[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
HEARING TO REVIEW EFFORTS TO DELIVER INTERNATIONAL FOOD AID AND PROVIDE 
              FOREIGN AGRICULTURAL DEVELOPMENT ASSISTANCE 

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

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON SPECIALTY CROPS, RURAL
                  DEVELOPMENT AND FOREIGN AGRICULTURE

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 16, 2008

                               __________

                           Serial No. 110-41


          Printed for the use of the Committee on Agriculture
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                        COMMITTEE ON AGRICULTURE

                COLLIN C. PETERSON, Minnesota, Chairman

TIM HOLDEN, Pennsylvania,            BOB GOODLATTE, Virginia, Ranking 
    Vice Chairman                    Minority Member
MIKE McINTYRE, North Carolina        TERRY EVERETT, Alabama
BOB ETHERIDGE, North Carolina        FRANK D. LUCAS, Oklahoma
LEONARD L. BOSWELL, Iowa             JERRY MORAN, Kansas
JOE BACA, California                 ROBIN HAYES, North Carolina
DENNIS A. CARDOZA, California        TIMOTHY V. JOHNSON, Illinois
DAVID SCOTT, Georgia                 SAM GRAVES, Missouri
JIM MARSHALL, Georgia                MIKE ROGERS, Alabama
STEPHANIE HERSETH SANDLIN, South     STEVE KING, Iowa
Dakota                               MARILYN N. MUSGRAVE, Colorado
HENRY CUELLAR, Texas                 RANDY NEUGEBAUER, Texas
JIM COSTA, California                CHARLES W. BOUSTANY, Jr., 
JOHN T. SALAZAR, Colorado            Louisiana
BRAD ELLSWORTH, Indiana              JOHN R. ``RANDY'' KUHL, Jr., New 
NANCY E. BOYDA, Kansas               York
ZACHARY T. SPACE, Ohio               VIRGINIA FOXX, North Carolina
TIMOTHY J. WALZ, Minnesota           K. MICHAEL CONAWAY, Texas
KIRSTEN E. GILLIBRAND, New York      JEFF FORTENBERRY, Nebraska
STEVE KAGEN, Wisconsin               JEAN SCHMIDT, Ohio
EARL POMEROY, North Dakota           ADRIAN SMITH, Nebraska
LINCOLN DAVIS, Tennessee             TIM WALBERG, Michigan
JOHN BARROW, Georgia                 BOB LATTA, Ohio
NICK LAMPSON, Texas
JOE DONNELLY, Indiana
TIM MAHONEY, Florida
TRAVIS W. CHILDERS, Mississippi

                                 ______

                           Professional Staff

                    Robert L. Larew, Chief of Staff

                     Andrew W. Baker, Chief Counsel

                 April Slayton, Communications Director

           William E. O'Conner, Jr., Minority Staff Director

                                 ______

    Subcommittee on Specialty Crops, Rural Development and Foreign 
                              Agriculture

                MIKE McINTYRE, North Carolina, Chairman

JIM MARSHALL, Georgia                MARILYN N. MUSGRAVE, Colorado, 
HENRY CUELLAR, Texas                 Ranking Minority Member
JOHN T. SALAZAR, Colorado            TERRY EVERETT, Alabama
JOHN BARROW, Georgia                 ADRIAN SMITH, Nebraska
EARL POMEROY, North Dakota           JEFF FORTENBERRY, Nebraska
                                     ROBIN HAYES, North Carolina

                Aleta Botts, Subcommittee Staff Director

                                  (ii)










                             C O N T E N T S

                              ----------                              
                                                                   Page
Goodlatte, Hon. Bob, a Representative in Congress from Virginia, 
  prepared statement.............................................     6
McIntyre, Hon. Mike, a Representative in Congress from North 
  Carolina, opening statement....................................     1
    Prepared statement...........................................     3
Musgrave, Hon. Marilyn N., a Representative in Congress from 
  Colorado, opening statement....................................     4
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, prepared statement..................................     5
Smith, Hon. Adrian, a Representative in Congress from Nebraska, 
  prepared statement.............................................     6

                               Witnesses

Yost, Michael W., Administrator, Foreign Agricultural Service, 
  U.S. Department of Agriculture, Washington, D.C................     7
    Prepared statement...........................................     9
Kunder, James R., Acting Deputy Administrator, U.S. Agency for 
  International Development, Washington, D.C.....................    13
    Prepared statement...........................................    14
Callahan, Sean, Executive Vice President, Overseas Operations, 
  Catholic Relief Services, Baltimore, MD........................    29
    Prepared statement...........................................    31
    Supplemental submitted material..............................    72
Barnes, Ph.D., Andrew, Director of Food Security, Food for the 
  Hungry, Washington, D.C.; on behalf of Alliance for Food Aid...    34
    Prepared statement...........................................    36
    Supplemental submitted material..............................    78
Guroff, Avram ``Buzz,'' Senior Vice President, Food Security and 
  Specialty Crops Portfolio, ACDI/VOCA (Agricultural Cooperative 
  Development International/Volunteers in Overseas Cooperative 
  Assistance), Washington, D.C...................................    40
    Prepared statement...........................................    41
    Response to submitted question...............................    81
Minot, Ph.D., Nicholas W., Senior Research Fellow, Markets, 
  Trade, and Institutions Division, International Food Policy 
  Research Institute, Washington, D.C............................    44
    Prepared statement...........................................    46
    Supplemental submitted material..............................    79
Dillaha III, Ph.D., P.E., Theo A., Professor of Biological 
  Systems Engineering and Program Director, Sustainable 
  Agriculture and Natural Resource Management (SANREM) 
  Collaborative Research Support Program (CRSP), Office of 
  International Research, Education, and Development, Virginia 
  Polytechnic Institute and State University, Blacksburg, 
  Blacksburg, VA.................................................    54
    Prepared statement...........................................    56
    Response to submitted question...............................    80

                           Submitted Material

Fowler, Dr. Cary, Executive Director, Global Crop Diversity 
  Trust, submitted statement.....................................    69
Paarlberg, Ph.D., Robert, B.F. Johnson Professor of Political 
  Science, Wellesley College, submitted statement................    67


HEARING TO REVIEW EFFORTS TO DELIVER INTERNATIONAL FOOD AID AND PROVIDE

              FOREIGN AGRICULTURAL DEVELOPMENT ASSISTANCE

                              ----------                              


                        WEDNESDAY, JULY 16, 2008

                  House of Representatives,
Subcommittee on Specialty Crops, Rural Development, 
                           and Foreign Agriculture,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 10:02 a.m., in 
Room 1300 of the Longworth House Office Building, Hon. Mike 
McIntyre [Chairman of the Subcommittee] presiding.
    Members present: Representatives McIntyre, Salazar, Barrow, 
Pomeroy, Musgrave, Smith, Fortenberry, and Moran.
    Staff present: Aleta Botts, Alejandra Gonzalez-Arias, John 
Riley, April Slayton, Mike Dunlap, and Jamie Weyer.

 OPENING STATEMENT OF HON. MIKE McINTYRE, A REPRESENTATIVE IN 
                  CONGRESS FROM NORTH CAROLINA

    The Chairman. This hearing of the Subcommittee on Specialty 
Crops, Rural Development and Foreign Agriculture will come to 
order. I am Congressman Mike McIntyre from southeastern North 
Carolina. Welcome to all of you for coming today and as shown 
by the presence of the number of people here, this obviously is 
a hearing that I believe will iterate--will be generating great 
interest. I would like to welcome everyone here to the 
Subcommittee's efforts to deliver international food aid and 
provide foreign agricultural development assistance in the form 
of a hearing to discuss these issues. I am pleased to welcome 
Mr. Michael Yost, the Administrator of the Foreign Agricultural 
Service, and Mr. James Kunder, acting Deputy Administrator of 
the U.S. Agency for International Development. Welcome, 
gentlemen.
    The world is facing an unprecedented challenge to its food 
and agricultural systems. Just last week, the U.S. Department 
of Agriculture released a food security assessment that 
projects that the food security situation in 70 developing 
countries will deteriorate over the next decade, and the number 
of hungry people will increase by 16 percent in the next year 
alone.
    This hearing will consider two key pieces of the continuum 
of options to address this crisis: immediate food aid and 
longer term agricultural development assistance. So we want to 
look at both the short term, the immediate crisis, as well as 
the longer view so that we can plan for the future.
    First, with regard to food aid, the United States is by far 
the largest contributor of food aid worldwide, giving over half 
of the annual total worldwide. I am grateful that the good Lord 
has blessed our land with plenty that we can do this and I 
think we should count our blessings and share that cornucopia 
with others. Worldwide, the act of breaking bread with another 
person symbolizes a fellowship, a kinship with another human 
being and not only nourishes the body but nourishes the soul. 
Our food aid accomplishes this on a huge scale, something that 
we all, in this room, know the United States needs to do in 
this time of international crisis. The United States has 
stepped up to respond to the crisis through additional 
resources, as well. The recently enacted supplemental 
appropriations bill provides over $1.2 billion in additional 
funds for 2008 and 2009 with the P.L. 480 Food for Peace 
program taking our contribution for food aid to an even higher 
level.
    We all are interested in learning the status of current 
food aid efforts, what is expected in the next year with regard 
to regions at risk of famine, including Ethiopia, a place that 
I have been to twice in the last 10 months and Somalia. And how 
the resources recently provided by the Congress and the 
supplemental appropriations bill will be used.
    Now, with regard to agricultural development, the United 
States, we realize, must continue to provide food aid to 
address crisis situations. However, we cannot be short-sighted. 
We have to consider how funds to provide the agricultural 
development can be used to enhance the ability of the 
developing nations themselves to produce food. After all, food 
provided directly today does not necessarily always lead to a 
full stomach for tomorrow. As Members of the Agriculture 
Committee, we are uniquely aware of the plentiful bounty that 
we do have in this country, with which we have been blessed in 
the forms of its fields and our resources. But, beyond that, we 
also understand the importance that supply chains have that 
deliver inputs and transport harvests; the markets that 
facilitate interactions between buyer and seller; and the well 
developed system of land-grant institutions, which I know many 
of us are proud of in our states, that conduct research and 
extension programs--extension assistance to our farmers and our 
ranchers and to farm families. Underlying all of this, our 
legal, judicial and regulatory systems help protect private 
property rights and other rights that we know are enshrined in 
our Constitution and by law. All of these elements are critical 
to our highly developed agricultural economy. Rarely are all of 
them present in the economies of developing countries that are 
experiencing food shortages, which is why we have to look at 
the broader picture.
    Agricultural development assistance competes with numerous 
other foreign aid priorities and has, too often, lost in the 
battle to these other priorities. The proportion of U.S. 
development assistance for agriculture has declined from 25 
percent of total development assistance in 1980 to less than 
one percent last year. The World Bank has decreased its lending 
to the agricultural sector from 30 percent in 1978 to eight 
percent in 2006. We need to evaluate that level of commitment 
from our own country and the developed world to measure the 
increase that we need to have in agricultural production.
    I hope the witnesses gathered today will provide answers to 
the questions that have arisen about the state of our 
agricultural development efforts with examples and statistics 
like I have just shared. How can limited agricultural 
development resources best be used with regard to particular 
sectors, and for countries that are devoting their own 
resources to the effort and have created a desirable regulatory 
environment for agricultural development. What do we know about 
the successes and the failures of existing programs and how can 
we use those lessons to educate and enhance future development 
efforts. Also, I want you to be thinking about how the United 
States can do a better job of reducing the impact of the food 
crisis on vulnerable populations through greater attention with 
regard to agricultural development.
    I would encourage the witnesses to use the 5 minutes that 
they are provided for their statements to highlight the most 
important points. Please do not read your statement, unless you 
can read it all within 5 minutes. Otherwise, please select the 
highlights and summarize those within the 5 minute time period, 
given our time constraints today. Pursuant to Committee rules, 
testimony by witnesses, along with questions and answers by 
Members of the witnesses, will be stopped at 5 minutes. But 
don't worry, your complete written testimony will be submitted, 
in its entirety, in the record and we welcome that complete 
statement.
    [The prepared statement of Mr. McIntyre follows:]

Prepared Statement of Hon. Mike McIntyre, a Representative in Congress 
                          From North Carolina
    Good morning, and welcome to the Subcommittee's hearing on efforts 
to deliver international food aid and provide foreign agricultural 
development assistance. I am pleased to welcome Mr. Michael Yost, the 
Administrator of the Foreign Agricultural Service, and Mr. James 
Kunder, Acting Deputy Administrator of the U.S. Agency for 
International Development.
    The world is facing an unprecedented challenge to its food and 
agricultural systems. Just last week, the U.S. Department of 
Agriculture released a Food Security Assessment that projects that the 
food security situation in 70 developing countries will deteriorate 
over the next decade and the number of hungry people will increase by 
16 percent in the next year alone.
    This hearing will consider two key pieces of the continuum of 
options to address this crisis: immediate food aid and longer-term 
agricultural development assistance.
Food Aid
    The United States is by far the largest contributor of food aid 
worldwide, giving over half of the annual total. I am grateful that the 
good Lord has blessed our country with plenty so we are in a position 
to do this. Worldwide, the act of breaking bread with another person 
symbolizes a fellowship, a kinship with another human being. Our food 
aid accomplishes this simply on a larger scale.
    The United States has stepped up to respond to the crisis through 
additional resources. The recently enacted supplemental appropriations 
bill provides over $1.2 billion in additional funds for 2008 and 2009 
within the P.L. 480 Food for Peace program, taking our contribution to 
food aid even higher.
    I am interested in learning the status of current food aid efforts, 
what is expected in the next year with regard to regions at risk of 
famine, including Ethiopia and Somalia, and how the resources recently 
provided by the Congress in the supplemental appropriations bill will 
be used.
Agricultural Development
    The United States must continue to provide food aid to address 
crisis situations. However, we cannot be short-sighted. We have to 
consider how funds we provide for agricultural development can be used 
to enhance the ability of developing nations to produce food. After 
all, food provided directly today does not necessarily lead to a full 
stomach tomorrow.
    As Members of the Agriculture Committee, we are uniquely aware of 
the plentiful bounty we have in this country in the forms of its fields 
and its resources. Beyond that, however, we also understand the 
importance of the supply chains that deliver inputs and transport 
harvests, the markets that facilitate interactions between buyer and 
seller, and the well-developed system of land-grant institutions that 
conduct research and extension assistance to our farmers and ranchers. 
Underlying all of this, our legal, judicial, and regulatory systems 
help protect private property and other rights enshrined in our 
Constitution and other laws.
    All of these elements are critical to our highly developed 
agricultural economy. Rarely are all of them present in the economies 
of developing countries experiencing food shortages.
    Agricultural development assistance competes with numerous other 
foreign aid priorities and has lost too often to these other 
priorities. The proportion of U.S. development assistance for 
agriculture has declined from 25 percent of total development 
assistance in 1980 to less than one percent last year. The World Bank 
has decreased its lending to the agricultural sector from 30 percent in 
1978 to eight percent in 2006. We need to evaluate the level of 
commitment of the United States and the developed world to measures to 
increase agricultural production.
    I hope the witnesses gathered today will provide answers to 
questions that have arisen about the state of our agricultural 
development efforts.
    How can limited agricultural development resources be best used 
with regard to particular sectors and for countries that are devoting 
their own resources to the effort and have created a desirable 
regulatory environment for agricultural development?
    What do we know about the successes and failures of existing 
programs and how can those lessons educate future development efforts?
    How can the United States do a better job of reducing the impact of 
the food crisis on vulnerable populations through greater attention on 
agricultural development?
Conclusion
    I would encourage witnesses to use the 5 minutes provided for their 
statements to highlight the most important points in their testimony. 
Pursuant to Committee rules, testimony by witnesses along with 
questions and answers by Members of the witnesses will be stopped after 
5 minutes. Your complete written testimony will be submitted in its 
entirety in the record.
    At this time, I would like to recognize the Ranking Member of the 
Subcommittee, Representative Marilyn Musgrave, for any opening comments 
that she may have.

    The Chairman. I would now like to recognize the Ranking 
Member, Mrs. Musgrave for an opening statement, and as a point 
of personal privilege, let me just say what an honor it is to 
work with her and I greatly respect her, her character and her 
work here in Congress. Mrs. Musgrave.

OPENING STATEMENT OF HON. MARILYN N. MUSGRAVE, A REPRESENTATIVE 
                   IN CONGRESS FROM COLORADO

    Mrs. Musgrave. Thank you, so much, Mr. Chairman. I 
appreciate you calling this hearing today to review the 
international food aid and agricultural development programs. 
As a Member of the House Hunger Caucus, these issues today are 
of particular importance to me. A little over a year ago this 
Subcommittee held a hearing to review food aid programs 
operated by USAID and USDA as a precursor to the Committee's 
work on the farm bill. That legislation was a catalyst to 
streamline our international food aid programs and more 
effectively meet the needs of millions of people throughout the 
world who do not enjoy the freedom and prosperity that we 
Americans, sometimes, take for granted.
    For many years, the United States has been the leading 
contributor of all kinds of foreign aid. As you said, Mr. 
Chairman, especially food and development aid. Emergency food 
aid is a big part of what we are able to provide to help people 
survive in the face of acute hunger resulting from drought, 
conflict or poor government, sometimes corrupt government. This 
continued trend in rising commodity prices has a double edge 
and we on the Agriculture Committee know that very well. While 
producers can benefit from higher prices, the U.N.'s food 
world--the U.N.'s World Food Programme estimates that higher 
commodity prices will drive an added 130 million people towards 
hunger, in addition to the 850 million people already suffering 
from chronic malnutrition.
    Congress recently stepped up efforts to help counter a near 
doubling in the cost of food aid commodities with an additional 
$1.2 billion to supplement current efforts to combat hunger 
around the world. Today I look forward to hearing about how 
those efforts are succeeding. Though emergency assistance is an 
important component of U.S. aid around the world, agricultural 
development is believed, by many, to be the very foundation of 
sound economic progress. We are very proud of our ability to 
provide resources to help feed the world, but I think that 
everyone here would applaud the moment that those developing 
countries are able to have a sustainable economy.
    The United States has always been a leader in contributing 
to a vast array of development and capacity building 
initiatives. With the advent of significant, private investment 
in development programs it is imperative that a consensus on 
the direction of agricultural development be reached among all 
contributing partners, here and abroad, to prevent duplication 
of projects. Agricultural development, certainly, cannot happen 
in a vacuum and I believe that the United States must also play 
an active role in building the institutions of law, property 
rights, which are critical to the long term success of 
development efforts. We want to foster peace and stability in 
these developing nations and that will diminish the need for 
acute aid and allow leaders to turn their attention to building 
the global economy.
    As food and energy prices rise, the World Bank and the 
World Food Programme have stated that much of the progress made 
in the last decade has been eroded. Poor governments, weak 
institutions, adverse weather and multiple approaches to aid 
programs present tremendous challenges for those Congress has 
entrusted with taxpayers hard earned money to help developing 
countries.
    I look forward to hearing from the witnesses today, and I 
want to hear how they are overcoming these challenges. Thank 
you very much, Mr. Chairman.
    The Chairman. Thank you very much, Mrs. Musgrave. The Chair 
will now request that other Members submit their opening 
statements for the record so the witnesses may go ahead and 
begin their testimony and we ensure that there is ample time 
for questions by the Members.
    [The prepared statements of Messers. Peterson, Goodlatte, 
and Smith follow:]
  Prepared Statement of Hon. Collin C. Peterson, a Representative in 
                        Congress From Minnesota
    Thank you, Chairman McIntyre for recognizing me to speak and for 
holding this hearing. I also want to welcome the witnesses who have 
joined us today and thank them for their testimony.
    The need for food aid has grown and changed in significant ways 
even just in the past few months. Administrator Yost from USDA and 
Acting Deputy Administrator Kunder from USAID, we are interested to 
hear how your agencies are responding to the increasing need for food 
aid and what can be done to help you respond to immediate and long term 
food assistance needs internationally.
    The international aid organizations on today's second panel play an 
integral role in delivering food aid and supporting long term 
agricultural development in the countries where hunger and poverty are 
most acute. Today, I hope they can share with us their experiences on 
the ground where development programs have succeeded, where they have 
failed and why.
    While the food crisis is a major challenge facing people living in 
poverty and organizations dedicated to helping them, this is also an 
opportunity to invest in the long term ability of poor regions to 
expand agricultural production to feed their people and create 
successful businesses in their rural and agrarian communities. The 
market is providing a clear signal to encourage production, but 
unfortunately, due to a lack of roads, access to credit and other 
factors, producers in many developing countries are not able to respond 
sufficiently to the market. While meeting the immediate needs for food 
continues to be a priority, I hope that our witnesses can offer insight 
into the long term development that is going on and that needs to be 
done in order to improve the ability of developing countries to meet 
some of their own food needs.
    Chairman McIntyre, thank you again for holding this hearing, and I 
look forward to the testimony from our witnesses.
                                 ______
                                 
Prepared Statement of Hon. Bob Goodlatte, a Representative in Congress 
                             From Virginia
    I thank the Chairman for convening the hearing today, and for the 
time our witnesses have taken to be here. Today's hearing is addressing 
two very important issues: food aid and agricultural development 
programs. Both of these programs have the potential to have a positive 
impact on the lives of many people throughout the world through 
emergency and long-term programs.
    The U.S. provides more food aid than any other country in the 
world. The recently passed farm bill reauthorized U.S. food aid and 
development programs and expands tools needed for quick humanitarian 
response, such as prepositioning commodities overseas. Our farmers and 
ranchers produce the safest, most abundant, most affordable food supply 
in the world and are proud of the role they play in helping those in 
need.
    Today, there are more people in need of urgent food aid than ever 
before. Sudan continues to struggle with conflict which is affecting 
over four million people in and around the country. Ethiopia is facing 
a chronic crisis with over ten million people requiring emergency 
assistance. And Zimbabwe has over five million people who are relying 
on food assistance. These are just a few of the many countries in need.
    While disruptions to crops, higher commodity prices, and growing 
populations add to the strain on their own food systems, the 
contributing factor of poor governance cannot be ignored. Today we will 
hear testimony discussing how USAID is coordinating agricultural 
development efforts through USDA and other partners.
    Agricultural development can provide a firm foundation on which 
countries can build their economy. It is important to pay attention to 
the details of how those programs are designed and implemented, so I 
look forward to hearing from the agencies and private organizations 
involved in carrying out these projects. I am particularly interested 
in hearing how the strategic approach USAID is using will overcome the 
significant challenges facing our experts in the field.
    Thank you, Mr. Chairman.
                                 ______
                                 
 Prepared Statement of Hon. Adrian Smith, a Representative in Congress 
                             From Nebraska
    Good afternoon and thank you, Mr. Chairman.
    The price of food and fuel has arrested the attention of 
Nebraskans, the United States, and indeed the world. As all of us here 
are aware, these increased costs have created great challenges for 
lower income Americans, but have had an even greater impact on the poor 
of developing countries. The budgets of both government and food aid 
organizations have been stretched as they try to provide more 
assistance with fewer resources. We are here today to consider tools to 
meet these challenges.
    Our food aid and agricultural development assistance dollars should 
be spent to help developing nations become capable of sustained 
economic growth. We can accomplish this objective through education, 
research into production systems best suited to different regions, free 
trade, and application of agricultural technologies.
    I personally find science-based solutions and new technologies 
exciting. They are the future of agriculture. Biotechnology has 
revolutionized agriculture in the United States, and genetically 
modified crops may lead to the second green revolution in the 
developing world. These technologies could help us to overcome the 
challenges of feeding an increasing number of people, dealing with 
extreme weather conditions, combating new and old diseases, and 
increasing efficiency with fewer inputs.
    I want to thank our witness for testifying, and the Committee and 
the Chairman for holding this hearing. I look forward to working with 
you in the future.

    The Chairman. So with that, we will begin with our first 
panel, and Michael Yost, Administrator of the USDA Foreign 
Agricultural Service, James Kunder, acting Deputy Administrator 
of the Agency for International Development. Gentlemen, as I 
said a moment ago, we welcome you here today. Mr. Yost, if you 
would please begin.

          STATEMENT OF MICHAEL W. YOST, ADMINISTRATOR,
 FOREIGN AGRICULTURAL SERVICE, U.S. DEPARTMENT OF AGRICULTURE, 
                        WASHINGTON, D.C.

    Mr. Yost. Mr. Chairman, Members of the Subcommittee, I am 
pleased to appear before you today. The U.S. Department of 
Agriculture, the U.S. Agency for International Development and 
all of our partner agencies and organizations are proud of the 
role we play in helping countries overcome hunger and 
malnutrition. USDA's Foreign Agriculture Service administrates 
two non-emergency food assistance programs that are making a 
difference in the lives of poor and hungry people: the Food for 
Progress (FFP) program and the McGovern-Dole International Food 
for Education and Child Nutrition (McGovern-Dole) program.
    The FFP is targeted to countries that are making strides 
toward democracy and private enterprise. The program emphasizes 
private sector agricultural and economic development to enhance 
food security. The McGovern-Dole program supports education, 
child development and food security in low-income, food-deficit 
countries that are committed to universal education. The 
program provides U.S. agricultural products, as well as 
financial and technical assistance, to our partners, who combat 
hunger and strengthen the quality and the access to education. 
FAS works closely on food assistance and agricultural 
development projects with USDA's Farm Service Agency, USAID, 
and other partners, including private voluntary organizations 
and inter-governmental organizations. We base our priority 
countries on factors such as per capita income levels, 
prevalence of under-nourishment, moving toward freedom, adult 
literacy rates, government commitment to education and degree, 
if any, of civil conflict.
    Food aid is just one component in our global assistance 
efforts. Trade-capacity building allows USDA to lend its 
expertise in agriculture, food and trade to support market-
based agricultural development and help countries create 
regulatory systems that enable them to produce safe products 
for domestic consumption and for trade with other markets.
    The Cochran Fellowship Program helps middle-income 
countries and emerging democracies develop the capacity to 
trade through short-term, market-orientated, agricultural 
training in the United States. The Norman E. Borlaug 
International Agricultural Science and Technology Fellows 
Program provides collaborative research training at U.S. 
universities, USDA or other government agencies and non-
governmental organizations that foster the scientific and 
technological advances in agriculture.
    USDA also has a critical role in the economic, political 
and security environment in Afghanistan and Iraq. In 
Afghanistan, 80 percent of the population is involved in 
farming and herding. In Iraq, the agriculture there is the 
second largest contributor to the country's gross domestic 
product and employs 25 percent of the labor force, making it 
the largest employer in Iraq. USDA provides expertise in 
agricultural policy and development in these two countries. We 
coordinate our efforts through an interagency process that 
includes, among others, the U.S. Department of State, the U.S. 
Department of Defense, and USAID.
    Our most notable role has been through USDA employees who 
have volunteered as advisors on Provincial Reconstruction Teams 
(PRT), which typically consist of military units of 50 to 100 
personnel with two to three U.S. Government civilian advisors. 
PRT activities include soil and water conservation, irrigation 
and water management, grain and seed storage, post-harvest loss 
reduction, market system development, livestock health, 
nutrition, and breeding. Since 2003 and 2006, respectively, 
USDA has deployed 48 volunteers in Afghanistan and 20 to Iraq 
from nine different USDA agencies.
    The Administration's Fiscal Year 2009 budget requests $12.5 
million for the Office of the Secretary, which is crucial for 
USDA to have the resources to support agriculture 
reconstruction and development in both of these countries.
    High commodity costs, combined with increased 
transportation costs, have tightened the amount of food aid 
that can be provided under the limited program budgets. We have 
taken innovative and bold steps to ensure critical needs are 
met. A year ago, USDA initiated the Stocks-for-Food program, 
exchanging government owned commodities, acquired through 
forfeitures of marketing assistance loans for processed 
products to be distributed through USDA domestic and 
international food assistance food programs. Stocks-for-Food is 
providing approximately $120 million in funds, with $100 
million going to the emergency food assistance program, and 
more than $20 million to benefit over 650,000 children and 
mothers in the McGovern-Dole Program.
    Last month, Agriculture Secretary Schafer laid out the 
United States' integrated three-pronged strategy to combat 
rising global food prices. First, the United States will target 
countries made vulnerable by rising food prices. To that end, 
President Bush directed USDA to draw down the Bill Emerson 
Humanitarian Trust, which made $200 million worth of total 
assistance immediately available through P.L. 480 Title II 
Program. We also greatly appreciate the supplemental 
appropriations provided by Congress for P.L. 480 Title II 
Program food aid in Fiscal Year 2008 and the additional bridge 
funding provided for Fiscal Year 2009. Second, we will provide 
developmental assistance to countries capable of rapidly 
increasing stable food production, such as through the trade-
capacity building programs that I previously talked about. And 
third, we will support trade liberalization, increasing the use 
of advanced agricultural technology.
    The United States is encouraging other governments to lift 
restrictions on agricultural exports, adapt science-based 
regulations that promote research and adoption of innovative 
technologies, such as biotechnology and conclude an ambitious 
agreement to the Doha Development Agenda of the World Trade 
Organization this year. While we will continue to deal with a 
variety of food assistance challenges in the years ahead, 
together we will remain focused on our primary goal to ensure 
that the food needs of the poor and hungry are met.
    This concludes my statement. I look forward to answering 
any questions.
    [The prepared statement of Mr. Yost follows:]

     Prepared Statement of Michael W. Yost, Administrator, Foreign 
 Agricultural Service, U.S. Department of Agriculture, Washington, D.C.
    Mr. Chairman, Members of the Subcommittee, I am pleased to appear 
before you today with James Kunder, Acting Deputy Administrator of the 
U.S. Agency for International Development (USAID). The U.S. Department 
of Agriculture, USAID, and all of our partner agencies and 
organizations are proud of the role we play in helping countries 
overcome hunger and malnutrition. I will review USDA's efforts to 
deliver international food and agricultural development assistance.
Food Assistance Programs
    The two food assistance programs administered by USDA's Foreign 
Agricultural Service (FAS) are making a difference in the lives of poor 
and hungry people: the Food for Progress (FFP) Program and the 
McGovern-Dole International Food for Education and Child Nutrition 
(McGovern-Dole) Program. These programs provide international 
assistance and support development activities that alleviate hunger and 
improve nutrition, education, and agriculture in some of the world's 
poorest countries.
    FFP is targeted to countries that are making strides toward 
democracy and private enterprise. The program emphasizes private sector 
agricultural and economic development and enhanced food security in 
recipient countries. In Fiscal Year 2007, USDA implemented 21 Food for 
Progress agreements in 15 countries with a total program value of 
nearly $120 million. Ongoing activities are reaching well over one 
million beneficiaries, including farmers and their families, community 
members, cooperatives, producer groups, and small agribusinesses. 
Activities have included improving agricultural techniques and 
marketing systems, providing education to farmers, helping to develop 
cooperatives, teaching irrigation and land conservation techniques, 
supporting agribusinesses and microcredit enterprises, and other 
activities that build the capacity to trade.
    The McGovern-Dole Program supports education, child development, 
and food security in low-income, food-deficit countries that are 
committed to universal education. The program provides donated U.S. 
agricultural products, as well as financial and technical assistance, 
to our partners, who creatively combat hunger and strengthen the 
quality of and access to education. In addition to providing food for 
direct distribution, USDA has provided cash resources for school-
related infrastructure improvements, teacher and parent-teacher 
association training, and school gardens. Since 2000, the McGovern-Dole 
Program has provided meals to feed more than 22 million children in 41 
countries and boosted school attendance.
    For both the FFP and McGovern-Dole Programs, FAS works closely on 
food assistance and agriculture development projects with USDA's Farm 
Service Agency, USAID, and our partners, including private voluntary 
organizations (PVOs), cooperatives, intergovernmental organizations, 
foreign governments, and the United Nations World Food Programme. Each 
fiscal year it is necessary to:

   Determine priority countries based on the objectives of each 
        program and factors such as per capita income levels, 
        prevalence of undernourishment, movement toward freedom, adult 
        literacy rates, government commitment to education, and degree, 
        if any, of civil conflict; and

   Evaluate and select proposals based on specific criteria. 
        These criteria are program-specific and may include assurances 
        that commercial markets will not be disrupted; tangible 
        benefits exist for the country's agricultural sector; the 
        recipient country is committed to improving its quality of 
        education and nutrition; and the program is sustainable after 
        USDA funding ends.
Trade-Capacity Building
    Food aid is just one component in our global assistance efforts. 
Trade-capacity building (TCB) allows USDA to lend its expertise in 
agriculture, food, and trade to support market-based agricultural 
development and help countries create regulatory systems that enable 
them to produce safe products for domestic consumption and for trade 
with other markets, leading to economic development and growth.
    Because of limited FAS resources, TCB is a shining example of how 
we coordinate with other agencies within USDA, and other parts of the 
U.S. Government, as well as with universities, PVOs, and the private 
sector. For example, we rely on the technical expertise of USDA's Food 
Safety and Inspection Service (FSIS) to conduct food safety seminars, 
USDA's Animal and Plant Health Inspection Service (APHIS) to explain 
U.S. import requirements, and USDA's Cooperative State Research, 
Education, and Extension Service (CSREES) to connect us with experts at 
land-grant and historically-black colleges and universities. We all 
have a common goal to provide the means for people to lift themselves 
and their countries out of poverty and into sustainable and ultimately 
viable economies that can trade in the world market.
    Our TCB activities with developing and transitional countries 
facilitate trade, promote food security, and increase the ability of 
developing nations to participate in global agricultural markets.
    For example, our Cochran Fellowship Program helps middle-income 
countries and emerging democracies develop the capacity to trade 
through short-term, market-oriented agricultural training in the United 
States targeted at senior and mid-level specialists and administrators 
from the public and private sectors. The program helps eligible 
countries develop agricultural systems that meet the food needs of 
their citizens and strengthens and enhances trade linkages between 
eligible countries and agricultural interests in the United States.
    Since its inception in 1984, the Cochran Program has provided 
training for more than 13,000 international participants from 103 
countries worldwide, including the President of Albania, the Prime 
Minister of Moldova, and Madagascar's Minister of Land Reform, Fields, 
and Urban Planning.
    The Norman E. Borlaug International Agricultural Science and 
Technology Fellows Program provides collaborative research training for 
entry-level international agricultural research scientists and 
policymakers from developing and middle-income countries. Training 
takes place at U.S. universities, USDA or other government agencies, 
private companies, not-for-profit institutions or international 
agricultural research centers through exchanges that foster the 
transfer of scientific and technological advances in agriculture, and 
that address obstacles to the adoption of technology, such as 
ineffectual policies and regulations.
    Since 2004, the Borlaug Program has grown from training 33 Fellows 
from five countries to 310 Fellows from 40 countries in 2008. Notable 
graduates from the Borlaug Program include the Director of Animal 
Industry and Fisheries in Uganda's Ministry of Agriculture, the 
Assistant Director for Nigeria's National Institute of Agronomic 
Research, and the Director of the Quality Mark and Certifications 
Department in Oman's Ministry of Agriculture.
    FAS' Trade and Investment Missions (TIMs) target emerging markets 
and free trade agreement (FTA) countries to promote two-way trade and 
investment. The missions form partnerships between local agribusinesses 
and U.S. financiers and agribusinesses. The missions provide U.S. 
participants with focused one-on-one meetings with host country 
business representatives. In addition to furthering business 
opportunities, these discussions also identify and address trade 
barriers. Financial support to U.S. and host country businesses is 
facilitated through the Export-Import Bank and other investment 
brokers.
    TIMs have been conducted in many countries and regions. Since 2005, 
missions to East Africa, the Republic of Georgia, Kazakhstan, North 
Africa, Southern Africa, and West and Central Africa have generated an 
estimated $45.8 million in two-way trade.
How These Programs Work Together
    Let me give you an example of how FAS weaves all these programs 
together in one region of the world to provide an integrated approach 
to developing stable, secure economies that can become reliable trade 
partners and markets for U.S. agricultural products now and in the 
future. The Dominican Republic-Central America Free Trade Agreement 
(CAFTA-DR) is notable for being the first U.S. trade agreement that 
includes trade capacity building in its structure. We are using all of 
our tools--food and technical assistance, trade-capacity building and 
training programs--to help our partners in this region realize the 
benefits of free trade.
    For example, in Honduras, USDA is working with Catholic Relief 
Services (CRS) to implement a McGovern-Dole Program agreement to 
improve access to quality education in 15 Honduran municipalities where 
malnutrition exceeds 60 percent. In 2006, CRS used 4,400 metric tons of 
U.S.-donated food valued at $3.4 million to provide daily meals to more 
than 32,700 students in 658 elementary schools. Take-home rations were 
delivered to more than 13,000 children under the age of 5. The free 
school breakfasts and dry rations have allowed parents to use their 
resources for other purposes. The project also included the delivery of 
take-home rations to nearly 7,000 pregnant women and new mothers.
    Several complementary activities are being supported by this 
project, which will improve sustainability, education, and hygiene. 
More than 120 gardens or fish ponds have been built, teaching parents 
and schoolchildren new ways to produce food and providing food and 
income for the schools. Elementary and pre-school teachers from the 
schools continue to receive training through organized workshops in 
mathematics and Spanish. The program has improved sanitation systems 
and infrastructure for 77 of the neediest 100 schools. Work is 
continuing at the remaining 23 schools. Employment opportunities have 
been created through handling and distribution of the food and the 
construction of the new infrastructure.
    In Guatemala, FINCA International, a PVO, implemented an FFP 
agreement in 2006 that used 8,000 tons of U.S. soybean meal and 2,000 
tons of U.S. tallow to generate $3.2 million in proceeds to support a 
micro-credit program. The proceeds were used to develop a village 
banking program tailored to the specific needs of Guatemala's rural 
entrepreneurs. The program brings neighbors together, giving them the 
collective power to disburse, invest, and collect loan capital. Clients 
report improved earnings and family nutrition, high loan repayment 
rates, and increased empowerment. Last August, former Agriculture 
Secretary Mike Johanns met with Guatemalan women who had used these 
loans to develop small businesses, all of which were generating income 
to support their families.
    Also during this trip, former Secretary Johanns announced that USDA 
would lead an agribusiness trade and investment mission to the CAFTA-DR 
region in the near future. This mission will provide an excellent 
opportunity for U.S. and Central American agribusinesses to develop 
commercial ties, expand two-way trade, and promote foreign direct 
investment.
    In Nicaragua, Cochran Fellowship Program alumni made valuable 
contributions to improving their country's national trade policies and 
regulatory frameworks, resulting in increased market access for U.S. 
agricultural products. The four alumni received Cochran training in 
agricultural biotechnology. Upon their return home, they provided 
expert consultations to the Health Commission of the Nicaraguan 
National Assembly, which enabled the Commission to send a positive 
report on a comprehensive Biosafety Bill to the President of the 
National Assembly.
    Under the Borlaug Program, USDA has formed a partnership with the 
World Cocoa Foundation to provide a specialized program to help the 
cocoa industry in CAFTA-DR countries, Africa, and South East Asia 
combat cocoa pests and diseases, build trade and scientific capacity, 
and improve regional cocoa production and market access. USDA is 
seeking a total of 14 fellows from these cocoa-producing countries--
four from CAFTA-DR, seven from Africa, and three from South East Asia--
for this new initiative.
Reconstruction and Stabilization in Afghanistan and Iraq
    Finally, I would like to discuss USDA's role in rehabilitating the 
agricultural sectors in Afghanistan and Iraq. Our assistance in these 
efforts is a critical component to the economic, political, and 
security environment in both countries. In Afghanistan, 80 percent of 
the population is involved in farming and herding. In Iraq, agriculture 
is the second largest contributor to the country's gross domestic 
product and employs 25 percent of the labor force, making it the 
largest employer in Iraq.
    USDA provides expertise in agricultural policy and development in 
these two countries. We coordinate our efforts with and through an 
interagency process that includes, among others, the U.S. Department of 
State, the U.S. Department of Defense (DOD), and USAID. Again, we draw 
from a full range of resources both here in the United States and as 
much as possible in-country to facilitate technical assistance, 
exchanges, and university extension programs to demonstrate sound 
agricultural and regulatory practices.
    Our most notable role has been through USDA employees, who have 
volunteered as advisors on Provincial Reconstruction Teams (PRT), which 
typically consist of military units of 50-100 personnel with two to 
three civilian U.S. Government advisors. PRT activities include soil 
and water conservation, irrigation and water management, grain and seed 
storage, post-harvest loss reduction, market system development, and 
livestock health, nutrition, and breeding. Since 2003 and 2006, 
respectively, USDA has deployed 48 volunteers to Afghanistan and 20 to 
Iraq from nine different USDA agencies, including the Agricultural 
Marketing Service; Animal and Plant Health Inspection Service; 
Cooperative State Research, Education, and Extension Service; Farm 
Service Agency; FSIS; FAS; Forest Service; Natural Resources 
Conservation Service (NRCS); and Rural Development. Of these agencies, 
NRCS has provided the most employees.
    The Administration's Fiscal Year 2009 budget request includes $12.5 
million in the Office of the Secretary to help support the costs of 
participating in these activities in both Iraq and Afghanistan. 
Agricultural reconstruction and development are crucial for 
establishing stability in both of these countries, and USDA needs 
dedicated funding to have the resources needed for its staff to play an 
effective role in achieving that goal.
High Food Prices
    High commodity costs, combined with increased transportation costs, 
have tightened the amount of food aid that can be provided under 
limited program budgets, but we have taken innovative and bold steps to 
ensure critical needs are met.
    About a year ago, we announced that USDA would exchange government-
owned commodities for further processed products to be distributed 
through USDA domestic and international food assistance programs. We 
call this new initiative ``Stocks-for-Food.'' The government-owned 
commodities were acquired through forfeitures of marketing assistance 
loans to farmers, and include wheat, corn, soybeans, cotton, peanuts, 
and rice.
    Stocks-for-Food is providing approximately $120 million in funds, 
with $100 million going toward The Emergency Food Assistance Program--
one of our domestic food aid programs--and more than $20 million to 
benefit over 650,000 children and mothers in several low-income 
countries through the McGovern-Dole Program.
    The issue of high food prices has received the attention of the 
world food aid community as well as world leaders. In response, 
President Bush directed USDA to draw down the Bill Emerson Humanitarian 
Trust, which made $200 million of total assistance immediately 
available through the P.L. 480 Title II Program to address the impact 
of rising commodity prices on U.S. emergency food aid programs, using 
the funds to meet unanticipated food aid needs in Africa and elsewhere.
    We greatly appreciate the work between the Administration and 
Congress to provide $850 million in supplemental appropriations for 
P.L. 480 Title II Program food aid in Fiscal Year 2008 and $395 million 
in additional funds to support the Title II program in Fiscal Year 2009 
to address the most immediate needs and alleviate systemic problems.
    At the High-Level Conference on World Food Security in Rome last 
month, Agriculture Secretary Schafer laid out the United States' 
integrated, three-pronged strategy to combat rising food prices. First, 
the United States will target countries made vulnerable by rising food 
prices. Second, we will provide development assistance to countries 
capable of rapidly increasing staple food production. And third, we 
will support trade liberalization and increasing the use of advanced 
agricultural technologies.
    The United States encourages other governments to conclude an 
ambitious agreement in the Doha Development Agenda of the World Trade 
Organization this year that increases market access for agricultural 
products and reduces trade-distorting subsidies; lifts restrictions on 
agricultural exports; and expands research, promotes science-based 
regulations, and encourages the adoption of innovative technologies, 
including biotechnology.
Conclusion
    While we will continue to deal with a variety of food assistance 
challenges in the years ahead, together we will remain focused on our 
primary goal--to ensure that the food needs of the poor and the hungry 
are met.
    This concludes my statement. I look forward to answering any 
questions you may have. Thank you.

    The Chairman. Thank you, sir. Thank you very much. Mr. 
Kunder.

          STATEMENT OF JAMES R. KUNDER, ACTING DEPUTY
          ADMINISTRATOR, U.S. AGENCY FOR INTERNATIONAL
                 DEVELOPMENT, WASHINGTON, D.C.

    Mr. Kunder. Thank you, Mr. Chairman. We very much 
appreciate your holding this hearing today. I think this is one 
of the most critical foreign policy issues facing our country, 
not only because of the human suffering that you mentioned, but 
because of the potential for instability in a number of 
critical countries around the world. What I tried to do in my 
testimony is talk about the nature of the current crisis we are 
facing. There are a lot of short term factors that are playing 
into this crisis, such as the drought that you mentioned in the 
Horn of Africa affecting Ethiopia and Somalia, increased 
petroleum prices, which obviously affect the utilization of 
fertilizer, and so forth, but essentially what I argue in my 
testimony is that we are facing a significant structural change 
in global supply and demand.
    During the 1970s and 1980s, global food production 
increases were averaging in the three to four percent rate. 
Those have now declined to one percent a year, and given the 
fact that we are talking about a global population increase of 
about 1.15 percent a year, and in the developing countries, 
more like 1\1/2\ percent a year. We are facing a structural 
supply and demand situation that will require long term 
sustained efforts on the part of the U.S. Government and other 
donors around the world.
    I cite in my testimony that this is not a change without 
some mixed benefits. Obviously, there are opportunities not 
only for American farmers; there are opportunities for poor 
farmers in the developing world. Zambia, which had, 
historically, a grain surplus, is now selling its grain. That 
means African farmers are benefiting from increased sales. But 
overall, we have a structural imbalance that we are going to 
have to address. I summarize in my statement the three basic 
approaches that the U.S. Government is taking.
    One is emergency food aid for the vulnerable, that the 
Ranking Minority Member cited, who simply don't have access to 
food. And not only is that a question of providing food, but 
certainly USAID's experience in 50 years of dealing with these 
problems around the developing world, it is primarily a 
purchasing power problem. There may be food available on the 
markets; the very poor, the bottom billion that we talk about 
around the world, simply can't afford it. So what we are trying 
to address is not only availability of food, but availability 
of credit and incomes, micro-lending programs that will give 
the poorest of the poor an opportunity to buy their own food.
    The second is we are looking at productivity increases 
where we think we can get an immediate bang for the buck in 
increased production in the developing world. To answer the 
part of your question, Mr. Chairman, as soon as we got that 
additional supplemental funding from the Congress, we have been 
identifying those countries in Africa and elsewhere where we 
believe an immediate infusion of additional foreign aid 
assistance could dramatically increase production of staple 
crops in the short term.
    And the third part of this equation is long-term trade 
facilitation, and again I would agree with what the Ranking 
Minority Member said. This is not just a question of increased 
trade, but it is also a question of macro-economic policy 
creating an environment where free markets will thrive around 
the world and we can see increased production.
    One last aspect that I touch on in my testimony is we have 
to make sure we have good data, and are targeting the aid that 
the American taxpayers are making available to us. USAID 
traditionally funds the so-called FEWS NET program, the Famine 
Early Warning System. This is a combination of satellite 
tracking and local monitoring of food prices. We have now 
extended the FEWS NET system into urban areas around the world, 
which face the greatest potential for instability in this 
environment. The overall trend, I report in my testimony, 
within the U.S. Government, in terms of investing in all of 
these agriculture research, agriculture development issues, has 
in fact been downward. And that trend, over the last 20 years, 
is paralleled by the European foreign aid donors and all the 
other major donors around the country. And I think your 
diagnosis is correct, Mr. Chairman, what has happened is not a 
lack of attention or lack of interest in this, but simply our 
desire as a government to address other critical priorities 
like the global AIDS pandemic, and so forth, have crowded out 
agricultural funding. And certainly, in our 2009 request we are 
increasing those levels and I would posit that we have to get 
that investment back up, both with our agricultural 
universities and in partnership with the U.S. private sector.
    We very much appreciate the assistance of the Congress in 
raising the appropriation levels that we asked for in Fiscal 
Year 2008 and 2009. I would just add one additional item to 
that. USAID is in the business of trying to rebuild our 
staffing levels. We once had a premier cadre of agricultural--
American agricultural--specialists that we could have around 
the world assisting local farmers. That staffing level has 
dramatically eroded over the years, so from our perspective, we 
need to build up both our dollar amounts and also our technical 
staffing. We work very closely with the United States 
Department of Agriculture to make sure that we have technical 
experts around the world, but we simply don't have enough 
technical officers out there working with the exchange programs 
and the other critical interventions.
    So that summarizes my statement, Mr. Chairman. I am glad to 
answer any questions you have. Thank you.
    [The prepared statement of Mr. Kunder follows:]

  Prepared Statement of James R. Kunder, Acting Deputy Administrator, 
      U.S. Agency for International Development, Washington, D.C.
    Thank you Chairman McIntyre and distinguished Members of the 
Committee. I appreciate the opportunity to be here today to address 
this important topic.
    We are in the midst of a global food crisis unlike other food 
crises we have faced in the past half century, one not caused by 
natural disasters, conflict or any single event such as drought. It is 
not localized--instead it is pervasive and widespread, affecting poor 
people in developing countries severely. It is one that has 
demonstrated how worldwide markets transmit price rises rapidly, 
underscoring the need for global solutions.
    The Members of this Committee are familiar with the new reality we 
face; Last year, the international food price index rose by 27.1%, 
compared with just 14.4% in 2006. So far from April 2007 to April 2008, 
the index is up more than 45%, and the prices of some major staples 
have increased even more. Dwindling global stocks of grain make prices 
even more sensitive to shocks, whether from a drought in Australia or 
floods in our Midwest. When countries react to high prices or tight 
supplies by hindering trade, the global food system functions less 
efficiently, further exacerbating price volatility.
    While sharply higher prices have been welcome news for many 
farmers, for the world's poor subsisting on $1/day or less they can 
mean deprivation and real hunger. The World Bank estimates that ranks 
of the chronically food insecure have grown, due to the impact of high 
prices, by over 100 million in the past year--to nearly 982 million. In 
addition to current estimates of 75 to 100 million people whose needs 
require immediate response, over two billion people, more than \1/3\ of 
humanity, are being seriously affected.
    The rapidly increasing cost of food is also weakening the ability 
of governments of both poor and middle-income countries to sustain 
growth, protect the vulnerable, or even to maintain order. The fear of 
food riots, even in some middle-income countries, presents a new 
dynamic that puts pressure on sound decision-making for long term 
growth and stability. The same high prices also limit our own ability 
to respond to critical emergency hunger needs around the world through 
our food aid programs.
    In response to the challenge posed by rising food prices, President 
Bush has called for a three-pronged strategy to the crisis resulting 
from high global food prices. The first and most pressing component 
involves expanding humanitarian assistance, the second increasing 
agricultural productivity in at-risk regions, and the third, a vigorous 
policy effort to promote agricultural trade and investment.
    Our food assistance programs have to be more efficient and targeted 
than ever. In Fiscal Year 2007, USAID provided more than two million 
metric tons of P.L. 480 Title II commodities, worth $1.87 billion, that 
reached an estimated 41 million beneficiaries in 56 countries around 
the world. In Sudan alone, more than 350,000 metric tons of food 
commodities, valued at $356 million, were provided to an estimated 6.4 
million beneficiaries.
    These amounts include approximately $1 billion annually to the U.N. 
World Food Programme (WFP), or approximately 40 percent of all 
contributions to the organization. We also contribute significant 
international food aid through private voluntary organizations (PVOs), 
and are committed to working with other donors, from both the 
commercial and nonprofit sectors.
    To assist in meeting these immediate needs, the United States has 
taken various steps:
    On April 14, President George W. Bush directed the Secretary of 
Agriculture to draw down on the Bill Emerson Humanitarian Trust to meet 
emergency food aid needs. The Emerson Trust is a food reserve of up to 
four million metric tons of wheat, corn, sorghum, and rice administered 
under the authority of the U.S. Secretary of Agriculture. The Secretary 
of Agriculture may authorize the release of commodities from the 
reserve to meet unanticipated emergency needs that cannot otherwise be 
met under Title II of P.L. 480. This release was estimated to provide 
$200 million in emergency food aid through USAID. This additional food 
aid is being provided for emergency needs in Afghanistan, Ethiopia, 
Kenya and Zimbabwe.
    In addition, President Bush on May 1 requested $770 million in 
additional allocations, including $395 million intended to preserve 
price parity in existing food aid programs. These funds will allow 
USAID's emergency food aid program partners to meet their ongoing 
humanitarian obligations.
    We thank Congress for passing the emergency supplemental spending 
last month, with $850 million in P.L. 480 resources for Fiscal Year 
2008. Working closely with USDA, within days of the President's 
signature of the emergency supplemental, USAID initiated expedited 
commodity procurement procedures to ensure rapid arrival of lifesaving 
assistance.
    Food for Peace has already provided significant assistance to the 
drought emergency affecting the Horn of Africa, particularly Ethiopia 
and Somalia. In Fiscal Year 2008 to date, more than 780,000 metric tons 
of Title II food aid, valued at nearly $650 million, has been provided 
to assist the region. With the new funding made available through the 
supplemental appropriation, much more food will soon be in the 
pipeline.
    In summary, USAID's Food for Peace funding committed to address 
food insecurity and price increases totaled $1.87 billion in Fiscal 
Year 2007, with more than $1.53 billion to date in Fiscal Year 2008. 
Additionally, the emergency supplemental appropriation makes available 
in Fiscal Year 2009 $395 million for additional emergency food 
assistance.
    To aid in addressing the new challenges we face, I'd like to share 
with you two new tools that will assist us in identifying populations 
impacted by rising food prices. The urban poor are particularly 
vulnerable to price increases because such a large portion of their 
income goes to purchasing food. These new early warning tools, 
developed by USAID's Famine Early Warning Systems Network (FEWS NET), 
will allow us to monitor more closely emerging food security threats in 
urban settings.
    The first tool is an urban food market price watch, which tracks 
price changes for staple foods in 20 countries. This price information 
will provide advance warning to better target our food aid resources to 
the most vulnerable. The second tool, which emerged from a workshop 
with private voluntary organizations and World Food Programme experts, 
is an urban food aid programming manual that will allow us to better 
target and deliver food aid to those most impacted by rising food 
prices.
    As I have stressed, food and emergency assistance are short-term 
measures; they are critical tools but food aid alone will not solve the 
food crisis. Our approach links those emergency tools to growth in 
agricultural production, access to markets and advancement of global 
policy solutions that foster trade and investment in agriculture.
    In its invitation, the Committee also asked for information about 
our agricultural development efforts--essentially the second thrust of 
our three-part effort in humanitarian assistance, growth in 
agricultural productivity, and sound global policies.
    Agricultural productivity in developing countries grew at between 
three and four percent per year during the 1970s and 1980s. These gains 
fueled broad economic growth and marked reductions in hunger and 
poverty; food became both more available and more affordable for 
literally billions of the world's people. Now, annual agricultural 
productivity growth rates in the developing world are less than 1%--a 
rate that will not keep up with rising demands from ever-larger 
populations.
    A coordinated global effort will be required to reverse the 
downward trend in productivity growth, and engagement by the United 
States as a leader will be essential. We have the world's largest and 
most diversified agricultural research capability, in our partnerships 
with USDA, the land-grant universities and in the private sector. Our 
seed, fertilizer and food industries represent tremendous resources in 
strengthening markets, reducing losses and generating economic gains 
through value addition.
    Many of the threats faced by agriculture are global--for example 
the new stem rust disease of wheat spreading in Africa and Asia that 
Norman Borlaug has warned of. By working with the International 
Agricultural Research Centers and partners in Africa and India and here 
at home, USAID and USDA have combined forces to reduce the impact of an 
epidemic overseas and at the same time help protect American farmers 
and consumers from this devastating disease which could potentially 
cause billions of dollars in losses. Sources of resistance have been 
identified through research partnerships and resistant varieties are 
being developed and multiplied.
    Similarly, our work to stop the spread of Avian Influenza is 
helping to protect both the health and livelihoods of millions of 
people in Africa and Asia. Valuable information is gained and lessons 
are learned that we can apply in similarly protecting our own nation's 
health as well as its poultry industry and wildlife.
    Agricultural growth and resilience not only lead to reduced needs 
for food aid and emergency assistance, they open up new markets 
opportunities for American farmers and business to reach new markets. 
Traditionally, as developing countries invest more in crops, livestock 
and irrigation, demand for feed grains, other commodities and 
technology increases.
    USAID has a proven track-record of promoting agricultural growth in 
many countries--we are seeing remarkably positive trends in countries 
that invest in technology and infrastructure, and build markets and 
trade that helps farms access the inputs they need and market the 
output they produce. Through the President's Initiative to End Hunger 
in Africa (IEHA), we have focused squarely on productivity, markets and 
trade--in other words, growth, but growth with special attention to the 
most vulnerable. This vision has now been widely acknowledged as the 
only sustainable means of reducing hunger.
    Unfortunately, in recent years funding for agricultural development 
investments have declined as we face budgetary constraints. Let me 
stress that there has not been opposition to agricultural investment by 
USAID. In fact, current and past leadership of USAID have called for 
the need to do more in this vital sector. And within our budgetary 
constraints, we have done what we can. However, support to some of our 
most effective and strategic investments--for example in agricultural 
biotechnology and the Consultative Group on International Agricultural 
Research centers--had to be reduced.
    Now that a renewed understanding of agriculture's vital importance 
to combating hunger, poverty and even civil unrest has emerged, the 
outlook for agricultural investment for FY 2009 has improved. USAID is 
gearing up to provide renewed leadership to the global development 
community. The emergency supplemental just passed by the Congress will 
provide an additional $200 million in FY 2009 development assistance to 
help us begin to mount an effective response to the crisis. Of that 
amount, $50 million will support regional market development and local 
procurement of major food crops, $130 million will target production 
increases and markets in countries that have the potential to mount a 
rapid production response, and $20 million will support science and 
technology aimed at increasing productivity of food staples.
    Our strategy focuses on increasing the availability and 
affordability of food staples on which low-income people depend in the 
most at-risk regions. We will do this by helping the agricultural 
sector in those countries modernize, providing new opportunities for 
millions of farm families, especially smallholders, to respond to the 
market. We can achieve this vision by building a coalition that aligns 
the resources of the U.S. Government with the commitment of the target 
countries themselves, other donors and the private sector--both for-
profit and nonprofit.
    Our investments will focus on restoring the growth in agricultural 
productivity in the developing world, especially of key staple foods, 
to levels that can meet rising demands. We will work to achieve rapid 
growth in agricultural trade--making markets more efficient for both 
low-income consumers and producers. The gains we make will actually 
reduce the need for emergency food assistance, as communities and 
nations make gains in ensuring their own food security. As we work 
toward these vital objectives, we will continue to meet the needs of 
those most vulnerable through both food assistance and emergency 
resources, all the while helping them to rebuild their livelihoods and 
resilience.
    The Development Leadership Initiative recently endorsed by the 
Congress will help us build the institutional capacity necessary to 
lead in the global development community. Our partnership with the U.S. 
University community through Collaborative Research Support Programs 
(CRSPs), Higher Education for Development and other partnerships 
remains strong, and are helping to build a new generation of scientists 
and decision-makers from our partner countries ready to apply 
technology, policy and marketing know-how to solving the problems 
facing developing countries.
    We are aligning our humanitarian and development assistance efforts 
in new ways. We are coordinating our efforts to address the near-term 
humanitarian crisis with the design of new programs that will build the 
foundation--information, technology, institutions, policies, safety 
nets--for the modernization of agriculture, transforming more small 
producers into commercial enterprises. To be successful we must focus 
our effort in agriculture while scaling them up to the level of the 
challenge.
    Following are the key elements of our vision:
    First, we must halt the slide into hunger and absolute poverty. 
Maintaining our global commitment to emergency food and nutrition 
assistance, and expanding local purchase and IDA funding to quickly 
reinforce productive safety nets (e.g. cash or food for work) and 
livelihoods, we will stabilize the situation, beginning this year in 
East and West Africa, and expanding to encompass other at-risk 
countries.
    Second, we must expand development and use of modern technology for 
staple foods. We know that we can double yields of staple foods by 
ensuring that small-holder producers access the tools of modern 
agriculture--improved seeds, fertilizer, irrigation, dairy management. 
This is an area for U.S. leadership. Through our universities and 
industry, we are global leaders in the area of science and technology. 
U.S. farmers are in the forefront of adoption of modern technologies 
and practices. We see this very clearly in the area of biotech crops, 
for example. We must dramatically expand the use of existing technology 
and practices by small farmers, while also investing in longer-term 
challenges to agricultural productivity--climate change, the high price 
of fertilizer linked to high fuel prices, natural resource degradation, 
competition for water resources, and emerging diseases such as avian 
influenza or wheat stem rust.
    To do this, we are expanding funding for research and development, 
harnessing traditional breeding, biotechnology, geospatial technology 
to guide resources management, as well as consider the role of advances 
in nanotechnology and energy efficiency. We will expand our 
partnerships with the biotechnology industry and the seed sector, U.S. 
universities, the Consultative Group on International Agricultural 
Research, and national research systems to leverage advance scientific 
research while training a new generation of agricultural researchers.
    Third, we must empower the private sector to deliver inputs and 
information. More than ever before, agribusiness will take the lead in 
getting up-to-date production and marketing information to smallholder 
farmers. We must support small and medium enterprises as the key means 
of delivering seeds and fertilizer to rural communities. That will mean 
expanding support for business services, strengthening linkages between 
public research and commercialization of technology, access to credit, 
and policy reform to reduce the barriers to private sector investment.
    Fourth, we need to expand market access and efficiency. We will 
connect small-holder producers to the market by expanding rural roads 
and information technology to provide access to market and price 
information. To stimulate market-led growth, we will strengthen the 
ability of producers to meet market standards--the quality, product 
diversity, and safety standards that will generate opportunity for 
commercial growth. Export restrictions, taxes and other hindrances to 
market signals and producer responsiveness will be reduced or 
eliminated. We will work to foster science-based regulatory policies 
that will foster trade, particularly in food staples, as well as 
investment by both the public and private sectors.
    Fifth, we must work with the partner countries and the private 
sector to expand access to financing. We must expand and strengthen 
mechanisms to stimulate private investment in agriculture--from small 
producers to the value chain industries that take the product to the 
market. We must go beyond producers, however, and develop new 
mechanisms to fund the larger agribusiness engaged in the value chain--
commodity importers, millers, processors, and distributors. Developing 
country policies must foster renewed confidence on the part of the 
financial sector that farming and other agro-enterprises are emerging 
as principal drivers of economic growth.
    Sixth, the United States must lead a global effort to promote 
policies that support growth. This is, in effect, the third, longer 
term dimension of the President's response to the food crisis. As we 
engage our own government as well as other donors and the target 
countries themselves, we will support further analysis and discussion 
on policy dimensions and especially the successful conclusion of the 
Doha agreement.
    Seventh, we must reduce risks to food security for the poor. We 
will align our humanitarian efforts with this growth strategy to 
maximize the synergies between meeting basic needs and enhancing 
productivity investments. This means linking our agricultural 
investments to humanitarian interventions (e.g. diversifying diets, 
delivering nutritional outreach alongside agricultural extension and 
health services) making sure that as we deliver humanitarian aid, we 
protect household productive assets and move families, communities, and 
the agricultural sector towards a growth strategy. We will also ensure 
that our productivity, market and finance activities build resilience 
for small producers. We are engaging the PVO and NGO community more 
comprehensively in ways that align with this growth strategy.
    And finally, eighth, we need to develop a new coalition based on 
commitment to a common agenda. The United States is a crucial part of a 
global response to a global problem. To be effective, we must work as a 
partner and engage leaders at the highest levels in the target 
countries, regional economic organizations, the international 
development community (UN, World Bank, regional banks, private 
foundations) and the private sector (agrifood, seed, fertilizer 
industry, and finance institutions).
    In sum, our vision calls for an unprecedented humanitarian and 
development assistance effort by the United States, distinguished by:

  b Significant attention to staple foods;

  b Action at scale with the problem;

  b Real integration of targeted safety nets with wealth creation;

  b Building the capacity in the target countries to carry the growth 
        process beyond our assistance;

  b Partnership with the target countries to ensure the commitment to 
        policy and good governance needed to reach success. Our partner 
        countries must demonstrate political will to invest and set a 
        positive policy environment;

  b Clear targets and metrics to gauge progress towards longer term 
        goals;

  b A ``whole of government'' approach, uniting the resources of 
        multiple agencies;

  b A coordinated effort with other donors; and

  b A major role for the private sector in implementing this agenda.

    We know we can increase food security in the world's poorest 
countries--in both its supply and demand dimensions--through strategic 
investments in agricultural development, markets and trade. The task of 
reducing hunger is huge, but the moral imperative is compelling. And in 
the long run, the cost of action will be less than the cost of 
inaction.
    The FY 2009 bridge funding just approved by the Congress is an 
important step in the right direction. I urge the Members of this 
Committee to help make United States' leadership in combating global 
hunger all that it should be. No one is better positioned to lead--in 
food assistance, in science and technology, and in fostering markets 
and trade.
    We are confident that, with U.S. leadership and investment, we can 
stem and reverse the supply-demand imbalance that exists today in food 
staples. Some of it will occur here at home, but some of it must occur 
in countries where poor, food insecure populations generally make their 
living in agriculture. We know how to do it--we know what works and 
what does not; we know that we must rely much more on the private 
sector and on broad alliances than was the case in the first Green 
Revolution. We have new tools, and we need to use them: markets, trade 
and science will transform our approach.
    Political leadership can help solve this crisis. Over the past 
months we have seen major commitments from the President and the 
Congress, and from leaders around the world. Ban Ki-moon, Bob Zoellick 
and Josette Sheeran have put the full force of their respective 
organizations behind this effort. But U.S. leadership remains vital to 
success and to the pursuit of a sustainable growth agenda for 
agriculture.
    Failure is not an option. Though I have concentrated on the problem 
and its solution, we must never lose sight of the terrible human cost 
of hunger. Even short term hunger can unalterably affect a child by 
exposing him or her to disease, threatening normal cognitive 
development and lifelong productivity, or, tragically, even early 
death. Yet the problem posed by high food prices is one we know how to 
solve--and in doing so we can also recommit to ending the scourge of 
chronic hunger once and for all. Thank you.

    The Chairman. Thank you. Excellent job. We appreciate that. 
Let me go ahead and ask you, since you were summarizing some of 
your points. You have the eight elements that you identify as 
part of the vision of USAID to address the food crisis. Many of 
these currently appear, in some form or fashion, in an existing 
development where, I noticed that you mentioned that it looked 
like, primarily, the concern was money and staffing. Are there 
other elements that can or should be enhanced in these eight 
items under the vision you have?
    Mr. Kunder. Beyond the funding level, sir?
    The Chairman. Right.
    Mr. Kunder. Yes, certainly the staffing levels. We had a 
U.S. foreign aid program, at one point during the Vietnam War, 
we had 12,000 Americans we were sending around the world to 
assist with health programs, education programs, agricultural 
extension. I think it is common knowledge that when the Cold 
War ended, we made a number of decisions, as a government, the 
Administration and Congress, to eliminate tools of foreign 
policy like the U.S. Information Agency. We made a decision 
that we really didn't need to engage in the global struggle for 
hearts and minds. In my view, sir, that was a mistake. The U.S. 
Agency for International Development went from 12,000 American 
officers, we are down to now about 1,200 officers. And I don't 
want to paint all gloom and doom. We worked very closely with 
the U.S. Department of Agriculture, with the Army Corps of 
Engineers, with other parts of the U.S. Government, but we have 
eroded the staffing to what I believe is a harmful level, in 
terms of America's ability to respond to these kind of crises 
when they arise. The second thing is we need to rebuild as many 
of our partnerships with the land-grant universities. As the 
staffing has gone down within USAID, we once had a much more 
robust partnership with the land-grant universities. They are 
an enormous benefit and tool that America has to contribute to 
these kinds of crises, and one of the things that Administrator 
Fore has committed to is rebuilding that partnership with the 
land-grant universities.
    The Chairman. Thank you, sir. And, Mr. Yost, can you tell 
us has there been any particular analysis done on the Food for 
Progress program to point out areas where the program has, 
particularly, achieved success that we can build on or, 
particularly, and conversely had a problem that we need to make 
sure is not repeated or that is removed.
    Mr. Yost. We have a number of success stories with the Food 
for Progress program. Kenya comes to mind where we have done 
something with Land O'Lakes where we have developed a founder 
market system, including coaching for dairy--for the dairy 
industry, budding dairy industry in that country. As we look to 
the future, it is incumbent upon us to leverage our resources, 
perhaps, more than we have in the past. To put these programs 
that we administrate at USDA in more of a holistic approach to 
development, and we are trying to accomplish that, trying to 
blend the Food for Progress program along with the Cochran 
program, the Borlaug Program, our trade investment missions, so 
that we can build an infrastructure in these countries that can 
participate in world trade, bring their agricultural economies 
into the 21st century. And also, we are exploring some 
partnerships in some private sector trade associations and 
companies.
    The Chairman. Can you give us an example of some of those 
private sector ones?
    Mr. Yost. I would go back to the trade investment missions 
that we have hosted. We have hosted them in different parts of 
the world, we have a couple more that we are proposing to take 
place this year, where we take U.S. companies, small, medium 
and large to different countries. We have been to Kenya, we 
have been to Ghana, we have been to Kazakhstan, and they 
interact with their peers over there and they talk about 
opportunities, what needs to be done to create opportunities, 
what the government needs to do, what the private sector needs 
to do, and I think these are very beneficial. With today's 
technology, with wireless communication, with the group of 
young entrepreneurs coming up around the world, I think this 
can create the foundation for something quite dynamic as we 
move to the future.
    The Chairman. Thank you, sir. Mrs. Musgrave.
    Mrs. Musgrave. Thank you, Mr. Chairman. Mr. Kunder, you and 
Mr. Yost, both, have talked about the three-pronged approach to 
combating the world food crisis and agricultural development 
seems to be the very centerpiece of that. I just would like to 
ask you why USAID previously diverted funding from the most 
effective and strategic investments, such as research that was 
mentioned in your statement, and where did you send this money?
    Mr. Kunder. Yes, ma'am. I probably would quibble with the 
term ``diverted'' because we have a Federal budgetary process 
and along the way we make a number of competing decisions. Our 
staff work in the developing world, and are passionately 
committed to food issues; and perhaps we have requested levels 
that perhaps weren't approved. But I particularly mention the 
term ``crowding out.'' I honestly believe that what we have had 
happen in the 150 account, the foreign assistance and foreign 
diplomacy account has had a cap established by the budget 
process. As we have made decisions to take on issues like 
PEPFAR and malaria and illiteracy and reconstruction in 
Afghanistan, the amount of money left over for some of the core 
things that we have traditionally done in foreign aid, jobs 
creation, creating private enterprise system, the kind of 
things you were talking about land titling, and certainly 
agriculture simply got crowded out within that 150 account. And 
I am not making excuses. We could have fought harder. Maybe we 
could have fought smarter, but that is the effect of what 
happened is we bumped up against those ceilings and I have 
enormous respect for the Congress. I am not here complaining, 
but our budget is currently earmarked. The U.S. Foreign Aid 
Budget is currently earmarked at about 104 percent. That is to 
say that we have enormous guidance from the Congress, in terms 
of how much we have to spend on malaria, how much we have to 
spend on child survival, and these are all worthy causes. But, 
what I find that is the core economic and agricultural 
functions which have the least passionate constituency and 
which end up at the end of the line, and that is the honest 
truth, ma'am.
    Mrs. Musgrave. Well, I certainly agree with the last part 
of your statement that you just made, the passion for each of 
these causes. Tell me about the role of private volunteer 
organizations and do they get to make many decisions about 
where programs should be and how it should be operated?
    Mr. Kunder. We rely enormously at USAID on the private 
sector, both not for-profit and for-profit. In terms of the 
NGOs, the way USAID operates around the world, the American 
non-governmental organizations and local NGOs are among our 
primary partners. They are actually out there on the front 
lines, working with the villagers, disseminating new seeds, 
disseminating new techniques, working with marketing systems. 
On the private sector side, the for-profit side, I have to say 
that this is one of the most productive areas for future work. 
We launched a couple of years ago what we call the Global 
Development Alliance, an explicit attempt to partner with for-
profit private sector American firms. I got our team to print 
out, before I came up here today, a list of our current 
agricultural partnerships, and it is quite dramatic. We are 
partnering with Shell Oil in Nigeria to improve cassava 
production. We are partnering with American business in Angola 
to increase food production there. This is an exciting area 
where we can devote more of America's desire to invest in these 
poor countries and to the cause of human progress. So, in 
short, both the NGOs and the American for-profit, private 
sector are critically important partners to us.
    Mrs. Musgrave. Very quickly, when we think about wise use 
of these taxpayers' dollars, what do you do to avoid 
duplication? That is probably one of our biggest concerns.
    Mr. Kunder. Yes, ma'am, it is a very fair question and I 
would not claim perfection, but what our Food for Peace office 
does and our agricultural office, they do a country by country 
analysis and they try to look at what the country is investing, 
what other donors are investing, the World Bank, the British, 
the Japanese, what the NGOs are able to raise on their own. 
They do a country by country analysis to make sure that we are 
filling in the critical gaps and trying not to duplicate what 
others are doing.
    Mrs. Musgrave. Thank you very much. Thank you, Mr. 
Chairman.
    The Chairman. Yes, ma'am, thank you. Mr. Pomeroy.
    Mr. Pomeroy. Mr. Chairman, and Ranking Member Musgrave, I 
want to commend each of you for your thoughtful opening 
statements and also for leadership of the Subcommittee in this 
way. You know, it disturbed me greatly, that as we were 
building the new farm bill, we found ourselves frequently at 
policy odds with the global hunger community, or at least the 
U.S. representatives of international food aid. We even heard 
suggestions, not new--that have made--been around for a few 
years, that the structure of the farm bill as constructed in 
this Committee has actually been a contributing factor to 
global hunger. That somehow U.S. agriculture was a contributing 
factor to the misery people are experiencing around the world 
and can't get enough to eat. I have just flat out rejected the 
premise of those advocates. I mean, the U.S. farmer has been 
extremely proud of the role they have played in providing food 
for the world. U.S. ag infrastructure has been very proud of 
the role they have played in the technological innovations that 
have greened the world. And so far from being a--viewing 
ourselves as somehow making the situation worse, we have always 
viewed ourselves as being a substantial contributing factor to 
the fight against global hunger.
    Now, if we have some things wrong, we need to have a very 
robust dialogue about straightening out this difference. I view 
this hearing, and I hope other hearings to follow, as a formal 
way by which this Subcommittee really grabs this issue. I think 
it is a big one and one that in the end will potentially 
threaten our ability to pass another farm bill, if we don't get 
these points of difference straight. So it is in our near term 
self interest, but far beyond that. It is also consistent with 
the best instincts of this Committee, historically, we want to 
do our part to making sure people across the world have enough 
to eat, and so I--you know, this isn't, maybe, kind of run of 
the mill Agriculture Committee stuff that we are doing. Some 
might think, well this is--almost feels like the Foreign 
Affairs Committee. It is right in the heart of what we ought to 
be doing and I really commend the leadership of each of you in 
getting into this area. To our panel, I would say, if I close 
my eyes Mr. Kunder and Mr. Yost, I think, gosh, I don't--this 
is USAID or the Secretary of Defense at the table. I am going 
to quote the Secretary of Defense. I think what he has done is 
extraordinary and spot on. Today's Washington Post, Secretary 
Gates, ``we cannot kill or capture our way to victory,'' he 
says, ``in the long term campaign against terrorism.'' Now, the 
military action should be subordinate to political and economic 
efforts to undermine extremism. ``American's civilian 
institutions of diplomacy and development have been chronically 
undermanned and under-funded for far too long, relative to what 
we traditionally spend on military, and more importantly, 
relative to the responsibilities and challenges our nation has 
around the world.'' How about that from the Secretary of 
Defense? I really think that the painful errors that have been 
made in military and foreign policy ought to shock us back into 
rebuilding the capacity, much in the ways that each of you have 
spoken of, so we have many things to talk about and not a lot 
of time.
    Let me start with the little issues to make sure I get to 
cover it all in with the bigger issue. Land-grant--I was in 
Mali, what is it 2 years ago, and I was just appalled. It said 
17 percent of the population has proximate access to potable 
water. I came back here to North Dakota State University with 
3,000 engineering students and just magnificent engineering 
capacity. Nothing would be better for the--some of those 
engineering students to be parlayed into meaningful assistance 
in a partnership way as part of their learning experience. 
Maybe some of them would find careers in international 
development, but if nothing else, it would still be an 
extraordinary experience as part of an undergraduate 
curriculum. Yes, absolutely consistent with hard core 
engineering training, I mean, are these the kinds of things, 
Mr. Kunder, that you believe we could build upon?
    Mr. Kunder. Yes, sir, we do have a cooperative research 
support program with the land-grant universities. We have been 
in discussions, Administrator Fore has directed us to talk with 
the National Association of State Universities and Land-Grant 
Colleges here in town, which happens to be headed by our former 
USAID Administrator, Dr. Peter McPherson, formerly of Michigan 
State, and that is exactly the kind of thing we want to 
explore. There is an enormous capacity within our land-grant 
system to contribute to the problems we have been discussing 
here today, but, again, as the funding has gone down, as the 
number of ag officers that we have had to talk to our 
colleagues in the land-grant universities has eroded for all 
the reasons I think you, rightly, summarized earlier, this 
discussion has waned.
    Mr. Pomeroy. I had spoken, at some length, to the President 
of North Dakota State University about this and if there was a, 
specifically, an idea you have about how we might engage, in 
North Dakota, in this way please let me know.
    Mr. Kunder. Thank you.
    Mr. Pomeroy. I would like to do a little matchmaking there. 
We are ready to go.
    Mr. Kunder. Thank you, sir. If I could just add one thing, 
sir. You mentioned this perception that somehow American 
agriculture is contributing to some of these problems, I know 
there is a huge policy debate out there, but the Congress, in 
its wisdom, has given us the Bellmon Amendment and we are 
required to do, by law, a Bellmon Analysis of making sure that 
whatever agricultural bounty we deliver from the American 
farmer does not, in fact, disrupt local markets. Now I am not 
going to claim 100 percent perfection. We sometimes make 
mistakes, it is a tough business, but this is a standard part 
of our doing business. Before we deliver any U.S. food aid 
assistance, we do a serious analysis to ensure that it does not 
disrupt local farmers markets.
    Mr. Pomeroy. I just have one.
    The Chairman. Thank you, Mr.----
    Mr. Pomeroy. Mr. Chairman, I have one more question. I know 
I am over time, but----
    The Chairman. We will come back to you because what we have 
is----
    Mr. Pomeroy. Fine, another panelist.
    The Chairman. Yes, if we have enough time, we can come 
back, I believe. Mr. Fortenberry.
    Mr. Fortenberry. Thank you, Mr. Chairman and Ranking Member 
for holding this hearing and thank you, gentlemen, for coming 
before us. I think at the outset it is important to point out 
that the United States leads the world in terms of generosity 
and outreach, both in terms of agricultural and humanitarian 
assistance. I think that is important to point out because it 
is important to examine how effective our programs are, but 
also the underlying premise there is, in spite of the needs 
that exist in the world and the fact that people are continuing 
to turn to us to lead in this regard, this is very good because 
it points to two things. One, our capacity to help other 
peoples and two the generosity of the American people and 
willingness to do that, and with that said, and I appreciate 
Mr. Pomeroy's pointing out some of the creative and interesting 
thinking that is going on, in terms of issues of international 
security. How they are interrelated with: building capacity for 
people in need, not only in civil structures, but in market 
structures so that we can prevent boom and bust cycles; the 
need for immediate humanitarian assistance in grave 
circumstances so that these problems are mitigated and 
stability comes to people throughout the world, not only in 
terms of food production, but also in terms of building a 
variety of civil capacity so that people can, truly, have lives 
filled with opportunity and hope and build just and good 
societies. I mean, that is going to continue to be an evolving 
part of our entire foreign policy and defense policy 
considerations in Congress. With that said, you have both of 
those jobs, to meet the immediacy of need in terms of 
humanitarian crises that exist in the world, but also to try to 
prevent those crises by building the capacity for people to 
stabilize institutions of--whether that leads to agricultural 
production or other institutions such as markets that can allow 
for the free flow of goods and help people. In that regard, and 
the second point in regards to capacity building, I would like 
you to point to some best practices that have evolved and are 
working extraordinarily well that have prevented boom and bust 
cycles in terms of food production throughout the world. These 
have led to, again, an increase in capacity and stability for 
people who are in the most dire and difficult circumstances.
    Mr. Yost. Congressman Fortenberry, as far as trade capacity 
building you were referring to?
    Mr. Fortenberry. No. I am referring to building 
sustainablility in country infrastructure that will lead to, 
again, stabilized food production. Basically, since that is the 
primary focus of our hearing today, and other capacities that 
will, again, prevent or help build long term capacity to 
prevent the types of humanitarian difficulties that seem to 
arise in various places in the world and then necessitate 
emergency responses.
    Mr. Yost. Well, it is a tall order, as you are well aware 
and other Members of the Committee have commented on. We have a 
number of things that we are trying to do and with varying 
amounts of success, as we try to establish sustainability, 
particularly in tenuous parts of the world. We have worked with 
countries on developing some good governmental practices. You 
have to have policies in place that reward production. You 
don't have economic policies in place that provide a 
disincentive to produce, you don't control food prices at an 
artificially low level, as far as what you pay to producers. 
You also have to have in place financing--especially small 
ordered land holders, need financing desperately. That is one 
of the common threads we see throughout the world. We are 
working on different programs, trying to bring that--raise that 
issue to a higher level.
    Mr. Fortenberry. Such as micro-finance.
    Mr. Yost. Micro-financing, exactly. Then it gets into the 
acceptance of new technology. There is a resistance to 
biotechnology in developing countries that is unfounded. It is 
one of the reasons we are so productive in this country. We 
need to accentuate the positive of biotechnology. It is not the 
only new technology that we need to accentuate, but that 
clearly is one of the critical ones. People have to realize 
that if there are millions of farmers around the world, 12 
million farmers, now using biotechnology, then it is good for 
all sizes of farmers. Things like: drip irrigation, water is 
getting to be a more and more precious resource; livestock 
genetics, we can quickly improve productivity by enhancing 
livestock genetics; food safety issues, post harvest handling, 
how to control losses. Many countries have up to 40 percent 
losses of post harvest handling to insects, rodents, because 
they don't have proper storage, don't have cold chains. These 
are all things that we are trying to work on, we are trying to 
elevate as necessities for sustainabilities.
    The Chairman. Thank you, very much, Mr. Fortenberry. We 
would like to welcome the gentleman from Kansas, Mr. Moran. 
Although he is not a Member of the Subcommittee, he is a Member 
of the full Committee and we are always happy to have his 
presence with us. I have consulted with the Ranking Member, we 
are pleased to welcome you to join us in the questioning of the 
witnesses. It is my understanding, you were waiting until the 
second panel for questions, is that correct?
    Mr. Moran. Mr. Chairman, I thank you for your and Mrs. 
Musgrave's courtesy in allowing me to join the panel here 
today, and the opportunity to listen to the testimony and hear 
the witnesses. I am one of the House co-chair hunger--I am one 
of the Co-Chairman of the House Hunger Caucus and this is an 
issue of significant importance to all of us and I am delighted 
that you are having this hearing. I thank you again for your 
allowing me to participate today.
    The Chairman. Thank you, Mr. Moran. Mr. Salazar, I 
understand you do not have a question at this time, but we 
welcome you with us. I will open the entire panel for anyone 
who may have a second question, and Mr. Pomeroy I believe you 
did, so I will be happy to call on you first.
    Mr. Pomeroy. Thank you, Mr. Chairman. It is probably an 
issue that, maybe, Mr. Moran will want to jump in on, as well. 
We discussed in the course of the farm bill construction, the 
structure of food aid response and we advanced the proposition 
and maybe we ought to wall off some of this aid to make sure 
that it goes into capacity building. Then, inevitably, there is 
an emergency, inevitably there is a complete spend out in the 
emergency response, so we are always fighting the fire and we 
never get around to fire prevention. In the end, that fell out 
of the bill and in light of the global food crisis, that 
wouldn't have probably had to, but Mr. Yost can you speak to 
this issue of--or either one of you, the issue of trying to 
build capacity, while on the other hand continually losing the 
resources because we have to deal with the emergency and not 
ever making much structural progress. Mr. Moran, have I 
captured your thoughts on that? Okay.
    Mr. Kunder. Sir, this was, as you know, a very hard-fought 
policy issue. We took the position that while we understand the 
basic principle that unless we invest in long term agricultural 
development in these poor countries, we are never going to get 
ahead of this thing, and we know we need to do that. But our 
argument was that the worst possible thing you could do would 
be to put rigid quantitative numbers into that bill. I am one 
of those people who have to, ultimately, sign the documents and 
make the decision to cut off emergency food to some place where 
people are starving because we would bump up against a ceiling 
and it has got to go into agricultural research. Now, 
obviously, the right answer in a resource unconstrained 
environment is we need both and that is why we are arguing for 
more money for long term agricultural research. That is why we 
appreciate the generosity of the Congress in giving us more 
money for that, but that is really the issue, is how to carve 
out enough money from the overall Federal budget to invest in 
long term agricultural research. But in the short term we would 
vigorously--respectfully, but vigorously--resist the notion of 
trying to figure this out ahead of time and allow us to make 
some of these very difficult decisions late in the fiscal year 
when people are starving somewhere.
    Mr. Pomeroy. Mr. Yost, are you seeing an evolution of 
receptivity to biotech foods in Africa? It was our take, a 
couple years ago, it seemed to be heavily influenced by 
European thinking on this. Basically, it was stifling some of 
the innovation that could be created to respond to unique 
circumstances of the extraordinarily difficult production 
circumstances in Africa. We could give them varieties that are 
going to do better down there, but the innovations used in 
developing those varieties was constrained, the ultimate result 
was food shortages.
    Mr. Yost. Congressman Pomeroy, you are exactly right. The 
Europeans do have a significant amount of influence over Africa 
when it comes to biotechnology. I think gradually, maybe more 
than gradually, now, with the food security, the food price 
issue being at the forefront in everyone's mind, that people 
are starting to look at this technology in a different view. 
There is no question about it, it started in Asia, quietly the 
Koreans and Japanese have let products of biotechnology enter 
the food supply now. They haven't shown the resistance they 
have in the past. And visiting with groups that work in Africa, 
visiting with representatives from African countries, I see 
more interest than in the past. The key will be to develop 
crops that are grown in Africa, that are grown for domestic 
needs, not for exports that have bio-traits, particularly 
drought resistance traits, some other pest resistant traits. If 
we can get those developed, in place, on the ground, I think a 
critical mass will be there to see its acceptance.
    Mr. Pomeroy. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you Mr. Pomeroy. Anyone else have a 
second question? Yes, sir, Mr. Fortenberry.
    Mr. Fortenberry. Mr. Kunder, I would like to allow you a 
chance to respond to the question that I asked, as well. In 
terms of looking at that second critical component of your 
work, emergency assistance. But, also, the balance that you are 
trying to achieve in terms of building sustainable capacity in 
the most difficult areas of the world so that we can prevent 
the emergencies that so often happen, and basically occupy, 
obviously, most of your effort. Best practices, in that regard, 
that you think have actually helped mitigate what could have 
been substantial crises that we can learn from and potentially 
duplicate.
    Mr. Kunder. Thank you, sir. I would agree with Mike that 
the range is pretty broad. The way we design our U.S. foreign 
aid program, we don't sit here in Washington, as the military 
likes to say, and apply the 6,000 mile screwdriver. We send an 
American team to a place like Malawi or Sri Lanka and then 
those folks tell us what is most needed. Is it improvement of 
the agricultural exchange service in that country, is it 
improved seed varieties, is it a strengthened agriculture 
training university? And then we try to build the program from 
the bottom up. But to answer your question directly, the two 
things that I think are unqualified successes around the world 
have to do with linking information technology with the effort 
to increase production. Number one, in places that don't have 
much infrastructure, where it is very hard to get farmers 
together because they don't have cars, pickup trucks, to 
disseminate new information about cropping techniques. Distance 
learning, we really perfected the technique of having an 
agricultural expert in the capital city and then having farmers 
gather around a radio somewhere and create an interactive 
extension service that is low cost, but effective, and then, 
increasingly try to disseminate to farmers the ability to tap 
into the Internet on market prices. One of the great 
impediments to these farmers is they are smart people and they 
know markets, but they simply don't have market data, and 
through simple dissemination of radios or other systems, we are 
able to allow them to tap into market data just like an 
American farmer and they will make the right decisions based on 
that. Those are the ones I would cite as real cost effective 
investments on the part of the American taxpayer.
    Mr. Fortenberry. Thank you.
    The Chairman. Thank you, sir. Mr. Moran, did you want to 
ask a question yet?
    Mr. Moran. Mr. Chairman, thank you, and I appreciate the 
gentleman from North Dakota and his line of inquiry. We 
struggled in a way that you, Mr. Kunder, indicated that you 
would expect people to struggle and try to figure out what the 
right answer is. Each of us recognizing the importance of--
emergency aid doesn't ever eliminate the need for emergency 
aid, and so there is a great desire, on our part, to make 
certain that developmental aid occurs. I think our balance--I 
don't know who won this battle, but I hope that the people who 
are hungry were the ultimate winners. As you probably know, the 
outcome of the farm bill debate, the provisions in that bill 
are for a $450 billion box, in which you cannot tap that for 
emergency aid without first utilizing the Emerson Trust, and 
you can't use that money for foreseen--for difficulties, 
disasters that are known to occur. They have to be unexpected, 
and you do have to notify Congress, although we no longer--we 
did not leave in that bill the provision that we have allow you 
the opportunity. So I hope we found that right mix, because the 
consequences of those decisions are about life and death for 
people around the world.
    I just wanted to ask a broader question about the 
Department of Agriculture's viewpoint on the opportunities that 
agricultural research has to alleviate hunger by producing 
greater yields and larger quantities of crops. Is there 
evidence that we are on the verge of scientific research 
breakthroughs that will dramatically increase the ability to 
feed the world?
    Mr. Yost. Congressman Moran, you are a little bit out of my 
area of expertise. I think that there are a lot of things I am 
told on the horizon, both in the public and private sector that 
can dramatically increase yields. There is no question about 
it, I touched on biotechnology, I touched on drip irrigation, 
there are a number of things, minimum tillage. There are a lot 
of things that can be done. Now with the economic incentive 
there, I think we are going to see a more amplified response in 
both the public and private sector. Agriculture has been in the 
back water, really, when you talk about the economy and the 
world concerns for a period of time. Mr. Kunder has talked 
about the diminishing roles played in their programs. Clearly 
in our economy, now, with it on the front page every other day 
of every major newspaper, I see a big change both in government 
and in the private sector on where resources are going to go, 
and where initiatives are going to begin. We have taken a 
renewed interest in pulling together the various agencies 
within the Department on this food security strategy. Our 
agency is trying to play point on that. We think we have an 
awful lot to offer and we are working with USAID and others 
inter-governmentally on this. It takes awhile to get it 
together, but to answer your question, yes I think that there 
are several things on the horizon that will dramatically allow 
increased food production, but we also have to have countries 
in the world that will allow that to happen. They have to have 
the rule of law and good governance of people who will go there 
and invest and allow things to happen.
    Mr. Moran. Administrator, if you would tell your colleagues 
at the Department of Agriculture of my interest in this 
question, I would be glad to hear from others as well. And I do 
think that it is an area that we, on the Agriculture Committee, 
ought to be spending more time on, on those who are concerned 
about hunger. I think there is significant potential and we 
often think about how do we divide up the resources that we 
have? How do we divide the loaf, as compared to how do we 
produce more loaves, and I think there are some significant 
opportunities with technology and research that advance 
agriculture in a hungry world. I thank you, Mr. Chairman, for 
the opportunity.
    The Chairman. Thank you so much, Mr. Moran. That concludes 
this panel. We thank both gentlemen. I would like you to answer 
in the affirmative, if you would be willing to answer Members 
written questions within the next 2 weeks should they be 
submitted to you. Would you?
    Mr. Kunder. Yes, sir.
    The Chairman. Would you, Mr. Yost?
    Mr. Yost. Yes.
    The Chairman. Okay, thank you. So, I encourage Members to 
please submit any further questions you may have in writing. 
The gentlemen have agreed to answer you within 2 weeks of the 
submission of those questions. This does complete our first 
panel. We thank the gentlemen very much.
    We would like to invite our second panel to come quickly to 
the table. Mr. Sean Callahan, Executive Vice President for 
Overseas Operations of Catholic Relief Services, Baltimore 
Maryland; Dr. Andrew Barnes, Director of Food Security, Food 
for the Hungry Incorporated here in Washington; Mr. ``Buzz'' 
Guroff, Senior Vice President, Food Security and Specialty 
Crops Portfolio of ACDI/VOCA in Washington; Dr. Nicholas Minot, 
Senior Research Fellow at International Food Policy Research 
Institute here in Washington; and Dr. Theo Dillaha, Program 
Director, Office of International Research for Education and 
Development, Virginia Tech University. If these folks would 
please come to the table, we want to stay on time and we will 
begin our questions. Thank you very much. Mr. Callahan, you may 
begin with your testimony.

           STATEMENT OF SEAN CALLAHAN, EXECUTIVE VICE
   PRESIDENT, OVERSEAS OPERATIONS, CATHOLIC RELIEF SERVICES, 
                         BALTIMORE, MD

    Mr. Callahan. Good morning Chairman McIntyre, Ranking 
Member Musgrave, Members of the Committee. My name is Sean 
Callahan. I am the Executive Vice President of Catholic Relief 
Services. We serve in over 100 countries throughout the world 
and are supported by over 68 million Catholics in our effort, 
and have been a long time partner of USAID and Food for Peace 
in trying to eradicate hunger globally. This hearing here today 
is very timely, and we very much appreciate the efforts that 
you have made to date. We would like to thank your leadership, 
not only in holding this meeting, but also in providing the 
leadership in food aid internationally and the recent approval 
of the farm bill.
    We think that that is a mechanism that will help us into 
the future, in responding to this grave crisis. As a U.S. 
taxpayer and a representative who goes oversees, the leadership 
that the U.S. has provided in this area is very, very helpful 
in us having a more influential voice to those overseas in 
trying to eradicate hunger. People are suffering in this global 
food crisis and we see that not only in our own country, and 
our colleague agency Catholic Charities, as increased numbers 
of participants in their local programs. Where in the United 
States only ten percent of the income is used for food 
purchases, whereas overseas it is over 75 percent, so we 
understand the grave need that people are facing. People are 
indeed stretched and Catholic Relief Services sees that on the 
ground. We see that people are eating less, and in some cases 
making very difficult decisions on who in the family should 
actually eat.
    Last month I was in Ethiopia and I happened to make a trip 
down to an area where one of our partners said people were 
suffering and in distress. And I went down to a site that was 
being serviced by the Ethiopian church, The Missionaries of 
Charity, and Doctors without Border were providing medical 
assistance. In this area, although people were claiming there 
wasn't a hunger crisis in the area, 23 children had died at the 
site that we had served once they had been admitted to the 
site, and over 40 children in the area community were said to 
have died. Now one of the parents brought one of the children 
in as we were there and told us that the situation was so bad 
that they brought their healthy child to the center because 
their unhealthy child probably wouldn't make it. Another 
grandfather was feeding a child with a syringe because the 
child didn't have the ability to even drink the high protein 
solution that was being provided at the time. So although some 
countries may not admit right away that there is a crisis, 
certainly we are seeing it on the ground.
    Unfortunately, this food crisis has deep roots, and the 
deep roots are complex and just can't be answered by providing 
additional food assistance. It is an increased demand for food, 
generally, an increased demand for animal protein, we are 
seeing higher fuel prices that are leading to this, a diversion 
of grain and oilseed crops that go into biofuel production, as 
well as commodity speculation and global climate change. We are 
trying to work in all of these different areas and in global 
climate change to try to reduce the affects that disasters have 
on people. It has affected not only the urban areas, but as I 
have just attested to in Ethiopia, also some of the rural areas 
where people produce.
    We see at Catholic Relief Services a couple areas that we 
can focus on. I think there are two of them that are structural 
and that is developing a mechanism to better enhance and 
strengthen our ability to coordinate our hunger efforts in the 
United States. The U.S. is a leader in this area, but I am not 
sure that we are coordinating our efforts as we have, possibly, 
in the HIV/AIDS with PEPFAR and so I ask you as a Committee to 
look at that to see if we need to focus a greater need and a 
coherence in our hunger efforts. In addition to that I would 
say greater partnerships overseas, as we do at the civil 
society, and community level because this isn't something that 
we can solve from the outside. We need to build the local 
capacity and strengthen the local communities so that they are 
more resilient and better able to respond to shocks in their 
systems.
    We look at four different areas for developmental 
assistance. One, certainly, is the global safety net which is 
not only saving but transforming lives as I saw personally in 
Ethiopia. We also need alternatives, and Mr. Fortenberry 
mentioned some infrastructural issues. Alternative to rain fed 
agriculture: One of the big problems that we see is the rain 
fed agriculture and so irrigation systems are crucial. A 
greater focus on agro-enterprise at the local level linking 
small farmers to markets is a crucial area. We found voucher 
programs that others are enticing small business people into 
the community so that we can actually develop a market and also 
the issue of infrastructure as far as roads go and 
transportation so that the communications are there so people 
can actually market their crops. Again, I would also say, 
alternative sources of energy are also very much needed at the 
local community level. Thank you.
    [The prepared statement of Mr. Callahan follows:]

Prepared Statement of Sean Callahan, Executive Vice President, Overseas 
          Operations, Catholic Relief Services, Baltimore, MD
    Good afternoon Chairman McIntyre, Ranking Member Musgrave, and 
Members of the Subcommittee.
    Thank you for calling this very timely hearing on delivering 
international food aid and providing foreign agricultural development 
assistance. I would like to express my gratitude for providing Catholic 
Relief Services the opportunity to share our insights--based on our 
long experience of programming food aid for emergencies and long-term 
development, including our support of agricultural development with 
poor farmers around the world.
    My name is Sean Callahan, Executive Vice President of Overseas 
Operations for Catholic Relief Services (CRS). Operating in more than 
100 countries around the world, CRS is the international development 
and relief agency of the U.S. Conference of Catholic Bishops, drawing 
support from among the 68 million members of the U.S. Catholic 
community. And for more than half a century, we have been in a 
partnership with Food for Peace that has tangibly expressed the 
goodwill and compassion of the American people.
    In my testimony, I will spotlight what I call the ``Global Food 
Crisis'' by citing the actual experiences of hungry people, including 
my personal observations. I will then focus on the deep roots of this 
crisis. Last, I will make five recommendations on food security to 
guide Congress in its response to the emergency: $2.1 billion for Title 
II, $300 million for the McGovern-Dole program, $230 million to 
replenish the Emerson Trust, more cash for local purchases and 
vouchers, and stronger partnerships with recipient nations.
Hungry People Suffer in the Global Food Crisis
    As you all know, high commodity prices are affecting people in 
every country of the world, including our own. The average American 
family spends less than ten percent of its income on food, while low-
income Americans spend a larger proportion of their limited resources 
on food. An impoverished family overseas that typically spends about 
half its income on food is now spending up to 75 percent or more 
because of the Global Food Crisis. These price increases have made food 
truly unaffordable to the very poor--and sometimes the not-so-poor. 
This desperation is fueling the urban demonstrations and riots that 
have been springing up around the world over the past several months. 
The problem for CRS relief efforts is not the availability of food, but 
the soaring prices that make food less and less affordable for the poor 
in both urban and rural settings
    CRS staff around the world has heard stories of families who are 
stretched to the limit by the high price of food. Some are having to 
make do with eating less at each meal. Some are already skipping meals, 
or even not eating on a particular day. Few can afford to buy meat or 
chicken for any of their meals. The most desperate will sell off 
precious resources, such as a water jug, a hoe or even the tin roof of 
their home in order to buy food. Tragically, they may even have to 
decide which child or children may have the best chance of survival and 
which, already ill and weak, will be allowed to die. These are the 
agonizing choices the global food crisis is forcing the poor to make.
    Frequent reports from our CRS field offices document that this 
awful scenario is being repeated in many countries in the developing 
world. In some regions of Niger, families have started eating only one 
meal a day. In dire circumstances, some families have resorted to 
eating anza, a wild plant with bitter leaves, to supplement their diet. 
In northern Ghana, students have been taking CRS-provided lunches home 
to share with hungry family members. For some children, this means 
sharing their only meal of the day.
    In southern and eastern Ethiopia, two consecutive seasons of poor 
rains have led to total crop failure. Many people in these areas now 
have nothing--literally nothing--to eat. And with food prices soaring 
worldwide, they cannot afford to buy the dwindling and increasingly 
expensive supplies in the market. As a result, we are beginning to see 
cases of severe malnutrition, especially in children.
    I was in eastern Ethiopia last month, and I saw how the people 
there are already suffering. I visited a feeding site run by the 
Ethiopian Catholic Church and the Missionaries of Charity in a largely 
Muslim area where, over the previous 5 weeks, 28 children had died of 
malnutrition. The conditions there are already dire. They are going 
through a ``green drought,'' where there was just enough rain to allow 
stocks to sprout 3 to 5 inches, but there is no yield.
    I saw one Ethiopian parent bring a very sickly, lethargic child to 
the center for emergency treatment. The parent told the sisters, ``I 
brought this child because I thought he could make it. My weakest child 
is at home.'' Nearby, a grandfather fed his grandson sips of milk every 
30 seconds from a plastic syringe.
This Food Crisis Has Deep Roots
    My first reaction on seeing all this was simply to bite my lip, to 
contain my emotion. My second reaction was anger. How could we let this 
happen? But the more I observed, I realized that this was a place of 
hope. I saw kids being fed and stabilized, getting better. Parents were 
thanking the workers for saving the lives of their children. This is an 
area that has had good production over the past 5 years, and they just 
need some immediate food assistance so that they can make it until the 
next harvest. And much of that help is coming in the form of food aid 
from the American people. They also asked for help to increase their 
planting for the next season. But if the next rainy season is poor and 
the next harvest fails, these people will be even worse off.
    What really concerns me about his food crisis is that it is not a 
blip on the screen. This food crisis is structural. Its causes are 
complex and are based on fundamental changes in the global marketplace. 
The Economist magazine has called these changes ``The end of cheap 
food,'' in recognition of a consensus that prices will not return to 
pre-food crisis levels.
    This food crisis will be long-lasting. And it is just beginning. 
Its effects are being seen first in urban areas where people cannot 
produce their own food and cannot absorb the steep price increases. 
There is widespread drought in East Africa, and there may be other crop 
failures this year, beginning with the massive destruction of rice in 
Myanmar. Farmers who are struggling to feed their families will not be 
able to invest in fertilizer that has doubled in price and continues to 
rise, so their yields will be lower. By next February, this crisis will 
be deeper and broader as more segments of society are pushed into 
poverty by the combination of higher food prices and reduced 
availability worldwide.
    Over the long term, there are several factors that could exacerbate 
the food crisis, including an increased demand for food generally, an 
increased demand for animal protein, higher fuel prices and the 
diversion of grain and oilseed crops for biofuel production. In 
addition, there is an emerging scientific consensus that there is 
evidence of global climate change, and that this phenomenon is having a 
significant impact on global agriculture. Earlier this month, the head 
of the UN's Framework Convention on Climate Change said the Global Food 
Crisis will only worsen because of climate change, as he urged the 
leaders of the G8 to set goals to reduce carbon emissions within the 
next dozen years. It is a fact that droughts and severe storms and 
other natural disasters are occurring more frequently and are adversely 
affecting food production. And it is inevitably those least responsible 
for the factors leading to climate change, the poor, who will bear the 
brunt of its effects. In terms of the response to this Global Food 
Crisis, we are looking at short-term measures as well as longer term 
initiatives.
    In the short term, CRS believes we need to get cash and food into 
the hands of the urban and rural poor, so people can eat. Our plan is 
to provide cash vouchers to help both urban and rural families afford 
sufficient food during the crisis, where food is available. Eligible 
families would receive a set amount of food vouchers to supplement 
their food supplies when rising prices limit their purchasing power. 
This approach was successfully applied by CRS in 2006 as part of a 
drought response in Kenya with 2,500 expectant and nursing mothers and 
3,500 families with malnourished children receiving food vouchers to 
supplement their food resources. Where there isn't sufficient food 
available, we are working with Food for Peace and the World Food 
Programme to ensure delivery of imported food.
    We are also providing an opportunity for people to receive cash for 
working on projects that better prepare communities to weather 
disasters like hurricanes or cyclones. For example, in Haiti, cash for 
work projects have helped to clear drainage canals that will help 
prevent flooding when a storm hits. We are also seeking to help farmers 
in the developing world by investing in seeds, fertilizer and other 
materials that will help them in the next planting season. For example, 
we have used a voucher approach to enable rice farmers in Burkina Faso 
to acquire both improved seed and fertilizer in order to boost 
production of this urban staple that is in such short supply. In Ghana, 
Senegal, Mali and Nigeria we are hoping to expand this approach, and we 
have a proposal waiting for funding to expand production in 16 
countries across Africa, and to move from rice to pulses and eventually 
to roots and tubers such as cassava.
    Unfortunately, within the current food aid framework, there are not 
enough cash resources available from Food for Peace to fund these types 
of programs, especially at the scale that is needed. In addition to 
using valuable food aid resources, CRS will also be devoting private 
resources to fund some of these short-term measures. This Global Food 
Crisis is bigger than food aid alone. The U.S. Government should 
provide much more cash in the International Disaster Assistance and 
Development Assistance accounts to complement current food aid efforts.
    In the longer term, CRS agrees with the general consensus among 
international PVOs that there must be a much more robust investment in 
agricultural productivity and market infrastructure in the developing 
world to reverse the decade-long decline in aid for agriculture. 
Ironically, the food crisis presents us with an opportunity to make a 
major impact in the fight against extreme poverty, particularly in 
Africa. Timely initiatives that increase agricultural productivity and 
expand small farmers' access to markets could go a long way toward 
easing the suffering caused by hunger. As Pope Benedict XVI said in his 
message to last month's FAO summit on food security:

        Hunger and malnutrition are unacceptable in a world which has, 
        in fact, levels of production, resources and knowledge 
        sufficient to put an end to such dramas and their consequences. 
        The great challenge of today is to `globalize,' not just 
        economic and commercial interests, but also the call for 
        solidarity, while respecting and taking advantage of the 
        contribution of all components of society.
Congress Can Help To Reverse the Global Food Crisis
    The response by Congress to the Global Food Crisis has already been 
substantial, and I must commend you for this. The 2008 Farm Bill will 
greatly help us in this fight against global hunger. I would in 
particular like to commend Chairman Peterson and Ranking Member 
Goodlatte for their bipartisan leadership in crafting the 2008 Farm 
Bill. A number of initiatives that strengthen food aid and food 
security were included in the Trade Title that was enacted into law. 
Perhaps the most important of these is the $450 million safebox for 
developmental food aid. CRS views this provision as an important first 
step in reshaping United States international food and agriculture 
assistance policy and increasing global food security. United States 
international food and agriculture policy must integrate Title II, 
McGovern-Dole, and regular bilateral and international agricultural 
programs, while continuing to provide adequate and practical resources 
for emergencies.
    I must point out, however, that the structural changes in commodity 
prices will likely erode any increases to developmental food aid in the 
safebox. The volume of commodities that can be procured and shipped 
will continue to decline as prices of food, fuel, and transportation 
skyrocket. Even with the recent supplemental appropriation, Food for 
Peace is not in a position to provide more food aid than it did in 
2007, which had the lowest volume (at 2.6 million metric tons) in many 
years. So, in fact, we are right back to where we started unless we 
take other urgent steps. We must remember that Food for Peace operates 
programs fighting long-term hunger in only 18 or so countries. The 
World Food Programme has identified more than 30 countries that are now 
affected by the current Global Food Crisis.
    Moreover, as part of a broad Catholic coalition working on the farm 
bill, CRS had sought real price support payment reform, especially to 
level the playing field for poor small farmers in our partner nations 
so they can compete fairly and help their countries respond to the 
global food crisis. A major opportunity for real reform was lost and 
what functions as a subsidy system continues to help those who need it 
least instead of those who need help the most, both in the United 
States and abroad.
    At the same time, we would like to thank the Congress and the 
Administration for acting to pass the FY 2008/2009 Supplemental 
Appropriations Act. It will provide vitally needed resources to begin 
an emergency response, as well as to continue developmental food aid 
programs that build long-term food security.
    Looking ahead, we would like to ask you to work with your 
colleagues on the Appropriations Committee to help enact the following 
five initiatives build food security:

   First, in addition to the $395 million included in the 
        supplemental, we recommend that Congress fund the FY 2009 
        regular appropriation for Title II at $2.1 billion. This 
        appropriation will bring the total appropriation for FY 2009 to 
        $2.5 billion, the maximum level authorized in the farm bill. A 
        level of $2.5 billion also ensures that we can provide enough 
        food aid to match closely the average tonnage level of the last 
        5 years of 2.77 MMT (assuming a cost of $700 per metric ton). 
        Only robust funding will fill the safebox and maintain the U.S. 
        contribution to global food aid, while ensuring that we can 
        respond to additional needs and ever-rising prices.

   We also recommend that Congress provide complementary 
        funding of $300 million for the McGovern-Dole Nutrition and 
        Education program. This level would equal the amount that would 
        be authorized by the Global Food for Education Pilot Program. 
        It would ensure that the McGovern-Dole program could also keep 
        pace with rising food aid costs while also responding more 
        completely to the rising demand for integrated education and 
        nutrition programs.

   Third, the Bill Emerson Humanitarian Trust complements 
        regular Title II emergency aid as an important reserve for 
        responding to acute hunger. We urge Congress to replenish $230 
        million, the amount withdrawn in April and May of this year to 
        address the current food-price crisis. We need an incremental 
        replenishment now or the next withdrawal likely will deplete 
        the Trust, the most timely and flexible resource for handling 
        unanticipated food emergencies.

   Fourth, the Administration and Congress must also recognize 
        the need for cash resources as a necessary complement to 
        commodities. In addition to new cash resources included in the 
        2008 Farm Bill, we urge you to work with your colleagues on the 
        Appropriations Committee to ensure that cash resources are 
        provided in the International Disaster Assistance and 
        Development Assistance accounts. We direly need cash to buy 
        food locally or to support voucher and food-for-work programs, 
        as may be appropriate.

   Finally, we need to build stronger partnerships with the 
        hungry and poor overseas. Money alone will not solve the 
        problem of food security. We need real commitments from 
        beneficiary nations to energize their own resources in the 
        fight against acute and chronic hunger. We also need to rely on 
        private voluntary organizations like CRS because we have 
        durable and effective partnerships with the poor overseas. We 
        further need to ensure that we integrate all food security 
        programs in close cooperation with recipients and host 
        governments. Such integration includes using cash wisely and 
        making effective investments in agricultural development.

    In conclusion, I want to once again thank you, Chairman McIntyre, 
and all the Members of the Subcommittee for your leadership on food 
security in the 2008 Farm Bill and for holding this hearing on 
responding to the needs of the hungry around the world. At Catholic 
Relief Services, we believe that the current food crisis will add 
another 100 million people to the 850 million people already suffering 
from hunger. This troubling reality requires the continued and 
augmented leadership of the U.S. Government in providing for both 
chronic and acute hunger needs.
    I would be pleased to respond to any questions that the Committee 
may have.

    The Chairman. Dr. Barnes.

 STATEMENT OF ANDREW BARNES, Ph.D., DIRECTOR OF FOOD SECURITY, 
 FOOD FOR THE HUNGRY, WASHINGTON, D.C.; ON BEHALF OF ALLIANCE 
                          FOR FOOD AID

    Dr. Barnes. Mr. Chairman, thank you for the opportunity to 
testify on food aid during this period of global food crisis. I 
am the Director of Food Security for Food for the Hungry and I 
am testifying today, on behalf of the Alliance for Food Aid, an 
alliance of 14 PVOs. We are most grateful to Congress for 
providing $850 million of emergency supplemental funding for 
2008 and $395 million of advanced funding for 2009. It is 
further proof that the United States is a long standing global 
leader in providing food assurance--food assistance.
    However, we feel that in light of the global food crisis, 
even greater funding will be needed for developmental food aid. 
Due to the crisis, an additional 100 million people are facing 
food shortages. We hear 130 million today. Many of these people 
are in Ethiopia where I served as Food for the Hungry's Country 
Director for the past 4 years. I returned to the United States 
last month. Therefore, I will focus my discussion on food aid 
in the developing crisis on my experience in Ethiopia, which I 
feel is very relevant across Africa.
    Ethiopia's farmers, like many in Africa, survive on small, 
highly eroded farms while facing frequent droughts. Food crises 
occur annually. To survive during these periods, families many 
times, need to sell assets, including agricultural tools and 
this results in long term reductions in productivity. The 
innovative Title II funded Productive Safety Net began in 2005, 
and was designed to alleviate the consequences of these annual 
food shortages. This program helps the poor before they must 
use destructive strategies to survive.
    American PVOs, Food for the Hungry included, have used 
Title II resources to work with communities to prevent annual 
food shortages and to build productive community assets. These 
food for work generated assets are being linked to other 
agricultural programs and have resulted in increased 
agricultural productivity and the lives of many have been 
greatly improved. In spite of the success of this safety net, 
the global food crisis has hit Ethiopia very hard and this year 
an estimated 10.4 million people, approximately 12 percent of 
the population, are in need of assistance. Three factors have 
combined to make this crisis worse than any crisis in recent 
years.
    First, very low crop yields have resulted from extremely 
poor rains in 2007 and 2008. Second, the cost of wheat and 
other staples has more than doubled and local market prices, 
surprisingly, are now higher than global market prices. Third, 
the supply of food in Ethiopia's emergency food reserve is very 
low. Much of this food, which is set aside to help in cases of 
emergency, has been sold in an attempt to stabilize the rising 
commodity prices. This action has greatly reduced the reserves 
of food stocks and very little emergency food is currently 
available in the country. Without this safety net, the current 
situation would be much worse than it is. It has greatly 
improved the lives of millions, but the current food crisis has 
the potential to undermine this progress.
    Consequently, PVOs have proposed an emergency program to 
USAID and resources are being mobilized. Rapid mobilization is 
critical to save lives. The question is, where do we go from 
here? Across the globe, long term solutions are needed. 
Innovative food-based development programs need to be expanded 
to other countries. Kenya, for example, would greatly benefit 
from a safety net type program. Unfortunately, important Title 
II programs in Kenya are ending this year because of limited 
funding.
    Food aid must be linked to long term strategies to improve 
nutrition, agricultural productivity and to build self-
sufficiency. Food for development is critical for this and we 
thank this Committee and Congress for setting minimum levels of 
Title II funding. However, we encourage that $500 million of 
Title II funds be made available, annually, for non-emergency 
developmental programs, in order to reduce the suffering during 
this global crisis.
    In conclusion, Mr. Chairman, because of the current global 
food crisis, developmental food aid funded by the United States 
of America, is needed now, more than ever. I thank you and I 
will be pleased to answer any questions.
    [The prepared statement of Dr. Barnes follows:]

Prepared Statement of Andrew Barnes, Ph.D., Director of Food Security, 
 Food for the Hungry, Washington, D.C.; on Behalf of Alliance for Food 
                                  Aid
Food Crisis in the Horn of Africa
    The United Nations reported on July 11th that approximately 14 
million people in the Horn of Africa (Ethiopia, Somalia, Eritrea, 
Djibouti, Uganda and Kenya) are facing an unprecedented food crisis. 
These countries are suffering from both rapidly rising food costs and 
an extensive drought. The 14 million includes 1.2 million pastoralists 
in northern Kenya, 700,000 Ugandans, and approximately 2.6 million 
people in Somalia. However the vast majority are in Ethiopia, which has 
10.4 million individuals facing an acute lack of food.
    The situation in Kenya is typical for the region. In Kenya drought, 
high fuel prices and political instability have contributed to the food 
crisis. The impacts of the food crisis are being felt in both urban and 
rural areas but the urban areas are facing the greatest difficulties. 
The country is being hit with increased inflation, increased costs of 
production, and lower crop production in 2008. Food prices for staples 
have risen rapidly; the price of corn flour has risen by more then 40%. 
These price increases are particularly hard on the poor who already 
spend a large portion of their income on food. To survive in this 
situation many are pulling children out of school and families skipping 
meals. Increased prices for fertilizers and fuel have resulted in a 50% 
increase in land preparation costs making land preparation less 
affordable and the results will be lower agricultural production. The 
reduced production will obviously extend and increase the intensity of 
the crisis.
    I served as Food for the Hungry's Country Director in Ethiopia from 
June 2004 until June 2008 when I took the position of Director of Food 
Security with Food for the Hungry in Washington. The majority of my 
comments will focus on Ethiopia because of my experience in that 
country.
Ethiopia's Productive Safety Net Program
    Ethiopia's economy and its people remain largely dependent on 
subsistence farming. This dependency has proven to be very problematic 
because of a number of factors including high variability of rainfall 
from year to year. However frequent droughts are not the only factors 
contributing to Ethiopia's food security problems. The average farmer 
works to feed his or her family on less than 2 acres of land and this 
land is often over cultivated and subjected to intense soil erosion. 
Ethiopia's population growth remains very high with an annual rate of 
approximately 2.4%, causing further reductions in farm size. As farm 
size decreases the intensity of agriculture increases contributing to 
further land degradation and soil erosion. These perennial problems 
make Ethiopia one of the world's poorest countries. Ethiopia's children 
bear the brunt of this poverty; approximately 50% of children under the 
age of 5 are moderately to severely stunted.
    Donors (including USAID), the Government of Ethiopia and PVOs have 
worked together to limit the adverse affects of this situation. The 
drought of 2002-2003 resulted in 21% of Ethiopia's population needing 
relief aid. The U.S. responded generously and many lives were saved. 
While saving lives is obviously necessary, those interested in 
Ethiopia's future realize that more must be done to break the vicious 
cycle of drought and poverty.
    Approximately 8.5 million people, ten percent of Ethiopia's 
population are chronically food insecure (face annual food deficits). 
These people are very vulnerable to the negative consequences of any 
variability in rainfall or other negative events. During an emergency 
situation their ability to survive depends on the ``mining'' of their 
already limited capital and assets including, physical assets (tools 
and oxen), natural assets (land and water) and human capital (education 
and labor). The mining of assets occurs when families take last resort 
actions such as taking children out of school, or selling productive 
assets and household goods in order to survive. These survival 
strategies result in long-term negative impacts. After the drought has 
passed, these families must rebuild their capital to become productive 
again; consequently, the economic impacts of a crop failure are long-
term and result in lifelong reductions in earnings. With each shock, 
families and communities become less able to cope and fall farther into 
food insecurity.
    Before the introduction of the Productive Safety Net in 2005 a 
large portion of food aid was programmed ``on the fly''. Food aid 
appeals were made based on annual crop assessments. The timing of these 
assessments and appeals made it difficult to receive the food aid on 
time and many people had to sell assets to survive until the food 
arrived. Also the food for work activities associated with these annual 
appeals were hastily planned and the quality of the activities was in 
many cases less than desired. Truly, a new approach to programming food 
aid was needed for the lives of these food insecure households and 
communities to improve.
    Ethiopia's recent history makes it clear that weather related 
problems and annual food shortages will continue to occur regularly in 
the future. Consequently, the Productive Safety Net Program (PSNP) was 
designed with the expectation of these annual food shortages. In the 
Productive Safety Net food aid is program based on long term historical 
needs and in a typical year no emergency appeal is need beyond the 
programmed PSNP resources. In this program the food aid is planned in 
advance and made available during the annual hunger period; therefore 
the safety net helps the chronically food insecure communities before 
the onset of the food shortage season and before they must use negative 
coping strategies. By eliminating the need to sell scarce assets to 
survive the food shortage season, the hard hit communities are able to 
retain and build upon their asset base. Through this innovative program 
American PVOs using Title II resources are working together with local 
communities to prevent annual food shortages, build community assets 
that will contribute to long term productivity and reduce the need for 
poor families to sell assets to survive until next year.
    The following figure represents a generalization of food 
availability throughout the year for a high-land community in Ethiopia. 
Food availability begins to increase in October when the harvest 
begins. It peaks in December but then begins to decline from March to 
June or July when it reaches the low point. It remains low through 
September and then climbs again at the start of the new harvest.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The lives of the safety net participants have been greatly 
improved. Families in the program no longer need to ``mine'' personal 
assets to survive the normal annual food deficient period. Community 
assets are being constructed through food for work activities and many 
of the assets are being synergistically linked to and utilized by other 
agricultural and food security programs to improve productivity and 
income.
    Graduation from the program is the ultimate goal of the PSNP and 
will result in the reduction of the number of households requiring 
external food aid and assistance. As community assets are built and are 
linked to other agricultural and income generating programs family 
assets are protected and can actually increase. After a family's assets 
grow to an appropriate level graduation from the Productive Safety Net 
program will occur.
    This program has been operating in Ethiopia since 2005. USAID is 
funding six PVOs (CARE, Catholic Relief Services, Food for the Hungry, 
REST (an indigenous Ethiopian organization), Save the Children and 
World Vision) to implement the Productive Safety Net in over 40 
districts. The program is supported by wheat, peas and vegetable oil 
produced by American farmers and is partially funded by monetization of 
vegetable oil. Without monetization this program would lack adequate 
funding and be greatly reduced in scale.
The Productive Safety Net and the Current Situation in Ethiopia.
    The Productive Safety Net has stabilized and greatly improved the 
lives of millions of people in Ethiopia. As intended community assets 
are being built, livelihoods are being protected and improved and the 
normal annual food gap is been filled.
    The Productive Safety Net was designed to fill the food gap during 
an average year. In general the food gap is about 6 months long and 
USAID and its partner PVOs have based their programs on a 6 month 
hunger period, understanding that abnormal years will occur and that 
actions outside the Productive Safety Net will be necessary in such a 
year. Unfortunately 2008 has developed into an extremely difficult year 
and the needs are well beyond the capacity of planned Productive Safety 
Net resources.
    Three factors have combined to make this food crisis much worse 
than any seen in Ethiopia in recent history. Some have used the analogy 
``Perfect Storm'' to describe the situation. I disagree with the term 
``storm'' because storm implies a short term, passing event, 
unfortunately the developing crisis will likely continue for the long 
term. The three major contributors to the current situation in Ethiopia 
are: (1) low crop yields due to inadequate rain, (2) the soaring cost 
of food and (3) very low food supplies in Ethiopia's Emergency Food 
Security Reserve. Past emergencies were primarily the result of the low 
availability of food; however this year rising food prices and low food 
reserves are exacerbating the problem.
Current Drought--Low Yields and Poor Harvest
    In April 2008, the government and its partners released a joint 
document that set out the humanitarian requirements for 2008. This 
analysis was based on an assessment conducted in November/December 
2007. As a result, the government-led multi-agency needs assessment 
estimated approximately 2.2 million people would require emergency food 
assistance in 2008. The situation however deteriorated greatly after 
the April report.
    The performance of the seasonal rains in the highlands including 
the Belg, (rains from March to May) were very poor and the area of 
farmland planted declined significantly as a result of the lack of 
rain. Pastoral and agro-pastoral areas also experienced very limited 
rains resulting in greatly reduced availability of pasture, reduced 
animal productivity, increased disease and many livestock deaths. Poor 
rains have also affected root crop production in southern Ethiopia 
where they make a significant contribution to the food security of many 
communities.
Rising Food Costs
    The Central Statistical Agency of Ethiopia reports that general 
inflation is running at over 20% annually and food prices have risen by 
over 40% in the past year. However, the prices of some staples such as 
wheat and corn have more than doubled and the price of cooking oil has 
increased by about \1/3\. Local cereal prices have now become higher 
than global market prices. According to the World Food Programme, 
imported wheat is currently cheaper than the local price of maize and 
sorghum. The current local price of wheat is U.S. $660/MT compared to 
import parity of U.S. $425/MT.\1\ In Food for the Hungry program areas 
corn has increased from $250 per ton a year ago to $650 and barley has 
increased from $150 per ton to $450 per ton.
---------------------------------------------------------------------------
    \1\ World Food Programme.
---------------------------------------------------------------------------
    These rising food costs are causing great hardships around the 
country but especially for the urban poor. In an attempt to reduce the 
impact of the rapidly rising food costs the Ethiopian Government has 
been selling staples such as corn at subsidized prices to the urban 
poor.
    The Government of Ethiopia has also restricted export of cereals 
and local purchases by aid agencies, in an attempt to control inflation 
of prices. It is believe that the government is planning to import 
cereals to be sold in major cities with the intention of stabilizing 
the market situation in Ethiopia.
    Unfortunately this situation is likely to get worse as the hunger 
season (April to September) progresses. The belg harvest is expected to 
be very poor which contributes to the expectation that price will 
remain very high until the next major harvest in October.
Low Stocks in the Emergency Food Security Reserve
    The Emergency Food Security Reserve Agency (EFSRA) was set up in 
Ethiopia as a source of food to be stored and released when emergencies 
like the current food crisis occur. The EFSRA has been every effective 
and has allowed rapid responses to previous food shortages. Government 
agencies, PVOs, and others borrow from the food reserve while waiting 
for food shipments to arrive from abroad or for food to be purchased 
locally if it is available.
    The EFSRA has been a very important component of the emergency 
response system in Ethiopia, however this year its stocks are very low. 
The Government of Ethiopia's attempt to stabilize food prices is one of 
the major reasons for the low stock levels. As stated above the 
government has been selling staples such as corn at subsidized prices 
to the urban poor. These commodities have been sold from the EFSRA and 
this attempt to stabilize prices has resulted in a depletion of 
inventory. Consequently, there have been ``pipeline'' breaks in food 
supplies for both the emergency response and the Productive Safety Net. 
Early in 2008 Food for the Hungry tried to borrow 8,000 tons from the 
reserve but was only able to obtain 5,000 because of limited stocks.
    The situation is critical. The need for emergency food has 
increased to over 400,000 tons and the food reserve is well below its 
minimum desired level of 100,000 tons and most agencies are being told 
food is unavailable for borrowing.
    According to the recent assessments by the government of Ethiopia 
the total number of individuals that will require emergency food 
assistance is 10.4 million people. Of this total 4.6 million will be 
individuals who are not involved in the Productive Safety Net and will 
require 5 or 6 months of assistance. The remaining 5.8 million people 
are in the PSNP and will need an extra 3 months of assistance because 
of the failed belg rains (rains from March to May). These numbers are 
expected to increase after the completion of the Ethiopian government 
led multi-agency assessment of the belg rains.
Solutions
Short Term Needs and Solutions
    The Productive Safety Net has been successful and greatly improved 
the lives of millions of people since its startup in 2005. Because of 
the USAID Title II funded safety net communities and families have been 
able to build assets, avoid using destructive coping strategies and 
have moved toward self sufficiency. Unfortunately the current food 
crisis has the potential to undermine the progress that has been made 
over the past 4 years. The PSNP districts that rely on the belg rains 
are facing an additional 3 months of limited food and will need 
assistance so that the progress made over the past 4 years will not be 
lost.
    With this need in mind the PVO's implementing the PSNP with USAID 
resources have prepared a Joint Emergency Operation Program with 
Catholic Relief Services acting as the lead agency. The proposal is 
base on the Government of Ethiopia's recent appeal and has been 
submitted to USAID and is under review. Because of the above mentioned 
factors rapid mobilization of resources will be very important. The 
next few months are critical.
Long Term Needs and Solutions
    Unfortunately the developing food crisis in Ethiopia and other 
countries in the Horn of Africa will not be quickly resolved. Long term 
solutions are needed. One possible solution is the increased use of 
monetization of food commodities in the Horn. The prices of staples 
such as wheat, corn and vegetable oil are soaring. Increased 
monetization of these commodities in the Horn may help to stabilize 
prices over the long run.
    Innovative, long-term food aid programs such as the USAID funded 
Productive Safety Net Program in Ethiopia are needed in other 
countries. Kenya and Uganda would both greatly benefit from a long-term 
safety net type program. Unfortunately Kenya was recently removed from 
the priority country list and Title II programs in Kenya are currently 
shutting down. Long term food based programs would help address the 
food crisis and lead to development.
    There also needs to be a renewed focus on increasing yields of 
small scale agriculture and food security in rural areas of the Horn. 
High food prices will provide farmers the opportunity to increase 
household income. To accomplish this traditional agriculture and 
livestock farming will need to be improved through effective 
agricultural extension and marketing. Example programs would be the 
promotion of small scale irrigation for production of high value crops, 
protecting and improving the capacity of the land and improving access 
to credit in rural areas.
    In conclusion, the developing food crisis in the Horn of Africa is 
tragic and U.S. food aid programs are needed now more than ever. Short-
term, timely emergency assistance is urgently needed to mitigate the 
affects of the soaring food costs and the current drought. Timely 
assistance will save thousands of lives. Long-term food based 
developmental assistance is also needed. Increased monetization of 
commodities in these countries may help to stabilize prices over the 
long run and the expansion of Title II food aid programs into other 
countries will help address the food crisis and lead to development.

    The Chairman. Thank you very much. Mr. Guroff.

        STATEMENT OF AVRAM ``BUZZ'' GUROFF, SENIOR VICE
          PRESIDENT, FOOD SECURITY AND SPECIALTY CROPS
         PORTFOLIO, ACDI/VOCA (AGRICULTURAL COOPERATIVE
            DEVELOPMENT INTERNATIONAL/VOLUNTEERS IN
       OVERSEAS COOPERATIVE ASSISTANCE), WASHINGTON, D.C.

    Mr. Guroff. Thank you, Mr. Chairman, for inviting me to 
testify. The present world food situation is unarguably in dire 
crisis. Today's high food prices will add about 100 million 
people to the 850 million already food insecure. I presently 
serve as Senior Vice President at ACDI/VOCA where this month we 
are observing our 45th anniversary working on worldwide 
agricultural development and food security.
    Twelve years ago I had the honor of serving as National 
Food Security Coordinator and participating as a member of the 
U.S. delegation to the World Food Summit in Rome. At that time, 
the U.S. Government joined the international community in 
committing to the reduction by half of the 850 million hungry 
people in the world by 2015. Regrettably, scant progress has 
been made on that commitment so far. I hope that the current 
crisis doesn't prove to be yet another opportunity for lofty 
rhetoric but little political will to address this 
unconscionable condition.
    The Summit did a good job of reaching consensus that the 
achievement of food security will require addressing multiple 
factors simultaneously. There is, of course, the need to 
provide emergency assistance, but that must be balanced by, 
among other things, a significant investment in food production 
and rural income generation. What is often overlooked in the 
rhetoric of the crisis is that many of the world's farmers see, 
in today's rising food prices, unprecedented opportunity if 
they are able to develop their capacity and capture markets. I 
would like to use this opportunity to say a few words about our 
approach to non-emergency food aid, specifically P.L. 480 Title 
II and Food for Progress programs, which are important parts of 
our portfolio. When possible, we use the process known as 
monetization, the selling of the donated U.S. commodities, as a 
means of promoting entrepreneurship and fair competition. We 
then use the proceeds to fund a wide range of developmental 
programs that are designed to assist families to become self-
sufficient and over time reduce the need for emergency food 
aid. Our programs in places like Uganda and Cape Verde are 
replete with examples of this.
    We need to avoid being too reliant on direct distribution 
of food aid as a response to the current crisis. We support 
local purchase of food aid as a tool in the tool box, but urge 
that it be employed carefully with all the same disciplines 
that are applied to other food aid programs.
    It has now been widely acknowledged that the diminution of 
development aid devoted to agriculture over recent decades was 
a terrible mistake. Almost no country has managed a rapid rise 
from poverty without increasing agricultural productivity. The 
2009 U.S. budget proposes that only two percent of foreign aid 
expenditures be directed to agricultural development, the 
lowest level of spending in more than a decade. As part of the 
Coalition for Agricultural Development, we are encouraging 
Congressional appropriators to allocate a minimum $600 million 
for ag development in 2009.
    Let me just mention a couple of examples of how the extra 
money should be spent. In Kenya, besides organizing producer 
groups and improving cultivation techniques, we develop market 
linkages and promote inter-firm cooperation. We have helped 
quadruple yields among beneficiary farmers while reducing costs 
40 percent. This has generated approximately $133 million in 
earnings for our 250,000 beneficiary farmers.
    A legacy of our work in Malawi is the National Association 
of Smallholder Farmers of Malawi, NASFAM, a member owned and 
run organization of over 100,000 farm families. It encourages 
smallholders to form village based clubs to increase farming 
revenues and stimulate economic development.
    Mr. Chairman, in summary, food shortages, lack of 
empowerment of people to become self-sufficient, high prices 
and inefficiency in the world food economy have been ACDI/
VOCA's 45 year preoccupation. We know that where livelihoods 
are agriculture based, food production is the economy of the 
economy and fundamental to progress and peace.
    To conclude, I reiterate my concern that the global food 
crisis not be just another opportunity for hand-wringing and 
lofty rhetoric on the part of the international community. I 
hope we will do our part by providing robust funding mechanisms 
to make long-term sustainable agricultural development a 
priority again. I thank you.
    [The prepared statement of Mr. Guroff follows:]

  Prepared Statement of Avram ``Buzz'' Guroff, Senior Vice President, 
  Food Security and Specialty Crops Portfolio, ACDI/VOCA (Agricultural
      Cooperative Development International/Volunteers in Overseas
               Cooperative Assistance), Washington, D.C.
    Mr. Chairman, thank you for inviting me to testify. You are to be 
commended for focusing attention on the present world food situation, 
which is unarguably in dire crisis. Most experts are telling us that we 
face a profound, pervasive and persistent problem--and a growing one. 
Today's high food prices will add about 100 million people to the 850 
million already food-insecure, and climate change may put another 50 
million at risk by 2020.
    I presently serve as Senior Vice President at ACDI/VOCA responsible 
for that organization's food security and specialty crop programs. This 
month ACDI/VOCA observes its 45th anniversary working on worldwide 
agricultural development and food security. We were founded in 1963 by 
U.S. farmer cooperatives in response to Congress's desire to have co-
ops play a role in U.S. foreign assistance, and since then we have 
operated in 145 countries on behalf of USAID, USDA and other donors. 
Andrew Natsios, former USAID Administrator, called ACDI/VOCA the 
``premier agricultural development NGO in the world.''
    I welcome the opportunity to speak the language of agricultural 
development to you. Permit me to say that, unfortunately, it has almost 
been a ``lost'' language in the foreign assistance arena. This defies 
logic, since the main beneficiaries are the billion people who subsist 
on less than a dollar a day, of whom three-quarters live in rural areas 
and depend on agriculture for a living. These rural poor now have to 
spend about half their income on food. And productivity growth in 
developing country agriculture has fallen from three percent per year 
in the 1970s and 1980s to less than one percent today, even in the face 
of burgeoning populations. This is a sorry situation--all the more so 
because it was largely preventable.
    Twelve years ago I had the honor of serving as the National Food 
Security Coordinator and participating as a member of the U.S. 
delegation to the World Food Summit in Rome. At that time the U.S. 
Government joined the international community in committing to the 
reduction by half of the 850 million hunger people in the world by 
2015. Regrettably scant progress has been made on that commitment so 
far. I hope that the current crisis doesn't prove to be yet another 
opportunity for lofty rhetoric but little political will to address 
this unconscionable condition.
    The World Food Summit did do a good job of reaching consensus that 
the achievement of food security will require addressing multiple 
factors simultaneously. There is, of course, the need to provide 
emergency assistance; but that must be accompanied by, among other 
things, a significant investment in food production and rural income 
generation. Technological advances cannot be overlooked; they were 
instrumental during the Green Revolution and are just as possible and 
necessary today. Trade policy, as well, is of critical importance; 
farmers obviously need to be able to market their production at a fair 
price.
    The strategy needs to be a balance between doing what we can--what 
we must--in the short-term to avoid starvation, distress and 
instability, but by all means redoubling our efforts toward sustainable 
solutions. And, as this Subcommittee surely understands, but as is so 
often overlooked in the rhetoric about the crisis, many of the world's 
farmers see in today's rising food prices unprecedented opportunity if 
they are able to develop their capacity and capture markets.
    Global food production must grow by 50 percent by 2030 to meet 
increasing demand, as United Nations Secretary General Ban Ki-moon told 
world leaders at a recent conference in Rome. ``Nothing is more 
degrading than hunger, especially when it is man-made,'' he said. ``It 
breeds anger, social disintegration, ill-health and economic decline.'' 
But will the world's 450 million smallholder farmers, those on 2 
hectares or less, be part of the solution? We say they must for the 
sake of widespread food security. Besides, leaving them out would 
result in greater hunger and poverty, and attendant disposal of 
productive farm assets, poor education, infant mortality, disease and 
massive out-migration from rural areas that would add to spiraling 
problems in overcrowded cities.
    Many of the world's worst-off need direct emergency food aid. For 
ACDI/VOCA's part, we are not generally involved in emergency 
assistance. However, we selectively do food distribution in contexts 
where it makes sense, e.g., supplemental feeding for HIV/AIDS-affected 
households, and mother and child health.
    Others will likely cover food aid distribution more fully. I would 
like to use this opportunity to say a few words about ACDI/VOCA's 
approach to non-emergency food aid, specifically P.L. 480 Title II and 
Food for Progress programs, which are an important part of our 
portfolio. When possible, ACDI/VOCA uses the process known as 
monetization, the selling of the donated U.S. commodities, as a means 
of stimulating trade within a country. Where appropriate, we design the 
process so that small traders have access to markets. By breaking up 
the commodities into small lots and working directly with local 
marketers in an auction or another sales process, we stimulate the 
local market, promote entrepreneurship and fair competition, and 
provide a more efficient and wider distribution of needed foodstuffs. 
ACDI/VOCA has considerable experience with P.L. 480 Title II programs 
in Africa and more recently in Haiti. We have monetized on behalf of 
NGOs such as Catholic Relief Services, World Vision and CARE. We have 
managed over a million metric tons of commodities.
    The second prong of ACDI/VOCA's food aid approach is the use of the 
monetization proceeds to improve food security, promote agricultural 
development, improve natural resource management, establish and promote 
rural micro- and small-business credit institutions, and open up 
commercial markets for small producers as well as programs for people 
living with HIV/AIDS and their families. In short we and other NGOs 
involved in food aid undertake developmental programs that are designed 
to assist families to become self-sufficient and, over time, reduce the 
need for emergency food aid programs. Our programs in places like 
Uganda and Cape Verde are replete with examples of this.
    We need to avoid becoming too reliant on direct distribution of 
food aid as a response to the current crisis. We support local purchase 
of food aid as a tool in the tool box, but urge that it be employed 
carefully with all the same disciplines that are applied to other food 
aid programs.
Agricultural Development
    It has now been widely acknowledged that the diminution of 
development aid devoted to agriculture over recent decades was a 
terrible mistake. Since ACDI/VOCA's roots are in the Green Revolution, 
we couldn't agree more. Investment in agriculture in recent decades 
should have been a powerful tool for improving food security and 
reducing poverty. The World Bank calculates that for the world's 
poorest, GDP growth generated by agriculture is up to four times more 
effective in reducing poverty than growth in other sectors. Yet the 
proportion of official development assistance to agriculture has fallen 
to less than three percent from 18 percent of all aid in 1979.
    The World Bank's 2007 World Development Report posits that almost 
no country has managed a rapid rise from poverty without increasing 
agricultural productivity. Vietnam, a graphic example, has risen from 
being a food-deficit country to the world's second-largest rice 
exporter, largely as a result of the development of its smallholder 
farming sector. The proportion of people living in absolute poverty 
there has declined from 58 percent to 14 percent.
    The FY09 U.S. budget proposes that only two percent of foreign aid 
expenditures be directed to agriculture. The U.S. commitment to 
agricultural development has declined from $489 million in 2005 to the 
current level of $283 million in 2008, the lowest level of U.S. 
agricultural development spending in more than a decade, even before 
adjusting for inflation. ACDI/VOCA is pleased to be playing a 
leadership role in a new broad-based Coalition for Agricultural 
Development (CFAD) which is encouraging Congressional appropriators to 
allocate a minimum of $600 million for agricultural development in 
FY09. This is the first time in history that a coalition of U.S. based 
private sector companies, NGOs, religious groups and others have come 
together to advocate for reversing the decline in U.S. spending for 
agricultural development.
Examples
    Let me address how the extra money should be spent. ACDI/VOCA takes 
a comprehensive value chain approach to agricultural development and 
examines whether, for example, farmers are organized to understand and 
capitalize on markets, build their internal capacities and take 
advantage of economies of scale. Do they need access to microfinance to 
pay for fertilizer, seeds and equipment, or can they even obtain those 
essentials? Do they need upgraded technology, land reform, an enabling 
business environment, infrastructure? We identify constraints and 
opportunities up and down the respective agricultural value chains and, 
within our donors' project objectives, act accordingly to develop a 
sustainable local food system.
    In Kenya, the poorest quarter of the population was spending 28 
percent of its income and probably more now on maize. Our project there 
considers the crop's entire value chain in an effort to improve the lot 
of smallholder farmers who grow it and to provide more food. Besides 
organizing Kenyan producer groups and improving cultivation techniques, 
ACDI/VOCA develops market linkages and promotes inter-firm cooperation. 
We have built relations with a diverse consortium of partners and 
established a market information network. This year's maize business 
fair in Eldoret, where our new 176 page Kenya Maize Handbook was a hot 
item, drew 15,000 people, including many key private sector players. 
ACDI/VOCA has helped quadruple yields among beneficiary farmers while 
reducing costs 40 percent. This has generated approximately $133 
million in earnings for our 250,000 beneficiary farmers.
    Good business principles help make producer groups sustainable. A 
legacy of our work in Malawi, which ended in 2003, is the National 
Association of Smallholder Farmers of Malawi, known as NASFAM, still 
going strong today. NASFAM is a member-owned and run organization that 
encourages smallholders to form village-based clubs and associations to 
increase farming revenues and stimulate economic development. The 
Association has developed farming skills, purchased inputs in bulk, 
built its own warehouses and linked to markets in Africa and Europe for 
sales of its high-value peanuts and bird's eye chilis. Today NASFAM 
represents over 100,000 farm families and has established a commodity 
exchange and subsidiaries that provide business services.
    Organizing for sustainability has been a hallmark of our success in 
Ethiopia where ACDI/VOCA helped revitalize cooperatives and founded 
second-tier coffee cooperative unions. These unions gained permission 
from the government to bypass the central coffee auction and began 
exporting on behalf of their members. Increased market share and 
traceability led to further quality improvements. Again, because the 
project addressed the whole value chain, it arranged finance, tractor 
rentals, transportation deals, representation at world coffee fora, 
etc. Today Sidama and Yirgacheffe coffee from these smallholders is 
recognized by gourmands around the world. Ethiopia's successful coffee 
growers are well positioned to continue putting food on the table even 
as food prices increase.
Conclusion
    Mr. Chairman, in summary, food shortages, lack of empowerment of 
people to become self-sufficient, high prices and inefficiency in the 
world food economy have been ACDI/VOCA's 45 year preoccupations. We 
know that more productive farming is fundamental to the world's 
prospects for progress and peace, and to the extent it is market-based, 
the private sector can and will play a welcome and significant role.
    As Senator Lugar said about the food crisis, ``Our response exposes 
our weaknesses, but it also points the way to needed reforms.'' Time 
after time, USAID mission directors have shared with us their 
frustration over allocations of development assistance that de-
emphasize agriculture. While the poor suffer from educational, health 
and other maladies, I trust we have learned that their foremost need is 
food, and, where livelihoods are agriculture-based, food production is 
the engine of the economy.
    To conclude, I reiterate my concern that the global food crisis not 
be just another opportunity for hand-wringing and lofty rhetoric on the 
part of the international community. I hope we will do our part by 
providing robust funding mechanisms to make long-term sustainable 
agricultural development a priority again. If ACDI/VOCA and its 
partners have the wherewithal to carry on our work, the risk of future 
food crises of this one's magnitude will be substantially reduced.

    The Chairman. Thank you Mr. Guroff. Dr. Minot.

         STATEMENT OF NICHOLAS W. MINOT, Ph.D., SENIOR
  RESEARCH FELLOW, MARKETS, TRADE, AND INSTITUTIONS DIVISION, 
               INTERNATIONAL FOOD POLICY RESEARCH
                  INSTITUTE, WASHINGTON, D.C.

    Dr. Minot. Thank you, Mr. Chairman, for the opportunity to 
participate in today's hearing. Since January 2006, the prices 
of corn, wheat and soybeans on the world markets have more than 
doubled and the price of rice has tripled. In developing 
countries, food accounts for 40 to 70 percent of family budgets 
and staple grains represent a large share of food spending, 
particularly for the poor. Although many farmers benefit, the 
urban poor and a surprising number of rural households are net 
buyers and therefore are hurt by higher prices. The net effect 
in most countries has increased poverty and hunger.
    These price hikes have been catalyzed by various factors 
including rising cost of oil, biofuel subsidies, depreciation 
of the dollar and export restrictions by some countries. 
Although the topic is complex and beyond the scope of this 
statement, I would like to clarify two points regarding the 
contributing factors.
    First, although the effect of biofuel subsidies on the 
global cost of food is small, the effect on corn prices and on 
the cost of food for poor people in developing countries is 
substantial. The Council of Economic Advisors confirms 
estimates by IFPRI, my institution, Iowa State University and 
the World Bank that biofuel demand accounts for at least \1/3\ 
of the increase in world corn prices.
    Second, the evidence that speculation in futures markets 
has contributed to high food prices is weak. If speculation 
were a factor we would see rising inventories, futures prices, 
leading spot prices and smaller increases for commodities that 
do not have futures markets. But this is not the case. What are 
the implications of the food crisis for development assistance? 
I believe that development assistance needs to respond in eight 
ways.
    The most obvious implication is that developing countries 
and international organizations need to devote more attention 
to and more resources to agricultural development. In real 
terms, donor support for agriculture is less than half of what 
it was in 1982. The U.S. Agency for International Development 
needs to boost its aid to agriculture, but this task is 
complicated by the large number of earmarks in the foreign 
assistance budget.
    Second, there is a need to expand resources available for 
emergency food aid. According to the USDA, the number of hungry 
people increased by 122 million, or 14 percent, in 2007 and 
undoubtedly continues to grow this year. At the same time, high 
prices have dramatically eroded the purchasing power of the 
budget of the world food program and other food aid programs. 
Furthermore, a more institutional approach for funding 
emergency assistance is needed, rather than the case by case 
allocations that are currently used.
    Third, there is a need to make better use of existing food 
aid budgets. While other industrialized countries have taken 
steps to untie their emergency assistance, shifting towards 
local purchases and cash transfers, U.S. food aid is still 
largely, in kind, based on U.S. sourced food transported on 
U.S. flagged ships. This policy raises the cost of shipping 
food aid by at least $70 per ton, according to the GAO, 
probably higher with the current high fuel prices, as well as 
delaying the arrival of emergency assistance. More flexibility 
is needed to reduce costs and streamline U.S. response to 
emergency needs.
    Fourth, emergency assistance should be more closely 
integrated with programs to increase agricultural production 
and invest in human capital. One promising approach is a 
conditional cash transfer program that provide cash transfers 
to poor households on the condition that children are kept in 
school and that family members participate in health and/or 
nutrition programs.
    Fifth, the most effective long term strategy for addressing 
the food crisis is to invest in agricultural research and 
development, particularly in the staple food crops. Not only is 
this the right response to the crisis, but it makes good 
economic sense. Over 250 economic studies confirm that 
investments in agricultural research in developing countries 
offer very high rates of return, generally more than 30 percent 
per year. Furthermore, the benefits tend to accrue 
disproportionately to poor farmers and consumers.
    Sixth, investments in agriculture research and development 
must be coupled with efforts to reduce the cost of marketing 
and storage in developing countries. Improvements in the 
marketing system will help distribute surpluses, alleviate 
local shortages and reduce volatility. This involves improved 
marketing infrastructure, establishing a policy environment 
that is conducive to the private sector, reduction in internal 
and external barriers to trade and identifying better ways to 
manage risk.
    Seventh, completing the Doha Round of trade liberalization 
would make the global agricultural system more resilient to 
shocks. Additional discipline on export restrictions is needed, 
either as part of the Doha Round or as a separate agreement.
    Finally, it is a mistake to think that one can design, in 
advance, the optimal long term agricultural development 
strategy. Agricultural policy and public investments must adapt 
in response to evolving conditions, and analysis provided by 
local researchers is more likely to be accepted, particularly 
if it concerns politically sensitive topics such as food 
prices. Thus it is essential that developing countries improve 
their own capacity to collect information, analyze data, 
diagnose problems and identify policy solutions. This concludes 
my statement. I would be pleased to answer any questions you 
may have. Thank you.
    [The prepared statement of Dr. Minot follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
 Thank you, Dr. Minot. Mr. Dillaha.STATEMENT OF THEO A. DILLAHA 
 III, Ph.D., P.E., PROFESSOR OF BIOLOGICAL SYSTEMS ENGINEERING 
                          AND PROGRAM
         DIRECTOR, SUSTAINABLE AGRICULTURE AND NATURAL
           RESOURCE MANAGEMENT (SANREM) COLLABORATIVE
           RESEARCH SUPPORT PROGRAM (CRSP), OFFICE OF
             INTERNATIONAL RESEARCH, EDUCATION, AND
     DEVELOPMENT, VIRGINIA POLYTECHNIC INSTITUTE AND STATE 
             UNIVERSITY, BLACKSBURG, BLACKSBURG, VA

    Dr. Dillaha. Thank you Chairman McIntyre and----
    The Chairman. Dr. Dillaha, sorry. Thank you.
    Dr. Dillaha. That is fine. Thank you Chairman McIntyre, 
Members of the Subcommittee. I speak today as a University 
Faculty member representing Virginia Tech and its Office of 
International Research Education and Development. Personally, I 
have been engaged in international development for a few 
decades as a Peace Corps volunteer, an ACDI/VOCA volunteer, an 
Engineers without Borders volunteer, a university faculty 
member and currently I serve as the Program Director of the 
USAID funded Sustainable Agriculture and Natural Resource 
Management Collaborative Research Support Program, one of the 
CRSPs. There are eight other CRSPs. Our primary objective is to 
build developing country capacity to address their own food 
security needs. We do this by working in partnership with the 
host country's scientists and institutions. And we also develop 
new technologies to help USAID, ACDI/VOCA and others that are 
engaged in addressing agricultural problems in developing 
countries.
    To improve U.S. food assistance, I would recommend the 
following three short-term actions. Fully fund the World Food 
Programme and other USAID--other U.S. programs, and improve the 
effectiveness of these programs by removing earmarked and tied 
aid requirements. This has been mentioned previously. I would 
also request that we reconsider some U.S. policies, such as our 
biofuel program and a 1986 Bumpers Amendment, which contribute 
to the food security crisis. I would also recommend 
facilitating the immediate provision of seeds and fertilizers 
for countries that are most affected by the food crisis.
    To improve U.S. agricultural development assistance, I 
recommend the following, intermediate term actions to help 
developing countries solve their own problems and improve food 
security. First, we need to expand agricultural research and 
development capacity in developing countries. We can do this by 
restoring funding for USAID's Collaborative Research Support 
Program, the CGIAR and other international agricultural 
research centers, the USDA Foreign Agricultural Service and 
other U.S. agricultural university engagement programs with 
their developing country partners. In particular we need to 
support long-term collaborative research programs which build 
developing country agricultural research and development 
institutions.
    Second, we need to expand agricultural education programs 
for host country nationals to increase the capacity of food-
insecure developing countries to solve their food security 
needs through education of their scientists and policy makers 
and we need to do this at U.S. universities. Adequate funding 
is needed for programs such as the USAID Collaborative Research 
Support Program, Fulbright Humphrey, Borlaug and numerous 
programs that work in this area, the USDA Foreign Agricultural 
Service and particularly the establishment of these long term 
partnerships between U.S. agricultural universities and 
developing country institutions that is being discussed.
    Long-term U.S. training has decreased dramatically since 
1980 from approximately 15,000 host country students to less 
than 1,000 last year. This is a disaster for developing 
countries and it also decreases U.S. influence abroad. We need 
to support the replication of the U.S. Land-Grant University 
model abroad. Combining agricultural research, teaching, and 
extension missions into a university led system is largely 
responsible for the success of the U.S. and, even now, the 
Indian agricultural systems. This system, or something like it, 
should be supported in other countries.
    Most importantly, as we have heard repeatedly today, we 
need to dramatically increase agricultural development 
assistance. A disproportionate amount of U.S. foreign 
assistance supports temporary emergency food aid. We must 
increase agricultural development assistance so that developing 
countries can feed themselves. We also need to restore the 
agricultural development capacity of USAID. We can do this by 
recognizing that, as it has been pointed out several times 
today, that agricultural development is the first step in 
economic growth by establishing agricultural production and 
food self-sufficiency as a USAID priority. It is not now. By 
doubling USAID and other U.S. foreign agricultural assistance 
support, by fully staffing USAID and hiring program managers 
with agricultural expertise, and it sounds like we are making 
some progress in that area, and by doubling USAID central 
funding for agricultural programs and by providing increased 
flexibility for those funds by reducing Congressional earmarks.
    Finally, we need to fully implement Title XII of the 
Foreign Assistance Act, which calls for full participation of 
U.S. agricultural universities and USAID efforts to improve 
world food production and nutrition.
    In conclusion, I thank the Committee for giving me the 
opportunity to testify. There are no quick-fix silver bullets 
or easy answers to the current food security crisis. Solutions 
will take time, but the time to act is now. Please make sure 
that U.S. food aid and foreign agricultural assistance 
investments benefit both the U.S. and our developing country 
host partners by ensuring that each investment reduces 
developing country dependence on foreign food aid, builds 
developing country capacity to solve their own problems and 
strengthens positive attitudes in developing countries 
regarding U.S. policies, actions and intentions. Thank you.
    [The prepared statement of Dr. Dillaha follows:]

  Prepared Statement of Theo A. Dillaha III, Ph.D., P.E., Professor of
    Biological Systems Engineering and Program Director, Sustainable
  Agriculture and Natural Resource Management (SANREM) Collaborative 
   Research Support Program (CRSP), Office of International Research,
 Education, and Development, Virginia Polytechnic Institute and State 
                 University, Blacksburg, Blacksburg, VA
    Thank you, Chairman McIntyre and distinguished Members of the 
Subcommittee, for inviting me to participate in today's hearing. I 
welcome this opportunity to testify before you on the need for a new 
approach to U.S. food aid and foreign agricultural assistance.
    I am speaking today as a faculty member representing Virginia 
Polytechnic Institute and State University and its Office of 
International Research, Education, and Development (OIRED). OIRED 
manages a research portfolio of over $46 million in 44 countries around 
the world. Current research projects involve forestry and natural 
resource management, integrated pest management, sustainable 
agriculture, watershed management, and micro-enterprise development and 
higher education capacity-building projects Haiti, Nepal, and Oman. 
Twelve full-time faculty and nine staff members support these efforts 
in partnership with over 40 U.S. university partners and a similar 
number of developing country institutions. The majority of these 
activities involve agricultural development and are funded by USAID. 
Personally, I have been engaged with the issues of international 
development for over 3 decades as a Peace Corps volunteer, a U.S. 
university faculty member involved in agricultural development and 
environmental protection, and currently as the Program Director of the 
Sustainable Agriculture and Natural Resource Management Collaborative 
Research Support Program (SANREM CRSP) managed by OIRED and sponsored 
by the U.S. Agency for International Development (USAID). The SANREM 
CRSP is a long-term, $2.4 million per year program that sponsors 
applied research to develop new knowledge and technologies to improve 
agriculture and natural resource management.
    Even before the current global food crisis, there were numerous 
calls for reviewing and improving the effectiveness of U.S. food aid 
and foreign agricultural assistance programs. Now with the food crisis 
and the potential for pushing at least 100 million people in developing 
countries back into poverty due to rising food prices, the need for 
program reform is even greater. I urge you and other Members to act 
quickly and responsibly to address this crisis. My recommendations are 
based on my personal experiences in international development and 
discussions and with colleagues involved in international development 
as well as developing country scientists, policymakers, and aid 
recipients.
    The overarching objective of the following recommendations is to 
increase the capacity of developing countries to pull themselves out of 
the food crisis spiral. I recommend that you consider the following 
actions:
Immediate
    1. Fully fund the emergency food assistance programs of the World 
        Food Programme and USAID's other Food for Peace activities, 
        improve the effectiveness of these funds by removing earmarked 
        and tied aid, and support World Food Programme and USAID 
        efforts to purchase food locally where possible. Wherever 
        possible, require strong linkages between emergency food 
        assistance and agricultural assistance programs.

    2. Do not transfer foreign agricultural assistance funds to 
        emergency humanitarian relief efforts.

    The practice of reducing foreign agricultural assistance programs 
        to provide emergency humanitarian relief is self-defeating and 
        delays and/or inhibits developing country self-sufficiency in 
        food production. After the successes of the Green Revolution we 
        assumed that the ``food'' problem was solved and funding to 
        increase agricultural productivity to keep pace with growing 
        populations and demand declined dramatically. Today, we are 
        faced with recurrent food crises in many developing country 
        populations and with current policies and aid programs, no 
        long-term solutions are in sight.

    3. Assess and change policies contributing to the global food 
        security crisis whose humanitarian and economic costs outweigh 
        their benefits. Key policies that need to be reviewed include:

       Biofuel programs competing with grains and oilseeds used 
            for food.

                Current short-term U.S. goals for biofuel use are not 
                reasonable in light of their effects on food prices. 
                Deadlines need to be scaled back until biofuels can be 
                supplied without competing with food crops; subsidies 
                for biofuel based on food crops should be reduced or 
                eliminated; and non-food crop biofuel research (e.g., 
                cellulosic ethanol) should be greatly expanded. While I 
                congratulate the Committee for recognizing the 
                importance of transitioning to advanced biofuel through 
                the introduction of a new producer credit for 
                cellulosic ethanol and for providing mandatory funding 
                for cellulosic infrastructure expansion, there is 
                certainly more that needs to be done. For one, a 
                6 cents reduction in the ethanol blenders credit does 
                not do justice to the immediate need to move U.S. 
                biofuel production away from an unsustainable corn 
                based system.

       Repeal the 1986 Bumpers Amendment, which prohibits the 
            use of foreign
              assistance funds in developing countries on crops that if 
            exported, would
              compete with U.S. agricultural commodity exports.

                This regulation is hampering agricultural development 
                and U.S. influence in some of the poorest countries. 
                Recognition that it is not helpful for development is 
                illustrated by the fact that it is slowly being 
                relaxed, e.g., U.S. assistance to cotton production in 
                West Africa.

    4. Facilitate the immediate provision of seeds and fertilizer for 
        countries most affected by the food crisis by using `smart' 
        subsides friendly to market development in the upcoming 
        planting seasons.
Intermediate to Long Term
    Increase the ability of developing countries to feed themselves and 
reduce their dependence on external food aid through capacity building.
    From the U.S. university perspective, the major agricultural 
development problem and a fundamental cause of the current food 
security crisis is the lack of effective capacity of developing country 
institutions and personnel to solve local problems and to work with 
U.S. and other international scientists and development specialists on 
more complex problems. Local capacity building is the cornerstone of 
sustainable development. Efforts to build local capacity and solve 
local problems have been hampered because:

   U.S. universities have had few effective and stable long-
        term developing country partners with which to build capacity 
        and few resources to do so.

   Long-term partnerships are necessary to address 
        sustainability problems because management strategies for 
        agriculture and natural resources are dynamic, constantly 
        presenting new challenges and opportunities that require new, 
        innovative and collaborative research.

   U.S. universities simply cannot return again and again each 
        time a new challenge appears to rebuild developing country 
        problem solving capacity that was lost and that is continually 
        needed for responding to evolving needs before they become 
        critical.

    5. Expand agricultural research: For the past forty years, the 
        Green Revolution and other public and private sector 
        agricultural research allowed food production to keep pace with 
        population growth and increasing demand and saved 100s of 
        millions of people from starvation. As a result, governments, 
        policymakers, and others concluded that the ``food problem'' 
        was largely solved and that the remaining issues were rather 
        marginal technology transfer, distribution, and marketing 
        problems. Resources for new technology development and systems-
        related research declined in real dollars. As a result, 
        agricultural production is not keeping pace with rising demand, 
        food prices are increasing dramatically, and the numbers of 
        people in poverty and at risk of malnutrition and starvation 
        are increasing.

        Needed investments in agricultural research include:

         Reversing declines and restoring funding for USAID's 
            Collaborative Re-
                search Support Programs, the Consultative Group on 
            International Agri
                cultural Research (CGIAR) and other international 
            agricultural research 
                centers, the USDA-Foreign Agricultural Service, and 
            other programs that
                engage U.S. universities agricultural research and 
            education in devel-
                oping countries.

         Long-term research programs with well-defined goals 
            rather than short-
                term projects. Long-term programs not only solve 
            current food production
                problems, they also build human and institutional 
            capacity to solve
                future problems.

         Creation of developing country agricultural research 
            institutions (national
                and/or regional) that can address local and regional 
            agricultural research
                needs.

        To solve the food security crisis, researchers from the U.S., 
        other developed counties, and our developing country partners 
        must work together to provide unbiased scientific knowledge, 
        which policymakers and development specialists can use to 
        address the food security crisis. Critical issues include:

         New agricultural production technologies and 
            methodologies;

         Sustainable food production given accelerating soil, 
            water, and ecosystem
                deterioration;

         Lack of well-trained local researchers;

         Extension services for technology innovation and 
            transfer;

         Economics (poverty cycle, markets, infrastructure, 
            trade issues including
                U.S. domestic agriculture policy);

         Storage and post harvest food losses (up to 50% in 
            some cases);

         Impacts of global warming and climate change;

         Control of invasive species and plant pests;

         Biotechnology;

         Outmoded land tenure systems;

         Gender and resource access issues;

         Corruption and governance issues;

         HIV/AIDS and other diseases;

         Increasing population pressure;

         Food aid and delivery mechanisms;

         Food transport systems; and

         Ecosystem services.

    6. Expand agricultural education: Increase the capacity of food-
        insecure developing countries to solve their food security 
        needs by educating developing country agricultural scientists 
        and policymakers at U.S. universities.

        The principal investment needed in long-term agricultural 
        education is adequate funding for training and capacity 
        building programs conducted by:

         the USAID Collaborative Research Support Programs,

         U.S. programs such as the Fulbright and Humphrey 
            Fellow and Scholar
                Programs,

         the USDA-Foreign Agricultural Service, and

         long-term partnerships between U.S. land-grant 
            universities and colleges
                and developing country educational, research, and 
            extension organiza-
                tions.

        Prior to 1990, the U.S. was the world leader in educating 
        developing country scientists and policy makers; however, U.S. 
        efforts in this area have declined dramatically. Long-term 
        training in the U.S. decreased from approximately 15,000 per 
        year in the 1980s to approximately 1,000 last year. Long-term 
        degree training in the U.S. also benefits the U.S. by exposing 
        future developing country leaders to the U.S. system and 
        creating leaders who understand and are supporters of U.S. 
        policy and actions. The decrease in training of Africans has 
        been particularly devastating for agriculture in Africa, as a 
        significant portion of U.S. educated African scientists and 
        policymakers have either died of AIDS or retired. Because of 
        the decrease in training, there is now a dearth of qualified 
        people for agricultural research, development, and leadership 
        positions. In Africa, China has replaced the U.S. as the 
        premier leader in long-term higher education, and we have lost 
        one of our most effective means of influencing future African 
        leaders.

    7. Support for the U.S. land-grant university model under Title 
        XII: Combining agricultural research, teaching, and extension 
        missions into a university led system has been largely 
        responsible for the success of U.S. agriculture. A similar 
        system based on the U.S. model is also largely credited with 
        the success of agricultural development efforts in India. This 
        success is due to the following factors:

         The U.S. land-grant university approach to 
            agricultural development fa-
                cilitates communication and collaboration among the 
            three
                necessary components of agricultural development: 
            research, education,
                and extension.

         Through this integration, research and education are 
            grounded in real
                world problems identified through agricultural 
            extension programs, and
                extension programs in turn benefit from the cutting-
            edge university re-
                search and teaching methods.

        In the developing world, the three missions are generally 
        housed in different ministries, greatly complicating 
        collaboration internally and externally.

        U.S. land-grant universities and colleges and their world class 
        researchers, educators, and extension specialists are ideal 
        mentors for developing country universities wishing to adopt 
        this model. They can build human capacity (long-term degree 
        training and faculty development) as they advise and helped 
        integrate the agricultural research, education, and extension 
        missions in developing country institutions based on the land-
        grant model.

        The U.S. land-grant university model with long-term 
        partnerships between U.S. land-grant universities and colleges 
        and developing country ``land-grant'' type institutions are 
        natural partners for solving the immediate as well as emerging 
        problems in agriculture and natural resource management. 
        Together they can leverage many more resources to support joint 
        efforts and thereby magnifying the impacts of U.S. foreign 
        assistance.

    8. Dramatically and sustainably increase agricultural development 
        assistance: The U.S. devotes too high a proportion of its 
        foreign assistance budget to temporary emergency food aid. More 
        resources should be devoted to developing country capacity 
        building to enable them to solve their own problems.

        Food aid is a double edged sword; it relieves immediate hunger, 
        but it can create dependency and more threateningly, it can 
        disrupt local food markets, lower local food prices, and make 
        local food production unprofitable. Many developing country 
        officials indicate that their people would be much better off 
        if food aid were reduced and resources were shifted to 
        agricultural development assistance so they could feed 
        themselves. For example, Ethiopia, a chronically food insecure 
        U.S. aid recipient, receives approximately $12 in food aid for 
        each dollar of agricultural development assistance. Food aid 
        and development assistance are related in their consequences 
        but should be funded separately.

    9. Restore the agricultural development capacity of USAID by:

         Recognizing that agricultural development is necessary 
            as the first step
                in economic growth and a precursor to 
            industrialization.

         Establishing agricultural production and food self-
            sufficiency as USAID's
                priority in developing countries that are food 
            insecure.

         Double USAID and other U.S. foreign agricultural 
            assistance support of
                rural infrastructure; water and irrigation services; 
            developing country ag
                ricultural education, research, and extension services; 
            and post-harvest
                management in countries that have supportive 
            agriculture policies that
                favor economic growth.

         Improving the effectiveness of USAID agricultural 
            assistance programs
                by fully staffing USAID and by hiring program managers 
            with
                expertise in agriculture and natural resource 
            management.

                        As noted by Peter McPherson, former USAID 
                        Administrator, and Secretary of Defense Robert 
                        Gates, USAID human resources have declined 
                        dramatically. Since 1980, permanent American 
                        USAID employees have declined from 4,058 to 
                        2,200 and permanent foreign officers from about 
                        2,000 to 1,000. In terms of all permanent USAID 
                        employees, USAID staff has dropped from a high 
                        of 15,000 during Vietnam to about 3,000 in the 
                        1990s. In addition, there has been a dramatic 
                        loss of technical expertise. For example, USAID 
                        now has only two engineers, 16 agriculture 
                        experts and 17 education experts. So the 
                        combination of reduced staff overall and the 
                        loss of technical expertise puts the agency in 
                        the difficult position of trying to manage 
                        projects and programs with technical expertise 
                        and numbers of staff that are substantially 
                        inadequate. We need to rebuild human capacity 
                        for our international work (Secretary of 
                        Defense Robert Gates).

         Doubling USAID central funding (USAID/EGAT/AG) for 
            agricultural pro-
                grams, and provide increased funding flexibility by 
            reducing earmarks.

                        USAID has much less flexibility today to 
                        respond to new problems and the needs of 
                        countries as the countries define them because 
                        of excessive congressional and executive 
                        earmarks and directives (sometimes exceeding 
                        100% of appropriated funds). There is 
                        insufficient funding and budget flexibility to 
                        respond to opportunities or to leverage 
                        resources from others. Congress must provide 
                        direction to USAID for appropriated monies, but 
                        with greater flexibility within the context of 
                        the appropriation process and oversight (Peter 
                        McPherson).

         USAID agricultural development assistance should be a 
            mix of short-
                term, intermediate, and long-term agricultural 
            development programs
                overseen by USAID staff with appropriate disciplinary 
            expertise.

                        Because of staff cuts, USAID has moved from an 
                        implementation to a contracting agency, which 
                        farms out large portions of the foreign aid 
                        program. It is increasingly difficult for USAID 
                        to provide proper technical oversight to these 
                        contracts. I have been told that because of 
                        staff shortages, USAID program officers are 
                        currently managing on average four times more 
                        funding than USAID policies call for. This 
                        makes technical oversight difficult. As an 
                        example, I recently conducted a training 
                        program for USAID staff in Washington on 
                        payments for environmental services. At one 
                        point I apologized that my program speakers 
                        were all economists. One of the USAID 
                        participants quickly responded, ``Don't worry 
                        about that; we are also almost all 
                        economists.'' USAID needs more staff and more 
                        appropriate disciplinary diversity.

    10. Full implementation of Title XII, the Famine Prevention and 
        Freedom from Hunger amendment to the Foreign Assistance Act, 
        which identifies a leading role for U.S. universities to work 
        with USAID to achieve the goals of ``ensuring food security, 
        human health, agricultural growth, trade expansion, and the 
        wise and sustainable use of natural resources''--agriculture in 
        all its dimensions--through research, education, extension/
        outreach, and policy formulation.

        Over the years, the scope and level of activities carried out 
        by USAID through U.S. universities that have been characterized 
        as ``Title XII activities'' has declined dramatically. The 
        early members of the Board for International Food and 
        Agricultural Development (BIFAD) had a broad and bold vision of 
        their role and were supported in that view by the USAID 
        administration of the time. They envisioned a huge potential in 
        the application of university-led cutting-edge research and 
        technical assistance in solving food and nutrition problems 
        around the world (Deborah Ruben, 2008 Title XII Activity 
        Report).
Conclusions
    In conclusion, I would like to thank the Committee for giving me 
the opportunity to testify. I hope that my testimony has been useful 
and will assist the Committee in playing a leadership role in the 
discussion and reform of U.S. international food aid and foreign 
agricultural assistance. There are no silver bullets or easy answers to 
the current food security crisis. Solutions will take time, but the 
time to act is now. Please make sure that U.S. food aid and foreign 
agricultural assistance investments benefit both the U.S. and our 
developing country partners by assuring that each investment:

   reduces developing country dependence on foreign food aid,

   builds developing country capacity to solve their own 
        problems, and

   strengthens positive attitudes in developing countries 
        regarding U.S. policies and actions.

    The Chairman. Thank you. Thank you to all of our witnesses. 
Dr. Minot, you mention in your testimony the need for more 
institutionalized system for funding emergency assistance. As 
we have heard today and has been referred to, emergency 
assistance is designed by nature to be somewhat ad hoc because 
of the fact that it, indeed, is an emergency. What systems or 
procedures do you suggest should be institutionalized to make 
the assistance more available when it is needed in times of 
emergency?
    Dr. Minot. Well, I think--and first of all, I think it 
needs to be internationally coordinated because this is 
something that where the risks of shock occurring, there may be 
several famines or several emergencies in a given year. It is 
much more difficult for one country, even the United States, to 
respond to multiple crises at the same time, than it is--it 
would be easier for the industrialized countries, as a whole, 
to respond to this crisis. So, first of all, some sort of 
international cooperation would be required. Second, some sort 
of--it is basically an insurance scheme. You have a situation 
where countries are willing to contribute a certain amount per 
year, but they want to make available a larger sum on this 
occasional, sort of, crisis situation, particularly when there 
are multiple crises--multiple emergencies that occur in a year. 
Those are the two key elements that would be required for a 
more institutionalized approach to emergency assistance.
    The Chairman. I know that we are moving close to votes and 
I want the many Members of the panel to have an opportunity to 
ask questions so that we will be able to complete this before 
the set of votes come on the House floor. So I now move to the 
Ranking Member for any questions she may have.
    Mrs. Musgrave. Several of you have cited the lack of 
current agricultural production and reminded of the gains that 
have been made through the green revolution. Zimbabwe is always 
on my mind and could you just address government policies and 
what effect they have had. You know, you think of Zimbabwe 
being the bread basket of Africa and the enormous ability there 
to grow food and now it is just--I mean, it is devastated in 
every way. Could one of you, or all of you, comment on that? 
Whichever or whomever would like. Yes, go ahead.
    Mr. Guroff. I mentioned in my statement about the World 
Food Summit and the fact that there are, by consensus, a 
variety of things that have to happen all at once if a country 
is going to become food secure. And one of those factors, and a 
big one in the Zimbabwe case, is clearly the enabling 
environment for success in that area. There is no amount of 
food aid, there is no amount of technology that can overcome 
bad government practices and the absence of an environment for 
private investment, which is also a critical factor. So the 
answer, unfortunately, is a broad political one, in that case, 
that as I said--no amount of aid is going to overcome.
    Dr. Minot. Let me just--I certainly agree with my 
colleague's comments. I spent 2 years in Zimbabwe in the early 
1990s and am very aware of, certainly, the potential of the 
country, both in terms of agricultural production and as a 
vibrant member of the international community. The case of 
Zimbabwe highlights the fact that technical assistance and 
technology and developmental assistance is not always 
sufficient. It also highlights the need for assistance in the 
area of democracy and governance. It may be that the situation 
in Zimbabwe could not have been prevented by assistance in this 
area, but it certainly highlights the importance of good 
governance and transparency. Thank you.
    Mr. Callahan. Representative Musgrave, I might just have 
one quick point on that, as well. Having been in Zimbabwe 
earlier this year, and then most recently in Sudan last month, 
that certainly civil society is a crucial area, in Zimbabwe 
they are now exporting some of their highest producing farmers 
to Zambia and other countries due to the insecurity in the area 
and the lack of continuity. It is difficult for people to plant 
crops if they don't know if they are going to be owning that 
land or be able to harvest them down the line. In addition to 
that, even food aid has become more and more difficult in the 
capturing of trucks and things that are going to certain areas 
to be used for political use, but I think we should use 
Zimbabwe as an example. Certainly in southern Sudan and other 
countries where there isn't stability, now is the time for us 
to address some of those concerns in civil societies so that we 
don't have a crisis down the line in other countries as we do 
in Zimbabwe.
    Mrs. Musgrave. Thank you very much, Mr. Chairman, and thank 
you, witnesses.
    The Chairman. Thank you. Mr. Pomeroy
    Mr. Pomeroy. What a terrific hearing. Mr. Callahan, I want 
to commend your testimony. We can almost feel the emotional 
impact of the trip you had into the feeding stations through 
your testimony for us. It certainly has created, in my own 
mind, a notion that we better take a trip there. I think that 
if these Committee Members could, similarly, see what you have 
seen, we might have a different notion about all of this. I am 
absolutely convinced that there are strategies that can 
profoundly improve our international food aid, that don't. On 
the other hand, we are bound against the very interest we are 
elected to represent, the well being of our farmers and so to 
those of you that--and I have heard a couple of statements. I 
think biofuels or some of the other ways we have structured our 
food assistance, we just have to reverse course on these. In 
other words, seek to dramatically reduce commodity prices so 
that we can do more relative food aid. Well, that is a 
structure that we are not going to really embrace here in the 
Agriculture Committee. We are trying to improve the financial 
circumstance of those we represent, but we are completely 
convinced this does not mean we are trying to starve the world. 
And so, trying to work through how we build capacity, how we 
drive innovation, how we expand global ag extension, how we 
weave in food for school attendance. These are strategies that 
are win-win strategies and these, in my opinion, needs to be--
if you are going to think about it practically and 
strategically and what is going to be politically, most likely, 
to prevail needs to be the key points of advocacy by the hunger 
community, and we are ready to partner with you on that. I am 
not going to partner with you on taking down commodity prices. 
The market is, ultimately, going to sort that out. As we look 
at so many issues, so little time to try and get our hands 
around, I am interested in what seems to be working. You know, 
what are best practices that we might identify, pull and 
export.
    And Mr. Guroff, you allude to some of them in your 
testimony. What factors are common to the success stories you 
have seen that we might learn from and, maybe, do a better job 
of incorporating into our policies?
    Mr. Guroff. I appreciate the question. There was discussion 
during the first panel about sustainability and one of the core 
elements of what we do at ACDI/VOCA is work at the local level 
to build cooperatives, to build associations, to build linkages 
that will be there long after we have gone. And this is--if 
there is anything that runs through our development efforts 
consistently it is this sort of development of human 
infrastructure, if you will. I referred to the hundreds of 
thousands that are benefiting from that organizational linkage 
and putting those groups to: linking them up in various stages 
of the value chain like NASFAM in Malawi; like the 
organizations that we have nurtured in Uganda; making small 
grants in Rwanda or Cape Verde with the resources made 
available through Title II programs. Taking what I have always 
referred to as the alchemy process of taking North Dakota wheat 
and turning it into road building and community organization 
and agricultural development around the world is a magical 
thing to me in the 10, 12 years I have been in this business. 
And I see this, as I say, working, essentially, through local 
organization building.
    Mr. Pomeroy. Dr. Dillaha, as part of the land-grant 
university, you talked earlier about the potential of trying to 
expand. We don't have enough folks to help. We have had, 
basically, USAID shrink to, it is a contracting agency, and in 
order to deal with staffing up, we are going to have to 
leverage some resources that are otherwise available. You fall 
pretty quickly on the land-grants there. What do you think, 
from your position, is the capacity that could be marshaled in 
a useful way from land-grants?
    Dr. Dillaha. I think there is a huge potential, and once 
again somebody mentioned earlier that Peter McPherson, through 
his role is the chair of the NASULGC is working with Members of 
Congress and others on some long-term programs that would 
establish partnerships between major U.S. agricultural 
universities; and either universities in different developing 
countries, or maybe a regional university that would represent 
a group of developing countries that would build up their 
capacities to educate people, to conduct research to address 
their problems. But, probably, more importantly is adapting 
their extension services to actually get the knowledge that we 
transfer from here that is developed there collaboratively, to 
get it out. One of the biggest problems that we have in many of 
the developing countries is they have educational institutions, 
they have agricultural research institutions, and they have 
extension services and they are all separate and they do not 
communicate. They do not work like the model we have. So I as 
an educator or researcher, I benefit from working with 
extension workers because I learn what the real problems are 
out there and then we integrate that into our teaching and our 
research programs. Then it also gives the opportunity for the 
extension workers to learn more about our research programs and 
the new knowledge that is generated so they can get that out 
there. That model just does not exist in innate places. There 
were attempts to establish this in the past and there wasn't 
long-term support to maintain these efforts.
    Mr. Pomeroy. Thank you, Mr. Chairman, for your indulgence.
    The Chairman. Yes. Thank you very much. Thank you, Dr. 
Dillaha. Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman. I guess I apologize for 
arriving late, I am trying to get a grasp of what all has been 
said and try not to repeat things. I would offer some comments 
first and that is that it is a relatively short period of time 
that we have gone from a surplus of some grains to, many would 
say, a premium. How can we explain that other than--I can't 
help but think that there are causes greater than and certainly 
have a greater impact than simply biofuel production. I can 
offer those, but in the interest of time I would prefer to hear 
from you, but the fact is when we hear about our current 
situation not being sustainable I would say neither is $2 
bushel corn sustainable. When you look at the bigger picture of 
production and the cost inputs and otherwise--I don't need to 
repeat prior information. I also think about GMOs and I think 
the important role that GMOs have played in, literally, feeding 
the world. Dr. Barnes, could you, perhaps, express your 
association's perspective on GMOs and perhaps how useful they 
are, or if you are not an advocate of GMOs, could you explain 
that.
    Dr. Barnes. Thank you for the question. Speaking for 
myself, and my organization, I would say that I advocate GMOs. 
Getting the proper GMO to the situation, say in Africa or to 
Ethiopia where I worked, would take some work, but Ethiopia 
needs improved productivity. It needs new options. The farmers 
there need new options and as my colleague from Virginia Tech 
said, extension work needs to be done. Well we need to give the 
right tools to the people. Genetically modified corn or wheat 
would be very helpful in Ethiopia if it fit the agricultural 
and environmental situation, so I fully support the idea.
    Mr. Smith. Thank you. Dr. Dillaha, could you elaborate, 
perhaps, on the acceptance? I would say GMOs are, maybe, 
accepted a little more today than just a couple of years ago. 
Could you speak to the acceptance worldwide, or to the science 
and those who may still fight GMOs, are they coming around?
    Dr. Dillaha. I don't know that I would have any more 
knowledge than you would. I think that the thing that we need 
to remember when we think about biotechnology and GMOs is they 
are not a silver bullet. It is just like the green revolution. 
The green revolution only worked in some parts of the world 
where there was adequate management skill, adequate water, 
adequate access to fertilizer and things like that. If we just 
introduce better seed, we are not, necessarily, going to get 
any increases in production and things like that. We have to 
have all of these other enabling factors. We have to look at 
farming systems. We have to look at the markets that have been 
mentioned and things like that. Certainly there is opposition 
to GMOs and some types of biotechnology in different parts of 
the world, but it is certainly a valuable tool that we have in 
our tool box to address the problems that we are talking about.
    Mr. Smith. Okay, thank you. And let me just say that last 
year when I traveled to Ethiopia, I must say that I was 
impressed and, actually, inspired by the interaction of USAID, 
Catholic Relief Services--by not only their interaction, but 
how they are bringing a better way of life to those folks that 
most Americans don't identify with. The increment of improved 
living is huge and I commend those agencies involved and 
certainly thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you very much. Mr. Callahan, you had 
mentioned the long term nature of the food crisis and how we 
are only at the beginning. Based on what you have seen, do you 
think the situation will be improved or worse a year from now?
    Mr. Callahan. From what we are doing, we need to make some 
significant efforts or the situation will be worse a year from 
now, so we are very concerned about it. I think the publicity 
that we are currently receiving; the fact that the Congress has 
acted and the U.S. Government has shown great leadership; the 
fact that the World Bank is getting involved; and the fact that 
a lot of other foundations such as Gates and others are 
participating, is very helpful to the cause. But I still see 
there are a lot of gaps, there are a lot of people in isolated 
areas that won't be reached by some of the quicker initiatives. 
As we have mentioned at this meeting--longer term agricultural 
production investments are going to be necessary or the 
situation will continue to be difficult and worse than it is 
today.
    The Chairman. What is your answer to that, Mr. Guroff? Is 
it going to be worse or better a year from now?
    Mr. Guroff. I think, as I said in my testimony, it depends 
on political will at this point. I think the jury is out on the 
question. We have made some progress in the farm bill, in terms 
of protecting non-emergency programs, which down the road will 
help us to avoid similar emergencies. But it is just a step in 
the right direction. It needs to go further. There has been no 
answer in terms of the Emerson Trust and replenishment, and as 
so many have said investment in agricultural development--if we 
can't really ramp that up, we are not going to be doing our 
parts, and as I said, it is the international community as a 
whole. Certainly the U.S. can't do it all, but the U.S. can 
certainly point the way and show that there is political will. 
Otherwise, I think we will see a worse situation a year from 
now.
    The Chairman. Okay. Dr. Barnes, your answer to that 
question? Is it going to be better or worse a year from now, 
and why?
    Dr. Barnes. Well I think, as we have all said, this is a 
long-term problem and I believe, at best, we can hope things 
will have perhaps bottomed out in a year from now. I feel that 
the global economic situation that we are facing took a long 
time to develop. It just didn't happen overnight and it is 
going to take a while to correct itself. So for the poor in the 
world and the hungry in the world I think this is going to be 
lasting a few more years. I hope it bottoms out in the next 
year and we can begin to make progress, but on the whole, I 
feel this is here for the long run and in the next year things 
will be about the same.
    The Chairman. All right, thank you, sir. We are getting 
ready to have votes at any moment now. Mrs. Musgrave had to 
leave a few moments early, but in our discussion, the question 
that I have just asked that three of you have answered, I would 
like you three to put your statement in writing and perhaps to 
expand upon it, if you like. I would also like Dr. Minot and 
Dr. Dillaha to answer the same questions and put that in 
writing. We would like, as you know, to be able to have any 
expanded comments and the answer to that question within 10 
business days from today. Normally it is 10 calendar days, but 
I am giving you 10 business days since earlier in the panel we 
asked you to be able to give any extended remarks within 10 
business days, so we will make that consistent. That would be 2 
weeks from today, 2 calendar weeks from today. The record will 
remain open to allow any supplementary written responses, 
specifically to the last question I ask. I would like all five 
of you to answer. Mrs. Musgrave has an intense interest in your 
answer as well, and unfortunately, had to leave a few moments 
early.
    Also, if there are any other questions that any Members 
have that they would like to submit to you, I encourage them to 
do so, immediately, within the next day or 2 so that you can 
also answer those questions within the 10 business days. Thank 
you all for your attendance. I thank the audience for their 
patience and thanks to the staff, Kim and Aleta, particularly, 
I want to say thank you and thanks to the minority staff, as 
well. This hearing of the Subcommittee on Specialty Crops, 
Rural Development and Foreign Agriculture is now adjourned. May 
God bless you.
    [Whereupon, at 11:51 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
      
Submitted Statement of Robert Paarlberg, Ph.D., B.F. Johnson Professor 
                of Political Science, Wellesley College
    In the developing world, advocates for high-yield farming have 
recently been on the defensive. The current spike in world food prices 
has raised a possibility that modern farming in developed countries may 
be close to exhaustion due to environmental limits. A global project 
called the International Assessment of Agricultural Knowledge, Science 
and Technology for Development (IAASTD), sponsored by the World Bank 
and the United Nations Food and Agriculture Organization, concluded 
earlier this spring that modern high-yield farming had led to land 
degradation, unsustainable water use, excessive fertilizer 
applications, inappropriate use of pesticides, and a loss of 
biodiversity. The implied conclusion was that poor countries in the 
developing world should stay away from modern high-yield farming and 
place much greater emphasis on agro-ecological approaches, organic 
farming, or ``traditional knowledge.''
    This conclusion would take the developing world in exactly the 
wrong direction. The record shows that high-yield farming in rich 
countries today is actually friendlier to the rural environment (per 
bushel of production) and hence more sustainable than low-yield 
farming, and it is becoming more so every day as technology continues 
to evolve. The popular impression that modern farming will ruin the 
environment dates from Rachel Carson's 1962 book Silent Spring, a 
description of the health and environmental damages done by the use of 
DDT in farming. Yet this impression is now out of date. Thanks in part 
to Carson's book chemical use in American farming is now more tightly 
restricted (DDT has not been used for nearly 4 decades) and numerous 
other regulatory and technical advances (such as conservation tillage) 
have dramatically reduced environmental damage even as yields have 
continued to increase.
    And, there is no end in sight to this important progress. The 
Organisation for Economic Co-operation and Development (OECD) has just 
published an important review \1\ of the ``environmental performance of 
agriculture'' in the 30 most advanced industrial countries of the 
world, those with the highest yielding farming systems. The new data 
show that between 1990 and 2004 total food production increased in 
volume by another five percent, while adverse environmental impacts 
were diminishing in every area.
---------------------------------------------------------------------------
    \1\ OECD (2008). Environmental Performance of Agriculture in OECD 
Countries Since 1990, Paris, France, www.oecd.org/tad/env/indicators.

   The area of land taken up by agriculture declined four 
---------------------------------------------------------------------------
        percent.

   Soil erosion from both wind and water was reduced.

   Water use on irrigated lands declined by nine percent.

   Energy use on the farm increased at only \1/6\ the rate of 
        energy use in the rest of the economy.

   Gross greenhouse gas emissions from farming fell by three 
        percent.

   Herbicide and insecticide spraying declined by five percent.

   Excessive nitrogen fertilizer use declined by 17 percent.

   Biodiversity improved, as increased numbers of crop 
        varieties and livestock breeds came in use.

    The OECD countries registered this strong performance even while 
continuing to carry a disproportionate production burden. They are home 
to only 18 percent of the world's citizens (and a much smaller fraction 
of the world's farmers) yet they produce 36 percent of the world's 
annual cereal crops, 40 percent of the world's meat, and 47 percent of 
the world's milk.
    What has made these reduced impacts on the environment possible is 
not a move away from high-yield farming, but instead a move toward 
``precision farming.'' Farmers are now conserving water with drip 
irrigation systems and laser-leveled fields. Farm tractors now have 
satellite-linked Global Positioning System (GPS) monitors and 
Geographical Information System (GIS) maps that can tell exactly where 
they are in a field (within 1 square meter) and precisely how much 
water or fertilizer that part of the field needs. In the United States, 
genetically engineered seeds have allowed farmers to control pests and 
weeds with fewer chemical sprays and less soil tillage, leading also to 
less burning of diesel fuel and more sequestered carbon.
     It is low-yield farming, not high-yield farming, that does 
greatest harm to the environment. In America it was in the 1930s, when 
wheat yields were less than half the current level, that farmers plowed 
fragile dry lands on the southern plains, and then watched the soil 
blow away creating an infamous ``Dust Bowl.'' In the decades that 
followed, improved seeds and new fertilizers made good lands much more 
productive, so fragile lands no longer had to be plowed. As a 
consequence total U.S. farm output doubled after 1950, even as the land 
area being farmed declined by 25 percent.
    When developing countries embrace modern farming they make 
comparable land conservation gains. In India in 1964, before the 
introduction of modern seeds and fertilizers, farmers produced 12 
million tons of wheat on 14 million hectares of land. Following an 
uptake of new seeds and fertilizers, yields increased dramatically so 
by 1993 India was able to quadruple its wheat production while 
increasing its cropped wheat area by only 60 percent. M.S. Swaminathan, 
the Indian crop scientist who led this ``green revolution'' later 
commented: ``Thanks to plant breeding, a tremendous onslaught on 
fragile lands and forest margins has been avoided.''
    The goal of environmentalists today should be to help farmers in 
Africa make a similar transition toward more productive cropping 
techniques. Roughly 60 percent of all citizens in sub-Saharan Africa 
are farmers, and most have no irrigation, no improved seed varieties, 
no nitrogen fertilizers, and no veterinary medicine for their animals. 
Their crop yields are only \1/10\ as high as in Europe and only \1/3\ 
as high as in the developing countries of Asia, and despite their best 
efforts production has fallen behind the rate of population growth. On 
a per capita basis, production in Africa today is actually 19 percent 
below where it was in 1970.
    Some (including those who influenced the ISTAAD assessment) like to 
peddle a romantic notion that Africa should stay away from high-yield 
farming and embrace pre-modern ``organic'' production methods instead. 
Yet most of Africa's smallholder farmers today are de facto organic 
(since they use little or no nitrogen fertilizer) and the outcome is 
anything but romantic. A majority of smallholder farmers in Africa are 
women who earn only about $1 a day, and \1/3\ of them are malnourished. 
Nor are they succeeding as stewards of the environment. The nutrients 
in their soils become exhausted from constant cropping without 
fertilizers, so they must move on to clear new lands. Land clearing for 
low-yield agriculture has become the cause of approximately 70 percent 
of all deforestation in Africa. High-yield farming based on modern 
agricultural science may not be romantic, but it remains the best 
option available for increasing both the production of food and the 
income of farmers, at least cost to the natural environment.
    What is it that holds poor farmers in Africa back from moving 
toward higher crop yields and a better-protected rural environment? In 
my new book Starved for Science: How Biotechnology is Being Kept Out of 
Africa (Harvard University Press) I show that farmers in Africa suffer 
from low productivity because most are laboring without any of the 
essentials of modern farming. No fertilizers, no hybrid seeds, no 
irrigation, no electrical power, no veterinary medicine. Only four 
percent of farmland in Africa is irrigated. Farmers in Africa use only 
about \1/10\ the amount of fertilizer per acre as farmers in the 
industrial world.
    It would be easier for farmers in Africa to get access to these 
essential technical supports if governments in Africa invested more in 
agricultural development. In recent years governments in Africa have 
dedicated only about five percent of their public spending to any kind 
of agricultural development, far too little for a sector employing \2/
3\ of their citizens and in such great need. Because of inadequate 
rural infrastructure investments, most farmers in Africa are 
significantly isolated from the modern economy. Seventy percent of 
rural dwellers live more than 2 kilometers (a 30 minute walk) from the 
nearest all-weather road, so most household transport still takes place 
on foot. High transport costs drive up the price of fertilizer 
deliveries and drive down farm profits from commercial sales. Rural 
infrastructure and agricultural research need public sector leadership, 
but government spending on farm-to-market feeder roads has been 
marginal and agricultural research has been particularly neglected.
    At an African Union (AU) meeting in 2003 in Maputo, governments in 
Africa pledged to increase their budgetary spending on agriculture to 
ten percent by 2009, in support of a new Comprehensive Africa 
Agriculture Development Programme (CAADP). Helping governments in 
Africa to reach this goal should be the first priority of U.S. 
development assistance in the region. Unfortunately, USAID support for 
agriculture in Africa has been shrinking rather than growing for the 
past 2 decades. As late as 1980 a full 25 percent of all U.S. official 
development assistance went to agriculture, but as of 2007 only one 
percent of USAID spending went for that purpose. When the aid-dependent 
countries of Africa see the donors pulling money away from agricultural 
modernization, they are inclined to do the same.
    Weak donor support has been particularly damaging to agricultural 
research investments in Africa. We know that agricultural research has 
big payoffs in Africa. Colin Thirtle, Lin Lin, and Jenifer Piesse have 
calculated that the weighted average rate of return to agricultural R&D 
spending in Africa's farm sector has been a respectable 22 percent. In 
its 2008 World Development Report the World Bank has estimated, from a 
review of 188 different studies carried out in Africa (between 1953 and 
1997) that the average rate of return on agricultural research 
investment in Africa is above 30 percent. Yet investments in 
agricultural research have been badly neglected. In one sampling of 
twenty-seven countries in sub-Saharan Africa in the 1990s, public 
spending on agricultural R&D had declined in half. Between 1981 and 
2000, per capita spending on agricultural science in Africa overall 
actually declined by 27 percent.
    This abandonment of agricultural research in Africa was caused, in 
significant measure, by a collapse in donor support. Between the mid-
1980s and 2004, annual USAID funding for agricultural R&D in Africa 
dropped by nearly \3/4\, down to a negligible $15 million for the 
entire continent. African governments were unable to make up for this 
decline in external assistance so their own spending on agricultural 
research was cut back.
    Why was external assistance to African farming cut back so sharply? 
One reason was an illusion, created by low international food prices in 
the 1980s and 1990s, that the world's food production problems had all 
been solved. In truth, food production problems in Africa were 
worsening in the 1980s and 1990s, and between 1991 and 2002 the number 
of undernourished people in the region increased from 169 million up to 
206 million. Nearly \1/3\ of all men, women, and children in sub-
Saharan Africa became malnourished, even at a time when world food 
prices were low. Price levels in the international marketplace have 
always been a poor indicator of actual circumstances in the African 
countryside.
    The current run-up in international crop prices has brought renewed 
attention to food and farming issues, but so far the response of the 
U.S. Government has been to stress short-term food aid needs over long-
term investments in agricultural development. Roughly 85 percent of the 
new funding pledged by President Bush in response to the world food 
crisis this year has been for food aid. Financing food aid is 
important, but what poor farmers in Africa need for the longer run is 
higher farm productivity. This will require revived international 
support for adequate local public investments in things like rural 
roads, rural irrigation and power, rural schools, rural clinics, and 
most of all local agricultural research. The bulk of Africa's food 
crisis comes not from the high cost of imported food but instead from 
the low productivity of Africa's own smallholder farmers. The current 
interlude of high food prices has revived interest in international 
food and hunger issues, which is a good thing. If the current crisis 
can be leveraged to revive USAID's traditional mission in supporting 
farm productivity gains in poor countries, then something even better 
will have been achieved.
                                 ______
                                 
Submitted Statement of Dr. Cary Fowler, Executive Director, Global Crop 
                            Diversity Trust
    On behalf of the Global Crop Diversity Trust I would like to thank 
the Committee for the opportunity to submit this testimony, and in 
particular for the Committee's recognition of the importance of the 
Trust's work through the authorization in the farm bill of the 
appropriation of $60 million to fund the United States' contribution to 
the endowment of the Trust.
Background
    The recent food price crisis has thrown into sharp focus many of 
the development challenges we face to ensure food security: population 
growth, little new land, water shortages, uncertain energy supplies, 
and climate change. These mean that soon our crops must produce more 
food, on the same amount of land, with less water, with more expensive 
and less secure supplies of energy and fertilizer, under climactic 
conditions which farming has never experienced.
    There is no possible scenario in which we can continue to grow the 
food we require without crop diversity. But this diversity is at risk, 
dying even in the gene banks where it has been placed for safekeeping. 
Individual varieties, such as the 200,000 varieties of wheat, have 
different traits for drought or heat tolerance, nutritional quality, 
disease resistance and every other possible characteristic. Crop 
diversity is therefore the raw material for improving and adapting 
crops to meet all future challenges.
    But securing crop diversity is a unique challenge because:

   There is complete agreement regarding its paramount 
        importance--it is the biological foundation of all agriculture, 
        everywhere.

   There is total global interdependence--no country in the 
        world is self-sufficient in the genetic diversity of the crops 
        which feed its people.

   The solution is available and simple--all the political 
        agreements are in place, the science is understood, the 
        institutions exist. Only the finance is missing.

   There is only one organisation working worldwide to solve 
        this problem--the Global Crop Diversity Trust.

    Therefore, full funding of the Global Crop Diversity Trust's 
endowment will guarantee that the genetic diversity of the world's main 
food crops will be secured, conserved and available--forever.
Global Crop Diversity Trust
    The Trust is an independent international organization, established 
in 2004. Its founders were the international research centers of the 
Consultative Group on International Agricultural Research (CGIAR), and 
the Food and Agriculture Organisation of the United Nations, both of 
which recognized the urgent need for a dedicated organisation to 
undertake a task which was beyond the mandate of either organisation.
    Since at least the 1980s, crop yield improvements have been the 
single greatest contributor to increased production. But the rate of 
increase has been dropping steadily. Not coincidentally, since 1980 the 
share of overseas development assistance for agriculture has plummeted 
from more than 16% to less than 4% of Official Development Assistance.
    These cuts impact not only research, but the conservation of the 
raw material for much research--the collections held by gene banks. The 
crop research called for so frequently, in particular with regard to 
fostering a second green revolution in Africa or adapting agriculture 
to climate change, is based on the material found in gene banks, the 
most important of which internationally are held by research 
organizations. The lack of security of funding threatens these, with 
implications for agriculture everywhere. The Trust will, once fully 
endowed, fund the maintenance of the world's most important gene banks 
so that the fluctuations of individual research budgets have no impact 
on the crucial collections of crop diversity.
    The Trust has already raised $143 million, from developed and 
developing country donors as varied as the United Kingdom, India, 
Australia and Ethiopia, as well as from philanthropic foundations and 
corporations. The U.S. was one of the first countries to announce 
support for the Trust, prior even to its formal establishment as an 
international organization. This early vote of confidence was vital to 
encouraging other donors, who have since come through very strongly. As 
other countries have stepped forward top fund the Trust, the U.S. is 
now one of the Trust's smallest donors. In a reversal of the earlier 
situation, now the lagging contribution by the U.S. has the potential 
to undermine confidence in the Trust, and consequently future 
fundraising.

-------------------------------------------------------------------------------------------------------------------------------------------------
    ``To ensure that the most critical collections of rice, wheat, corn,
 potatoes and the other staple crops that feed the world continue to be
 protected, the Global Crop Diversity Trust deserves continued
 support.At a time when science is providing the keys to understanding
 how best to use the contents of these precious food crop gene banks in
 order to benefit humanity and the environment, the collections
 themselves are under threat. The Global Crop Diversity Trust will help
 protect these irreplaceable sources of global biodiversity, ensuring
 that their promise is fully realized.''                                                      Dr. Norman E.
         Borlaug,
        Nobel Peace Prize Laureate, 2007 Recipient of Congressional Gold
         Medal.
------------------------------------------------------------------------

The Work of the Trust
    The Global Crop Diversity Trust is the sole worldwide response to 
the under-funding crisis facing gene banks, offering a clear and 
achievable solution. The Trust will ensure the conservation and 
availability of the vast genetic diversity of our food crops. Although 
less than 4 years old, the Trust has already raised $143 million, and 
has launched a comprehensive programme to:

   regenerate and safely duplicate threatened, and unique, 
        collections (the Trust is already funding regeneration 
        activities in 45 collections in 32 countries);

   upgrade key gene banks holding multiple globally important 
        collections;

   safely duplicate collections at the Svalbard Global Seed 
        Vault (the Trust has organised and funded the shipment of over 
        100 million seeds to this unique back-up facility in the 
        Arctic);

   develop information systems for better management of, and 
        dramatically improved access to, collections-specifically:

     the Trust is funding the development of a version of 
            USDA's gene bank management software which can be rolled 
            out for free to developing countries; and

     the Trust is also developing a system to enable plant 
            breeders to search collections globally, by trait, over the 
            Internet, which will massively expand the ability of 
            scientists to research and access useful traits;

   screen collections for traits essential to meet climate 
        change and other challenges, for example the Trust has just 
        entered into partnerships with institutions in 15 countries to 
        support screening of collections of banana and plantain, 
        barley, chickpea, coconut, cowpea, grasspea, lentil, maize, 
        millet, rice, sweet potato, taro, wheat, and yam; and

   develop improved conservation methods for difficult-to-
        conserve crops of particular importance to the poor in tropical 
        countries, such as cassava, yam, and sweet potato.

    This programme can be seen as preparing a `global system' for the 
conservation and availability of crop diversity, whose permanent 
maintenance the Trust will fund through its endowment. The Trust has 
also already started funding vitally important collections from its 
endowment--effectively providing grants which will last in perpetuity 
and therefore removing all funding uncertainty from vital collections. 
In 2008, long-term grants drawn from the Trust's endowment will already 
total $1.95 million and will provide security to cassava, wheat, 
barley, faba bean, lentil, pearl millet, banana, bean, grass pea, 
sorghum, yam, forages, rice, and the management of the Svalbard Global 
Seed Vault.
Long-Term Funding for a Long-Term Task
    The conservation of crop diversity is by its nature a very long-
term task, requiring consistent and reliable funding. Uncertainties in 
funding for gene banks place collections at risk, and even short-term 
interruptions in funding can result in the loss of unique material. The 
current funding approaches--a reliance on annual funding from central 
treasuries and on traditional 3 to 5 year grants--are failing, despite 
the importance to development of a well-funded system of gene banks 
worldwide.
    There is a focus from most donors on short-term impact, though 
shortfalls in gene bank funding can reduce options for agriculture 
forever. In the long-term nature of gene banks' work, a 3 to 5 year 
grant provides very little meaningful security. Only an endowment fund 
can provide the requisite guarantees of truly long-term funding, which 
will insulate the vital work of gene banks from budget cuts and changes 
in funding fashions, while still exposing them to the rigours of 
effective project management, external review and proper 
accountability.
    The Congress endorsed the Trust's mission and the need to fund it 
through a permanent endowment when it enacted section 3202 of the 2008 
Farm Bill. Section 3202 authorized the appropriation of $60 million 
over 5 years to fund the U.S. contribution to the Trust endowment.
    The appropriation of funds for the Trust endowment is a concrete 
contribution to one of the most important issues facing agriculture--
the conservation of its biological base. Globally, current arrangements 
for conserving crop diversity are failing to provide adequate security 
for this vital resource.

   The international community therefore funds the conservation 
        of crop diversity in a patchwork of individual commitments and 
        arrangements, yet does not have the reassurance that the job is 
        being done.

   The Trust, as the sole dedicated worldwide funding 
        organization for the conservation of crop diversity, is 
        uniquely placed to allow donors to view this work globally, 
        rather than through disparate institutions across the globe.

   The Trust allows donors to apply rigorous standards to 
        donations whilst avoiding the competition and duplication 
        inherent in current funding arrangements.

   The Trust allows donors to remove funding uncertainty from 
        the conservation of crop diversity as a whole, while 
        reinforcing the need for individual institutions to perform.

   The Trust will promote the effective, goal-oriented, 
        economically efficient and sustainable global system which the 
        conservation of crop diversity requires.

-------------------------------------------------------------------------------------------------------------------------------------------------
    ``Low agricultural productivity in sub-Saharan Africa is due, in
 part, to the limited use of agricultural inputs, such as fertilizer and
 improved seed varieties, and the lack of modern farming practices.''
    ``The U.S. Agency for International Development (USAID) funding to
 address food insecurity in Africa has been primarily for emergency food
 aid, which has been crucial in helping to alleviate food crises but has
 not addressed the underlying factors that contributed to the recurrence
 and severity of these crises.''                                Government Accountability Office (May
         2008).
------------------------------------------------------------------------

What Sets the Trust Apart?
    In a world where there are many important, and apparently 
overwhelming, issues demanding attention, it is important to note how 
the Trust differs from other organizations competing for donations.

   Its mission is achievable. It is rare that the world faces a 
        major problem which has highly disturbing implications but an 
        identifiable and achievable solution. This is precisely what 
        the Trust offers; a costed, measurable plan, relying on 
        existing institutions and simple proven technologies.

   It is the only solution. Crop diversity is disappearing, 
        even in the gene banks built to protect it, and there is no 
        organization apart from the Trust tackling this problem 
        worldwide. The Trust offers a unique opportunity to put in 
        place a rational and cost-effective system for the conservation 
        of the resources which underpin all agriculture and the world's 
        future food supplies.
U.S. Funding for the Trust
    Sixty million dollars has been authorized for the Trust in the 2008 
Farm Bill. The Trust hopes to make significant strides towards this 
target in the early period of the Bill, due to the twin imperatives of 
the urgency of delivering its mission, and the importance of 
establishing clear support from the U.S. in the eyes of other potential 
donors.
    In this regard, we urge the Congress to ensure that the precious 
and irreplaceable resource of our crop diversity is preserved through 
the provision of funding for the Trust from funds provided in the FY 
2008 supplemental appropriations provided for agricultural development. 
In addition, we urge that funding for the Trust endowment be provided 
within the FY 2009 Foreign Operations appropriations at a level which 
would ensure fulfillment of the $60 million Trust authorization within 
the 5 year timetable approved by this Committee and enacted by 
Congress.

-------------------------------------------------------------------------------------------------------------------------------------------------
    ``Since crop gene banks around the world are so critical for
 sustaining the U.S. food supply system and a major sector of the U.S.
 economy, full support for the Global Crop Diversity Trust and its
 conservation goals is essential.''                                  Safeguarding the Future of U.S.
         Agriculture,                                              University of California,
         2005.
------------------------------------------------------------------------

    The Global Crop Diversity Trust is extremely grateful to the 
Committee for the chance to present this testimony, as the Committee 
considers the complex issues surrounding agricultural development 
assistance and food aid. We will of course welcome the opportunity to 
respond to any questions that the Committee may have in this regard.
                                 ______
                                 
   Supplemental Material Submitted By Sean Callahan, Executive Vice 
        President, Overseas Operations, Catholic Relief Services
CRS Expectations About the Global Food Crisis Next Year
    Summary: Encouraging signs indicate that the rapid, upward trend in 
food prices is abating. However, major multilateral organizations and 
think tanks point out that this is a long-term crisis.

   Vulnerable countries and volatile markets need to be 
        monitored closely, and the U.S. response needs to be expanded 
        geographically and even modified to better address the needs on 
        the ground. The real danger in this situation is the prospect 
        of high fuel and food prices putting extreme pressure on 
        societies already vulnerable to political or environmental 
        shocks.

   Countries hardest hit will be food and fuel importing 
        nations with low per capita incomes. Slowing food price 
        increases, or even a leveling off, will not be enough to 
        overcome the extreme vulnerability throughout much of the 
        developing world.

   Congress should continue leadership that it has shown in the 
        Trade Title of the 2008 Farm Bill and the FY 2008-2009 
        Supplemental Appropriations bill.

   CRS has outlined additional steps in this prospective review 
        for consideration by the House Agriculture Committee. In 
        particular, CRS urges Congress to conduct both oversight 
        hearings and overseas fact-finding trips.

    Expected Short-term Trends: The current global food crisis stems 
from increased costs in the commodity, fuel, and credit markets. A 
critical factor in this ongoing crisis is the ability of countries to 
buffer the most negative economic effects as they arise. While OECD 
countries are tightening their belts, developing economies have less 
room for maneuver, and the most vulnerable countries have virtually no 
flexibility to handle severe economic stress and hunger.
    The course of the global food crisis over the next 6-12 months will 
depend upon the political will of all nations to employ real remedies 
for the causes of food insecurity. Evidence of economic resilience in 
major economies, greater global political stability, downward pressure 
on oil prices, and resolution of international financial turbulence 
would all help maintain food price stability. Given this long list of 
contributing factors, food prices do appear to be stabilizing at 
significantly higher levels than in 2006. See charts below.
    Although strong wheat production has led to falling prices, maize 
sells at double the previous levels and rice prices remain historically 
high. Poor harvests, climate change, low grain stocks, and increased 
demand for animal protein and biofuels all contribute to the 
continuation of high commodity prices. Record prices for energy and 
fertilizer, both key inputs to global agriculture prices also 
exacerbate the food price crisis. Current threats to oil production 
from hurricanes, insecurity in Nigeria, and uncertainty about Iranian 
policy hold prices at record levels.
        Price Graphs for Key Food and Fuel Commodities 2007-2008

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The Multilateral Assistance Outlook: The World Bank has launched a 
special request for Ethiopia at $200 Million, but even if successful, 
this approach cannot be easily be replicated for all the other 
countries. In an alternative approach the World Bank is calling for a 
``Global vulnerability fund'' to provide a new channel for investment 
in crisis areas, but there is little new money to fund this idea. 
Agencies such as World Food Programme are looking to the Middle East 
for new funds and the Saudi Government has given $500 million to date. 
Other UN Agencies are also undergoing planning efforts, but how these 
will be manifested and at what funding levels remain unclear. 
Unfortunately, many other donors are only seeking to reshuffle existing 
development aid rather than adding new resources to keep pace with 
rising food insecurity.
    Recommendations: What we see in our field programs across the 
developing world is that the current food aid structure lacks certain 
provisions to maximize the already generous resources provided by the 
American people. The following list of recommendations for the 
Subcommittee provides steps to address both short and long-term aspects 
of the crisis.

   Feeding the poorest of the poor--Establish a global social 
        safety net program to be administered by FFP with approximately 
        $50 million per year of Title II resources. The multi-year 
        unconditional social safety net programs would target people 
        most vulnerable to food insecurity. In addition to the current 
        food aid programming objectives, these safety net resources 
        would be used to preserve the human dignity of the most 
        vulnerable and expand outreach to the most vulnerable, those 
        who suffer from the most severe forms of chronic hunger. These 
        same people are currently victims of geography, as they are 
        outside of the Food for Peace's regular programs.

   Providing PVOs more resources to complement Title II food 
        aid--Establish a cash pipeline for FFP (outside of P.L. 480, 
        Section 202e) to use in both emergency and development programs 
        (this would be either through funding authorized by the Foreign 
        Affairs Committee, the Agriculture Committee or both). The 
        funds would be made available from outside current P.L. 480 
        legislation but would be used by Food for Peace to supplement 
        food aid resources. Such cash resources would tackle hunger 
        more broadly than the current resources allow, by employing 
        voucher programs and agriculture development activities, which 
        require more appropriated funding than allowed under Title II.

   The widespread suffering in the current crisis points to a 
        complex of food security factors:

                (1) availability of food (including food aid); and

                (2) access to and affordability for vulnerable 
                populations (targeted food vouchers); as well as

                (3) boosting agricultural production (through input 
                vouchers).

        Such effective interventions apply across the range of 
        countries suffering from this crisis. Providing more commodity 
        food aid is clearly not enough. Food for Peace needs to build a 
        more flexible and comprehensive response to world hunger.

   Creating a Mechanism for Government to Government Technical 
        Assistance on Agricultural Policy--Amend the farm bill to 
        provide government to government technical assistance on 
        agricultural policy by creating a mechanism for USDA 
        representatives (and U.S. Land-Grant partners when appropriate) 
        to provide short and long-term technical assistance to 
        developing country governments suffering from the food crisis. 
        Areas of assistance could include specific areas as follows:

                --Creating or strengthening government social safety 
                net programs, using experts from U.S. Government WIC, 
                food stamp and school feeding programs.

                --Land tenure structures to allow owners of farms large 
                and small to enjoy free-title to their land and enter 
                into the formal agricultural economy.

                --Strengthening farm credit systems through technical 
                expertise from the U.S. Farm Credit Administration to 
                establish or strengthen legal environments for 
                agricultural credit as well as assistance to improve 
                the ability of nations to carry out agricultural credit 
                programs that reach farmers and agribusinesses of all 
                income levels.

                --Research and extension technical assistance through 
                the USDA Agricultural Research Service, the Cooperative 
                State Research, Education, and Extension Service as 
                well as U.S. Land-Grant partners to help countries 
                build or strengthen national research and extension 
                structures.

   Monitoring Title II Safe box Programs--Provide oversight to 
        Food for Peace as it carries out expanded development food aid 
        programs as a result of new provisions called for in the 
        current farm bill. Currently, Food for Peace operates 
        development food aid programs in about 18 countries, while the 
        World Food Programme and the World Bank estimate that countries 
        hit especially hard by this long-term price crisis number over 
        30. Both need to coordinate on how to achieve food aid 
        effectiveness. The Agriculture Committee can provide crucial 
        oversight to this process.

   Supporting House efforts to increase investment in 
        agricultural production, agro-enterprise, market 
        infrastructure--In addition to the suggestions for expanded 
        authority and funding for Food for Peace, Members should 
        support expanded appropriations for USAID/EGAT to increase 
        funding for interventions that will expand global food 
        availability and decrease the vulnerability of the poorest 
        producers and most vulnerable urban populations.

    The matrix below offers a birds-eye view of possible trends and 
responses in the nest year,

------------------------------------------------------------------------
       Scenarios                 Outcomes              Interventions
------------------------------------------------------------------------
The current situation     Declining        Food
 is one of high fuel      urban poor purchasing    transfers to most
 and food prices,         power                    vulnerable urban
 leading to increased     Food             groups
 vulnerability,           reductions in rural      Input support
 especially in net        areas                    to farmers
 importing countries      Reduced          Link
 with large low income    ability of governments   production to markets
 populations.             to support vulnerable    Use local
                          communities              procurement methods
                          Reduced demand   to meet urban and
                          for fuel and oil based   rural needs
                          products                 Improve
                                                   market information
                                                   systems
------------------------------------------------------------------------
Hopeful: In 6 months      Stabilizing      Food
 time lowering fuel       commodity prices         transfers to most
 prices and increasing    Fuel costs       vulnerable urban
 global production will   fall to below $100/      groups
 led to falling fuel      barrel levels            Input support
 and food prices.         Food prices      to farmers
                          begin to fall            Monitor
                                                   markets
------------------------------------------------------------------------
Less Hopeful: In 6        Continued        Food
 months time with         pressure on food         transfers via food
 continued high fuel      prices, combined with    vouchers for urban
 and food prices, many    hungry periods,          and rural poor to
 governments will be      requires increased       access food
 unable to continue       levels of intervention   Rural farmers
 subsidies to fuel and    in affected countries    to access inputs to
 food or support to                                boost production
 vulnerable                                        Voucher based
 populations.                                      local procurement to
                                                   buy initial increase
                                                   in production to
                                                   avoid production
                                                   losses
------------------------------------------------------------------------

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                                   
``Based on your experience, what do you think the food security 
        situation will be a year from now, either globally or in areas 
        with which you are especially familiar?''
    The food security situation is areas of Africa that are generally 
food insecure will not be greatly improved in a year's time. In the 
best of times these food insecure countries struggle to meet their food 
needs. In Ethiopia food needs of the chronically food insecure are 
supported by hundreds of thousands of tons of imported foods annually. 
Much of this food is supplied by the United States through Title II. 
The cost of buying that food, transporting it to Ethiopia and trucking 
it to its final destination has approximately doubled in the past year; 
making food aid a very costly intervention.
    The factors contributing to the rapidly rising food prices are well 
know and included:

   Supply and demand for food. The population of the world is 
        increasing at faster rate then global food production. Also the 
        middle class is expanding in developing countries such as China 
        and India and these upwardly mobile people are eating more per 
        capita and are enjoying different foods, both of which are 
        contributing to greater demand for food. This increase in 
        demand seems to be permanent.

   Rising fuel costs. The rapidly growing middle class in China 
        and India are purchasing more automobiles driving up the demand 
        for fuel and therefore the price of fuel. This trend is not 
        likely to change and therefore, it appears that the high cost 
        of fuel is here to stay.

   Loss of crop land. The planting of land with non-edible 
        biofuel production has reduced food production in some 
        countries. The increased interest in the planting of biofuels 
        is based largely on government policies which are not likely to 
        change rapidly.

    All these factors contribute to the very high price of Title II 
food. The American taxpayer can only bear so much. Title II programs 
are being closed in a number of countries due to the raising costs of 
the program. Hard choices must be and have been made. Should the U.S. 
Government fund Title II programs in Kenya or Ethiopia? Someone will 
lose out, and countries such as Kenya will not be receiving Title II 
food aid in the future.
    The poor in Kenya will not see a great improvement in their food 
security situation in the next year or so. On the contrary they may be 
in worse condition than they currently are. It takes a couple of years 
to recover from a bad drought and the associated loss of productivity. 
In the past when food aid was less expensive it was more plentiful and 
could reach more people. The dwindling availability of food aid will 
make the effects of current drought even more difficult to recover 
from.
    The above mentioned factors that contribute to the current global 
crisis did not suddenly develop because a rapid change in the global 
economy or a sudden change in global food policy. The current global 
food supply and demand ``equation'' did not spring up over night. Long 
term population trends and a long term ``disinterest'' in improving 
agricultural productivity have contributed to the problem. These trends 
will not change over night. Even if the governments of the world 
decided to immediately double funding for research to increase 
agricultural productivity it would still take a number of year to see 
the results. The fuel shortage and the associated high cost of fuel are 
the consequences of long term population growth, a greater demand for 
fuel and stagnant oil production. The growing middle class of the 
developing world will continue to want vehicles and the change to more 
fuel efficient vehicles will take time. High fuel prices may be here to 
stay. The large increase in the use of farmland to produce biofuels is 
affecting the availability of food. Government policies promoting 
biofuels will be hard to overturn in spite of the global need for food.
    All these issues will make the ``food crisis'' long term in many 
countries which are chronically food insecure. This is especially true 
for the urban poor. Before the ``global food crisis'' large portions of 
their incomes were devoted to purchasing food and these people ``lived 
on the edge''. With today's prices many of them are falling off the 
edge. Even if food prices over the next year or so decline somewhat 
from their current highs these urban poor will still be desperate and 
be among the world's chronically food insecure.
    Unfortunately, the current situation appears to be long term and 
will increase the length of the list of those who cannot feed 
themselves adequately. The consequences of this situation may include 
forcing a young girl into prostitution to support her family on the 
personal level or anarchy on the national level. This is a rather 
gloomy perspective but one that does occur daily in the first case and 
may occur in the second case if global food prices do not come down.

Andrew Barnes, Ph.D.,
Director of Food Security,
Food for the Hungry.
                                 ______
                                 
  Supplemental Material Submitted By Nicholas W. Minot, Ph.D., Senior
      Research Fellow, Markets, Trade, and Institutions Division, 
              International Food Policy Research Institute
July 29, 2008

    At the July 16 hearings of the Subcommittee on Specialty Crops, 
Rural Development and Foreign Agriculture, Representative Mike McIntyre 
asked the witnesses to respond to a follow-up question: ``Based on your 
experience, what do you think the food security situation will be a 
year from now, either globally or in areas with which you are 
especially familiar?'' This note is a response to his question, with 
emphasis on the impact in low-income countries.
    The food security situation in July 2009 will depend on a number of 
factors including the trend in commodity prices over the next 12 
months, the response of governments and international organizations, 
and the response of individual farmers and consumers in developing 
countries.
Commodity Prices
    It is very difficult to predict commodity prices, but we can draw 
some clues from the expected duration of the factors that have pushed 
these prices up. Wheat prices have been driven up by depreciation of 
the dollar and modest supply shocks, but a major factor has been 
restrictions on exports by Russia, Argentina, and other countries. It 
is likely that production will increase this year and next in response 
to higher prices. The USDA is predicting a record wheat crop for 2008-
2009, based on a strong U.S. harvest and a possible end to the drought 
in Australia. It is quite possible that some of the major exporters 
will relax their restrictions on exports. Earlier this month, the 
Senate in Argentina rejected the President's plan to continue taxing 
agricultural exports, which will probably mean increased supplies of 
wheat and soybeans on the world market. Indeed, world wheat prices have 
declined about 25% from their peak in March, though they are still far 
above the 2007 average.
    Rice prices have been increased by depreciation of the dollar, 
strong demand, and export restrictions by India, Vietnam, Egypt, and 
other countries. However, talk of creating a rice exporters cartel has 
been dropped, and the 2008 harvest is forecast to be 2.3% higher than 
last year, though much of it will not hit the market until the second 
half of the year. In response to these factors, the price of Thai Super 
A1 broken rice has also declined 28% from its peak in May, though still 
much higher than in January of this year.
    The price of corn, on the other hand, is supported by the strong 
demand for animal products and for ethanol, the latter linked to the 
high price of oil. Although the European Union is scaling back its 
biodiesel subsidies because of its effect on oilseed prices, political 
support for ethanol subsidies in the United States remains strong, so 
it is less likely that corn prices will fall over the next 12 months 
unless oil prices do.
    In summary, the prices of wheat and rice have already fallen from 
their peaks earlier this year, but are expected to remain significantly 
above the 2007 levels over the next 12 months. The price of corn will 
depend on the price of oil and U.S. ethanol policy, but is less likely 
to fall over the next 12 months. A global recession would reduce 
commodity prices quickly, but in this case the cure may be worse than 
the disease.
Food Security
    Farmers that are able to produce marketable surpluses of the wheat, 
rice, and corn will benefit from the high prices, though the gains will 
be partially offset by higher fuel and fertilizer prices. These farmers 
represent 20-40% of the rural households in most low-income countries 
in sub-Saharan Africa and Asia. The urban poor and rural agricultural 
laborers spend a large share of their income on staple foods and depend 
entirely on the market for their food supplies, so their losses, as a 
percentage of income, are the greatest. Small-scale farmers that are 
net buyers also lose, though the loss is partially offset by the fact 
that they meet some of their food requirements from their own 
production. Other urban households also lose, though their higher 
income protects them to some degree.
    Assuming that commodity prices remain high by historical standards 
(even if they decline somewhat from the current levels), the effect on 
food security 1 year from now will be mixed. On the one hand, 
households will respond to the higher prices. Consumers will shift to 
staple crops that are not internationally traded (such as cassava, 
sweet potatoes, yams, sorghum, and millet) because their prices have 
not increased as much. Farmers will shift to producing these basic 
grains in response to the higher prices. For example, the FAO expects 
rice production to grow 3.6% in sub-Saharan Africa and 7.4% in Latin 
America and the Caribbean. It is also possible that the high food 
prices will slow or even reverse urban migration in some countries, as 
household respond to the high prices by returning to agricultural 
production. These responses by consumers and producers will reduce the 
negative impact of the high prices on food security.
    On the other hand, many poor households will be forced to pay for 
food by pulling their children out of school, postponing health care, 
and reducing other non-food spending. If this is not enough, they may 
be forced to sell off assets, such as animals, consumer goods, or even 
land, to cover the cost of food purchases. If this is not enough, they 
may be forced to eat less, with dire consequences for nutrition and 
productivity. Obviously, the latter two responses cannot be sustained 
over time. Households that sell their assets this year to purchase food 
may have nothing left to sell next year. Furthermore, if they sell 
productive assets such as oxen this year, it will reduce their income 
next year. Likewise, the condition of people that start to eat less 
this year will worsen over time. Because of these cumulative factors, 
it is quite possible that the food security situation in 2009 may be 
worse than this year, even if food prices remain at current levels.
    The response of the international community may represent the ``tie 
breaker'' between these two opposing factors. If food aid deliveries 
can be maintained or increased in volume terms and if social protection 
programs (like conditional cash transfer programs) can be expanded, it 
will help households avoid liquidation of their assets and 
malnutrition, reduction in school enrollment, and malnutrition. This 
will provide time and energy needed to adapt to the higher food prices. 
Support for agricultural development, particularly agronomic research 
on staple grains, will not improve food security by 2009, but it is an 
indispensable part of the long-term recovery of the balance between 
food supply and demand.
    The biggest danger, in my view, is that the political will in both 
rich and poor countries to expand support for food and agriculture will 
dwindle when grain prices are no longer rising, even if they remain 
two- to three-times higher than in 2006.
                                 ______
                                 
  Response to Question Submitted to Theo A. Dillaha III, Ph.D., P.E.,
   Professor of Biological Systems Engineering and Program Director,
   Sustainable Agriculture and Natural Resource Management (SANREM) 
Collaborative Research Support Program (CRSP), Office of International 
 Research, Education, and Development, Virginia Polytechnic Institute 
            and State University, Blacksburg, Blacksburg, VA
    Question. ``Based on your experience, what do you think the food 
security situation will be a year from now, either globally or in areas 
with which you are especially familiar?''
    Answer. My best professional judgment is that is that there is a 
significant risk that the food security situation will be more serious 
next year. My judgment is based on the following factors:
    Factors that will potentially worsen the food security situation 
(in no particular order):

   U.S. and European biofuel programs will require for grain to 
        supply increasing biofuel factories. For example, current U.S. 
        ethanol capacity as of July 24, 2008 is 9,407.4 million gallons 
        per year and an additional capacity of 4,208 million gallons 
        per year is under construction, a 45% increase in production. 
        The vast majority is reliant on corn as a feedstock. According 
        to the USDA, U.S. corn ethanol production currently uses 30% of 
        the global change in total wheat and coarse grains production 
        from 2002/03 to 2007/08. This has decreased wheat and coarse 
        grains supplies and increased prices by varying estimates, but 
        the estimates are generally in excess of 25%. EU diesel 
        programs have a similar effect.

   Increasing meat consumption: Globally, meat consumption is 
        increasing at a rate of 2.1% per year while global grain 
        production is only increasing by 1.2%. Meat requires 2.6 lbs 
        grain/lb meat (chicken) to 7.0 lbs grain/lb meat. Consequently, 
        unless growth in meat consumption decreases, there will be less 
        grain for other uses, which will make grain scarcer and more 
        costly.

   High energy prices: Increases costs of production by 
        increasing fertilizer, production, and transport costs. I have 
        no idea where energy costs are going.

   Grain reserves: Many countries maintain grain reserves for 
        food security reasons. Theses have been depleted this year and 
        countries will be trying to rebuild reserves, which will tend 
        to increase prices.

   Weather: Agricultural droughts are expected to continue in 
        many parts of the world.

   Speculation: I don't know.

    Factors that will potentially improve the food security situation 
(in no particular order):

   High commodity prices should increase production.

Theo A. Dillaha, Ph.D., P.E.,
Program Director SANREM CRSP,
Office of Int. Res., Edu., and Development,
Virginia Tech.
                                 ______
                                 
  Response to Question Submitted to Avram ``Buzz'' Guroff, Senior Vice
   President, Food Security and Specialty Crops Portfolio, ACDI/VOCA
   (Agricultural Cooperative Development International/Volunteers in 
                    Overseas Cooperative Assistance)
    Question. Based on your experience, what do you think the food 
security situation will be a year from now, either globally or in areas 
with which you are especially familiar?
    Answer. That will largely depend on the political will of the 
international community. High food and energy prices will be with us 
for some time to come. Some of the adverse effects of this are yet to 
be felt--not just hunger, but malnutrition and morbidity rates will 
continue to rise. Productive assets will in some cases be sold off in 
lieu of farming income. Also, continued societal unrest could 
exacerbate the crisis.
    At the same time, rising food prices present an unprecedented 
opportunity if farmers in the developing world are able to develop 
their capacity and capture markets. Some of the greatest productivity 
gains could come in regions that are now the least advanced. However, 1 
year is a short timeframe for building the capacity of people to 
produce their own food, which is the most sustainable and cheapest 
method of addressing world hunger and poverty.
    Still, the market will respond over time and food shortages will 
abate. The extent to which the U.S. and other donors provide increased 
emergency and agricultural development assistance, as well as adjust 
trade and price control policies, to help avert future crises will be 
critical to how much better or worse things will get over the next few 
years.

                                  
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