[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
HEARING TO REVIEW U.S. INTERNATIONAL FOOD AID PROGRAMS
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HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JUNE 24, 2015
__________
Serial No. 114-18
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Agriculture
agriculture.house.gov
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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
(ii)
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
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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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