[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
  LOCAL AND REGIONAL PURCHASES: OPPORTUNITIES TO ENHANCE U.S. FOOD AID 

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


                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON AFRICA AND GLOBAL HEALTH

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 4, 2009

                               __________

                           Serial No. 111-75

                               __________

        Printed for the use of the Committee on Foreign Affairs


 Available via the World Wide Web: http://www.foreignaffairs.house.gov/

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                      COMMITTEE ON FOREIGN AFFAIRS

                 HOWARD L. BERMAN, California, Chairman
GARY L. ACKERMAN, New York           ILEANA ROS-LEHTINEN, Florida
ENI F.H. FALEOMAVAEGA, American      CHRISTOPHER H. SMITH, New Jersey
    Samoa                            DAN BURTON, Indiana
DONALD M. PAYNE, New Jersey          ELTON GALLEGLY, California
BRAD SHERMAN, California             DANA ROHRABACHER, California
ROBERT WEXLER, Florida               DONALD A. MANZULLO, Illinois
ELIOT L. ENGEL, New York             EDWARD R. ROYCE, California
BILL DELAHUNT, Massachusetts         RON PAUL, Texas
GREGORY W. MEEKS, New York           JEFF FLAKE, Arizona
DIANE E. WATSON, California          MIKE PENCE, Indiana
RUSS CARNAHAN, Missouri              JOE WILSON, South Carolina
ALBIO SIRES, New Jersey              JOHN BOOZMAN, Arkansas
GERALD E. CONNOLLY, Virginia         J. GRESHAM BARRETT, South Carolina
MICHAEL E. McMAHON, New York         CONNIE MACK, Florida
JOHN S. TANNER, Tennessee            JEFF FORTENBERRY, Nebraska
GENE GREEN, Texas                    MICHAEL T. McCAUL, Texas
LYNN WOOLSEY, California             TED POE, Texas
SHEILA JACKSON LEE, Texas            BOB INGLIS, South Carolina
BARBARA LEE, California              GUS BILIRAKIS, Florida
SHELLEY BERKLEY, Nevada
JOSEPH CROWLEY, New York
MIKE ROSS, Arkansas
BRAD MILLER, North Carolina
DAVID SCOTT, Georgia
JIM COSTA, California
KEITH ELLISON, Minnesota
GABRIELLE GIFFORDS, Arizona
RON KLEIN, Florida
                   Richard J. Kessler, Staff Director
                Yleem Poblete, Republican Staff Director
                                 ------                                

                Subcommittee on Africa and Global Health

                 DONALD M. PAYNE, New Jersey, Chairman
DIANE E. WATSON, California          CHRISTOPHER H. SMITH, New Jersey
BARBARA LEE, California              JEFF FLAKE, Arizona
BRAD MILLER, North Carolina          JOHN BOOZMAN, Arkansas
GREGORY W. MEEKS, New York           JEFF FORTENBERRY, Nebraska
SHEILA JACKSON LEE, Texas
LYNN WOOLSEY, California
               Noelle Lusane, Subcommittee Staff Director
          Sheri Rickert, Republican Professional Staff Member
                     Antonina King, Staff Associate
















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. Thomas Melito, Director, International Affairs and Trade 
  Team, United States Government Accountability Office...........     6
Mr. Jon C. Brause, Deputy Assistant Administrator, Bureau for 
  Democracy, Conflict, and Humanitarian Assistance, United States 
  Agency for International Development...........................    21
Mr. Bud Philbrook, Deputy Under Secretary, Farm and Foreign 
  Agricultural Services, United States Department of Agriculture.    30
Ms. Jean McKeever, Associate Administrator, Business and 
  Workforce Development, Senior Program Manager, Office of Cargo 
  Preference Program, Maritime Administration, United States 
  Department of Transportation...................................    37

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Mr. Thomas Melito: Prepared statement............................     9
Mr. Jon C. Brause: Prepared statement............................    23
Mr. Bud Philbrook: Prepared statement............................    32
Ms. Jean McKeever: Prepared statement............................    39

                                APPENDIX

Hearing notice...................................................    50
Hearing minutes..................................................    51


  LOCAL AND REGIONAL PURCHASES: OPPORTUNITIES TO ENHANCE U.S. FOOD AID

                              ----------                              


                         THURSDAY, JUNE 4, 2009

                  House of Representatives,
          Subcommittee on Africa and Global Health,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:40 a.m. in 
room 2172, Rayburn House Office Building, the Hon. Donald M. 
Payne, (chairman of the subcommittee) presiding.
    Mr. Payne. Let me call this hearing to order. I was waiting 
for the ranking member but many of you may know that he is 
involved in a very intense case of a constituent who is in 
Brazil, and the constituent's son is in a legal entanglement. I 
assume he will be here if his schedule permits, but we will 
move forward. As you know, there are always many conflicts in 
our schedule.
    Let me certainly welcome all of you here this morning for 
this very important continuation of the subject that we have 
been dealing with here at the Subcommittee on Africa and Global 
Health for several years. Let me welcome all of you to the 
fourth hearing that we have had of the subcommittee this year; 
today's hearing is entitled ``Local and Regional Purchases: 
Opportunities to Enhance U.S. Food Aid.'' The hearing will be 
followed by a briefing of the same title.
    This is the third in a series of hearings we have held on 
U.S. food aid programs and security. The hearing will focus on 
the results of a Government Accountability Office (GAO) report, 
which I requested last year, related to the role that 
purchasing food locally or regionally can play in improving 
efficiency and effectiveness of the U.S. in-kind food programs.
    The 2007 GAO report has shown that there was a great room 
for improvement within our traditional in-kind food aid 
programs. Local and regional procurement (LRP) and we will be 
using the acronym for local and regional procurement. LRP is 
the purchasing of food commodities in countries with emergency 
food needs, or in another country within the region to be 
provided as food aid.
    As we will hear today, this approach is already being put 
to use to some extent in U.S. programs and is used extensively 
by the World Food Program, the WFP. As many of us know, the 
U.S. is the largest food aid provider in the world. In 2008, 
the U.S. gave $2.1 billion in U.S. commodities for WFP 
emergency food operations. Almost all U.S. food aid is provided 
in the form of U.S. commodity donations and it has been that 
way for the last 50 years. Other donors such as the EU, the 
second largest provider of food aid, have switched over almost 
entirely to cash donations to WFP to purchase food aid. In 
2008, the WFP purchase more than $1 billion worth of 
commodities or 2.1 million metric tons worldwide. More than 
half of those commodities were purchased in developing 
countries.
    In recent years, LRP have been discussed as a cost-
efficient time saving option to be employed to meet emergency 
food needs, and it has been explored through several programs. 
The food aid budget requests for Fiscal Year 2006 through 2009 
include language authorizing the U.S. Agency for International 
Development (USAID) to allocate up to 25 percent of funds for 
food aid, Title II of P.L. 480--or as it has been recently 
renamed, Food for Peace--to local or regional purchase. The 
justification for this request was that it would increase 
timeliness and effectiveness of our response to emergency food 
aid needs. The language did not make it in the final bill.
    The former administration's foreign bill proposal also 
authorized P.L. 480 funds for LRPs. The 2008 Farm Bill did 
include a 5-year $60 million U.S. Department of Agriculture 
(USDA) pilot project for LRP. The U.S. Agency for International 
Development (USAID) provided $125 million to implement LRP in 
developing countries through Fiscal Year 2008 Supplemental 
Appropriations Bill.
    There are currently several LRP initiatives before the 
111th Congress. President Obama's Fiscal Year 2010 budget 
proposal has, in addition to other food security-related items, 
$300 million in international disaster assistance (IDA) funds 
for LRPs, cash transfers, and cash vouchers to meet emergency 
food needs.
    Additionally, the President announced, at the G-20 meeting 
in April, his plans to double agricultural assistance toward 
helping nations around the world reach and sustain food 
security. Secretary Clinton has begun the plans, and we look 
forward to holding hearings and working closely with the 
administration on these new critical initiatives to see just 
what form the new administration's programs will take.
    Also under consideration are the Lugar-Casey Global Food 
Security Act and a similar measure in the House, to be led by 
Congresswoman McCollum, which I am collaborating with her as 
this legislation moves forward.
    Some of the questions which has been raised by LRP include 
the following: One, could the U.S. respond to emergency food 
needs at lower cost in a more timely manner if commodities were 
purchased in locations closer to where they were needed?
    Two, what risks would be associated with LRPs that would 
make it a less effective response to emergency food needs and 
provisions of U.S. commodities?
    Three, could LRP contribute to agricultural development, 
increased production, productivity, development of markets for 
small holders or low-income farmers in developing countries?
    Finally, could LRP adversely affect agriculture development 
and make poor consumers more food insecure?
    So there is still a number of questions that need to be 
answered as we move forward. It is not as simple as it might 
seem at first blush.
    The GAO report found that, overall, LRP is more cost 
effective and arrives quicker than U.S. in-kind donations. In 
fact, 95 percent of WFP's local procurement in sub-Saharan 
African costs roughly 34 percent less than similar food 
purchased by USAID which was shipped from the United States to 
the same countries between 2001 and 2008. This is quite 
remarkable.
    The report also mentions, however, some of the challenges 
that prevent wider use of LRP. These include a lack of 
reliability suppliers, poor infrastructure and logistical 
capacity, weak legal systems, timing and restrictions on donor 
fundings, and quality considerations.
    There are also questions about the disruption factor on 
local markets by LRP, a feature of the in-kind approach which 
we have long decried. These issues highlight the need for 
greater United States investment in these areas in Africa, 
particularly in infrastructure and legal systems for long-term 
development.
    Other issues include the limitations on LRP due to cargo 
preference requirements that 75 percent of the gross tonnage of 
agricultural foreign assistance cargo be transported on U.S.-
flag vessels. These and other issues have been addressed in the 
GAO report and will be discussed in this hearing.
    It is my belief that we must begin to think more creatively 
about our food aid program. Ultimately the objective should be 
the elimination of food assistance. This can only be reached if 
we focus on development of agricultural systems and 
infrastructure, among other things, particularly in Africa. 
However, food aid, including in-kind aid, will likely be a 
feature of U.S. Government programs for a very long time for 
several reasons.
    One, there will always be emergencies. The global 
population is set to increase dramatically over the coming 
decades, and increasing industrialization across the globe will 
lead to more urbanization and less agricultural production, and 
we can see that in the United States. As we continue to see 
industrial development, we see former farmlands being taken for 
housing developments and industrial developments, et cetera. So 
this is going to be a worldwide trend, especially in new 
industrialized countries like Indian and China, countries that 
are large food consumers.
    In other words, there will likely always been the need for 
food assistance somewhere in the world. It is incumbent upon 
our generation to think strategically about how to strike a 
balance between meeting the world's emergency food needs and 
working toward long-term food security and the elimination of 
chronic hunger among the world's poor.
    I welcome the testimony of our distinguished panel. We will 
hear from Tom Melito of the GAO; John Brause of the U.S. Agency 
for International Development; Bud Philbrook of the U.S. 
Department of Agriculture; and Jean McKeever of the U.S. 
Department of Transportation. Following their testimonies and 
members' questions, we will be briefed by Allan Jury of the 
World Food Program.
    The committee thanks each of you for your participation 
today. I will open our panel for remarks from our members, and 
then I will introduce our panelists. We will start with our 
representative from California, Congresswoman Watson.
    Ms. Watson. Thank you very much, Mr. Chairman.
    Just to follow up with your opening, I would like to take a 
few minutes to discuss the monumental nature of world hunger.
    A child dies every 6 seconds because of malnutrition-
related causes, and already there are 963 million people 
worldwide who go to bed hungry or malnourished. Two-thirds of 
the world's hunger live in the Asian-Pacific region. Around the 
globe the need for food assistance is on the rise as a result 
of warfare, natural disasters, crop failure, or the inability 
to work due to medical and illness reasons.
    In the future, climate change too will play a role by 
exacerbating water shortages in some areas while flooding 
others.
    As most of you may already know, UNICEF's humanitarian and 
action report of 2009, which was released just this past 
weekend, found they required a 17-percent increase from its 
2008 funding level to meet emergency response needs worldwide. 
This report also noted hunger is at a 40-year high in South 
Asia, especially in Nepal, Bangladesh, and Pakistan. This is in 
addition to the doubling in emergency needs in Eastern and 
Southern Africa.
    Through U.S. food aid, and though it does not solely focus 
on emergency funding, it is a large function of the provided 
aid irrespective of agency. The U.S. has traditionally provided 
in-kind food aid which ensures quality and reliability rather 
than contributing cash funds. In-kind aid requires over 100 
days to reach its destination and in many instances it is 
excessively costly. That is 100 days that food victims are 
without food. With local and regional procurement, food aid can 
reach those in need in a third of the time and at a lower cost.
    In addition to speed and costs, local and regional food and 
procurement provides incentives for farmers to raise cash crops 
and government to invest in infrastructure building. I am aware 
that local and regional procurement faces its own set of 
problems. Small farmers are subject to the whims of the 
environment, and thus cannot always deliver their promised crop 
or the crop may not be up to standard. However, I feel that 
local procurement holds much promise.
    Each situation is unique, and we must concentrate on 
developing a method to evaluate the best method of delivery, be 
it in kind or aid or cash aid.
    We must consider the rising fuel cost, the availability of 
food in the locality, and the substainability of 
the programs. We must not forget our goal, and that is to end 
hunger. We must feed the hungry and teach them to feed 
themselves as well, and I hope the panelists can enlighten us 
on how best to do just that, and with that I yield back my 
time, and thank you for the opportunity, Mr. Chairman.
    Mr. Payne. Thank you very much, Congresswoman Watson. 
Another Congressperson from California, Congresswoman Woolsey.
    Ms. Woolsey. Thank you, Mr. Chairman.
    I think what I am going to be listening for today, I am so 
thankful to have such a great panel, is how with 850 million 
malnourished people in this world of ours and 30-40 percent of 
them in Africa, how we are going to sort of follow the parable 
in the Bible that I couldn't tell you where it is and I am not 
going to quote it right because I don't know that much about it 
except that there is some truth in giving somebody a fish to 
eat for that day, teach them to fish, and indeed they know how 
to feed themselves from then on.
    So I will be looking at ag development investment, local ag 
and whatever the United States can do to help the local areas 
feed themselves in the very best possible way, which means, of 
course, they need development assistance and they need 
infrastructure, irrigation, they need fertilizer, they need 
power and power tools and machinery, and they need roads to 
market. I mean, there is a lot that is missing in this picture, 
but rather than just bring food from our country and handing it 
to them I think we could do a lot better by bringing seeds and 
education and the support that they need. I understand that is 
what the Europeans and the Canadians are doing now, so I am 
anxious to hear more about that. Thank you.
    Mr. Payne. Thank you very much.
    Today we will hear from our distinguished witnesses, Mr. 
Melito, Mr. Brause, Mr. Philbrook and Mr. McKeever--Ms. If I 
had looked up, I would have known that, but I was looking down. 
Let me first introduce Dr. Melito, who is the director of 
international affairs and trade team at the Government 
Accountability Office, and they are the ones that do so much 
good work in giving us reports that give us the tools that we 
need to move forward, and I really thank that outstanding 
government agency.
    In this capacity, he is primarily responsible for GAO work 
involving multilateral organizations and international finance. 
Over the past 10 years, Dr. Melito has been focusing on a wide 
range of development issues, including debt relief for poor 
countries, international food security, and human trafficking. 
Since 2007, Dr. Melito testified several times to Congress on 
GAO reports on challenges U.S. agencies face in improving the 
efficiency and the effectiveness of food aid.
    Dr. Melito holds a M.A. and a Ph.D. in economics from 
Columbia University, and a B.S. in industrial and labor 
relations from Cornell University.
    Next we will have Mr. Jon Brause who is currently serving 
as the deputy administrator in the Bureau for Democracy, 
Conflict, and Humanitarian Assistance. In this capacity, he is 
responsible for disaster response, food aid, and transitional 
assistance. Mr. Brause has 18 years of experience in USAID 
covering procurement issues, operational and budgetary 
policies, and programming and managerial management of 
humanitarian and development resources.
    During his tenure in the Office of Food for Peace, Mr. 
Brause managed all aspects of the U.S. Government food aid 
programming for humanitarian activities worldwide. Prior to his 
current position, Mr. Brause was special assistant to the 
president and senior director for relief, stabilization and 
development at the National Security Council's Directorate on 
International Economic Affairs.
    Mr. Brause has a bachelor's degree in international 
relations from University of California--Davis, and a master's 
degree in national security strategic from the National Defense 
University, National War College in Washington, DC.
    Next we have Mr. Bud Philbrook representing the U.S. 
Department of Agriculture. In 2009, Agriculture Secretary Tom 
Vilsack appointed Bud Philbrook as USDA's deputy under 
secretary for farm and foreign agricultural services.
    In this role, Mr. Philbrook has responsibility for the 
international side of the Farm and Foreign Agricultural 
Service's mission area. His mission area includes the Foreign 
Agricultural Service that works to expand exiting and build new 
markets for U.S. products, improve the competitive position of 
U.S. agriculture in the global marketplace, and to provide food 
aid and technical assistance to foreign countries.
    Mr. Philbrook received his bachelor's degree from the 
University of Minnesota, his master's degree from the Hubert 
Humphrey Institute of Public Affairs at the University of 
Minnesota and earned a law degree from Hamline University 
School of Law in St. Paul, Minnesota.
    He and his wife Michele have three adult sons.
    And finally we have Ms. Jean McKeever--McKeever--I will get 
her altogether at one point. She joins us from the United 
States Department of Transportation. Ms. McKeever serves as the 
Assistant Maritime 
Administration's Assistant associate administrator 
for business and workforce development. She is responsible for 
the agency's Title XI ship financing guarantee program, as well 
as tax deferral funds for ship construction. In addition, she 
oversees the Maritime Administration's shipbuilding, marine 
insurance and labor and training programs.
    Previously, she served as the associate administration for 
shipbuilding at the Maritime Administration, a post that was 
created in 2000 to combine the Maritime Administration's main 
shipbuilding-related functions under one single manager. She 
has served over 25 years in various financial and analytical 
positions, most recently as deputy director of the agency's 
Office of Ship Financing.
    She holds her degree from Mount Holyoke College in 
Massachusetts, and an M.B.A. from Frostburg State University in 
Maryland.
    Let me once again thank all of the panelists, and we will 
begin with Dr. Melito.

STATEMENT OF MR. THOMAS MELITO, DIRECTOR, INTERNATIONAL AFFAIRS 
 AND TRADE TEAM, UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Melito. Mr. Chairman and members of the subcommittee.
    I am pleased to be here to discuss how local and regional 
purchase, or LRP, can provide opportunities to enhance U.S. 
food aid. This hearing is of particular importance given 
today's environment of growing global food insecurity in which 
the United States and other donors face intense pressures to 
feed the world's expanding undernourished population. The 
number of chronically hungry people in the world has been 
growing and now stands at almost 1 billion despite 
international commitment to halve the number of hungry people 
by 2015.
    My testimony is based on our May 2009 report which is being 
publicly released today. I will focus on four topics. First, I 
will discuss the impact of LRP on the efficiency of food aid 
delivery. Second, I will discuss the impact of LRP on economies 
where food is procured. Third, I will discuss U.S. legal 
requirements that could affect U.S. agencies' use of LRP. 
Finally, I will summarize our recommendations regarding 
improvements to U.S. agencies' use of LRP.
    Regarding the first issue, we found that donors can reduce 
food aid costs and delivery time through LRP. Our analyses show 
that LRP in sub-Saharan Africa costs about 34 percent less than 
similar food aid purchased and shipped from the United States. 
However, the cost of LRP in Latin America was comparable to the 
cost of U.S. in-kind food aid. We also found that in-kind food 
aid donations to sub-Saharan Africa took on average 147 days 
compared to about 35 days for locally procured food.
    Despite these benefits, donors face challenges to ensuring 
cost efficiency and timely delivery, including a limited number 
of reliable suppliers and weak legal systems that could limit 
buyers' ability to enforce contracts. In addition, while LRP 
may provide food that is more suited to local preferences, 
concerns persist about the quality of food aid procured in 
developing countries. However, evidence on how LRP affects 
donors' ability to adhere to quality standards and product 
specifications has not been systematically collected.
    Regarding the second issue, LRP has the potential to make 
food more costly to consumers in areas where food is purchased 
by increasing demand. However, steps are being taken to reduce 
these risks, such as coordination among donors. LRP's impact 
can depend on the scale of procurements and whether the market 
is sufficiently integrated with neighboring markets to absorb 
increased demand. The most significant challenge to avoiding 
potential adverse market impacts when conducting LRP is 
unreliable market intelligence.
    For example, in 2007, inaccurate information on production 
levels in Malawi led WFP to believe it was purchasing maze in a 
surplus market. Malawi faced food shortages a few months later.
    LRP does have the potential to support local economies by 
increasing demand for agricultural commodities and raising 
farmers' income, but little data exist to demonstrate that 
these benefits have occurred or are sustainable in the long 
term.
    Regarding the third issue, legal requirements may constrain 
agency's use of LRP.
    First, LRP cannot be funded out of the Food for Peace Act, 
but instead must come from other authorities such as the 
Foreign Assistance Act.
    Second, the Cargo Preference Act requires up to 75 percent 
of the gross tonnage of all U.S.-funded food aid to be 
transported on U.S.-flag vessels. However, there is 
disagreement among U.S. agencies on how to interpret these 
requirements, such as which agency is responsible for 
determining the availability of U.S.-flag vessels. The 
Memorandum of Understanding (MOU) that helps guide U.S. 
agencies' implementation of cargo preference does not address 
these areas of ambiguity. The resulting lack of clarity could 
constrain agency's ability to fully utilize the authorities to 
conduct LRP when responding to food emergencies.
    Regarding the final issue, to address the concerns I have 
just summarized, we recommend that USAID and USDA, first, 
systematically collect evidence on LRP's adherence to quality 
standards and product specifications; second, work with 
implementing partners to improve the reliability of market 
intelligence; and finally, work with the Department of 
Transportation to update the MOU to resolve uncertainties 
associated with the application of cargo preference.
    In summary, the timely provision of food aid is critical in 
responding to humanitarian emergencies and food crises. LRP has 
the potential to meet the needs of hungry people by providing 
food in a more timely and less costly manner. However, to fully 
realize its potential, challenges to its effective 
implementation must be addressed.
    Mr. Chairman, this concludes my statement. I will be 
pleased to respond to any questions you or the other members of 
the subcommittee may have.
    [The prepared statement of Mr. Melito follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
        
    Mr. Payne. Thank you very much. Mr. Brause.

STATEMENT OF MR. JON C. BRAUSE, DEPUTY ASSISTANT ADMINISTRATOR, 
 BUREAU FOR DEMOCRACY, CONFLICT, AND HUMANITARIAN ASSISTANCE, 
       UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

    Mr. Brause. Thank you, Chairman Payne and distinguished 
members of the committee. I appreciate the opportunity to be 
here today to address this important topic.
    As I intend to keep my comments brief, I ask to submit for 
the record a longer response to the information requested in 
the committee's invitation, and a copy of the USAID/USDA Annual 
International Food Assistance Report.
    The committee is aware of the current economic global 
economic downturn and continuing food security crisis impose 
constraints that exacerbate the severity of emergencies and 
further strain the capacity of both donors and the vulnerable 
to respond to them. This is resulting in decreased purchasing 
power, loss of livelihoods and the erosion of coping mechanism; 
thus imperiling a generation's future in many countries. Today, 
over 1 billion people live in poverty and chronic hunger, and 
this number appears to be rising, and food insecurity respects 
no boundaries. It is vital to U.S. Government interests to 
enhance the capability and flexibility of USAID to respond to 
emergencies.
    While in-kind U.S. Government food aid remains our 
primarily food assistance response, and is the most visible and 
valuable humanitarian resource in the world, the ability to 
procure food aid commodities locally and regionally over the 
last 12 months has increased USAID's capability to meet 
emergency food aid needs in an efficient and timely fashion. We 
fill pipeline gaps prior to the arrival of food shipped from 
the United States. We increase the total amount of life-saving 
food aid that U.S. assistance resources can provide in response 
to the crisis. It has also increased our understanding of LRP's 
limitations and the need for further data collection, analysis 
and discussion on its roles in the U.S. Government's 
humanitarian tool kit.
    Turning to the recently released Government Accountability 
Office report on local and regional procurement, USAID 
appreciates the amount of time and effort that is reflected in 
the audit. We believe that it provides a useful perspective of 
locally and regionally procured food assistance as a tool which 
complements the U.S. Government's considerable humanitarian 
response capabilities.
    The GAO report supports our own experience this year that 
LRP has the potential not only to stretch the food aid dollar 
but also to reduce response times when in-kind food assistance 
is not already in the pipeline. A current example of this is 
Pakistan where due to sharp increases in the numbers of people 
displaced by violence. We are procuring locally even while we 
expedite the shipment of additional Title II assistance from 
the United States.
    While we agree that the impact data is currently lacking, 
we believe that LRP has the potential to significantly 
contribute to broader U.S. Government efforts to reduce global 
food insecurity. By stimulating local and regional food 
production, encouraging value-added post-harvest practices, and 
supporting open and fair market practices, LRP can strengthen 
the rural economy and reduce the vulnerability of those who 
depend on it.
    USAID concurs with the GAO comments on the need to pay 
close attention to food aid quality, and its view that reliable 
market intelligence is critical for any LRP efforts. We intend 
to work closely with our non-governmental partners, WFP, and 
our colleagues at USDA to tackle these important issues.
    I would like to take 1 more minute of your time to give you 
an idea of what we were looking at as we move forward in Fiscal 
Year 2010. I made the point earlier that we believe LRP has a 
special role to play in a whole of government approach to 
addressing global food insecurity. As we move forward we intend 
to work closely with our regional bureaus in USAID and the 
interagency to help ensure that whenever possible our emergency 
response supports other U.S. Government efforts to stimulate 
agricultural productivity and strengthen the participation of 
the small holder farmers in local and regional trade in the 
developing world.
    This could mean ensuring that Title II commodities are 
available when food shortages threaten the lives and 
livelihoods of assistance farmers, facilitating the flow of 
food from surplus to deficit areas through local procurement, 
or implementing a cash-based voucher program when food is 
available in local markets but vulnerable households simply 
cannot afford it.
    Even as we respond to emergency needs, we want to make sure 
that we are using the right tools at the right time and in the 
right way to contribute to a sustainable solution to global 
hunger.
    I would again like to thank you for the support that your 
committee has given the administration in addressing food 
security needs abroad and demonstrating to the world the great 
heart of the American people. I would be happy to take any 
questions that you might have. Thank you very much.
    [The prepared statement of Mr. Brause follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
    Mr. Payne. Thank you. Mr. Philbrook.

 STATEMENT OF MR. BUD PHILBROOK, DEPUTY UNDER SECRETARY, FARM 
AND FOREIGN AGRICULTURAL SERVICES, UNITED STATES DEPARTMENT OF 
                          AGRICULTURE

    Mr. Philbrook. Yes, Mr. Chairman and members of the 
committee. I am pleased to appear before you to discuss the 
role of LRP in the context of the United States Department of 
Agriculture's food aid programs.
    The 2008 Farm Bill directed USDA to undertake a local and 
regional procurement pilot program to be completed in Fiscal 
Year 2012. Local and regional purchase of food aid has the 
potential to provide another tool in support of President 
Obama's commitment to work in partnership with the people of 
economically poor nations. This pilot program will help inform 
USDA whether local and regional purchases are more quickly 
available and cost effective than traditional food aid 
donations.
    Congress directed that the pilot program be used for 
emergency food crises as well as field-based projects that 
provide development assistance. Further, Congress directed that 
it not disrupt local and regional markets, and the first step 
was for the Secretary of Agriculture to submit a study on local 
and regional procurement to the Congress, and that report was 
provided in January of this year.
    USDA consulted with USAID, other donor countries, PVOs and 
the World Food Program, and the study found the following: 
First, local and regional purchase is an important tool 
enabling food aid agencies to respond quickly to emergency food 
needs both during and after food crises and disasters; second, 
local and regional purchase can be a timely and effective 
complement to in-kind food aid programs; and third, to ensure 
the success of LRP, market intelligence is critical.
    USDA will issue guidelines to implement the pilot program 
by mid-July. We will then solicit proposals to conduct field-
based local purchase pilot program. The Farm Bill provides $25 
million each in Fiscal Years 2010 and 2011 for the pilot 
program, and requires that a diversity of field-based projects 
be undertaken in food surplus regions, food deficit regions, 
and multiple geographic regions. Africa is designated as the 
priority region, and USDA is required to conduct the majority 
of field-based projects in Africa. A portion of the funds is to 
be used for development assistance projects of not less than 1 
year.
    USDA has the capacity to implement the pilot program and 
our experience with the pilot will help inform us for future 
efforts.
    USDA has reviewed the GAO study thoroughly, and we have 
come to many of the same conclusions. We agree with GAO that 
local and regional procurement is an important tool that can 
reduce commodity and transportation costs and shorten delivery 
times, and we share GAO's concern that poorly targeted local 
and regional purchases have the potential to lead to price 
spikes and shortages of staple foods in source countries. But 
likewise, poorly targeted distributions of in-kind food aid 
have the potential to depress prices and negatively impact 
domestic production in recipient countries.
    USDA agrees that the best way to mitigate these potential 
adverse effects is through improved market intelligence.
    In addition to feeding hungry people, USDA's food aid 
programs are opportunities to use USDA's global capacity 
building and development expertise to help developing countries 
create sustainable economic growth that improves peoples' 
lives. Successful development efforts come from the local 
level. USDA and others have knowledge and resources that can 
assist with development but the recipients--village farmers and 
community folk--best know the barriers to their development and 
what is required to move forward. We must work in partnership 
with the recipients to design sustainable and effective human 
and economic development projects.
    We are particularly proud to administer the Food for 
Progress and McGovern-Dole programs. To date, USDA has provided 
meals to more than 22 million children in 41 countries and 
boosted attendance in the schools served. These programs have 
helped build school gardens and fish ponds, improve sanitation 
systems, rehabilitate schools, and remove unexploded ordnance 
that prevent children from attending school.
    This administration is committed to a permanent solution 
for food and security, and we look forward to implementing the 
LRP pilot program and using it as another tool to achieve our 
goal of feeding the hungry and malnourished, and I look forward 
to answering any questions that you may have. Thank you.
    [The prepared statement of Mr. Philbrook follows:]

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    Mr. Payne. Thank you very much. And Ms. McKeever.

   STATEMENT OF MS. JEAN MCKEEVER, ASSOCIATE ADMINISTRATOR, 
  BUSINESS AND WORKFORCE DEVELOPMENT, SENIOR PROGRAM MANAGER, 
 OFFICE OF CARGO PREFERENCE PROGRAM, MARITIME ADMINISTRATION, 
           UNITED STATES DEPARTMENT OF TRANSPORTATION

    Ms. McKeever. Good morning, Mr. Chairman and members of the 
subcommittee.
    I appreciate the invitation to brief the House Committee on 
Foreign Affairs, Subcommittee on Africa and Global Health, on 
the recent Government Accountability Office study on local and 
regional purchases, use for food aid.
    The Cargo Preference Statute of 1954, as amended in 1985, 
was envisioned by the Congress to help support the U.S. 
Merchant Marine which is vital to the nation's defense by 
requiring the use of U.S.-flag carriers for at least 75 percent 
of food aid shipments. Support of the U.S. fleet was structured 
in a way that reimburses the food programs on shipments in 
excess of 50 percent of food aid shipped. Any additional costs 
on the first 50 percent of food aid shipped under cargo 
preference and not reimbursed are borne by the agencies 
implementing the food aid programs.
    Mr. Chairman, the subcommittee asked that we address three 
specific issues in our testimony today. First, relating to the 
need to update the Memorandum of Understanding, or MOU; second, 
obstacles to ensuring that an updated framework governs the 
application of cargo preference requirements to LRP; and third, 
whether there are actions that Congress could take to clarify 
the application of cargo preference with regard to LRP. I will 
defer to my colleagues from the food aid programs on any issues 
related to the implementation of food aid programs.
    In regard to ensuring that an updated framework governs the 
application of cargo preference requirements to U.S. food aid 
that clarifies how they pertain to U.S. agencies' use of LRP, 
we believe the requirements as established by law are clear, 
and there are no obstacles.
    Except as otherwise exempted by law, cargos financed by the 
American taxpayer and moving by water are subject to 50-percent 
carriage on U.S.-flag vessels when practicable. Only food aid 
specified in 46 U.S.C. 55314, exported from the United States 
is subject to the 75-percent requirement; otherwise it is 50 
percent.
    With regard to the GAO recommendations on the Memorandum of 
Understanding, we maintain that the MOU is not an impediment to 
the agency's use of LRP. The MOU among USAID, the Commodity 
Credit Corporation of USDA, and the Maritime Administration 
merely describes the process of how MARAD's ocean freight 
differential reimbursement to USDA and USAID is calculated. In 
addition, because LRP is subject to cargo preference at the 50-
percent level, the MOU is not applicable.
    Finally, we appreciate the subcommittee's consideration in 
asking whether there are actions that Congress could take that 
could clarify some of the ambiguities in the application of 
cargo preference requirements as they pertain to LRP. We 
anticipate holding discussions with the agencies whose programs 
are affected by the legislation in P.L. 110-417, and we look 
forward to working with them toward an appropriate consensus in 
advance of submitting regulations for review by the Office of 
Management and Budget.
    In summary, I want to thank the members of the subcommittee 
and the chairman for your leadership in holding this hearing 
today, and I will be glad to answer any questions that you may 
have.
    [The prepared statement of Ms. McKeever follows:]

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    Mr. Payne. Thank you very much. I let me thank all of you 
for your testimony, and we will move into questions, but before 
I do that, I would like to welcome the members of the National 
Assembly of Cambodia on my right-side of the room who are 
visiting the U.S. Congress hosted by the National Democratic 
Institute. We wonder if you would stand.
    [Applause.]
    Mr. Payne. Thank you. Let me begin by asking this question 
and anyone could chime in. In your opinion, what are the macro 
and microeconomic impacts locally and regional from local and 
regional purchases vis-a-vis in-kind contributions?
    For example, does it reduce unemployment while increasing 
production as a result of increased consumer demand in 
agricultural products? Is there evidence that the LRP leads to 
agricultural and microenterprise development in general? Would 
anyone like to tackle that? Yes.
    Mr. Brause. Mr. Chairman, thank you very much.
    We believe that the LRP can have significant impact in both 
a macro level and a micro level, and as I think has been 
pointed out, we have to be careful because those impacts can be 
both positive and negative. We have to watch out that both LRP 
commodities and in-kind food aid don't have a negative impact 
on macro market systems in the countries in which they are 
provided.
    But in a more positive sense, having the flexible tools 
available to us both in-kind food aid and LRP will let us 
target our assistance so that we can have the greatest positive 
impact on not only the vulnerable people but the market systems 
in which they work and live.
    Part of our efforts under LRP will be to strengthen the 
local market systems for the small farmers, to give them the 
knowledge and the technical skills they need to bring their 
fruits to market so that they can strengthen their livelihoods 
and increase the incomes that they have for their families.
    So if LRP Is used properly, it can have an impact at the 
household level and it can have an impact at the more macro 
level in the countries in which it is used.
    Mr. Payne. Thank you very much. I wonder if anyone would 
like to talk about what kind of strategies or mechanisms you 
recommend to increase effective and reliable market 
intelligence, in order to make informed decisions about LRP. We 
have heard that inaccurate information led to problems, and I 
don't know if anyone could think of any strategies, or how we 
can determine that information is more accurate. Yes.
    Mr. Brause. Mr. Chairman, USAID has been paying very close 
attention to the Belman amendment which is in the Food for 
Peace Act which requires us to track the market impact of in-
kind food aid. That same system can be used to help us track 
the potential impact of local and regional procurements on 
market.
    In addition, the Office of Food for Peace and USAID in 
general support the famine early warning system which currently 
has 25 offices around Africa and the world that track food 
security issues, including market data to help ensure that we 
have the information available to know what the right resource 
should be to address a particular food security situation.
    We also work very closely with our partners, the U.S. PVOs, 
and the World Food Program who also have very significant 
technical knowledge that allows them to identify the most 
appropriate response for a given food security situation, and 
we will be looking to them to help guide us as well on what 
resources we should bring to bear on any particular situation 
in the developing world. Thank you.
    Mr. Melito. I would like to add that I agree with what Mr. 
Brause said. Greater coordination though among the donors is 
probably the area that they should press the most. I mean, 
there are a lot of individual efforts going on. Each 
transaction provides good information about the market, but if 
you aggregate those transactions you learn a lot more, so 
greater collaboration.
    Mr. Payne. Thank you very much.
    Let me just, before I yield, ask Ms. McKeever: You did 
mention in your testimony that you will be getting together 
with the various agencies to discuss the Memorandum of 
Understanding, but I wonder, do you think that it is 
recommended to revisit the 1985 statute of the Memorandum of 
Understanding and to meet current food crisis cost effectively 
and in a timely way?
    Do you feel that there really needs to be a revisit. There 
was some mention of ambiguity in the agreement, as was 
mentioned in the testimony of Dr. Melito.
    Ms. McKeever. In our view the Memorandum of Understanding 
is strictly limited in scope to how our reimbursement 
methodology works with regard to paying an ocean freight 
differential to the food agencies when there is a preference 
shipping requirement for cargos over 50 percent, between the 50 
percent and 75 percent, is strictly a process memorandum of how 
we pay that differential, and it doesn't extend to other 
matters. It is very limited in scope.
    So, to the extent there are matters in the cargo preference 
arena that have to be clarified, we think it is more 
appropriate to do it through regulation rather than expanding 
that MOU which really is not germane to this particular topic. 
That is strictly a procedural MOU, and we think it should be 
kept that way and limited in scope to the ocean freight 
differential payments. It wasn't intended to be an all-
encompassing vehicle to embrace any number of elements of the 
cargo preference program. That was never the intention.
    Mr. Melito. Mr. Chairman.
    Mr. Payne. Yes.
    Mr. Melito. GAO recommended in 2007 to update the MOU based 
on our in-kind system which was directly related to the system 
for compensating the programs. So there is a need to update the 
MOU even within the context of DOT's criteria.
    However, when the memorandum was created in 1987, when it 
was signed, it never envisioned LRP, and these ambiguities do 
have the potential to really restrict the use of LRP. So there 
needs to be a vehicle for resolving the ambiguities and the MOU 
is the most direct way to bring the agencies together and 
resolve the issue. Thank you.
    Mr. Payne. Thank you very much.
    I will yield to the gentlelady from California, 
Congresswoman Watson.
    Ms. Watson. First, let me get to a domestic question that 
has been of great concern to all of us. I would like to address 
this question to Mr. Philbrook.
    Unemployment is on the rise in this country. That doesn't 
even have to be said. And as the tragic results of General 
Motors having to declare bankruptcy, many of the families in 
Michigan may struggle to provide food, and how is the USDA 
planning on addressing the increase in demand for food stamps 
in our nation, and can we provide enough food stamps to meet 
the demand?
    Mr. Philbrook. Congresswoman, I can't answer that question, 
but we----
    Ms. Watson. Is it an unknown?
    Mr. Philbrook. I don't know that it is an unknown. It is 
just way outside my area of responsibility or knowledge. But we 
will get you answer to that question.
    Ms. Watson. I would like to have that answered because 
right here I am going to relate to the subject of this hearing, 
but that has been on my mind----
    Mr. Philbrook. Yes, we will----
    Ms. Watson [continuing]. For the last 48-72 hours.
    Mr. Philbrook. Yes, we will get you an answer to that 
question very quickly.
    Ms. Watson. Okay. I would like to address this to Mr. 
Brause, and maybe Ms. McKeever, whoever. We are finding more 
and more that international aid agencies are disjointed and 
uncoordinated, and that has been mentioned, and oftentimes we 
can find several agencies working in one area whereas other 
areas are completely ignored. In terms of food aid, how does 
the United States agencies coordinate with international 
bodies, and how does the World Food Program coordinate with 
other relief efforts, and how are efforts coordinated 
internationally?
    And are blankets and clothing say, you know, mixed kind of 
aid along with food, are they shipped in the same shipments or 
are they required to be shipped separately, and are they 
locally procured?
    So these are all relative kinds of activities. We just need 
to have some clarity, so let me start with Mr. Brause.
    Mr. Brause. Thank you very much.
    Fortunately, I can tell you I just returned from a meeting 
in Helsinki with a group of major donors. We were meeting with 
the Office of the Coordinator for Humanitarian Affairs, Sir 
John Holmes of the United Nations, and our whole sole purpose 
was to discuss how we can better coordinate our assistance and 
ensure that the response in any crisis is well coordinated, 
well managed, and that all areas of assistance needs are 
identified and met. So there is a great deal of work that is 
actually done among the donors to ensure that we are always 
cooperating.
    Now having said that, of course, it is not a perfect 
system, but for us that is why it is important that the United 
States has as many tools available to it as possible to make 
sure that we can fill gaps that develop. But I do want to say 
that the coordination is actually quite good.
    Also in the case of WFP specifically, I leave over the 
weekend with Mr. Philbrook, we will be heading off to Rome to 
meet with the World Food Program at their executive board 
meeting which again is a gathering of all the donors who 
support the World Food Program, and part of the purpose of 
being there is to discuss how to better support their 
activities worldwide.
    Ms. Watson. I guess it was a couple of years ago we were in 
Chad and we were told by Mr. Rusesabagina, who was the subject 
of the movie that dealt with Darfur, and he said that shipments 
of food from our various foreign agencies were hijacked and the 
food never got to the camps. You know, they had 250,000 in the 
camps in Chad which we visited. And so he bought his own 
company, and the whole issue was security.
    When we roll the trucks in, are we finding that we are free 
to deliver the food or do we have trouble along the way? Is 
there hijacking? Are they attacking these food supplies? And 
anyone can respond that has any recent information.
    Mr. Brause. Congresswoman, unfortunately the situation in 
the developing world is rather difficult, and we find that in 
many of the countries in which we work--Sudan, Somalia as 
examples, and I guess now also in Pakistan--that security is a 
very, very, very significant issue.
    Ms. Watson. Yes.
    Mr. Brause. And it can in fact impede our programs and the 
efforts of the international community to meet the needs of the 
vulnerable groups we are trying to help. So it is an issue and 
all of the donors and the international organizations do work 
together on security planning, but it is often an imperfect 
system.
    Can I answer one of your other questions? You asked whether 
the other resources----
    Ms. Watson. Right.
    Mr. Brause [continuing]. That we provide are--whether they 
are locally procured. In some cases they are locally procured 
and in other cases they are procured in the United States. As 
an example our assistance in Pakistan much of our materials are 
being resourced in Pakistan because Pakistan has the markets 
and the manufacturing capabilities to provide much of what the 
displaced in Pakistan need. So in that example we do buy 
locally.
    Ms. Watson. Let me refer to Ms. McKeever. How do we 
strengthen our food delivery programs?
    Ms. McKeever. You mean in terms of ship security?
    Ms. Watson. Yes.
    Ms. McKeever. We are working very closely with DoD and the 
U.S. Coast Guard and the State Department on security issues. 
That is an ongoing very serious matter to all of us.
    Ms. Watson. Yes.
    Ms. McKeever. And as you are well aware, Congresswoman, so 
those are--they are developing the best steps that could be 
taken within the constraints under which we have to operate.
    Ms. Watson. I want to address this question to the chair. 
He just came back from Zimbabwe, in our conversation, we were 
in South Africa, is about the food fights and the fact that 
most of the native people were starving and they were eating 
from the piles of garbage on the streets and so on. I would 
hope that part of this discussion you would share with us what 
are they doing about food there in Zimbabwe. And I yield back 
my time.
    Mr. Payne. Thank you very much. Just in a nutshell the 
situation has improved in Zimbabwe. The currency has been 
changed; it was hyper-inflation. Of course, it was very 
worthless currency, and so it has gone to the dollar and the 
rand, and interestingly enough, there are commodities that are 
back on the shelves and the new MDC government, Tsvangirai and 
President Mugabe are attempting to move forward, primarily 
dealing with not only the food situation but the water 
situation with cholera. We recently visited the water supply 
for Harri and other parts to get first-hand knowledge of what 
is going on, but thank you for your interest, and we will be 
giving a report soon.
    Congresswoman Woolsey.
    Ms. Woolsey. Thank you, Mr. Chairman.
    Maternal mortality in underdeveloped nations is a huge 
problem. We know that, that is an understatement. We also know 
that one of the keys to promoting healthy pregnancies and 
births is good nutrition. So what would be the best effort--
probably you, Mr. Brause, would be the one that would talk 
about this--to get food into these needy areas and make sure 
that the people who need them the most get the food, who need 
it the most get it, and that hey get quality food, balanced 
diets of some sort? That has to be part of what we are working 
on. And what role does food security plan in our overall goal 
for healthier mothers and babies?
    Mr. Brause. Thank you. Those are two critical issues that 
Food for Peace has been working on, and actually the entire 
agency has worked on not only with our food aid resources but 
with our development assistance resources and our health 
resources. But with food aid specifically, the Title II program 
has been supporting material child health programs around the 
world for decades and will continue to do so, and we work very 
closely with our partner organizations who also feel very 
strongly about addressing the needs of pregnant women and young 
children to ensure that the children are born healthy and that 
they develop healthy during those critical first few years, and 
that leads me to the response on what we could do on food 
assistance.
    The Office of Food for Peace has just recently signed an 
agreement with Tufts University School of Nutrition to do an 
evaluation of the commodities that we have available to us and 
their nutritional composition to meet the needs of the 
beneficiaries around the world. And the group that we are 
trying to work on now is the under twos. What commodities and 
what nutritional makeup do those commodities need that would be 
appropriate for young children? Because if you miss the 
nutrition for children under two, then you have lost pretty 
much the entire ball game, and we really, really want to focus 
on that, and that is actually something that WFP and the NGOs 
are keenly interested in.
    So we are working together, if I might just add, with USDA 
on that effort to make sure we get the best commodities 
available.
    Ms. Woolsey. Do you see any difference in delivery of these 
food products between the urban areas and the rural areas, the 
moms who do all the toting, walk miles to get commodities or 
what they need? Do the urban families, are they treated 
differently than the rural families? Is there a difference in 
their health?
    Mr. Brause. I would say generally in the rural areas 
families have more access to locally grown foods, and we are 
paying particular attention to the urban poor, and they are the 
ones who often are in an environment where food is available 
but they don't have access to it, so they have to make the 
difficult decisions on what to buy and what not to buy.
    Ms. Woolsey. Mr. Philbrook, you look like you wanted to say 
something.
    Mr. Philbrook. Well, thank you, Congresswoman. I just 
wanted to add that in rural areas of developing countries, that 
is where the largest percentage of the population is, up to 70 
percent in many countries, and most of the women are also the 
farmers. In fact, the vast majority of farmers in developing 
countries are women. And so material health and child health 
and nutrition need to go hand in hand with what women do, and 
it would be our judgment that if we want to address the issue 
that you raise we need to look at it comprehensively. We need 
to do rural agricultural development, and that includes--that 
includes a wide range of activities from extension information 
to irrigation, appropriate irrigation technology, to education, 
to health care, to assisting folks with understanding the 
values of bio technology, et cetera. It is a comprehensive 
development that needs to be done at the local level, at the 
village level with local people, mostly with women. If we 
address that comprehensively, then I believe we address the 
issue that you raise.
    Ms. Woolsey. And do you believe we also address the issue 
of self-sufficiency for the communities?
    Mr. Philbrook. That is the key, that would be one of the 
key results of that activity, yes.
    Ms. Woolsey. Okay. Thank you, Mr. Chairman. Thank you.
    Mr. Payne. Yes, Congresswoman Watson wanted to ask another 
question.
    Ms. Watson. And I am sensitive to the fact that we have a 
bill on the floor. But I want to address this to Mr. Brause 
because you mentioned something that really triggered a memory. 
Intelligence, in going into the--I guess the biology of the 
food that we supply. I am reminded in the early seventies of 
the Nestles Company sending Similax to the western coast of 
Africa, and many of the babies died, and we realized then the 
biological and endocrine makeup of the African child was so 
different and they couldn't process the milk sugars and so on.
    So in the laboratories that you mention, are we looking at 
the kinds of foods that we send geographically? And you know, 
if we don't have to time to really get into it, I could take it 
in writing, but I am really concerned about the products that 
we send over to meet the hunger needs.
    Mr. Brause. Yes, ma'am. As a matter of fact, cultural and 
regional food uses are a very big issue for USAID and the team 
that we have working on this, and again it is going to take all 
of us, it is going to take assistance from USDA and our 
partners, and even it is going to take assistance from 
industry. Our industry in the United States has the knowledge, 
the depth of knowledge on food manufacturing and food nutrition 
that we need to draw into this discussion. And so I think with 
the help of Tufts we are going to have that kind of information 
available to us very soon, and then again we will work with 
industry to see if we can manufacture those products in the 
United States.
    Mr. Payne. Well, thank you very much. I had several other 
questions, but because there is a vote on we will probably send 
some questions to you in writing, this whole question of how to 
deal with food aid. As a matter of fact it goes way back to the 
potato famine in Ireland in the 1840s: It was a question of 
food that was in the country, but it was high value food, and 
the question about importing wheat from the United States and 
the question was who is going to pay the tariffs as people 
died. So this whole question of food and food security is 
certainly not a new issue, and we certainly are trying to look 
at how we can have the most positive impact, and we really look 
forward to working with the GAO and the rest of you to try to 
figure out what is the best way; how we avoid price and 
securities; what happened in Ethiopia and Niger and other 
places when food was purchased locally and destabilized the 
market locally, and increased the price because of the scarcity 
for local people. It is a very complicated issue as we know. We 
will follow up with this, and since we have a vote, I would 
like to adjourn the meeting. I did have many, many more 
questions, but I would like to adjourn this portion of the 
meeting and ask for our briefer, Mr. Jury, to come forward.
    So thank you all very much, panelists. Briefing by 
Mr. Allan Jury deleted from transcript
    [Whereupon, at 12:03 p.m., the subcommittee 
was adjourned.]
                                     

                                     














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