[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
                THE INTERNATIONAL FUND FOR AGRICULTURAL


                DEVELOPMENT (IFAD) AND THE IMPORTANCE OF


                 AGRICULTURE DEVELOPMENT IN SUSTAINABLE


                        GLOBAL POVERTY REDUCTION

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                       DOMESTIC AND INTERNATIONAL
                 MONETARY POLICY, TRADE, AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 12, 2006

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 109-118




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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana          PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio                  MAXINE WATERS, California
SPENCER BACHUS, Alabama              CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware          LUIS V. GUTIERREZ, Illinois
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma             MELVIN L. WATT, North Carolina
ROBERT W. NEY, Ohio                  GARY L. ACKERMAN, New York
SUE W. KELLY, New York, Vice Chair   DARLENE HOOLEY, Oregon
RON PAUL, Texas                      JULIA CARSON, Indiana
PAUL E. GILLMOR, Ohio                BRAD SHERMAN, California
JIM RYUN, Kansas                     GREGORY W. MEEKS, New York
STEVEN C. LaTOURETTE, Ohio           BARBARA LEE, California
DONALD A. MANZULLO, Illinois         DENNIS MOORE, Kansas
WALTER B. JONES, Jr., North          MICHAEL E. CAPUANO, Massachusetts
    Carolina                         HAROLD E. FORD, Jr., Tennessee
JUDY BIGGERT, Illinois               RUBEN HINOJOSA, Texas
CHRISTOPHER SHAYS, Connecticut       JOSEPH CROWLEY, New York
VITO FOSSELLA, New York              WM. LACY CLAY, Missouri
GARY G. MILLER, California           STEVE ISRAEL, New York
PATRICK J. TIBERI, Ohio              CAROLYN McCARTHY, New York
MARK R. KENNEDY, Minnesota           JOE BACA, California
TOM FEENEY, Florida                  JIM MATHESON, Utah
JEB HENSARLING, Texas                STEPHEN F. LYNCH, Massachusetts
SCOTT GARRETT, New Jersey            BRAD MILLER, North Carolina
GINNY BROWN-WAITE, Florida           DAVID SCOTT, Georgia
J. GRESHAM BARRETT, South Carolina   ARTUR DAVIS, Alabama
KATHERINE HARRIS, Florida            AL GREEN, Texas
RICK RENZI, Arizona                  EMANUEL CLEAVER, Missouri
JIM GERLACH, Pennsylvania            MELISSA L. BEAN, Illinois
STEVAN PEARCE, New Mexico            DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas              GWEN MOORE, Wisconsin,
TOM PRICE, Georgia                    
MICHAEL G. FITZPATRICK,              BERNARD SANDERS, Vermont
    Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina
CAMPBELL, JOHN, California

                 Robert U. Foster, III, Staff Director
Subcommittee on Domestic and International Monetary Policy, Trade, and 
                               Technology

                       DEBORAH PRYCE, Ohio, Chair

JUDY BIGGERT, Illinois, Vice Chair   CAROLYN B. MALONEY, New York
JAMES A. LEACH, Iowa                 BERNARD SANDERS, Vermont
MICHAEL N. CASTLE, Delaware          MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma             MAXINE WATERS, California
RON PAUL, Texas                      BARBARA LEE, California
STEVEN C. LaTOURETTE, Ohio           PAUL E. KANJORSKI, Pennsylvania
DONALD A. MANZULLO, Illinois         BRAD SHERMAN, California
MARK R. KENNEDY, Minnesota           LUIS V. GUTIERREZ, Illinois
KATHERINE HARRIS, Florida            MELISSA L. BEAN, Illinois
JIM GERLACH, Pennsylvania            DEBBIE WASSERMAN SCHULTZ, Florida
RANDY NEUGEBAUER, Texas              GWEN MOORE, Wisconsin
TOM PRICE, Georgia                   JOSEPH CROWLEY, New York
PATRICK T. McHENRY, North Carolina   BARNEY FRANK, Massachusetts
MICHAEL G. OXLEY, Ohio
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    September 12, 2006...........................................     1
Appendix:
    September 12, 2006...........................................    21

                               WITNESSES
                      Tuesday, September 12, 2006

Beckmann, Rev. David, President, Bread for the World.............     4
Howard, Julie, Executive Director, Partnership to Cut Hunger and 
  Poverty in Africa and co-author of Investing in Africa's 
  Future: U.S. Agricultural Development Assistance for Sub-
  Saharan Africa.................................................     6
Lowther, Kevin G., Regional Director for Southern Africa, 
  Africare.......................................................     9
McNamer, Bruce, President and CEO, TechnoServe, Inc..............    11

                                APPENDIX

Prepared statements:
    Waters, Hon. Maxine..........................................    22
    Beckmann, Rev. David.........................................    27
    Howard, Julie................................................    34
    Lowther, Kevin G.............................................    41
    McNamer, Bruce...............................................    45


                       THE INTERNATIONAL FUND FOR



                    AGRICULTURAL DEVELOPMENT (IFAD)



                   AND THE IMPORTANCE OF AGRICULTURE



                       DEVELOPMENT IN SUSTAINABLE



                        GLOBAL POVERTY REDUCTION

                              ----------                              


                      Tuesday, September 12, 2006

             U.S. House of Representatives,
                       Subcommittee on Domestic and
                     International Monetary Policy,
                             Trade, and Technology,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 2 p.m., in 
room 2128, Rayburn House Office Building, Hon. Frank D. Lucas, 
presiding.
    Present: Representatives Lucas, Watt, and Frank.
    Mr. Lucas. This hearing of the Subcommittee on Domestic and 
International Monetary Policy, Trade, and Technology will come 
to order. I am pleased to chair today's hearing that will 
examine the efforts of the International Fund for Agricultural 
Development, IFAD.
    The United States has been the largest contributor to IFAD. 
In December of 2005, the United States announced a pledge of 
$54 million to IFAD's seventh replenishment, which maintains 
approximately the same level of burden sharing as it did in the 
previous replenishment. As chairman of the Subcommittee on 
Conservation, Credit, Rule Development, and Research of the 
Committee on Agriculture, and as a member of the Committee on 
Financial Services, I have a particular interest in hearing how 
IFAD works to complement efforts made by governments, donors, 
nongovernmental organizations, and other partners, such as 
members of the private sector, involved with capital markets, 
additional U.N. agencies, the World Bank, and research 
institutions in helping to finance cultural development 
projects for the primary purpose of producing food in 
developing countries, which, in turn, leads to greater services 
and a stronger economy.
    I have always been struck by the fact that food insecurity 
and famine are not so much the result of failures in food 
production but structural problems related to poverty. I am 
also amazed by the fact that nearly 75 percent of the poor in 
developing countries, about 900 million people, are 
concentrated in the rural areas. IFAD believes, as I do, that 
the rural poor must be empowered to lead their own development. 
These people must be able to develop and strengthen their local 
organizations and have a say in the decisions and policies that 
affect their lives.
    It is for this reason that IFAD is so important. IFAD works 
on the local level to create projects that will end the cycle 
of poverty. By working closely with governments to develop and 
finance programs, IFAD is expected to help more than 100 
million rural people living in poverty.
    Unfortunately, due to U.N. regulations, we are not able to 
have representatives from IFAD testify before the committee 
today. However, I am pleased that we will have various 
organizations who work directly with IFAD and their partners 
who will be able to give us a close-up view of how IFAD 
operates.
    I am also pleased to hear testimony that will address the 
progress made by IFAD and other organizations that seek to aid 
Africa in its development, the kind of commitments and future 
cooperation that would be necessary for continued progress and 
suggestions for making IFAD more effective.
    And with that I would like to turn to the ranking member of 
the full committee, Mr. Frank.
    Mr. Frank. Thank you, Mr. Chairman.
    This is a hearing we have not because there are problems, 
which sometimes we have, but really, I think, to show our 
support for this important operation.
    As many of you understand, it is election season. There 
won't be votes until 6:30, so it is a time when there are not a 
lot of members around, but that is not an indication of there 
not being support. Not a lot of media either, but, as you know, 
interest around here tends to be generated by controversy, not 
by substance. And the lack of controversy, for which you can, 
to some extent take credit, because of the work you have done 
with IFAD, means that we don't have a lot of attention. But I 
am glad that you are here.
    Let me say, I read over the statements and I am very much 
in agreement about what we should do. At least one of you said, 
in the testimony that I read, that Congress should avoid 
earmarking some of the assistance that we give. And I agree 
with that. Earmarks here, we should be clear, are not earmarks 
of the sort of company of A or company B, but they are policy 
related earmarks: Put in water, put in this, put in that.
    I will tell you this. I can't think of an earmark that was 
generated by a Member of Congress. Earmarks come in response to 
well-meaning organizations that say, oh, well, this is 
important or that is important. So I would say two things. One, 
to those of you who agreed that we shouldn't earmark, never ask 
us to; and, secondly, help us resist. Because often what 
happens is a very good organization of decent, hard-working 
people comes and says, this area of activity is important. And 
an earmark is then considered to be, well, do you think that is 
a good activity or not, rather than should you restrict the 
flexibility and prefer this activity over other good ones. So I 
agree with that, but we are going to need your help in doing 
it.
    And it may mean even--and this is, I noticed--I don't mean 
to single you out. People are always coming to us asking us to 
do things; and then I sometimes say, yes, but to do that we 
have to do the following. And they say, oh, well, that is 
controversial; we can't take that position. That is, if you 
want to help us block earmarks, oppose the earmarks of some of 
your well-meaning colleagues, because otherwise they will go 
through unopposed.
    Beyond that, I did want to say, as I read the testimony, 
that I agree that you have pointed out one of the enduring 
inconsistencies in American politics. That is American politics 
is, to a very great extent, today dominated by people who are 
generally conservative and who preach to others the values of 
the free market and the virtues of nongovernment intervention. 
But, as I have said before, apparently in all the great free 
market texts there is a secret footnote that says, oh, by the 
way, not agriculture. So that when my conservative colleagues 
talk about the importance of keeping the government out of the 
private sector, about self-reliance, about the dangers of tax 
subsidy, about protecting efficiencies, etc., they have taken 
this mental reservation that it doesn't apply to agriculture. 
Because agriculture in America is the most subsidized, 
regulated industry that we have.
    For instance, we are sometimes told, well, we need that for 
the food supply. But I know that a couple of you mentioned that 
one of the problems that African countries encounter in their 
efforts to become economically advanced is the American subsidy 
of cotton which keeps African countries which could grow high-
quality cotton more cheaply than us from putting it on the 
market. And when we raise the issue of these kinds of subsidies 
we are told, well, but what about food supply? I have not 
observed people eating much cotton. Maybe my experiences are 
too limited. But the cotton area is an example of an American 
policy of subsidy which has no basis, obviously, in food.
    What particularly concerns me is that when some of us who 
have represented industrial areas have raised concern about the 
short-term impact of foreign trade, we are told that we are 
being protectionist and insensitive to poor people. And of 
course, as the collapse of the Doha Round just showed, the 
single greatest obstacle to progress in world trade and to 
alleviating poverty internationally in this regard is American 
agriculture policy.
    Well, I take it back. We are not the single greatest. The 
single greatest is European agriculture policy. We may be tied 
for second with Japan, and the fact is that it is time to 
introduce agriculture in America to the joys of the free market 
which its Congressional representatives so freely argue for.
    I have one last point along those lines. I agreed with the 
Bush Administration, particularly with Andrew Natsios with whom 
I had served in the Massachusetts House 30 years ago, that we 
should allow more of the food aid to be money, which would buy 
food on the spot. The insistence that all food aid be 
physically transported, I think, greatly lessens its value. A 
significant amount of it should be grown and transported, and 
that is only sensible, and it is political reality. But we are 
too restrictive in allowing some of it to be the money 
equivalent.
    So I thank you for the work you do, for your support of 
IFAD, and for the policy points that you have made.
    Mr. Lucas. And the Chair thanks the ranking member and 
offers up to the panel an observation of all the fun and 
challenges that the 2007 farm bill will be next year as we work 
our way through that.
    With that, let's note for the record that, without 
objection, all members who may want to submit an opening 
statement will have that made a part of the record.
    Now, let's turn to the introduction of our panel.
    Reverend David Beckmann is president of Bread for the 
World. Bread for the World is most famous for working closely 
with rock star Bono and is a nationwide Christian movement that 
seeks justice for the world's hungry people by engaging in 
research and education on policies related to hunger and 
development.
    Also, Dr. Julie Howard is the executive director for the 
Partnership to Cut Hunger and Poverty in Africa, where she 
works to reverse the persistent hunger and poverty in Africa. 
She has also co-authored the comprehensive agricultural report 
on Africa entitled: Investing in Africa's Future: U.S. 
Agricultural Development Assistance for Sub-Saharan Africa, 
with Michael Taylor.
    We also have Mr. Keith Lowther. He is the regional director 
for southern Africa at Africare, an organization that works in 
partnership with African communities to achieve healthy and 
productive societies.
    And, also, Mr. Bruce McNamer is the president and CEO of 
TechnoServe. TechnoServe is a nonprofit organization that 
focuses on economic development of Africa and Latin America. 
Its mission is to help entrepreneurial men and women in poor 
rural areas of the developing world.
    With that, you may begin whenever you are ready, Reverend 
Beckmann.

STATEMENT OF REVEREND DAVID BECKMANN, PRESIDENT, BREAD FOR THE 
                             WORLD

    Rev. Beckmann. Thank you, Mr. Chairman, and Mr. Ranking 
Member. I really appreciate you holding this hearing.
    The world, in fact, is making progress against poverty and 
hunger, and the work that IFAD has done over the last 30-some 
years is part of that progress. The attention that this 
committee is giving to that good work is part of that progress, 
so thank you.
    At Bread for the World, in addition to doing research, we 
organize people and churches to lobby Congress. We mobilize 
about a quarter of a million letters to Congress every year on 
issues that are important to hungry and poor people in our own 
country and around the world. We think agriculture and rural 
development are really important to progress against poverty 
around the world, also progress against poverty in our own 
country, and we have come to love IFAD.
    Almost 80 percent of the world's poor live in rural areas, 
but only 8 percent of development assistance goes to 
agriculture and rural development; this just doesn't make 
sense.
    Compared to 10 years ago, USAID and the World Bank are 
talking a lot more now about agriculture, again. But there has 
been very little, if any, change in levels of funding for 
agriculture and rural development.
    The most encouraging recent development is that the 
Millennium Challenge Account is including agriculture and rural 
development in most of its compacts. And it is really 
instructive that when the MCA picks countries, poor countries, 
that have good governments, those countries overwhelmingly are 
coming back and saying they want help with agriculture and 
rural development.
    We think that IFAD is an excellent vehicle for U.S. 
investment in agriculture and rural development. Bread for the 
World was founded about the same time as IFAD, and we have 
monitored IFAD since its inception. We follow its policies, our 
staff visits its programs and projects, and we are impressed.
    In particular, we are impressed by two of IFAD's policies. 
One is a resolute focus on the rural poor. Most of our foreign 
aid money has two or three different objectives for every 
dollar that we spend. We are trying to contribute to U.S. 
security and help some interest group in this country and also 
help poor people around the world, and so it is not surprising 
sometimes that the objective of reducing poverty doesn't get 
carried out very effectively. IFAD is resolutely focused on 
helping poor people in rural areas get ahead.
    The other policy that we think has been critical to its 
success is that it tries to involve those poor communities in 
decisions so they are not just the object of investment but, 
rather, IFAD makes real efforts to empower groups of farmers, 
women's groups, and other groups in rural areas so that they 
can take part in the design of the interventions. That means 
that those interventions are more likely to be effective, more 
likely to be successful, and they are more likely to last after 
IFAD finally concludes its involvement in the area.
    So let me conclude with four recommendations. Two are 
directly under the jurisdiction of this subcommittee.
    First, Bread for the World encourages you to 
enthusiastically support IFAD and, specifically, to support its 
policies of resolute focus on the rural poor and empowerment of 
the rural poor.
    Second, we would encourage this committee to encourage 
other official development banks to increase their investment 
in agriculture and rural development and, specifically, to 
focus on poverty and the empowerment of poor communities.
    Third--and this is a more general recommendation--we are 
thrilled that Congress and the President have been increasing 
funding for poverty focused development assistance. It is 
really remarkable. In 1999, the programs and agencies that we 
considered poverty focused development assistance were funded 
at a level of about $4 billion. That is up to $10.6 billion for 
this year, this fiscal year. The President has requested a $2 
billion increase, but the House has so far approved only $1 
billion of that increase that the President asked for. So our 
third recommendation is that you participate in getting the 
final number up to the President's recommendation for poverty 
focused development assistance generally.
    And then, fourth, I do want to address the issue of 
agricultural protectionism. It is a very difficult issue. But 
the agricultural protectionism of the industrialized countries, 
first, it is tough. It is not good for our own agriculture. Our 
own agriculture becomes unresponsive. It is not meeting the 
needs of small-scale farmers and other poor people in rural 
Oklahoma. It is not easy to solve this problem.
    But the current structure of global agriculture is really 
tough on farmers in poor countries, and, in the long haul, 
nothing is more important to U.S. farmers than the expansion of 
markets in developing countries. When people in East Asia were 
able to get out of poverty and hunger to some extent, that was 
good for agriculture in Oklahoma. And it is that positive 
interaction between agriculture and rural development among the 
poor around the world and agricultural and industrial 
development in our own country that we should be fostering. 
When really poor people get ahead a little bit, the extra 
dollar they get, 80 percent of it goes into food. So some of 
that will go into imported food and agricultural imports.
    So addressing the concerns that Mr. Frank addressed is a 
big task for Doha. We hope the President will rescue Doha, and 
we hope the next foreign bill will find some ways to make 
progress in changing the structure of global agriculture.
    Thank you very much.
    [The prepared statement of Rev. Beckmann can be found on 
page 27 of the appendix.]
    Mr. Lucas. Thank you.
    Dr. Howard.

 STATEMENT OF JULIE HOWARD, EXECUTIVE DIRECTOR, PARTNERSHIP TO 
CUT HUNGER AND POVERTY IN AFRICA AND CO-AUTHOR OF INVESTING IN 
 AFRICA'S FUTURE: U.S. AGRICULTURAL DEVELOPMENT ASSISTANCE FOR 
                       SUB-SAHARAN AFRICA

    Ms. Howard. Mr. Chairman, thank you very much for this 
opportunity to testify about the importance of U.S. support for 
African agriculture in general, and for IFAD in particular.
    I represent the Partnership to Cut Hunger and Poverty in 
Africa, which was founded in 2001 by African Union Commission 
Chair Alpha Konare and former USAID Administrator Peter 
McPherson; the Presidents of Uganda, Ghana, and Mozambique; 
former Congressman Lee Hamilton; Senator Robert Dole; and 
Reverend David Beckmann, to my side.
    The Partnership is an independent U.S.-African coalition of 
public and private organizations advocating for greater and 
more effective investment in Africa's agricultural and rural 
sectors.
    I would like to make six key points today.
    The first one is that agriculture is pivotal in the fight 
against hunger and poverty in Africa. As you know, poverty and 
hunger are acute in sub-Saharan Africa and conditions are 
worsening. Nearly half of the population there gets by on less 
than a dollar a day, and a third go hungry.
    Over the past few years, these tough realities have 
triggered a global recommitment to eradicate poverty and 
hunger. We see this reflected in the 1996 World Food Summit to 
halve the number of undernourished people by 2015, and this is 
reinforced by the United Nations Millennium Development Goals. 
This global consensus recognizes both the moral imperative of 
addressing these inequalities and also the self-interest of 
rich countries to do so.
    Historically, agriculture has provided the foundation for 
economic take-off in almost every single country of the world. 
In Africa, 70 percent of the population lives and works in 
rural areas. So if you want to have a major impact on poverty 
and hunger, there is really no other way and no better way to 
do this than by rapidly growing the rural economy.
    My second point is that agricultural assistance to Africa 
is going to require broad and costly interventions. In Africa, 
the development challenge is more difficult and more complex 
than elsewhere in the world. Historically, during the Green 
Revolution in the 1960's in Asia and Latin America, a lot was 
achieved through improvements at the farm level just by 
providing improved seeds, fertilizer, research, and extension 
services for small-scale farmers.
    But sub-Saharan Africa lacks much of the physical 
infrastructure, the roads, the ports, and the institutional 
capacity for research, governance, and functioning markets that 
made the Green Revolution possible for these other regions. 
Thus, for Africa, it is really important for us to reframe our 
thinking about agricultural development assistance.
    So we are not just thinking about farm-level improvements, 
but we are actually including a much broader range of 
activities to help foster this agriculture-led economic growth. 
These improvements range from natural resources management and 
improved farm productivity all the way to assistance for market 
development, rural roads, and improving trade policy.
    My third point, considering the issues that we have been 
discussing today, of the three Rome-based United Nations 
agencies, IFAD focuses exactly on this critical role of 
agriculture in facilitating broad-based economic growth for the 
rural poor. IFAD projects generate growth by integrating 
smallholders into markets, developing rural financial systems, 
improving land and water management and improving knowledge, 
information, and technology systems for the rural poor. It has 
important field experience, and on the basis of this field 
experience, IFAD is becoming an increasingly important voice at 
the policy level, arguing for market-led agricultural 
development. And, as Reverend Beckmann noted, IFAD also is 
facilitating the participation of the rural poor themselves in 
policy formulation and project implementation.
    Mr. Chairman, support for IFAD is one of a number of ways 
that the United States supports African agricultural 
development. About 80 percent of U.S. funding for African 
agriculture is provided directly through U.S. agencies. USAID 
is the lead, also USDA, African Development Foundation, and now 
the MCC. It is just the remaining 20 percent of funding that is 
filtered through the multilateral agencies, including IFAD, the 
United Nations FAO, World Food Program, World Bank IDA, and the 
African Development Fund of the African Development Bank.
    My fourth point is, given the critical importance of 
getting rural economies in Africa going, the United States is 
significantly underinvesting in African economic growth 
relative to spending for social programs.
    The Partnership documented actual U.S. spending on African 
agricultural development in a report we released one year ago, 
``Investing in Africa's Future: U.S. Agricultural Development 
Assistance for Sub-Saharan Africa.'' We found that although 
U.S. leaders are embracing agriculture-led economic growth at 
the policy level, the financial support, in truth, is actually 
lagging. It has stagnated since 2000. So total U.S. 
agricultural development assistance for Africa between 2000 and 
2004 grew by only 2 percent in real terms. And if you compare 
this to what has happened with health programs and education 
programs, USAID health programs in Africa grew by 61 percent in 
the same time period; and this increase doesn't even include 
what we are spending on HIV/AIDS in the global fund to fight 
AIDS, tuberculosis, and malaria. The HIV/AIDS commitment itself 
is for $15 billion over 5 years.
    Furthermore, the effectiveness of U.S. assistance is 
limited by earmarks, by fragmentation across agencies, and by a 
lack of coordination. Some of these challenges indeed could be 
eased if the Millennium Challenge Corporation fulfills its 
considerable potential. The MCC operates under a different 
framework, and it receives funds that are not earmarked, at 
least not thus far.
    Our experience of MCA indicates when countries are allowed 
to choose assistance priorities for themselves, they go ahead 
and choose to fund programs that do stimulate broad-based 
economic growth. The three MCA compacts signed in Africa thus 
far, Madagascar, Ghana, and Benin, all have significant 
agriculture components. But MCA remains largely untested as a 
vehicle for development assistance, and it really focuses on a 
very limited number of countries.
    Fifth, beyond the U.S., OECD development assistance 
reflects the same imbalance: great concentration on social 
spending, very little actually on economic growth. I think this 
puts into question whether we are going to be able to achieve 
the sustained progress on poverty and hunger that we want and 
need.
    While overall bilateral assistance from OECD countries grew 
by 74 percent between 2000 and 2003, the share of agriculture-
related assistance in ODA actually declined from 13 to 9 
percent. By contrast, in this same period, health-related 
bilateral ODA grew by 115 percent and ODA for education 
increased by 77 percent. It has a spill-on effect in Africa, 
because African political leaders, while they also put high 
priority on rural economic growth and on the place of 
agriculture in their economies, they can't do this with their 
own domestic resources. They rely on the resources they receive 
from bilateral and multilateral donors. And if those are pre-
selected for social projects, then the actual budget allocation 
is strong on social spending and weak on economic growth.
    My final point is that the United States should take the 
lead with IFAD in urging significant increases in funding for 
economic growth, for facilitating agriculture-led economic 
growth in Africa.
    While increased expenditures for health and education are 
important, the current ratio of investment by the U.S. OECD 
will not enable African countries to sustain their health and 
education systems over the long term. Food, health, and 
education are all high priorities and very interdependent. 
Without adequate food, people will never be healthy and 
children will not be prepared to learn. And without growing 
their rural economies, African nations will always be reliant 
on external assistance.
    Thank you for this opportunity.
    Mr. Lucas. Thank you.
    [The prepared statement of Ms. Howard can be found on page 
34 of the appendix.]
    Mr. Lucas. Mr. Lowther.

 STATEMENT OF KEVIN G. LOWTHER, REGIONAL DIRECTOR FOR SOUTHERN 
                        AFRICA, AFRICARE

    Mr. Lowther. Thank you, Mr. Chairman. I am going to beg 
your indulgence and try to focus a bit on the field 
perspective.
    I have had a working relationship with IFAD for the past 20 
years, and I think everything you are going to hear today is 
simply going to underscore my own experiences there. But what I 
want to bring out in this testimony is a perspective from the 
farmers themselves and, in this case in particular, Zimbabwe. 
So the overall context of my testimony is going to be southern 
Africa.
    Having lived or worked there for the past 28 years, I have 
had the opportunity to observe several trends as they evolved 
over an entire generation. When I went to live in Zambia in 
1978, southern Africa was locked in several armed liberation 
struggles and confronting apartheid in South Africa. HIV/AIDS 
was still unknown, and the region was essentially food secure. 
Today, apartheid is history, and there is peace throughout. 
HIV/AIDS has emerged as a modern-day plague, but the most 
surprising change, to me at least, in southern Africa is that 
the region is now chronically food insecure.
    If southern Africa was feeding itself a generation ago, 
what has happened that requires the World Food Program, USAID, 
and other agencies annually to provide thousands of tons of 
food to sustain millions of people? The short answer is the 
maize trap. Now for decades, smallholder farmers in southern 
Africa have relied almost exclusively on maize as their staple. 
Colonial and post-colonial governments alike promoted this 
dependence for reasons of their own, but not because maize was 
the best agronomic choice to ensure long-term food security.
    The trouble with maize is that it is not a particularly 
nutritious crop. It exhausts the soil, and it requires reliable 
rainfall. This would not be a problem if there were an endless 
supply of fresh land and cheap fertilizer. It would not be a 
problem if rainfall in much of southern Africa were still 
reliable, which it is not. Farmers continue trying to grow 
maize on soil that is increasingly infertile, and the decline 
of those rainfall patterns have become notoriously fickle.
    A more recent factor is HIV/AIDS, which is decimating 
families' capacity to cultivate their land. But the core 
reality is that farmers in southern Africa are trapped in a 
vicious cycle. The more they cling to maize, the more food 
insecure they become. Even in relatively good rainfall years 
few are able to produce enough maize to feed their families. 
The region is basically in a death spiral in terms of food 
security.
    Along with dependence on maize has come a collateral myth 
that southern African farmers are unwilling to adopt new crops 
and technologies. Africare's experience in the SADC region 
shows the contrary, and perhaps the most instructive lessons 
have been learned in the drought-prone Midlands Province of 
Zimbabwe.
    Africare decided to ask what the farmers of Midlands 
Province thought. We first organized a series of farmer 
demonstrations. Residents were introduced to simple, affordable 
technologies for processing more drought-tolerant crops. These 
include sunflowers processed into edible oil, and soybeans 
converted into a variety of tasty and nutritious products. 
Farmers also began to appreciate what they could do with 
improved varieties of cassava, with more drought-tolerant crops 
like pigeon peas, and with leaves, as well as the flesh of 
cassava and sweet potatoes. They found that all of these crops 
could be integrated into their farming systems and that 
soybeans in particular restored soil fertility by fixing 
nitrogen. Because they could process these crops themselves, 
mainly for consumption, they did not have to worry about 
selling to some distant market. Their diets were enriched, and 
their immune systems strengthened. When communities elsewhere 
continued to suffer through drought, our Midlands farmers did 
not.
    Who funded this innovative program? IFAD, which provided 
Africare with modest grants to support crop diversification and 
village-based food processing. As a result, we have a proven 
farmer-driven model which has liberated, in this case, more 
than 4,000 people in several wards of Midlands Province from 
the ``maize trap.'' This is the kind of breakthrough 
programming which IFAD was intended to nourish.
    IFAD had the flexibility to invest in a couple of $100,000 
grants in the Midlands farmers to see what might happen. But 
IFAD's policies and procedures do not allow it to expand this 
program more broadly in Zimbabwe unless it does so through a 
loan to the government. IFAD is not presently able to consider 
new loans to the Zimbabwe government, and even if it were, we 
would have to hope that the Ministry of Agriculture would be 
prepared to embark on a national campaign to de-emphasize maize 
in favor of more nutritious, drought-tolerant, and soil-
friendly crops.
    The farmers in Midlands Province and elsewhere in the 
region have demonstrated that they are willing to diversify 
away from maize if they know that they can process and utilize 
these alternative crops. Within a decade, the face of 
smallholder agriculture could be changed dramatically if those 
agencies most concerned with food security and poverty were 
able to join forces to make it happen.
    It was the Rockefeller Foundation which got Africare to 
begin focusing on soybeans, mainly as a means to strengthen 
soil fertility. The work has been very successful in a limited 
geographical area, but the foundation is not prepared by itself 
to replicate this throughout the region. The Bill and Melinda 
Gates Foundation is funding Africare in another part of 
Midlands Province to test crop diversification, but again on a 
limited scale. And, meanwhile, our IFAD-funded work in Zimbabwe 
is coming to an end. Very sad news for the farmers, I can tell 
you.
    IFAD, I think, has a leadership role to play here. IFAD has 
the broad understanding of agriculture and its centrality in 
addressing poverty in regions such as southern Africa. It 
should have a clear and documented awareness of what works and 
what doesn't at the community level. It does not have the 
mandate or resources to restore sustainable food security in 
southern Africa. But it does have the credibility to lobby 
governments, its fellow United Nations agencies, and major 
donors, to launch a coordinated effort to end southern Africa's 
dependence on a crop, maize, that is steadily aggravating food 
insecurity.
    It is sad to say that Africare's largest funder in Zimbabwe 
is not IFAD, not the Rockefeller Foundation, nor the Gates 
Foundation. It is the World Food Program, which contracts 
Africare and other NGOs to deliver food--grown far, far away--
to vulnerable groups. There is something very wrong with this 
picture. We know what can be done to achieve sustainable food 
security throughout southern Africa. Emergency food aid is not 
the answer. It is a Band-Aid, at best and, at worst, a crutch 
which will allow us to believe that all will be well in the 
long run and no one will starve.
    Mr. Chairman, I will end there and, again, apologize for my 
voice and for my uncongressional garb, but there is a reason 
for that. And I will be happy to answer your questions later. 
Thank you.
    Mr. Lucas. Thank you.
    [The prepared statement of Mr. Lowther can be found on page 
41 of the appendix.]
    Mr. Lucas. Mr. McNamer.

  STATEMENT OF BRUCE McNAMER, PRESIDENT AND CEO, TECHNOSERVE, 
                              INC.

    Mr. McNamer. Mr. Chairman, Ranking Member and members of 
the committee, first, thank you for the opportunity to testify 
before you today and to offer a strong voice in support of the 
International Fund for Agricultural Development and its unique 
role in creating economic opportunity and hope for the world's 
rural poor. That, too, is TechnoServe's work and has been since 
we were founded 40 years ago by a Connecticut entrepreneur 
named Ed Bullard who sought himself to apply private-sector 
solutions and business-based approaches to alleviating poverty 
in the developing world.
    Since then, we at TechnoServe have evolved to focus on 
building thriving businesses and industries as catalysts for 
poverty reducing economic growth in rural economies where 70 
percent of the world's poor reside. We base our work out of 
offices in 13 countries in Africa and Latin America.
    As with my own background, most of our global staff of 350 
professionals is drawn from leading private-sector firms, both 
multinational and host county institutions. Many have run their 
own successful businesses, and this is based on our belief that 
the best people to help other entrepreneurs is business people 
themselves.
    Last year, we assisted generated well over $50 million in 
revenues, and brought local raw materials worth $30 million, 
benefiting 700,000 people. In our work, we rely heavily on 
corporate partners--Proctor and Gamble, Kraft Foods, McKenzie, 
Cargill, Nestle, Google--and a number of public-sector 
partners. But quite prominent among those are USAID and IFAD.
    Mr. Chairman, with its focus squarely on rural and 
agricultural development, IFAD is an organization with a unique 
mandate and a crucially important role. Indeed, it is much like 
TechnoServe with its mission of helping the rural poor to 
overcome poverty.
    With U.S. and other funding for agricultural development in 
Africa stagnating from 2000 to 2004, IFAD's support for 
agricultural development in the world's poorest places is even 
more vital to the development and dissemination of sustainable 
improvements. Since its creation 28 years ago, IFAD has worked 
continually to empower rural producers and to emphasize and 
promote the role of markets, the development of competitive 
value chains, opportunities to generate non-farm income and 
employment, and on the vital role of access to capital in rural 
economies.
    While many major donors like the World Bank invest much of 
their efforts on higher-level policy and regulatory reform, or 
on large-scale infrastructure investments, IFAD stands out as 
the organization providing solutions to poverty targeting the 
rural poor where they live, in their communities, with hands-on 
practical assistance.
    I want to give you just a recent example of a partnership 
with IFAD and TechnoServe in the African Cashew Development 
Program. This is a 3-year regional program in East Africa, and 
it aims to work all along the cashew value chain to increase 
farmer productivity and incomes, and to work with entrepreneurs 
to build value-added cashew processing factories. This is 
instead of a traditional reliance on the export of raw 
commodities to enable existing processors to be more 
competitive; to support sustainable industry trade and 
marketing organizations functioning at national and regional 
levels; to increase regional industry competitiveness through a 
stronger, harmonized policy environment; and to improve 
regional relationships and synergies among cashew industry 
stakeholders, leading to sustained growth, competitiveness, and 
profitability in the sector beyond that achieved at national 
levels.
    IFAD's role in our partnership is threefold: as a funder 
for a subset of activities, specifically around farmer 
productivity and policy improvement; as a convener of public 
and private regional stakeholders; and as a disseminator of 
best practices both into the program, bringing to bear lessons 
they have learned in other value chain work, and out of it as 
well, cataloging what we together are learning for its wider 
application.
    Our IFAD-supported cashew program is proof that these kinds 
of smart interventions can help. It has already resulted in 14 
rural-based cashew processors in Mozambique purchasing raw 
cashew nuts from 110,000 farmers, earning $5.1 million last 
year in export earnings and employing over 3,000 workers.
    We are working with IFAD now on replicating that success 
regionally. Already one new factory has been established in 
rural Kenya, industry efficiency improvements have been 
achieved in the existing factories in Kenya and Tanzania, and 
we have an entrepreneur who has established his first 
Mozambican model factory in Benin.
    Our partnership extends to improving the business 
environment. A policy reform effort in Tanzania contributed to 
the creation of over 1,500 jobs and $5.5 million in export 
earnings from processed cashew kernels. And for the first time 
the Government of Kenya is about to start debate on creation of 
a national cashew policy.
    We are gradually working ourselves out of jobs. Already, 
Mozambican processing factories have formed an association 
which has now taken over the majority of TechnoServe functions: 
financing, procurement, shipping and logistics, government 
lobbying, etc. Together with IFAD we look forward to moving on 
from the cashew-processing industry confident that African 
farmers and entrepreneurs can take this business forward.
    Mr. Chairman, this is but one example of the kind of work 
that IFAD undertakes and supports every day. There are many 
others. IFAD's focus and its particular approach are unique and 
effective, and they warrant our strong and continued support.
    Thank you.
    Mr. Lucas. Thank you, Mr. McNamer.
    [The prepared statement of Mr. McNamer can be found on page 
45 of the appendix.]
    Mr. Lucas. For the record, I would note, without objection, 
that the entire written statement of each of the witnesses will 
be made a part of the record.
    Mr. Lowther, you mentioned the challenges--obstacles 
perhaps is a better phrase--in Zimbabwe. Are there other 
obstacles that IFAD and organizations like yourself face in 
different parts of Africa of a similar nature?
    Mr. Lowther. We probably need a full hearing for this.
    Mr. Lucas. Point understood.
    Mr. Lowther. I think--let me put it this way. I was giving 
vent here to some frustrations that have built up over a long 
period of time in my work in the field, and I think it is 
shared by farmers, local officials, NGO workers, and everybody 
who is close to the ground, that there is a general 
appreciation that the people themselves are ready to take 
control of their destiny. They are not sitting around waiting 
for things to happen.
    And I think one of the obstacles, as you put it, is the 
fact that the right people aren't giving the right credit to 
that reality. So the farmers in Zimbabwe that I was describing, 
these are people who are not sitting around waiting for me or 
you or Robert Mugabe to do something for them. As soon as they 
see good ideas, they will run with them, and that is what has 
happened here. New technologies, better seeds; once it is 
there, they can run with it.
    I think the greatest obstacle is simply making sure that 
people on the ground have access not to a lot of money, but to 
information, to technology, and that no one gets in the way. 
One reason that our work in Zimbabwe has gone forward, 
thankfully, is that the government did not get in the way. Very 
often, governments do get in the way with wrong policies, and 
that goes back to the maize issue. As you know, maize was 
encouraged for all sorts of reasons, but very little to do with 
agriculture, and what grows best in the African environment. So 
I put my faith in the African farmers, Mr. Chairman.
    Mr. Lucas. This is an authorizing committee, and on many of 
these issues we have to deal with the appropriators to actually 
cut the check, so to speak, and they are the proverbial bean 
counters, so to speak. How do you measure the results on the 
impact on your communities in the situations that you just 
mentioned, the successful project and in the particular area in 
Zimbabwe? Is there a quantitative way to analyze that for the 
benefit of the people we deal with here?
    Mr. Lowther. Yes, it has been analyzed. Because you can see 
how many meals a day people are eating. You can see what they 
are consuming in terms of nutritional value.
    As I mentioned in my testimony, these people are surviving 
in drought circumstances. They are eating at least two meals a 
day, if not three, when communities elsewhere in the same 
general region are in jeopardy. There are other ways of 
measuring this, but we did make that effort to document it.
    Mr. Lucas. Mr. McNamer, you mention the businesses. How is 
the money earned by the businesses that are supported by 
TechnoServe? How does that stay in the hands of Africans?
    Mr. McNamer. A lot of that has to do with the fact that we 
are systematically trying to move value and value chains back 
closer to Africa and to African farmers themselves. In the 
instance I cited, in the cashew-processing instance, the 
entrepreneurs themselves are Mozambican in the first instance 
and East African themselves.
    We actually measure, to Mr. Lowther's point, a lot of 
metrics with respect to the businesses and some of those 
include wages that actually are disbursed to employees in the 
factory. So you can count the number of employees, and then you 
can track the wages that are paid in the hands of employees who 
are themselves African.
    We track, as well, the percentage of total revenues that 
are paid to the providers of raw cashews in this instance. So 
as you start a tick-down and see those proceeds all start with 
a revenue number and say, you know, your cost of goods that is 
going to African farmers, your labor is being paid to African 
employees. Ultimately, your profits being kept in the pockets 
of African entrepreneurs.
    Mr. Lucas. Dr. Howard, how does the micro credit micro 
financing help with the rural work force in these sub-Saharan 
areas?
    Ms. Howard. Providing access to financial services, I 
think, is critical to make a transition from project-oriented 
support to a system where, you know, once farmers, once 
agribusinesses begin to realize, well, how is it that you 
organize management, how do you organize yourself to get 
improved inputs, or how do you organize yourself to run a 
business--you know, that access to financial services lets them 
expand and gives them a window to increased profitability, 
expanding their business.
    So I think that is one of the key missing links that we 
find in many parts of rural Africa especially. I mean, you have 
project finance and then, once the project ends, people have 
nowhere to go to get financing. So making this link is 
tremendously important.
    Mr. Lucas. Very good point. And as I turn to the ranking 
member, I would just note that in that infamous 2007 farm bill 
that we will work on next year, 36 million acres of American 
farmland are held at the CRP, held out of production. So while 
there are many effects of all nature of the farm bill, 
nonetheless, having that 36 million acres out of production 
reduces the supply that these individuals have to compete with 
around the world.
    With that, the Chair wishes to turn to the ranking member 
of the full committee, Mr. Frank.
    Mr. Frank. Thank you.
    Dr. Howard, one provincial point. When you list the African 
countries that are participating in the Millennium Challenge 
Account, my Cape Verdian constituents would want me to remind 
that you Cape Verde was one of the first in the first round. I 
don't know if you have separated them from Africa, but they 
consider themselves a successful African example of that.
    And, Mr. Lowther, our colleague, Mr. Watt, had to go off to 
a briefing on some security matters in the Judiciary Committee, 
but he was particularly interested in your conversation, and 
you might want to follow up with him. You know, he is the 
current Chair of the Congressional Black Caucus and is 
particularly interested in the specific issue, as are all of 
us.
    The chairman and I sort of turned to each other. That is 
the first good news out of Zimbabwe many of us have heard. Is 
that going forward despite what would appear to be the extreme 
craziness of the President of Zimbabwe?
    Mr. Lowther. There are a lot of good things happening in 
Zimbabwe, and it doesn't really surprise me. But when I go 
there, you gear up for, you know, all the bad things you know 
you may experience. And then nothing happens. And what is 
inspiring is when you are with the people in the rural areas. 
They are not bellyaching about all of these problems. They are 
looking for ways to deal with the day-to-day issues. And the 
biggest one really is feeding their families, and the other is 
finding health care.
    Mr. Frank. Oh, I agree. But it is just encouraging to know 
that they are able to do that without interference. I mean, in 
some areas we have heard that.
    The one thing I would say is that--you are free to say what 
you want. I wish we were doing more in other areas, but, if I 
were you, I wouldn't denigrate emergency aid. As a substitute 
for something else, it is a problem. But I guess the question 
would be, would we be better off, everything else being equal, 
if we didn't offer it in emergencies?
    Mr. Lowther. Well, I am not denigrating it. I am simply 
indicating that if you add up the resources that go into 
emergency assistance--and I have seen billions over the last 
25, 30 years go in that direction--that is money that is 
basically lost for development.
    Mr. Frank. Okay. That is where I would differ with you. The 
fact is, nobody has set aside a pot of money to go for that. 
And my feeling, politically, would be that making a fight for 
the kinds of things you care for is important. But I don't 
think reducing emergency aid would help with that. I think it 
just responds to different political impulses, and I think the 
result would just be less overall.
    Mr. Lowther. I agree with the point as you express it that 
way. But I think the point I was trying to make is that it is a 
lot easier for WFP to go out and bang the drum for people in 
need in Zimbabwe than it is for IFAD.
    Mr. Frank. I understand that. But what I am saying is, 
good, then help IFAD. Don't knock the WFP. And what you said 
could have been interpreted that way, and there is plenty of 
room for everybody here.
    Mr. Lowther. Well, I hope it wouldn't be interpreted that 
way because, actually, WPF, from my standpoint--
    Mr. Frank. I understand that, but it came across that way. 
You said it is worse than a Band-Aid. It was a crutch. Although 
I, frankly, generally think that a crutch is probably higher up 
than a Band-Aid in the hierarchy of medical supplies. In terms 
of, certainly, Medicare reimbursement it would be.
    I don't want to overdo the point, but I think it is 
important. We are in an uphill fight to get anything for 
anything that is good, and I wouldn't want to--but then that 
leads to my next question.
    What I am struck by is the disparity between the good that 
you say IFAD does and the relatively small amount of money it 
gets. Now, obviously, it is an international thing. Should we 
be taking the lead, the United States, in trying to 
significantly increase IFAD's funding? It is in the, what, in 
the millions. What is it, $18 million? Within our budget there 
would seem to be room to increase that. Has there been an 
effort? Are you all involved in an effort to try and increase 
this?
    Now, as the chairman pointed out, it is an appropriations 
issue since we have a permanent open-ended authorization here. 
So we don't get into it within this committee except we could 
become advocates for it with the appropriators.
    So let me go down the list. Should we all start trying to 
double the money for IFAD? It doesn't seem like that would have 
any great budgetary strength. Reverend Beckmann.
    Rev. Beckmann. Yes, we do support increased funding for 
IFAD. There was a period where we were struggling just to 
maintain U.S. funding for IFAD. But among--it is a multilateral 
development bank. It is now supervised by Treasury. It is under 
your jurisdiction. We think--in general, we think the 
multilateral development banks do a pretty good job. But IFAD 
is unique in its focus on rural poverty and in the way it 
empowers poor people. So we do think and are arguing for 
increased funding for IFAD as part of the overall increase of 
development assistance that we are seeking.
    Mr. Frank. Well, I am glad you said that. Because 
implicitly there was a suggestion again that you want to 
increase IFAD by taking it away from the other banks. And I 
mean, when you said doing it comparatively--
    Rev. Beckmann. No. I agree. I didn't mean to suggest that.
    Mr. Frank. You caught it. Again, but particularly here, the 
amount of money is so little. As I go down--because I am 
assuming implicitly there was no capacity problem, that we 
could make a significant increase in the funding and they would 
be able to spend it appropriately.
    Dr. Howard.
    Ms. Howard. I believe that is the case. I mean, we also 
would support an increase in IFAD funding. I mean, in talking 
to some of our colleagues on the European side I believe that 
other bilateral agencies are considering ways to increase 
working with IFAD and increase budget allocations from their 
countries to IFAD.
    Mr. Frank. Yes.
    Rev. Beckmann. Just the immediate opportunity is you 
mention that you agree with the President on reform he has 
proposed in food aid. The President has also asked for a $2 
billion increase in poverty focused development assistance, and 
the House has approved a $1 billion increase. I am grateful for 
the $1 billion. That extra $1 billion, a lot of that would go 
into the Millennium Challenge Account for agriculture and rural 
development. So when Congress returns after the elections and 
finalizes appropriations, there is a billion dollars for poor 
people that is hanging fire. It is money that the President has 
asked for and if--we hope that the final number is the 
President's number and is closer to the President's number than 
the House's initial number.
    Mr. Frank. And would you--because at this point I guess 
there would need to be some steps taken before they go to IFAD. 
But it would go to the MCC?
    Rev. Beckmann. A lot of the difference would go to MCC.
    Mr. Frank. MCC for agriculture.
    Rev. Beckmann. Yeah. A lot of the MCC money turned out to 
be going toward agriculture.
    Mr. Frank. Mr. Lowther, the capacity problems if you were 
able to increase the money?
    Mr. Lowther. Well, I would certainly increase the funding, 
but I think IFAD also has to decide what it really wants to 
achieve. I mean, we have this kind of diffuse focus right now, 
helping the rural poor. But I think the assistance is just 
that. It gets diffused in a way that we do some good things 
here, we do some good things there, but not an awful lot in 
between.
    And this is what I was trying to explain in the context of 
Zimbabwe. You wouldn't need an awful lot of extra money to make 
a much broader impact in that country. But in southern Africa, 
as a whole, if you could get a consensus that crop 
diversification, as an example, needed to be promoted, you 
could put a price tag--
    Mr. Frank. Let me ask, with the chairman's indulgence, is 
that something that would primarily come from IFAD? What is the 
balance of power between what IFAD does and local--
decisionmaking local governments? I mean, we have different 
problems. The World Bank will tell you sometimes, well, we 
would like to do this, but we have local resistance. I mean, 
how much autonomy does IFAD have in make the decisions about 
where it would spend its money?
    Mr. Lowther. It can be a partnership. And that is what I 
was trying to suggest, that I think IFAD has a potential role 
here.
    Mr. Frank. I understand that. But I am asking you what it 
is. I mean, are you saying they should take more of the 
leadership? Should they be more--that they should be more 
directive? Would they run into resistance? Should they be 
pushing the governments more?
    I mean, I want to get beyond the level of everybody--if 
everybody was nice and everybody agreed, everything would be 
good. Then I wouldn't have a job. I agree. But given that there 
are disagreements, you think, you don't like what they are 
doing now. You think they could be doing better? How should 
they do that? Should they push the governments more?
    Mr. Lowther. Absolutely.
    Mr. Frank. Should we be pushing them to do more?
    Mr. Lowther. They know what works. They are in a better 
position than most to know what works.
    Mr. Frank. IFAD.
    Mr. Lowther. Yes, and they need to be more aggressive in 
getting that information out to the right folks.
    Mr. Frank. Do the others agree with that?
    Yes, Dr. Howard.
    Ms. Howard. I just want to return to a point that you 
actually made early on about the importance of strengthening 
African capacity. I mean, I think at the end of the day, we are 
only going to make progress if we can create African capacity, 
African institutions so there can be strong governance and 
strong civil society organizations to guide investments. I 
mean, to some extent, we are seeing MCA starting to go down 
that road, and I think it is very impressive that MCA is 
actually turning into a learning organization, and I would 
commend the Congress for supporting that, to the extent that we 
should be looking to increase our investments.
    Mr. Frank. Well, is IFAD the vehicle for doing that? I 
mean, we are here on IFAD. Should they be focusing on 
technical, or do you want them to get into this kind of 
capacity building as well in a broader sense?
    Ms. Howard. IFAD does focus on capacity building. I mean, 
they are building the empowering local organizations 
participating in these policy discussions--very, very 
important, but I just want to point that out as a very 
important principle.
    Mr. Frank. You did. There are a lot of nice things in this 
world, but I really am interested in how we get there.
    I mean, yes, I am all for hopeful capacity. I want to know 
who should be doing what. I read that--well, let me ask, I will 
get to Mr. McNamer. I am stuck with this because to some extent 
when we hear from local groups, for instance, if we are talking 
about some of the IFI's, there is an argument that they have 
been too assertive and not respectful enough of local 
decisions. Mr. Lowther is suggesting the balance might be the 
other way.
    There is room, not being disrespectful, but for the 
international financial institution to be more assertive. I 
want to know what people think about it, the whole question of 
more money for IFAD and its role.
    Mr. McNamer. I think we are a long way from running up 
against capacity strength, so, yes, more money for IFAD.
    There is some self-interest at work here to the extent that 
they are uniquely focused on what our organization is focused 
on, which is rural development, small holder farmers as 
business people. There are very few organizations with such a 
unique focus; in some sense it is an earmark, but it is one 
that we like.
    But--and I would say, moreover, that it is increasingly our 
sense that money spent with IFAD is money well spent. I think 
they have taken seriously in these last several years a mandate 
to think about themselves, organizations, both in respect to 
strategy and their focus in respect--and with respect to 
organizational locations. In my own short tenure in 
TechnoServe, we have seen the results of some of that brought 
to bear both in terms of processes and new organizational 
approaches and in terms of persons.
    Mr. Frank. That is useful and I appreciate the indulgence 
the chairman is showing on the time, but we don't usually get, 
frankly, this kind of a consensus. We didn't set out to 
handpick witnesses who were going to be favorable. In fact, 
usually when you have a hearing, it is easy to get people and 
you want to come whack somebody because generally people are 
more motivated.
    So this is an unusual consensus and leads me to think maybe 
we should talk to the chairman and some others. Maybe we can 
get some support for higher funding, especially--and given the 
low level or relatively small amount of a few million.
    Let me ask my last question. Obviously, we are part of a 
multilateral operation there. If we were to take the lead, who 
are the other major funders? Is this the western Europeans, or 
where does the other major funding come from?
    Rev. Beckmann. It is unique in that the developing 
countries themselves put in a substantial amount of money, 
especially the oil countries. It was started about the time 
when OPEC raised prices in the 1970's, and so the OPEC 
countries, the oil countries, have traditionally contributed 
substantially.
    Mr. Frank. This would be a useful time for the United 
States to initiate an increase going by those others. So when 
you say ``developing countries,'' are you talking about oil 
producing countries?
    Rev. Beckmann. They were partners from the beginning, but I 
think, in general, there is more money from the developing 
countries that goes into IFAD, and then other institutions.
    Mr. Frank. I appreciate that, and we will continue to work 
on what I hope are necessary changes to the American policy. 
But that is a good message to come away with. It is unusual to 
hear an international institution have this degree of support.
    Thank you, Mr. Chairman.
    Mr. Lucas. The ranking member's time has expired and the 
Chair would note that he will always be indulgent of the 
ranking member, until November 7th.
    With that, the Chair notes that some members may have 
additional questions for the panel which they may wish to 
submit in writing, and without objection, the hearing record 
will remain open for 30 days for members to submit written 
questions to the witnesses and to place their responses in the 
record.
    With that, the hearing is adjourned.
    [Whereupon, at 3:00 p.m., the hearing was adjourned.]

                            A P P E N D I X


                           September 12, 2006

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