    It is wonderful that the administration asked for increases 
in P.L. 480, Title II. That could be used immediately. But, I 
have a question. If they asked for these increases, why, in the 
fiscal year 2003 program cycle, are my members, the PVOs, being 
told by USAID that there will not be enough food for 
development programs? PVOs are being asked to cut back on their 
proposals because the administration is holding back Title II 
food aid in order to keep it in reserve for emergencies.
    Well, the Bill Emerson Humanitarian Trust is for 
emergencies, why do you not use it for emergencies? Why are 
they taking food away from developmental Title II programs? 
Seventy-five percent of Title II food aid, according to the 
law, is for developmental programs, not emergency. When the 25 
percent of Title II that is for emergencies is used, the 
administration should go to the Trust, which is a reserve of 
commodities. The problem with the Trust is that when you draw 
down on those commodities and use them for an emergency, you 
have to pay back the Trust in the future. USAID has to pay CCC 
for those commodities that were used.
    What the administration wants to do, basically, is to draw 
it down, and encumber future funding for P.L. 480 to pay it 
back. That is not sufficient. All you are doing is taking it 
out today and then taking away from food aid in the future. If 
Congress appropriates $900 million, let's say, for Title II or 
a billion dollars, but that money will not go to Title II. It 
is going to go to pay back the Trust in the future.
    This reserve has to be set up in such a way that USAID does 
not have to pay it back by encumbering future Title II funds or 
P.L. 480 Title I funds. That is really important.
    The second problem with the Trust is that when you take 
commodities out, you have to fill it back up. The money USAID 
pays back to the Trust does not go to buy more commodities. It 
just goes back to the Treasury, except for $20 million. That is 
all they can use, and that will buy, maybe, 140,000 metric tons 
of wheat. That is all.
    There needs to be a mechanism to put the commodities back 
in. There is a mechanism. Right now, USDA could, through CCC 
Charter Act authority, buy commodities off the market because 
prices are low. There is definitely abundance of availability, 
which I know you hear from your constituencies regularly. USDA 
could buy commodities off the market, taking them into CCC 
inventory and then designate them as part of the Trust and 
replenishing the Trust.
    I think the administration's food aid policy is a half 
loaf. It definitely is not a full loaf. Congress tried to make 
some changes in the Farm Bill, calling for improved management 
at AID and USDA, which should be terrific. But, the 
administration really needs to think again, about how we 
address chronic needs, as well as emergency needs. Thank you.
    Senator Durbin. Thank you. Mr. Phillips.

TESTIMONY OF JASON PHILLIPS,\1\ COUNTRY DIRECTOR, INTERNATIONAL 
                    RESCUE COMMITTEE, KENYA

    Mr. Phillips. Mr. Chairman, thank you for inviting me to 
testify today.
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    \1\ The prepared statement of Mr. Phillips appears in the Appendix 
on page 99.
---------------------------------------------------------------------------
    As the International Rescue Committee's Country Director 
for Kenya, I spend a good deal of my time managing IRC's health 
and feeding programs in Kenya's Kakuma refugee camp.
    I would like to offer some brief observations on the 
problems in the camp related to food security and ask that my 
more detailed, written testimony be submitted for the record.
    Senator Durbin. Without objection.
    Mr. Phillips. There is a high rate of malnutrition in 
Kakuma, reflective of an abandonment of minimum international 
humanitarian standards in food assistance. According to the 
United Nations High Commissioner for Refugees and World Food 
Program guidelines introduced in 1998, the minimum caloric 
requirement for one person for 1 day is 2,100 kilocalories.
    For the past 2.5 years, the Kakuma general ration has 
fallen woefully short of these standards. In the year 2000, the 
average twice-monthly general ration distributed was 1,877 
kilocalories. In 2001, it was 1,770. Since January 2002, the 
situation has deteriorated even further and can only now be 
described as critical. The average ration distributed from 
January to mid-May 2002 was 1,449 kilocalories. This is perhaps 
best graphically illustrated on the chart that is here for your 
review.
    According to the last camp-wide nutrition survey conducted 
in Kakuma in April 2001, the global malnutrition rate stood at 
17.3 percent. While alarming, in and of itself, what is more 
alarming is that these rates in Kakuma have not significantly 
deviated from this level for the last 6 years.
    Since 1995, the rate has not dropped below 14 percent and 
was as high as 18.3 percent in May 1999. These are rates that 
one would expect to see in nutritional emergencies and 
represent levels in excess of what one would find in 
protracted, stable refugee camps in neighboring countries. 
While, fortunately, the rate of severe malnutrition, which 
requires therapeutic intervention to save life, is very low, 
the high global rate suggests there are many vulnerable people 
in Kakuma who, under continuing poor or deteriorating general 
rations, stand to slide into a life-threatening situation.
    IRC has been running supplementary and therapeutic feeding 
programs to cater for the needs of the malnourished, 
particularly the most vulnerable members of this refugee 
community, children under five and pregnant and lactating 
women. As long as the general ration remains compromised, it is 
impossible to envision an end to what should be temporary 
feeding programs.
    In April 2001, IRC, in conjunction with the United Nations 
High Commissioner for Refugees and the Institute of Child 
Health in London, undertook a micronutrient survey in Kakuma. 
The results suggest that the composition, as well as the 
amount, of the general ration leaves a lot to be desired. 
According to the analysis, the general ration was deficient in 
three of six key micronutrients. Overall, Vitamin A deficiency 
was found in 47.2 percent of children under five, and anemia 
was present in 61.3 percent of children. The latter was flagged 
as a situation of high public health significance.
    To some extent, the picture I have just given you is the 
good news. The entire World Food Program food pipeline for the 
protracted refugee operation in Kenya has been consistently 
underresourced throughout the year and remains in critical 
condition.
    As of 15 May, WFP reported that wheat flour stocks are only 
expected to last through May, although a U.S. pledge sufficient 
to cover 5 to 6 months has been made, but not arrived yet.
    Pulses, such as lentils, have not been distributed since 
mid-April and only a 3-month supply is in the pipeline. Oil has 
run out completely in Kakuma, and there is nothing in the 
pipeline, and salt is only sufficient until June.
    What is particularly notable about this situation I have 
recounted is that this is happening not in an acute emergency 
setting, but in a care and maintenance camp that has been in 
existence for over 10 years. The cruel irony is that a 
nutritional emergency in Kakuma will not only lead to a loss of 
life, but also significant financial cost to donors above and 
beyond the costs of meeting minimum food assistance standards, 
to treat and rehabilitate the victims of increasing severe 
malnutrition.
    Given all of the circumstances I have described, what would 
be the implications of a further reduction in food assistance 
to Kakuma? The short- to medium-term impact would be an 
increase in hardship and a decrease in household food security 
leading to increased malnutrition for the vast majority of the 
64,000 refugees living in Kakuma. The effects of this reduction 
will be felt first and most acutely by the most vulnerable 
members of the community. The condition of children under five 
in supplementary feeding programs will deteriorate, leading to 
increases in admissions in therapeutic feeding.
    Pregnant women stand an increased risk of delivering low-
birth-weight babies. Malnutrition makes one more susceptible to 
other diseases and, thus, malnutrition-related morbidity will 
increase. Depending on the severity and the duration of the 
reductions in the general ration, one would expect this cycle 
to eventually lead to a rise in malnutrition-related deaths.
    Reductions in food aid to refugees in Kakuma could also be 
expected to lead to an increase in insecurity. Evidence shows 
that under worsening conditions, there are other coping 
strategies that refugees can, and will, resort to when all 
others are exhausted. These include theft, banditry, and 
violent conflict with neighbors in order to access food.
    Finally, I want to touch on the special role that the 
United States plays in Kakuma and review some of the options 
going forward. To speak of an international community in 
support of refugee assistance in Kenya is a bit misleading. 
This is because, by and large, it is the U.S. Government that 
is financing the care and maintenance of refugees there. The 
Bureau of Population, Refugees and Migration itself provides 
over 50 percent of the International Rescue Committee's $3 
million annual budget for Kakuma and makes sizable 
contributions to other organizations such as Lutheran World 
Federation, CARE and UNHCR.
    Nowhere, however, are Kenya refugee operations more 
dependent on U.S. assistance than in the area of food aid. 
According to statistics provided by the World Food Program, the 
United States provided 68.3 percent of donor food assistance to 
refugees in Kenya during the period October 1, 2000, to March 
14, 2002. Were it not for a very recent sizable cash 
contribution from the Japanese Government, that figure would 
have stood at approximately 80 percent.
    This represents a significant shift in the overall 
financing of the refugee food assistance program in Kenya from 
4 years ago. From October 1, 1998, to September 20, 2000, the 
U.S. contributed 39 percent of the total resources. Refugee 
food aid in Kenya has gone from a multilateral to almost a 
unilateral affair.
    As I have tried to outline in my testimony, cutting back on 
food at this stage is neither cost-effective nor humane. From 
my experience in the camp, I would make the following 
recommendations aimed at reducing the U.S. share of assistance 
to Kenya and providing more durable solutions for the refugees.
    No. 1, engage in multilateral diplomacy with the rest of 
the donor community to share the burden of caring for refugees 
in Kenya.
    Two, engage in bilateral diplomacy with the Government of 
Kenya to expand opportunities for local integration and remove 
fundamental barriers to self-reliance.
    Three, continue to generously support and fast track 
resettlement for those for whom repatriation is not an option 
and for those who face protection problems in the country of 
asylum.
    Four, explore with the U.N. High Commissioner for Refugees 
more aggressive and creative opportunities to support voluntary 
repatriation, not just to Sudan, but for all nationalities 
resident as refugees in Kenya.
    Five, continue and increase assistance to developmental 
projects in Southern Sudan to make it an attractive place to go 
home.
    Finally, six, continue and expand the U.S. role in bringing 
peace to countries generating refugees in Kenya, particularly 
Sudan and Somalia. Peace is the most durable solution to the 
plight of the refugee.
    Mr. Chairman, thank you very much, again, for giving me the 
opportunity to appear before you today.
    Senator Durbin. Thank you, Mr. Phillips.
    Let me follow up on your last comment, and from what I 
hear, if you do not have basic food security, you are fomenting 
instability, individually, by family, by community, and 
inviting the very problems that we are worrying about around 
the world. This is the kind of instability in societies that 
lead to violent conduct by young people and extremism being an 
appeal to the poorest of the poor. Is that what you have seen? 
I do not want to take it any further than you want me to, but 
that is a conclusion which I find inescapable from what you 
just said.
    Mr. Phillips. Well, I think evidence definitely shows that 
under conditions of poor resourcing for these types of 
programs, that violence is one option that people resort to, 
when you have scarce resources that have to be divided among a 
growing population, and I think we have heard testimony today 
to the fact that these problems are not diminishing; in fact, 
they are increasing. When we have scarce resources, those often 
become the subject of competition. And certainly in a very 
micro-local context like the one camp that I work in, we see 
evidence of that on a daily basis.
    Senator Durbin. I have a number of questions. You are going 
to help to educate a Senator, which is no mean feat, on some 
questions that have been on my mind for a while. Let me just 
preface it by saying that I hope to go to the floor this 
afternoon or first thing in the morning to offer an amendment 
to the supplemental to make a rather substantial increase in 
our contribution to the global AIDS crisis.
    To put this in some context, we talked a lot about food 
here. I do not think we can discount this from health care, and 
the problems that are facing these same people are not just 
starvation, but AIDS, and malaria, and tuberculosis and so many 
other things that also can compromise an ordinary life and make 
it very difficult to survive.
    We spent last year $300 million on the global AIDS effort. 
This year we will spend $200 million. If you think the AIDS 
epidemic is under control and that is why we are spending less, 
just the opposite is true. The estimates are 40 million 
infected people in the world. Ninety-five percent of them do 
not know it. Twenty-five million in Africa is the last figure I 
heard, some 15 million AIDS orphans in Africa. Mr. Wolfensohn, 
at the World Bank, says that in the next 5 years we will have 
20 million infected people in India alone.
    So take this food discussion to a health discussion and try 
to visualize what this world starts looking like 2, 3, 4, 5 and 
10 years from now, when our children are looking for some 
stability and absence of fear in their daily lives. I think 
that is part of this discussion.
    I hope we all concede as a starting point that we are not 
making sufficient progress, in terms of world hunger, to reduce 
our commitment. Is there anyone who quarrels with that premise, 
for what I am about to ask? I do not believe anyone does.
    Let me ask you then, Ms. Terpstra and Mr. Winter, I 
understand what you are saying, and your terminology, from a 
management viewpoint is, Mr. Yager agrees and we all agree, 
using surplus commodities is totally unpredictable. You just do 
not know what you are going to have, and when you are going to 
have it, and you try to build a program around a surplus, it 
may come pouring in at a time when you do not need it and be 
absent when you do.
    I think what you have suggested is, from a management 
viewpoint, you have used words like dependable, transparent, 
rationalized process, streamlined, and all of that suggests 
that if you are not dependent on surplus, you can manage better 
what you are dealing with and know where to allocate it and the 
impact it is likely to have.
    Am I putting words in your mouth or is that the conclusion 
that you are bringing to us, in terms of moving away from 
Section 416(b)?
    Ms. Terpstra, is that fair?
    Ms. Terpstra. Yes, I would say that sums it up very well.
    Senator Durbin. But then let me ask you, in fairness now, I 
mean, if you eliminate the surplus, you are, clearly, at least 
in the good times, eliminating food aid to some people. Let us 
assume that you have a group of 30 children somewhere in the 
Third World, and the United States is feeding 15 of them, since 
we provide about half of the aid there, but in a great year, 
with a great surplus, we may feed 25. Now we are in a situation 
where we have eliminated that surplus, so the best we can do is 
15, even in the bad years, because I do not see the overall 
spending for food aid going up, I just see the elimination of 
the surplus.
    Mr. Winter, is that a fair characterization of where we are 
headed?
    Mr. Winter. Well, I mean, at least for USAID, we will have 
a significant increase in the coming year, if appropriated. Our 
request is quite substantial. In addition, I think you have to 
take food aid in the context of a whole series of other factors 
that relate to it. For example, within USAID, agriculture and 
improving agriculture in these food-deficit countries is a high 
priority for us. As a matter of fact, it is USAID's major 
priority area right now. We have already reprogrammed this year 
from the appropriation an additional $30 million to improve 
agricultural productivity in the countries that we are talking 
about. We have asked for a 25-percent increase in our 
agricultural programs for next year. We expect to continue to 
do that.
    If you take the country that Jason was talking about, in 
terms of Sudan, we have just made a $22.5-million commitment to 
agricultural extension services and a whole range of compatible 
efforts to help those countries actually begin to produce more 
so it is not just food aid, it is food in the context of an 
overall development program that we are----
    Senator Durbin. Can we go there next? Because I could not 
agree with you more, but I want to make that the second phase 
of the question.
    The first phase of the question relates to direct food aid 
to people who are hungry. Now development--I want to get into 
next because I think that is a critical issue, but in terms, I 
want to make sure I understand what you are saying. You are 
saying if the administration's request is approved by Congress, 
there will be more money spent on food aid in the next fiscal 
year than is being spent this year?
    Mr. Winter. No, because the last couple of years have been 
atypical. There have been the Section 416(b) resources that 
have been very high. There was a big spike that occurred in 
1999, as we were discussing earlier in 1999, 2000, and 2001. So 
the last several years have been atypical even for the pattern 
of the last decade or so.
    What I am saying is, if you take the average of Section 
416(b) availability in the last decade and Title II 
availability, and package them together, you will find out that 
what is budgeted solely to USAID in Title II funds is in line 
with the 10-year average. Now that does not mean we think that 
is the end of the story, because we are just beginning to 
implement the administration's new packages now, and there are 
going to have to be adjustments in subsequent years as we do 
it. So I think you should not take the immediate budget as the 
be-all and end-all. We have a lot of sorting out still to do.
    Senator Durbin. At least in the first year, there will be 
less food aid available, less money available for food aid for 
feeding hungry people around the world than this year.
    Mr. Winter. Because of the atypical highness of Section 
416(b) for the last couple of years.
    Senator Durbin. Ms. Terpstra, do you disagree with that or 
is that the way you see it as well?
    Ms. Terpstra. My impression was that it is just a slight 
decrease.
    Senator Durbin. Do you have any idea what the number might 
be, the reduction, perhaps?
    Ms. Terpstra. No, we are still estimating that you are 
going to have about 3.7 million tons of commodities available. 
Perhaps we could give you more information in writing to 
clarify the situation.
    Senator Durbin. I wish you would.
    Mr. Yager, could you make some observations on that?
    Mr. Yager. Yes, Mr. Chairman. I think that what we have 
done in Figure 1 in our testimony, as well as in the board 
here, is show the actual dollars that are being expended from 
1990 through the year 2003. Now I should also comment that 
these are real dollars. So this is the buying power of these 
dollars in 2002.
    So you can see that the planned expenditures for the year 
2003 are not the low point for the 13-year period, but they are 
certainly not the high point either. So this represents the 
planned expenditures for the current year. As you see the Title 
II share is the dominant share during this last year.
    Senator Durbin. Now our numbers that we have from the USDA 
suggest that fiscal year 2001, total food aid from the United 
States, $2.29 billion. This year, fiscal year 2002, total food 
aid from the United States, $1.97 billion. Budget request for 
the next fiscal year, total food aid, $1.4 billion. Now that is 
a substantial decrease from this year to the next, but these 
figures, I believe, are from the budget summary from the U.S. 
Department of Agriculture. If someone here has different 
figures, please tell me right now because it looks to me like 
the amount of money we are putting into total food aid is going 
to be substantially less next year, from $1.97 billion to $1.4 
billion.
    Mr. Winter. My figures are not displayed like that. I 
apologize for that. What I can tell you is, for USAID it is 
actually obviously a substantial increase that would be taking 
place in 2003.
    Senator Durbin. So perhaps it is between the two agencies 
where the difference is.
    Ms. Levinson, the point you have made is not just the 
decrease in the total amount of food aid, but also is this new 
administration-proposed accounting wrinkle, where they have to 
replenish from the surplus, the Emerson surplus, from future 
Title II? Is that a new approach?
    Ms. Levinson. Well, actually, the Bill Emerson Humanitarian 
Trust is imperfect in the way that it was developed in the law.
    Senator Durbin. Though he was a pretty good guy.
    Ms. Levinson. He was a good guy. That is why it is named 
for him. But, the way that it was developed over time is the 
problem. Remember back in 1979, when we had the embargo on 
grain from Russia? You will never forget that because everybody 
in agriculture was furious at President Carter because he said 
we are not going to ship anything to the Soviet Union during 
the Afghan war. What that meant is that wheat sales, 4 million 
metric tons of wheat sales, fell out that were supposed to go 
to the Soviet Union.
    Instead, the Congress established something called the Food 
Security Wheat Reserve and bought 4 million metric tons of 
wheat off the market and established this reserve.
    The reserve had a purpose, and the purpose was a back-up to 
P.L. 480, a back-up emergency reserve for food aid. In years 
when USDA could not buy commodities off the market. For 
example, in 1996-1997 when there were very high prices in wheat 
and a tight market, and the Secretary did not want to buy wheat 
off the market. Secretary Glickman bought food aid from the 
Wheat Reserve, which was then called the Grain Reserve because 
it's name has changed over time.
    The Secretary used P.L. 480 money and bought right from the 
Reserve.
    The law has been changed over the years so that now up to 
500,000 metric tons in any year can be withdrawn without having 
just to pay for it.
    Senator Durbin. This is for emergencies that come up.
    Ms. Levinson. For emergencies, and that has to be for 
urgent emergencies; emergent needs. When that occurs, though, 
the Trust has to be repaid in future years. So, what USDA does 
is basically wait a year or two and pay back the Reserve with 
money that has been appropriated for P.L. 480.
    Senator Durbin. So let me stop you there----
    Ms. Levinson. So that is in the law.
    Senator Durbin. Let me go back to Mr. Winter, and perhaps 
this is more USDA than USAID or Ms. Terpstra. So, if we run 
into--not only do we see an overall reduction in total food 
aid, what I hear is that if we run into an unanticipated 
emergency in some part of the world, and we have to draw down 
from the Emerson Surplus, it is going to jeopardize Title II 
funding, P.L. 480 Title II funding in the next fiscal year. It 
is a payback.
    One of the first things you have to do is not only fund the 
program, but pay back what you borrowed from it in the previous 
year. Is that your understanding too?
    Ms. Terpstra. You would need to go to Congress for 
appropriations. You could seek additional appropriations.
    Senator Durbin. So not only would the overall amount come 
in the next year, if we run into an unanticipated emergency, 
the following year may be worse. So, I mean, we cannot predict. 
It could be wonderful and no problems, it could be an 
emergency, and we find ourselves really starting to see a 
steady decline in U.S. food aid around the world, if that 
happened.
    Ms. Terpstra. Well, it is up to congressional 
appropriations.
    Senator Durbin. Sure, I know where the buck stops.
    Mr. Winter. Mr. Chairman, if I understand it correctly, 
there is no limitation in the law that says it has to be paid 
back in the subsequent year. We have a number of cases where 
there have been draw-downs from the Emerson Trust that have 
not, in fact, been reimbursed at all at this point in time. So 
I would just say the idea of talking about next year we get 
cut, is not necessarily the case. There is a provision in the 
law that basically does indicate it does need to be paid back 
at some point, but it does not say when.
    Senator Durbin. Mr. Phillips, your testimony, on the 
ground, how long have you been in Kenya?
    Mr. Phillips. I have been personally in Kenya for the last 
almost 2 years.
    Senator Durbin. But the testimony you have given us talks 
about the caloric intake over a longer period of time. So 
someone has kept track of it. When we are in a position where 
the United States is a major donor and you said 60 to 80 
percent, depending on Japan and other countries coming forward, 
and so the United States starts cutting back in Kakuma refugee 
camp, and so you see the caloric intake for the refugee 
families going down, in terms of the amount of nutrition and 
sustenance they are receiving, what impact does this have on 
actual people that you are witnessing, the lives that they are 
leading?
    Mr. Phillips. Well, I think the first thing, to put the 
topic in a broader context, is that, even with the incredibly 
generous support that the U.S. Government has been giving at 
this time and the almost unilateral nature of the food aid 
support for Kenyan refugees, we are still falling far short of 
some of the standards and targets that we, as an international 
humanitarian community, have set for refugee assistance.
    So the backdrop that we must start from is that current 
conditions are already, in many ways, in this particular camp, 
substandard. So, to start from that base and then you can 
extrapolate exactly some of the issues that I described, 
exactly what can we see on human terms, we can see an increase 
in the number of children under five that will require 
supplementary feeding and therapeutic feeding. We will see or 
there is the potential to develop low-birth-weight babies as a 
result of the poor nutritional status of mothers.
    I mean, the realities, the way these macro-level forces 
that we are discussing here actually come together is in the 
case of the human being that is on the receiving end in a place 
like Kakuma.
    Senator Durbin. So we are dealing with emergency feeding 
programs for refugees primarily from the Sudan, is that 
correct, in your camp?
    Mr. Phillips. In my camp, yes, it is particularly Southern 
Sudanese.
    Senator Durbin. And the point made by Mr. Winter, I do not 
think anyone will argue with, and that is that we certainly 
want to keep these children and families alive, but we 
understand that this is a temporary emergency nature or should 
be under the best circumstances. You made the point, Mr. 
Winter, and I do not disagree with it, you have to be thinking 
ahead saying, OK, someday we want them out of the camps back 
into a normal life where they can sustain themselves, which 
goes to the whole question of development.
    Mr. Winter. Right.
    Senator Durbin. Maybe beyond USDA, Department of 
Agriculture, but certainly in your jurisdiction----
    Mr. Winter. Absolutely.
    Senator Durbin. I think you complement one another in the 
way that you approach it.
    Ms. Levinson has made the point that many of the Food for 
Work programs and Food for Education programs are really trying 
to be development programs that are fueled by food so that you 
create the incentive that Senator McGovern and Congressman 
McGovern spoke of.
    Do you see a problem then, if we do not have the food to 
use as incentives for development programs?
    Mr. Winter. Actually, we think there needs to be both. 
There needs to be direct food assistance, most particularly in 
an emergency context, but direct food assistance in my opinion 
does not actually produce development. It is a different kind 
of approach that is required, and food security requires 
developmental inputs. So, in fact, we need both, and the 
purposes are a little bit different for the two.
    Senator Durbin. But the money through USAID that you 
anticipate next year, will it be enough to sustain the programs 
that link food and development? Going beyond the emergency 
feeding, trying to get to the development level so that people 
are more self-sustaining, less dependent, do you think that 
your budget request for next year is going to give you the 
same, more or fewer resources?
    Mr. Winter. At this point, we think we can sustain both 
kinds of programs. However, as I said, this is, to some degree, 
a work in progress. If we get at least our request, we believe 
that we can sustain both our development programs and our 
emergency feeding programs, and if, for some reason, something 
unforeseen occurs, we will proceed to try to draw down the Bill 
Emerson Trust.
    But, ultimately, our first-year experiences I think will be 
very determinative in what the nature of our requests are past 
2003. We do think we are OK for 2003, but we are going through 
a learning process in the implementation of this new framework.
    Senator Durbin. Mr. Phillips, you have seen it on the 
ground. I mean, beyond subsistence from this feeding effort by 
the United States, have you seen families, people graduating 
from this dependence into more independence, through 
developmental programs?
    Mr. Phillips. I think the camp that I am particularly 
discussing right now may not be the best example to use for the 
success or graduation, as you call it, from dependency in this 
context. There are tremendous--I did not get into them in my 
oral testimony--but in the written testimony I elaborate on 
many of the structural conditions which militate against 
strategies of self-reliance in the particular context of 
Kakuma, and it is unfortunate, but largely as a result of those 
barriers, that the need for continuing strong support, 
particularly in the area of food aid remains.
    In the absence of the abilities to actually move in these 
more developmental directions that Mr. Winter and others have 
articulated, we need to continue and, in fact, in some ways, on 
a multilateral basis, find ways to increase the types and the 
quality of assistance that we are providing in these contexts.
    Mr. Winter. Mr. Chairman, can I pick up on what Mr. 
Phillips said?
    Senator Durbin. Sure, of course.
    Mr. Winter. We have a real problem here. What he is talking 
about, that is, the absence of other donors, the increasing 
disinterest of other donors, is a serious problem. In 
Afghanistan, we covered 90 percent, basically, of the food 
assistance. In many of these circumstances, we may be covering 
sometimes up to 70 percent.
    In the case of Sudan, again, not to pick on Jason's refugee 
country, we negotiated, as he pointed out, a peace arrangement 
that opened up areas for humanitarian access where we could 
begin to provide food for the first time in a decade or so. The 
Europeans and others expressed great admiration for our 
accomplishment in negotiating this but did not put up much of 
anything to actually put the food in the hands of the people 
who are now newly accessible.
    So we have a donor problem, and the United States is doing 
the lion's share. We want to. We are not backing away from 
that. Somehow we have to mobilize these other donors to be more 
productive in terms of their donations, too. This is a real 
problem.
    Senator Durbin. Let me follow up, since you raised 
Afghanistan, it is one of the questions. In yesterday's 
Christian Science Monitor--I do not know if you saw the 
article--entitled, ``A Fight to Feed Hungry Afghans,'' a new 
report commissioned by your agency has found that the level of 
food security in Afghanistan is now down to 9 percent from 
nearly 60 percent 2 years ago.
    Would you tell us what efforts USAID has underway in 
Afghanistan, for example, and whether you foresee any negative 
impacts for those programs from this reduction in commitment to 
food aid in the next year.
    This is really going to be, is it not, in the near future a 
test for the United States? This was the first battlefield in 
the war against terrorism, and the way we leave Afghanistan is 
kind of a message to the world; if you want to let the U.S. 
cops show up to take out your terrorists what is left behind.
    Is this not kind of a special-needs case that is going to 
perhaps call on Congress and the administration to think about 
more resources?
    Mr. Winter. It is. We have, obviously, a political 
commitment, as well as all kinds of other commitments when it 
comes to the case of Afghanistan. I am not going to avoid your 
question, but I have been out of the country. I have not seen 
either the article or the report that is being cited in the 
article.
    In the way we have been structured, we have had a special 
task force dealing with the issue of Afghanistan, specifically. 
So I would prefer, if you will OK it, to give you a response on 
the steps we are going to take on Afghanistan in writing.\1\
---------------------------------------------------------------------------
    \1\ The information on Afghanistan Food Aid supplied by Mr. Winter 
appears in the Appendix on page 117.
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    Senator Durbin. I wish you would. I was there in January 
for just a very brief visit. It was the first daylight Codel 
into the country. Senator Lieberman and McCain preceded us at 
night, and I say, half jokingly, that the Pentagon decided it 
was worth risking four Democratic Senators for a daylight 
flight, and so they let us come in there.
    And I will tell you that as we went along the roadway from 
Bagram to Kabul, that the children standing by the roadway, 
pointing at our speeding vans as we were going through 
dangerous territory, pointing to their mouths. It was all about 
food. We think about the political stability there, but I think 
we had done a lot by then. We probably are doing more now, but 
I think the demands are going to be so much greater. So, if you 
could fill me in on that, I would appreciate it.
    Mr. Yager, the GAO has looked at our food programs year 
after year after year and made recommendations of ways that you 
think we can manage them better. Can you highlight some of 
those or point to areas where you think we might be able to be 
more efficient because we bear this major responsibility?
    Mr. Yager. Certainly, Mr. Chairman. Let me just get back 
one moment to the other questions you were asking about trying 
to take advantage of the benefits of surpluses, while trying to 
minimize the downside. The more that we talked about this in 
preparation for this hearing, the more that we really thought 
about this idea of a reserve, and the more attention that you 
pay--as Ms. Levinson did--to the Bill Emerson Humanitarian 
Reserve. What it does is offers the opportunity to try to hold 
some of the benefits of these surpluses during the good years 
for the tough years.
    But what you also hear, in her testimony, as well as 
others, is that there needs to be a clear strategy for both the 
use of the reserve, as well as the replenishment of the 
reserve. This involves trying to model what you might use it 
for and trying to anticipate the kinds of changes that do occur 
over time in farm prices and in shipments. This might allow you 
to make a better effort at taking advantage of this vehicle, 
the Bill Emerson Reserve, which has not been used extensively 
over the last decade.
    Just in putting this in scale and context, the 500,000-
metric tons of grain is about one-tenth of what is shipped in a 
typical year during the food aid program. So it gives you some 
idea of the scale of what could be done with this----
    Senator Durbin. Under Section 416?
    Mr. Yager. Well, no, we are talking about all programs in 
general.
    Senator Durbin. All.
    Mr. Yager. So it would not create the kinds of peaks that 
were created through the Section 416(b) program, but it does 
offer some ability to try to improve or try to increase the 
level of resources that are provided to food aid. However, it 
has to be done in a very thoughtful way, and I think it has to 
be managed with a strategy both for the use, as well as for the 
replenishment.
    Senator Durbin. Ms. Terpstra, I live in a farm State and 
just met with some farmers last week talking about the new farm 
bill and their challenges. In the last 10 years, the general 
economy has been very good, but not in the farm belt. We have 
seen, even in strong agricultural States like Illinois and 
Iowa, a lot of problems with low prices, limited income, more 
dependence on Federal payments.
    And so if the administration walks away from using the 
surplus for Section 416(b), will that create more supply on the 
domestic market, pressing prices even further, calling then for 
more government payments to farmers because of these depressed 
prices?
    Ms. Terpstra. Let me answer that by noting that we have two 
places where we would continue to use surplus commodities. One 
is the opportunity to replenish the Bill Emerson Trust. I think 
my colleague from GAO is very correct. We need to be thoughtful 
about how to use that more aggressively in the years ahead and 
how to replenish it, and that is an issue currently under 
interagency discussion because we are faced with utilizing it 
for Southern Africa. So we need to look at how we can replenish 
that trust, which currently, I think, is about 2.5 million tons 
out of the 4 million that it can be held at.
    The second thing is I wanted to also reiterate that we are 
not seeking to end the authority of Section 416(b) and that we 
will continue to use any commodities in CCC inventories for 
food aid programs.
    Senator Durbin. You used dried milk in your testimony as an 
example.
    Ms. Terpstra. For example, yes, we have those commodities 
available currently.
    Senator Durbin. But if you follow my logic, and if my 
economics course is going to hold up for this explanation here, 
if we are not careful, we are going to run into the following 
circumstance:
    We stop exporting the surplus; we leave it on the market 
here; the domestic prices go down; and so the Federal 
Government then makes greater payments to the farmers because 
of their depressed prices. So we pass a supplemental 
appropriation bill to give farmers in Illinois more money 
because we are not using corn, soybeans and wheat that they 
produce.
    In the meantime, the recipients, at the other end, are not 
receiving the benefits of the additional surplus in the good 
years. So there is less food aid going out, and we are really 
not gaining anything from it on a budget viewpoint. We are 
instead sending it back to farmers because of depressed prices.
    Now that is, as I look at this just from the outside, I do 
not know if I am missing something here, but that strikes me as 
a quandary. We are not saving money by reducing the surplus. We 
may be making it more dependable, in terms of what we can 
provide, but it may be costly.
    Ms. Levinson, since you used to work for me, I guess you 
have to agree with me---- [Laughter.]
    Ms. Levinson. One hundred percent.
    Actually, this is an issue that has been raised. When you 
go to CBO, the Congressional Budget Office, or OMB to make the 
argument that they should show some savings in farm payments 
because of purchases of surplus off the market should have an 
elevating effect on prices, from what I understand, they do not 
buy it. They will not agree to that, as a budget matter. They 
will not look at it and say, yes, it is an offset, and 
therefore increase spending on food aid.
    However, as a practical matter, this offset should happen 
and I think some of the commodity groups have figures that show 
this and we would be happy to share that with you. PVOs worked 
with the agricultural groups in an Agriculture-PVO Coalition on 
Food Aid that came up with food aid recommendations, including 
replenishing the Trust.
    I want to make an important comment about surpluses. In the 
past few years, many of them have been used very 
constructively. The CCC-funded food aid programs are Section 
416 and Food for Progress, but Food for Progress is a small 
program. It had a cap of 500,000 metric tons before, and the 
new farm bill creates a minimum level of 400,000 metric tons. 
At least this requires some CCC-funded food aid.
    At USDA, they received 250 proposals for 1 year for the 
Food for Progress program, 250 proposals for something that 
ended up being a couple hundred thousand metric tons.
    The request is for 3 million metric tons of food aid. There 
is demand and it's not just to dump commodities. These are 
proposals for programs; agriculture development programs, Food 
for Education, many different kinds. The United States paid for 
recovery after hurricanes in Central America and emergencies 
all over the world with Section 416, which was used as a back-
up to Food for Progress.
    The demand is there for food aid, and Congress is not 
providing enough through CCC funding. I am glad there is a 
request for higher Title II funding, but we could be spending 
more money on food aid. The demand is very high for very good 
programs.
    Senator Durbin. I want to thank the panel for their 
testimony and for your patience as I have asked these 
questions. I thank you all for what you do, for all of the 
agencies involved here. Particularly, Mr. Phillips, thank you 
for coming here to tell us the story firsthand that you face in 
Kenya.
    I can understand, from a management viewpoint, why this 
decision has been made, but I think the net impact on poor 
people around the world is, at least in the next year, going to 
be very painful.
    If there was ever a time in history when the United States 
needs to project a different image, an image of compassion and 
caring, I think this is the year to do it. The McGovern-Dole 
program is an example. There are others, Food for Progress, 
Food for Work and others, that can start telling the story of 
America that can confound some of our critics around the world, 
and I think we are moving in the wrong direction in food aid.
    I hope we, in Congress, can look at this thoughtfully, work 
with the administration and come up with an approach that does 
not have that negative impact.
    Thank you all for joining us today. I appreciate it.
    This Subcommittee is adjourned.
    [Whereupon, at 4:05 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

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