[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]





         HEARING TO REVIEW U.S. INTERNATIONAL FOOD AID PROGRAMS

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

                                HEARING

                               BEFORE THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 24, 2015

                               __________

                           Serial No. 114-18


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                        COMMITTEE ON AGRICULTURE

                  K. MICHAEL CONAWAY, Texas, Chairman

RANDY NEUGEBAUER, Texas,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
BOB GOODLATTE, Virginia              DAVID SCOTT, Georgia
FRANK D. LUCAS, Oklahoma             JIM COSTA, California
STEVE KING, Iowa                     TIMOTHY J. WALZ, Minnesota
MIKE ROGERS, Alabama                 MARCIA L. FUDGE, Ohio
GLENN THOMPSON, Pennsylvania         JAMES P. McGOVERN, Massachusetts
BOB GIBBS, Ohio                      SUZAN K. DelBENE, Washington
AUSTIN SCOTT, Georgia                FILEMON VELA, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHELLE LUJAN GRISHAM, New Mexico
SCOTT DesJARLAIS, Tennessee          ANN M. KUSTER, New Hampshire
CHRISTOPHER P. GIBSON, New York      RICHARD M. NOLAN, Minnesota
VICKY HARTZLER, Missouri             CHERI BUSTOS, Illinois
DAN BENISHEK, Michigan               SEAN PATRICK MALONEY, New York
JEFF DENHAM, California              ANN KIRKPATRICK, Arizona
DOUG LaMALFA, California             PETE AGUILAR, California
RODNEY DAVIS, Illinois               STACEY E. PLASKETT, Virgin Islands
TED S. YOHO, Florida                 ALMA S. ADAMS, North Carolina
JACKIE WALORSKI, Indiana             GWEN GRAHAM, Florida
RICK W. ALLEN, Georgia               BRAD ASHFORD, Nebraska
MIKE BOST, Illinois
DAVID ROUZER, North Carolina
RALPH LEE ABRAHAM, Louisiana
JOHN R. MOOLENAAR, Michigan
DAN NEWHOUSE, Washington
TRENT KELLY, Mississippi

                                 ______

                    Scott C. Graves, Staff Director

                Robert L. Larew, Minority Staff Director

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                             C O N T E N T S

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                                                                   Page
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     1
    Prepared statement...........................................     3
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     3

                               Witnesses

Karsting, Philip C., Administrator, Foreign Agricultural Service, 
  U.S. Department of Agriculture, Washington, D.C................     4
    Prepared statement...........................................     6
    Submitted questions..........................................    47
Staal, Thomas H., Acting Assistant Administrator, Bureau for 
  Democracy, Conflict and Humanitarian Assistance, U.S. Agency 
  for International Development, Washington, D.C.................    10
    Prepared statement...........................................    11
    Supplementary material.......................................    45
    Submitted questions..........................................    53

 
         HEARING TO REVIEW U.S. INTERNATIONAL FOOD AID PROGRAMS

                              ----------                              


                        WEDNESDAY, JUNE 24, 2015

                          House of Representatives,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Committee met, pursuant to call, at 10:01 a.m., in Room 
1300 of the Longworth House Office Building, Hon. K. Michael 
Conaway [Chairman of the Committee] presiding.
    Members present: Representatives Conaway, Lucas, Gibbs, 
Austin Scott of Georgia, Crawford, Gibson, Hartzler, Benishek, 
LaMalfa, Davis, Yoho, Walorski, Allen, Bost, Rouzer, Abraham, 
Moolenaar, Newhouse, Peterson, David Scott of Georgia, Walz, 
McGovern, DelBene, Vela, Lujan Grisham, Kuster, Nolan, 
Kirkpatrick, Aguilar, Plaskett, Adams, Graham, and Ashford.
    Staff present: Bart Fischer, Caleb Crosswhite, Callie 
McAdams, Carly Reedholm, Haley Graves, John Goldberg, Matt 
Schertz, Mollie Wilken, Scott C. Graves, Andy Baker, Liz 
Friedlander, and Nicole Scott.

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE 
                     IN CONGRESS FROM TEXAS

    The Chairman. Good morning. This hearing of the Committee 
on Agriculture regarding a review of the U.S. international 
food aid programs, will come to order. I have asked David 
Scott, the gentleman from Georgia, to open us with a prayer. 
David?
    Mr. David Scott of Georgia. Thank you. Dear Heavenly 
Father, we come before your throne of grace to first of all 
give thanks. We thank You so much for the many blessings that 
You bestow upon us, so many blessings, dear Heavenly Father. We 
do not even know the blessings that You give to us every single 
day. We thank You for the gift of being able to be selected by 
the people of this nation to serve here in Congress, and we ask 
that You pour down your wisdom, your Spirit, that we keep 
humble hearts and open minds to do your will and the will of 
the people of the United States of America. And these are the 
blessings we ask in your Son, Jesus Christ's name. Amen.
    The Chairman. Thank you, David. I appreciate our witnesses 
being here this morning. For over 6 decades, the United States 
has played a leading role in global efforts to alleviate hunger 
and malnutrition and to enhance food security through 
international food aid. Today's hearing marks the beginning of 
the Committee's work to review these efforts.
    As we begin this process, it is important that we start off 
with an overview, so I am grateful that representatives from 
the respective agencies charged with implementing these 
programs are able to testify before us today.
    By 2050, the world's population is expected to grow by 30 
percent, from approximately seven billion to nine billion 
people. Likewise, demand for food is projected to grow by as 
much as 60 percent. A significant portion of this growth will 
occur in some of the world's poorest countries. These 
projections not only underscore the importance of reviewing the 
efficiency of these programs in achieving their stated 
objectives, but also the importance of maintaining broad 
support for the programs. While we rightly focus on trying to 
achieve world food security, ultimately eliminating the need 
for food aid altogether, the fact remains that hundreds of 
millions of people around the globe remain hungry, placing 
unlimited demand on food aid resources. On behalf of the people 
these programs are intended to help, it is critically important 
that we ensure that these programs are working as intended.
    Agricultural commodities grown by our farmers here at home 
have been a core component of U.S. international food aid 
programs for over 60 years now. That said, I am aware of the 
continued calls for additional reform to these programs, Title 
II of the Food for Peace Act in particular. However, the 
balance struck in the most recent farm bill shows the 
agricultural community's recognition of those concerns. It is 
prudent that we monitor the outcome of these added 
flexibilities over the life of the farm bill to get a better 
sense of what is working and what needs to be improved.
    I fear it is shortsighted to charge ahead with efforts to 
transition Title II into a program virtually indistinguishable 
from the cash assistance programs already provided for by the 
Foreign Assistance Act. This is especially the case given GAO's 
concern with the integrity of those cash-based programs, 
including vulnerability in counterfeiting, diversion, fraud, 
and misuse.
    I also share similar concerns regarding negotiations that 
circumvent the traditional agricultural community, an 
instrumental part of the coalition responsible for the proud 
legacy of global food aid. Any additional food aid reforms 
should be debated in an open and transparent manner and should 
be debated in the context of developing the next farm bill. I 
hold the same view when it comes to discussions about whole-of-
government approaches to global food security. Agriculture must 
be an integral part of those discussions. Those advocating 
reform often talk about the importance of having a variety of 
tools in the toolbox. It seems to me that the current slate of 
international food aid programs provides just that. Today I 
look forward to hearing from the agency witnesses on why that 
may or may not be the case, and I hope that each of us gains a 
better understanding of these important programs.
    Again, thank you for being here today, and I look forward 
to continuing to work together on this review.
    [The prepared statement of Mr. Conaway follows:]

  Prepared Statement of Hon. K. Michael Conaway, a Representative in 
                          Congress from Texas
    For over 6 decades, the United States has played a leading role in 
global efforts to alleviate hunger and malnutrition and to enhance food 
security through international food aid. Today's hearing marks the 
beginning of the Committee's work to review those efforts.
    As we begin this process, it is important that we start off with an 
overview, so I am grateful that representatives from the respective 
agencies charged with implementing these programs are able to testify 
before us today.
    By 2050, the world's population is expected to grow by 30 percent--
from approximately seven billion to nine billion people. Likewise, 
demand for food is projected to grow by as much as 60 percent. A 
significant portion of this growth will occur in some of the world's 
poorest countries. These projections not only underscore the importance 
of reviewing the efficiency of these programs in achieving their stated 
objectives, but also the importance of maintaining broad support for 
these programs. While we rightly focus on trying to achieve global food 
security--ultimately eliminating the need for food aid altogether--the 
fact remains that hundreds of millions of people around the globe 
remain hungry, placing unlimited demand on food aid resources. On 
behalf of the people these programs are intended to help, it is 
critically important that we ensure that these programs are working as 
intended.
    Agricultural commodities grown by our farmers here at home have 
been a core component of U.S. international food aid programs for over 
60 years now. That said, I am aware of the continued calls for 
additional reform to these programs--title II of the Food for Peace Act 
in particular. However, the balance struck in the most recent farm bill 
shows the agricultural community's recognition of those concerns. It is 
prudent that we monitor the outcome of this added flexibility over the 
life of the farm bill to get a better sense of what is working and what 
needs to be improved.
    I fear it is shortsighted to charge ahead with efforts to 
transition Title II into a program virtually indistinguishable from the 
cash assistance programs already provided for by the Foreign Assistance 
Act. This is especially the case given GAO's concerns with the 
integrity of those cash-based programs, including vulnerability to 
counterfeiting, diversion, fraud, and misuse.
    I also share similar concerns regarding negotiations that 
circumvent the traditional agricultural community--an instrumental part 
of the coalition responsible for the proud legacy of global food aid. 
Any additional food aid reforms should be debated in an open and 
transparent manner and should be debated in the context of developing 
the next farm bill. I hold the same view when it comes to discussions 
about whole-of-government approaches to global food security; 
agriculture must be an integral part of those discussions.
    Those advocating reform often talk about the importance of having 
``a variety of tools in the toolbox.'' It seems to me that the current 
slate of international food aid programs provides just that. Today I 
look forward to hearing from the agency witnesses on why that may or 
may not be the case, and hope that each of us gains a better 
understanding of these important programs.
    Again, thank you all for being here today, and I look forward to 
continuing to work with you throughout this review process.
    I now yield to the Ranking Member for any remarks he would like to 
make.

    The Chairman. I now yield to the Ranking Member for any 
comments he would like to make.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mr. Peterson. Thank you, Mr. Chairman. For more than 60 
years, the United States has been a leader in providing food 
for those in need around the world. Partnering with private 
organizations, mailers, and shippers, the United States has 
delivered more than $80 billion in international food aid since 
World War II.
    The 2014 Farm Bill continued our commitment to providing 
global food aid by making several improvements to U.S. food aid 
programs, specifically the farm bill increased flexibility in 
the use of section 202(e) funds including cash-based assistance 
and placed special focus on the types and quality of 
agriculture commodities donated as food aid.
    I look forward to hearing from today's witnesses on how 
these changes are being implemented, and while the 2014 Farm 
Bill made important improvements to food aid programs, some in 
Congress have proposed additional reforms. I have said 
repeatedly that reopening the farm bill is a bad idea, and I 
will oppose any effort to change the farm bill provisions 
outside of the reauthorization process.
    I do think it is important for the Committee to continue 
oversight of the farm bill implementation, learn more about how 
these programs are working, and what changes if any may be 
needed in the next farm bill.
    So again, thank you, Mr. Chairman, and I yield back.
    The Chairman. Thank you, Collin. The chair would request 
that other Members submit their opening statements for the 
record so that the witnesses may begin their testimony and to 
ensure there is ample time for our questions.
    I would like to welcome our witnesses to the table today. 
We have Mr. Phil Karsting, Administrator of the Foreign 
Agricultural Service, U.S. Department of Agriculture here in 
Washington, D.C., and Mr. Thomas Staal, Acting Assistant 
Administrator, Bureau for Democracy, Conflict and Humanitarian 
Assistance, U.S. Agency for International Development here in 
Washington, D.C.
    Mr. Karsting, the floor is yours for your opening comments.

        STATEMENT OF PHILIP C. KARSTING, ADMINISTRATOR,
 FOREIGN AGRICULTURAL SERVICE, U.S. DEPARTMENT OF AGRICULTURE, 
                        WASHINGTON, D.C.

    Mr. Karsting. Thank you, Mr. Chairman, and Members of the 
Committee. I am pleased to come before you to discuss USDA 
international food aid and capacity-building programs, and I am 
pleased to do so with my colleague and partner from USAID.
    Our agencies, along with others, work side by side to 
combat global hunger and increased food security through the 
whole-of-government Feed the Future Initiative. My formal 
testimony has been submitted for the record, and I welcome an 
opportunity to discuss it later in the hearing. I would like to 
use the time you have given me right now to make a handful of 
points.
    First, I want to acknowledge that the United States is the 
world's leading food assistance provider. In Fiscal Year 2013, 
the U.S. Government provided $1.7 billion in food aid, which is 
the equivalent of 1.4 million metric tons to more than 46.2 
million beneficiaries in 56 countries. My agency, the Foreign 
Agricultural Service, operates a number of key food aid and 
capacity-building programs that have been authorized by 
Congress, and I would like to describe them briefly.
    First is the Food for Progress Program which was 
established in 1985. This is the cornerstone of USDA efforts to 
support sustainable agricultural markets in developing nations. 
Under Food for Progress, U.S. agricultural commodities have 
generally been donated and monetized. The proceeds are used to 
fund projects which improve market systems and trade capacity.
    The second critical program is the McGovern-Dole Food for 
Education and Child Nutrition Program, otherwise known as 
McGovern-Dole. It provides commodities and technical assistance 
for school feeding programs and maternal and child nutrition. I 
have seen first-hand, most recently in Laos, in the Sekong 
Province, how these programs are making a difference.
    Third is the Cochran Fellowship Program. This is one of our 
signature exchange programs. It helps emerging leaders in 
developing countries cultivate skills and expertise so they can 
improve trade linkages with the United States and other trading 
partners. Cochran Fellows study everything from agribusiness to 
zoonotic disease treatment and prevention.
    Fourth, I want to mention the Norman E. Borlaug 
International Agricultural Science and Technology Fellowship 
Program. This program promotes food security and economic 
growth by educating a new generation of agricultural scientists 
from developing nations. And I should point out that the 
benefits run in both directions. A 2011 Borlaug Fellow from 
Morocco has played a key role in upgrading laboratories at home 
for better pest management and more effective control of 
viruses and bacteria. His Borlaug program colleagues and 
mentors at Texas A&M Kingsville are testing Moroccan water 
conservation and drip irrigation techniques to improve Rio Red 
grapefruit production in south Texas.
    We are also preparing to implement at USDA new authorities 
included in the 2014 Farm Bill for which I thank you. This 
Local and Regional Procurement Program builds on a pilot from 
the 2008 Farm Bill. Under the pilot, USDA demonstrated and 
reported to Congress that food assistance could, in many cases, 
be provided more economically and faster with some combination 
of local and regional procurement. USDA's 2016 budget proposes 
$20 million in funding for the new LRP program which we think 
would support three to four development programs.
    My prepared testimony is packed with details and numbers. 
It points out, for instance, that FAS is currently overseeing 
nearly $637 million in Food for Progress programming in 23 
countries. It talks about what we are doing in Jordan to 
improve water conservation and help relieve the challenges 
presented by 620,000 Syrian refugees.
    To pull all these programs together, I want to give you a 
quick example of how USDA programs operate in a unified 
approach to food security. In Honduras, the agricultural sector 
stands as the top source of income for the poor. More than 1.7 
million Hondurans, or 65 percent of the population, live below 
the national poverty line with more than 20 percent living on 
$1.25 a day. At the request of the Honduran Government under 
the Food for Progress Program, proceeds of 30,000 metric tons 
of corn and 18,000 of soybean meal will be used to improve 
agricultural productivity, enhance farmers' skills, and 
strengthen trade and agricultural products. A portion of the 
funds will go toward follow-on training and food safety and 
market information systems. This work dovetails with the 2014 
Cochran program where we trained Honduran participants on 
methods of identifying foodborne diseases. Combined, the Food 
for Progress agreements and the Cochran training will help 
Hondurans apply appropriate sanitary and phytosanitary measures 
to exports as well as imports, including those from the United 
States.
    Cocoa and coffee are important for Honduras, and the Food 
for Progress Program has worked with both to help lead a 
renaissance in cocoa production. The combined effects of 
hurricanes, disease outbreak, and low prices brought cocoa 
cultivation in Honduras to the brink of extinction. Food for 
Progress advisors identified promising native plant varieties 
and trained farmers in grafting techniques to reproduce new 
trees. The program is supporting more than 2,500 acres of fine 
cocoa, and with USDA's support, there are plans for significant 
additional growth. The revitalized cocoa plantations are also 
replenishing deforested areas. Building on the success, the 
World Cocoa Foundation is now accepting applications under the 
auspices of the Borlaug Fellowship Program for a number of 
Latin American countries including Honduras. Borlaug's Global 
Cocoa Initiative supports participants with skills and 
knowledge to help their countries become more competitive in 
producing and exporting cocoa and cocoa products.
    Finally, USDA's McGovern-Dole is at work in Honduras as 
well in assisting children in the Western Highlands. Nearly \1/
2\ of the children in this region are stunted by malnutrition, 
and because of a shortage of middle schools, only 63 percent of 
students continue to the seventh grade. Since 2012, this 3 year 
project has provided 17 million school meals to upwards of 
53,000 students in over 1,000 schools. Our implementing 
partners report that student attendance is up to 98 percent, 
and reading competency has improved measurably. To complement 
our McGovern-Dole efforts, in 2013 USDA began a Cochran program 
enabling Honduran officials to determine which type of school 
feeding program best fits their individual circumstances.
    From farm to port, from nutrition to food safety, from 
helping farmers to feeding children, USDA has used the full 
force of its resources to improve food security in Honduras and 
in developing countries around the world.
    Thank you for the opportunity to testify. USDA appreciates 
the support of this Committee for our food assistance and 
capacity-building programs.
    [The prepared statement of Mr. Karsting follows:]

   Prepared Statement of Philip C. Karsting, Administrator, Foreign 
 Agricultural Service, U.S. Department of Agriculture, Washington, D.C.
    Mr. Chairman, Members of the Committee, I am pleased to come before 
you today to discuss U.S. international food aid and capacity building 
programs with my colleague and partner, Thomas Staal, of the U.S. 
Agency for International Development (USAID). The U.S. Department of 
Agriculture (USDA) endeavors to strategically utilize our programs, in 
concert with programs of all U.S. agencies, in the Administration's 
efforts to combat global hunger and increase food security through the 
whole-of-government, Feed the Future initiative.
    In addressing the global food security challenge, the United States 
is the world's leading food assistance provider. In Fiscal Year (FY) 
2013, the U.S. Government provided $1.7 billion of food aid, or 1.4 
million metric tons (MT) of food, to more than 46.2 million 
beneficiaries in 56 countries.
USDA Current Food Aid and Capacity-Building Programs
    I welcome the opportunity to talk about not only what USDA food aid 
and capacity building programs deliver, but how they can deliver more 
with modest, proposed change and the judicious use of the funding 
requested for Fiscal Year (FY) 2016. USDA programs established by 
Congress include: the Food for Progress program (FFPr), the McGovern-
Dole International Food for Education and Child Nutrition Program 
(McGovern-Dole), the Cochran Fellowship Program (Cochran), and the 
Norman E. Borlaug International Agricultural Science and Technology 
Fellowship Program (Borlaug). USDA also looks forward to implementing 
in FY 2016 the new Local and Regional Purchase (LRP) program. We 
appreciate the food aid reform in the 2014 Farm Bill, which included 
authorization of the new LRP program and flexibilities to the P.L. 83-
480 Title II, Food for Peace program that provide USAID options to help 
achieve more sustainable results and reach about 600,000 more people 
annually.
    If you have not done so already, I encourage Members to visit USDA 
and USAID project sites around the world to see the impact of providing 
U.S. food assistance, improving nutrition, increasing school 
attendance, and building agricultural and trade capacity.
    The Feed the Future initiative has strengthened our programming and 
coordination among Federal agencies. Importantly, the collaboration is 
not just in Washington. As Administrator of the Foreign Agricultural 
Service (FAS), I see firsthand the benefit of FAS attaches 
collaborating in embassies around the world with colleagues from USAID, 
the State Department, the Department of Commerce, the Office of the 
U.S. Trade Representative, the Millennium Challenge Corporation, and 
numerous other agencies. Our implementing partners, including U.S. 
private voluntary organizations (PVOs) and the United Nations food 
agencies, bring expertise and talent that directly address global food 
security efforts. Drawing on the wealth of agricultural expertise 
throughout USDA and in U.S. land-grant universities, our programs 
assist developing countries around the world address agricultural 
productivity, malnutrition, and trade challenges.
Food for Progress Program
    Since Congress established the Food for Progress program in 1985, 
it has been a cornerstone of USDA's efforts to support sustainable 
agricultural production in developing nations that are committed to 
free enterprise in the agriculture sector. USDA can enter into 
agreements with developing country governments, private voluntary 
organizations (PVOs), nonprofit agricultural organizations, 
cooperatives, and intergovernmental organizations.
    In FY 2014, FFPr provided 195.9 MT of U.S. commodities valued at 
$79.7 million. FFPr projects funded in previous years continue to 
operate throughout the world. Currently, FAS oversees $636.69 million 
in programming in 23 countries that were funded in 2011-2015. For FY 
2016, FAS expects to announce solicitations in the next few weeks for 
our agreements. We also have the ability to respond to requests by 
governments.
    For example, at the request of the Government of Jordan, USDA 
announced last month an agreement to provide 100,000 MT of U.S. wheat, 
valued at approximately $25 million. The Jordanian Government will use 
proceeds from the sale of the commodities to improve the country's 
agricultural productivity, specifically through water conservation 
(over 20 percent of Jordanians are water insecure). As one of our most 
steadfast partners in the Middle East, the Government of Jordan will be 
able to access the expertise of USDA to improve its agricultural 
productivity and therefore relieve some of the economic burden that it 
is facing as a result of nearly 630,000 refugees from Syria living in 
Jordan.
    This latest 2015 agreement builds off a previous FFPr project, 
where $10.6 million of proceeds from the sale of donated U.S. wheat are 
helping fund the construction of the Al-Karak Dam located in the 
southern region of the Jordan Valley. Once completed, this project will 
help support economic growth and job creation in the agricultural 
sector by increasing agricultural productivity through water 
conservation and stewardship.
    In Liberia, FFPr is helping to revitalize the cocoa sector with 
funding through the sale of 11,900 MT of donated U.S. rice. Following 
Liberia's civil war, abandoned cocoa plantations were infected with 
black pod disease. In 2010, USDA began a FFPr grant with a PVO to help 
producers in Liberia establish sustainable cocoa trees to expand both 
production and market opportunities. The project established nurseries 
for farmers to access high-yielding hybrid seedlings and high-quality 
plants. In 2008, prior to the project, farmers produced 107 MT of 
cocoa, with sales of $64,000. By 2013, farmers who participated in the 
USDA-funded project were producing 725 MT of cocoa, valued at $1.2 
million. USDA will also be implementing a follow-on regional program in 
Liberia and Cote D'Ivoire, which is the world's leading exporter of 
cocoa beans, so that Liberian farmers can learn best practices from its 
neighbor.
    In Central America, we are helping to address the underlying 
factors that led to the spike in the migration of unaccompanied minors 
last summer. In Honduras, and throughout Central America, the 
agriculture sector stands as the top source of income for the poor. 
More than 1.7 million Hondurans, or 65 percent of the population, live 
below the national poverty line, with more than 20 percent living on 
$1.25 a day or less. In April 2015, USDA signed, at the request of the 
Honduran Government, a second governmental FFPr agreement with Honduras 
for 30,000 MT of U.S. yellow corn and 18,000 tons of U.S. soybean meal, 
valued at approximately $17 million. The Honduran Government will use 
proceeds from the sale of the donated U.S. commodities to implement 
projects aimed at improving agricultural productivity, enhancing 
farmers' access to information and market skills, building government 
capacity, and strengthening local, regional, and international trade in 
agricultural products. The proceeds of this program will fund follow-on 
training in market information systems and food safety certification. 
Honduras has, through our program and ancillary programs such as the 
Cochran Fellowship Program, become a leader in the region for 
collecting, analyzing, and disseminating agricultural data. The 
beneficiaries include small farms, businesses, and producer 
organizations, particularly those that support rural women and youth.
    USDA Deputy Secretary Krysta Harden recently visited several of our 
programs in Central America, including programs that continue to be 
successful after completion. This to me shows we are making real 
contributions to the development of our neighbors and sound investments 
of taxpayer monies.
McGovern-Dole Program
    The McGovern-Dole Program provides agricultural commodities and 
technical assistance for school feeding and maternal and child 
nutrition projects in low-income, food-deficit countries committed to 
universal education. If funding is maintained as requested at this 
year's level, the program is projected to assist three million women 
and children worldwide in 2016.
    McGovern-Dole is making an impact in literacy and improved 
nutrition. In Nicaragua, USDA is supporting a $14 million project using 
nearly 5,000 MT of U.S. commodities, including beans, soy protein, 
vegetable oil, dehydrated potato flakes, rice, and dry milk for school 
meals. The program is feeding approximately 70,000 children and funding 
infrastructure improvements. By installing latrines, hand-washing 
stations, kitchens and stoves, and purchasing school furniture, the 
project has transformed schools into functioning learning centers. 
Complementary education activities in hygiene and preventative health 
care are taking place in over 670 schools, often alongside parent-
teacher organizations. More than 1,100 Nicaraguan teachers have been 
trained in reading and math. Nicaraguan children, who would normally 
attend rundown schools without learning materials, are now becoming 
literate and gaining knowledge in health and nutrition.
    By statute, Congress identified a priority of awarding McGovern-
Dole grants for programs that foster local self-sufficiency and ensure 
the longevity of programs in recipient countries. In Bangladesh, FAS is 
witnessing success in obtaining local support. The Government of 
Bangladesh pledged that from 2015 onward it will spend $49 million 
annually for school feeding programs in poor areas. By 2017, the 
Government of Bangladesh will manage school feeding in 50 percent of 
the schools currently receiving food under McGovern-Dole.
    Based on USDA's experience implementing the McGovern-Dole program, 
the Administration's FY 2016 Budget proposes modest reform that can 
lead to improved attendance, meals reflecting local diets, and, 
ultimately, sustainability of projects. The proposal is to amend the 
definition of an eligible agricultural commodity so that meals can be 
enhanced with locally produced foods. Through procuring local food such 
as fruits and vegetables, FAS will be able to offer nutritionally rich 
meals consistent with local diets, boost local farmer incomes, and 
build supply chains. These enhancements will maximize community support 
and increase the probability that local governments take ownership and 
maintain school feeding programs.
New Local and Regional Program
    This year, we aim to implement an additional food assistance and 
food security tool that Congress provided in the 2014 Farm Bill; the 
Local and Regional Purchase (LRP) program, which is authorized through 
2018. In implementing the LRP pilot program authorized in the 2008 Farm 
Bill, USDA demonstrated and reported to Congress that food assistance 
could in many cases be provided more economically and faster, while 
protecting and strengthening local markets. In emergencies, the report 
noted that WFP and PVOs participating in the pilot were systematically 
able to purchase more food aid and avoid pipeline breaks, thereby 
reaching more of those with urgent needs in an expeditious manner.
    In a non-emergency situation, an LRP pilot implementing partner, 
Land O' Lakes, worked with local processors in Bangladesh who made 
cereal bars from chickpeas, peanuts, rice, and sesame seeds that 
supplemented a school feeding program. Land O' Lakes reportedly saw a 
27 percent increase in overall school attendance. Today, this project 
is ongoing. According to Land O' Lakes, local processors have 
commercialized the cereal bar and are now sourcing from 15,000 farmers 
in Bangladesh, instead of importing ingredients. Reported production is 
up to 15 million cereal bars a month.
    USDA's FY 2016 Budget proposes $20 million in funding for the new 
LRP program. Funding is expected to support three to four development 
programs, such as the Bangladesh program and a pilot project in 
Nicaragua completed in 2012 where the addition of local fruits and 
vegetables in a school meals also correlated with increased attendance. 
The program will serve as a complementary tool to support existing food 
aid programs, especially for the McGovern-Dole school feeding program.
    Unfortunately, the request for flexibility in operating the 
McGovern-Dole program and funding for LRP were not included in the FY 
2016 agriculture funding bill marked up in at the appropriations 
subcommittee level last week. We ask that Congress examine ways to 
provide the requested flexibility and funding for these farm bill 
programs as the appropriations process continues.
Borlaug Program Promotes Food Security
    Congress established the Borlaug Fellowship program to promote food 
security and economic growth by educating a new generation of 
agricultural scientists from developing countries. The program provides 
collaborative research opportunities with experts from U.S. land-grant 
colleges and similar universities, and organizations working in 
agricultural research. Often, the collaborative research extends beyond 
the typical, 6 month fellowship award in the United States because of 
the relationships built by Fellows and academic hosts.
    An illustrative example is the Borlaug Fellowship of a 2011 
Moroccan fellow trained in improved citrus orchard management at Texas 
A&M University-Kingsville. The Fellow has since implemented a new 
Moroccan Government laboratory for better citrus pest mitigation that 
utilizes training in technology to test for plant pests, bacteria, and 
viruses. Production of oranges and lemons contributes significantly to 
the local agricultural economy and stand to benefit from best practices 
employed in pest mitigation.
    Importantly, the collaboration continues, with benefits flowing 
both ways. In South Texas, U.S. collaborators are testing water-
conserving, drip irrigation techniques employed in Morocco to improve 
Rio Red grapefruit production. A production design applicable for all 
citrus and orchard-based agriculture in the United States, which would 
reduce water irrigation usage, reduce pest pressure, and increase per-
acre profitability, is being investigated.
Cochran Fellowship Program in concert with other programs
    The Cochran Fellowship program was established by Congress to 
assist eligible countries develop agricultural systems to meet food and 
fiber needs and improve trade linkages with the United States. One 
country example, that shows how the Cochran program meshes with other 
programs in a unified approach to food security, is Honduras.
    In 2011, the Cochran Fellowship Program helped coffee producers 
develop a coffee waste biomass digester in Honduras to produce biogas 
to fuel coffee dryers. That success was a catalyst for a 2012 Food for 
Progress program that assisted coffee producers in improving their 
production.
    In 2013, Cochran funded a program on capacity building in school 
nutrition to enhance Honduran officials' understanding of how both U.S. 
international food aid programs and domestic school feeding programs 
function. This program will enhance sustainability of McGovern-Dole 
school feeding program by helping Honduran Government officials 
determine which type of school feeding program best fits their 
circumstances.
    In 2014, the Cochran program trained Honduran participants on 
methods of identifying foodborne diseases. This work dovetails with 
activities under the 2015 Food for Progress agreement that will 
strengthen the capacity of Honduran officials in sanitary and 
phytosanitary training. Combined, the training will help Hondurans 
apply appropriate sanitary and phytosanitary measures to imports, 
including those from the United States.
    At USDA we coordinated with USAID, which helped identify 
opportunities and provided funding for training to meet a Cochran 
Fellowship goal of enhancing trade linkages. Nearly 1,400 Honduran 
Government and private sector officials received training in 
certification and inspection. Due to the training, Honduras is now home 
to the only international supplier of Terra Chips, a snack food 
featuring a wide-variety of Central American vegetables.
    From farm to port, from nutrition to food safety, from helping 
farmers to feeding children, USDA has used the full force of all of its 
resources to improve food security in Honduras.
Conclusion
    Thank you for the opportunity to testify. USDA appreciates the 
support of the Committee for our food assistance and capacity building 
programs.

    The Chairman. Mr. Staal, for 5 minutes.

         STATEMENT OF THOMAS H. STAAL, ACTING ASSISTANT
ADMINISTRATOR, BUREAU FOR DEMOCRACY, CONFLICT AND HUMANITARIAN 
                  ASSISTANCE, U.S. AGENCY FOR
          INTERNATIONAL DEVELOPMENT, WASHINGTON, D.C.

    Mr. Staal. Thank you, Chairman Conaway, Ranking Member 
Peterson, Members of the Committee. Thank you for this 
opportunity to testify today, and thanks to your long-standing 
bipartisan support. The United States as you mentioned is the 
largest provider of food assistance in the world. And none of 
our work would be possible without our partners, America's 
farmers and mariners, NGOs, intergovernmental organizations, 
and I am also very proud of our partnership with our colleagues 
in the U.S. Department of Agriculture.
    Last year USAID's Office of Food for Peace celebrated 60 
years of bringing hope, opportunity, and dignity to those 
suffering from hunger. These efforts are driven by a moral 
imperative as well as our own national security interests to 
maintain America's leadership as a beacon of hope around the 
world. And I am especially proud of these efforts myself as a 
former Food for Peace Deputy Director. As the son of 
missionaries and with family who are farmers in the Midwest, I 
have dedicated much of my career to combating hunger. Today I 
would like to share with you an overview of our programs, how 
they have evolved, and importantly, how we ensure oversight of 
our efforts.
    USAID's Office of Food for Peace is tasked with managing 
Title II programs which provide agricultural goods for relief 
and development, and last year in 2014, Food for Peace Programs 
reached over 40 million people in 50 different countries.
    For instance, following April's shattering earthquake in 
Nepal, USAID sent emergency food assistance including pre-
positioned U.S. foodstocks valued at $4 million. In Yemen's 
current crisis, we have provided over 41,000 tons of food 
valued at about $40 million to help feed six million people. In 
South Sudan this year we have sent over 130,000 tons of in-kind 
U.S. food to avert famine as the senseless violence rages on 
there. And in 2014 we have implemented development programs 
reaching over nine million people in 14 different countries to 
combat malnutrition and boost agriculture production.
    Despite this progress, however, we are in a time of 
unprecedented need and stretched resources around the world. 
Tonight nearly 800 million will go to bed hungry: one in five 
children is stunted, meaning their development is impaired by 
malnutrition. Every 7 seconds a child dies from hunger-related 
causes. Nearly 60 million people, about the population of the 
U.S. Midwest, are displaced from their homes, the largest 
exodus in modern history.
    We increasingly operate in environments of high insecurity 
and protracted conflict as well, making it more expensive to 
deliver our food. And so our programs have necessary evolved to 
meet those growing demands. In partnership with USDA, we have 
added specialized food products to our in-kind food aid basket 
that have been transformative in treating and preventing 
malnutrition, especially among children, globally. Our highly 
regarded Famine Early Warning System, FEWSNET, allows us to 
project and prepare for food needs before they arise. Our 
forecasting data is coupled with pre-positioned resources in 
seven different sites that are quickly deployed to meet 
emergency needs.
    And thanks to the important reforms in the 2014 Farm Bill, 
we have additional flexibilities in Title II programs to 
complement our in-kind food aid with local and regionally 
purchased food, cash transfers, food vouchers. Coupled with our 
International Disaster Assistance, IDA funds, these 
flexibilities help to ensure we get the right assistance to the 
right people at the right time.
    The President's 2015 and 2016 budget proposals seek an 
additional 25 percent of Title II funding for flexible food 
assistance which would allow us to reach another two million 
people per year. And we take very seriously our decisions on 
what food assistance to use based on several criteria. Even as 
we seek additional flexibility, the majority of our Title II 
requests continue to be U.S. in-kind food, grown by American 
farmers which is still necessary and appropriate for many of 
our responses.
    In our development efforts, we are focusing attention on 
building resilience to recurring shocks like drought and floods 
which drive the same communities into crisis year after year. 
In the Sahara, for instance, we are teaching farmers to grow 
drought-resistant crops, to conserve water, to increase yields 
during dry spells. And thanks to additional authorities first 
granted in the 2008 Farm Bill, we are better able to monitor 
and evaluate their food aid. We have more staff than ever 
monitoring assistance first-hand, and we are leveraging GPS 
technology to track our food aid.
    We are very proud of being entrusted with the generous 
resources and honorable mandate afforded to us by Congress and 
the American people. As part of USAID's mission to end extreme 
poverty, we are committed to finding ways to effectively combat 
global hunger in partnership with the Committee and with our 
stakeholders.
    Thank you very much for your time. I look forward to your 
questions.
    [The prepared statement of Mr. Staal follows:]

Prepared Statement of Thomas H. Staal, Acting Assistant Administrator, 
    Bureau for Democracy, Conflict and Humanitarian Assistance, U.S.
         Agency for International Development, Washington, D.C.
    Chairman Conaway, Ranking Member Peterson, and distinguished 
Members of the Committee, thank you for inviting me today to testify on 
the United States Agency for International Development's (USAID) 
international food aid programs. I want to thank you for your 
longstanding, bipartisan support for our efforts to combat hunger 
worldwide.
    Thanks to your generosity, the United States is the largest 
provider of food assistance in the world. With Congressional support, 
USAID's Office of Food for Peace has reached more than three billion of 
the world's neediest people in over 150 countries with life-saving food 
assistance--perhaps the largest and longest-running expression of 
humanity seen in the world. I want to also thank our partners--American 
farmers, mariners, and non-governmental organizations (NGOs) and 
intergovernmental organizations--for supporting USAID in our work. Our 
efforts would not be possible without them, and we look forward to 
continuing our strong partnership to make millions of people around the 
world more food secure. I am also pleased to testify alongside my 
colleague, Phil Karsting, of the U.S. Department of Agriculture's 
Foreign Agricultural Service, and am proud of the ongoing partnership 
between our two agencies.
    Last year, the Office of Food for Peace celebrated 60 years of 
bringing hope, opportunity, and dignity to those suffering from hunger. 
These efforts have not only saved millions of lives, but have helped 
the world's most vulnerable progress from dependency to self-
sufficiency. Today, some of our past recipients, like the Republic of 
Korea, have become food secure and international donors themselves. As 
we work towards USAID's mission of ending extreme poverty and promoting 
resilient, democratic societies, we strive to help many more countries 
eradicate hunger and get on a path of shared peace and prosperity. 
These efforts are driven by a moral imperative as well as our national 
security interest to promote American goodwill and maintain America's 
leadership as a beacon of hope for so many around the world.
    I am especially proud of these efforts as a former Food for Peace 
Deputy Director. I began my career at USAID in the 1980s, compelled to 
action by the devastating famine in Ethiopia. As a son of missionaries, 
and farmers from the Midwest, much of my career at USAID has been 
dedicated to promoting programs that alleviate hunger and address the 
root causes of food insecurity. As Mission Director in Ethiopia, I 
oversaw several groundbreaking programs to promote agriculture-led 
growth, supported both by Food for Peace programs and through the U.S. 
flagship Feed the Future initiative; expand a productive safety net for 
the poorest communities; and build resilience among the most vulnerable 
farmers. I'm heartened to see the enormous progress underway in 
Ethiopia, one of the fastest growing economies in Africa, in large part 
due to these programs.
    Today I would like to share with you an overview of our emergency 
and development food aid programs and how global trends are shaping the 
way our programs evolve to remain cutting-edge and reach the most 
people in need. I also want to highlight best practices we have 
instituted and how we ensure oversight of our efforts globally.
Overview of Programs
    USAID's Office of Food for Peace is driven by its mandate in the 
Food for Peace Act to combat world hunger and malnutrition and its 
causes, and is tasked with managing programs under Title II, which 
consists of providing agricultural goods for emergency relief and 
development. These programs are administered through grants to U.S. 
NGOs and intergovernmental organizations such as the United Nations 
(UN) World Food Programme (WFP). Title V Farmer to Farmer programs are 
administered by USAID's Bureau for Food Security.
Title II. Emergency and Development Programs
Responding to Emergencies
    In FY 2014, Title II emergency programs, which account for over \3/
4\ of the Office of Food for Peace's base Title II funding, helped feed 
over 20 million food-insecure people in 32 countries. Complementing 
Title II emergency resources--a critical tool in our arsenal to fight 
hunger--USAID reached an additional 14 million people through 
International Disaster Assistance (IDA) funds through local and 
regional purchase, cash transfers, and food vouchers in 39 countries. 
This combined assistance was life-saving for many around the world in 
FY 2014, an unprecedented year of crisis in which USAID responded to 
five Level-3 emergencies--the UN's most severe emergency designation--
and other protracted crises.
    Following the shattering earthquake in Nepal on April 25, and 
subsequent aftershocks, U.S. food assistance provided a critical 
lifeline to those in need. USAID has provided almost $7 million in 
emergency food assistance to Nepal. On April 29, we provided an initial 
contribution of $2.5 million in IDA funds to help WFP jump start the 
response and buy 1,390 tons of regionally grown rice from India for 
120,000 people for 1 month. By buying rice locally, we ensured 
emergency food was available in the crucial early relief stages. U.S. 
in-kind food was also critical. While shipping U.S. food to Nepal, a 
landlocked country, would have taken months, we were able to draw down 
on pre-positioned U.S. food stocks valued at $4.4 million from our 
warehouse in Sri Lanka to meet ongoing food needs for 150,000 people 
for 1 month. The emergency food assistance complements ongoing Feed the 
Future and new Food for Peace development programs, which are helping 
Nepalese farmers get back on their feet and overcome key obstacles to 
growing and getting their crops to market.
    In Yemen--where the recent outbreak of fighting has exacerbated 
already high levels of acute food insecurity--USAID has provided almost 
$40 million in food assistance in FY15. This includes over 41,000 tons 
of in-kind food that is targeting over six million food-insecure 
people, including children under 5.
    However, ongoing conflict has made it increasingly difficult to 
reach those in need. During an unprecedented 5 day humanitarian pause 
in May, partners were able to distribute food and re-stock health 
facilities with medicines and U.S. supplemental and therapeutic foods 
for children and mothers. On June 2, 5,700 tons of emergency food 
supplies--including more than 800 tons of food from USAID's pre-
positioning facility in Djibouti--were sent to Al Hudaydah Port to feed 
another 390,000 Yemenis this month. These shipments provide much-needed 
relief for the Yemeni people who have been cut off from regular food 
aid and commercial food imports for months.
Promoting Development
    In FY 2014, our U.S. NGO partners implemented development food aid 
programs in 14 countries to benefit over nine million people. We are 
focusing our development food assistance programs in the most food 
insecure countries, where the rates of stunting--when a child's 
physical and cognitive development is impaired by lack of proper 
nutrition--are highest and people live on less than $1.25 per day. 
These programs address chronic malnutrition, boost agricultural 
productivity and incomes, and build resilience in communities that are 
locked in a cycle of recurring crises.
    Before 2014, many development activities were funded by buying food 
in the United States, shipping it overseas, and selling it so that our 
partners had local currency on hand to run the projects, a process 
known as monetization. However, thanks to meaningful reforms in the 
2014 Farm Bill, USAID was given new flexibilities that increased the 
amount of cash available under the Title II program by seven percent to 
reduce monetization, implement development activities, purchase food 
locally and regionally, and help disaster victims buy food in their 
local markets. The $21 million saved as a result allowed us to reach an 
additional 600,000 people in 2014.
    Our development programs under Title II are complemented by other 
USAID investments, including through the U.S. Government's global 
hunger and food security initiative, Feed the Future. Launched in 2010, 
and targeting 19 countries spanning three continents, Feed the Future 
has a mission to sustainably reduce hunger and poverty through 
agriculture-led growth. It strives to increase agricultural production 
and the incomes of women and men farmers, by scaling up their 
production, expanding their access to markets, and increasing their 
resilience in the face of risk. Our Title II development programs 
complement and reinforce these efforts.
    For example, in Bangladesh, the world's eighth-most populous 
country with over 160 million people, about a quarter of the population 
is food insecure and nearly 17 percent is undernourished. Food for 
Peace partners are helping poor farmers increase their income by 
training them to manage fish farms, providing a nutritious food source 
and an entry point into the cash economy. One couple, Harun and Bina 
Majhay, first received training in nursery management and fingerling 
(young fish) production from Food for Peace. After the training, their 
income rose from $90 to $129 a month. A year later, they were trained 
through Feed the Future, on fish hatchery management so that they could 
produce higher-quality fingerlings at a larger scale and grow their 
business. Today, the Majhys not only manage a successful fish nursery, 
but also employ others in their community. As of 2014, more than 34,000 
households and 150 commercial fish farms have benefited from these 
programs. Fish accounts for about \1/5\ of the world's animal protein 
and this proportion is expected to increase as a result of successful 
initiatives like these where food and income security are enhanced 
simultaneously. Other Food for Peace development programs in Bangladesh 
have brought down child stunting rates by 30 percent and increased 
pregnancy check-ups from 13 to 84 percent. This work is complemented by 
USDA's McGovern-Dole program, which for 10 years has partnered with the 
World Food Program to provide daily meals to over 161,000 school 
children in Bangladesh annually, thereby improving basic nutrition and 
encouraging parents to keep their children in primary school.
Title V. Farmer to Farmer Program
    The John Ogonowski and Doug Bereuter Farmer-to-Farmer Program 
(Title V of the Food for Peace Act) provides voluntary technical 
assistance to farmers, farm groups, and agribusinesses in partner 
countries to promote sustainable improvements in food security and 
agricultural processing, production, and marketing. The program relies 
on the expertise of volunteers from U.S. farms, land-grant 
universities, cooperatives, private agribusinesses, and nonprofit farm 
organizations to respond to the local needs of host-country farmers and 
organizations. In FY 2014, implementing agencies fielded 296 volunteers 
from 44 states and the District of Columbia who provided technical 
support to farmers abroad in the areas of technology transfer, 
organizational development, business and enterprise development, 
financial services, and environmental conservation. In FY 2014, we also 
designed and launched new projects under this program, which will 
include 700 volunteer assignments a year for the next 4 years focused 
on 58 thematic areas in 28 core countries.
Current Trends
    As illustrated above, our food assistance programs have saved 
millions of lives and led to enormous progress in addressing the 
underlying causes of food insecurity around the world. Despite this 
progress, we are living in a time of unprecedented need and stretched 
resources. Tonight, nearly 800 million people will go to bed hungry; 
one in five children is stunted; and every 7 seconds a child dies from 
hunger-related causes.
    Extreme weather events and rapid urbanization are putting more 
people at risk of natural disasters that disrupt farming and access to 
food markets. Conflict is driving up displacement, making it harder for 
people to feed their families. Nearly 60 million people are displaced 
from their homes right now; the largest global exodus in modern 
history. That figure is almost equal to the population of the American 
Midwest, or one in every 122 people worldwide.
    The cost of implementing food assistance programs is rising, as we 
are increasingly operating in environments of high insecurity and 
protracted conflict. Roughly \1/3\ of our food assistance budget goes 
towards feeding people caught in the crossfire of conflict. In South 
Sudan, one of the most food insecure countries in the world, we have 
had to resort to delivering food aid through air operations, which are 
approximately eight times as costly as delivering food by trucks.
    Over the years, our food assistance programs have evolved to meet 
these growing demands and challenges more effectively and cost-
efficiently. In the food price crisis of 2008, with millions facing 
hunger and civil unrest spreading following sudden food price spikes, 
Congress approved the Bush Administration's request for supplemental 
funds for USAID that allowed for local and regionally purchased food 
aid for the first time.
    In 2010, the Obama Administration requested and received funding 
for emergency food assistance in the base appropriation of the IDA 
account, authorized through the Foreign Assistance Act. USAID used 
these funds to establish the Emergency Food Security Program (EFSP) to 
buy food locally and regionally and to provide targeted cash transfers 
or food vouchers so that people in food crises could buy food directly 
in local markets. EFSP has proven indispensable in our response to 
major crises, such as Syria, where U.S. in-kind food aid is not an 
appropriate option.
    The 2014 Farm Bill gave us additional flexibilities to enhance 
Title II and other food aid programs. Thanks to this Committee and 
these reforms, we have several key food assistance tools we use and 
different ways they are applied to respond swiftly, effectively, and 
efficiently to combat hunger in a time of complex crises around the 
world.
Best Practices
    Our food assistance programs continue to evolve so that we can 
deliver the best possible results in fulfilling our mission and mandate 
under the Food for Peace Act to combat world hunger. In both our relief 
and development efforts, we leverage years of experience, evidence-
based learning and a willingness to innovate to bring about positive 
change in the some of the world's toughest places. I would like to 
highlight several initiatives USAID has undertaken to ensure our food 
assistance is timely, responsive to local needs, and impactful.
Improving the Quality of Food Aid
    USAID is applying the best of nutrition science to better target 
the special nutritional needs of vulnerable groups, especially women 
and children under 2, because we know that if a child does not receive 
certain basic nutritional requirements in the first 1,000 days of life, 
his or her brain may never fully develop. For older infants and young 
children at risk for malnutrition or already malnourished, USAID has 
added several U.S. products to our in-kind food aid basket, including 
Ready-to-Use Therapeutic Food (RUTF), Ready-to-Use Supplementary Food 
(RUSF), and Nutributter' through the International Food 
Relief Partnership (IFRP). These products have been transformative in 
treating and preventing malnutrition and preventing stunting globally. 
For example, when Typhoon Haiyan struck the Philippines in 2013, USAID 
airlifted 55 tons of nutrient-dense, meal replacement food bars, 
biscuits and pastes, which were a critical source of food for children 
and mothers in hard-hit Leyte province. Altogether, nine new or 
improved products came online in the last 4 years, including better 
fortified vegetable oil, blended products, and milled foods. USDA has 
been a critical partner in this process, lending their expertise to 
help us improve the U.S. food aid basket.
Early Warning Leads to Early Action
    Early warning systems have proven critical in ensuring that we are 
projecting food needs and preparing to meet them before they arise. 
USAID's Famine Early Warning System (FEWSNET)--the most highly regarded 
early-warning systems in the world--relies on a unique combination of 
advanced technologies and field-based data collection. It is 
increasingly accurate in its ability to predict weather-related 
anomalies. In the Horn of Africa in 2011, FEWSNET not only predicted 
the drought many months in advance, but also analyzed markets, crops, 
livestock production and livelihoods patterns to forecast how it would 
impact food consumption, malnutrition, and mortality. FEWSNET's new 
Food Assistance Outlook Briefing now allows us to forecast food 
assistance needs 6 months into the future for more targeted programing.
    Our forecasting data is coupled with pre-positioned resources that 
can be quickly and accurately deployed to meet emergency needs. USAID 
has seven sites around the world with pre-positioned U.S. food. In the 
aftermath of Typhoon Haiyan, we shipped 1,020 tons of rice from our 
pre-positioning warehouse in Colombo, Sri Lanka. That same warehouse 
proved indispensable in our response to this year's earthquake in 
Nepal.
Getting the Right Food to the Right People at the Right Time
    In every context, our Office of Food for Peace uses several 
criteria to determine what type of food assistance is most appropriate, 
including timeliness of delivery, local market conditions, and cost-
effectiveness. We also take into consideration whether one type of 
assistance can reach more people than others, is preferred by 
beneficiaries, or will help us target vulnerable populations in need, 
like women and children. We also assess whether one type of assistance 
poses less security risks to aid workers or beneficiaries and will help 
us best meet our objectives.
    For instance, in response to both Typhoon Haiyan and this year's 
earthquake in Nepal, we were able to provide cash grants for WFP to buy 
regionally grown rice to meet immediate food needs in the first few 
weeks of these crises, before our pre-positioned stocks of food were 
able to arrive to meet medium-term needs. This flexibility was critical 
to reaching people with food assistance in the immediate aftermath of a 
sudden onset crisis.
    The President's FY 2015 and FY 2016 Title II budget proposals build 
on previous reforms and seek an additional 25 percent of the $1.4 
billion requested in Title II funding to be available for flexible food 
assistance programming. This will allow USAID to reach an additional 
two million emergency beneficiaries, due to an average cost-savings of 
33 percent by buying food locally and regionally compared to shipping 
similar food items from the United States. This flexibility is 
essential as we strive to meet food assistance needs in ever more 
complex environments.
    Even as we seek additional flexibility, the majority of our Title 
II request continues to be for U.S. in-kind food, which is still 
necessary and appropriate for many of our responses. Last year, a 
large-scale in-kind U.S. food response was exactly the right response 
in South Sudan when conflict cut off millions and markets were not 
functioning. In FY 2014, USAID provided nearly 120,000 tons of food to 
pull South Sudan back from the brink of famine. We tapped into the 
seldom-used Bill Emerson Humanitarian Trust to dramatically scale up 
food assistance during this extraordinary and unforeseen crisis, 
supporting a massive UN airlift operation to move that food, and 
shipping U.S. specialized food products to prevent and treat acute 
malnutrition. Just last week, we announced an additional nearly $98 
million in food assistance to South Sudan, which will include more than 
44,000 tons of U.S. food that will be trucked, airlifted, and ferried 
by boat. We have provided over 138,000 tons of in-kind food to South 
Sudan in FY 2015. This aid will keep millions of hungry--mostly women 
and children--alive in South Sudan as the government and warring 
parties continue to engage in senseless violence that has devastated 
the country.
Building Resilience
    As the number and duration of disasters we respond to continues to 
increase, our programs are focused on building resilience among the 
most vulnerable to sudden shocks and chronic stresses that drive 
communities into crisis food insecurity year after year. The 
devastating drought in the Horn of Africa in 2011, when I was in 
Ethiopia, was a collective wake-up call that more must be done to build 
resilience among the world's most vulnerable. Our food aid programs are 
a cornerstone of USAID's resilience efforts that combine our 
humanitarian and development investments across a range of sectors to 
build the capacity of communities to anticipate risks, and mitigate 
recurring shocks.
    In the Sahel--an arid belt that stretches from Senegal through 
Niger and Burkina Faso to Chad--we are helping farmers, especially 
women, plant drought-resistant crops, like onions. In Ethiopia, we are 
working with some of the poorest communities to improve irrigation 
systems to reduce the time required for irrigation and diversify crops 
grown, particularly for women farmers. In Kenya, we provide U.S. in-
kind food in communities that are cut off from markets. In exchange, we 
require recipients to take part in trainings where they learn skills to 
increase yields during dry spells, like creating sunken crop beds that 
retain water during irrigation.
    We teach mothers how to cook healthy foods for their children and 
improve their access to nutritious foods to prevent malnutrition in the 
first place. These efforts are especially focused on reaching children 
in the first 1,000 days of life, when a child's brain and body is still 
developing. Complementing this work, USDA is active in Kenya with 
McGovern Dole programs that are feeding school children and teaching 
nutrition.
    These programs empower communities to combat chronic food 
insecurity and be better prepared to bounce back from crises, so that 
they are less reliant on humanitarian food assistance.
Oversight
    Thanks to additional authorities granted in the 2008 Farm Bill, our 
efforts to better monitor and evaluate our food aid programs have 
evolved as well. We are grateful for the generosity of the American 
people who make these programs possible, and we take very seriously the 
need to be effective stewards of U.S. taxpayer resources. Today, we 
have more staff on the ground than ever before overseeing the delivery 
of our food assistance and making sure it reaches those who are most in 
need. In some countries, we use third-party monitoring to ensure 
effective programs and increasingly, we are leveraging GPS and other 
technology to track the transportation and arrival of packages of food 
aid, especially in conflict zones where security concerns may require 
remote monitoring. We also provide call-in hotlines where people on the 
ground can provide feedback on the programs and tell our partners what 
is working well and what needs improvement.
Conclusion
    At USAID, we are committed to maintaining our leadership role--to 
be the best at what we do--as the largest provider of food assistance 
globally. With your support, our programs have fed billions of the 
world's neediest people, averted famines, and helped countries lift 
themselves out of poverty and dependence.
    These achievements would not be possible without our critical 
partnerships with NGOs and WFP. Their teams work tirelessly and 
fearlessly to feed those in need and to combat malnutrition, often at 
great personal risk. We recognize their commitment and their sacrifice, 
including the many humanitarian aid workers who have lost their lives 
while assisting others. We are also grateful for the work of our 
agriculture and maritime partners, including farmers, millers, grain 
elevator operators, truckers, bargemen, freight forwarders, port 
operators, carriers, and others who represent America's enduring 
goodwill and generosity.
    As part of USAID's mission to end extreme poverty and promote 
resilient, democratic societies, we are committed to finding ways to 
most effectively and efficiently combat global hunger. We are proud of 
being entrusted with the generous resources and honorable mandate 
afforded to us by Congress and the American people. We look forward to 
continuing to work together to identify meaningful reforms and 
innovations to reduce hunger and eradicate extreme poverty in our 
lifetime.
    Thank you again for this opportunity to testify on these important 
programs, and I look forward to your questions.

    The Chairman. Well, thank you both for your opening 
statements. I would like to remind Members that they will be 
recognized for questioning in order of seniority for Members 
who were here at the start of the hearing. After that, Members 
will be recognized in order of arrival, and I appreciate 
Members' understanding of that. I recognize myself for 5 
minutes.
    Again, gentlemen, thank you for being here this morning. 
Mr. Staal, I want to ask my question in the broadest terms 
possible. We have recently heard that USAID and the U.S. 
Maritime Administration have signed an agreement, an MOU, an 
understanding, or something regarding cargo preference. Is that 
accurate?
    Mr. Staal. Thank you very much for that question, 
Congressman. We are in the government's, the President's Fiscal 
Year 2016. We have requested additional flexibility. And so we 
have been in dialogue with a variety of stakeholders, the 
maritime industry, Agriculture Committee, NGOs, the agriculture 
commodity providers. And so there is a discussion and dialogue 
going on. There is no finalized deal. There is no MOU. We 
certainly are in----
    The Chairman. But particularly with----
    Mr. Staal.--dialogue.
    The Chairman. Let me get to the Maritime Administration. No 
deal? Nothing's gone on that is in writing? No handshakes, 
nothing like that that we should be aware of?
    Mr. Staal. That is correct. We are definitely in discussion 
with them, and we have continued those discussions to find 
better ways to effectively use the resources we have. And in 
fact, we would love to have additional dialogue with your 
Committee, with the Members, with the staff to look, to get 
your input on how to reach these objectives.
    The Chairman. I appreciate that. Thank you very much for 
that kind offer, and we will seek to take you up on that.
    [The information referred to is located on p. 45.]
    The Chairman. In the same regard, has there been some sort 
of a deal with the maritime industry regarding what we are told 
is in the amount of $95 million in subsidies to the Maritime 
Security Program, ostensibly provided in exchange for 
Maritime's support for your request to convert 45 percent of 
in-kind aid to cash assistance? Have you done that?
    Mr. Staal. As I have said to your first question, 
Congressman, we are in dialogue with the maritime industry 
about how to better----
    The Chairman. Have you offered them----
    Mr. Staal.--offer flexibility but we don't have any 
finalized deal----
    The Chairman. Okay.
    Mr. Staal.--and we continue to dialogue, not only with the 
maritime but with----
    The Chairman. Have you offered them $1.5 million per ship, 
for the 60 ships?
    Mr. Staal. We have no specific offers. It is just a 
dialogue, a discussion that continues trying to find the best 
way to achieve the flexibility that the President has 
requested.
    The Chairman. That is a pretty precise number, and I am 
curious how that number would come into existence if in fact 
your conversations are so broad-based and non-specific?
    Mr. Staal. There have been numbers put back and forth, but 
it is still an ongoing dialogue. We haven't made----
    The Chairman. Okay. So the substance----
    Mr. Staal.--any finalized agreements.
    The Chairman.--of the conversation with the maritime 
industry would trade cash support for the Maritime Security 
Program for their support for your position on converting in-
kind aid to cash.
    Mr. Staal. No. Like I said, it is just a matter of dialogue 
and looking at the various options and trying to find best ways 
to utilize the scarce resources that are provided.
    The Chairman. The GAO report had some generally 
complimentary things to say but also some negative things. You 
mentioned you have more people today looking at food assistance 
at your agency. Can you walk us through the levels of oversight 
on the cash programs, the monetization programs, where you are 
actually doing the internal controls and making sure that 
fraud, abuse, diversion is not happening, and where you are in 
that program in response to the study?
    Mr. Staal. Yes. Thank you very much for that question. It 
is an important aspect of everything we do to make sure that we 
monitor our resources to get them to the right people. In the 
GAO report, we welcomed that as well as our own IG. They did 
identify some weaknesses in our monitoring and oversight, 
although they also mentioned that there was no evidence of any 
large-scale diversion or, a systematic evidence of wrongdoing 
by our partners.
    So based on their suggestions, we have already made 
improvements, and there is a variety of things. First of all we 
have tightened up our oversight. We have added staff as well as 
looking at third-party monitoring. Our partners are partners 
who have been doing this for years, even in conflict zones. And 
so they have also tightened up their oversight and monitoring. 
We have added technology with GPS, smart phones. You can take 
pictures now with bar codes on stuff and really be able to 
track food so that even in the GAO and the IG reports, we have 
seen that barely less than one percent of our assistance has 
been diverted or used wrongly.
    The Chairman. Yes.
    Mr. Staal. So we feel like we are continuing to strengthen 
this, and it is actually a good-news story.
    The Chairman. I am pretty confident we can track a hundred-
pound sack of rice. It is hundred-dollar bills we have a 
difficult time tracking.
    Ranking Member Peterson is recognized, for 5 minutes.
    Mr. Peterson. Thank you, Mr. Chairman. Following up, the 
discussions that are being had, there are agriculture people 
involved in those discussions, Mr. Staal?
    Mr. Staal. Thank you, Congressman. Yes, we have met with 
the maritime industry as indicated, with NGOs and with also 
agriculture commodity groups.
    Mr. Peterson. What is their involvement and who are they?
    Mr. Staal. I don't have the exact names of the 
organizations. I can provide that to you, but certainly we have 
met with them and continue to meet with them. And as I said, we 
would be very happy to meet with Members of the Committee, your 
staff, to get your input as well.
    [The information referred to is located on p. ??.]
    Mr. Peterson. How has the shift to more cash-based 
assistance affected the operations of the private voluntary 
organizations that work with the USAID to implement the P.L. 
83-480?
    Mr. Staal. That is an excellent question, Congressman. They 
have actually welcomed that because in many cases, they are on 
the ground and have capability to be more flexible to use the 
right kind of resources, given the situation. So when we are 
able to use things like vouchers and mobile banking, mobile 
money, cash transfers, that sort of thing, the NGOs actually 
have the capacity, even more than the World Food Programme, in 
many cases to operate and do those things. So they have been 
very much a part of that and very supportive of our flexibility 
there.
    Mr. Peterson. How involved was your agency in formulating 
the U.S. negotiating position on food aid in the Doha Round and 
have there been any recent consultations on that issue?
    Mr. Staal. I think I will turn that----
    Mr. Peterson. No?
    Mr. Staal.--to my colleague from USDA. Thank you.
    Mr. Karsting. If I could jump in there, Congressman. Those 
consultations are still ongoing in Geneva. We have an attache 
at post. We work a great deal with USTR, Ambassador Punke, 
Ambassador Vetter, on that. As you know, some countries are 
pushing toward cash-based to eliminate in-kind contributions. 
We think it is important from USDA's perspective to continue to 
have the full range of tools in our toolbox, and our focus is 
on ensuring the WTO disciplines guard against disruptions and 
allow us to appropriately use our programs.
    Mr. Peterson. The shift to using cash-based, does that put 
any limitations or what effect does that have on the other 
programs, if any? Has the fact that you are using cash limited 
what you normally do with commodities?
    Mr. Karsting. If you want to talk about the McGovern-Dole 
and our----
    Mr. Peterson. Yes.
    Mr. Karsting.--Food for Progress Program, we did have a 
pilot program that this Committee was generous enough to give 
us in 2008 on Local and Regional Procurement. I have seen in my 
travels--as I mentioned, I was in southeastern Laos. Our food 
aid is doing great things there. You have kids whose health and 
vigor and ability to learn is measurably improved by us being 
there. Those diets could be augmented in some ways under 
authority that we have asked for in the President's budget to 
allow some local and regional procurement. That is not the same 
as cash, per se. That is getting some local items into their 
diets, and we think that would be a valuable way to help 
improve local support for McGovern-Dole, and for helping them 
build value chains on the ground, to in country.
    Mr. Peterson. Is there any limit on the amount of locally 
produced food that can be purchased? Do you have any kind of 
limit?
    Mr. Karsting. The President's budget has two things in it. 
One is the request for $20 million under the Local and Regional 
Procurement Program. We think we could do two to four programs 
in countries with that. The other part of the budget as far as 
McGovern-Dole is concerned is to redefine the use of eligible 
commodities, and that doesn't have a limit on it. Where I have 
seen with my own eyes, we wouldn't be talking wholesale shifts 
under that authority but rather augmentation of existing 
programs.
    Mr. Peterson. All right. Thank you. I yield back, Mr. 
Chairman.
    The Chairman. The gentleman yields back. Mr. Crawford, of 
Arkansas, for 5 minutes.
    Mr. Crawford. Thank you, Mr. Chairman. I appreciate that. 
Mr. Staal, I have to ask you a question or two about rice. Half 
the U.S. rice crop is growing in my district. The farmers are 
very concerned about the Food for Peace Program and I was just 
wondering if you can tell me how many metric tons of rice are 
currently being shipped through the Food for Peace Title II 
Program?
    Mr. Staal. Thank you, Congressman. Certainly rice is an 
important part of our assistance. I have to admit I don't have 
the exact number, but we can certainly get that to you.
    [The information referred to is located on p. ??.]
    Mr. Crawford. Okay. I appreciate that. If you could get the 
information for the last 10 years, is that something you could 
also provide to the Committee?
    Mr. Staal. Sure.
    Mr. Crawford. I appreciate it.
    Mr. Staal. We can do that.
    Mr. Crawford. Let me ask you. Can you explain why $300 
million in emergency food security program USAID is not 
sufficient for your efforts?
    Mr. Staal. That is an excellent question, Congressman. With 
the increased needs in the world, it is just amazing. Right now 
there are five what they call Level-3 emergencies, yes, in the 
world, and there were never four before in history. So the 
needs are just huge. Of the $300 million you mentioned that is 
being used in a number of countries, but the needs are way 
beyond that because of Afghanistan, Syria especially and the 
surrounding countries, South Sudan, a number of these huge 
emergencies in the world. And we are still getting increased 
requirements beyond what we are able to meet with our need. For 
instance, recently in Afghanistan, they needed additional 
resources, and we didn't have the cash to buy locally. So we 
had to ship U.S. food, and it cost 20 to 30 percent more than 
we would have if we had been able to buy it locally. And 
therefore, we were able to provide less unfortunately. So it is 
those kind of trade-offs unfortunately we have to look at.
    Mr. Crawford. Has there been an assessment of what kind of 
impact proposals to convert the Food for Peace Title II Program 
into a cash-based system might have on U.S. ag economy?
    Mr. Staal. I haven't seen an assessment of what would 
happen if the entire program were converted to cash, and 
certainly we are not requesting that. We are requesting just 
some additional flexibility. If we continue to believe that the 
in-kind U.S. food will be the majority of the needs, and in 
fact, there may be cases where with cash we will buy U.S. 
commodities and not only the grains but certainly also the 
specialized foods that are produced in some of your districts. 
And it is still less than \1/2\ of one percent of ag exports 
are food aid. So it is a pretty minor impact on the entire 
industry.
    Mr. Crawford. We hear a lot about the cost of shipping in-
kind food aid donations. In your written statement you said 
that the savings from eliminating shipping costs would 
translate into helping more people. But in cases of cash-based 
aid, that seems to ignore the fact that recipients are 
purchasing food from supermarkets and other sources at prices 
that, I would assume, include processing, shipping, and profit 
margins for those supplying the food.
    So my question then, Mr. Staal, is this. What is the 
difference between in-kind and cash-based food aid in terms of 
cost per calorie consumed?
    Mr. Staal. Yes, thank you. That is an excellent question, 
and we will have to do a little more digging. I will get you an 
answer on the cost per calorie. Certainly the cost per ton is 
significantly cheaper in a lot of cases. It varies a lot by 
country. The land-locked countries like Chad or Afghanistan, 
the cost for the shipping, handling, and so on is much higher. 
In some countries, Bangladesh for instance, it is less of a 
factor. So that continues to be an important thing. Basically 
overall, we figure it is about 30 percent less to purchase 
locally and regionally than it is to ship from the United 
States.
    Mr. Crawford. That is 30 percent less on a per-calorie 
basis?
    Mr. Staal. That is on a per-ton basis for the commodities. 
We will have to look into the per-calorie basis. That is a 
slightly different calculation.
    [The information referred to is located on p. ??.]
    Mr. Crawford. Okay. Thank you, Mr. Stall.
    Mr. Staal. Thank you.
    The Chairman. The gentleman yields back. Mr. McGovern, for 
5 minutes.
    Mr. McGovern. Thank you, Mr. Chairman. First of all, let me 
thank you both for being here, and I have to say that I am most 
proud of our international food aid programs. I make it a point 
when I travel to other countries to try to see our 
international food aid programs. So I know what I am talking 
about when I say that they are impressive. And in 2003 I 
remember being in Colombia and visiting an internally displaced 
persons community outside of Bogota and visited a pilot project 
for the McGovern-Dole International Food for Education and 
Child Nutrition Program. This is again an area where there were 
tens of thousands of displaced, internally displaced 
Colombians. And I remember standing there and seeing hundreds 
and hundreds, if not thousands, of kids under a tent attending 
school and being fed and being approached by a mother of an 11 
year old boy. She approached me and the U.S. Ambassador and 
said, ``I want to tell you, please tell the people of the 
United States thank you because in this village, where I can't 
feed my son, every day, one of the armed men comes through 
here. Some days it is the FARC guerillas. Other days it is the 
right-wing paramilitaries.'' And they ask me, this mother of an 
11 year old boy, to give up my son to them, and in exchange 
they will feed my son every day, which is something that I 
can't guarantee. And she said now, because of this, my son is 
being fed, and he is learning how to read and write and may get 
out of this slum. He has the chance to make something better of 
himself.
    And I remember in 2007 I traveled to Africa specifically to 
see our food aid programs in all their diversity in remote Dire 
Dawa, Ethiopia, we saw a combination of USAID and USDA-
supported programs diversify seeds and food crops, help support 
a milk cooperative, better manage water and the use of 
fertilizer, and benefit from targeted drip irrigation. This 
community was in the middle of as desolate an area as I have 
ever seen, but the community was a sea of green and productive 
land. And the program was a partnership between U.S. Food for 
Peace, Catholic Relief Services, and the local Catholic 
archdiocese. Now these programs, as you know, in Ethiopia 
became models for what we now call resilience, helping 
communities become self-sufficient and better able to withstand 
both economic and the weather shocks that so afflict that 
region. And when the most recent famine hit the Horn of Africa, 
these villages did not fail. They did not fall into hunger and 
starvation. They did not lose their livelihoods. And these 
successful programs served as the models for the creation of 
Feed the Future and the strengthening of our Food for Peace 
developmental programs.
    So I am grateful for the fact that I worked with USDA and 
USAID over the years to improve our programs, to make them more 
efficient, effective, more flexible, and better able to 
incorporate nutrition and resilience into every aspect of their 
program. And I admire how USDA and USAID now track and monitor 
our programs so that much more oversight is in place than in 
the past.
    I also think these programs are an investment in our 
national security. You don't have to be a rocket scientist to 
figure that out. And I would just stay this. I mean, I always 
tell people hunger is a political problem. We have the 
resources and the ability to solve it, but we don't have the 
political will. We should be talking about how to expand some 
of these programs rather than to try to contract them in any 
way, shape, or form. Look, we need to have flexibility because 
these programs are designed to end hunger. So if it makes more 
sense to send direct food commodities to a hungry village, we 
ought to do that. If it makes more sense to buy the crops 
locally, to buy the food locally or regionally, we ought to do 
that. We ought to do whatever works, whatever feeds the most 
people, because first and foremost, these are programs designed 
to combat hunger.
    I would ask you, we talk a lot in this Congress about 
national security. Talk to me a little bit about how our 
international food assistance programs complement our national 
security interests, either one of you.
    Mr. Karsting. I would say I don't want to swim in the 
Pentagon's lane too much, but I know that the National Security 
Council and the Pentagon and some really bright minds in 
national security have focused on this. In fact, there may be 
even a report on their website that speaks to the nexus between 
food security and national security and what it means for 
potential civil strife in the areas where there is real food 
insecurity. And so that is something we take very seriously in 
working with them.
    I would just say you have had some great experiences going 
out to look at things. I would invite all the Members here if 
you are traveling internationally, and I realize sometimes that 
is not very popular, but it is really important for people to 
see on the ground how these programs are working. And if you 
ever do have occasion to travel outside the United States, I 
hope you will reach out to USDA, reach out to USAID, and give 
us a bit of your time so that we can demonstrate to you how we 
are working to make these programs work together in a 
complementary fashion.
    When I talked about our Feeding Program and our Scientific 
Exchange Programs and our Capacity-Building Program, we want 
those all, and USAID has education programs. We are trying to 
make them all fit together on the ground in-country, and we 
would love to show that to you.
    Mr. McGovern. Well, thank you. Just please tell--
    The Chairman. The gentleman's----
    Mr. McGovern.--tell the people--
    The Chairman. The gentleman's time has expired.
    Mr. McGovern.--in the field that we are proud of the work--
--
    The Chairman. The gentleman's time----
    Mr. McGovern.--that they do.
    The Chairman. The gentleman's time has expired. Mr. Staal, 
if you have an answer for that, please provide it for the 
record for Mr. McGovern. Mr. Gibson, for 5 minutes.
    Mr. Gibson. I thank the Chairman and the Ranking Member for 
holding this hearing today because we are concerned about a 
potential policy shift away from in-kind to cash-based 
assistance. Towards that end, I appreciate the comments of the 
panelists today, and I thank you for being here today. I just 
want to share from the perspective of somebody who has been on 
the implementing end of this, some of my experiences and then 
raise a question.
    So in addition to the obvious concerns of impacts on our 
farmers and impact on the shipping industry, which we have 
already covered that, and I will remind the panelists that 
Congress had a chance to consider a policy shift here during 
the farm bill process, and we rejected that.
    I want to talk a little bit about what Mr. McGovern was 
pointing to as well, and that is the impact from a foreign 
policy perspective of this in-kind aid. I was the ground 
commander from the 82nd Airborne Division in the aftermath of 
that devastating earthquake in Haiti in January of 2010. This 
was a 7.2 on the Richter scale, and without a building code, 
Port-au-Prince lost about \1/4\ million people. And our 
paratroopers, when we were there, in addition to the rescue and 
recovery were involved in the distribution and helping organize 
the distribution of in-kind aid. And the world was watching. 
There were over 100 nations involved including China and Cuba, 
and when I would go to the U.N. cluster meetings, I heard 
before the meetings would begin what the talk was. And they 
were overwhelmingly impressed by our servicemen and women and 
what they were doing, everything that they could do to make a 
difference in trying to save lives, including the distribution 
of this aid.
    I came away from this after four combat tours in a peace-
enforcement mission to Kosovo. It really struck me that some of 
the work we were doing in Haiti was as important to our 
national security as anything else I had done over the course 
of my 29 years in uniform. And I just want to make sure that 
that point resonates. I suspect it does, but it is hard to 
quantify that in terms of dollars and cents, but it is real. I 
mean, they saw the sacrifices of our troops and what the 
generous taxpayer was doing to try to make a difference.
    The other reality of Haiti was that candidly, we were 
dealing with gangs that were starting to take the food in the 
first couple of days to such a degree that the Haitian 
Government made a decision, and we did everything we could to 
support them that only women would be able to get aid at the 
distribution points. And that provided other challenges because 
of 100 pound bags. So our troopers would try to help the women 
get it to a point where their children could get the bags. My 
point was just that they were already dealing with fraud with 
100 pound bags. I can't imagine if we tried to go to cash 
assistance what that would have done in those moments.
    So I guess I want assurances as you are considering all 
this that you understand in the nature of a crisis that we 
wouldn't want to go to some kind of shift in policy.
    Mr. Staal. Thank you, Congressman. Those are extremely 
important points, and as a former USAID director in Iraq, I 
know what you are talking about in some of those conflict 
situations.
    When we are talking about cash, we are not talking about 
handing out bills on the street to people. We are talking about 
mobile money, electronic transfers, vouchers, systems where we 
can actually monitor it quite carefully, and we are using the 
same partners that we have been using for many years in these 
conflict situations to provide the right tool at the right time 
in some places like Syria for instance where it is difficult 
for us to get, then maybe a voucher program. We include that 
under the cash. It is a voucher program so that they are 
actually using a card then that can only purchase certain 
things, and then with modern technology, we have biometrics, 
things like fingerprints, iris scans, and so on to make sure 
that only the correct person is getting it. So in some ways we 
are actually able to monitor it and control it even more 
carefully than we can with bags of food.
    Mr. Gibson. I would also ask that we just keep in mind the 
value of that transaction, okay? Thank you, Mr. Chairman.
    The Chairman. The gentleman's time has expired. Mr. Scott, 
for 5 minutes.
    Mr. David Scott of Georgia. Thank you very much, Mr. 
Chairman. World hunger is a world-wide issue now of staggering 
dimensions. And while yes, it is true the United States 
provides 51 percent of all of the food aid in the world, one 
nation, 51 percent, and that is followed by the European Union 
with 27 percent, Canada with nine percent, Japan with six 
percent, and Australia with five percent. But the big question 
is what about these other nations? What is going on in South 
America? What is going on in Africa which is the heartbeat of 
hunger? And yet we have the technology and the capacity now to 
grow food anywhere and everywhere, even in the desert.
    I went to Israel and I saw in Israel in the desert, down 
from the Jordan River, where they are able to grow crops with 
the technology.
    Our world is rapidly growing at an enormous rate. Literally 
thousands of new people are being born into the world every 
year, every day. Every day. The world's population is booming, 
which means the world's hunger problem is booming.
    So the question we have to start asking ourselves is this 
and the question I would like for each of you to respond to is 
what are the other nations doing? Unless we have a world-wide 
collaborative effort pouring in the technology, it is a shame 
upon us having the technology, having the capacity that we do 
and yet have one in nine people, men, women and children going 
to bed hungry every night.
    Ladies and gentlemen, that is 11 percent of the world's 
population. This is a crisis as Mr. McGovern articulated of 
national security but more than that, world security. And so I 
would like for you two gentlemen to please share with us, what 
is the rest of the world doing? What are the other nations 
doing?
    Mr. Karsting. I would say, and I will defer to you in just 
a second. The United States is a member to the Food Assistance 
Convention, and this is the forum where we try to encourage 
other countries to participate as well in international food 
assistance and development programs. We have been pushing to 
expand the membership to other countries including Brazil, 
South Korea, South Africa, Saudi Arabia, and Turkey to name a 
few, and the purpose is to get more donors to the table and 
better coordinate international assistance. Brazil is in the 
process of signing onto the Food Aid Convention. South Africa 
has participated as an observer but has not yet joined. So we 
are engaged in these multi-lateral fora to try to encourage 
participation.
    Mr. David Scott of Georgia. Let me ask you this. My time is 
short. But specifically, what is China doing? The major 
contributor to the world's population growth rests within 
China. Russia itself has the capacity, the land mass. Africa, 
the land mass. I mean, when you say join membership, are there 
any efforts, going forward, to plow our technology into these 
areas where the problem is persistent? It is in Africa. It is 
in Asia. It is in South America. What are we doing to get our 
technology and actually start growing crops, producing, and 
getting the aid to the people in those most critical areas?
    Mr. Staal. Thank you, Congressman Scott. And by the way, 
thank you very much for the work being done in your district. 
It is specialized foods, especially the ready-to-use foods.
    Mr. David Scott of Georgia. Yes, we are really proud of 
that.
    Mr. Staal. That is great. What you are addressing is a 
critical issue of how do we help these countries get out of the 
dependency on food aid and able to produce more on their own. 
And that is the central theme of the Feed the Future Initiative 
that we are working jointly with USDA on. The food aid in Title 
II is a piece of that, and it is a complementary piece dealing 
with the most vulnerable people and helping them to kind of 
stand on their feet so that then we can help them with greater 
technology and so on to be more productive. We have been able 
to do that in a number of countries. In Ethiopia, where I was 
the USAID Director--Mr. McGovern, thank you again for your 
continued advocacy and support. You mentioned Ethiopia. It is 
these countries where actually they could produce so much 
more----
    Mr. David Scott of Georgia. Yes.
    Mr. Staal.--with the Borlaug work and so many other things. 
And in terms of other donors, we are certainly working very 
closely with them, trying to not only encourage our traditional 
donors but to get some non-traditional donors. I have recently 
traveled to Saudi Arabia, to Kuwait, to encourage them to 
provide more assistance in overall development but specifically 
in resources for food as well.
    Mr. David Scott of Georgia. Thank you.
    Mr. Staal. So that is a continuing challenge for us.
    Mr. David Scott of Georgia. Thank you, Mr. Chairman.
    The Chairman. The gentleman's time has expired. Mr. Austin 
Scott, for 5 minutes.
    Mr. Austin Scott of Georgia. Thank you, Mr. Chairman. And 
Mr. Staal, I am the other Congressman Scott from Georgia. And 
MANA, the Mother Administered Nutritive Aid, is manufactured in 
Fitzgerald, Georgia, which is a part of my district and 
certainly from peanut paste and from vitamins and other things. 
That one organization, through their ready-to-use therapeutic 
foods, is estimated to have saved over a million children that 
were malnourished. Six weeks on that peanut butter and vitamin-
enriched paste, it is amazing what you see and the difference 
that you see in the children, I mean, basically children who 
can't stand up because of the weakness. They almost look like 
stick figures in the pictures until they have been given this 
aid for 6 weeks.
    And so I want to thank you for continuing to support that. 
I have shared that packaging with some of our military leaders. 
One bit of advice that some of our military leaders had would 
be that on these ready-to-use foods that if we displayed the 
American flag more prominently. While the USAID symbol 
incorporates the American flag, it is not exactly the American 
flag. And they felt like that might be a plus because of what 
the American flag means around the world with regard to food 
aid and that if possible, making sure that the language from 
the country, which is not always going to be possible, is on 
the instructions.
    I would just like for you to talk further about the role of 
the fortified foods, the ready-to-eat foods, how they are 
funded. I know you gave the specific title, but then what steps 
are being taken to make sure that we get this particular aid 
which is extremely inexpensive to other parts of the world 
where it is needed?
    Mr. Staal. Yes, thank you, Congressman Scott. It is a 
critical part of our assistance and especially as you mentioned 
for children who are malnourished who can't just eat raw grains 
or even the cooked food that adults eat. They need some 
specialized food, and we have been working with MANA Industries 
in your district to develop some improved systems and made a 
lot of improvements in that. And it is about ten percent of our 
assistance, of our funding, goes to those kinds of specialized 
products. For instance, in the recent hurricane in the 
Philippines, we were able to very quickly fly in 55 tons of 
specialized food products for children and got there within the 
first few days. It is those kind of filling the gaps where it 
really helps and makes a huge difference. And that continues in 
so many places, especially in Africa and elsewhere where people 
are really malnourished. Children are on the edge, and it is a 
way to get them through. Thank you.
    Mr. Karsting. I would also just add, in 2010, the ag 
appropriations bill included money for a pilot program on 
micronutrients that USDA managed. We are now ready to go to the 
field with a micronutrient-fortified rice which will be used by 
McGovern-Dole in Cambodia. It has led to better zinc and 
Vitamin A uptakes and diminished the incidence of diarrhea.
    We have also worked creatively with some fortified poultry 
products with micronutrients, and they did some blood testing 
at Creighton University in Omaha, Nebraska, Congressman 
Ashford. And it showed real meaningful changes in kids' blood, 
not only in their blood uptake of these things but in their 
abilities and skills as well. It had impacts in the classroom 
and we are trying to be innovators as best we can.
    Mr. Austin Scott of Georgia. One of the key elements to 
that I would just, and I am sure you know this but remind you 
is the packaging of it to make sure that it is packaged in a 
manner where it is actually still safe to eat when it gets 
there. And that is one of the things that I think that we very 
much have the technology to do.
    Before I go, I would express some of my same concerns about 
the ability to use cash or cash-type payments in areas. Many of 
the people that we are dealing with are doing the best that we 
can to help are subject to being taken advantage of because of 
being malnourished and because of a lack of education. So with 
that said, I want to thank you for what you do. I am very proud 
of MANA and what we have been able to do in Fitzgerald, 
Georgia. I say we. I shouldn't take credit for it. The people 
that work there do. And I am proud of our ag producers, 
especially our peanut producers, in helping provide the 
products for that. So with that said, Mr. Chairman, thank you.
    The Chairman. The gentleman yields back. Thank you. Ms. 
Adams, from North Carolina, for 5 minutes.
    Ms. Adams. Thank you, Mr. Chairman, and thank you, 
gentlemen, for your testimony. The President's last three 
budget requests have asked for more flexibility in Title II 
funding which would allow a portion of the Food for Peace 
funding to be used for flexibility, to purchase U.S. 
commodities, local-produced commodities, or to provide 
vouchers. Given all the tools that you have at your disposal, 
why is this flexibility needed? And what would the role of U.S. 
farmers be under the proposed request for flexibility?
    Mr. Staal. Thank you, Congresswoman. That flexibility is 
critical, and what has already been provided has helped a lot. 
But there is still a need for additional flexibility just 
because of the huge demands around the world.
    For instance, in the Central African Republic recently, 
when fighting broke out there, we needed some immediate 
assistance. So we started the process of bringing in in-kind 
food from the United States, but it was going to take several 
months. So with that flexibility in Title II that we received, 
we were able to do some local purchase to fill the gap until 
the U.S. commodities came in.
    Also, we were able to provide sometimes some supplementary 
assistance to help the farmers while they are trying to produce 
more food. So you can maybe buy seeds and tools with some 
additional resources to enhance the Title II programs that we 
have. But the problem is that the needs are so huge that we are 
not able to do as much as we would like, and we could reach 
additional people if we had additional flexibility, up to two 
to three million more people at least we feel if we received 
these additional resources.
    Ms. Adams. All right. Thank you. One recent innovation in 
food aid programming is the increased use of nutritionally 
fortified foods to prevent or to treat malnutrition. So what 
role do you see the U.S.-based producers of these products 
currently and going into the future?
    Mr. Staal. Yes, that is a critical aspect as we heard from 
Congressman Scott. That is something that the United States is 
a world-wide leader on these ready-to-use nutritional food and 
developing that. We have worked over the last several years to 
provide new products and improved products that we already had, 
especially for these malnourished children, whether they are in 
a feeding center or at home to target them with the high 
nutrition.
    And then also we feel with a little additional flexibility 
in cash, sometimes the mother, even if the children are not 
really badly malnourished, but you want a more varied diet for 
better nutrition. And so if the mother has a voucher or like a 
mobile money type of financial transfer, she is able to buy 
some vegetables to supplement the in-kind food that she is 
getting. So it is those kind of flexibilities that we are 
looking at that we think would really help the women and 
children especially.
    Ms. Adams. Thank you very much. Thank you, Mr. Chairman. I 
yield back.
    The Chairman. The gentlelady yields back. Mr. Rodney Davis, 
for 5 minutes.
    Mr. Davis. Thank you, Mr. Chairman. Thank you to both 
witnesses. Over here, Mr. Staal. My colleague, Mr. Rouzer's 
head seems to get in the way sometimes. I think it is his 
hairstyle more than his head, but you know, I won't be the 
judge there. Hi, David.
    First off, I want to say thank you. Food programs, 
obviously very important to a rural district like mine in 
central Illinois. Some of the challenges that both of you have 
mentioned in getting food to those who need it the most, is 
telling to us here in this institution. But I would also urge 
you and many of my colleagues to read the book by my 
constituent, Howard Buffett, called 40 Chances, talking about 
some of the challenges that even an NGO, like the Buffett 
Foundation, runs into when trying to utilize more local 
capabilities in addressing food shortages.
    So I found it interesting in the farm bill that we allowed 
for more flexibility. Some of your testimony has been 
enlightening and interesting, but I still have some concerns as 
to how do we balance the ability of our American farmer to grow 
an excess amount of food and get it to countries who need it 
the most, rather than the flexibility that both of you have 
said is needed to be able to utilize some local resources. And 
how do we keep that balance? That has been my concern during my 
2 years here in Washington, and I have been very interested in 
hearing what each of you have had to say today.
    I want to start with Mr. Staal. You mentioned something 
earlier about utilizing new technology, biometric scanning, 
other new types of monetization to allow for locals to purchase 
food products in certain countries. Now, the cost of those new 
processes and procedures, have your administrative costs then 
gone up substantially or are you saving money by instituting 
these new technologies?
    Mr. Staal. Thank you, Congressman Davis. By the way, I was 
just in central Illinois on Monday in Champaign-Urbana.
    Mr. Davis. Well, that is my district.
    Mr. Staal. Is that right?
    Mr. Davis. Why didn't you call?
    Mr. Staal. I should have called. I went to visit the Museum 
of the Grand Prairie there. It is excellent.
    Mr. Davis. Oh, shoot. I have to admit, I have never been 
there.
    Mr. Staal. My niece is----
    Mr. Davis. Wow. There goes my reelection.
    Mr. Staal. Oh. There you go.
    Mr. Davis. How was it?
    Mr. Staal. It was excellent. Of course, my niece works 
there. So I have to give a plug for it. But it is great. I 
always feel at home when I am back in the Midwest.
    You bring up an important point about the technology in 
making best use of the resources we have on the ground. It 
continues to be something we have to continue to target 
closely. The resources we provide, we could do more with more 
flexibility, okay, but the U.S. in-kind food we believe will 
continue to be the major resource that we will be using. But 
with modern technology, we are actually able to save money by 
using biometric scans and things like fingerprinting and so on, 
we have found actually we reduce the number of beneficiaries. A 
lot of people were getting food who shouldn't have been. There 
is certainly a cost of doing the biometrics, but the overall is 
a cost savings because you reduce the beneficiaries by 
targeting exactly on the people who need it. So it has been a 
cost savings.
    So we are continuing to find ways to use technology, not 
only to improve our oversight and monitoring, but it actually 
reduces costs.
    Mr. Davis. Well, thank you, Mr. Staal. And next time you 
are in central Illinois, give me a heads-up. I would love----
    Mr. Staal. Okay.
    Mr. Davis.--to go visit the museum. Mr. Karsting, it is 
interesting to hear Mr. Staal talk about cost savings by 
utilizing new technologies. Do you happen to maybe think these 
new technologies might result in cost savings if they were used 
domestically, too?
    Mr. Karsting. Domestically? You mean for our nutrition 
programs here in the United States?
    Mr. Davis. Yes.
    Mr. Karsting. That is a little bit outside of my area of 
expertise in the Foreign Agricultural Service, and I know that 
they are trying to employ technology to get error rates down. 
But I am not going to pretend to be an authority on that topic.
    I would say, as he was describing sort of the technology 
that they use for fingerprinting or other sorts of things, 
USAID operates in a lot of environments that are frankly 
sometimes much more complicated than where USDA operates. Our 
area is development, McGovern-Dole, those sorts of things, and 
they do a lot more work in the disaster field. So for us, that 
additional flexibility, it really depends on the location where 
you are working and having a little bit of flexibility to have 
a school cook in rural Laos be able to add some bananas to the 
porridge or something like that could do two things: first, it 
makes a product more palatable and gain greater cultural 
acceptance nearby. Second, it also begins to plant the seeds 
for value chains in countries so that when we try to graduate a 
country out of the McGovern-Dole program, there is continuous 
and ongoing support locally so that they can assume that 
program.
    The Chairman. The gentleman's time has expired. Mr. 
Aguilar, for 5 minutes.
    Mr. Aguilar. Thank you, Mr. Chairman. Thank you, gentlemen, 
for joining us, and I share some of the sentiments that Mr. 
McGovern mentioned and as Mr. Davis just said. We need to 
ensure that our food programs offer the greatest assistance to 
the most people in need. And I know that that is the goal that 
you share as well.
    There have been reports--and back to the vouchers 
discussion for non-food use, there have been reports that the 
vouchers are regularly diverted for non-food uses in Lebanon 
and Jordan and other places in connection to the Syrian refugee 
crisis. This has happened in other humanitarian crises like 
Iraq and Afghanistan, and I am concerned that the rush to 
convert our food aid programs into cash and vouchers will mean 
potentially fewer not more people are served. I am also 
concerned about the potential for fraud and corruption and 
abuse within that aspect of the program.
    What is USAID doing to bolster the traditional P.L. 83-480 
Program? And are there measures the agency is taking so that it 
doesn't have to use cash and vouchers to provide aid abroad?
    Mr. Staal. Thank you, Congressman Aguilar. That is an 
important issue. The proper use of our resources is a critical 
aspect of everything we do, and we continue to tighten up and 
refine our oversight and our partners actually as well because 
in many cases, especially the NGOs but also the U.N. 
organizations, their own reputation is on the line, and they 
want to make sure that those resources are properly used. And 
there have been instances where there are problems, but then 
they quickly refine that and address it. And as the GAO report 
mentioned, there is no systematic abuse of the resources that 
we have been providing. And that is true also of the vouchers 
and the cash mobile money kind of programs as well.
    So not to say that it doesn't happen, but we continually 
track it as it happens. We clamp down. We refine. We make 
adjustments to make sure it doesn't happen again.
    Mr. Aguilar. Anything else to offer, Mr. Karsting? Thanks. 
How are audits performed to verify the resources are followed 
and tracked?
    Mr. Staal. Thank you. At USAID, we have our own Inspector 
General that is independent, and they do audits of all of our 
programs, both programmatic audits and financial audits. For 
instance, recently in the Syria crisis, they have stepped up to 
a higher level of oversight. We work with them very closely. We 
welcome that because anything that we can do to improve our 
oversight and making sure that that assistance gets to the 
right people is welcome to us. And we require additional 
reporting now from our partners working in the Syria crisis in 
Lebanon and Jordan and Turkey as well, and they have welcomed 
that. They have tightened up their own systems. But the 
Inspector General and the audits are a critical aspect of that.
    Mr. Karsting. In our programs, McGovern-Dole and Food for 
Progress, that monitoring and evaluation plan has to be 
submitted when our implementing partners make an application. 
So it is sort of baked into their process that they have to do 
monitoring and evaluation. That usually involves about five 
percent of the expenditures that they use. So they do that. We 
also do verification from USDA Washington and at the post as 
well.
    Mr. Aguilar. So they initially provide their own oversight 
but then that is verified?
    Mr. Karsting. They get oversight from USDA. I wouldn't say 
they provide their own oversight, but they have to submit 
reports on how many people they fed, how the products have been 
dispensed. That is sort of the monitoring and evaluation to 
make sure that we are having the impacts that we have been 
promised.
    Mr. Aguilar. Thank you, gentlemen. I could go on and offer 
Mr. Davis some travel tips, but we will refrain and I will 
yield back.
    The Chairman. The gentleman yields back. Mr. Abraham, from 
Louisiana, for 5 minutes.
    Mr. Abraham. Thanks for being here, guys. I represent 
probably the largest rural crop district in the nation, 
northeast Louisiana and the southern part of the state. We grow 
corn, soybeans, a lot of rice. And I guess my concern is, 
dovetailing on Mr. Aguilar's questions, Mr. Staal, can you 
provide an explanation of how you will police the use of the 
cash vouchers for LRP and make sure that money is not being 
diverted some way to our competitors?
    Mr. Staal. Yes, thank you, Congressman. As I mentioned, 
that is a critical aspect of what we do. And there are several 
levels of that. First of all, our partners do a detailed 
assessment of the situation to find out what is the best 
resource to provide. If they determine that it is vouchers or 
some sort of mobile money, then they put that in place. But it 
is all done through financial institutions, like a bank, 
savings and loan.
    Mr. Abraham. Is that bank accountable then?
    Mr. Staal. Exactly.
    Mr. Abraham. Who is accountable for that money and that----
    Mr. Staal. It is our implementing partner, okay? The NGO in 
most cases or in some cases the World Food Programme. So they 
are accountable to us. So they have their systems in place, and 
as my colleague was saying, then they have to provide regular 
reports, and we provide very close oversight. We have people 
based in the region who travel out and visit the projects, look 
at their books. I used to do that as a Food for Peace officer 
myself back in the day in places like Sudan and Ethiopia and 
literally look at it, go to the beneficiaries, and ensure that 
they have received commodities. And really, it is the same 
whether it is a voucher or a mobile payment, whatever. The 
mechanisms are very similar in terms of ensuring that it gets 
to the individual that it was directed to.
    Mr. Abraham. Okay. Thank you. And I guess another question 
I have, the USAID logo, it says, ``Gifts of the American 
people.'' Across the world, it is renowned for promoting 
goodwill, showing compassion of the American people that we 
have for those in need. I guess the question to kind of follow 
up that, the ATM cards or the cash vouchers that are going to 
be in place, is that going to help convey that message 
worldwide to the people that need these supplies?
    Mr. Staal. We have a branding policy, and everything has to 
have that on that. And that includes the vouchers or the cards, 
whatever. They will also have the USAID logo, and we will look 
at improving upon that as your colleague, Congressman Scott, 
mentioned. Even the local purchase, when it is purchased from 
within the region, they have to use a bag that has the USAID 
logo on that. So it is not just food coming from here. When it 
is a program like food for work, yes. I even have a bag here. 
This is a local purchase bag, and you see it was purchased in 
Kenya, but it has the USAID logo on there as well.
    Mr. Abraham. Great.
    Mr. Staal. And then it has from the American people on 
there. Okay? So just to show you. If it is a program where like 
a food for work program, okay, where it is harder to show on a 
specific piece of merchandise, then we put up signs at the work 
site----
    Mr. Abraham. Okay.
    Mr. Staal.--that this is from USAID, a gift of the American 
people. So it is an important branding issue. The only 
exception is in cases where you have a really delicate conflict 
situation where it would actually put our partners in danger if 
they were seen. So that is the exception to this.
    Mr. Abraham. Okay. Thank you.
    Mr. Staal. Thank you.
    Mr. Abraham. Mr. Chairman, I yield back.
    The Chairman. The gentleman yields back. Ms. Kuster, for 5 
minutes.
    Ms. Kuster. Thank you very much, Mr. Chairman, and thank 
you to you. And I just want to recognize my colleague, Mr. 
Gibson, for his role in distributing aid and also Mr. McGovern 
and others that have been very involved in this issue.
    My question relates to this dilemma about in-kind aid 
versus financial aid and the impact on the local community. I 
wonder if you could pick a specific example of whether this 
cycle of providing in-kind aid in some way exacerbates the 
problem of economic development and building up infrastructure 
for their own agricultural well-being, going forward, and 
whether we haven't created a situation that just perpetuates 
this cycle of dependence. Could you comment? Do you have any 
specific examples where we have been able to invest in 
infrastructure and had a more sustainable outcome for the 
population and then we can target our food aid for earthquakes 
or more severe situations?
    Mr. Staal. Yes, it is an excellent question, Congresswoman. 
As an example, I can talk a little bit about Ethiopia. As was 
mentioned before, I was the USAID director there, and we have a 
program there called the Productive Safety Net which does food 
for work and cash for work. And so it depends on the community 
that you are working with and what is available in the market. 
So we do what we call a Belmont assessment to look at the 
agricultural and market conditions, whether there is sufficient 
food in the market or not. If there is food and the ability of 
the farmers to grow but people just can't afford it or don't 
have access for one reason or another, then we can provide 
cash. If there isn't enough food in the market, then cash isn't 
going to help them. So we provide food. But that dependency 
issue is critical.
    Then as a part of that program, the work that they are 
doing under the food for work is to improve their capacity and 
capability to grow more food so they are less dependent. And we 
saw real gains over the last 5 years in Ethiopia, and it is 
amazing. I went to places that were just desert years ago, and 
now you are seeing crops being grown there. You are seeing 
water coming back in the wells because the food for work they 
were doing was things like terracing, tree planting, water 
catchment systems that then started to bring the agriculture 
back to the country. And then as you say, then we can use that 
food aid for the Nepal earthquake or elsewhere.
    So that combination and that flexibility becomes very 
important so we can use the right tool at the right time, both 
to address the needs most effectively and efficiently but also 
so that we are not creating dependency as you mentioned.
    Ms. Kuster. So then also to further on that, Mr. Scott 
mentioned Israel, and I also saw in Israel the impact of the 
water treatment and how they went about that, planting trees 
you mentioned. How do we share best practices and what is the 
role of, whether it is USAID or whatever agency of the U.S. 
Government is actually taking best practices to these regions 
and trying to improve upon their capacity to grow food?
    Mr. Staal. That is an excellent question, and I have a very 
specific example, again from Ethiopia. We actually had a 
tripartite agreement with the Israeli Government Development 
Agency, MASHAV, USAID, and the Ethiopian Government, 
specifically on high-value fruit crops, everything from avocado 
to improved apples and oranges and so on.
    So we provided some funding. The Israelis provided 
technical expertise based on the experience that they have as 
you mentioned. And then the Ethiopian Government provided the 
facilities and the people on the ground. And so over several 
years, we were able to really improve their ability, they were 
already growing these crops, but the quality wasn't very good, 
the yield was low, and with the Israeli technology and 
expertise, we were able to provide some significant 
improvements in their crops, especially in those high-value 
crops.
    Mr. Karsting. Congresswoman, I would say, too, that USDA's 
programs in this area, the McGovern-Dole or the Food for 
Progress and our Borlaug and Cochran exchange programs are 
really built around that whole notion of extension and exchange 
and research and getting technology transferred to the farmers 
who need it most.
    The reason America has a really powerful ag sector is that 
150 years ago, we started our land-grant university systems. 
And that same notion is something that is very much with us 
every day at USDA, and it colors the way that we do our 
development programs overseas. I mentioned in my opening 
remarks about programs in Honduras where we monetize a certain 
amount of American products in a way that didn't displace or 
upset local markets and use the proceeds of that to launch 
local extension programs so that farmers can get better at what 
they do. And we do that all around the globe. And the benefits 
flow both ways. We have a Borlaug Fellow from Morocco who came 
to study horticultural issues. His mentors and peers went back 
to Morocco, and now they are implementing and testing Moroccan 
water efficiency technology in south Texas. So it is a cross-
pollination process.
    The Chairman. The gentlelady's time has expired.
    Ms. Kuster. Thank you.
    The Chairman. Mr. Yoho, for 5 minutes.
    Mr. Yoho. Thank you, Mr. Chairman. I appreciate you 
gentlemen being here and going over this. Mr. Staal, you were 
talking about, if I just kind of recap, the GAO reports that as 
of September 2013, 2.5 million people were receiving assistance 
in Syria. There are between six to seven million people 
displaced in Syria, and with the EBT cards you went over I 
thought very well about how that process works. And then you 
were talking about the metrics that you were using, the 
biometrics, to make sure they were being used properly by the 
right people. And then the question was asked to Mr. Karsting, 
would that improve the efficiency of the program here 
domestically? Just as a quick aside, what is your opinion on 
that?
    Mr. Staal. Well, I mean in the United States, of course, we 
are much more advanced already with our systems to track people 
and identify the right people and stuff. So it is a different 
situation, different context here. So it can be very difficult 
for me to tell you what----
    Mr. Yoho. So that is fair.
    Mr. Staal.--would work in one area.
    Mr. Yoho. I just thought it was interesting that you found 
it that effective over there. Going back to Syria with their 
infrastructure, and I have not been there, but we have 
definitely have a conflict area that has been going on, that is 
getting worse: 230,000 people have been slaughtered over there. 
Do they have the infrastructure where people can use an EBT 
card or is it very isolated where they can use that? And on top 
of that, do they have a productive agricultural sector where 
they can buy products that are efficient to meet the 
nutritional needs of what we are trying to resolve, and that is 
either malnutrition or food insecurity or just starvation?
    Mr. Staal. Yes, that is an excellent question, Congressman. 
It varies by location and that is why we have to be very sort 
of granular and directed. There are areas that the government 
controls where WFP is working where you can do some things. In 
the opposition-held areas, again, it varies. Is it an 
opposition that is friendly to the United States or an 
opposition area that is not friendly? We can do different 
things in different areas.
    Mr. Yoho. In your experience in Syria, what are you 
finding? Are they friendly? Or there is strong opposition from 
the Assad Administration?
    Mr. Staal. No, in terms of our actual things like food aid 
and humanitarian assistance, we have good cooperation, both in 
government-held areas and in opposition-held areas and are able 
to monitor things. We have our implementing partners again who 
have good experience in this. They in turn work with local 
partners in the region. Some things can go across the border. 
There was a U.N. resolution from the Security Council that 
allowed some commodities to be able to move across the border. 
That helps a lot.
    Mr. Yoho. Okay. And then I want to pivot on what both 
Congressmen Scott brought up about the RUTFs, the ready-to-use 
therapy foods, and peanut butter is a great one. It has high 
protein, high energy, high nutritional content. Are we 
utilizing products like that in addition to like EBT cards?
    Mr. Staal. Absolutely, yes. This is what they were talking 
about, these ready-to-use products, whether it is for 
supplementary feeding or even for severe malnutrition. And the 
one is called Nutributter. So it is a peanut paste----
    Mr. Yoho. Right.
    Mr. Staal.--product, peanut butter paste product----
    Mr. Yoho. Coming from Florida, I hope we use a lot more of 
that.
    Mr. Staal. Okay. But it is supplemented with additional 
vitamins and minerals----
    Mr. Yoho. Right.
    Mr. Staal.--specifically for malnourished children.
    Mr. Yoho. It is a great product, and I would hope we would 
use a lot more of that. And I know my mom raised six of us on 
peanut butter and jelly.
    Mr. Staal. There you go.
    Mr. Yoho. And a brown bag to take the lunch. And what I see 
is that you have conflict areas that we are trying to intervene 
and help with, and you have local, a lack of resources or 
knowledge, and we see Israel is a great example of how to grow 
in a desert area because of technology. And they have a stable 
government, and I know that is a big part of not being able to 
produce the foods that a country needs. And then we have the 
national disasters, or natural disasters, kind of like what 
happened in Haiti and the Philippines. And I would assume that 
your programs vary according to each type of situation, 
correct?
    Mr. Staal. That is correct.
    Mr. Yoho. Okay. And then I just kind of want to wind up 
with over the course of decades, America has stood head and 
shoulders above every other nation when it comes to assisting 
those in need both domestically and internationally. That is no 
small part due to the labors of our farmer and our ranch 
community. We all must be good stewards of the money taxpayers 
send up to Washington. We must ensure the efficiency and 
effectiveness of these programs are maximized, and you guys are 
doing a great job doing that. At the same time, I would hope 
that these programs are analyzed and future changes are 
considered. All parties will be included in the process; 
especially are folks who labor to produce much of the world's 
food supply. I appreciate your time.
    Mr. Staal. Thank you.
    The Chairman. The gentleman yields back. Mr. Ashford, for 5 
minutes.
    Mr. Ashford. Thank you, Mr. Chairman. A couple of comments. 
I am happy, Congressman Davis, was able to share Howard Buffett 
with you and central Illinois. I know that Howard's 
grandfather, Howard Buffett, who was a Member of Congress, 
Warren's father, was a Member of Congress after World War II, 
was quite a guy, and obviously Warren is as well. So we are 
very proud of Howard and what he is doing in this area.
    Thank you, Mr. Karsting, for your service to Nebraska, to 
the great Senator J.J. Exon who was a friend of mine, though I 
was quite a bit younger in those days. We miss him, and he was 
a force.
    Obviously Nebraska is an annex state, and we are proud of 
what our industry, what our farmers and ranchers have done in 
our state, obviously. And one example of that is Valmont 
Corporation, Bob Dougherty, as you know, the inventor, really, 
of center pivot irrigation technology, and the Dougherty 
Foundation which was just set up at the University of Nebraska 
to deal with water issues, not only in the United States but 
globally. And I am familiar, was just made familiar actually, 
with a program that Valmont is, I believe it is on the 
nonprofit side, is doing in East Africa that has to do with the 
single-pivot technology, to be able to develop agricultural 
products with a single pivot in small farms. Ms. Kuster's 
comment was right on. I mean, at what point--and this is the 
question. At what point, following on with Ms. Kuster, do we 
get to where we can focus, utilize in those areas of the world, 
where that kind of technology will have the most benefit, like 
in East Africa, and then how do we pursue that into the future?
    Mr. Karsting. I would love to learn more about what Valmont 
is doing there because that is a process that I am not familiar 
with, but we would like to learn more. I think where our people 
work at posts overseas in implementing our Food for Progress 
Programs, it varies so much from region to region and how you 
transition an emerging economy where they don't have value 
chains, they don't have food systems in place. How do you 
design a program where you start feeding kids who are 
malnourished and stunted, and then follow on with our Food for 
Progress, our Cochran, our Borlaug programs to try to ramp up 
everybody's capacity for stability and resilience for their 
local food systems. Look at Vietnam. Vietnam is now our 13th 
largest agricultural market. They weren't always that way. And 
what we find over the long-term is that the more we enhance 
people's capacity to have good food systems, the more they have 
transparent rules-based trade, the likelihood they're going to 
become our customers someday. And that really reinforces and 
stabilizes their food systems, the more we have those sorts of 
systems in place.
    So I don't have a one-pat answer for each area, but it is 
really exciting stuff to work on.
    Mr. Ashford. It seems that this single-pivot technology is 
being utilized in Tanzania and Ghana maybe and parts of 
Nigeria. Or Kenya, I am sorry, parts of Kenya. And we will get 
you some information on it. I would like to get some feedback 
because it is very interesting because not only are they 
providing food for themselves, they are also selling it in 
almost sort of a mini-export kind of economy.
    So I appreciate that. I appreciate your service, Mr. 
Staal's service, and thank you. Thank you, I yield back, Mr. 
Chairman.
    Mr. Staal. If I can just add, one of the important aspects 
of the U.S. assistance in the world is our technical expertise 
as you were mentioning, and we have a Farmer-to-Farmer Program, 
for instance, which brings volunteers, farmers, people from 
land-grant universities and so on to developing countries. Last 
year we brought almost 300 people into 28 different countries. 
So that is an important aspect of helping them to utilize these 
new technologies around the world and build their resilience as 
you mentioned.
    Mr. Ashford. Yes. Right. Thank you. Thank you, Mr. 
Chairman.
    The Chairman. The gentleman yields back. Mr. LaMalfa, for 5 
minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. For both you 
gentlemen: In a situation where a food supply might be limited 
in a foreign aid situation, the amount of intake certain folks 
might have, the idea of nutritionally fortified food is going 
to have a greater percentage of importance for someone's 
nutrition, getting those vitamins, getting those things they 
need.
    So what is the balance of shipping U.S. food that has that 
nutritional fortified aspect to it versus the cash program of 
buying whatever is available locally that may not be of that 
quality or may not have that input in that? How do you quantify 
that balance in those decisions? I am concerned, too, on the 
cash side with the fraud. The Chairman mentioned early on that 
it is a lot harder to wrangle a 100 pound sack of rice than it 
is a hundred dollar bill and have to go to the wrong place, 
what have you. What is the nutritionally fortified angle as 
well on that as far as having higher food quality shipped from 
the U.S. in these aid situations versus whatever may be 
available locally? Both of you, please.
    Mr. Karsting. Our implementing partners overseas take a 
look at those issues all the time. Fortified products are often 
more expensive than bulk commodities. And so they need to come 
to an understanding of where the trade-offs are and where the 
benefits arise. We are----
    Mr. LaMalfa. How are they fortified?
    Mr. Karsting. Well, actually we have just added two new 
products to the list. There is a micronutrient-fortified rice 
that we are going to be using soon in Cambodia in a McGovern-
Dole program that in the trial runs has shown it increases the 
uptake of Vitamin A and Zinc and reduces diarrhea in the target 
populations.
    Mr. LaMalfa. Yes.
    Mr. Karsting. So that is a good thing. We also have a 
micronutrient-fortified poultry-based product that people are 
exploring right now. So those products are going to cost more. 
And so you sort of have to go on a case-by-case basis to see if 
regular commodities or the fortified commodities make sense.
    Mr. Staal. And just to answer the question about cash-based 
aid, that is a very minor aspect. It may be about four percent 
of our assistance. But again, it is not cash in terms of 
hundred dollar bills. It is vouchers. It is working through 
financial institutions, not through governments, by the way, 
managed by our NGO partners, and then it is a card or some kind 
of----
    Mr. LaMalfa. Well, I understood it is not----
    Mr. Staal.--financial transfer.
    Mr. LaMalfa.--cash is cash, but certainly it is a medium 
that is much easier to move around. We have issues of that here 
domestically on how easy it is to----
    Mr. Staal. Sure.
    Mr. LaMalfa.--misuse those credits. That is what I am 
getting to.
    Mr. Staal. Yes.
    Mr. LaMalfa. Food is a lot harder for warlords to--they 
still manage but----
    Mr. Staal. They find a way. Yes. No, it is something we 
would target very carefully, the oversight. And we do find that 
the most needy people and especially as much as possible the 
cash and voucher assistance, we target to the women because we 
know women will use it to buy food for their children. And that 
is an important aspect of the way we work it.
    Mr. LaMalfa. Well, thank you. I yield back, Mr. Chairman.
    The Chairman. The gentleman yields back. I apologize. Mr. 
Benishek, I skipped you out of order. Sorry about that. Mr. 
Benishek is recognized for 5 minutes.
    Mr. Benishek. Thank you, Mr. Chairman. Well, it has been 
really interesting listening to you gentlemen talk this 
morning. I have a couple of specific questions that come to 
mind after listening to your testimony and that is I don't know 
what this biometric stuff that you were talking about for these 
cards, Mr. Staal. So you are telling me that Syria are 
identified by their thumbprint or their retinal scan in order 
to use this card? Is that what you are telling me?
    Mr. Staal. It is for the refugee populations that are----
    Mr. Benishek. So the refugee has been identified----
    Mr. Staal.--in Jordan----
    Mr. Benishek.--by their fingerprint then? And so when they 
go to the store, they have to fingerprint themselves and it 
identifies them as the person on this card?
    Mr. Staal. They use those biometrics to get the card to 
make sure that only people have it, and then the card can have 
their picture, similar to what we have here. And so using those 
biometrics, we are able to reduce the numbers of people because 
when it was just a name on a roll, then people were able to 
misuse that. Now--
    Mr. Benishek. Well, no, it is really a photo ID then 
basically is what you are saying?
    Mr. Staal. Basically a photo ID----
    Mr. Benishek. Okay.
    Mr. Staal.--but then it is verified with the finger scan 
and----
    Mr. Benishek. Yes, but you don't have to put your finger 
scan on it when you use the card?
    Mr. Staal. No, not every time. But in order to get the 
cards----
    Mr. Benishek. All right.
    Mr. Staal.--and to verify them on a regular basis.
    Mr. Benishek. Yes. I just find that amazing. Where is this 
actually in use?
    Mr. Staal. We are using it in a number of countries. It is 
not rolled out----
    Mr. Benishek. Name one.
    Mr. Staal.--anywhere yet.
    Mr. Benishek. Name one where it is actually in use.
    Mr. Staal. In Kenya in the refugee camps there, and then we 
are starting to use it in Jordan as well.
    Mr. Benishek. So it is not really widely used?
    Mr. Staal. It is not worldwide yet.
    Mr. Benishek. Okay.
    Mr. Staal. It is rolling out now.
    Mr. Benishek. I see. Let me ask you another question then, 
too. When we are using this cash-based aid, I noticed that 
Syria was a big part of the money that, there are refugees and 
all. I am sure all that kind of stuff is going on in Syria. But 
where does actually the food come from? Now we are spending as 
I understand like $272 million in humanitarian crises in Syria. 
I am looking at this GAO report. So where does the food come 
from? I can't imagine they are growing that food in Syria. 
Where are we buying this food from?
    Mr. Staal. Yes, it is an important question, and I am glad 
you asked that because it is local and regional procurement.
    Mr. Benishek. Like this bag of corn. Are they actually 
buying bags of corn in Syria from somebody else then?
    Mr. Staal. No, what they are is regionally and----
    Mr. Benishek. What are they buying?
    Mr. Staal. So they are able to buy----
    Mr. Benishek. What are they buying with the money?
    Mr. Staal.--say in Turkey or in the case of Malawi, they 
can buy it in Tanzania.
    Mr. Benishek. What are they actually buying? Are they 
buying rice or corn? What is the majority of the----
    Mr. Staal. Usually we do an----
    Mr. Benishek.--calories?
    Mr. Staal. Yes. Our partners do an assessment of what are 
the types of food that people prefer to eat and what is 
available and so on and then try to get a balanced diet. So it 
is a combination of----
    Mr. Benishek. Well, there is $272 million. I am just kind 
of wondering what are the two biggest commodities that they are 
buying?
    Mr. Staal. I can get that for you.
    [The information referred to is located on p. ??.]
    Mr. Benishek. You don't know?
    Mr. Staal. Off the top of my head I don't, but it is 
different in each country, okay? So for instance----
    Mr. Benishek. I am just wondering because----
    Mr. Staal.--in South Sudan it is sorghum.
    Mr. Benishek. I am just wondering because we spent $272 
million in Syria on cash-based food assistance. And I mean you 
kept saying that our NGO partners are overseeing that there is 
no fraud. It would seem to me that besides relying on the NGO 
partners to make sure there is no fraud, you should have some 
ability to answer a few questions about like what is the most 
common commodity bought in Syria with the $272 million. You 
understand what I am saying? I don't like the answer where you 
say in cooperation with our NGO partners we are doing good 
oversight. You know what I mean? I don't like that answer, 
especially when I have this GAO report that says the U.S. aid 
cannot hold its staff or its partners accountable for taking 
all necessary steps to justify and document the modification of 
awards. That is the GAO report on what is going on.
    I appreciate that you are here, defending the program, and 
it is worthwhile. But, we here are concerned that money is not 
going to the right places and that your own internal audit 
methods aren't really satisfactory. The answer you have given 
me repeatedly is the NGOs are dealing with the fraud part. So 
tell me about that a little bit.
    Mr. Staal. Yes, and obviously it is not just the NGOs. We 
provide strict oversight over the NGOs. In fact, we put out 
additional staff----
    Mr. Benishek. I understand you say that but----
    Mr. Staal.--in Jordan and Turkey and so on.
    Mr. Benishek.--you don't know the top two commodities that 
you purchased for the $272 million.
    Mr. Staal. Yes. Well----
    Mr. Benishek. That doesn't mean to me that you know what 
the oversight is. My time is up.
    The Chairman. The gentleman yields back. Mr. Allen, for 5 
minutes.
    Mr. Allen. Yes, sir. Thank you, Mr. Chairman, and thanks to 
both of you for monitoring and implementing this program. A 
couple things, and it has been interesting listening to 
particularly this cash versus in-kind process. The challenges 
with the cash obviously is compliance, is to make sure that the 
food is appropriately disbursed. Do you have any feel for--
okay. In-kind, I mean, that is food, and you disburse that I 
guess based on the needs of a family.
    Mr. Staal. Yes.
    Mr. Allen. On the cash side, how do you know what to give a 
family and what they are able to purchase with that?
    Mr. Staal. Yes, that is a critical question, and in a 
similar assessment, we do an assessment of the needs, okay, and 
based on that, whether they need in-kind or cash, depending on 
what is in the market. And then the value is assessed to that, 
okay? For a family of four or five, they look at what they need 
on a calorie basis and determine how much it costs in the 
market to buy certain commodities. They agree, okay, in this 
particular instance, they need to get lentils and some oil and 
wheat, and you need this much for this many people. And then 
you are going to need this much cash to do that, okay? So it 
is----
    Mr. Allen. Is that----
    Mr. Staal.--quite a detailed assessment.
    Mr. Allen. Is it based on the currency in that country or 
our currency?
    Mr. Staal. Yes, based on the currency in the country and 
what they can buy with it there. You know, then of course that 
has to be translated back into dollars for us----
    Mr. Allen. Right.
    Mr. Staal.--because we get dollars from----
    Mr. Allen. But you have countries like Zimbabwe where the 
inflation rate--you can't even get through the grocery line 
before the price goes up.
    Mr. Staal. Yes, Zimbabwe is a special case where actually 
we are able to use dollars in the market there, and so it 
doesn't fluctuate like that.
    Mr. Allen. So the dollars will buy a better value for that 
family?
    Mr. Staal. Although in Zimbabwe, a lot of it is in-kind 
there from local and regional purchased in neighboring 
countries.
    Mr. Allen. Okay. Mr. Karsting, I was interested in the 
self-sufficiency programs that you mentioned in your testimony 
and trying to get countries in a position where they can 
actually feed their people if the government is interested in 
actually doing that. One of the things that I have recognized 
in my travels is that--and I have no idea what their spoilage 
is. But basically pretty much outside the United States you go 
and you buy at a market foods that are almost produced on a 
daily basis. And so I didn't see--in fact, some countries had a 
hard time finding a cube of ice. So refrigeration was non-
existent in a lot of these countries. I think that in our 
country the invention of refrigeration probably was the largest 
single food production invention in our history because we were 
able to preserve foods and then eat them, as we needed. And we 
thought about changing how they do things over there from a 
preservation standpoint. And again, you may know some 
statistics on spoilage and that sort of thing. But obviously 
the more we can use the food and preserve it and use it on a 
long-term basis, obviously we are going to feed a lot more 
people.
    Mr. Karsting. Yes, that is another topic that would be 
really interesting to get into in some detail, the whole notion 
of food loss and food waste is a really a big topic right now. 
Groups like the Food and Ag Organization of the U.N. are 
working on it. It is important to the Secretary of Agriculture. 
It is important to USDA. What we see a lot of in developing 
countries is that it is food loss, getting food from farmers to 
consumers is where the waste occurs. In more developed 
countries, the higher incidence of food waste is post-consumer 
purchase. And so it is different problems in different regions 
of the world. Our fancy term for refrigeration and ice is cold-
chain development. We do training through the Cochran program 
for people to help them implement ways of efficient cold-chain 
development. You have to have a reliable electricity grid. You 
have to have all those other things that are sort of nascent in 
more emerging democracies or emerging civil societies. But we 
are focused on----
    Mr. Allen. Well, I am glad to hear that you are doing that, 
and we have to squeeze every nickel we can----
    Mr. Karsting. Yes.
    Mr. Allen.--to make this food available. Thank you. I yield 
back.
    The Chairman. The gentleman's time has expired. Thank you. 
Gentlemen, thank you very much for being here this morning. Mr. 
Staal, one final quick question. I appreciate your comments 
that you have made that there is no deal with the maritime 
groups. I am a little concerned that whatever dialogue or 
negotiations that are going on lack transparency. I also intend 
to take you up on your offer to keep agricultural groups at the 
table in these discussions. We are not seeing where that is 
happening, and we can't find out the folks that are 
participating. So, as we conduct this review over the next 
couple of years, I appreciate your openness to keeping all the 
players at the table so that we can have as broad of support as 
we can. I yield a couple of seconds to the gentleman from 
Georgia.
    Mr. David Scott of Georgia. Thank you very much, Mr. 
Chairman. It just occurred to me, since we have you here, this 
has been a very, very informative discussion, and as we have 
discussed back and forth, it is a profound, profound issue. So 
I feel we would be derelict in our duty if we didn't ask you 
two experts on this area, are you hopeful that this issue can 
be solved? Do you feel that it will be solved? And what do you 
see as the main forces if you don't feel it will be solved that 
are preventing that? Just briefly. I'd appreciate that. Give us 
some hope here at the end or tell us what we have to do to get 
that hope.
    Mr. Staal. Thank you, Congressman Scott. That is a critical 
question that we wrestle with every day. When I go to a camp or 
a place where people are really poor and I see children who are 
malnourished and suffering right there in front of me. And 
certainly, our food aid assistance is a stop-gap measure, and 
it is doing some great work. With additional flexibility, we 
feel we can do more, but the needs are huge and unfortunately 
getting worse right now with conflict around the world. And so 
it needs to be a combination of things, both political and 
military efforts. But the critical aspects of improving 
agriculture production--in so many countries, I mean, Ethiopia 
is sort of famous for unfortunately being a poster child for 
famine, yet with some relatively modest improvements, they 
could easily be self-sufficient.
    Mr. David Scott of Georgia. Yes.
    Mr. Staal. And the same is true in so many other countries. 
So the efforts being done by colleagues within USDA under Feed 
the Future will really help to change the world that way, and I 
do have a hope but unfortunately it is a longer-term hope that 
we have to continue to stay focused on. Thank you.
    Mr. David Scott of Georgia. Very good. Thank you.
    Mr. Karsting. Congressman, I work with farmers a lot, and 
farmers are by their very nature hopeful. They have to hope 
that rain comes and everything happens the way it should be. 
But hope is not a plan, and that is really what we need to 
focus on is how does our planning work. How do we get our hands 
dirty and actually deliver programs that work on the ground so 
we build strong partners all around the globe? That is what we 
focus on at USDA and USAID.
    Mr. David Scott of Georgia. Thank you. Thank you for your 
graciousness, Mr. Chairman, in letting me ask that question.
    The Chairman. Well, thanks. I appreciate that. Mr. Staal, 
we will appreciate your efforts to keep a broad coalition of 
everybody at the table as you analyze the flexibility that we 
gave in the 2014 Farm Bill. There is a tension between feeding 
people and teaching them to grow food and the limited resources 
we have to try to do both at the exact same time. And then we 
add to the tension with the cash versus in-kind conversations. 
We will use this period as we do with the safety net programs 
that we put in place in the 2014 Farm Bill for U.S. production 
agriculture. We will use this timeframe to look at the changes 
we did make with respect to the program, going forward. I am a 
little uncomfortable giving you additional flexibility now. I 
want to make sure that the flexibility you have is being used 
appropriately as we walk forward.
    A couple of us have mentioned that if you look at the last 
100+ years, we would argue there has never been a country that 
has done as much good for the rest of the world and asked so 
little in return as the United States of America. And there are 
a lot of players, including our military certainly, but much of 
that high profile is from coming to other people's aid, feeding 
them when they are hungry or when they are starving. All those 
kinds of things happen. That charity, that heart for the folks 
that need help is based on broad support, and we have to keep 
everybody at the table, the folks who support the in-kind and 
the folks who want cash-based assistance. We have to keep them 
all there so that we can maintain this incredible heart for 
helping people in need around the world.
    I had a really poignant experience. I was in Jalalabad, 
Afghanistan, one Sunday afternoon, and we had a group of 101st 
Airborne guys who were sitting around the table, at basically a 
chamber of commerce meeting. They had good production 
agriculture there, but they had no value-added chain. They had 
no refrigeration; electricity was intermittent; and they had 
customers they thought that they could arrange for in Kuwait to 
buy the food that was being grown there. But they were missing 
that middle piece. And these men who are warriors at heart 
didn't know really much about commerce, but yet they were 
focused on trying to make it happen. And they were really 
excited because the following month we were getting a bunch of 
real farmers from the Missouri National Guard who were coming 
there, and so they were excited about that opportunity to bring 
American expertise, American folks who do it for a living, to 
come there and to try to help these folks, take care of 
themselves. The poignant part of that is the day before, the 
Saturday before, they had been in an 8 hour run and gunfight 
with bad guys. So a warrior one day, and chamber of commerce 
guys the next. That is a good example of the incredible heart 
this country has for everything that is going on. But we have 
to maintain the broad support. So again, I appreciate both of 
you being here today. This is an issue that the Agriculture 
Committee has great interest in, keen interest in obviously, 
and I will continue to review the program, the new flexibility 
that you received under the 2014 Farm Bill as well as 
opportunities to improve it the next time we do the farm bill. 
So there is a theme here; you get the hint.
    Under the rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material, including anything else that you would 
like to supply us with to help us in this review. This hearing 
of the Committee on Agriculture is adjourned.
    [Whereupon, at 11:50 a.m., the Committee was adjourned.]
    [Material submitted for inclusion in the record follows:]
 Supplementary Material Submitted by Thomas H. Staal, Acting Assistant 
    Administrator, Bureau for Democracy, Conflict and Humanitarian 
         Assistance, U.S. Agency for International Development
Insert 1
          The Chairman. Let me get to the Maritime Administration. No 
        deal? Nothing's gone on that is in writing? No handshakes, 
        nothing like that that we should be aware of?
          Mr. Staal. That is correct. We are definitely in discussion 
        with them, and we have continued those discussions to find 
        better ways to effectively use the resources we have. And in 
        fact, we would love to have additional dialogue with your 
        Committee, with the Members, with the staff to look, to get 
        your input on how to reach these objectives.
          The Chairman. I appreciate that. Thank you very much for that 
        kind offer, and we will seek to take you up on that.

    Since 2013, USAID has had conversations with a broad array of 
stakeholders, including Members of Congress, NGOs, maritime and 
agriculture representatives, about enacting food aid reform to reach 
additional beneficiaries more efficiently and with the same resources. 
Though there is not an MOU, USAID and maritime representatives have had 
conversations and agreed upon an approach. The potential compromise has 
not been finalized, and does not represent the Administration's 
position as it has not gone through a formal approval process. The 
elements of the potential compromise include: (1) additional 
flexibility for the Food for Peace Title II program (2) cargo 
preference efficiency reforms related to the implementation of the 
Cargo Preference Act and (3) transfer of a portion of the Title II 
funds out of the efficiency savings generated by Food for Peace reforms 
to MARAD to enhance national sealift capacity and provide support for 
non-Maritime Security Program (MSP) vessels that carry food aid 
cargoes. We would be pleased to continue to meet with Members and 
Congressional staff to provide further details of this potential 
compromise.
    As mentioned, the potential compromise includes certain cargo 
preference efficiency reforms. Cargo preference reforms have been the 
subject of discussions between USAID and MARAD for years, and the ones 
under consideration as part of the current compromise have been 
reflected in written Terms of Agreement signed by the USAID Acting 
Administrator and the MARAD Administrator. Some of these proposed 
reforms could be implemented through rulemaking while others could be 
implemented through legislation, assuming the potential compromise is 
finalized and such legislation is introduced and enacted.
    As USAID and other Administration officials have testified in a 
number of Congressional hearings, the Administration's current food aid 
reform proposal is included in the 2016 Budget proposal. We continue to 
consult with a broad array of stakeholders to solicit input and look 
for ways to achieve the Administration's proposed food aid objectives.
Insert 2
          Mr. Peterson. Thank you, Mr. Chairman. Following up, the 
        discussions that are being had, there are agriculture people 
        involved in those discussions, Mr. Staal?
          Mr. Staal. Thank you, Congressman. Yes, we have met with the 
        maritime industry as indicated, with NGOs and with also 
        agriculture commodity groups.
          Mr. Peterson. What is their involvement and who are they?
          Mr. Staal. I don't have the exact names of the organizations. 
        I can provide that to you, but certainly we have met with them 
        and continue to meet with them. And as I said, we would be very 
        happy to meet with Members of the Committee, your staff, to get 
        your input as well.

    Since 2013, USAID has had conversations with a broad array of 
stakeholders, including Members of Congress, NGOs, maritime and 
agriculture representatives, about enacting food aid reform to reach 
additional beneficiaries more efficiently with the same resources. Food 
aid reform conversations have also been part of USAID's Food Aid 
Consultative Group meetings that occur twice a year.
    U.S. agriculture has always been and will continue to be a key 
partner in our efforts to feed the world's most hungry. Representatives 
from the agriculture sector who have been engaged in recent food aid 
reform discussions include:

  American Farm Bureau Federation
  American Peanut Council
  American Soybean Association
  Archer Daniels Midland
  Cargill
  Global Food and Nutrition, Inc.
  National Association of Wheat Growers
  National Corn Growers Association
  National Farmers Union
  National Oilseed Processors Association
  National Potato Council
  National Sorghum Producers
  North American Millers Association
  U.S. Dry Beans Council
  U.S. Rice Producers Association
  U.S. Wheat Associates
  USA Dry Pea and Lentils Association
  USA Rice Federation

    We look forward to continuing this partnership as we seek the right 
mix of tools to respond most effectively to humanitarian crises. As the 
numbers of internally displaced persons and refugees grow and global 
humanitarian needs outpace limited resources, our ability to respond 
appropriately and efficiently has never been more critical.
Insert 3
          Mr. Crawford. Thank you, Mr. Chairman. I appreciate that. Mr. 
        Staal, I have to ask you a question or two about rice. Half the 
        U.S. rice crop is growing in my district. The farmers are very 
        concerned about the Food for Peace Program and I was just 
        wondering if you can tell me how many metric tons of rice are 
        currently being shipped through the Food for Peace Title II 
        Program?
          Mr. Staal. Thank you, Congressman. Certainly rice is an 
        important part of our assistance. I have to admit I don't have 
        the exact number, but we can certainly get that to you.

    The amount of rice purchased in a given year fluctuates greatly 
depending on what crises emerge and the appropriate commodity for the 
populations being served. In FY 2014, USAID shipped 84,610 MT of rice 
through the Food for Peace program. From 2005-2015 the Office of Food 
for Peace purchased approximately 1.13 million metric tons of rice in 
the U.S., averaging 102,800 MT per year, to support its Title II food 
assistance programs valued at approximately $576 million.
Insert 4
          Mr. Crawford. We hear a lot about the cost of shipping in-
        kind food aid donations. In your written statement you said 
        that the savings from eliminating shipping costs would 
        translate into helping more people. But in cases of cash-based 
        aid, that seems to ignore the fact that recipients are 
        purchasing food from supermarkets and other sources at prices 
        that, I would assume, include processing, shipping, and profit 
        margins for those supplying the food.
          So my question then, Mr. Staal, is this. What is the 
        difference between in-kind and cash-based food aid in terms of 
        cost per calorie consumed?
          Mr. Staal. Yes, thank you. That is an excellent question, and 
        we will have to do a little more digging. I will get you an 
        answer on the cost per calorie. Certainly the cost per ton is 
        significantly cheaper in a lot of cases. It varies a lot by 
        country. The land-locked countries like Chad or Afghanistan, 
        the cost for the shipping, handling, and so on is much higher. 
        In some countries, Bangladesh for instance, it is less of a 
        factor. So that continues to be an important thing. Basically 
        overall, we figure it is about 30 percent less to purchase 
        locally and regionally than it is to ship from the United 
        States.
          Mr. Crawford. That is 30 percent less on a per-calorie basis?
          Mr. Staal. That is on a per-ton basis for the commodities. We 
        will have to look into the per-calorie basis. That is a 
        slightly different calculation.

    USAID's Office of Food for Peace provides different ration sizes, 
food baskets, and transfer amounts specific to the context of each 
emergency response. The goal of emergency food assistance, regardless 
of modality, is to help beneficiaries meet their daily caloric needs. A 
full food basket provides an adult 2,100 kilocalories per day, or 
approximately 17 kilograms of food per month. Based on the context of 
the emergency response, USAID will often provide less than a full food 
basket, allowing beneficiaries to supplement food assistance with other 
sources. Commodity, transportation, and operational costs also vary by 
operation. For example, it is more expensive to program food assistance 
in war-torn South Sudan than in Guatemala. When compared to U.S. 
procured in-kind food, local and regionally procured food in FY 2014 
was an average of 29 percent less expensive.
    Cash and voucher programs propose cash transfer or voucher value in 
order to cover a proportion of a beneficiaries food needs, again 
assuming a full food basket of 2,100 kilocalories per day. Program 
beneficiaries often have the freedom, to select a wide variety of 
commodities--and commodity volumes--with that transfer. Operational 
costs also vary based on a number of factors, including local prices, 
market sophistication, and beneficiary targeting.
    For example, USAID supported the U.N. World Food Programme's (WFP) 
provision of cash transfers and vouchers valued at $10.35 a month to 
vulnerable populations in Senegal suffering from drought, a value 
equivalent to the cost of a daily ration meeting approximately 92 
percent of kilocalorie needs. Thanks to a stable political and economic 
situation, established relationships between WFP, retailers, and 
financial institutions, as well as availability of diverse nutrient-
rich foods in local markets, this program is approximately 46 percent 
less expensive than a comparable Title II in-kind contribution. In 
neighboring Mali, however, a more complex, conflict affected operating 
environment with less sophisticated retail and financial systems 
contribute to increased operating expenses for all programming, 
including cash transfers. A non-governmental organization managed cash-
for-work program improving levees and irrigation systems in Mali is, 
therefore, less efficient than the example above, at only 10 percent 
less expensive than comparable Title II in-kind contributions in a 
food-for-work activity.
Insert 5
          Mr. Benishek. I see. Let me ask you another question then, 
        too. When we are using this cash-based aid, I noticed that 
        Syria was a big part of the money that, there are refugees and 
        all. I am sure all that kind of stuff is going on in Syria. But 
        where does actually the food come from? Now we are spending as 
        I understand like $272 million in humanitarian crises in Syria. 
        I am looking at this GAO report. So where does the food come 
        from? I can't imagine they are growing that food in Syria. 
        Where are we buying this food from?
          * * * * *
          Mr. Benishek. Well, there is $272 million. I am just kind of 
        wondering what are the two biggest commodities that they are 
        buying?
          Mr. Staal. I can get that for you.

    In Fiscal Year (FY) 2014, USAID's Office of Food for Peace provided 
$177.8 million to the U.N. World Food Programme's (WFP) emergency 
operation inside Syria. Funding for this operation supports the 
regional procurement of commodities to provide a monthly food basket to 
conflict-affected people in Syria. The top two commodities purchased 
with USAID resources are rice and wheat flour. From 2014 through the 
present, WFP has purchased nearly 73,000 metric tons of rice from India 
and more than 34,000 metric tons of wheat flour from Turkey.
    USAID provided an additional $272.5 million to WFP's regional 
operation providing food vouchers to Syrian refugees in Egypt, Iraq, 
Jordan, Lebanon, and Turkey. Refugees used electronic debit cards to 
purchase urgently needed food in local stores and markets, including 
rice, potatoes, oil, meat/chicken, eggs, yoghurt, and/or cheese.
                                 ______
                                 
                          Submitted Questions
Response from Philip C. Karsting, Administrator, Foreign Agricultural 
        Service, U.S. Department of Agriculture
Questions Submitted by Hon. K. Michael Conaway, a Representative in 
        Congress from Texas
    Question 1. A recent GAO report states that, ``Although LRP may 
have the added benefit of providing food that may be more culturally 
appropriate to recipients, evidence has yet to be systematically 
collected on LRP's adherence to quality standards and product 
specifications, which ensure food safety and nutritional content.'' How 
does USDA plan to ensure food safety on such a large scale without the 
legal requirements and technology that exist in the U.S. food system?
    Answer. USDA plans to continue practices that successfully ensured 
food safety in operating the Local and Regional Procurement Pilot 
Program authorized under the 2008 Farm Bill. Contracts with LRP pilot 
program implementers specified that all commodities purchased must meet 
national food safety standards or Codex Alimentarius standards, and 
also be tested for aflatoxin. There is considerable experience with 
these standards. For example, these are the standards that the World 
Food Program (WFP) and the U.S. Agency for International Development 
(USAID) use in their LRP programs. The independent evaluation of the 
LRP Pilot \1\ also reported that ``Since each of the participants 
tested food quality, there is little risk that the project distributed 
food that threatened human health. The evaluation team found no 
evidence that anything distributed by the field projects ever 
threatened human health.''
---------------------------------------------------------------------------
    \1\ USDA Local and Regional Food Aid Procurement Pilot Project, 
Independent Evaluation Report available at: http://www.fas.usda.gov/
sites/default/files/lrp--report--12-03-12--to--print.pdf

    Question 2. What is the approximate share of U.S. food aid funding 
spent on actual commodities? What are the tonnages (and associated 
costs) of food purchased, and what are the trends in the tonnage of 
food that the U.S. is able to deliver over the last several decades? 
Where possible, please include a breakdown of the raw commodity cost 
and any associated transportation (or other non-commodity) costs.
    Answer. The table below highlights the commodity purchases 
completed under P.L. 83-480 Title I, II, and III, Food for Progress, 
McGovern-Dole International Food for Education and Child Nutrition, 
Section 416(b), and Bill Emerson Humanitarian Trust (BEHT) programs 
between fiscal years (FY) 1997 and FY 2014.

                                                        Food Assistance Purchases and Program Costs--All Programs: Fiscal Years 1997-2014
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                          Commodity
          Metric Tons                        % of     Ocean and Inland  Freight %                     ITSH % of                      202(e) %  Administrative  Administrative
   FY      Purchased     Commodity Cost     Total       Freight Cost     of Total         ITSH          Total          202(e)        of Total       Costs        % of Total        Total Cost
                                             Cost                          Cost                          Cost                          Cost                         Cost
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
   1997     3,873,624  $1,025,081,804.12     64.62%    $459,088,008.17     28.94%     $78,416,879.00      4.94%     $23,348,000.00      1.47%       $381,681           0.02%      $1,586,316,372
   1998     4,526,435  $1,145,917,828.82     62.92%    $529,233,303.10     29.06%    $115,298,852.00      6.33%     $28,000,000.00      1.54%     $2,825,051           0.16%      $1,821,275,035
   1999     7,879,628  $1,564,751,053.92     62.97%    $784,682,403.56     31.58%    $122,063,226.00      4.91%     $12,687,100.00      0.51%       $790,484           0.03%      $2,484,974,267
   2000     5,456,450  $1,064,002,679.32     58.02%    $615,253,781.76     33.55%    $140,725,902.07      7.67%     $11,720,700.00      0.64%     $2,148,058           0.12%      $1,833,851,121
   2001     4,983,130  $1,006,411,932.76     60.55%    $496,518,624.27     29.87%    $131,757,888.00      7.93%     $25,700,000.00      1.55%     $1,832,748           0.11%      $1,662,221,193
   2002     4,542,956  $1,048,084,151.86     58.34%    $516,340,420.18     28.74%    $187,449,024.09     10.43%     $32,800,000.00      1.83%    $11,826,962           0.66%      $1,796,500,558
   2003     4,696,563  $1,196,952,211.58     52.96%    $678,656,600.65     30.03%    $305,201,000.32     13.50%     $72,800,000.00      3.22%     $6,545,486           0.29%      $2,260,155,299
   2004     3,630,749  $1,085,009,310.44     51.18%    $591,719,669.12     27.91%    $355,026,662.00     16.75%     $80,500,000.00      3.80%     $7,887,451           0.37%      $2,120,143,092
   2005     3,786,115    $939,330,736.70     44.13%    $674,846,626.87     31.70%    $420,649,123.36     19.76%     $85,100,000.00      4.00%     $8,684,299           0.41%      $2,128,610,786
   2006     2,837,370    $725,001,664.32     37.39%    $562,502,532.14     29.01%    $542,662,409.36     27.99%     $94,800,000.00      4.89%    $13,805,238           0.71%      $1,938,771,843
   2007     2,496,411    $847,958,201.38     44.74%    $513,907,228.25     27.11%    $441,695,100.00     23.30%     $85,680,900.00      4.52%     $6,134,996           0.32%      $1,895,376,426
   2008     2,840,479  $1,315,557,683.94     47.66%    $722,880,719.58     26.19%    $555,281,400.00     20.11%    $159,178,300.00      5.77%     $7,668,652           0.28%      $2,760,566,756
   2009     2,806,341    $955,058,794.36     38.62%    $660,805,329.04     26.72%    $640,077,600.00     25.88%    $203,434,400.00      8.23%    $13,577,906           0.55%      $2,472,954,029
   2010     2,338,405    $828,309,710.29     39.80%    $552,006,030.92     26.53%    $482,927,900.00     23.21%    $210,467,300.00     10.11%     $7,270,228           0.35%      $2,080,981,169
   2011     1,808,624    $954,479,601.50     45.57%    $565,402,757.80     26.99%    $383,262,700.00     18.30%    $180,750,200.00      8.63%    $10,820,879           0.52%      $2,094,716,138
   2012     1,736,961    $789,927,112.70     44.49%    $400,608,148.06     22.56%    $405,165,600.00     22.82%    $169,901,100.00      9.57%    $10,025,229           0.56%      $1,775,627,190
   2013     1,452,312    $743,317,044.22     44.27%    $366,458,820.90     21.82%    $374,253,300.00     22.29%    $184,218,600.00     10.97%    $10,901,396           0.65%      $1,679,149,161
   2014     1,333,971    $562,218,487.73     35.22%    $362,173,223.89     22.69%    $398,378,400.00     24.96%    $265,455,900.00     16.63%     $8,051,365           0.50%      $1,596,277,377
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ITSH = Internal Shipping and Handling costs for all programs (USAID and USDA).
202e = Allowable implementation costs by USAID partners under Food for Peace programs (USAID Only)
Administrative Costs = Allowable implementation costs by USDA food assistance program partners (USDA Only).
Bill Emerson Humanitarian Trust (BEHT) = Drawdowns made against BEHT in 2002; 2003; 2004; 2005; 2008; and 2014.


    Question 3. What is the biggest constraint on being able to 
increase the impact of in-kind food aid?
    Answer. The impact of in-kind food aid depends upon the specific 
program. For example, when segments of the local population cannot 
afford food but the local supply is sufficient, in-kind food aid can 
adversely affect local farmers and worsen the situation; so in-kind 
food aid is not appropriate in these cases. This is one reason that 
USDA and USAID are required to assess the impact of in-kind food aid on 
local markets. There are logistical, cost, and other constraints that 
are inherent in the current in-kind system that often limit the ability 
of the programs to reach the largest number of beneficiaries in the 
most appropriate way and in the timeliest manner.
    Both the McGovern-Dole and Food for Progress Program (FFPr) 
programs were oversubscribed in the FY 2015. FFPr relies on 
monetization, and sales of commodities being monetized typically incur 
a loss. McGovern-Dole has the authority to use cash for administrative 
and other program costs to address educational and other objectives. In 
addition, the Administration has requested the authority to use local 
and regional procurement (LRP) for McGovern-Dole in order to provide 
complementary programs that can, among other things, improve nutrition 
by procuring foods that cannot be provided through an in-kind program, 
such as fresh fruits and vegetables.
    The maximum volume of food aid delivered under the Food for 
Progress program is governed by the authorized funding limit of $40 
million for transportation, which has been subject to sequestration in 
recent years. In FY 2015, the number of applications exceeded the level 
of projects that were able to be funded
    Unlike USDA development food aid programs, USAID addresses mainly 
emergency needs in increasingly complex situations. For many crises, 
like South Sudan, in-kind food aid can address much of the need. Even 
in those cases, logistical and cost issues constrain the impact of our 
in-kind food aid funding. However, the flexibilities provided through 
the 2014 Farm Bill allow USAID to augment in-kind food with cash-based 
assistance for timelier and/or more market appropriate food assistance. 
For example, as Ebola spread across West Africa in the summer of 2015, 
USAID provided funds for local and regional procurement of 
commodities--allowing the World Food Programme to quickly provide life-
saving assistance to Ebola patients and quarantined communities while 
mitigating the market impacts of the Ebola crisis.
    The USDA FY 2016 Budget included a proposal to address a constraint 
in the definition of ``agricultural commodity'' under the McGovern-Dole 
program. A goal of the McGovern-Dole is for projects to achieve 
sustainability and host governments continue the school feeding 
programs using their own resources. With this outcome, McGovern-Dole 
resources are freed up for new, additional projects. The Budget 
proposes to amend the definition of an eligible agricultural commodity 
for McGovern-Dole programs so that meals can be enhanced with locally 
produced foods. Through procuring local food such as fruits and 
vegetables, FAS will be able to offer nutritionally rich meals 
consistent with local diets, boost local farmer incomes, and build 
supply chains. The FY 2016 Budget also proposed $20 million in funding 
for the Local and Regional Procurement (LRP) program authorized in the 
2014 Farm Bill. USDA's FY 2016 Budget proposed $20 million in funding 
for the newly authorized LRP program. The program will serve as a 
complementary tool to support existing food aid programs, especially 
for the McGovern-Dole school feeding program. LRP, when used in 
conjunction with McGovern-Dole, will maximize community support and 
increase the probability that local governments take ownership and 
maintain school feeding programs.
    USAID's 2016 Budget Request included a request for an additional 25 
percent flexibility for interventions such as purchasing food locally 
and regionally or providing food vouchers or cash transfers for food 
within the Title II account. This flexibility will, among other 
benefits, help to ensure that U.S. food assistance is part of the 
immediate response to natural disasters and other humanitarian 
emergencies and will allow USAID to reach about two million more 
emergency beneficiaries per year without additional resources.

    Question 4. As you well know, monetization is the process by which 
U.S. commodities are shipped overseas and sold locally to generate 
funds to be used for development purposes. Across all programs, how 
much of U.S. food aid does monetization account for? What are the pros 
and cons of monetization in terms of efficiency of delivery, impacts on 
markets, and U.S. contributions to food aid?
    Answer. In Fiscal Year 2014, total funding for U.S. international 
food aid was $1.881 billion, including funding for Food for Peace 
($1.466 billion), FFPr ($230 million) and McGovern-Dole ($185 million) 
programs. In Fiscal Year 2014, monetization totaled to approximately $ 
253.7 million, or 13.5 percent of total food aid.
    At certain times, monetization can facilitate opportunities for 
recipient countries to procure sufficient quantities of necessary 
staples due to low financial resources, poor credit, or other market 
conditions and use the proceeds to further develop the agriculture 
sector. For example, the Government of Jordan, a member of the World 
Trade Organization, requested that USDA donate 100,000 metric tons of 
wheat in 2015 to address a shortage caused by the influx of over 
600,000 Syrian refugees. USDA was able to respond and will use the sale 
proceeds to work with the Government of Jordan to address water and 
trade facilitation issues to strengthen Jordan's agriculture sector.
    By providing an appropriate commodity in the recipient country and 
generating funds for development activities, monetization can build the 
capacity of local producer groups and cooperatives. An FFPr project in 
Honduras helped local coffee producers improve their agricultural 
productivity and quality and the success of the project was highlighted 
when the producers won a prestigious coffee award. Monetization can 
also assist in supporting the creation of new market inputs that 
channel into existing domestic industry. For example, the monetization 
of soybean meal has been coordinated with in-country development 
projects in the livestock sector and provided the basis for supporting 
long term access to quality feed ingredients.
    Several GAO and academic studies have pointed out the negatives of 
monetization, including that the inefficiency of the monetization 
process reduced funding available to the U.S. Government for 
development projects. For example, a GAO report in 2011 found that 
monetization lost between 24 and 42 per dollar spent (GAO report no. 
11-636: Published: Jun 23, 2011). Further, the report noted that 
monetization programs risk disrupting local markets and production if 
not employed correctly. Monetization requires additional time, money, 
and staff invested in the procurement and shipping of in-kind food.

    Question 5. We are trying to identify ways to make U.S. food aid 
programs more effective and to stretch our dollar further to meet the 
nutritional needs of more people. Where are the areas where we can 
improve efficiencies in the system? Procurement? Transportation? In-
country delivery? What specific actions have been taken to implement 
these ideas for improving efficiency?
    Answer. The Administration's FY 2016 Budget request proposed 
changes to make U.S. food aid programs more effective and to meet the 
nutritional needs of more people.
    The proposed changes included providing authority for some local 
and regional procurement in the McGovern-Dole program, which can lead 
to increased sustainability and, in effect, stretch our financial 
investment as host countries invest in the school feeding projects. As 
mentioned previously, funding at the 2016 President's Budget requested 
level for the Local and Regional Procurement program, authorized in the 
2014 Farm Bill, would enable USDA to take steps to implement the 
complementary tool to support and increase sustainability of existing 
food aid programs, especially for the McGovern-Dole school feeding 
program.
    The Administration's request for USAID's Food for Peace program 
(P.L. 83-480 Title II) is for $1.4 billion, including $270 million to 
be used for development programs in combination with an additional $80 
million requested in the Development Assistance account under USAID's 
Community Development Fund, bringing the total funding for these types 
of programs to $350 million. Together, these resources support 
development food assistance programs' efforts to address chronic food 
insecurity in areas of recurrent crises using a multi-sectoral approach 
to reduce poverty and build resilience. The balance of the Food for 
Peace request, $1.13 billion, will be used to provide emergency food 
assistance in response to natural disasters and complex emergencies. 
The request also includes new authority to use up to 25 percent ($350 
million) of the Food for Peace appropriation in emergencies for 
interventions such as local or regional procurement of agricultural 
commodities near crises, food vouchers or cash transfers. The 
additional flexibility makes emergency food aid more timely and cost 
effective, improving program efficiencies and performance and 
increasing the number of people assisted by about two million annually 
with the same level of resources.

    Question 6. What impact does the shipping cap have on the number of 
Food for Progress projects that FAS is able to carry out?
    Answer. The annual budget for transportation costs for FFPr 
programs is $40 million. In recent years, sequestration has reduced the 
FFPr budget by roughly seven percent. Available transportation funds 
have also been reduce by Congress' elimination of reimbursements from 
the Maritime Administration that partially offset the cost of complying 
with cargo preference requirements on the use of U.S.-flagged ships. 
Both of these factors negatively impact the number of Food for Progress 
projects FAS is able to carry out. In FY 2014, USDA awarded nine 
programs under FFPr, whereas in FY 2012 (prior to sequestration and the 
elimination of reimbursements from the Maritime Administration), USDA 
awarded 18 projects. Other factors impacting the number of projects are 
varying destination costs for selected projects and fluctuations in 
shipping costs.

    Question 7. What impact has the lowering of cargo preference from 
75% to 50% had on shipping commodities used in the Food for Progress 
program?
    Answer. The lowering of cargo preference from 75 percent to 50 
percent for commodities used in the Food for Progress (FFPr) program 
has had a minimal impact on the shipment of commodities, in large part 
because the amounts of commodity that USDA ships under FFPr is in 
relative terms, low in tonnage. USDA makes multiple year awards--to 
coincide with the length of the projects and the absorbative capacity 
of the market. As such, the approved commodity quantities are split 
into several shipments, which reducing the number of metric tons 
shipped at given time. Although both U.S.- and foreign-flag steamship 
companies submit offers for the entire quantity to be shipped, U.S. 
companies offer volume premiums. (For example, a U.S.-flag carrier may 
offer $100 per metric ton to ship 10,000 metric tons, but if that 
carrier is only awarded 50 percent, or 5,000 metric tons, the rate 
could increase to $300 per metric ton due to the volume premium.) In 
many instances FFPr commodities are forced to be shipped 100 percent 
U.S.-flag vessel because the volume premium makes awarding 50 percent 
of the commodities cost prohibitive.

    Question 8. What is the process for approving a commodity for use 
under Food for Progress? How long does that process take? Please 
provide a list of any products that have been requested for approval 
over that past 3 years and the result of those applications.
    Answer. USDA and USAID have developed and implemented a ``New 
Commodity and Supplier Qualification Policy'' to establish a framework 
to identify and assess the suitability of new commodities or new 
suppliers for their utilization by USDA and USAID. When approached by a 
potential supplier, USDA and USAID discuss standard requirements. If 
USDA and USAID agree that the product is suitable for food aid, then 
USDA asks the potential supplier to submit a formal proposal. Upon 
receipt of the proposal, a Technical Evaluation Committee (TEC) is 
formed, comprising representatives from the USAID, USDA and possible 
implementing partners. The TEC has 30 days to evaluate the proposal. If 
the TEC deems the proposal sufficient, then the standard documentation 
is developed. When the process is complete, the Food Aid Consultative 
Group issues a notice that the new product is available. The process 
takes between 6 to 9 months to complete.
    In the past 3 years USDA and USAID have approved two new products 
which have been added to the approved commodity list. These products 
are fortified milled rice and fortified poultry-based spread, both 
products that tested successfully in USDA's Micronutrient-Fortified 
Food Aid Products Pilot Program. Also, the supplier of a lipid-based 
ready-to-use supplementary food product is in the process of completing 
the application to add this product to the approved commodity list.

    Question 9. We understand that FY 2015 McGovern-Dole funding 
allocations have been released. Have FY 2015 proposals for Food for 
Progress been approved? If so, please provide a list of the approved 
proposals. If not, please provide the reasons for the delay.
    Answer.

                       FY 2015 Approved Proposals
------------------------------------------------------------------------
         Country                  Participant           Estimated Value
------------------------------------------------------------------------
                  Benin   Technoserve                        $35,980,000
                  Benin   Partners for Development           $15,631,458
                  Domini  International Executive            $18,948,664
                   can     Service Corps
                   Repub
                   lic
                  Domini  National Cooperative               $21,033,087
                   can     Business Association
                   Repub
                   lic
                  Ghana   ACDI/VOCA                          $36,555,573
                  Ghana   American Soybean                   $20,465,000
                           Association
                  Hondur  Government of Honduras             $16,998,000
                   as
                  Jordan  Government of Jordan               $25,100,000
------------------------------------------------------------------------


    Question 10. Can you provide an update on the status of the report 
required by Section 407(f) of the Food for Peace Act that was due on 
April 1st?
    Answer. The International Food Aid Report (IFAR), drafted by USDA 
and USAID, is in Administration clearance.
Response from Thomas H. Staal, Acting Assistant Administrator, Bureau 
        for Democracy, Conflict and Humanitarian Assistance, U.S. 
        Agency for International Development
Questions Submitted by Hon. K. Michael Conaway, a Representative in 
        Congress from Texas
    Question 1. 1.Please provide a listing by commodity of purchases 
through Food for Peace of U.S. commodities for in-kind food aid, as 
well as a listing by commodity of locally and regionally procured 
commodities. Please provide both of these information sets for the most 
recent 10 years that are available.
    Answer. Below are details on U.S. commodities purchased for food 
assistance programs between FY 2005-2014, as well as information on 
commodities purchased locally or regionally from FY 2010-2014.

                                                                                     Title II Commodity Mix
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 Total Title II/BEHT
        Group                  Commodity            FY 2005      FY 2006      FY 2007      FY 2008      FY 2009      FY 2010      FY 2011      FY 2012      FY 2013      FY 2014        Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Wheat/WheatProducts    Bulgur                         109,230      153,070      145,474       97,970      112,970       25,260       17,010        8,940       10,360        3,016       683,300
                       S.F. Bulgur                     31,440       27,400       22,720       18,860       22,510       39,450       23,410       19,010       13,970        7,420       226,190
                       Wheat Flour                     71,930       47,130       62,340       44,860       96,500      120,380       85,390       41,530       24,980       19,360       614,400
                       Wheat Flour Bread                5,240       14,390       16,560        6,510        4,850       27,110        6,960       14,560                                  96,180
                       Wheat Soya Blend                15,700        6,350        2,400                                    690        7,940        1,870        4,270        1,720        40,940
                       Wheat Hard Red Spr Bulk                                    1,530                                                                        24,320                     25,850
                       Wheat Hard Red Win Bag          15,510        5,050        6,510       16,040                     2,780       14,850                     6,510        1,700        68,950
                       Wheat Hard Red Win Bnt         833,500      238,150      335,020      384,890      454,750      559,170      314,790      337,100                               3,457,370
                       Wheat Hard Red Win Bulk        121,370      135,530      135,400      151,730      153,720      100,610      109,370      125,600      259,490      147,500     1,440,320
                       Wheat Hard White Bnt                          2,000                                                                                                                 2,000
                       Wheat North Spr Bulk           107,040      113,550       98,740       12,470                                                                                     331,800
                       Wheat North Spr Dk Bnt                                     4,500                                                                                                    4,500
                       Wheat North Spr Dk Bulk                                   11,520        9,500                                                                                      21,020
                       Wheat Soft Red Win Bag                                     5,120        4,110        5,650                                                                         14,880
                       Wheat Soft Red Win Bnt                                    14,980                                                                                                   14,980
                       Wheat Soft Red Win Bulk                       3,150                    14,890        8,910                                                                         26,950
                       Wheat Soft White Bag             1,500                     1,940                                                                         2,270          880         6,590
                       Wheat Soft White Bnt           700,760      295,180      101,350      127,510       24,340       37,830       41,650       71,050                               1,399,670
                       Wheat Soft White Bulk           24,500       69,440       45,330       29,130       74,990       92,380       30,700       61,550      112,380      110,690       651,090
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Subtotal                                          2,037,720    1,110,390    1,011,434      918,470      959,190    1,005,660      652,070      681,210      458,550      292,286     9,126,980
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Grains and Fortified/  Corn Soya Blend                186,020      140,650      105,907      120,380      122,300      120,590       74,990       60,770       12,900        5,660       950,167
 Blended Food          Corn Soya Blend Plus                                                                                                        1,080       32,700       44,488        78,268
 Products
                       Cornmeal                       112,880      106,720      179,777       88,660      142,710      102,500       75,840       31,630       32,240       37,322       910,279
                       Corn, Bagged                     6,910        6,120          720        3,900                       890          790                     6,860          600        26,790
                       Corn, Bulk                                                                                                                               9,060                      9,060
                       Corn Bulk w/bnt                106,470       60,480       16,920      101,000       21,000                     6,000       12,420                                 324,290
                       Sorghum, Bagged                 21,840       19,210       10,910       14,650       18,360       13,740       28,640       20,970       35,820       19,060       203,200
                       Sorghum, Bulk                                                                                                              27,350      262,090      379,080       668,520
                       Sorghum, Bulk bnt              363,060      460,320      400,550      891,820      771,250      448,210      244,570      247,000                   170,440     3,997,220
                       Sorghum, White Bagged                                                                             2,270                                                             2,270
                       S.F. Cornmeal                   24,500       10,250        5,141        5,160        1,920          790          360        1,080          770          500        50,471
                       S.F. Sorghum Grits               8,570        5,720        4,140          970                                                                                      19,400
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Subtotal                                            830,250      809,470      724,065    1,226,540    1,077,540      688,990      431,190      402,300      392,440      657,150     7,239,935
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Pulses                 Beans                           24,970       20,020       41,245       42,840       38,900       28,720       11,660       13,110       11,330        6,030       238,825
                       Peas                           101,950       98,283      102,150      124,300      131,940      121,320      119,520       96,940       85,710       74,140     1,056,253
                       Lentils                        100,206       58,131       46,300       76,250       36,830       26,810       20,440       32,630       17,690       25,515       440,802
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Subtotal                                            227,126      176,434      189,695      243,390      207,670      176,850      151,620      142,680      114,730      105,685     1,735,880
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Vegetable Oil          4 Liter                        142,570      103,456      101,570      148,470      112,210       93,340       95,270       65,600       56,490       48,670       967,646
                       4 Liter Plastic                     50          150                                                              950           70                                   1,220
                       20 Liter                        24,560       17,290        9,020        2,810        2,280        2,850        1,620        1,000          540          260        62,230
                       208 Liter                        1,000          500                                  4,460       11,280        3,180          150          460          210        21,240
                       Bulk                                         15,360       14,290                                                                                                   29,650
                       Crude De-Gummed                 60,810       47,485       23,270        8,470        8,280       14,670       12,010        7,850        5,720                    188,565
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Subtotal                                            228,990      184,241      148,150      159,750      127,230      122,140      113,030       74,670       63,210       49,140     1,270,551
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Other                  A20 Paste Pouch                                                                                                                                          30            30
                       A28 Rice Bar                                                                                                                                             10            10
                       A29 Wheat Bar                                                                                                                                            20            20
                       Potatoes (Flakes)                               230          140           70          120                                                                            560
                       Rice, Bagged                    65,170       47,430       54,230       71,850       43,290      158,710       67,370       48,020       34,980       37,195       628,245
                       Rice, Bagged (Par-Boiled)                                                                                      5,280       13,610        2,180                     21,070
                       Rice, Bulk bnt                                5,460                     4,800                                 41,100       63,040       38,150       29,930       182,480
                       RUSF                                                                                                                                                  1,110         1,110
                       RUTF                                                                                                                          990        3,700        4,630         9,320
                       Defatted Soy Flour                              150           90                        70          510                                                               820
                       Soybeans                         6,000                                                                                                                              6,000
                       Soybeans, Bulk/Bags                                                     5,060                                                                                       5,060
                       Soybeans, Bagged                                                                                     80                                                                80
                      --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  Subtotal                                             71,170       53,270       54,460       81,780       43,480      159,300      113,750      125,660       79,010       72,925       854,805
                                                 ===============================================================================================================================================
    Total                                           3,395,256    2,333,805    2,127,804    2,629,930    2,415,110    2,152,940    1,461,660    1,426,520    1,107,940    1,177,186    20,228,151
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


    USAID/Food for Peace Local & Regional Procurement FY 2010-FY 2014
------------------------------------------------------------------------
                                   Metric Tons (MT)
  Commodity  -----------------------------------------------------------
                FY 2010     FY 2011     FY 2012     FY 2013     FY 2014
------------------------------------------------------------------------
CSB (Corn          1,344       8,059
 Soy Blend)
CSB+                           2,938                     548       5,942
 (SuperCerea
 l)
CSB++                                                  1,208       1,132
 (SuperCerea
 l Plus)
High Energy                    2,395       2,102                     178
 Biscuits
 (HEB)
Maize             47,388      27,899      50,151      27,032      52,148
Millet                                     3,084       2,694       4,131
Lipid-based                                  122         337         896
 Nutrient
 Supplement
 (LNS)
Palmolein                                                             85
 Oil
Pulses/Beans      12,508      13,639       7,135      13,466      16,353
Rice               3,555       5,254       7,051       8,295      21,964
Ready-to-use                     977         238                    1121
 Therapeutic
 Foods
 (RUTF)
Ready-to-use                               1,025         192         401
 Supplementa
 ry Foods
 (RUSF)
Salt                                                     170         617
Sorghum           12,396           0      26,125                  30,457
Soybean Oil                                               90
Sunflower                                                145
 Oil
Vegetable            932       5,862       2,355          55       2,030
 Oil
Wheat Flour      217,190     305,114      19,500                   1,981
             -----------------------------------------------------------
  Total          295,313     372,137     118,888      54,232     139,435
------------------------------------------------------------------------
Note: The majority of local and regional procurement for the Syria
  regional crisis is provided through monthly food baskets and is
  measured in terms of number of baskets vs. tonnage. Therefor it is not
  included in this data set.

          Note: A sample is provided below because the content of food 
        parcels may vary slightly based on the implementing partner.
Sample of Locally & Regionally Procured Commodities in Monthly Food 
        Baskets for Syria Regional Crisis FY 2010-FY 2014
          Bulgur Wheat
          Canned Beans
          Canned Fish
          Chickpeas
          Lentils
          Pasta
          Raisins
          Rice
          Salt
          Sugar
          Sunflower Oil
          Tahini
          Tomato Paste
          Vegetable Oil
          Wheat Flour

        Syria Wheat Flour  for Bakeries Program FY 2013-FY 2014
------------------------------------------------------------------------
    Fiscal Year (FY)            Commodity                   MT
------------------------------------------------------------------------
          FY 2013              Wheat Flour                   28,147
                           Dry Active Yeast                     130
          FY 2014              Wheat Flour                   23,120
                           Dry Active Yeast                      29
                                                 -----------------------
  Total................                                      51,426
------------------------------------------------------------------------
 Locally and regionally procured flour
 Metric tonnage based on planned procurement


    Question 2. Please provide detailed information on which countries 
are the top recipients of U.S. food aid? Also, what is the total split, 
across all U.S. food aid programs, of emergency versus non-emergency 
food aid?
    Answer. In FY 2014, the following countries were the top recipients 
of Title II emergency food aid. Title II emergency food assistance 
totaled $1.0702 billion in FY 2014. These totals do not include any 
International Disaster Assistance funds or funds from the Bill Emerson 
Humanitarian Trust contributed towards emergency activities.

------------------------------------------------------------------------
               Country                           FY 2014 Value
------------------------------------------------------------------------
                  Sudan                          $155 million
            South Sudan                        $138.8 million
               Ethiopia                          $135 million
                  Kenya                           $86 million
                Somalia                         $78.7 million
            Afghanistan                         $65.9 million
                   Chad                           $65 million
               Pakistan                           $61 million
                    DRC                         $60.9 million
                  Yemen                         $52.8 million
------------------------------------------------------------------------

    The following countries were the top recipients of Title II non-
emergency (development) food aid. Total Title II development food 
assistance in FY 2014 was $254.6 million. These totals do not include 
any Community Development Funds (which are Development Assistance funds 
appropriated by the State, Foreign Operations, and Related Programs 
Appropriations Act under the Foreign Assistance Act) contributed 
towards development activities.

------------------------------------------------------------------------
               Country                           FY 2014 Value
------------------------------------------------------------------------
               Ethiopia                         $82.7 million
             Bangladesh                         $34.5 million
                    DRC                           $29 million
               Zimbabwe                         $19.4 million
                 Uganda                           $16 million
                       Liberia                  $15.4 million
             Madagascar                         $11.5 million
                Sierra Leone                      $11 million
                  Niger                         $10.6 million
                Burundi                          $7.5 million
------------------------------------------------------------------------

    The following countries were the top recipients of Food for 
Progress food aid (note that Food for Progress is implemented by the 
U.S. Department for Agriculture).

------------------------------------------------------------------------
               Country                           FY 2014 Value
------------------------------------------------------------------------
              Guatemala                           $30,380,000
   East Africa Regional                           $26,435,032
               Tanzania                           $19,588,775
            El Salvador                           $15,851,605
    Republic of Senegal                           $14,349,278
              Nicaragua                           $13,902,921
        The Philippines                           $11,970,100
------------------------------------------------------------------------

    The following countries were the top recipients of McGovern-Dole 
school feeding programs (note that McGovern-Dole is implemented by the 
U.S. Department for Agriculture).

------------------------------------------------------------------------
               Country                           FY 2014 Value
------------------------------------------------------------------------
                       Laos                       $26,799,831
           Burkina Faso                           $21,601,854
                  Nepal                           $19,358,326
                  Benin                           $19,016,535
             Bangladesh                           $16,167,145
              Nicaragua                           $12,245,078
    Republic of Senegal                           $11,253,142
              Guatemala                            $5,452,120
------------------------------------------------------------------------

    In total, across all USAID Title II food assistance programs 
approximately 81 percent of the funding went towards emergency 
responses in FY 2014. Approximately 19 percent went towards development 
(non-emergency) food assistance programs.
    For all U.S. food aid programs funded through the Farm Bill in FY 
2014 (Title II, McGovern-Dole and Food for Progress), 34 percent went 
towards development (non-emergency) programming, and 66 percent towards 
emergency responses.

    Question 3. Can you describe the process of transitioning from a 
Title II emergency feeding program to a Title II development program? 
Over time, what percentage of emergency programs have been replaced 
with development programs? Who is charged with overseeing the process 
and how long does it usually take?
    Answer. USAID's Office of Food for Peace (FFP) selects countries 
for development and emergency food assistance programs based on 
distinct sets of criteria.
    USAID/FFP responds to an emergency when one or more of the 
following occur: the U.S. Embassy declares a disaster; the United 
Nations issues an emergency appeal for funding; verification is made 
that a humanitarian need exists for external food assistance; and/or a 
request is made by local authorities for assistance because they do not 
have the capacity to respond. Additionally, USAID/FFP takes into 
consideration input from staff in the country or region and relies on 
food security analysis from the USAID-funded Famine Early Warning 
Systems Network (FEWS NET). USAID/FFP emergency food assistance 
programs decline or end when the conditions for intervention 
ameliorate, are no longer present, or needs elsewhere are prioritized.
    For development food assistance programs, USAID/FFP weighs 
countries of potential operation based on stunting, poverty and 
undernourishment rates, and then further narrows the list based on: 
where there has been a high humanitarian assistance caseload over the 
last decade; U.S. Government foreign policy priorities; potential 
security and access constraints; where there might be monetization or 
in-kind distribution constraints; and the strength of the enabling 
environment. The high humanitarian caseload is particularly of interest 
when looking to establish development food assistance programs, as the 
chronic recurrence of crisis is indicative of the need for longer-term 
interventions designed to reduce the need for emergency assistance.
    In some countries-such as the Democratic Republic of the Congo and 
Ethiopia-USAID/FFP provides both emergency and development food 
assistance. However, the programs target different beneficiaries and 
are often located in different geographic areas.
    USAID is working to better bridge the gap between emergency and 
development programs through a stronger resilience-oriented approach so 
communities can better resist, recover from, and adapt to shocks. In 
Ethiopia, for example, USAID supported the Productive Safety Net 
Program which prevented 7.5 million chronically food insecure people 
from needing emergency food assistance in 2011 through the provision of 
seasonal food transfers in exchange for public works that advance the 
livelihoods of the community (e.g., reversing soil degradation to 
improve farming). The Productive Safety Net Program helped both improve 
community assets and prevented people from migrating or selling off 
their belongings to survive during the drought.

    Question 4. Who decides that a program has served its purpose or 
that world food needs have evolved and there are now other priority 
needs to be served? How is that decided, and how often is this re-
evaluated?
    Answer. Emergency food assistance resources, whether from the Title 
II or International Disaster Assistance (IDA) accounts, are programmed 
on a contingency basis to meet emergent food needs throughout the year. 
To guide these decisions, USAID continuously monitors food insecurity 
levels globally through various tools and prioritizes its responses 
based on needs and resources. Food for Peace officers around the world 
are the first line of defense, monitoring local conditions and changing 
environments. The Famine Early Warning System Network (FEWS NET) allows 
us to compare depth and scale of food need across food insecure 
countries and predicts conditions 6 months out. In addition, the United 
Nations, implementing partners, and other governments also conduct 
annual or semi-annual assessments to determine food insecurity in many 
countries.

    Question 5. We hear about concerns with U.S. food aid disrupting 
local markets. Yet, the Bellmon requirements have been in place since 
the 1970s to ensure that we have done the market research necessary to 
ensure that we do NOT disrupt those markets. So, for those who argue 
that U.S. aid disrupts local markets, are they wrong? Or are U.S. 
Bellmon estimates incorrect?
    Answer. USAID's food assistance is guided by a ``do no harm'' 
principle--which is the core of the Bellmon legislative requirement. To 
ensure our assistance reaches those in need without undermining the 
local private sector, USAID routinely engages an array of technical 
experts who specialize in understanding how the local markets work to 
guide our programming decisions. USAID also works with our partners at 
USDA, technical partners such as Famine Early Warning Systems Network 
(FEWS NET), as well as ministries of agriculture and our USAID Missions 
around the world to ensure we have the highest quality information 
about evolving market conditions.
    USAID Missions are responsible for issuing Bellmon Determinations. 
The preparation of the Bellmon Estimation Studies for Title II (BEST) 
analysis by an independent third party has informed Bellmon 
Determinations for USAID development food assistance programs in recent 
years. This analysis guides USAID decision making on whether in-kind 
commodities, monetization, or other modalities are appropriate in a 
given development context.
    The Bellmon Determinations are an accurate reflection of current 
market conditions and dynamics at a specific point in time but cannot 
account for market changes over a prolonged period. In addition, in 
emergency settings, data informing a Bellmon Determination by a USAID 
Mission can be more limited. Evidence suggests that in-kind food aid's 
damaging effects on markets can take place when: food arrives or is 
purchased at the wrong time; when food distributions are poorly 
targeted; and when markets are poorly integrated at the local, national 
and regional level (Barrett, 2006). While imperfect information can 
sometimes lead to less than optimal results, USAID makes every effort 
to avoid such market disruptions. Historically, there was only one 
option for response-U.S. in-kind food aid-which provided less 
flexibility for programmatic adjustments to best meet market 
conditions. This may also account for unintended impacts in the past, 
since responses could not evolve or quickly adapt to meet changing 
circumstances on the ground.

    Question 6. Should cargo preference requirements be changed? If so, 
how and why?
    Answer. At this point in time, USAID is comfortable with the 
current 50 percent cargo preference requirement for U.S. flagged 
vessels carrying U.S. food aid. This level is adequate for providing 
logistical flexibility to meet program demands for shipping food aid 
around the world. However, USAID is proposing changes to the cargo 
preferences regulations being updated by the Maritime Administration 
that would ease logistical burdens and increase efficiencies, saving 
USAID time and money when using U.S. flagged vessels. These discussions 
are ongoing.

    Question 7. A recent GAO report states that, ``Although LRP may 
have the added benefit of providing food that may be more culturally 
appropriate to recipients, evidence has yet to be systematically 
collected on LRP's adherence to quality standards and product 
specifications, which ensure food safety and nutritional content.'' How 
does USAID plan to ensure food safety on such a large scale without the 
legal requirements and technology that exist in the U.S. food system?
    Answer. USAID's Food for Peace (FFP) Annual Program Statement (APS) 
states that local and regional procurement (LRP) should meet recipient 
country food standards, and in their absence awardees must adhere to 
World Health Organization/Food and Agricultural Organization Codex 
Alimentarius standards for food hygiene, to Hazard Analysis and 
Critical Control point (HACCP) guidelines, or International Standards 
Organization (ISO) 22000 food safety management standards. Awardees 
must contract established food safety testing and inspection services 
that meet ISO-17025 standards (similar to U.S. laboratory accreditation 
organizations such as the American Association for Laboratory 
Accreditation). Cereal and cereal product commodities as well as 
locally-manufactured lipid nutritional spreads must be tested for 
aflatoxin with an upper limit of 20 parts per billion and have moisture 
content certified. Organizations are referred to USAID's Commodity 
Reference Guide and to the USDA Aflatoxin Handbook. The APS indicates 
that potential awardees should include the costs of food safety 
assurance in their budget.
    Most countries receiving U.S. food aid already have established 
food safety standards that meet international norms. USAID/FFP is part 
of an internal food safety working group along with the USAID Feed the 
Future Innovation Labs, looking at improving host country capacity to 
apply and monitor food safety as part of the rollout of the USAID 
Multi-Sectoral Nutrition Strategy and the U.S. Government coordinated 
plan for multi-sectoral nutrition capacity building. The current multi-
donor (Gates Foundation, World Bank, USAID) Partnership for Aflatoxin 
Control in Africa (PACA), which is working to improve food safety 
standards, grew out of a sensitization process that began only when the 
UN World Food Programme, USAID/FFP's largest partner, began testing for 
aflatoxin in grains that were being locally procured. PACA is leading 
to a much more aggressive approach to pre-harvest and post-harvest 
control of this deadly fungus-derived toxin in a number of African 
countries.

    Question 8. The 2008 Farm Bill authorized a Local and Regional 
Procurement Pilot Project. The LRP program was authorized in the 2014 
Farm Bill as a permanent program, but was never funded. It seems that 
that there is a lack of will by the Appropriators to fund the USDA's 
LRP program. Do you think that is because the program would be 
duplicative of those already made possible by EFSP funds? Given this 
lack of political will, how do you plan on ensuring continued support 
for food assistance programs if you succeed in moving towards increased 
funding for cash-based assistance and LRP?
    Answer. The authorizing language for the USDA Local and Regional 
Procurement (LRP) program notes that, ``Preference for funding may be 
given to eligible entities that have, or are working toward, projects 
under the McGovern-Dole International Food for Education and Child 
Nutrition Program established under section 3107 of the Farm Security 
and Rural Investment Act of 2002 (7 U.S.C. 1736o-1).''
    While USDA's final regulations are still pending, based on the 
statutory framework established in the Agricultural Act of 2014, it is 
expected that the USDA LRP Program will support development activities 
aimed at strengthening the trade capacity of food-insecure developing 
countries and to address the causes of chronic food insecurity. The 
objectives of the USDA LRP program are expected to be to support the 
consumption of locally produced food and to strengthen local value 
chains and all associated procurement activities. The initial phase of 
the program is expected to focus primarily on development programs, 
although if a need arises, emergency programs may be approved.
    By contrast, USAID's Emergency Food Security Program, funded 
through the International Disaster Assistance account and authorized 
under the Foreign Assistance Act (FAA), is an emergency response 
program which takes advantage of USAID's strong field presence and 
responds to hunger needs created by conflict and natural disasters. In 
some cases, it is implemented in countries where local and regional 
procurement is not appropriate. If USDA succeeds in implementing local 
procurement activities to complement or increase the sustainability of 
McGovern-Dole school feeding programs, such activities would not be 
duplicative of USAID's EFSP programs or its mandate to save lives and 
protect livelihoods.
    U.S. Government humanitarian programs funded through the Foreign 
Assistance Account have historically had strong bipartisan support from 
Congress. These programs, along with the USAID food programs supported 
by the Agricultural Committees, collectively demonstrate the compassion 
and goodwill of the American people and contribute to the national 
security interests of the United States. We believe that strong 
bipartisan support for a food program that offers flexibility to 
improve the efficiency and effectiveness of operations while 
maintaining our goals of combatting global hunger and contributing to 
U.S. national security interests can be maintained.
    Under a further reformed food assistance program, USAID will 
continue to purchase significant quantities of commodities and enhanced 
nutritional products in the United States. We hope that farmers, ocean 
carriers and other stakeholders can maintain pride in knowing they 
still play a key role and that the U.S. program is evolving to reflect 
the changed world in which we live. As food assistance is less than one 
percent of all agricultural exports from the United States, American 
commodity groups have noted that it is indeed pride and not profit that 
drives their enthusiasm for the program. That abundance of pride should 
continue both for the role in-kind food has played in the past and the 
part it will play in the future.

    Question 9. In the Syria region where EBT-type cards are used, what 
controls are in place to ensure benefits are not misappropriated?
    Answer. In the case of the EBT-type cards used for Syrian refugees, 
monthly funds for food are deposited directly on a beneficiary's card, 
which they can then use in designated local markets across the country 
to buy food. Each beneficiary has a unique pin code that must be 
entered at the point of purchase and funds are limited to the purchase 
of essential food items. At each point of purchase the cashier compares 
the identification information from the e-card to the UN High 
Commissioner for Refugees (UNHCR-issued refugee registration 
identification to ensure the voucher is being used by the correct 
person. The use of biometrics, which allows partners to identify 
beneficiaries using photographs, fingerprints, or iris scans, helps 
ensure benefits are not misappropriated. The use of iris scanning is 
also being piloted within the Syrian regional response as a further 
safeguard to ensure the resources are going to the appropriate people.
    In addition, oversight has expanded to include monitoring the usage 
of vouchers through the participating banks' electronic systems, 
receipt comparisons, and reconciliations to ensure receipts are 
accurate; regular in-person and unannounced visits to supermarkets and 
shops taking part in the program; a hotline for program participants to 
report problems; and periodic re-verification of beneficiaries to 
ensure that they are still in need of food assistance and are using the 
cards. In instances where misuse of resources has been suspected or 
evident, the UN World Food Programme (WFP) has taken action to remove 
participating shops from the program and recover losses. It is 
important to note that weaknesses have been identified through WFP's 
own monitoring systems and audit process, made public, and addressed. 
Effective monitoring systems by both partners and USAID are critical to 
reducing misuse of funds.
    USAID receives regular reporting from its implementing partners, 
and USAID staff based in Jordan and Turkey meet regularly with partners 
(including those in Lebanon). USAID staff visit shops serving the 
refugees and conduct refugee house visits and focus groups to hear 
first-hand how the system is working from the beneficiary perspective. 
USAID requires immediate reporting by partners if fraud is suspected. 
In Syria and beyond, USAID continues to seek ways to further assure 
that assistance is reaching intended beneficiaries, including the use 
of mobile phones for data collection and surveys and expanded use of 
third-party monitoring.

    Question 10. GAO reviewed 13 different grants awarded across four 
countries through the Emergency Food Security Program. After 20 grant 
modifications, costs ballooned from $91 million to $626 million, a 591 
percent increase. One concern with cash-based assistance is the ability 
to contain costs. What is being done to contain those costs?
    Answer. USAID makes every effort to contain costs in individual 
awards and across the Emergency Food Security Program as a whole. The 
2015 Government Accountability Office (GAO) report on International 
Cash Based Food Assistance reviewed a sample of cash-based emergency 
food assistance interventions in Kenya, Niger, Somalia, and the Syria 
refugee response. From January 2012 to June 2014, the period studied by 
the GAO, the food security context in these four countries, but 
especially in the Syria response, changed dramatically. Costs grew 
because the number of people in need of assistance increased rapidly, 
not because spending on an original caseload of beneficiaries grew.
    Today, largely due to conflict, more people are displaced than at 
any time since World War II. Refugee outflows from Syria had just begun 
in 2012. USAID's initial contribution to the UN World Food Programme's 
(WFP) Syria Refugee operation was just $8 million and targeted 120,000 
refugees. By 2014, the same operation was targeting over 2.6 million 
refugees. This operation was modified eight times during the period 
reviewed by the GAO. The voucher based program for food assistance 
expanded to meet growing numbers of people in need, and the 
modifications allowed WFP to rapidly scale-up operations as millions of 
highly vulnerable people fled conflict in Syria. As the numbers of 
people in need of assistance grew, WFP improved targeting and took 
other efficiency-related measures that reduced the overall program 
costs by 25 percent in 2014.
    Cash-based food assistance in Kenya and Niger remained stable 
across the GAO review period, allowing beneficiaries to buy food in 
local markets in the areas where markets remained functional. 
Modifications of awards in these countries allowed activities to be 
extended because assessments revealed persistent drought situations and 
continued high levels of need. Cash-based programming in Somalia in 
2012 was necessary to prevent famine in an operating environment where 
in-kind food assistance was not feasible. Modifications to cash-based 
assistance awards in Somalia were likewise to support beneficiaries due 
to a prolonged need and recovery period that lasted beyond the life of 
the original awards.
    USAID closely examines the budget of every application before any 
program is approved or modified. The process for award modifications 
was clarified by USAID's Office of Food for Peace (FFP) as a result of 
a related GAO recommendation. It is now clearly articulated in the FFP 
Annual Program Statement guidance. Awardees are also required to submit 
quarterly financial and programmatic reports, allowing USAID staff to 
monitor spending as well as program progress. USAID staff also work 
closely with implementing partners to improve targeting, leverage 
economies of scale, and reduce operational costs as much as possible. 
This is true for both in kind and cash based food assistance.

    Question 11. Much of USAID's spending on the Emergency Food 
Security Food Program (EFSP) has been in assisting Syrian refugees. GAO 
reports that as of September 2013, 2.554 million people were receiving 
assistance. As of September 2014--the last period included in their 
report--GAO reports that 2.554 million continue to receive assistance. 
What procedures does USAID have in place for transitioning individuals 
off of cash assistance?
    Answer. As UN Secretary General Ban Ki Moon recently observed, 
humanitarian aid is becoming increasingly prolonged because the 
disasters generating the need for it have become protracted. This is 
true of relief operations responding to conflicts in Africa and the 
Middle East, as well as for those established to address recurrent or 
long-term natural disasters like drought. The Syrian refugee caseload 
has remained high as conditions have not improved inside Syria, and 
because many refugees left Syria without resources or depleted what 
resources they had while living in exile for many years. Most are not 
legally allowed to work in their refugee-hosting countries, thereby 
limiting their access to additional income. Street begging and early 
child marriage are among the ways that families are coping with lack of 
income. The migrant crisis now unfolding in Europe is also a reflection 
of the acute needs of the Syrians and other conflict-affected 
populations.
    The UN makes a determination as to when refugee assistance ends, 
including food assistance, whether it be delivered through a cash 
transfer, food voucher or in-kind food aid (note: in FY 2014 only four 
percent of USAID's total food assistance was provided as a cash 
transfer for food). Programs close when people can return home, are 
integrated into the host community, or are resettled in another 
country. The United States does not make this determination, although 
it does decide when and how much to support food assistance for refugee 
populations based on a variety of factors, including global 
requirements and assessed level of vulnerability of the refugee 
populations being supported.
    Because more people are now displaced than at any time since World 
War II, and because crises are becoming increasingly protracted, food 
assistance resources are insufficient to meet global need. The United 
States, in cooperation with the UN and other donors, are looking to 
improve registration systems, refine vulnerability targeting, and 
identify other efficiencies to assure the neediest are served.
    Other disaster affected groups that are non-refugee populations are 
transitioned off of food assistance-be it with in-kind aid, food 
vouchers or cash transfers-based on the pace of recovery. For example, 
USAID food assistance to victims of the 2013 Philippines typhoon ended 
within 1 year. Responses to floods are likewise usually short-term. 
Level of need and pace of recovery are assessed through regular field 
assessments by USAID staff, the UN, non-governmental organizations and 
the affected host nation, as well as through independent analysis such 
as the Famine Early Warning Systems Network (FEWS NET).

    Question 12. In your written testimony you mention savings of ``$21 
million'' as a result of the changes in the 2014 Farm Bill by allowing 
more flexibility. How does cash flexibility in Food for Peace actually 
save money and allow you to reach more people? What metrics are used to 
estimate these figures? How do you know how many people would have been 
served with the equivalent amount of in-kind food aid to make these 
comparisons?
    Answer. Cash flexibility can be used to save the U.S. Government 
money in several ways. The first is monetization replacement. The 
monetization process involves buying food commodities on the U.S. 
market, shipping them overseas, and then recouping a portion of the 
procurement and shipping costs through sale of the commodities on 
markets in developing countries. For every dollar spent to buy, ship, 
and sell the food, the U.S. only recovers about 75, thus losing money 
in the process. Implementing partners then use the proceeds of the 
sales to fund development food assistance activities. When USAID 
provided funds directly to partners to implement programs rather than 
asking them to monetize food, it eliminated the process of selling 
commodities for less than it cost the government to buy and transport 
them. The project budgets could then be revised downward to include 
only the amount of money that would have been generated by 
monetization. The $21 million figure in the written testimony in part 
reflects the difference between the development programs' budgets with 
food and the related costs of a monetization process and their revised 
budgets without monetization.
    The second way that flexible funding is used to generate savings is 
by enabling additional options for emergency response. When USAID's 
Office of Food for Peace (FFP) receives applications under the 
Emergency Food Assistance Annual Program Statement, applicants are 
expected to provide justification of cost efficiency relative to Title 
II in-kind food assistance. Applicants can download a commodity 
calculator worksheet from the USAID website which is updated quarterly 
with U.S. commodity price estimates provided by USDA and ocean freight 
estimates provided by the USAID Office of Acquisition and Assistance. 
Implementing partners who want to procure food commodities on local or 
regional markets must identify the current market price in the 
locations in which they would like to procure, and then they can use 
the commodity calculator to generate an estimate of the cost to procure 
and transport the same or nearest substitutable commodities available 
in the United States. This process helps USAID decision-makers 
objectively compare and evaluate the amount of food that can be 
procured (and consequently the number of people who can be fed) with a 
finite amount of resources through local and regional procurement and 
Title II U.S. procurement respectively.
    For cash and voucher programs, USAID relies on a minimum 
expenditure basket (MEB) developed by implementing agencies in the 
field, which identifies the cost of basic food and non-food items 
needed for survival in a specific geographic area. Once the Agency 
receives information from its partners or the Famine Early Warning 
Systems Network (FEWS NET) or both about the cost of the food component 
of that minimum expenditure basket on the local market, the Agency can 
compare that cost to the nearest equivalent ration of foods from the 
United States in order to determine whether there opportunities to 
achieve cost efficiencies. If the Agency can provide the same level of 
assistance to do the same kind of intervention in the same country at a 
lower cost per person than it would cost to use Title II in kind 
resources, this can help the Agency reach as many people as possible 
within the same budget.

    Question 13. There has been a long-running debate on the balance 
between in-kind and cash-based assistance for as long as Food for Peace 
has been in existence. An interesting statement was made by the then-
acting Assistant Administrator of USAID before the then-Subcommittee on 
Rural Development, Research, Biotechnology, and Foreign Agriculture 
back during the 2012 Farm Bill audit hearings. Ms. Lindborg explained 
how commodities from pre-positioned warehouses were used to quickly 
meet the needs of the flood survivors in Pakistan and, similarly, how 
pre-positioned stocks of food aid from Texas were delivered to 
earthquake survivors in Haiti within 1 day. We constantly hear about 2 
or 3 month lag times in moving commodities as justification for moving 
away from in-kind aid to cash-based assistance. Does pre-positioning 
solve a lot of these problems? In your response, please provide an 
overview of current prepositioning efforts including locations where 
aid is being prepositioned.
    Answer. Prepositioning has been incredibly useful in improving 
USAID's response time to emergencies by storing food strategically 
around the world so that it can be deployed more easily in times of 
crisis. However, maintaining secure, safe warehouses for food around 
the world is very expensive, so USAID limits its number of 
prepositioning warehouses to key locations closest to regions where 
there are recurrent crises.
    Prepositioning does not eliminate shipping expenses to the various 
programming sites, and there are additional costs incurred when 
prepositioned food has to be moved again from warehouse to the crisis 
location. A recent study completed by USAID indicates that costs were 
31 percent higher for delivering prepositioned commodities due to 
warehousing and second-leg ocean freight costs as compared to 
commodities delivered directly from the United States. We also do not 
want to unnecessarily subject larger volumes of commodities to the risk 
of spoilage or damage during warehousing. As certain commodities age 
faster than others, USAID is limited in the types of commodities that 
it can effectively store.
    There is typically one domestic prepositioning site in the Gulf 
region, one in East Africa, one in Southern Africa and one in Asia. 
Additional sites may be added in West Africa and Central/East Africa as 
well. In combination, the warehouses can store approximately 100,000 MT 
of commodities. USAID generally maintains rotating stocks of up to 
50,000 MT of commodities at any given time. USAID stocks the most 
commonly used commodities so that when an unanticipated emergency 
strikes, a complete ration basket appropriate for most countries can be 
provided quickly.
    Critically, prepositioning also does not change the fact that in 
some cases, like Syria, due to security concerns or other constraints, 
U.S. commodities are just not the most appropriate tool. In other 
cases, purchasing food locally and regionally will still be more cost 
effective and reach the crisis in a shorter time frame than 
prepositioned food. There are other interventions that USAID and other 
international donors can now use to refine and improve our response.

    Question 14. In a recent GAO report on USAID cash assistance, GAO 
found that although USAID requires partners to monitor market 
conditions which may trigger award modifications, USAID does not 
provide guidance on how and when to respond to changing market 
conditions. This ability to respond to changing conditions is one of 
the stated reasons for going to cash-based assistance. What is USAID 
doing about this?
    Answer. USAID's emergency food assistance programs operate in 
complex market environments, often suffering from price shocks due to 
natural disaster or conflict. The 2015 Government Accountability Office 
(GAO) report on International Cash Based Food Assistance noted that 
implementing partners are required to monitor food prices and often 
build a response to food price fluctuations into program design. USAID 
staff review implementing partners' price monitoring submissions and 
will discuss changes in market conditions and recommend adjustments to 
programming, as necessary. USAID staff also rely on the Famine Early 
Warning Systems Network (FEWS NET) price and food availability data, 
which has grown increasingly sophisticated in recent years, to 
triangulate information. Determining when and how to shift programming 
is highly context specific, as the case studies in the report show.
    USAID has entered into an agreement with the Cash and Learning 
Partnership (CaLP) to support shared learning. CaLP will also support 
USAID's markets team as they develop guidance for implementing partners 
on appropriate adjustments to adapt food assistance programming in 
response to changing market conditions. Sharing learning from 
implementing partners in varied and dynamic operating environments will 
allow both implementing organizations and USAID to make better, more 
evidence-based programming decisions.

    Question 15. GAO reports that USAID's ``country-based assessments . 
. . do not address financial vulnerabilities that may affect cash-based 
food assistance projects, such as counterfeiting, diversion, and 
losses.'' Why is this the case, and what is USAID doing about it?
    Answer. USAID takes its oversight role extremely seriously and has 
very low loss rates on both in-kind and cash based assistance. In its 
numerous reviews of USAID's food assistance programs, the Government 
Accountability Office has found very few irregularities. Even so, based 
on GAO recommendations, in the Food for Peace Annual Program Statement 
(APS) for 2015, USAID included tougher guidelines relating to this 
issue. For cash transfers and food voucher proposals, applicants 
provide information on the proposed distribution modality and frequency 
of distribution. The guidance asks partners to ``provide an assessment 
of risk of fraud or diversion and controls in place to prevent any 
diversion of cash, counterfeiting of food vouchers and diversion of 
food voucher reimbursement of funds.'' The guidance encourages partners 
to include a separate annex on this information relating to risk 
assessment and controls, as annexes are not subject to a page number 
limit and allow for thorough presentation of the approach. USAID is 
also expanding training for USAID and implementing partner staff on 
managing and monitoring cash-based programming.
    Post distribution monitoring by USAID and partners can identify 
problems if targeted beneficiaries are not receiving the intended 
support. Post distribution monitoring can happen in a variety of ways 
including household visits, hotlines that allow beneficiaries to 
register complaints, and spot checks on merchants and markets involved 
in the program. Proper targeting to assure that the truly vulnerable 
are receiving aid is also important, as they are least likely to try to 
en-cash in-kind food or vouchers for other items. Data shows that poor 
households in countries where USAID works spend the majority of their 
income on food.
    There are a variety of controls that mitigate fraud and provide 
oversight in cash-based food assistance programs. In the Syria refugee 
program, oversight has expanded to include monitoring the use of 
vouchers through the participating banks' electronic systems; receipt 
comparisons and reconciliations to ensure receipts are accurate; 
regular in-person and unannounced visits to supermarkets and shops 
taking part in the program; a hotline for program participants to 
report any problems; and periodic re-verification of beneficiaries to 
ensure they are still in need of food assistance and still using the 
cards. The UN World Food Programme will soon begin using iris scan 
technology at points of sale as a further safeguard.
    In other places, cash transfers are usually distributed at a bank 
or other financial institution so resources will be secure until they 
are transferred. Vouchers, if not electronic, often have holograms, 
watermarks or serial numbers to prevent fraud and in some cases, the 
vouchers are printed on a different color of paper each month, so they 
cannot be copied and have limited redemption periods. Vouchers allow us 
to track exactly what foods are purchased. Biometric identification 
systems are also an important tool, allowing partners to identify 
beneficiaries using photographs, fingerprints, or iris scans. In some 
instances where access to beneficiary populations is not possible, 
USAID has been making increasing use of third party monitors to provide 
up to date information on food assistance programs.

    Question 16. Whether it is in the President's budget submission or 
any variety of materials provided by USAID, you have advocated for 
additional cash-based aid. Yet, in the cash-based assistance you 
already provide, GAO recently noted that ``USAID relies on its 
implementing partners to oversee and ensure the financial integrity of 
cash-based assistance . . . [but] does not provide its partners with 
essential operation policy guidance on how they should conduct 
financial oversight . . . [and] several instances of malfeasances have 
already surfaced in this program.'' How is USAID addressing those 
issues?
    Answer. USAID implements both in-kind and cash-based emergency food 
assistance programs in extremely challenging operating environments and 
will continue to do so in order to provide life-saving food to 
populations in need around the world. One modality is not inherently 
riskier than another, and USAID and its implementing partners use past 
performance, risk analysis, market indicators, and food security 
analyses to make informed decisions regarding what food assistance 
modality is most appropriate for a particular emergency context. All 
USAID programs, including those funded through the Office of Food for 
Peace, expect partners to conduct financial oversight over their 
activities and comply with audit requirements set forth in 2 CFR 200 as 
well as meet the standards outlined in USAID's Automated Directive 
System (ADS) 303.3.9 and Procurement Executive Bulletin 2005-12.
    The Government Accountability Office's (GAO) recent report on 
International Cash-Based Food Assistance did note several instances 
where implementing partners--through their existing monitoring and risk 
mitigation efforts--identified limited instances of diversion or loss 
during the transfer process and subsequently were able to correct the 
factors that led to these losses and strengthen controls in the 
program. It is important to note that the GAO did not uncover any 
previously unreported or unaddressed fraud, misuse, or diversion of 
resources in cash-based food assistance programming.
    As part of continual efforts to improve the effectiveness and 
efficiency of cash-based food assistance, USAID has entered into an 
agreement with the Cash and Learning Partnership (CaLP) to build the 
knowledge, skills, and practice of cash-based food assistance for both 
USAID staff and implementing partners. A component of this award is to 
engage in the development and dissemination of policy and guidance 
relating to cash-based food assistance. These activities complement 
existing knowledge-sharing and training for in-kind food assistance 
facilitated through the Technical and Operational Program Support 
(TOPS) program; both initiatives allow implementing partners to build 
the knowledge base and reduce the risks inherent in providing food 
assistance in high-risk emergency situations.

    Question 17. The 2014 Farm Bill increased the percentage allocation 
of funds available for Sec. 202(e) from 13 percent to 20 percent. As 
described in law, these funds can now be used for a variety of purposes 
beyond administrative costs. Can you explain how much flexibility was 
gained through these changes in the 2014 Farm Bill? What specific 
activities are you currently using those additional Sec. 202(e) funds 
for? How, if at all, has the increase in Sec. 202(e) funds changed the 
use of monetization?
    Answer. The 2014 Farm Bill increased USAID funding for Section 
202(e) from 13 to 20 percent and expanded the funding purposes beyond 
administrative costs. In FY 2014, the increase meant approximately $100 
million in additional flexibility for Food for Peace. The expenses 
covered with the base 13 percent remained relatively the same, and 
USAID has used the additional seven percent for purposes outlined in 
the legislation: to implement development activities (and thereby allow 
USAID to reduce monetization or the sale of food overseas to fund 
development projects) and to enhance ongoing Title II food programs. 
USAID has enhanced programs in a variety of ways including 
supplementing Title II in-kind food with locally or regionally procured 
food or with cash transfers or food vouchers.
    USAID saved $21 million by ending monetization in all but one of 
its 19 development program countries. On average, the Office of Food 
for Peace lost 25 on the dollar in every monetization transaction. 
That is, the funds for development generated by the sale of the food 
was on average 25 percent less than what it cost the U.S. to buy, ship 
and sell the food abroad. By providing money directly to partners 
rather than selling food to generate development dollars, the U.S. 
saved $21 million. These savings were reinvested in food assistance 
programs.
    USAID enhanced Title II programs with Section 202(e) funds by 
providing critically needed locally or regionally procured in-kind food 
when it was needed most. For example, when food needs were greater than 
expected in Malawi, USAID complemented its large in-kind U.S. food 
assistance basket with some additional regionally-procured food to 
allow for more beneficiaries to be served. This food was both timely 
and 26 percent less costly than the Title II equivalent, generating 
$1.5 million savings for the program.
    USAID has also used Section 202(e) resources to support food 
insecure beneficiaries with food voucher or cash transfer programs 
where markets are working. This has enabled USAID to prioritize Title 
II in-kind aid for nutrition interventions or where markets were less 
functional. Drought-affected Haitians and Ethiopians have benefited 
from these approaches.
    In addition, USAID has used Section 202(e) funding to pay the 
modest costs of tools and other supplies for community-based asset 
building programs. In food-for-asset programs, communities are paid in 
food for implementing public works activities that mitigate the impact 
of drought or other shocks on the community.
    In FY 2014, USAID used the over $100 million of enhanced Section 
202(e) funding in the following countries and territories: Burkina 
Faso, Burundi, Central African Republic, Cote d'Ivoire, Ethiopia, 
Haiti, Kenya, Liberia, Malawi, Niger, Sierra Leone, Somalia, South 
Sudan, the West Bank and Gaza, Yemen, and Zimbabwe.
    USAID will continue to document and report to Congress how 
programming is evolving as a result of changes in the 2014 Farm Bill.

    Question 18. One of the adjustments in the farm bill is a 
requirement that between 20 and 30 percent (and at least $350 million) 
of Food for Peace Title II funds be used for non-emergency development. 
As you know, this fund is known as the safebox. Is USAID counting 
Community Development Funds toward safebox funding levels in order to 
meet the minimum requirements? From which accounts do Community 
Development Funds originate?
    Answer. USAID is not utilizing Community Development Funds (CDF) to 
meet the safe box funding level required by the Food for Peace Act. In 
2014, FFP exercised the emergency notwithstanding authority in section 
202(a) of the FFP Act to allow it to not meet the safe-box requirement 
in order to respond to urgent and unprecedented emergency food aid 
needs around the world. At no time has FFP utilized non-Title II 
funding to meet the statutory requirement found in the FFP Act.
    While in 2014 FFP's exercise of notwithstanding authority enabled 
it to fund the safe box at an amount less than required by the FFP Act, 
the Agency recognized the important objectives of the non-emergency 
food assistance program. As such, USAID relied on its independent 
authority in section 103 of the Foreign Assistance Act of 1961 (FAA), 
and utilizing Development Assistance (DA) funding provided by the 
Department of State, Foreign Operations and Related Programs 
Appropriations Act, supported activities that furthered these same 
objectives. The DA funds used for these purposes are made available to 
USAID's Bureau for Food Security (BFS), and a portion is then 
programmed by FFP on behalf of BFS. Both offices refer to these DA 
funds as ``Community Development Funds.''
    CDF may support all activities normally funded with monetization of 
FFP Title II nonemergency funding, as well as those carried out 
pursuant to section 202(e) of the FFP Act. CDF resources are provided 
to partners eligible for FFP Title II funding and are targeted to 
vulnerable communities in areas with high concentrations of chronic 
hunger, helping to bridge humanitarian and development objectives 
through expanded support for productive safety nets, livelihood 
diversification, microfinance and savings, and other programs that 
reduce vulnerability to production, income, and market disruptions. FFP 
follows the Congressional direction embodied in section 103(f) of the 
FAA to link programming of Title II and CDF grants to assist developing 
countries enhance their national food security and achieve the broader 
development goals of the FAA.
    USAID has previously sought express statutory authority to count a 
specified amount of DA funding toward meeting the nonemergency 
requirement. Were such legislation to be enacted, in years in which FFP 
could not meet the non-emergency funding level with FFP Title II funds, 
FFP would not have to rely on the use of notwithstanding authority but, 
instead, could use DA to meet any shortfall.

    Question 19. Do you think the safebox strikes the appropriate 
balance in funding between emergency and non-emergency assistance?
    Answer. USAID prioritizes meeting the non-emergency safe box level 
each year. Non-emergency (development) food assistance programs are a 
foundational component of USAID's work on resilience and key to 
addressing the underlying causes of chronic hunger and poverty. 
However, USAID/Food for Peace resources are stretched each year to 
adequately respond to new and ongoing crises around the world. Since 
non-emergency programs are funded out of the Food for Peace 
appropriation, robust funding for Food for Peace overall is critical to 
ensure both emergency and non-emergency needs are adequately met.

    Question 20. How does the Administrator's ability to waive the 
minimum tonnage requirements for non-emergency aid effect the required 
minimum funding for non-emergency food aid within the safebox?
    Answer. Section 204 of the Food for Peace Act sets a minimum 
requirement for non-emergency programming of not less than 1,875,000 
MT. The average cost per metric ton in FY 2014 was $1,273. Therefore, 
purchasing and programming 1,875,000 MT for development food assistance 
programs would require a development program budget of nearly $2.4 
billion--$1 billon more than recent Title II appropriations for 
development and emergency food assistance combined.
    The Administrator's ability to waive the minimum tonnage 
requirements does not have any impact on USAID's ability to meet the 
required funding levels for non-emergency food aid. Rather, waiving the 
requirement allows USAID to focus programming the safebox funding 
levels for development food assistance toward activities that tackle 
chronic under nutrition and help the most vulnerable break the cycle of 
poverty and hunger through agriculture and livelihoods support, rather 
than simply distributing commodities. Evidence shows that such 
development interventions, which improve beneficiary access and 
utilization of food, are needed to address the underlying causes of 
food insecurity.

    Question 21. Please provide specific examples of projects that are 
being counted towards the safebox minimum.
    Answer. USAID currently has development food assistance projects in 
15 countries; a few of those examples are below. In each case, 
conditional Title II food rations are provided to mothers in exchange 
for their participation in nutrition classes and weight monitoring of 
their children. USAID often provides conditional rations to farmers in 
exchange for their participation in farmer field schools and to 
community members for participation in public works programs that build 
community assets and reinforce the resilience of communities to 
withstand future shocks.

   Guatemala: Three USAID/Food for Peace (FFP) partners work on 
        a variety of development activities in Guatemala. These 
        programs address chronic malnutrition in children and pregnant 
        and lactating women, improve and diversify agricultural 
        production, generate micro-enterprise activities, and improve 
        water and sanitation issues.
    Under one project, Guatemalan mothers learn to build home gardens 
        filled with chard, spinach, carrots and other crops, and 
        practice improved health and nutritional behavior to ensure 
        their children will grow up healthy and strong. Before the 
        project, mothers throughout the community had struggled to grow 
        many crops and mainly spent their money on staple rice foods. 
        Since the project began, mothers have seen significant 
        improvements in their home gardens, including increased access 
        to nutritious foods and improved soil conservation. The 
        program, which runs from 2012 to 2018, aims to sustainably 
        improve food security for approximately 23,500 rural families 
        living in poverty in San Marcos and Totonicapan.

   Bangladesh: Three USAID/FFP partners implemented multi-year 
        development projects which ended in 2015. The projects were 
        designed to improve agriculture, livelihoods, maternal and 
        child health, disaster risk reduction and community resilience, 
        climate change and adaptation, and women's empowerment in 
        multiple regions throughout the country.
    As a specific example from Bangladesh in FFP's recent publication, 
        ``Voices from the Field,'' highlighted the story of Harun and 
        Bina Majhy, who have co-managed a fishing business in rural 
        Bangladesh for years. To take their small-scale operation to a 
        commercial level, the couple needed training and equipment. 
        Before training from USAID, Bina earned the equivalent of about 
        $90 every month. Using her newfound skills, she now brings in 
        about $129 per month through her family's business. Equally 
        important, she plays a vital role as a service provider, acting 
        as a local facilitator for other aspiring women aquaculture 
        entrepreneurs and providing quality fingerlings to her 
        community. Her husband Harun also benefited from Food for 
        Peace's partnership with Feed the Future (FTF). He received FTF 
        training on fish hatchery management. As a couple, the Majhys 
        could begin producing even higher quality fingerlings at a 
        larger scale. USAID trainings on nursery management and 
        fingerling production benefited more than 34,000 households and 
        150 commercial fish farms over the course of the project.

   Niger: USAID/FFP supports three integrated development food 
        assistance programs to reduce food insecurity and malnutrition 
        and improve community resilience among rural households in the 
        Maradi and Zinder regions of Niger. The programs target over 
        500,000 individuals and aim to promote positive behavior change 
        in nutrition, health, hygiene, sanitation, and agriculture, as 
        well as diversify livelihoods through livestock, savings and 
        lending, and literacy activities.
    In Niger, it is common for girls to get married as young as 14 
        years old and miss out on the opportunity to attend school and 
        learn essential life skills such as good health and nutrition 
        practices. Through one of the projects, more than 2,400 
        adolescent girls in the Maradi and Zinder regions are learning 
        proper health and nutrition practices through an activity 
        called ``safe spaces''. In safe spaces, adolescent girls meet 
        regularly to discuss early marriage, nutrition and livelihood 
        practices, and are taught by female mentors selected by their 
        communities as positive role models. The safe spaces activity 
        is improving educational prospects and livelihoods among girls 
        by helping them gain the confidence to advocate for themselves 
        and work toward a more positive future, which in turn makes 
        them more food secure.

   Malawi: Through a consortium of non-governmental 
        organizations, a development food assistance project that ended 
        in 2014 targeted close to 230,000 food-insecure households. The 
        program specifically targeted the most vulnerable in eight 
        districts in southern Malawi, including children under the age 
        of five, pregnant and lactating women, orphans and vulnerable 
        children, people living with HIV, and chronically ill people.
    Activities included agricultural and small business development, 
        village savings and loan projects, community health outreach, 
        and safety net food rations for vulnerable households. To 
        challenge the notion that the poorest individuals can't help 
        themselves out of hunger and poverty, this program helped 
        communities establish Village Savings and Loan (VSL) groups, a 
        group of people who save together and take small loans from 
        those savings. VSL groups in Malawi have succeeded in helping 
        people build a better life for themselves and their families. 
        While the consortium initially designed the VSL groups only for 
        USAID program beneficiaries, in 2011 it began allowing non-
        beneficiaries in the communities to join. Today, an estimated 
        15 percent of VSL members are not directly affiliated with the 
        program.
    Across all VSL groups started by consortium partners, members have 
        saved a cumulative total of $1.6 million since 2010, growing 
        from the initial 696 groups to 7,400 groups today, or more than 
        92,710 Malawians--65,470 women and 27,240 men--saving on a 
        regular basis.

    Question 22. How often does the Food Aid Consultative Group meet, 
and how is the input from the meetings utilized? When was the group 
last consulted in advance of the issuance of regulations or guidelines 
to implement Title II of the Food for Peace Act? Was the group 
consulted prior to the issuance of the latest Sec. 202(e) guidelines?
    Answer. Convened by USAID and USDA, the Food Aid Consultative Group 
(FACG) holds semi-annual meetings in the spring and fall. An Executive 
Committee made up of representatives from food assistance 
stakeholders--including commodity suppliers, maritime industry, private 
voluntary organizations, the Maritime Administration, USDA and USAID--
gather agenda items for discussion ahead of each semi-annual meeting. 
Meetings consist of a plenary session for all members and multiple, 
voluntary break-out sessions built around specific issues facing the 
food assistance community. Feedback from the semi-annual meetings is 
recorded and compiled for use in creating guidance for upcoming 
projects.
    In addition to in-person meetings, USAID and USDA both use the FACG 
email listserv extensively to solicit feedback on related policy and 
guidance. For example, USAID shares all Food for Peace Information 
Bulletins (FFPIBs) through the FACG listserv to communicate 
announcements of or modifications to Food for Peace policies. As 
required by Sec. 205(d), any new FFPIB must undergo a 45 day comment 
period by the FACG, after which a final version of the new FFPIB will 
be issued on USAID's website. USAID shared the FFPIB related to the new 
uses of Section 202(e) funds in this manner and issued it for comment 
in May 2014. USAID last consulted the FACG group in August 2015 in 
advance of issuance of new guidance on FY 2015 annual results reports 
submissions. The group was asked to comment on this draft guidance.
    The FACG is integrated into the process of creating guidance for 
all food assistance projects. Both USAID's Requests for Applications 
for development food assistance and International Food Relief 
Partnership projects and its Annual Program Statement (APS) for 
emergency projects are sent to FACG members for a comment period 
lasting 45 days. Questions and comments from partners are carefully 
considered before updating and releasing the final version directly to 
FACG members.

    Question 23. GAO recently reported that with respect to the Farmer-
to-Farmer program, implementing partners do not systematically share 
negative volunteer assessment information with USAID and each other. Is 
that the case? If so, what is being done about it?
    Answer. Farmer-to-Farmer volunteers have a strong track record and 
reputation for providing practical, high-quality technical assistance 
and training services to farmers and agriculture sector organizations 
in host countries. They are consistently flexible and generous with 
their time, go out of their way to secure significant resources for 
their hosts, and make their depth of expertise and technical assistance 
available both during and long after their assignments. Volunteers act 
as ambassadors of American culture and generosity overseas. Of the 
thousands of Farmer-to-Farmer volunteers, there have been very few 
instances of negative volunteer performance or behavior, despite the 
fact that volunteers often serve in very challenging environments. We 
know of only three assignments that were terminated early for 
performance issues over the past 10 years. Sharing information on such 
volunteers among implementing partners had been the norm, but had not 
been formalized.
    Since the GAO Recommendation, USAID has taken actions to strengthen 
the existing systems for sharing information on poor volunteer 
performance by: requesting implementing partners to immediately share 
any very negative volunteer experiences with USAID; issuing a memo to 
all implementing partners on information sharing relating to volunteer 
performance; updating the Farmer-to-Farmer volunteer manual on this 
matter; and retaining this topic for discussion in annual implementing 
partner meetings.
    A meeting held on May 13, 2015 with all implementing organizations 
provided an opportunity for joint review of current and proposed 
procedures for sharing information on negative volunteer performance. 
Following the meeting, USAID issued a letter to all implementing 
organizations requiring them to inform USAID immediately of any 
negative volunteer experience and encouraged implementing partners to 
share such experiences among the other Farmer-to-Farmer implementing 
partners. All implementing partners have replied confirming their 
agreement to inform USAID immediately of any negative volunteer 
experience and share such experience with other Farmer-to-Farmer 
program implementing partners. New guidelines for reporting and sharing 
information on negative volunteer experience have been incorporated 
into the Farmer-to-Farmer Program Manual.

    Question 24. USAID has delivered substantially less P.L. 83-480 
commodities so far in fiscal year 2015 compared to prior fiscal years 
despite relatively static funding and generally lower commodity prices. 
According to industry information, the shortfall is almost 400,000 
metric tons. What is the cause of this shortfall and what is USAID 
doing to increase the tonnage in the program?
    Answer. According to USAID's projections, USAID plans to buy more 
than 1,083,000 MT by the end of FY 2015. This is approximately 95,000 
MT less than FY 2014. This lower number is due to several factors. 
First, USAID purchased a greater quantity of commodities in FY 2014 in 
anticipation of the need for a large emergency response to the crisis 
in South Sudan. Secondly, USAID scaled back the number of 
prepositioning sites from six to five, so, consequently, purchased less 
to go into those warehouses. Tonnage also likely decreased because 
USAID now only monetizes commodities in one country.
    USAID purchases commodities based on programming needs. The tonnage 
can fluctuate from year to year depending on the type of programming, 
the type of commodities required, and other factors. For example, 
associated costs of programming food can grow when fuel prices are 
high, warehouses are in short supply in project areas, or security 
costs are high due to insecurity, which can also affect tonnage. 
Agricultural commodities shipped from the U.S. will continue to play a 
critical role in Food for Peace programming.

    Question 25. What role, if any, does USAID play in the selection 
and approval of Food for Progress and McGovern-Dole programs?
    Answer. The USDA Foreign Agricultural Service (FAS) invites USAID 
staff to review and comment on new McGovern-Dole and Food for Progress 
proposals during each annual proposal review cycle. Food for Peace 
staff in Washington and the field review and provide feedback on 
proposed activities, considering the potential for complementarity or 
overlap with existing USAID food security programs. USAID and USDA now 
have a memorandum of understanding that outlines new collaboration to 
create stronger synergies between the USAID Office of Education 
literacy programs and FAS McGovern-Dole programs.

    Question 26. Can you provide an update on the status of the report 
required by Section 407(f) of the Food for Peace Act that was due on 
April 1st?
    Answer. The International Food Assistance Report to Congress for FY 
2014 is in final clearances at both USDA and USAID. The report is 
delayed because USAID does not get final budget actuals from the prior 
fiscal year completed until the 2nd quarter of the new fiscal year 
(ending March 2015). Two federal agencies are then required to write 
and clear on this report, making it consistently difficult to meet an 
April reporting deadline. USAID apologizes for this delay and makes 
every effort to get this report completed as quickly as possible.
Questions Submitted by Hon. Bob Goodlatte, a Representative in Congress 
        from Virginia
    Question 1. In general, from the time that a grant is awarded by 
USAID's American Schools and Hospitals Abroad (ASHA) program, how long 
does it take for the funds to be released so that work on the ground 
can begin?
    Answer. As soon as a USAID/ASHA agreement is signed, funds can be 
released. For capital improvement and hazardous commodities projects, 
however, grantees must perform an initial environmental examination 
before construction or procurement can begin. Environmental 
examinations typically take between one and three months to approve. 
Construction can only begin once the initial environmental examination 
has been approved by USAID.

    Question 2. A recently released GAO report indicates that USAID has 
invested over $2 billion in Haiti for reconstruction purposes. This 
report also cites delays in some of these reconstruction efforts due to 
``lack of staff with relevant expertise, unrealistic initial plans, 
challenges encountered with some implementing partners, and delayed or 
revised decisions from the Haitian Government.'' In light of these 
delays and the investment made by the United States Government, what 
plans does USAID have to work more closely with implementing partners 
who have the expertise necessary to accomplish the goals of 
reconstruction and be sustainable in doing so?
    Answer. First and foremost, we welcome external audits, such as the 
recent GAO report, which captured progress to date on the projects 
examined, as well as some of the ongoing challenges we continue to face 
in Haiti. In addition, USAID has internal mechanisms in place to 
monitor how well our programs and our implementers are performing. 
These mechanisms include portfolio reviews, field visits, results 
tracking, performance audits, independent evaluations, and cost-benefit 
analyses. These types of monitoring and evaluation practices help us as 
we review progress, plan, and make mid-course corrections.
    Due to a combination of unrealistic initial planning, inadequate 
staffing, and other unforeseen challenges, some of the initial targets 
are taking longer to achieve or will not be reached. We are constantly 
evaluating our performance and taking corrective action where obstacles 
are standing in the way of real results. As a result of this regular 
feedback, we have adapted our programs based on lessons learned, as 
evidenced, for example, by important changes in our shelter, ports, and 
energy investments.
    In the shelter sector, we have shifted from an original emphasis on 
building houses to a new approach that is helping Haitians build and 
improve their own homes through access to finance and technical 
support, while also building the capacity of Government of Haiti (GOH) 
entities to deliver better community services. This approach is proving 
to be more sustainable and cost-effective.
    In the ports sector, we redirected our assistance to rehabilitation 
of the existing port at Cap Haitian to meet the near- to medium-term 
demand for port services in the northern part of Haiti in response to a 
request from the GOH after our research showed that a new port would 
not be economically viable. In order to ensure sustainability, we are 
working with the GOH to structure a public-private partnership to 
manage port operations at Cap Haitian.
    We have also refocused our goals in the energy sector. As part of 
the post-earthquake strategy, USAID had a program in place to help the 
national electric utility improve its operations. However, we were 
disappointed with the reversal of progress in some instances and an 
overall lack of political will to carry out reforms that would improve 
efficiency and reliability of service. As a result, USAID stopped this 
program and, going forward, will not support the national utility 
absent concrete progress in achieving unambiguous targets and 
milestones.
    The sustainability of our programs in Haiti depends ultimately on 
the capacity of the Haitian people and their government to maintain 
them. Central to the USG strategy to enhance sustainability is shifting 
from the current approach of providing services primarily through non-
Haitian intermediaries. This shift includes a greater focus on 
strengthening the capacity of state institutions to deliver 
sustainable, quality service. While this approach will be a long-term 
endeavor, this new partnership model with the GOH will better ensure 
the sustainability of our investments over time.
    An example of strengthening the capacity of GOH institutions is the 
USAID's work with the Entreprise Publique de Promotion de Logements 
Sociaux (EPPLS), the unit in charge of the country's affordable housing 
program. In newly built communities, EPPLS is responsible for items 
such as collecting lease fees, solid waste management, cleaning 
drainage systems and maintenance of common areas. EPPLS' performance is 
beginning to improve, with fee collection rates at one USAID-funded 
site far exceeding those at other GOH locations. In the food security 
sector, USAID is working with the U.S. Department of Agriculture to 
strengthen the Haitian Ministry of Agriculture to strengthen 
policymaking, institute market information systems, and conduct crop 
production and soil surveys.
    The United States is committed to supporting the long-term efforts 
of the Haitian people to build a more prosperous and secure nation. 
Recognizing that development progress in Haiti will ultimately depend 
upon sustainability of our investments, USAID will continue to 
incorporate rigorous sustainability plans into our projects.

    Question 3. What portions of the U.S.'s reconstruction investment 
in Haiti was allocated through U.S.-based organizations and through 
Haitian-based organizations?
    Answer. The USG has made a long-term commitment to helping Haiti 
recover and rebuild. Integral to our assistance is a strong effort to 
help build the capacity of local NGOs, businesses, and the GOH so that 
the country can lead its own development. Our ultimate goal is to help 
Haiti develop beyond the need for international assistance.
    A key part of USAID's strategy is to improve the capacity of local 
Haitian institutions and organizations, while at the same time ensuring 
rigorous oversight of our assistance funds. In Fiscal Year 2014, 11 
percent of all funding was directly implemented by the Haitian 
Government and local organizations. In addition, USAID works with a 
significant number of local organizations through sub-grant or sub-
contract mechanisms. From 2010 to 2014, USAID has provided more than 
$84 million to more than 500 local organizations through sub-contracts 
and sub-grants.
    As our strategy in Haiti has shifted from recovery to long term 
development and reconstruction, USAID has increased direct funding to 
local organizations. To help achieve this goal, USAID established a 
local solutions office within the Mission to lead this effort, released 
annual program statements targeting local organizations, and has 
several capacity building mechanisms designed to assist local 
organizations in complying with USAID's reporting and accountability 
requirements. With these measures in place, USAID aims to increase 
direct funding to local organizations in the coming years.
Questions Submitted by Hon. Eric A. ``Rick'' Crawford, a Representative 
        in Congress from Arkansas
    Question 1. How many metric tons of rice are currently being 
shipped through the Food for Peace Title II Program? Please provide 
data for the last 10 years.
    Answer. The amount of rice purchased in a given year fluctuates 
greatly depending on what crises emerge and the appropriate commodity 
for the populations being served. In FY 2014, USAID shipped 84,610 MT 
of rice through the Food for Peace program. From 2005 to 2015 the 
Office of Food for Peace purchased approximately 1.13 million metric 
tons of rice in the United States, valued at approximately $576 
million. This is an average of 102,800 MT per year to support Title II 
food assistance programs.

    Question 2. We hear a lot about the cost of shipping in-kind food 
aid donations. In your written statement you said that the savings from 
eliminating shipping costs would translate into helping more people. 
But in cases of cash-based aid, that seems to ignore the fact that 
recipients are purchasing food from supermarkets and other sources at 
prices that, I would assume, include processing, shipping, and profit 
margins for those supplying the food. What is the difference between 
in-kind and cash-based food aid in terms of cost per calorie consumed?
    Answer. USAID's Office of Food for Peace provides different ration 
sizes, food baskets, and transfer amounts specific to the context of 
each emergency response. The goal of emergency food assistance, 
regardless of modality, is to help beneficiaries meet their daily 
caloric needs. A full food basket provides an adult 2,100 kilocalories 
per day, or approximately 17 kilograms of food per month. Based on the 
context of the emergency response, USAID will often provide less than a 
full food basket, allowing beneficiaries to supplement food assistance 
with other sources. Commodity, transportation, and operational costs 
also vary by operation. For example, it is more expensive to program 
food assistance in war-torn South Sudan than in Guatemala. When 
compared to U.S. procured in-kind food, local and regionally procured 
food in FY 2014 was an average of 29 percent less expensive.
    Cash and voucher programs propose cash transfer or voucher value in 
order to cover a proportion of beneficiaries' food needs, again 
assuming a full food basket of 2,100 kilocalories per day. Program 
beneficiaries often have the freedom to select a wide variety of 
commodities--and commodity volumes--with that transfer. Operational 
costs also vary based on a number of factors, including local prices, 
market sophistication, and beneficiary targeting.
    For example, USAID supported the UN World Food Programme's (WFP) 
provision of cash transfers and vouchers valued at $10.35 a month to 
vulnerable populations in Senegal suffering from drought, a value 
equivalent to the cost of a daily ration meeting approximately 92 
percent of kilocalorie needs. Thanks to a stable political and economic 
situation, established relationships between WFP, retailers, and 
financial institutions, as well as availability of diverse nutrient-
rich foods in local markets, this program is approximately 46 percent 
less expensive than a comparable Title II in-kind contribution. In 
neighboring Mali, however, a more complex, conflict affected operating 
environment with less sophisticated retail and financial systems 
contributes to increased operating expenses for all programming, 
including cash transfers. A non-governmental organization managed cash-
for-work program improving levees and irrigation systems in Mali is, 
therefore, less cost efficient than the example above, at only ten 
percent less expensive than a comparable Title II in-kind contribution 
for a food-for-work activity in Mali.
Questions Submitted by Hon. Dan Benishek, a Representative in Congress 
        from Michigan
    Question 1. I understand that cash-based food assistance has 
increased to the Syrian region by 440% from 2010 to 2014, and for FY 
2014, 67% of the EFSP grants awarded by USAID went to the Syrian 
region. Given the ongoing political turmoil in the area, and the large 
number of refugees flooding camps (over two million), why is the focus 
on cash assistance?
    Answer. USAID provides cash transfers for food assistance only in 
those very specific instances in which we believe cash transfers are 
the best way to meet the food needs of vulnerable households that have 
been hit by a shock. Hence, cash transfers represent a small fraction 
of our portfolio--only four percent in FY 2014. It is a 
mischaracterization to say that the focus in the Syria response is on 
cash assistance. In FY 2014, Local and Regional Procurement (LRP) 
constituted 49 percent of FFP's overall assistance to the region. Food 
vouchers accounted for approximately 51 percent. Within Syria itself, 
1.5 percent of the assistance in FY 2014 was voucher-based, and the 
remainder was LRP.
    However, there are some instances where responding with cash-based 
assistance makes the most sense. If it is difficult for our partners to 
deliver in-kind food or establish relationships with vendors to program 
food vouchers, cash may be the best tool to meet food needs. In these 
cases, we can confidently program cash when we know food is available 
in the local markets but people just do not have the cash to buy it. 
Before receiving funding for cash and voucher programs, market analysis 
is required--cash is not automatically the first choice option. USAID 
food assistance partners are required to submit information on market 
analysis and a monitoring and evaluation plan when applying for a grant 
from USAID. Independently, USAID uses FEWS NET analyses--evaluations of 
food assistance needs, and markets and trade conditions and anomalies--
to inform our programming decisions. These analyses help us determine 
when cash is most appropriate.

    Question 2. What steps are being taken to increase oversight and 
reduce fraud in such an unstable environment?
    Answer. USAID takes its oversight role extremely seriously, and we 
have very low loss rates on both in-kind and cash-based assistance. In 
its reviews of USAID's food assistance programs, the Government 
Accountability Office (GAO) has found very few irregularities with 
respect to diversion and loss. Even so, USAID has released tougher 
guidelines including on the depth of risk analysis required with regard 
to potential for fraud or misuse of funds. We are also expanding 
training for USAID and implementing partner staff on managing and 
monitoring cash-based programming.
    Regarding cash-based assistance, there are a variety of controls in 
place for oversight and fraud prevention. Vouchers, if not electronic, 
often have holograms, watermarks or serial numbers to prevent fraud; in 
some cases, paper vouchers are a different color each month so they 
cannot be copied and have limited redemption periods. Vouchers allow us 
to track exactly what foods are purchased. Biometrics are also an 
important tool, which allow partners to identify beneficiaries using 
photographs, fingerprints, or iris scans. The very limited cash 
transfers we use are usually distributed at a bank or other financial 
institution so resources will be secure until they are transferred.
    For the Syrian refugee program, oversight has expanded to include 
monitoring the usage of vouchers through the participating banks' 
electronic systems, receipt comparisons and reconciliations to ensure 
receipts are accurate; regular in-person and unannounced visits to 
supermarkets and shops taking part in the program; a hotline for 
program participants to report problems and issues; and periodic re-
verification of beneficiaries to ensure that they are still in need of 
food assistance and are still using the cards. The UN World Food 
Programme (WFP) will soon begin iris scan technology at points of sale 
as a further safeguard. In those instances where misuse of vouchers has 
been suspected or evident, WFP has taken swift action to remove 
participating shops from the program and to recover losses.
    Inside Syria, where in-kind food is distributed, the USAID non-
governmental organization partners are triangulating information to 
mitigate misuse of resources using a variety of means, including: GPS-
tagged photos and, in some cases, videos to confirm delivery occurs 
where and to whom it should; signing for receipt by beneficiary 
households or bakeries; barcoding of individual food parcels with 
tracking to the household delivery level; telephone hotlines and e-mail 
addresses that beneficiaries can utilize to report issues; and follow 
up by field monitors in person and by phone. Any and all losses, 
whether fraud or not, are reported to USAID, which includes 
notification to the Office of the Inspector General. USAID requires 
immediate reporting by all partners if fraud is suspected.
    For its part, USAID prioritizes placing field staff, both 
international and local staff, in countries with large food assistance 
programs. These in-country monitors are supported by a Food for Peace 
five-person global monitoring and evaluation team that provides support 
to staff in bilateral USAID Missions. USAID/Food for Peace is also 
increasing use of third party monitoring for locations where its staff 
cannot access project sites.

    Question 3. In an environment like Syria, how does a cash 
assistance program compare to a more traditional program that would 
offer food aid only?
    Answer. USAID's Office of Food for Peace (USAID/FFP) determines the 
best means of responding to food security emergencies--whether that 
assistance be provided with U.S. in-kind commodities, locally and/or 
regionally procured commodities, food vouchers, or cash transfers for 
food--based on the context of each individual humanitarian response. 
This decision making process is based on the timeliness for each 
modality; local market conditions; cost effectiveness; feasibility and 
scale; beneficiary preferences; beneficiary targeting and gender; 
security; and program objectives.
    In the case of the Syria crisis, analysis has led USAID/FFP to 
support two types of programming--food vouchers in the neighboring 
countries and an in-kind program inside Syria that provides locally and 
regionally procured (LRP) food parcels and flour. In FY 2014, this LRP 
program constituted 49 percent of USAID's overall food assistance to 
the region. USAID/FFP is also providing funds to WFP to support an 
electronic voucher program in five refugee hosting countries for Syrian 
refugees and to NGOs to implement very small scale voucher activities 
inside Syria. Food vouchers accounted for 51 percent of the Syria 
operations in FY 2014.
    In the Syria context, the voucher program is an efficient and 
effective way to reach millions of refugees across five countries, many 
of whom are living in cities and towns with functioning markets. The 
approach is different from in-kind aid programs because it does not 
require a large logistics operation to buy, transport, warehouse, and 
distribute food which would not be feasible in this particular context 
Refugees have more diversity of choice, enabling preparation of meals 
with more nutritious, micronutrient rich and perishable commodities. 
Given the availability of food in the surrounding countries that are 
hosting Syrian refugees, the food voucher program enables USAID to 
support these local host economies and brings in other private actors 
such as to banks, and credit card companies (including American Express 
and Visa). Their oversight systems allows USAID to track where 
purchases are made, and the type and quantity of foods purchased. The 
use of a voucher system is also different from an in-kind program 
because it reinforces and benefits local economies in new ways by 
creating demand for goods. Delivery costs are usually lower for such 
programs since the shipping, handling, storage and distribution of 
large amounts of commodities is not required.
    The program inside Syria is predominantly a commodity based program 
but it is funded through grants to UN and NGO partners. Import 
constraints, concerns that the Syrian Government could block or tamper 
with U.S. goods, and fears that recipients or aid workers might face 
security threats if found using U.S. food has limited the use of U.S. 
commodities. Cost and appropriateness are also factors since canned 
goods and processed commodities make up part of the monthly family 
rations.

    Question 4. Regarding cash-based assistance in Syria, where does 
the food being purchased actually come from? What are the top two 
commodities that this funding is buying?
    Answer. In fiscal year (FY) 2014, USAID's Office of Food for Peace 
provided $177.8 million of International Disaster Assistance (IDA) 
funding to the U.N. World Food Programme's (WFP) emergency operation 
inside Syria. Funding for this operation supports the regional 
procurement of commodities to provide a monthly food basket to 
conflict-affected people in Syria. The top two commodities purchased 
with USAID resources are rice and wheat flour. From 2014 through the 
present, WFP has purchased nearly 73,000 metric tons of rice from India 
and more than 34,000 metric tons of wheat flour from Turkey. WFP does 
not implement cash transfer programs inside Syria, and WFP has only 
implemented a very small food voucher pilot program inside Syria (less 
than .01% of the operation).
    USAID provided $272.5 million to WFP's regional operation providing 
food vouchers to Syrian refugees in Egypt, Iraq, Jordan, Lebanon, and 
Turkey in FY 2014. Refugees use electronic debit cards to purchase 
urgently needed food in local stores and markets, including rice, 
potatoes, oil, milk, meat/chicken, eggs, yoghurt, canned goods and/or 
cheese. Given the high number of refugees, the developed market systems 
in the hosting countries, and that many refugees are not situated in 
camp settings, an electronic voucher system is the most efficient and 
effective way to distribute food assistance.
Questions Submitted by Hon. Ralph Lee Abraham, a Representative in 
        Congress from Louisiana
    Question 1. 1.A November 2014 internal audit (http://
documents.wfp.org/stellent/groups/public/documents/reports/
wfp269800.pdf) of World Food Program operations in Syria and 
neighboring countries reveals significant diversion of assistance 
through the WFP's cash and voucher process, which I understand is 
similar to USAID's LRP program. The audit also found flaws in the 
procurement process. Doesn't this internal report reveal the inherent 
flaw in voucher assistance over ``in-kind'' donations? As a key partner 
of WFP, is USAID worried that the mismanagement of cash vouchers by 
their partners will also expose you to the same fraud and abuse? Why 
does USAID believe the results of LRP will be any more successful in 
preventing encashment of vouchers? What specific processes will be in 
place to ensure a transparent and systematic approach to procurement? 
How could USAID effectively prevent fraud and abuse of vouchers with a 
substantial increase in flexibility if you and your partners can't 
effectively do so with your current allotment?
    Answer. The World Food Programme (WFP) audit report makes no 
comparison between voucher assistance and in-kind donations and does 
not demonstrate that one is inherently better than the other. As 
pointed out in the Government Accountability Office and USAID Inspector 
General testimony before this Subcommittee in July 2015, the ``right'' 
modality depends on the context, and there is the potential for 
mismanagement if any modality is not carefully managed and monitored. 
Indeed, as was noted in that testimony, there are more recorded 
challenges to date relating to ``in-kind'' assistance. USAID takes the 
loss and diversion of assistance-no matter the modality-very seriously. 
The monitoring and evaluation of all programs is a high priority. With 
regard to the WFP regional audit for Syria, it is notable that WFP 
first detected the diversions of some of the program vouchers through 
its own monitoring system, which allowed it to take quick corrective 
action. The encashment was later noted by the internal audit, whose 
findings WFP made public. The audit, covering the period July 2013 
through March of 2014, noted WFP offices had already ``initiated a 
number of measures to mitigate the risk. These included increasing the 
number of shops and stronger monitoring.'' Both the monitoring and the 
audit process implemented by the partner are the kinds of measures that 
identify misuse and allow for rapid action to address weaknesses.
    WFP and its partners conduct monthly monitoring of shops to ensure 
controls are in place and are being followed. In 2015, WFP is further 
enhancing monitoring capacity by recruiting additional WFP field 
monitors and increasing the number of third-party monitoring service 
providers. In addition, it is instituting an ``iris scan'' procedure at 
point-of-sale that will validate the card-holder is indeed the refugee 
intended to receive the food support.
    With regard to encashment, the audit found that in some cases, 
households were making the difficult decision to feed their families 
less, ``selling'' some of their food to buy critical non-food items or 
meet other basic needs, like doctor expenses. This ``encashment'' of 
food assistance can also happen with in-kind food and is more often a 
reflection of the desperation of the recipients to meet household needs 
than anything nefarious. Over the past 17 months since the end of the 
period that audit covered, WFP refined its targeting and worked with 
other partners to ensure that the value of vouchers intended for food 
was used in this way.
    The debit card approach used for Syrian refugees allows us to track 
exactly what foods are purchased and eliminates the need for logistics 
operations to buy, move, and warehouse food. The high risks for 
diversion of in-kind food are usually associated with transportation 
and warehousing of the food. An electronic system avoids these risks 
and in many ways is more secure than the large-scale movement of food.

    Question 2. I understand that USAID representatives invited 
stakeholders from the agriculture community to meet with them just 1 
day before the hearing and after what some of them described as three 
years of silence from the agency. During that particular meeting, 
several USAID representatives outlined a large payout planned for the 
U.S. Maritime Administration (MARAD) and part of the maritime industry 
that has so far been anything but transparent. It was indicated to the 
stakeholders that the deal will involve an annual Sec. 302(b) transfer 
of $95 million from the Title II budget to the U.S. DOT to be merged 
with an additional $34 million in transportation money to provide an 
additional $1.5 million per vessel for those participating in the 
Maritime Security Program (currently about 60 vessels). In response, 
the maritime industry would not oppose USAID's requests for 45% 
additional flexibility on top of the 20% authorized in the farm bill. 
Please verify whether this report has merit and explain why the agency 
has not brought the agriculture industry to the table for nearly 3 
years. Do you anticipate the agriculture industry would remain a vital 
partner in your cause if the in-kind contribution is decreased from 80% 
to 35%? And how do you plan to further engage the industry and attempt 
to garner their support for this plan?
    Answer. USAID has been engaging with the agricultural industry on 
increased flexibility in food assistance since 2013. Following the 
introduction of the first food aid reform proposal by the 
Administration, representatives from a variety of agricultural 
stakeholder groups met with former USAID Administrator Rajiv Shah to 
discuss the proposal and the need for increased choice in food 
assistance modalities. Since then, food aid reform has been a recurring 
topic at the biannual Food Aid Consultative Group (FACG) meetings, to 
which all agricultural stakeholders are invited. Several key commodity 
groups also sit on the executive committee of the FACG and help to 
determine the meeting's agenda. Additional outreach has also been done 
over the past several years to engage various agricultural groups in 
discussions on food aid reform, including attending and having an 
information booth on the Food for Peace (FFP) program at the National 
Farmers' Union Convention in 2014.
    The specific meeting in question did take place on the day before 
the hearing; however the timing was unintentional as planning for this 
meeting with agricultural stakeholders had been in process for some 
time and a final date was set before a hearing date was determined.
    During that meeting, details of a potential compromise between 
USAID and the maritime industry were shared and feedback from the 
agricultural groups present was requested. USAID asked for additional 
ideas from those present at the meeting to help further support 
additional food aid flexibility to meet growing and changing needs 
while also acknowledging the important role of the agricultural 
community in the FFP program. However, it is important to note that the 
potential compromise has not been finalized and no legislation has been 
introduced to codify any changes into law.
    Food aid reform efforts continue to be focused on providing USAID 
with enough flexibility to always use the right tool at the right time 
to respond to food insecurity around the world. U.S. food is a 
lifesaving tool that USAID will continue to need as part of this 
evolving toolbox, and we believe that our partnership with the U.S. 
agriculture community will continue to be a critical part of our life-
saving efforts around the globe. Our hope is that U.S. farmers will see 
the value USAID places on U.S. commodities within the Food for Peace 
program, as well as appreciate the other tools available to respond to 
food insecurity effectively and the benefits these modalities can play 
in helping farmers in developing countries become more self-sustaining.
    After meeting with agricultural community stakeholders, USAID 
indicated a willingness to meet again to continue a discussion on the 
future of food assistance. We welcome and look forward to ongoing 
engagement and partnership with agriculture community stakeholders.
Question Submitted by Hon. Collin C. Peterson, a Representative in 
        Congress from Minnesota
    Question. Regarding negotiations with the maritime industry, NGOs 
and with agriculture commodity groups about an increase in the Maritime 
Security Program (MSP) subsidy, what is their involvement and who are 
they? Please provide exact names of the organizations and when you met 
with them.
    Answer. Since 2013, USAID has had conversations with a broad array 
of stakeholders, including members of Congress, non-governmental 
organizations (NGOs), maritime and agriculture representatives, about 
enacting food aid reform to reach additional beneficiaries more 
efficiently with the same resources. Food aid reform conversations have 
also been part of USAID's Food Aid Consultative Group meetings that 
occur twice a year.
    U.S. agriculture has always been and will continue to be a key 
partner in our efforts to feed the world's most hungry. Representatives 
from the agriculture sector who have been engaged in recent food aid 
reform discussions include:

        American Farm Bureau Federation
        American Peanut Council
        American Soybean Association
        Archer Daniels Midland
        Cargill
        Global Food and Nutrition, Inc.
        National Association of Wheat Growers
        National Corn Growers Association
        National Farmers Union
        National Oilseed Processors Association
        National Potato Council
        National Sorghum Producers
        North American Millers Association
        U.S. Dry Beans Council
        U.S. Rice Producers Association
        U.S. Wheat Associates
        USA Dry Pea and Lentils Association
        USA Rice Federation

    USAID met with a number of NGOs between November 2014 and July 2015 
including but not limited to:

        Alliance for Global Food Security representatives
        American Jewish World Service
        Bread for the World
        CARE
        Catholic Relief Services
        InterAction and affiliated member organizations
        Mercy Corps
        Modernizing Foreign Assistance Network
        ONE Campaign
        Oxfam America
        Save the Children
        World Food Program USA
        World Vision

    USAID met with a number of maritime industry and labor 
representatives between January 2015 and June 2015 including but not 
limited to:

        American Maritime Congress
        American Maritime Officers Service
        American President Line
        Jones Walker
        K+L Gates
        Maersk Line Limited
        Maersk, Inc.
        Marine Engineers' Beneficial Association
        Maritime Institute for Research and Industrial Development
        Maritime Trades Department and Port Maritime Councils, AFL-CIO
        Masters, Mates, and Pilots
        Seafarers International Union
        Squire Patton Boggs
        Transportation Institute

    We look forward to continuing this partnership as we seek the right 
mix of tools to respond most effectively to humanitarian crises. As the 
numbers of internally displaced persons and refugees grow and global 
humanitarian needs outpace limited resources, our ability to respond 
appropriately and efficiently has never been more critical.

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