[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
    MODERNIZING U.S. INTERNATIONAL FOOD AID: REACHING MORE FOR LESS

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


                                HEARING

                               BEFORE THE

                      COMMITTEE ON FOREIGN AFFAIRS

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 12, 2013

                               __________

                           Serial No. 113-61

                               __________

        Printed for the use of the Committee on Foreign Affairs


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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida                ALAN S. LOWENTHAL, California
TREY RADEL, Florida                  GRACE MENG, New York
DOUG COLLINS, Georgia                LOIS FRANKEL, Florida
MARK MEADOWS, North Carolina         TULSI GABBARD, Hawaii
TED S. YOHO, Florida                 JOAQUIN CASTRO, Texas
LUKE MESSER, Indiana

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

The Honorable Andrew Natsios, executive professor, The George 
  H.W. Bush School of Government and Public Service, Texas A&M 
  University (former Administrator of the United States Agency 
  for International Develop-
  ment)..........................................................     4
The Honorable Dan Glickman, executive director, Aspen Institute 
  Congressional Program (former Secretary of Agriculture)........    14

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Andrew Natsios: Prepared statement.................     6
The Honorable Dan Glickman: Prepared statement...................    16

                                APPENDIX

Hearing notice...................................................    54
Hearing minutes..................................................    55
The Honorable Adam Kinzinger, a Representative in Congress from 
  the State of Illinois: Material submitted for the record.......    57
Written responses from the Honorable Andrew Natsios to questions 
  submitted for the record by the Honorable Luke Messer, a 
  Representative in Congress from the State of Indiana...........    58


    MODERNIZING U.S. INTERNATIONAL FOOD AID: REACHING MORE FOR LESS

                              ----------                              


                        WEDNESDAY, JUNE 12, 2013

                       House of Representatives,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 10 o'clock a.m., 
in room 2172 Rayburn House Office Building, Hon. Edward Royce 
(chairman of the committee) presiding.
    Chairman Royce. This committee will come to order. If we 
could ask all of the members to take their seats.
    Today we meet to discuss bringing more flexibility and more 
efficiency and, at the end of the day, more effectiveness to 
U.S. international food aid. It was 60 years ago during the 
Eisenhower administration that the U.S. Government set up a 
system to buy surplus food and then to donate it overseas.
    In an effort to bolster domestic farmers and to assist 
shippers, this was mandated to be U.S. grown and U.S. shipped, 
and decades ago that may have made some sense. But farm markets 
have changed substantially since the policy was set in the 
Eisenhower administration.
    Food prices and U.S. agricultural exports have reached 
historic highs. In fact, the past 4 years have been the 
strongest in history for agricultural exports. Food aid now 
accounts for less than \1/2\ percent of net farm income, and 
this farm subsidy can no longer be defended.
    Another impediment to an effective, efficient program is 
the requirement that 50 percent of U.S. food aid be shipped on 
U.S. flag vessels. Decades ago, this cargo preference was seen 
as a way to ensure a reserve of ships and crew for the U.S. 
Navy in times of war.
    But by restricting competition to the few U.S. flag ships 
still sailing, the majority of which do not meet the Maritime 
Administration's age-based criteria. Cargo preference adds $140 
million in transportation costs each year, and delivery times 
are lengthened by many, many months, which in times of 
emergency, in times of famine, doesn't make a lot of sense.
    On average, only about two to four U.S. flag carriers place 
bids per food shipment, making the system prone to 
manipulation. Due to a complex set of holding companies, most 
of these American vessels are in fact foreign-owned. They are 
foreign-owned.
    As one witness will testify today, in the past decade 50 
percent of the food aid budget has been eaten up by 
transportation costs. Fifty percent of the food aid budget 
eaten up by transportation costs.
    Today, the U.S. flag requirement simply serves the 
interests of a handful of companies. In fact, the Pentagon has 
determined that an easing of cargo preference requirements 
would have, in their view, no tangible effect upon U.S. 
maritime security.
    Perhaps the worst abuse of the U.S. food aid program is 
monetization, the process by which Washington supplies American 
commodities to private groups to then be sold overseas. The 
Government Accountability Office called monetization inherently 
inefficient and found that it resulted in a net loss of $219 
million over 3 years. Worse, dumping commodities often destroys 
local markets, putting local farmers out of business while 
increasing the dependency on food aid that we would like to see 
end. That is why you have seen some countries like Rwanda shut 
down this easily abused practice.
    Given our fiscal constraints, we must be prepared to do 
more with less. We must replace entitlements for a few with 
tools that would provide more flexibility, more efficiency, 
more effectiveness, and we can do this in a bipartisan way.
    I am encouraged that President Obama has proposed to loosen 
the restrictions on U.S.-bought commodities, so that more food 
can be brought closer to a crisis. With the farm bill scheduled 
for floor consideration this month, members will have a chance 
to advance these common sense reforms.
    In recent years, there has been a lot of focus in 
Washington on foreign assistance reform. In my eyes, this food 
aid reform proposal is an acid test. If Congress can't agree to 
help more people in less time and at less cost, then there is 
little hope for broader foreign aid reform. And I hope we can 
do better than that.
    But I will now turn to our ranking member, Mr. Engel, from 
New York for his opening remarks.
    Mr. Engel. Well, thank you. Thank you very much, Mr. 
Chairman. Thank you for holding this very timely hearing and 
for your leadership in tackling the issue of food aid reform. 
We have been working together on this, and we see these things 
in exactly the same way, and I think that is very, very 
important.
    Administrator Natsios, welcome.
    Secretary Glickman, it is great to have you back where you 
belong. For many years, you served in this body as a member of 
the House and very distinguished--in a very distinguished way, 
and then as Agriculture Secretary, of course, and we are all 
aware of the good work that you have done through the years. 
And so welcome to you as well.
    Since 1954, the Food for Peace Program has fed more than 1 
billion people around the world and saved countless lives. This 
reflects the compassion and generosity of the American people, 
and it is something that we should all be proud of. However, 
despite its great success, Food for Peace is now showing its 
age and is in urgent need of reform. One of the key problems 
with the current system is that it takes too long to deliver 
U.S.-grown food aid, an average of 130 days. That is a long 
time.
    By purchasing food in the recipient country or region, we 
can cut that time in half, and in the process get food to 
starving people before it is too late. Hunger pangs shouldn't 
be subject to shipping schedules. In addition, it is very 
expensive to transport the food from the U.S. heartland to 
recipient countries. In fact, shipping, transportation, and 
handling costs accounts for approximately half of the food aid 
budget. We can save hundreds of millions of taxpayer dollars by 
purchasing food aid closer to the destination countries.
    And, thirdly, the current system sometimes harms 
agricultural markets in the countries we are trying to help. 
This is the result of a somewhat bizarre process called 
monetization in which non-governmental organizations sell U.S. 
commodities overseas in order to fund other development 
projects. Doesn't make any sense to me.
    In my travels to Haiti, I have seen firsthand how the sale 
of American rice under this well-intentioned program has driven 
local rice farmers out of business, thus making it harder for 
Haitians to feed themselves. Monetization is also exceedingly 
wasteful. According to the GAO, at least 25 cents of every 
dollar is lost during this process. I commend the President, I 
commend the administration for its food aid reform proposal, 
and I am pleased to support it, along with Chairman Royce, whom 
I also commend.
    In this time of increasing political polarization, I think 
it is a testament to the strength of good ideas and common 
sense, and this plan has garnered bipartisan support on Capitol 
Hill and from groups as disparate at the Heritage Foundation 
and Oxfam. And on this committee particularly, the chairman and 
I have worked together to promote bipartisanship. And this is 
another example of bipartisanship and it is all good.
    Sometimes it seems that we lose sight of why we have a food 
aid program in the first place. It isn't to subsidize growers, 
shippers, or NGOs. It is to prevent men, women, and children in 
the developing world from starving to death.
    For those who worry about the impact of this proposal on 
the farm community, there is a reason why Cargill, the National 
Farmers Union, and other ag interests have expressed support 
for additional flexibility in our food aid programs.
    Mr. Chairman, the easy thing is to do nothing on the issue 
of food aid reform. But the right thing to do is to enact 
sensible reforms that save taxpayer money and, most 
importantly, save lives.
    I look forward to working with you to get some of these 
reforms implemented, and I look forward to hearing from our 
distinguished witnesses.
    I yield back the balance of my time.
    Chairman Royce. Thank you, Mr. Engel.
    We have two distinguished witnesses here today, Mr. 
Natsios--well, we were--in the interest of time, we were going 
to move forward at this point, and perhaps during your 5 
minutes you could get that 1-minute statement in, if that is 
all right, Mr. Sherman.
    Mr. Natsios is an executive professor at the School of 
Government and Public Service at Texas A&M University. For 6 
years he served as Administrator of U.S. Agency for 
International Development. He served as U.S. Special Envoy to 
Sudan, and as vice president of World Vision.
    Secretary Glickman is the executive director of the Aspen 
Institute, the congressional program there, and he served as 
the U.S. Secretary of Agriculture for 6 years. And before his 
appointment as Secretary of Agriculture, he served for 18 years 
in the U.S. House of Representatives representing the fourth 
congressional district of Kansas.
    So we welcome you both. And without objection, the 
witnesses' full prepared statements will be made part of the 
record. Members have 5 days to submit statements and questions 
for the record. And I would ask if you could summarize your 
statements.
    Mr. Natsios, we will begin with you. Thank you.

STATEMENT OF THE HONORABLE ANDREW NATSIOS, EXECUTIVE PROFESSOR, 
 THE GEORGE H.W. BUSH SCHOOL OF GOVERNMENT AND PUBLIC SERVICE, 
TEXAS A&M UNIVERSITY (FORMER ADMINISTRATOR OF THE UNITED STATES 
             AGENCY FOR INTERNATIONAL DEVELOPMENT)

    Mr. Natsios. Thank you, Mr. Chairman. Thank you for the 
opportunity to talk about an issue close to my heart. About 10 
years ago, when I was aid administrator, we proposed a similar 
reform, which didn't go quite as far, because we wanted to just 
try it out, that 25 percent of Title 2 of the Food for Peace 
Act would be used--could be used at the discretion of the 
Administrator of Aid and the Director of Food for Peace Office 
and Aid for local purchase.
    I presented the proposal to the Coalition of Food Aid, and 
I was astonished at the hostility of the reaction. When 
interest groups assemble around a particular law, they can get 
quite aggressive.
    So this is not a partisan issue. This was proposed by 
President Bush. It has been proposed by President Obama, and 
they don't exactly agree with each other on a lot of issues. So 
given the comprehensiveness of the coalition behind this--
Oxfam, the Heritage Foundation, there are conservators behind 
it, liberals behind it. Mr. Chairman, you have shown great 
leadership on this issue yourself. This is the time to approve 
these reforms.
    There are four arguments for this. I will make them very 
quickly, and then talk about three cautions on this. The first 
is it saves time. When I was in charge of the Somalia response 
during the Somalia famine of 1991/'92 in which a \1/4\ million 
people died, I literally watched children die while we waited 
for food to arrive. It took 2 to 3 months. That is the thing 
that shocked me into realizing we needed changes to the system, 
but it wasn't my place at that point to propose the changes. 
Once I became Aid Administrator, it was a different story.
    So there is a time factor. You have to order the food in 
the Midwest. It gets put on ships. It is shipped down the 
Mississippi River usually, depending on where it comes from in 
the U.S. It can go 7,000 miles to the other side of the world. 
It is offloaded, put onto trucks, and then moved to the famine 
or the emergency.
    Frequently, it is through a war zone. Frequently, it is 
through a war zone. We have gone through several war zones, in 
some cases, to get the food to where it belongs. If the food is 
bought locally, in a local market, you can avoid a 7,000-mile 
supply chain.
    Amartya Sen, who won the Nobel Prize for economics--he is a 
friend of mine, a professor at Harvard, and he wrote the 
seminal work on famine economics. And he argues that that 
supply chain makes it dysfunctional to use food aid under these 
circumstances when there is an emergency that is right in front 
of us or we have to respond very quickly.
    People cannot wait for food aid and can't suspend their 
nutritional requirements. They simply die. And I have watched 
too many people die in these emergencies over the last 23 years 
while I have been involved in humanitarian work.
    Secondly, it saves money. The cargo preference law, with 
one or two exceptions over the last 20 years, has required us 
to spend much more money to ship than it would have been if we 
had gone to a free and open market. I am a free trader, and I 
think if we open this up to competition internationally we 
would not have to spend this much on shipping. So there is a 
cost savings involved here.
    In addition, with respect to monetization, the two ranking 
members have mentioned the arguments--I am not going to repeat 
them, but I ran these programs when I was at World Vision, so I 
know very much the limitations. I used to sit and say, ``Why 
are we doing this? This doesn't make sense.''
    The reason NGOs do it is because it is a source of revenue 
to run programs. And I understand people would say, ``Well, we 
have to run the programs, Andrew.'' I said, ``Yes, but we are 
damaging local markets, and this is not efficient.'' We have 
just spent half of the budget getting the food to where it is 
going, and then we only get back a portion of the value of the 
commodity when it is auctioned off in local markets.
    So monetization doesn't make sense from a financial 
standpoint, and programmatically and economically doesn't make 
sense. I think, given the savings, we can in fact feed more 
people.
    And, finally, we can encourage local agriculture. The World 
Food Program, in order to provide food aid to the people in 
southern Sudan during the civil war, made arrangements with 
farmers in northern Uganda over many years to produce the food 
locally, grow the food locally, and that stimulated 
agricultural development and stimulated markets. It 
strengthened markets. It put more money in poor people's 
pockets, and it was much faster and more efficient.
    We know it works because we have already tried it. This is 
not experimental. The two things--three things I would mention 
is that we should take out the requirements, but don't put new 
requirements in. That is to say, there is one instance where we 
do want to be able to auction food off in local markets.
    One of the causes of famines is spikes in food prices, 
massive price increases over a short period of time. We have 
three or four times in the last 20 years intervened in markets 
to auction food off to stabilize prices. When prices go up 700 
to 1,000 percent in 3 months, if that happened in the United 
States we would have hungry people. In fact, some people might 
even die here if that happened. It happens regularly in 
famines.
    We want the flexibility to be able to do that, and so the 
decision as to whether or not to use market intervention should 
be left with the Director of Food for Peace at the lowest level 
and not put into law to protect interest groups in the United 
States.
    So I think, frankly, if we do these things, we do it right, 
we will strengthen the Food for Peace Program. It is a 
wonderful program. It is a jewel in the United States. We have 
saved millions of people's lives. The question is, can we 
improve the system? And the answer is, yes, we can. These 
reforms do that; I support them.
    Thank you.
    [The prepared statement of Mr. Natsios follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Chairman. Royce. Thank you, Mr. Natsios.
    Mr. Glickman.

 STATEMENT OF THE HONORABLE DAN GLICKMAN, EXECUTIVE DIRECTOR, 
  ASPEN INSTITUTE CONGRESSIONAL PROGRAM (FORMER SECRETARY OF 
                          AGRICULTURE)

    Mr. Glickman. Thank you, Mr. Chairman, Ranking Member 
Engel, members. It is a delight to be here. I look up on the 
walls. I see Ben Gilman, Henry Hyde, Dante Fascell, Tom Lantos, 
and Clem Zablocki. Without dating myself, I served with all of 
these people. So it is just a great joy to be here at this 
committee room.
    First of all, it is an honor to be here with Andrew 
Natsios, who very few people can claim the fact that they have 
saved hundreds of thousands of lives, and he and his agency 
have done that. So, and the Bush administration I must commend 
for their great efforts in these areas, particularly in global 
AIDS health, TB, and the food part of it has been remarkable. 
It is bipartisan. It is one of the things that makes America 
unique and great, and it is something that we should continue 
to reinforce.
    I am going to--my statement talks about the great 
humanitarian needs which are increasing. We see that happening 
in the Middle East right now. The commitment is bipartisan, 
which we see from the chairman's own bill that he has talked 
about with Mr. Engel, Congresswoman Bass, and others. And we 
see a consensus growing on issues that Andrew talked about, 
which are need for greater flexibility, using cash transfers 
and food vouchers where appropriate, but supplying commodities 
in those cases where it is appropriate, not a one size fits all 
situation, great efficiency.
    We talked about the losses that are in the current way we 
do business, and greater impact is achieved by having this more 
flexibility. But I thought I would talk a little bit about the 
agriculture side of this picture because of the impact on 
American farmers and ranchers and what this all means.
    And as a former USDA Secretary, it is critical to 
underscore the benefits of food aid reform to agriculture. So 
we started this program in part because of big surpluses and 
the American moral desire to help the rest of the world, and 
those two facts work together.
    More than 60 years later, U.S. agriculture productivity 
remains high. In 2002, agriculture was one of four categories 
with a U.S. trade surplus. Changes in U.S. agricultural policy 
and rising consumer demand outside of our country, where 95 
percent of the people live, ensure that commodities not needed 
for American consumption now flow quickly into thriving global 
markets.
    That means that food aid procurements have become an 
increasingly smaller proportion of U.S. overall commercial 
agriculture sales. From 2002 to 2011, the Food for Peace 
Program procured less than 1 percent of the total food that was 
exported from the United States. The volume of food assistance 
provided by the U.S. has been steadily declining over time due 
to higher food prices and lower overall appropriations for the 
program.
    From 2002 to 2011, the purchases of U.S. food aid by the 
U.S. Government declined from 5 million to 1.8 million metric 
tons. Given these changes, the future interests of U.S. 
agriculture are less in the provision of U.S. food aid and, to 
a greater extent, in the development of stable, thriving 
economies that can create new markets for American business and 
new consumers for American products and developing stronger 
economies and bringing these countries out of poverty.
    The opportunities for American farmers for overseas are no 
longer on our soil but dependent on purchases and trade with 
countries overseas. Developing countries accounted for 97 
percent of global population growth in 2012, and it is 
anticipated that nearly all future population growth will be in 
the world's less developed economies.
    So it is firmly in the interest of American farmers to 
support greater efficiencies and flexibility within our food 
aid system, so that we can provide more food to more people and 
support the local and regional agricultural development systems 
of future trading partners. This would promote the well-being 
and health of populations and potential future consumers, 
opening up new trade and investment opportunities for U.S. 
agribusiness.
    As the chairman mentioned, both the National Farmers Union 
and Cargill recently expressed support for food aid efforts. 
Cargill said it is time that we reassess the current program to 
make certain it is efficient and effective in meeting the needs 
and flexibility, and we can move people on the brink of 
starvation to the brink of development.
    For example, South Korea, once a huge recipient of U.S. 
food aid, is now America's sixth largest trading partner and, 
in 2011, imported more than $4 billion worth of agriculture 
commodities from the United States. This can happen to the 
developing world in Africa and South Asia and Latin America, 
not overnight, and we realize that many of these countries, 
because of humanitarian desires and needs, will still need some 
food aid. There is no question about it. But we need to 
transition ourselves to building their economies, so that they 
can buy more from us.
    In conclusion, the world has long possessed the collective 
resources and knowledge to end global hunger. What has often 
been lacking is the political will and sustained leadership at 
the highest levels of government. I think we now have broad 
agreement on what needs to be done to improve our food aid 
programs, and we must seize the opportunity.
    With your leadership, with the leadership of the Obama 
administration, the historic leadership of the Bush 
administration, I am confident that we can modernize these 
programs, make them much more flexible to help the world, to 
help the humanitarian needs of people overseas, and to help 
America's farmers and ranchers as well.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Glickman follows:]
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Chairman Royce. Let me go to Mr. Natsios for a question 
about emergency aid to Syria that might make my point and your 
point here. The majority of food aid we have been discussing is 
through the Department of Agriculture's Food for Peace. Now, 
there is a small separate emergency food security program that 
USAID set up. All right?
    This emergency program allows for cash resources to be used 
for local and regional purchases of food and food vouchers. And 
as I understand it, if not for the flexibility of that program, 
USAID would not have been able to launch a rapid food response 
to the Syrian crisis, and here is why: Because it is a very 
stark contrast.
    The first shipment, U.S. food shipment, just arrived in the 
region in Syria. Just arrived 2 weeks ago. That is 2 years 
after the crisis began. But even with this shipment, it is now 
the case that trucking it in to the population in need, because 
of the difficulties of doing that, it is not conceivable to 
move major portions of food by truck into those regions on a 
daily basis, because there is a daily assault by the Syrian 
military unit. So that isn't likely to happen.
    So this old structure, you know, frankly, comes 2 years 
late. And now the food aid is in country, but how do you get it 
to the region most in need, to those most in need?
    So with a more flexible program, it seems to me, we have 
been able to respond quickly, we have been able to maintain 
access and help keep local markets running and reduce the 
probability of aid dependency over the long term, but I would 
like to just ask you for your thoughts on that, Mr. Natsios.
    Mr. Natsios. Well, this goes back, Mr. Chairman, to this 
comment of Amartya Sen that when you have a 7,000-mile supply 
chain a lot of things can happen along the way. It is not just 
in the country. We had pirates in Somalia steal or take two 
ships. They pirated two ships of food aid from the World Food 
Program over a number of years, and we never saw it. Another 
shipment of food sank in a storm.
    The warehouses down in Galveston, we were crossing our 
fingers when Hurricane Katrina--it barely missed those 
warehouses. We would have had people die because those 
warehouses had been destroyed. They weren't, but it was very 
close.
    So the longer the supply chain, the more bad things can 
happen. But particularly the most serious problem we face is in 
civil wars where there is food and security. And most of the 
food now--82 percent of all food from Food for Peace is now 
going to emergencies, which is usually civil wars and famines. 
Most famines are also an offshoot of civil wars. The two things 
are a toxic mix with each other.
    And what usually happens is one side sees the food coming 
in, because it is very visible. You can't hide 100,000 tons of 
food. You can't ship it electronically through a banking 
system, which you can do with cash, to an NGO doing local 
vouchers, for example. It is a giant red flag. And if a 
particular side in the civil war wants to starve their 
opponents to death, the way you do it is you blow up the food 
shipments.
    And this is not new. The Sudanese Government starved 
hundreds of thousands of southerners to death during the 
Sudanese civil war which killed 4 million people over 50 years. 
There were two civil wars, actually. And a lot of those people 
died of starvation because the government used the very long 
supply chain, the logical system to get food in, to simply stop 
the shipments.
    Mengistu did the same thing, the Marxist dictator of 
Ethiopia, in 1990 and '91, and he was blowing up our shipments 
of food convoys going into Ethiopia because he was trying to 
starve the Tigrayans and the Eritreans to death during a 
famine.
    And the way we in fact got around that is I, with 
congressional approval, used a couple of million dollars in the 
OFDA budget, which is a separate emergency account. It is not 
supposed to be used for food purchase. Not by law--by law we 
could do it--but the congress said that is for health and water 
and sanitation and shelter. The Food for Peace budget is for 
food.
    But in this particular case, they let us do it. We bought 
20,000 tons of sorghum in a surplus area that Mengistu did not 
control. We moved it into the famine area. We saved tens of 
thousands of people's lives by doing that. That is where I got 
convinced in that 1990 famine that this is the best way to 
approach this. And you, Mr. Chairman, have just pointed out not 
a 20-year-old example but a current example of exactly the same 
thing happening in Syria.
    Chairman Royce. And I think now we need to go to the cargo 
preference, the impact on competition there. So I am going to 
ask you a couple of questions, because USAID reports that on 
average only two to four companies respond to solicitations to 
ship food aid to begin with. How does the lack of competition 
among shippers impact cost, and how does it impact 
accountability? I am going to ask you those questions, and then 
I would also--you know, during your tenure at USAID, we began 
to become involved in a number of major conflicts.
    So I am going to ask you if during your tenures were any 
private U.S. flag commercial vessels called upon to protect 
U.S. maritime security during that period of time? And to your 
knowledge, since the Cargo Preference Act was enacted back in 
1954, have any private U.S. flag commercial vessels ever been 
called upon to protect U.S. maritime security?
    And I will just finish with this last question: Should U.S. 
flag vessels that fail to meet the eligibility criterion for 
the maritime security program continue to be eligible for cargo 
preference?
    Mr. Natsios. Well, I didn't want to start casting 
aspersions on different industries, Mr. Chairman, but I am not 
a supporter of the cargo preference law, particularly with 
respect to USAID. It has outlived its usefulness. The argument 
during the Cold War was that we needed our Merchant Marine 
because there was an existential threat to the survival of the 
United States during World War II and then during the Cold War. 
And it was real, and we needed to protect our domination of the 
world sea lanes.
    That is no longer the case. The threats to the United 
States are not of the same character. We are not facing a 
superpower that is threatening whole regions of the world. The 
threat now is completely different. Al-Qaeda is not threatening 
the sea lanes of the world; they are threatening terrorist acts 
in particular countries, but they are not the same kind of 
threat.
    And so the general justification for the cargo preference 
law, in my view, doesn't exist anymore. And I think your 
questions answer themselves, Mr. Chairman. There is no 
justification for doing this, particularly when there has been 
such a huge decline in the amount of tonnage we have been able 
to buy, because there has been a big increase in food prices. 
And there is an argument from some reputable economists that we 
are not going to go back to the era of cheap food anymore.
    There has been a huge decline in the volume of food aid we 
have been able to deliver, and the principal source of most 
food aid in the international system is the U.S. Government. It 
is not other countries. We are the greatest agricultural power 
in the world. I mean, our farmers are the best in the world and 
the most efficient and the highest quality.
    But the reality is prices are going up, and so we are able 
to buy less food. We need the reforms now in order to buy more 
food with a fixed budget, given the fiscal constraints that the 
Federal Government is facing. So----
    Chairman Royce. Thank you, Mr. Natsios.
    We will go to Mr. Engel.
    Mr. Engel. Thank you, Mr. Chairman.
    Mr. Natsios, we often hear from opponents of food aid 
reform that the current system doesn't need to be changed, that 
there is plenty of flexibility with the positioning, especially 
with the positioning of food stocks and limited cargo 
preference waivers that we have enough flexibility now.
    In your experience as USAID Administrator, do you believe 
that is the case?
    Mr. Natsios. No, I do not believe it. If I did, I wouldn't 
have come all the way from Texas to testify. I wouldn't have 
gotten President Bush to offer these reforms, which, by the 
way, he enthusiastically embraced when we explained them to 
him. And he has been an advocate even after he left office of 
these reforms.
    So I think the notion that the current system works well, 
the facts don't support that. And I might add, it is not from 
one source that it is making this argument. The General 
Accounting Office has done a whole series of papers over two 
decades.
    Professor Chris Barrett, a colleague of mine at Cornell 
University, wrote a book some years ago about this. USAID's 
internal studies show these reforms are necessary. OMB research 
shows it. The Center for Global Development has done an 
excellent brief on this paper, on this reform, and they have 
endorsed it. I mean, you can go through a whole series of 
sources all arguing reform is necessary.
    I am not aware of one single source, other than special 
interest groups, who are affected financially by these reforms, 
who think the current system works well and works to our 
advantage.
    Mr. Engel. Can you share with us an example of how the 
current food aid authorities hindered your ability to get food 
into emergency relief situations in a timely manner?
    Mr. Natsios. Yes. In Somalia, we were caught. Because the 
famine was connected to a civil war, the U.N. had withdrawn, 
the International Committee of the Red Cross had withdrawn, and 
we had shut down the aid mission. There was literally no one 
there--this was 1991--to see what was going on until it was too 
late.
    When I realized that there was actually--I went myself 
because I heard these reports that were trickling out. And when 
I saw the conditions, I was shocked how bad things were. It 
took 3 months to ship the stuff just to port. And because there 
was chaos in the country, it took even more months to get it to 
the epicenter of the famine.
    So that specific instance was very clear, because I watched 
it myself on the ground. The second instance is the Ethiopian 
famine that I mentioned earlier. It didn't become a famine 
because we intervened in 1990, because we used a provision of 
OFDA's very limited budget, and we couldn't--what we did was we 
took money out of the health budget and the water budget, which 
kills people if you don't spend enough on it, to purchase food 
in one part of Ethiopia and move it to another.
    Had we had more money and more flexibility in the Food for 
Peace account, we could have done that on a much larger scale. 
More recently, the Somali famine of 2 years ago, the same thing 
happened.
    Al-Qaeda did not want the United States Government 
providing food aid, and I will tell you why. When we responded 
to the Aceh tsunami, al-Qaeda's poll ratings collapsed. I don't 
know if you know this, but they had a 63 percent approval 
rating, Bin Laden in Indonesia, before the Aceh tsunami, which 
took place I think in December of '04, as I recall. Yes, '04, 
December of '04.
    After the U.S. Government's response, which was USAID and 
the U.S. military, his poll ratings went down to 26 percent, 
and our poll ratings, which had been at 23 percent, went up to 
57 percent. So we had a massive spike in our popularity and a 
massive decline in his popularity because of our responses.
    Now, I am not suggesting we just save people's lives to get 
more public support, but it has a consequence when we do it. A 
third example would be the Syrian example that was just 
mentioned by the chairman. The Syrian Government is trying to 
starve the opposition into surrender. The Sudanese Government 
did the same thing in southern Sudan over 22 years of civil 
war.
    What did WFP do with European money, not American money 
because we couldn't use our food aid budget for this purpose, 
is they went to northern Uganda to farmers and said, ``Grow the 
food locally; we will ship it in. It is much faster and the 
Sudanese Government can't stop it through Port Sudan.'' And 
that is what they did.
    The Europeans went, and the Canadians, the biggest producer 
of food, went to 100 percent local purchase a long time ago. We 
are the last remaining outliers in this because of interest 
group opposition.
    Mr. Engel. Thank you. I would like to just quickly ask Mr. 
Glickman a question. You served as Agriculture Secretary, and 
with distinction I might add. And you mentioned in your opening 
testimony something that surprised me initially is that the 
agriculture community is not opposed to this reform plan 
resolutely.
    The National Farmers Union, as you mentioned, Cargill, and 
others, who are supportive of some of the President's proposal, 
are calling for more flexibility. If you didn't know that, you 
would think it would be counterproductive at first blush. So 
why is that?
    Mr. Glickman. Well, first of all, I think the agriculture 
community is probably split on this subject, being honest with 
you. And I think a lot of people are either fearful of what 
might happen if we don't have a statutory requirement that the 
overwhelming majority of the food aid that is sent is in 
commodities, because I think they fear that maybe with budget 
issues or other things it won't get the same priority here in 
the Congress or the administration.
    But I think there is the growing recognition that we need a 
heck of a lot more flexibility. It is not all or nothing, and I 
think what the chairman is proposing, and what the 
administration is proposing, is just upping the amount of cash.
    Mr. Engel. Do you think this would have much of an impact 
on American farm income?
    Mr. Glickman. No. In fact, my judgment is over the long 
term, this is a big plus for American agriculture, because it 
will create the opportunity for countries to become more self-
sufficient and buy more things from us. And there are examples 
around the world, in Southeast Asia, and I mentioned Korea and 
others. It is tough in sub-Saharan Africa and other places to 
do this in the short term, but they desperately need us to help 
them become more food self-sufficient.
    If I may just say that I owe a lot of my own knowledge of 
this to Catherine Bertini, who was head of the World Food 
Program for 10 years, and she and I co-chaired an effort for 
the Chicago Council on Global Affairs called Advancing Global 
Food Security, which I would encourage to the committee it 
could be part of the record, whatever you would want to do.
    And it goes into great detail about what countries can do 
for themselves. And we need a combination of cash and 
commodities with much greater flexibility. And I think when the 
agriculture community realizes that, I think you are going to 
see more support than there has been in the past. But, yes, 
there is clearly some support.
    [Note: The material submitted for the record by Mr. 
Glickman is not reprinted here but is available in committee 
records or may be accessed on the Internet at: http://
www.thechicagocouncil.org/UserFiles/File/GlobalAgDevelopment/
Report/2013_Advancing_
Global_Food_Security.pdf (accessed 7/10/13).]
    Mr. Engel. Thank you, Mr. Glickman.
    Thank you, Mr. Chairman.
    Chairman Royce. Thank you, Mr. Engel.
    We go now to the chairman of the Subcommittee on Africa, 
Global Health, Human Rights, and International Organizations, 
Mr. Smith of New Jersey.
    Mr. Smith. Thank you very much, Mr. Chairman, for calling 
this very important hearing.
    Welcome to our two very distinguished witnesses who have 
done so much for so long to save lives. And having worked with 
Mr. Natsios for so long when he was doing emergency help for 
refugees and others, particularly getting food aid out--and I 
remember those Mengistu years. They were awful, when he used 
food as a weapon.
    I visited Banda Aceh after it was devastated by the 2004 
tsunami, and you, Mr. Natsios, pointed out that the Indonesian 
Foreign Minister asked us not to send rice. We did it anyway. 
And then you said the rice farmers were almost completely 
ruined. I would hope that you could elaborate on that, because 
I think that is a very poignant story and needs to be 
elaborated on.
    Secondly, you have testified that as many as 4 million 
people receive food aid, and you mentioned that Elliot and 
McKitterick said that as many as 10 million could be reached if 
we went with local purchase. That is a big disparity, but it 
also is all in one direction. Maybe you might want to touch on 
that further.
    And the response time issue, which you strongly 
highlighted, USDA 130 days to purchase--to actual delivery as 
compared with 56 days for local purchase, a whopping 74-day 
time when people could be literally starving. I wonder if you 
could perhaps elaborate on that a little bit as well.
    And, finally, you mentioned in your testimony, with regards 
to the Food for Peace Program, when you break out the 49 
percent savings, you have a number of variables in there. 
Seventeen percent, 17.6, for ocean freight; inland freight is 
7.5 percent of the additional cost. Internal transport, 
storage, and handling is 24.3 percent.
    And my question is about local purchase. Could you define 
that more clearly for the committee, because obviously in some 
war-ravaged and famine-ravaged areas local purchase could be 
two countries away, or several countries away? Just so we have 
a real sense of accuracy about what the true savings are.
    There is no doubt that the savings are enormous, and the 
potential for lives saved is, in similar fashion, enormous. But 
just so we have clarity on that.
    Mr. Natsios. Just to answer your last question first, the 
data, which I have in a footnote, you know, in my testimony is 
aggregated over many years. It is not for one specific 
emergency. It varies very substantially.
    The food aid, for example, that went to Haiti, the costs 
were much lower. Why? Because Haiti is not too far from our 
coast. But the majority of food aid right now that we ship from 
the United States--not the majority, the overwhelming majority, 
81 percent, goes to Africa.
    Mr. Smith. Right.
    Mr. Natsios. And it goes to emergencies, not to stable 
areas where no one is shooting at you. When they shoot at you, 
the costs go up because you have to hire guards to protect the 
shipments from being looted, for example.
    Some of this cost is security, in fact, guards to prevent 
the warehouses from being looted in a civil war. So it depends 
on the area. The percentages will vary very substantially, but 
we know historically over the last 5 or 10 years where most of 
this aid has been going, and it has been going to sub-Sahara 
Africa.
    Now, that shifted because of what is happening in Libya 
now. Okay? So----
    Mr. Smith. If I can just be clear----
    Mr. Natsios. Yes.
    Mr. Smith [continuing]. The internal transport, storage, 
and handling, that cost is evaded when local purchase is used? 
Or is it evaded in some instances?
    Mr. Natsios. If we are shipping to Haiti, the cost is not 
going to be--the savings is not going to be as great, anywhere 
near as great. But that is not where most of the food is going. 
As I said, 80 percent is going to Africa. That is much further 
distance away.
    If the emergency, like Liberia for example, is right on the 
coast and the food is going not too far inland, the savings 
will be less. If it goes to south Sudan or Ethiopia--Ethiopia 
doesn't have its own port, for example, or when we had the 
Rwandan genocide going on, you have a huge number of miles for 
the shipments of food to go.
    The food that went to Darfur, we are still feeding people 
in those camps. It is very expensive to get food to Darfur. You 
have to go 900 kilometers from the port to Darfur to get the 
food into those camps.
    Mr. Smith. And where would the local procurement be for 
Darfur?
    Mr. Natsios. Darfur--what I would do if I were--had the 
authority, I would do it in northern Uganda or northern----
    Mr. Smith. But there would be some shipping costs, but it 
would be far less than----
    Mr. Natsios. It would be far less. Exactly.
    Mr. Smith. In terms of Banda Aceh--my time is almost out--
you mentioned that the rice farmers were devastated.
    Mr. Natsios. Well, they had a choice.
    Mr. Smith. Okay.
    Mr. Natsios. It wasn't the rice farmers--it was the rice 
farmers in Haiti that were devastated, not in Indonesia.
    Mr. Smith. Oh. It wasn't clear from your testimony.
    Mr. Natsios. Right. In both cases, the Foreign Ministry 
asked us not to ship the food and we said, ``We cannot ship it, 
but we cannot buy the food locally because we are not allowed 
to do that under the law.'' And they said, ``Oh, no, no, no, 
no. We have to have the food. We would prefer you to buy it 
locally.'' I said, ``So would we. But if we can't, we will stop 
the shipment if you want.'' And they said, ``No, no, no. We 
need the food.'' So we shipped it.
    It devastated the Haiti rice farmers after the earthquake 
which took place a couple of years ago. And Aceh, Indonesia, is 
a much larger market, so we did not destroy markets because the 
country is so large. But it damaged markets, and that is why, 
you know, if we had a choice we should have bought the food in 
Indonesia, which has functioning agricultural markets.
    Mr. Smith. Well, as I saw and you saw and everyone else 
saw, the tsunami only went in 200, 300, 400 yards----
    Mr. Natsios. That is right.
    Mr. Smith [continuing]. And after that it was totally 
untouched.
    Mr. Natsios. Exactly.
    Mr. Smith. Okay. I am not out of time. On the response 
time, 130 days versus 56, 74 days, a huge improvement. That is 
a tremendous savings of time, which means life. Thank you for 
emphasizing that in your testimony.
    Mr. Natsios. Yes.
    Chairman Royce. Mr. Sherman of California.
    Mr. Sherman. Thank you, Mr. Chairman.
    So far every minute in this room has been spent advocating 
food aid reform. If every minute had been spent up until now 
trashing food aid reform, I would spend my 5 minutes promoting 
it. But that is not the case.
    There are strong arguments for food aid reform. They were 
summarized well in the opening statements of the chairman and 
the ranking member.
    I believe one of the witnesses has testified that all of 
the questioning of reform has come from special interests, so 
this will be a new experience for you, since we will spend a 
few minutes. As to me being a special interest, I have zero 
farms in my district, I have zero ports in my district, I have 
zero ships in my district, and my state pretty much doesn't 
grow anything you would want to ship in food aid because 
oranges are really not part of our disaster relief program.
    But the fact is that there are some arguments on the other 
side. The one place, though, where there are no arguments is 
you can't let people starve in a disaster because of an 
inflexible statute. But much of our food aid could continue to 
be American-produced without that eventually happening.
    Now, we are told that we have the lion's share of 
agricultural production; therefore, we provide the lion's share 
of food aid. Well, if food aid is no longer food aid, food aid 
is just money to spend in northern Uganda, yen can be spent 
there as well as dollars, Euros are accepted with the same 
glee, and the real pressure should be, and is not really put by 
the United States on our European and Japanese friends, to 
provide their share of food aid now that food aid is money to 
be spent locally.
    As to shipping, I think it would be wrong to blame the 2-
year delay in sending food to Syria on American ships. Most of 
that delay is not the speed of the ships. The current system of 
preferences may be very impaired, may be close to useless, but 
that doesn't mean our choices abolish it or preserve it.
    We ought to give a preference only to U.S.-owned, U.S.-
crewed ships that are not available to the military--and that 
may not be important to the military--but one thing we haven't 
talked about here is our trade deficit, our need for U.S. jobs.
    You know, every part of the government could save money if 
we didn't make them buy American, and then we would have a lot 
fewer jobs. Now, I am reluctant to give the State Department 
flexibility in any issue involving U.S. jobs and our trade 
deficit because they are almost hostile to even talking about 
the trade deficit.
    The last time I quizzed them they said there is no 
relationship between the trade deficit and U.S. jobs, so we 
need statutory formulas so that State will give due credit to 
U.S. jobs in shipping and agriculture. Otherwise, they will 
just give it lip service and say, ``Well, they looked at it and 
then they hired the cheapest ship with zero U.S. sailors 
aboard.'' And I think that given the size of the U.S. trade 
deficit, we should never have a discussion of international 
financial transactions that doesn't include looking at the 
trade deficit.
    Let us see, we also have to take a look at the possible 
negative effect on the local market. If you go into northern 
Uganda, you don't automatically create new food. You are buying 
food that was going to be sold in Kampala, and now you are 
buying it and sending it into Sudan.
    Maybe that is a good thing long term, because it gives 
farmers the money to improve their farms, or maybe it causes a 
famine or at least higher prices in urban Uganda. So we need to 
look at both the positive and negative effects on local 
markets.
    Finally, and I do have a question in here somewhere, our 
Indonesian experience demonstrated that where there is American 
food going to disaster victims--and everybody knows it is 
American food and it is grown in America, it has got an 
American flag on the bag--that we get a response that is 
helpful.
    Are we going to see a flag on a bag if the food inside 
isn't grown in America? And are we going to see those who carry 
out the food aid find it even more convenient to obscure the 
fact that they have anything to do with the United States 
because they are more popular with those they have to work with 
and more immune from terrorist attack if they say all of this 
stuff is coming from Europeans and Canadians? Mr. Glickman?
    Mr. Glickman. Okay. I will start this because--one is, 
under the President's proposal, 55 percent of the food aid that 
would be going would be required to be in the form of 
commodities, and that is the first year. They had no language 
on what future years would be. I think they probably should 
have put in some language on that.
    And then under the chairman's issue, he is not changing the 
percentage in a revolutionary way. So all we are trying to do 
is to provide more flexibility, so that local food purchases--
--
    Mr. Sherman. But my question was, what do we lose in 
Indonesia if the food isn't from the United States?
    Mr. Glickman. I can't answer that. The only thing I can 
tell you is that when I was Secretary, I was very much involved 
in both ways to both trade out and give out our excess and 
surplus commodities because we were growing way more than we 
could consume in this country.
    Those days are over, and the supply-demand lines in the 
future will not be anywhere like they were in the past. So 
given that, I do agree with you that to the extent possible we 
need to make sure we use all relevant means to let folks know 
that the aid is coming from America. And my judgment is the 
overwhelming percentage of the aid is still going to be in the 
form of commodities, because of humanitarian needs that both 
Mr. Natsios and the chairman have talked about.
    But at the same time, commodities are not suitable for 
everybody every place, and we should not be statutorily 
prevented from offering other ways of providing assistance. So 
I just think that this is a much more modern way to get our 
food and our aid into these desperate places that need it. That 
is my judgment.
    Mr. Sherman. Thank you. My time has expired.
    Mr. Natsios. Could I just add something with respect to 
Indonesia----
    Mr. Sherman. Mr. Natsios.
    Mr. Natsios [continuing]. And the branding campaign? I put 
in place when I was Aid Administrator the branding campaign 
that says, ``U.S. Aid from the American People.'' So I am very 
familiar with it, very proud of it, but no one would argue that 
we should only provide aid if we get credit for it, because a 
lot of the aid we provide makes the difference between whether 
people live or die.
    You don't kill children in order to get better public 
diplomacy. In fact, if people actually knew the reality, they 
might say, ``Wait a second. You denied us aid in order to get 
credit for it?'' That doesn't make any sense. And I know, 
Congressman, that is not what you are suggesting, but we don't 
want--we want to understand the purpose of this program, by 
statute, is to provide humanitarian assistance. Public 
diplomacy is an offshoot of it, and a good offshoot.
    Mr. Sherman. When we see al-Qaeda affiliated ``humanitarian 
organizations'' distributing aid that is actually paid for by 
the American people, because they get their hands on the bag, 
we have got a big problem for the American people.
    My time has expired.
    Mr. Natsios. Well, let me just answer that. The increase in 
our poll ratings in Indonesia, the dramatic improvement, and 
al-Qaeda's collapse in the poll ratings, took place before one 
bag of any U.S. food arrived. It took place over a 3-month 
period, and that is how long it took to ship the food from the 
United States.
    So the data that I quoted to you, which is widely 
publicized, but it is in several reports that this happened, 
took place before any food aid arrived. And principally, as the 
chairman pointed out, or I guess it was Congressman Smith 
pointed out, this was not principally a food emergency because 
the Aceh tsunami came in a few hundred feet, killed a lot of 
people, and then it departed. But it didn't destroy the 
agricultural system of Indonesia, and so it wasn't principally 
a food emergency. We did send some food in.
    But in the branding campaign, every NGO, every contractor, 
every partner of the U.S. has to put a big brand on the thing 
``U.S. Aid from the American People,'' red, white, and blue. 
And it is required. And we did this deliberately, and we also 
run some public service announcements on the media to show what 
we are doing.
    So there are ways, without putting the flag on every single 
bag, of making it clear to everyone where the aid is coming 
from. And I can give you other examples, if you are interested, 
in other areas of the world where there was no food aid 
involved and yet there was a huge increase in American approval 
ratings because of our aid program. Nothing to do with food.
    Chairman Royce. Let us go to Mr. Kinzinger.
    Mr. Kinzinger. Thank you, Mr. Chairman. I am limited to 5 
minutes, so I am going to cut you guys off at 5 minutes, so 
that this is fair.
    I want to tag on to what Mr. Sherman was saying on that. 
Speaking very honestly, food aid, the reason we do it is for 
national defense. It is for defense policy. That is how I see 
it. I see, you know, foreign aid is--there is compassionate 
reasons, of course, but it is all really in interest of 
furthering American goals.
    One of the concerns I have, and it was mentioned, so I 
don't want to keep rehacking this to death, is not only, will 
we lose the ability to put the American flag--I have a picture, 
by the way, here. This is what the--and you are very familiar 
with it, being involved, that this is what food aid looks like. 
It says, ``From the American People, USAID.'' It makes it very 
clear that that is directly American product.
    If we subcontract this out to a country that doesn't--as 
Mr. Sherman was saying, does have these huge surpluses of 
agricultural goods, and, in many cases, we may actually be 
driving up the local commodity price for that local nation, and 
it comes out in the form of a voucher with no real obvious, you 
know, anything.
    And even if we do come around and say, ``Okay. Well, we are 
going to have a way to put an American flag on this, so that 
they know, do we really want an American flag on commodities 
not grown in the United States?'' with a different kind of 
maybe grain that is not up to an American standard, you know.
    And I think there is also a huge point of pride from an 
American perspective in terms of this was grown here and now we 
are feeding you with it. And so I just want to--I will give you 
another chance, and I am going to keep you guys very short on 
that, because, again, I want this to be fair back and forth. 
But I think we are losing, and it is a concern I have.
    And I am not fully decided on where to go on this, but I 
think we are losing a very impactful thing that we do, which is 
put right in front of the people of Afghanistan or Darfur, or 
wherever, that this is a gift grown in and from the American 
people. So I will give you another 15 to 20 seconds to address 
that, if you want.
    Mr. Natsios. Congressman, if you could put up that picture 
of the food voucher----
    Mr. Kinzinger. Yes.
    Mr. Natsios [continuing]. It says on it, ``U.S. Aid from 
the American People'' on the right side.
    Mr. Kinzinger. Yes. But it is not quite the same as a bag 
with food.
    Mr. Natsios. We might want to make it a little bit bigger, 
but the point is it is there. And many of those bags actually 
don't get in the hands of the people at the retail level who 
get the food. They get it in cans or in bags that they bring 
themselves. So they may never even see the bag. It depends. It 
depends on the circumstance.
    The other thing is, the NGOs that have trucks or vehicles 
bought with U.S. Government money, which is very often in these 
emergencies, has to have a thing on it that says, ``U.S. Aid 
from the American People.'' Everything has to be branded. In 
fact, some people are getting tired of the level of branding, 
because we are everywhere. I mean, there are tens of thousands 
of these projects all--in fact, hundreds of thousands of these 
projects all over the world, not including food aid, that has 
that branding campaign. It is very clear in these emergencies 
where it is coming from.
    Even if the bag itself doesn't have it on it----
    Mr. Kinzinger. Just do this in 15 seconds, Congressman.
    Mr. Natsios. Sure.
    Mr. Glickman. One is, my belief is a majority of food aid 
will continue to be in the form of commodities, just not 
statutorily required to have almost all of it because I think 
it--when you go--like I spent time in Tanzania, Mozambique, and 
Kenya, and other places, where it is just clear from the people 
on the ground, from USAID and the World Food Program, and 
others, that they need the flexibility to do both.
    But I don't see a day where we will not be giving food aid 
in the commodity form. I just think the majority.
    Second of all, you talk about national security. The main 
thing for national security is to build these economies up, so 
that they become more stable. They get these people out of 
poverty so that they can have an economic system that works, 
like in South Korea, where they used to depend almost entirely 
on food aid, and now they are one of our biggest customers. 
That is a big thing.
    And the third thing is just supply and demand. We just 
don't have the food to give anymore. It is not in the 
quantities that we used to have, and that is going to continue. 
It will no longer----
    Mr. Kinzinger. Yes. But you are saying--in one breath you 
are saying, ``Boy, if we cut this off, it is less than 1 
percent of agricultural products.'' In another breath you are 
saying, ``Boy, we just don't have the food to continue to do 
this.'' And I don't--those two are competing goals.
    Mr. Glickman. Not necessarily, because one of the 
foundations behind the Food Air Program was huge surpluses in 
the '50s and '60s.
    Mr. Kinzinger. I understand that.
    Mr. Glickman. We had them even when I was Secretary, you 
know, because we had low prices and high quantities of grain. I 
still think it is in our interest to provide traditional food 
assistance during many humanitarian disasters. Cash does not 
work everywhere. But we have tied our hands right now.
    Mr. Kinzinger. Thank you. And I just want to add, and then 
I will be done, in terms of the situation in Syria--and I know 
this is a little off topic, but I think that delay and 
everything there is a result of an administration that really 
doesn't know where it is going in the Middle East, and, 
frankly, doesn't know where it is going in foreign policy. And 
it is sad, but I think that is a result of what we have seen 
there.
    But, with that, thank you, gentlemen, and I yield back to 
the chairman.
    Chairman Royce. We will go to Gerry Connolly of Virginia.
    Mr. Connolly. Gee, I was agreeing with my colleague from 
Illinois in some of his skeptical questioning until that very 
last editorial comment, and now I find myself on the opposite 
side.
    But welcome, both of you, and thank you so much for your 
service. I guess I have two concerns. I completely agree that 
we need more flexibility. I completely agree that in some 
circumstances, with the best of intentions, massive commodities 
flooding a market actually depress local production, depress 
local prices, and can have the opposite--I mean, they might 
feed people in the short run, but have the opposite effect in 
terms of long-term self-sustainability. And so we don't want to 
be doing that. And if we can make it better, we certainly want 
to do that.
    But, Mr. Natsios, I have two sets of concerns, and I ask 
you, Secretary Glickman, to address them as well. I was a 
staffer in the Senate Foreign Relations Committee who helped 
write the last foreign aid bill to become law. That was 1986. 
It has been 27 years since we passed a foreign aid 
authorization bill.
    There is a reason for it. The coalition up here, after the 
Cold War, has fractured. It is extremely fragile. It is 
extremely difficult to find people to be enthusiastic about a 
bilateral foreign aid program of any kind. And anything that 
peels off support is a risk.
    And while we may look, in an ideal world, at what is the 
perfect public policy--and this may very well be it when it 
comes to food aid--I am concerned about the downsize. And who 
do we replace those lost supporters with up here? And I wonder, 
having run the aid program, Mr. Natsios, whether you might 
reflect a little bit on that because you certainly had to deal 
with that.
    And the second concern--I will just put both of them on the 
table--over and above the political consequences, you talked 
about the problems of managing large bulk commodities, 
correctly so. Logistics are tough, theft is rampant, spoilage 
is a problem, ships sink, pirates still--it is like we are 
talking about the 18th century, but pirates still, you know, 
capture ships, and so forth.
    But what you didn't address, and I want you to, now let us 
look at the downsides of cash. Mr. Kinzinger talked, correctly 
I think, about there is an opportunity cost to the American 
taxpayer in terms of people not knowing, other than the central 
banker, that the taxpayers of America have helped.
    And then there is the issue of theft. I mean, commodities 
you get take a little work, if you are going to steal them. 
Cash is pretty easy. And we do know that our--you know, with 
the best of intentions, again, cash transfers are not 
corruption-free.
    So I wonder if you could address the downsides of those two 
aspects of what we are talking about here, understanding it is 
in the context of general support for improving a public 
policy.
    Mr. Glickman. Can we both get----
    Mr. Connolly. Absolutely. Mr. Glickman, in fact, if you 
want to go first, Secretary Glickman. You actually have 
protocol; you go first.
    Mr. Glickman. Well, no. I have more here, but----
    Mr. Connolly. You were a full Cabinet Secretary.
    Mr. Glickman [continuing]. Not much. The politics worries 
me a little bit, I will be honest with you. You know, I mean, I 
have been up here. I know what life is like, and I know the 
difficulties of it. But I would say nobody is talking about 
going to a cash-only system. Nobody. Not the White House; they 
have a 55 percent minimum on commodities. Not the chairman, 
whose--I think his is even--the flexibility with a larger 
amount of commodities.
    I would not support going to a cash-only system. I don't 
care what country does it, I think that is a mistake. We have 
to have the right to move this thing around. Somebody has to 
make some judgment calls.
    What we have now is we prevent judgment from being made as 
to what the wise thing to do is on a country-by-country basis. 
And Mr. Natsios talked about that. So from the political side 
of it, yeah, I worry a little bit about that this might fray 
the coalition a bit.
    But, you know, I would hope that we would be looking at the 
long-term national security interest of the United States in 
terms of having stronger developing nations that could be more 
politically stable and economically stable. But we are not 
going to a cash-only system.
    Mr. Natsios. Let me just mention, this is not cash to 
developing countries. We are giving cash to NGOs, and probably 
the best-run U.N. agency by far is the World Food Program. By 
far. And that is my experience over 23 years.
    And they have the highest level of accountability of any 
U.N. agency. When we give money to WFP, we are very--we are 
assured that it will be well spent. That is not true in all 
U.N. agencies. I don't want to get into other names, but WFP is 
very well run.
    The NGOs that do emergency response, the International 
Rescue Committee, CARE, Catholic Relief Services--I am going to 
forget some now--World Vision, the institution I worked for--
they have, with respect to their cash, actually higher levels 
of accountability than the food program, because food is--it is 
just much easier to steal.
    Now, if you compare our food programs to those of many 
other countries, we have very high levels of accountability. I 
am not arguing that. But it is not the commodity itself, 
whether it is cash or--it is the institution through which the 
program is being run. And we have a highly developed emergency 
response system that actually works very well, and we don't 
have a lot of leakage in it, at least in the American part of 
it.
    Now, in terms of the politics of this, I have heard this 
argument before, and I--you know, I at first worried about it. 
However, there is one little interesting fact. There are two 
other big emergency accounts. One is the Office of Foreign 
Disaster Assistance. That was my first job under President Bush 
41, 23 or 24 years ago. I am dating myself now. And that budget 
has steadily grown over 25 years. There have been no cuts in 
it.
    The refugee account, which is something like $800- or $900 
million in State, until last year or the year before had not 
sustained cuts either, even during the 1990s when there were 
big cuts in the food--in the development program of U.S. 
Government. Massive cuts. Those two accounts were not cut.
    I think the reason that they didn't get cut is that 
Congress, in both parties, supports humanitarian assistance in 
emergency situations far more than they do development 
assistance. Senator Helms, Jesse Helms, when he was in the 
Senate said, ``I would abolish all foreign aid except for 
disaster relief.''
    Patrick Buchanan, not a big supporter of foreign aid, the 
first thing when he ran for President in 1992 he said, 
``Abolish all foreign aid except for disaster relief.'' So even 
on the very conservative wing of the Republican Party, even the 
more isolationist wing, they support emergency response/
disaster relief because it is very popular in a bipartisan way 
in the Congress. That is the reason that the budgets have been 
sustained even during difficult times.
    And the final thing I would just emphasize is when 
President Bush proposed the reform, we said 25 percent. I would 
not support a requirement that we go to an entirely cash 
response. I don't think the political support for Food for 
Peace is going to decline because only half of the budget goes 
to buy American food.
    I would support a maximum, personally, of 50 percent. We 
proposed 25 percent when we----
    Mr. Connolly. Sold.
    Mr. Natsios [continuing]. Learned that 75 percent would 
have to be purchased in the United States. We just want more 
flexibility in emergencies where a response through NGOs with 
cash and vouchers is a more appropriate way, given the security 
situation and the economics of what we are facing.
    Chairman Royce. The gentleman's time has expired.
    We will go now to Mr. Perry from Pennsylvania.
    Mr. Perry. Thank you, Mr. Chairman.
    And thank you very much, gentlemen, for being here. First 
of all, I agree with the chairman that the current 
International Food Aid Program suffers from gross 
inefficiencies and that we in Congress absolutely must strive 
to do better and be better stewards of the taxpayers' dollars.
    However, I would like some clarification on the oversight 
of proposed local purchase programs which are designed to be 
more cost effective, and this is most to--this question I think 
would be to Mr. Natsios.
    My concern is that food could be brought from a broker who 
could collect the commodity from various sources and not just 
from local area farmers. And so I wonder, how can we ensure 
that local purchase programs are actually locally and 
regionally grown programs, not just providing U.S. taxpayer 
funds to fuel our agricultural competitors?
    Mr. Natsios. Well, the areas in which there are emergency--
because 80 percent of this food goes to civil wars, famines, 
disaster relief. These are not the most stable and prosperous 
countries in the world. Believe me, they are not our 
competitors. This is not going to Brazil or Argentina or middle 
income countries. It is going to southern Sudan, it is going to 
Ethiopia, to Somalia, to Syria. They are not our competitors.
    But you are right in terms of the risk of middlemen taking 
the money. In the first year that the World Food Program ran 
the local purchase program in northern Uganda, that is exactly 
what happened and they corrected the program. They corrected 
the problem. They cut out the middlemen and went directly 
themselves to the farmers. They did not use middlemen after 
they realized what was happening. So there is that risk if you 
don't run it properly.
    What the intention is for USAID, and I have talked to some 
of the career officers, is to integrate this with our 
agriculture programs. If we have an agriculture program in 
Uganda, and one in Ethiopia, for example, one of the most food-
insecure countries in the world, the idea would be to get the 
NGOs and the contractors that are doing the agriculture program 
to be integrated with our food local purchase program.
    It would tell them we want a system put in place, so that 
if we are facing a multi-year emergency, which happens in these 
famines often, it is not just for a few months that you 
distribute food. We would use the agriculture development 
funding of USAID as a way of producing more food for there to 
be local purchase. You integrate the two, which we wanted to do 
for years but we couldn't do it because we couldn't do the 
local purchase.
    But you are right, there is the risk, but the NGOs and the 
World Food Program I think have done a very good job in seeing 
to it that those risks are alleviated through good programming.
    Mr. Perry. Certainly we know that the recipients of the 
food aren't competitors, right? That is obvious. But it is 
where the food is coming from. Are you suggesting that the 
controls that are put in place--and you talked about Uganda in 
the past, so I would be interested to know how that was handled 
and if you are supporting a legislative fix or if you would be 
supportive or you are advocating for flexibility within USAID 
or the other organizations involved to do it themselves, and 
then how would we monitor, how would we ensure oversight and 
accountability.
    Mr. Natsios. Well, believe me, I had to deal with the 
General Accounting Office and the Inspector General's Office 
and OMB. There are more levels of accountability in our 
Government, frankly, on our aid programs than any--and I say 
this--and I have studied this, and I wrote a long article about 
it--than any country in the world.
    There is far more accountability in our aid program than 
any place in the United Nations or any other developed country 
that has an aid program. There are just layers and layers and 
layers of accountability.
    Mr. Perry. If I can just interrupt because I don't want my 
time to expire. But I think Americans are right to be 
skeptical, with all due respect when we hear about the Food for 
Oil Program and you talk about accountability. Now, that wasn't 
just simply the United States, but, still, I think most 
Americans feel that millions, if not billions, of dollars were 
lost and unaccounted for, and so I appreciate what you are 
talking about regarding accountability and oversight, but on 
some levels it seems to have been lacking.
    Mr. Natsios. Right. But that wasn't an aid program. I am 
saying the aid program of USAID and the State Department, with 
respect to our 150 account. That was not--believe me, that was 
not a 150 account program. If it had been, that scandal would 
not have taken place.
    Mr. Perry. But, again, are you advocating for a legislative 
fix or for flexibility within the organization?
    Mr. Natsios. I think it would not be a bad idea, Mr. 
Chairman, to put language in your bill to say we would want you 
to integrate our local purchase of food aid with the 
agriculture program. We expect you to integrate them. That is 
number one.
    Number two, we would want some reporting on a regular basis 
on how the program is being run and then ask the USAID 
Inspector General to produce a report annually, which he will 
do anyway, but putting it in the law emphasizes it. It would 
focus on accountability. I don't think it would be a bad idea 
at all to require an evaluation that would go to the committee. 
So I think it is well taken and should be put into the 
legislation.
    Chairman Royce. I think it is a good idea, Mr. Natsios. 
Point well taken.
    Mr. Natsios. Thank you.
    Chairman Royce. We go now to Karen Bass of California, 
ranking member of the Subcommittee on Africa, Global Health, 
Human Rights, and International Operations.
    Ms. Bass. Thank you. Thank you, Mr. Chair, and thank you 
very much for your efforts in having this hearing and also in 
raising this issue.
    I am obviously working with the chairman on this piece of 
legislation, and so, obviously, I am supportive of it. But I 
want to figure out how to address some of the concerns of the 
opposition, and you mentioned from years ago that this was an 
issue, and so I am trying to get a sense of if the concerns 
that people are raising now are historical concerns and what 
your ideas might be to address them.
    What might replace, for example, you know, the resources 
that we use to purchase the commodities? How might we replace 
that on the U.S. side? You know, to me the idea that we have an 
opportunity to feed between 2 million and 4 million people, and 
some estimate as high as 10 million, and knowing what Feed the 
Future does in your vision, Mr. Glickman, which I am sure is 
shared by our other witness, the idea of sub-Saharan Africa one 
day being like South Korea, I think that is absolutely the 
model that we want to go for, which is increasing the capacity 
of countries to feed themselves and not be reliant on our food.
    So I know that there have been concerns about an 
opposition, about the loss of business from the maritime 
industry. We talked a little bit about the cargo preference 
law. But I wanted to ask you how you might address the 
opposition. What do we need to do?
    Mr. Glickman. Well, you know, in terms of--I am not as 
familiar with the maritime issue as Andrew is, but I think 
you----
    Ms. Bass. Okay.
    Mr. Glickman [continuing]. May need some transition 
assistance. The administration I think has proposed something 
in this regard. I don't know what the right numbers should be. 
That is a political decision. But I think that that is not 
inappropriate, to consider that, although I agree totally with 
what he said about the merits or demerits of cargo preference 
in this area.
    I do worry about the total appropriations. I notice that 
the House Appropriations Committee has cut back on some of 
these accounts, and so I worry about if we don't appropriate 
the amount of money that is needed, it is going to impact these 
programs writ large, whether they are cash or commodities.
    But the other side of the coin is my judgment is 
humanitarian needs are going to increase in the future, and you 
see this happening with droughts and extreme flood events, and 
so we are going to have greater and greater pressure on us to 
provide some stability to areas that are going to be suffering 
dramatically.
    And I think that is just part of the U.S. culture and our 
U.S. fabric to do that. So I think ultimately Congress will 
respond.
    And the second thing I would point out is, I say this 
again, we are not talking about cold turkey----
    Ms. Bass. Right.
    Mr. Glickman [continuing]. All cash.
    Ms. Bass. Right.
    Mr. Glickman. We wouldn't ever want to do that. We may want 
to do 100 percent commodities in certain parts of the world. 
But having been--I was at a place in Mozambique where they were 
having some issues and they were getting some Food for 
Progress--I mean, they were getting some Title 2 aid, and they 
got some money through the U.S. to actually create something 
called Food for Progress, working with the World Food Program 
where they were actually engaged in growing their commodities 
and selling them locally.
    We have a real opportunity here to combine humanitarian 
concerns with what I call appropriate development concerns, 
realizing humanitarian efforts have to be key to this effort. 
That is the foundational basis. And creating economies that are 
largely world-based.
    Sub-Saharan Africa is largely rural agriculture, women-
owned. I mean, but they are poised for significant development. 
And it is us in America.
    And I will tell you one quick anecdote. I was there and I 
was in Tanzania, and I was meeting with some government 
officials and they said to me, they said, ``You know, you have 
three of the greatest people in the world in your country.'' 
And I said, ``Who is that?'' And they said, ``It is Bill 
Clinton, Barack Obama, and George W. Bush.''
    Ms. Bass. Right.
    Mr. Glickman. And I said, ``I couldn't find 10 people in 
the United States that would say that.'' And I said, ``Why?'' 
And they said, ``Well, Bill Clinton because of his effort to 
the Clinton Foundation and everything he has done. Barack Obama 
in part because he has carried on a lot of the Bush 
initiatives, plus, you know, his heritage. And George W. Bush 
was the greatest of all.'' And I said, ``Why?'' And they said, 
``Because he really realized the significance of potential in 
Africa, particularly when it came to health, global health 
assistance,'' which you may have been responsible for.
    And I thought to myself, they like us here. We are----
    Ms. Bass. I have found that every place I have been as 
well.
    Mr. Glickman. You know, I mean----
    Ms. Bass. Exactly what you said.
    Mr. Glickman [continuing]. We have got great potential 
here. It is part of our national security areas, and so I think 
what we are trying to recommend in this area, which you and the 
chairman have agreed on, is how we can make it better.
    Ms. Bass. Right. Thank you.
    Mr. Natsios. I just might add that under President Bush the 
budget for all aid, not just health, all aid to Africa, went up 
600 percent in that 8 years. It was a massive increase and it 
was done deliberately. Colin Powell and I had a discussion when 
we started, President Bush endorsed it, and then there were 24 
different initiatives.
    Ms. Bass. And it is well appreciated and acknowledged----
    Mr. Natsios. Yes, it is.
    Ms. Bass [continuing]. Around the continent as I have 
traveled.
    Mr. Natsios. Exactly. Exactly. With respect to the maritime 
industry, let me just mention, I told you my personal opinion I 
don't like cargo preference. I don't think--I think the time 
has come to change it. But the proposal before you is much more 
accommodating than I would be. Okay?
    And there is a proposal under the compromise. The effect 
would be only six or eight ships would be affected by the 
proposal the way the compromise is written now, and there would 
be 240 to 320 mariners who would be affected, and they would be 
eligible for a kind of a subsidy that is in the legislation.
    I am not an expert on the actual provisions of the law, of 
the proposal that President Obama has made, but USAID's career 
staff has explained it to me and they have tried to make 
provision for it. If I had been around, I might have not been 
so accommodating, but they are trying to deal with the 
objection of interest groups in terms of the more narrow focus.
    Ms. Bass. You know, when I have talked to some of my 
colleagues who were concerned about the loss of jobs in their 
particular district, you know, one individual had a school for 
merchant marines, for example, and so they were concerned about 
that. And maybe it is a question of the transition, but some 
type of way because I see this as a long-term issue.
    And so how are we addressing the concerns, you know, of 
members now so that we can garner more support for it. So the 
six to eight ships, you know, again, I think maybe we could 
look for ways.
    Chairman Royce. I think we had better go to Mr. Meadows of 
North Carolina.
    Mr. Meadows. Thank you, Mr. Chairman, and thank each of you 
for being here today. You know, it can be said, you know, when 
you are in the middle of a budget crunch that you should take 
the risk of looking at a program that works moderately well, 
even though it may not be optimal.
    And so, obviously, we are looking at this today in the 
middle of this budget crisis. Can each one of you share with me 
why you feel like that this should be a priority this year and 
why these reforms need to be made now versus at a later date? 
Mr. Glickman or----
    Mr. Glickman. You know, I just think that you can make 
reforms that are not disruptive, and I think the chairman has 
proposed an adequate and successful way of doing that so it 
doesn't create havoc in terms of how to administer the 
programs. And I think he is right in substantively trying to 
give more flexibility and efficiency to the way the monies are 
being spent.
    Based on my experience, I think that it is the right thing 
to do. We will help more people and in the process we will 
advance the long-term security interest of the United States. 
That is the best way I can tell you, and you have got the 
opportunity now, hopefully, in the farm bill to do it. You 
don't have a farm bill up all that frequently.
    Mr. Natsios. I would make two arguments. First is that the 
world is changing. Price--food prices have dramatically 
increased over the last 4 or 5 years. There are several 
governments that fell or collapsed because of the price 
increases in the developing country.
    The Haitian Prime Minister resigned over price increases 3 
years ago because of riots. There are food riots across the 
world when these price increases take place. So we know that 
the world is changing; the program isn't changing.
    We need to find ways of making the program more efficient 
given the shift in the market and the shift in our own markets. 
It is much more expensive for us to buy food in the United 
States than it was before. The era of cheap food is over. Most 
economists would say that now, and I think that is true.
    The second thing I would say is, when we first proposed 
something like this under President Bush 10 years ago, we were 
doing it for the first time. No one had proposed this before 
anywhere with respect to the aid budget. We now have 10 years 
of experience because there was a $60 million pilot program 
that was in the appropriations bill for the Title 2 program, I 
think it was 4 years ago, 5 years ago. They went through that. 
USDA did all of these experiments. They did all of these 
reports. I read the reports to write the testimony.
    United Nations World Food Program, which as I said is the 
best-run U.N. agency by far, they have a lot of field reports 
on what mistakes they made early on, how they fixed those 
mistakes, and how the program is running now.
    So it is not as though this is new. We have a lot of 
research now as to what works and what doesn't work and how to 
do this the right way.
    Mr. Meadows. Well, let us pick up there because I think 
that was a GAO report in 2008 that we--you know, we looked at 
that being part of that farm bill. And so as we see that, some 
5 years ago that pilot program that was, you know, a local/
regional pilot program. What would you both say are the two 
lessons learned from that, both pro and con, that we need to 
look at in terms of addressing this piece of legislation that 
is before us? I mean, what are the good points and the bad? 
Obviously, it wasn't totally successful or this would be--you 
know, we wouldn't be having this hearing. It would be a slam 
dunk, so----
    Mr. Natsios. Well, I think interest groups would want the 
hearing held regardless of whether it was a slam dunk or not, 
because part of this debate is on the merits itself.
    Mr. Meadows. Sure. Sure.
    Mr. Natsios. Part of it is on how it affects the maritime 
industry and the shippers and, you know----
    Mr. Meadows. Okay. But what would be the two cons? Other 
than on the maritime issue, what would be the two cons in terms 
of the implementation? Is what I am talking about.
    Mr. Natsios. Exactly.
    Mr. Meadows. And the two pros.
    Mr. Natsios. I think there are two things we have to watch 
out for, and I have mentioned that in my testimony.
    Mr. Meadows. Right.
    Mr. Natsios. One is you have to have agricultural 
scientists and economists working on this, not just logistics 
people, who will see the effect on local markets. If you are in 
the middle of an emergency--and I will give you an example--in 
1992, we had the worst drought in 20th century in Africa, and 
13 countries had a 90 percent crop loss in southern Africa. 
Massive crop loss.
    We intervened--I ran the program, so I remember it very 
well--with 2.2 million tons of U.S. food. Had that taken place 
now under this legislation, I would still ship U.S. food. Why? 
Because the price spikes that went on in southern Africa, with 
drawing in food from all over the rest of Africa, we could not 
have gone to local or regional purchase under those 
circumstances because the crisis was too big. So----
    Mr. Meadows. I am going to cut you off there and let Mr. 
Glickman--and then I will yield back.
    Mr. Glickman. One thing. I think nobody has mentioned the 
word ``nutrition,'' which has got to be a key part of this 
discussion, how to not only get quantities of food but 
qualities of food. And some of these pilot programs have 
created--they purchase locally and they have allowed the 
ability to include food with higher nutrients being bought 
locally, and that has been a positive as well, which we don't 
get with just bulk commodities going over.
    Mr. Meadows. Thank you, Mr. Chairman. I yield back.
    Chairman Royce. Ami Bera from California.
    Mr. Bera. Thank you, Mr. Chairman. As I have often said, 
the best part of this committee is it is pretty non-partisan. 
It is Democrats and Republicans working together to go toward a 
common goal, and the conversation taking place today is a great 
example of that.
    You know, it doesn't take a fiscal crisis--and it shouldn't 
take a fiscal crisis--for us to look at programs and evaluate 
programs to make them more efficient and meet goals. And the 
goals of our food programs are to save lives, advance peace, 
advance diplomacy. So if we look at our Food for Peace Program, 
and affiliated programs, we should evaluate it amongst those 
metrics. How can we save the most lives? How can we be the most 
efficient? And, you know, I applaud both of our witnesses today 
for talking about that.
    When you talk about the supply chain, efficiency is going 
to come from shrinking the supply chain. And we have had Dr. 
Shah come, you know, talk about a shift in mission for USAID 
from just being a donor organization to a capacity-building 
organization.
    You know, my questions--and let me use an example that we 
have talked about in India. You know, India is a country that 
grows an abundance of food, but up to 40 percent of that food 
is lost to waste. It is lost to lack of infrastructure to move 
that food. It is lost to a lack of cold storage.
    And, you know, there is a great example of a USAID-funded 
program at my home institution which I am faculty, the 
University of California Davis, that is looking for low cost 
ways to improve storage and going into countries in Africa, 
going into countries in South Asia, to help them develop low 
cost ways to store food, to develop cold storage, and I do 
think that is exactly where we should be going. Again, moving 
from countries that lack capacity, helping them build that 
capacity, moving them into self-sufficient countries, and then, 
as Mr. Glickman, you pointed out, once they get there moving 
them into countries that are partners with us, that, you know, 
are able to consume.
    You know, I would ask both of you how--what you would 
advise this body as we want to move from just being a donor 
nation to being a capacity-building nation in our partner 
countries. Either one of you can take this.
    Mr. Natsios. Well, we are a capacity-building nation. We 
have done that. The question is how much we do. We used to have 
a program in USAID which we stopped because the quantitative 
measurement people insisted that we have to quantify the 
results of all programs. And I know that is popular in 
Congress, but my own view is there are things of things you 
can't quantify.
    We do help countries write constitutions. How do you 
quantify technical assistance writing a constitution? The 
scholarship program of USAID used to train people who are in 
critical institutions in the developing world. We did 20,000 
scholarships a year for master's degrees, Ph.D.'s, and some 
undergraduate degrees, at the height of the Cold War. It was 
our most successful program if you talk to the career people.
    We do 900 scholarships a year now. I think we should go 
back to the scholarship program, not just randomly giving out 
but focus on a sector. If you go to rural Haiti and rural 
Dominican Republic, we had a scholarship program at my 
university, Texas A&M, over 20 years actually to train people 
with master's degrees in the Ministry of Agriculture in the 
Dominican Republic. We did not do that in Haiti. Go to the two 
countries and see what the rural areas look like.
    Mr. Bera. Would you suggest shifting some of our resources, 
then, to doing university-to-university exchanges?
    Mr. Natsios. Yes. Absolutely. We should move back to that 
system, which, by the way, was very successful in India. A lot 
of those high-tech centers in India were actually built in the 
1950s, '60s, and early '70s with a linkages program between 
American universities and Indian universities funded by USAID.
    Mr. Bera. Well, again, it is certainly something that we 
are talking about at UC Davis, which is obviously a major 
agricultural university.
    Mr. Glickman. Can I just say, you know, I think this is 
what Administrator Shah is attempting to do in Feed the Future 
Initiative, which is to provide a holistic approach to dealing 
with issues like post-harvest loss, which you have talked 
about, where we lose in many of these countries 40 percent, 50 
percent, of their production.
    And so it is not all just relying on USAID when there is an 
emergency; somehow we have to build up these systems so they 
are able to be self-sufficient in food. And I think that that 
has--I think that in some of the countries that have been Feed 
the Future countries you have seen some significant metrics in 
achieving the goals that you have talked about.
    I might mention one other thing which doesn't relate to 
this subject. The level of American commitment to agriculture 
research writ large is coming down. The rest of the world is 
going up. We face a catastrophe in the future if we don't fund 
and sustain adequate funding in both basic and applied research 
at our universities, land grant schools, and others.
    They are the ones that are doing research here at home as 
well as around the world. And a lot of the work that they are 
now longer doing is either not being done at all, and 
especially as you deal with drought-resistant crops and the 
changing weather patterns, or else it is being done by 
universities in China and the rest of the world. And we are big 
losers if that continues.
    Mr. Bera. Great.
    Chairman. Royce. We go now to Mr. Yoho from Florida.
    Mr. Yoho. Thank you, Mr. Chairman, and I appreciate your 
opening remarks, reaching more with less, and I commend you 
guys for being here.
    Mr. Natsios, you said that you have been around for a long 
time with different policies under George Bush. And as 
frustrating that the policies haven't been enacted, and the 
reforms, what reforms would you recommend that should be 
implemented and--which ones and how? I mean, you have given 
kind of a list of them, but just--can you kind of just bullet 
point them and just say, ``I would do this, this, this.''
    Mr. Natsios. Sure. First, I would phase out monetization to 
produce cash to run development programs through NGOs. That is 
a bad practice. I think we should simply move toward cash 
grants to the NGOs to do the same thing. We will basically 
double the efficiency of the spending of that money if we did 
that.
    Number two, I think we should phase out the requirement 
that 50 percent of the food has to go on American ships. They 
could continue--there is a subsidy of some kind that they are 
talking about in the compromise, and all of that.
    The third change is that we should allow I think it should 
be--no more than 50 percent of the Food for Peace budget, in 
the judgment of the Food for Peace Director and the 
Administrator of USAID, can be used--doesn't have to be, can be 
used for local purchase of food aid.
    Some years you may want to use the whole 50 percent; some 
years you may not want to use that much. It depends on the 
kind--if it is Syria and southern Sudan, you may want to use 
the whole 50 percent. If it is a more stable thing, in a 
country that has security, for example, as Haiti or Indonesia, 
where there isn't the same circumstance, maybe the percentage 
would go down.
    Mr. Yoho. Okay.
    Mr. Natsios. But I think those three changes would have a 
profound effect on the flexibility and the efficiency of our 
program.
    Mr. Yoho. Mr. Glickman, do you have anything to add to 
that?
    Mr. Glickman. No. I concur.
    Mr. Yoho. Okay. My next question is, you mentioned that we 
were late to the table in helping other countries grow their 
own food. What policies would we need to reform to fix this and 
to create it to be more effective? You brought up Canada is 
doing a lot better job in Uganda, or several of the other 
countries?
    Mr. Natsios. Yes. Let me say something controversial, and 
I--I always say something outrageous at every----
    Mr. Yoho. It is all right. We are in Congress; don't worry 
about it.
    Mr. Natsios [continuing]. Every hearing. Okay? When Peter 
McPherson, the USAID Administrator under Ronald Reagan and 
considered one of the most revered and able USAID 
administrators by the career staff, left USAID, the budget for 
agriculture was $1.2 billion, for agricultural development, not 
food aid. This has nothing to do with food aid.
    See, what we are talking about today in food is the 
emergency side. That is 10 percent of USAID's budget. The other 
90 percent goes for long-term development. Okay? So the long-
term development program for agriculture was $1.2 billion. When 
I arrived in 2001, the budget for agricultural development was 
$250 million, and that is in 2001 dollars, which are not the 
same as 1985 dollars. Okay?
    So what happened? I am quoting Norman Borlaug, who won the 
Nobel Peace Prize in 1970 for creating the Green Revolution in 
Asia. He probably saved 1 billion people's lives, if you read 
his obituary. He also taught at my university, Texas A&M. He 
was one of my heroes, and he is a friend of mine. Okay?
    We wrote an article on this issue today for The Wall Street 
Journal 6 or 7 years ago. Dr. Borlaug gave a speech and he said 
the environmental movement--the more radical, not the 
mainstream environment--said fertilizer is bad, pesticide is 
bad, irrigation is bad, we should go back to basically organic 
agriculture.
    Now, it is easy for Americans to say that, but you cannot 
grow more food unless you put nitrogen back in the soil. What 
happened is the environmental groups, the more radical ones, 
went to Congress and said, ``AID is doing all of this modern 
agriculture stuff. It is a bad idea. Cut the budget.'' And they 
did.
    I think many people realized in the environmental movement 
that that is a disaster, and they have changed their position. 
And I support--President Obama's major initiative in foreign 
aid is the Feed the Future Program, which is not a food aid 
program. It is an effort to grow more food through agricultural 
development.
    Mr. Yoho. Okay. Mr. Glickman, do you have anything to add 
to that?
    Mr. Glickman. No. The number of agriculture specialists 
within USAID went down about the same precipitous level as the 
funding went down. And so I would just say that, you know, the 
``teach the man to fish'' has been the philosophy of the Feed 
the Future Initiative. And hopefully with the adequate 
resources, and with the research world involved with it, we can 
actually change their lives.
    Mr. Yoho. Okay. You mentioned also a list of acronyms and 
NGOs that provide food aid. Would it be more--wouldn't it be 
wise to eliminate some of these and streamline it to make it 
more efficient to get our food aid out? Because it is almost 
like you could pick up a can with all of the alphabet letters 
in there and any four letters would be an acronym for one of 
the agencies we have or programs.
    If there are some that you could recommend eliminating, I 
am out of time here, if you could submit them in writing, both 
of you, just say if we could combine these and eliminate them, 
or just streamline them, it would be a lot more efficient.
    And I appreciate your time, and I yield back my negative 
time.
    Mr. Wilson [presiding]. Thank you, Mr. Yoho.
    We proceed to Mr. Lowenthal of California.
    Mr. Lowenthal. Thank you, Mr. Chairperson. I want to 
compliment the chair and also the ranking member Bass for--to 
support the development of local sustainable food concerns. But 
I still have some of the same concerns, and I need to be 
reassured.
    I think you have already said it, but I need to hear more 
about it, that Mr. Perry raised, I think Mr. Meadows raised, 
about what mechanisms are really going to be proposed that 
ensure that the funds are used to purchase food locally. How 
will we monitor these brokers who will collect the commodities 
from various sources and not just local farmers?
    And as you pointed out before, if a broker country in 
Uganda or Nigeria is aggregating, let us say, imported Russian 
wheat or Brazilian soybeans, how will we know that? And even 
going further, we heard in this committee, the Subcommittee on 
Europe, Eurasia, on the threat of China's unsafe consumables, 
we learned about the health risks of unsafe food produced in 
China.
    We have got to be really sure that we are not going to be 
spending money on food that is cheaper from countries with very 
low food safety standards. How are we going to know that, as we 
move in this direction, that we are really not going to lower 
the standards as the--I like the goal; I am just not really yet 
feeling comfortable that we have in place the mechanisms.
    Mr. Natsios. Let me just reassure you, Congressman. There 
is a program now. It was started by the Congress. The 
international affairs committees, as opposed to the agriculture 
committees, have supported this idea for some time now. OMB got 
tired of proposing this reform every single year and getting it 
killed in the Congress through the agriculture committees.
    So what they did was they went to the appropriators and the 
international affairs/foreign ops committees and said, ``Would 
you consider a separate line item called the Local Purchase 
Cash Voucher Initiative?'' It is $375 million. It has been a 
very big success. It does exactly what you just mentioned. In 
other words, it does what this would allow Title 2 to be used 
for.
    So we already have 5 years of experience doing exactly the 
same thing. All the proposal is is to extend this to Title 2, 
to this particular account. So what you can do--and I am not at 
USAID anymore. If I were USAID Administrator, I could send them 
to you tomorrow. But I am sure if you asked USAID, they would 
do it.
    We have evaluations and Inspector General reports of how 
that money was spent in that account. The oversight systems 
that are in place for that account will be used because it is 
the same office running both programs. It is the Food for Peace 
Office that would be running both programs. They have already 
put in place those systems for the $375 million program that 
has existed for--I think it was passed in 2009 for the first 
year, or maybe--I think it was 2009.
    So we already have it in place. It is simply a matter of 
extending the authority to use the same systems that are 
already in place for Title 2.
    Mr. Glickman. You know, Mr. Kinzinger made a point that I 
think is worthwhile repeating right now. And your concerns are 
well-founded, but, you know, this is a national security 
interest issue for the United States. How we deal with 
humanitarian disasters and how we stabilize the economies in 
the developing world, one-third of all members of the United 
Nations are in Africa alone. We are talking about 30 percent, 
actually. I mean, this is a big, powerful political force.
    And, by and large, we have to look at our American 
relationship for that part of the world in a strategic way as 
well. In my judgment, we can be more helpful, it is in our 
interest, and it is better for the economies of both the United 
States and the rest of the world if we give more flexibility to 
these accounts. I mean, it is a part of our national security 
interest as well.
    And we are not talking about a revolution here. I repeat 
that. This is what I call a necessary incremental step to give 
more flexibility to people on the ground.
    Mr. Lowenthal. Thank you, and I yield back my time.
    Mr. Wilson. Thank you very much, and I now yield to myself. 
And I would like to thank both of you for being here today. The 
Aspen Institute makes such a difference.
    And, Mr. Natsios, I have just gotten back from Afghanistan, 
and I am always impressed to see throughout the country in 
front of schools, clinics, roads, there will be signs, and it 
has the clasped hands with the U.S. flag and an Afghan flag. 
And what is impressive to me is that those signs are very 
rustic. And so if the people didn't appreciate the USAID 
projects, they know how to take the sign down.
    So I just--you know, and it is so sad to me that we hear 
people in that country don't appreciate what we are doing. You 
know, to see the little girls going to school with the white 
scarves, the little guys going to school with baseball caps, 
that I know are not indigenous to Afghanistan, there is so much 
good, and USAID has been in the forefront. So I want to 
congratulate you on helping set this up.
    Additionally, with Public Law 480, we stamp the U.S. flag 
from the American people on the bag. I have seen the residual 
of that. And when I saw in Darfur, it was heartwarming to see 
the shelters that were made, very primitive, but yet they were 
made out of the bags. And that was their home.
    But it just--as an American citizen, I felt very good about 
that. And I also had the opportunity in Muzaffarabad, Pakistan, 
for earthquake relief to see the same from the American people. 
It was very heartwarming.
    But under a cash-based program, how could we have a 
benefit, a hearts and minds benefit, which is so important 
trying to reverse, as you indicated in Indonesia, a negative 
view to positive? Because it seems like to me that there would 
be concern--by having foreign source commodities under a U.S. 
flag, there is a danger of reputation, safety, quality of the 
product.
    How can we see that wiring funds would be more benefit than 
what we have--a program that works?
    Mr. Natsios. Well, Congressman, in some countries where 
there is a civil war going on in which we are taking sides--
Iraq, Afghanistan--those signs are a target for our enemies. 
Al-Qaeda murdered the headmasters of 50 schools that we rebuilt 
in Afghanistan because they were USAID schools or U.S. 
Government schools, and because they had the logo on them. So 
they are also a target, unfortunately, in civil wars.
    And so some places we have to, for safety's sake, say don't 
use the logo and the flag, because if you do you are going to 
get the people killed in the war, if we are not--if we are 
participants in some way in what is going on.
    The same thing happened in Iraq. Now, what we chose to do 
in both cases and several other countries is we found another 
way, without specifying a specific school, we did radio and TV 
ads, particularly radio ads because almost all of these 
countries, including Afghanistan, that is where people get most 
of their news and we did spot radio ads. They are very 
inexpensive. They cost a couple of dollars to do them, and we 
talk about our program without putting a target on the building 
that can get the headmaster killed.
    And we did some surveys afterwards in the Palestinian 
areas, for example, in Gaza and West Bank, to see the 
difference after we did the ads. And we went from a 5-percent 
name recognition to 55 percent in a matter of 3 months using 
these ads. So we like the ads on the projects themselves, but 
in some cases when it is a security risk to do it, an even more 
effective way is to do radio ads. And we have done that.
    And, you know, if we tell people the food aid program is 
being run through the U.S. Government on a radio ad, which we 
have done sometimes in some places, then you have the option of 
an alternate way of getting the brand of the American people 
out there or acknowledging the American people. It doesn't have 
to be on the project itself, is what I am saying.
    Mr. Lowenthal. Mr. Glickman?
    Mr. Glickman. Like was said before, a majority of this aid 
is going to continue to be in the form of commodities, not 
cash. Cash just--there may be some more cash in certain parts 
of the world because of flexibility.
    The other thing I would tell you is that one of the most 
successful foreign aid initiatives that I have ever seen is the 
Global Health Initiative that took place. And that was a multi-
faceted effort to try to immunize people, teach them about the 
prevention of disease, and U.S. got a huge amount of credit in 
that appropriately. And that one didn't have the flag and the 
bags on it, but it shows you you can accomplish your objectives 
in a multitude of different ways.
    Mr. Wilson. Thank you very much.
    And we now proceed to Congressman Jeff Duncan of South 
Carolina.
    Mr. Duncan. Thank you, Mr. Chairman. You look good in the 
chair, by the way. We have already heard concerns over the 
practice of monetization of the commodities by the NGOs for the 
purpose of raising cash. So I am not going to go there, but I 
am concerned about that.
    I think we have a responsibility to be good stewards of the 
American tax dollars, and I believe that the majority of 
Americans would agree with this type of foreign aid. Now, they 
may not agree with giving F-16s to Egypt, or M1-A1 tanks, but I 
think they agree with feeding the needy and starving, famine-
stricken people of places like Darfur.
    However, I am concerned that we are considering taking a 
transparent, reliable, accountable, and highly efficient 
program that has worked well for almost 60 years with strong 
bipartisan support and are replacing it with a black box 
program that operates without congressional statutory 
limitations and without real accountability.
    So how is wiring cash to someone in a developing country a 
good idea instead of giving them wholesome, nutritious 
commodities grown by hardworking Americans? And is the risk of 
diverting cash-based assistance from its intended purpose 
greater than it would be for commodity food aid? And I will ask 
Mr. Natsios that.
    Mr. Natsios. Well, first, Congressman, this is not a black 
ops program. We have been running the program for 5 years now 
with a $375 million appropriation from Congress. We already run 
the program, and it is not a black ops program. And it is not 
wiring money to people in developing countries. It is giving 
money to NGOs that are very responsible.
    The Catholic Church runs Catholic Relief Services. World 
Vision is run by the evangelical churches, and Samaritan's 
Purse. I was just in South Carolina, as a matter of fact, to 
speak to a retreat of Samaritan's Purse. They distribute some 
of these--they run some of these programs. And that is who 
would be getting the money, not black ops programs, and----
    Mr. Duncan. I said ``black box,'' but that is fine. Let me 
ask you this. We already see that----
    Mr. Natsios. Black box. I am sorry.
    Mr. Duncan [continuing]. NGOs have taken this food and sold 
it for cash purposes. And I am not saying they don't use that 
cash for good intentions. That is absolutely not what I am 
saying. Samaritan's Purse and other groups like that do 
tremendous work.
    But I think we need to make sure that as good stewards of 
American tax dollars that the NGOs are doing with the money 
what they are supposed to do, or doing with the food what they 
are supposed to be doing with it. And we also need to make sure 
that this money doesn't find its way to the hands of the 
dictators around the world that have been notorious for lining 
their own pockets with U.S. foreign aid. That is documented.
    And so I would just ask, what sort of accountability 
measures are in place to make sure that these NGOs, which I 
believe a lot more NGOs will be created, should be convert this 
to a cash-only system? What mechanisms were in place to make 
sure that those dollars are accounted for?
    Mr. Natsios. Well, the first thing is--I am not sure, 
Congressman, you were here when I mentioned this. I have 
actually done some research since I left USAID. We have more 
levels of accountability on our USAID program run by USAID and 
State than any donor government. And it is not just the 
Inspector General of USAID. It is the OMB has a whole set of 
accountability systems separate from the Inspector General, and 
then there is the General Accounting Office.
    General Accounting Office, on the food program, has done 
more research than probably any institution in the United 
States on this, a whole series of reports. So there are already 
very high levels of accountability on this program.
    That same level of accountability would be applied to this 
as it is now, because it is easy--I have to tell you, I have 
watched food aid get stolen before. Food aid can get stolen, 
and it can get abused, and it has been before in emergencies. I 
can give you specific examples. I don't want to embarrass any 
institutions here now, but there have been scandals over food 
aid being misused.
    So if you think food aid somehow is immune from abuse, but 
a cash grant to an NGO can be misused, I can just tell you from 
my personal experience there is risk in both circumstances. And 
the way you avoid that risk is put very strong accountability 
systems in place, which I have to say Administrator Shah--I 
don't agree with some of the things he has done, but he has put 
a whole bunch of new systems in place.
    The money is being tracked, but, you know, we are in very 
risky circumstances. If you are in Somalia where there is no 
government, there is no functioning government, and there 
hasn't been for 20 years. And al-Qaeda is everywhere in 
Somalia, and they don't like us. I don't have to tell you that.
    Mr. Duncan. Well, I would just reclaim my time because I am 
almost out. But we just want to make sure that, as the stewards 
of taxpayer dollars, that it doesn't fall in the hands of al-
Qaeda, it doesn't fall in the hands of rogue dictators, Joseph 
Kony, or anyone else.
    I understand you mentioned southern Sudan and buying food 
in Uganda. Uganda has its own issues. And so, you know, I want 
to try to support American jobs, American farmers, American 
agriculture, American commodities, American maritime. I like 
the American bag on the product that is delivered. All of those 
are good things. They are good I guess ambassadorship-type 
things for America. But graft and corruption does take place.
    And the chairman just got back from Afghanistan. You know, 
I went over there and investigated the fuel theft and graft 
that was going on in Afghanistan, the hospital plus-ups, and 
American dollars being spent on a hospital there in Kabul, the 
Afghan-Kabul banking system money.
    So we need to make sure that the right accountability and 
checks and balances and transparency is in place, and that is 
all I am saying. As we move forward on this, we need to make 
sure that those systems are in place, that American tax dollars 
aren't lining the pockets of dictators or going to fund 
terrorists that don't like us very much.
    Mr. Duncan. I have got 2 seconds.
    Mr. Glickman. I think your concerns are well-founded. I 
would point out that we are not talking about changing this 
from an all-commodity to an all-cash system. We already commit 
a little bit of cash. We want to give more flexibility for 
that, but it is still going to be largely commodity-driven, 
even under the changes that the chairman has proposed.
    Mr. Duncan. I yield back.
    Mr. Wilson. Thank you, Mr. Duncan. You have done so well. 
As we proceed to Mr. Deutch, you will now be presiding. Thank 
you.
    Mr. Deutch. Thank you, Mr. Chairman. Welcome to the new 
chairman.
    I appreciate, Mr. Chairman, your holding this hearing 
today, and I would like to thank our distinguished witnesses 
for coming and for staying and for answering all of these 
questions. As an outspoken supporter of U.S. foreign aid, I 
believe that providing food aid not only aids in the fight 
against global hunger but also stabilizes critical regions in 
the world, in turn providing a low-cost opportunity to bolster 
our efforts to protect our national security as well.
    And like my friend, the chairman, I support American 
maritime and American agriculture and American jobs, and I also 
support American values. And the proposed food aid reform I 
believe strengthens our foreign policy by reducing costs, by 
maximizing efficiency, and, most importantly, by ensuring that 
a minimum of 2-4 million more people will receive U.S. food 
aid. I understand that there is hesitancy among many of our 
colleagues to support change at this time, but it is good 
policy and I support it.
    And I would like to ask our witnesses, given that we have 
seen in our pilot program that we have already--we have seen 
the ability to increase the number of lives that we save, if 
you could address the concern that some of my colleagues have 
raised, that if we move forward with reform like this, the 
United States isn't going to get the credit or may not get the 
credit that it deserves.
    Can you speak to that, please? Mr. Natsios first.
    Mr. Natsios. U.S. Aid from the American People, the 
regulations for branding which we call the branding campaign, I 
put in place when I was USAID Administrator. And I did that 
because of the threat of al-Qaeda and the change of the world. 
We were facing a threat that was very psychological in many 
respects and we wanted to show what we were doing.
    We did not have those regulations in place to the degree 
before. We also used red, white, and blue. I know those 
regulations thoroughly. Everything we do, every NGO project, 
every contractor project, has to be branded. And I don't mean 
just food bags. If you go into a project and you see the 
headquarters, if it is a school being built, if it is a health 
clinic, if it is commodities that are being distributed through 
the health system, not food, has to have the brand on it.
    So it is thorough and complete. I have to say, the NGOs 
were very upset when we put them in place. They said, ``We will 
be targeted, you know, we object to this,'' because they like 
to put their own brand on stuff, to be very frank with you. But 
everybody has accommodated themselves to it now.
    It is very difficult for people not to know, under the 
existing rules, that this comes from the American people. You 
don't have to have it in every single thing, but we--so if only 
half the bags have it on it, people will still know United 
States is where the resources are coming from.
    Mr. Deutch. And if we--again, just consistent with the 
values that the chairman and Ms. Bass and I and the other 
members of our committee all share, if reforms--if we don't 
enact some reform here, will it impact America's ability to 
continue to be a leader in providing food assistance, 
particularly to the most vulnerable populations in the world? 
Secretary Glickman.
    Mr. Glickman. My answer is yes, but it has to be combined 
with the kind of reforms that Administrator Shah is doing in 
the Feed the Future Initiative and other things to build self-
sufficiency, education, training, all sorts of other things, 
responsible research, all of that stuff. But, you know, my 
experience is anecdotal, but I go back--I don't know if you 
were here.
    I was talking with government officials in Tanzania. They 
know how valuable America has been in a variety of areas, from 
agriculture to health to other places. They know the commitment 
we have made to the developing world from the Bush era to the 
present. And I think this augments that, enhances that, but it 
doesn't eliminate--I think people are afraid that we are going 
to absolutely close down the shop of providing commodities and 
only go to another way of doing business. That is not the case 
at all.
    We are going to keep as a foundation what we are doing, 
providing food assistance in humanitarian cases where needed. 
But we are going to give ourselves the flexibility to help 
build local purchasing, nutrition, other kinds of things that 
will build self-sufficiency.
    Mr. Deutch. And what will the benefits--or what benefits 
will enure to us if the perception globally is that the United 
States is modifying its program in a way to help address the 
needs of an additional 2 million or 3 million or 4 million 
people?
    Mr. Natsios. Well, let me just say, when we go out--the 
Food for Peace officers and the USAID agricultural officers go 
out and work with the NGOs to buy the food locally, they are 
going to know there are Americans buying the food. Don't you 
think that will make the farmers happy in terms of the United 
States? We keep thinking it is only the recipients, but the 
people who are going to--we are going to buy the food from 
locally, they are going to be tied to the United States. They 
are going to see our aid program in a much more favorable 
light.
    So we should see this as a whole, not as--just in terms of 
the beneficiary. The beneficiaries are not going to be just the 
people who are going to be eating, but the people who are going 
to be growing the food with assistance from the United States 
Government. And that will help us across the world.
    The biggest example of our success story in terms of our 
aid program is the shift in public opinion polls in sub-Sahara 
Africa when President Bush increased aid by 600 percent. I 
mean, he was not popular in some areas of the world. I don't 
need to tell you that. I am a Republican, okay? To say that I 
know that in sub-Sahara Africa he had 70, 80, 90 percent 
approval ratings. He is a very popular--when he visited Ghana 
when they opened that big road up, he was treated as a 
conquering hero when he came. This is after he left office.
    So why is that? Because the African people know what we 
did. And the United States is popular because our aid program, 
in my view, is the best image of the Unites States we want to 
project around the world.
    Mr. Deutch. I appreciate that. And, Mr. Chairman, I don't 
know if Secretary Glickman wanted additional time. Okay. I 
appreciate it, and I yield back. Thank you, Mr. Chairman.
    Chairman. Royce [presiding]. All right. I thank the 
gentleman from Florida.
    In closing, let me just make a quick observation here and 
that is that one of the more confounding arguments against 
reform is that moving toward a more flexible, efficient, 
effective system will make it vulnerable to cuts. That is kind 
of a conundrum, to hear that argument, but in the current 
budgetary environment I believe the opposite is true.
    Why should the Congress, why should the American people, 
continue to provide up to $2 billion to support a program that 
is anything less than stellar if we can make it stellar? We can 
do better. And we must do better. And we have before us a 
bipartisan proposal that will enable us to reach more people in 
less time at less expense. That is the point. We can save lives 
and reduce the deficit. How can you argue with that?
    So I plan to support reform, and I hope my colleagues will 
do the same, and we greatly appreciate the time and expertise 
of our two witnesses here today. Thank you for coming all the 
way.
    We stand adjourned.
    Mr. Natsios. Thank you for your leadership on this issue, 
Congressman.
    Chairman. Royce. Thank you, Mr. Natsios.
    Thank you, Mr. Glickman.
    [Whereupon, at 12:08 p.m., the committee was adjourned.]
                                     

                                     

                            A P P E N D I X

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