    Foreign Assistance: Sustained Efforts Needed to Help Southern
    Africa Recover from Food Crisis (25-JUN-03, GAO-03-644).

    The southern Africa food crisis threatened 15.3 million people in
    six countries (Lesotho, Malawi, Mozambique, Swaziland, Zambia,
    and Zimbabwe) with famine. GAO was asked to look at (1) factors
    that contributed to the crisis, (2) how well the populations'
    needs were met, (3) obstacles to the food aid effort, and (4)
    challenges to emerging from crisis.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-03-644
        ACCNO:   A07214
      TITLE:     Foreign Assistance: Sustained Efforts Needed to Help
    Southern Africa Recover from Food Crisis
         DATE:   06/25/2003
      SUBJECT:   Federal aid to foreign countries
    	     Food relief programs
    	     Foreign aid programs
    	     Foreign economic assistance
    	     Strategic planning
    	     HIV/AIDS
    	     Lesotho
    	     Malawi
    	     Mozambique
    	     Swaziland
    	     Zimbabwe
    	     Zambia
    	     UN World Food Program
    	     International Monetary Fund

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    GAO-03-644

                                           A

    June 25, 2003 Let er t The Honorable Russell D. Feingold

    Ranking Minority Member Subcommittee on African Affairs Committee on
    Foreign Relations United States Senate

    Dear Senator Feingold: The southern Africa region has been facing its
    worst food crisis in more than a decade. Approximately 15. 3 million
    people (26 percent of the total population) in 6 countries* Lesotho,
    Malawi, Mozambique, Swaziland, Zambia, and Zimbabwe* have experienced
    severe food shortages and the threat of famine. Avoiding famine has
    required substantial supplies of food from commercial imports 1 and a
    large international food aid effort. The United Nations began establishing
    emergency food aid operations in

    individual countries as early as November 2001. In July 2002, the United
    Nations appealed to international donors for $507 million to provide 1.2
    million metric tons of emergency food aid as part of a consolidated
    regional program for the April 2002- March 2003 crop year. However, food
    shortages continue and emergency operations have been extended through
    June 2003.

    Because of concerns over the nature and severity of this food crisis, you
    asked us to determine: (1) what factors contributed to the current crisis
    in southern Africa, (2) how well were the populations* overall food needs
    met during the crisis period, (3) what were the major obstacles to the
    food aid effort, and (4) what are the challenges to emerging from the
    crisis into sustained recovery.

    To address these objectives, we met with and analyzed information from U.
    S. government officials at the U. S. Agency for International Development
    (USAID) and the Departments of State and Agriculture in Washington, D. C.,
    and at U. S. missions in Botswana, Malawi, Mozambique, Zambia, Zimbabwe,
    and South Africa. We also met with officials and reviewed information from
    the World Food Program (WFP), the Food and Agriculture Organization (FAO),
    and the International Fund for

    1 Depending on a country*s policies, commercial imports represent the
    private sector, the government, or both. In some cases governments
    subsidize private sector imports.

    Agricultural Development (IFAD) at their headquarters in Rome and in the
    southern African countries we visited. In addition, we gathered
    information from and met with representatives of the World Bank and the
    International Monetary Fund (IMF), other U. N. agencies, nongovernmental
    organizations (NGO), other donor governments, and host government
    ministries in Washington and at the country level in southern Africa. As
    part of our fieldwork, we observed WFP and NGO food aid distributions in
    Malawi, Mozambique, Zambia, and Zimbabwe. (App. I provides detailed
    information on our scope and methodology.)

    Results in Brief The primary factors that contributed to the food crisis
    were: (1) erratic weather, (2) a poorly functioning agricultural sector,
    (3) questionable

    government actions, (4) widespread poverty, and (5) the HIV/ AIDS
    epidemic. Erratic weather patterns contributed to a reduction in southern
    Africa*s cereal 2 production by 29 percent on average. 3 But this decline
    alone

    would not have caused a food crisis absent other conditions. Food stocks
    were depleted from previous poor harvests and farmers lacked access to
    agricultural inputs such as seeds and fertilizer. Government actions such
    as

    the sale of grain reserves in Malawi and disruptive land reform policies
    in Zimbabwe* which spurred a 75 percent drop in that country*s commercial
    maize (corn) production over the past 2 years* further reduced food

    supply. Widespread poverty contributed to food insecurity in the region.
    HIV/ AIDS, which has infected 13 percent to 33 percent of the population
    in the six countries, exacerbated the crisis by reducing both productivity
    and agricultural output and severely limiting the populations* ability to
    cope

    with a bad harvest and high food prices. By the end of the April 2002-
    March 2003 crisis period, approximately 93 percent of the regional cereal
    gap 4 was met. Commercial cereal imports were reported as 1.72 million
    metric tons (MT), while the food aid effort achieved at least 0.73 million
    MT (60 percent of the planned amount). Provision of this food prevented
    large- scale famine and death. However, 2 As used in this report, cereal
    refers to plants that yield grain suitable for food and includes

    maize, millet, sorghum, rice, and wheat. 3 This figure reflects total
    production for these six countries in the 2001/ 02 season compared with
    average production over the previous 5 years.

    4 Total cereal gap is calculated by estimating annual domestic cereal
    needs and subtracting the estimated harvest during the year plus cereal
    stocks at the beginning of the year.

    food did not reach the region early enough to avert widespread hunger, and
    many people resorted to rationing food, reducing expenditures on nonfood
    items, and selling household assets (such as tools and livestock). Success
    in filling the total cereal gap varied widely across the six affected
    countries. For example, Malawi more than eliminated its cereal gap,
    whereas Mozambique cut its gap by about 50 percent. According to currently
    available data, rates of acute malnutrition in the region have not

    deteriorated significantly. The major obstacles to the food aid effort
    were (1) the lack of sufficient, timely food donations; (2) poor
    infrastructure in recipient countries; and (3) concerns associated with
    biotech food. 5 Although the United States made substantial, early
    donations, in aggregate, donor country commitments of food were 18 percent
    below WFP*s operational needs through the end of December. Moreover, given
    the lag in time between when food commitments were made and when food
    arrived in country, the shortfall in the first 6 months of the crisis
    period was much higher. Poor infrastructure* ports, rail, roads, and
    storage facilities* in recipient

    countries hampered efficient delivery of food aid, limited how quickly
    food could reach recipients, and ultimately prevented food from reaching
    some beneficiaries. Concerns about the health and environmental safety of
    food aid that might contain bioengineered products led Zambia to reject U.
    S. donated maize and most of the other countries to impose costly and
    timeconsuming processing requirements* which further reduced or delayed
    the food aid effort, increased costs, and complicated emergency
    operations. The major challenges to emerging from the current food crisis
    into

    sustained recovery include (1) declining investment in the region*s
    agricultural sector, (2) the limited scope of existing programs related to
    food security, 6 and (3) the negative impact of HIV/ AIDS. Recognizing
    that little progress has been made to address impediments to the
    transition from crisis to recovery, the U. N. Secretary- General and
    several other key

    5 Modern agricultural biotechnology employs scientific techniques, such as
    genetic engineering, to modify plants, animals, or microorganisms by
    introducing desired traits in them, including characteristics from
    unrelated species. For example, traits may be introduced to facilitate
    pest management and improve yield or nutritional value. In this report, we
    refer to foods derived from genetically modified plants as biotech foods.
    (See

    app. VII and our evaluation of agency comments.) 6 Food security is
    commonly defined as physical and economic access by all people at all
    times to enough food to meet their dietary needs for an active and healthy
    life.

    stakeholders have called for a more comprehensive, integrated approach to
    break the pattern of recurrent food crises in Africa. While the food
    outlook for the next crop year* April 2003 through March 2004* is better,
    food security conditions are still tenuous; and without sustained
    progress, recurring food crises may be difficult to avoid in the future.
    This report makes recommendations to the Secretaries of State and
    Agriculture and the Administrator of USAID, to (1) undertake a
    comprehensive review of the issues pertaining to biotech foods in
    emergency food aid in anticipation of future food crises, and (2) work
    with

    international organizations, donors, national governments, and key
    stakeholders to develop a recovery strategy that integrates agricultural
    development, HIV/ AIDS, and natural disaster management, among other
    things.

    We received written comments on a draft of our report from the Departments
    of State and Agriculture, USAID, and WFP, which we have reprinted in
    appendixes VIII, IX, X, and XI, respectively. These agencies generally
    agreed with our overall conclusions and recommendations while expressing
    technical concerns on specific points, primarily issues related to biotech
    food. Their technical comments, along with those received from FAO, IMF,
    and the World Bank, have been incorporated into the report as

    appropriate. Background In 1991/ 92, drought caused massive crop failure,
    threatening 18 million

    people in 10 southern African countries with famine. Because of a similar
    reduced maize crop after the 2001/ 02 crop cycle, 7 several early warning
    systems predicted an impending food crisis that would run through the
    beginning of the following harvest in April 2003. (App. II provides a
    timeline of the crisis period, and app. III provides information on early
    warning systems.)

    7 The maize crop cycle in southern Africa runs roughly from mid- November
    (when crops are planted) through mid- April (when crops are harvested).

    Regional and national assessments of the crisis conducted by WFP, FAO, and
    others estimated that 15.3 million people 8 in the region were at risk of
    starvation. (Fig. 1 shows the population at risk of famine in each of the
    six

    affected countries.) 8 Three assessments of the southern Africa food
    crisis were conducted between April 2002 and March 2003. The first round
    was a series of national Crop and Food Supply Assessment Mission (CFSAM)
    reports published in May 2002, which estimated that 12.8 million
    individuals would be at risk of starvation at the peak of the crisis. The
    second round, published in September 2002 as Emergency Food Security
    Assessment Reports, increased the at- risk estimate to 14.4 million people
    at the peak of the crisis. The third round of assessments, published in
    January 2003, increased the estimate to 15.3 million people.

    Figure 1: Population at Risk of Famine in the Affected Southern African
    Countries DRC

    Tanzania 31%

    Angola Zambia

    Malawi 2.8 million

    3.6 million Mozambique

    650,000 3%

    Zimbabwe 7.2 million

    28% Namibia

    Botswana Madagascar

    52% 28% South Africa

    Swaziland 300,000 34%

    (Number): Number of people affected by the food crisis

    Percent of country's population

    Lesotho

    affected by the food crisis

    760,000

    Source: GAO and MapArt.

    In July 2002, WFP initiated the Southern Africa Crisis Response Emergency
    Operation (EMOP) for providing food aid to the six countries on a regional
    basis. Prior to this consolidation, WFP had been delivering food to the
    individual country emergency operating programs. WFP*s objectives in the
    southern Africa food crisis were to prevent severe food shortages,
    safeguard the nutritional well- being of vulnerable segments of the

    population, preserve human assets, and prevent migration out of affected
    areas.

    As the major food aid donor in the southern Africa crisis, the U. S.
    government has a significant role in the relief effort. Through USAID*s
    Food for Peace Office and its Office of Foreign Disaster Assistance and
    USDA, the U. S. government has worked to support the EMOP and address the
    crisis. In February 2002, in an effort to avert famine, the United States
    began authorizing food aid shipments to the region. As of March 18, 2003,
    the U. S. government had provided approximately $275 million in food aid

    and $13 million for bilateral nonfood- related assistance such as
    agriculture, health, shelter, and sanitation. (See app. IV for additional
    information on the U. S. contributions.) WFP, the United States, and other
    countries partner with nongovernmental

    organizations to distribute food aid at the regional and village level. In
    addition, many of these organizations also provide nonfood emergency
    assistance and long- term development aid. 9

    Much of the population in each of the affected countries works in the
    agricultural sector. The percentage of labor force engaged in agriculture
    ranges from 66 percent in Zimbabwe to 86 percent in Lesotho and Malawi.

    Many of these farmers rely on maize (corn) as the primary staple crop.
    Unlike root crops such as cassava and sweet potatoes* which are common but
    less popular staples in the region* maize is relatively fragile, requiring
    more fertilizer and differing amounts of water during the growing season.

    Multiple Factors The immediate factor contributing to the food crisis was
    the erratic

    Contributed to the weather patterns that disrupted the normal growing
    cycle, causing maize

    production in southern Africa to drop from a 5- year average of about 7.3
    Food Crisis

    million MT to about 5.2 million MT in 2002. The dramatic reduction in
    available maize can also be linked to a weak agricultural sector and
    government actions, such as Malawi*s decision to sell off its strategic
    grain reserve and Zimbabwe*s fast- tracked land reform. In addition, much
    of the

    region*s population had limited access to food because of widespread
    poverty. The HIV/ AIDS epidemic further exacerbated the population*s
    access to basic commodities by decreasing household food production and
    income and increasing consumption requirements. 9 Nongovernmental
    organizations are nonprofit, private entities funded by private,
    governmental, and international organizations. NGOs are WFP's principal
    implementing

    partners in providing emergency food assistance.

    Erratic Weather Patterns Erratic weather patterns between December 2001
    and May 2002 reduced

    Played a Key Role in the harvests in five of the six affected countries,
    except Mozambique, when

    Reducing Maize Production compared with 5- year averages. Drought- like
    conditions gripped parts of

    Malawi, southern Mozambique, Swaziland, southern Zambia, and Zimbabwe in
    the middle of the growing season (see app. II for timeline). This water
    deficit at a crucial point in the growing season severely stressed crops
    and caused many hectares 10 to wilt. In addition, parts of Zambia suffered
    high rainfall mid- season, flooding the still- growing crops. Similarly,
    in Malawi, after the mid- season dry spells wilted some crops, the

    country received heavy rains that hampered the harvesting and drying of
    what crops remained, and in some cases, caused them to rot. Lesotho also
    experienced prolonged rains late in the season as well as an additional
    lateseason

    frost that damaged crops across large parts of the country and drastically
    reduced production. Regional Cereal Production

    Regional food supplies have been limited due to poor cereal harvests in
    five Dropped by 29 Percent

    out of the six affected countries. (See table 1.) Mozambique was the one
    exception: Its 2001/ 02 cereal harvest was actually above average.
    However, due to transportation constraints, Mozambique*s production
    surpluses

    could not be supplied to the southern part of the country where cereal
    harvests were lower.

    10 One hectare equals 2. 47 acres.

    Table 1: Cereal Production by Country In metric tons

    Percentage 2001/ 02 season 5- year average a change

    Lesotho 121,500 171, 000 b -29% Malawi 1,772, 000 2,081, 000 -15%
    Mozambique 1, 767,000 1,678, 000 5% Swaziland 70,000 90, 000 -22% Zambia
    738,000 1,095, 000 -33% Zimbabwe 705,840 2,164, 000 -67%

    Total 5, 174,340 7,279, 000 -29%

    Source: Famine Early Warning Systems Network (FEWS NET) Vulnerability
    Assessment Committee (VAC) Reports, September 2002 through January 2003. a
    Represents average production for the harvests in 1997 through 2001. b
    Estimated.

    Poorly Functioning In addition to poor weather conditions, weaknesses in
    the agricultural

    Agricultural Sector sector contributed to a poor harvest. According to
    IFAD, these weaknesses

    Negatively Affected Food included the following:

    Supply  Declining soil fertility reduced crop yields. In Lesotho, average

    maize and sorghum yields have declined by more than 60 percent since the
    mid- 1970s. According to FAO, declining soil fertility is a primary cause
    of this trend and is leading to a crop production catastrophe in that
    country.

     Restricted access to agricultural inputs such as seeds and fertilizer
    limited harvests. In Zambia, important inputs such as seeds and fertilizer
    were not available until December 2001 or January 2002, resulting in late
    plantings. These crops were at a crucial stage of development when the
    rains ceased in early 2002, causing crop failure.

     Incomplete market development impaired farmers* ability to sell crops.
    In Malawi, market reforms of the 1980s and 1990s eliminated price controls
    and removed government food grain monopolies. While these liberalizing
    reforms increased the availability of seeds and fertilizer, small farmers
    still lack access to credit.

    Recent Government Actions The food supply has been constrained further by
    certain government

    Further Reduced the Food actions, the most damaging of which were the sale
    of grain reserves in

    Supply Malawi and fast- tracked land reform in Zimbabwe.

    Sale of Malawi*s Grain Reserve Between July 2000 and August 2001, the
    National Food Reserve Agency of Hindered Stable Food Supplies

    Malawi sold the 167,000 MT of maize it had purchased and stored as food
    reserves for the country. Despite several audits, it is still uncertain
    where the proceeds of the sale went. While the sold reserves did not cause
    the Malawi food crisis, their absence jeopardized the population*s food
    security. Had the government retained 60,000 MT of maize in accordance

    with its own policy to ensure adequate food supplies or an equivalent
    amount of currency to purchase new stocks, it could have been used to help
    ease food shortages in the early stage of the crisis, when a considerable
    number of people are reported to have died, 11 and to fill almost one-
    quarter of the country*s cereal gap while emergency response operations
    were ramping up.

    An investigation by Malawi*s National Audit Office in May 2002 concluded
    that the National Food Reserve Agency lost money in every area of handling
    maize because of poor financial management. Another investigation,
    conducted by Malawi*s Anti- Corruption Bureau in mid- 2002, found that
    poor management of the grain reserve allowed companies and individuals to
    take advantage of the maize shortage to increase prices beyond the reach
    of a large sector of the community. The mismanagement cost the Malawian
    government more than K 2.9 billion (about $40 million). 12

    Zimbabwe*s Land Reform After years of trying to redistribute the country*s
    arable land, the

    Decimated Production and government of Zimbabwe fast- tracked its land
    reform and resettlement

    Strained Region*s Supply policy in 2000 with the aim of acquiring all
    commercial farms no later than

    August 8, 2002. The campaign was characterized by the forced expulsion of
    landowners and farm laborers. To date, there remain more than a million

    11 According to a study by the international NGO ActionAid between January
    and April 2002, at least 500 to 1,000 people died of hunger and hunger-
    related diseases in southern and central Malawi. WFP reported that more
    than 70 people died in the village of Gwengwe during that time* all
    victims of the district*s severe food crisis. The Commissioner of Malawi*s
    Department of Disaster Preparedness for Relief and Rehabilitation told us
    that his agency estimated 1,200 people died from hunger- related causes
    between December 2001 and June 2002.

    12 Based on 2001 year- end exchange rate: US$ 1= Malawi K 72.2.

    internally displaced farm laborers. While the government did acquire these
    farms, it did not maintain them to ensure continued productivity. As a
    result, the land seizure destabilized the country*s economy, leading to a
    75 percent drop in commercial maize production over the past 2 years and
    turning Zimbabwe from a net exporter of grain to a net importer. Because
    Zimbabwe now cannot grow enough food to feed its own population, it has
    strained the cereal supply for the entire region. According to the State
    Department, the country*s gross domestic product

    fell by more than 20 percent and inflation soared to more than 269 percent
    between 1998 and 2002, coinciding with fast- tracked land reform. At the
    same time, unemployment rose by more than 25 percent as dismantling of

    commercial farms left many rural farm workers without a source of income
    and, therefore, a way to purchase food when their subsistence crops
    failed. In addition, government- imposed price controls on basic
    commodities have caused shortages of everything from bread, milk, sugar,
    and wheat flour to fuel and electricity.

    Widespread Poverty The six nations affected by the food crisis are
    generally low- income

    Contributed to Food countries. The percentage of population subsisting on
    less than $1 per day

    Insecurity range from 36 percent in Zimbabwe to 64 percent in Zambia. This

    widespread poverty and lack of productive assets (e. g., livestock and
    farm machinery) contribute to food insecurity in the region. In addition,
    the region is currently facing serious economic problems that further
    increase the population*s food insecurity. For example, in recent years,
    the dramatic collapse in the economy of Zimbabwe and a decline in the
    mining industry

    in South Africa and Zambia have removed sources of employment for many
    individuals in the region. The region*s food insecurity is associated with
    high rates of chronic malnutrition in the under- 5 population* ranging
    from

    30 percent in Swaziland to 59 percent in Zambia. HIV/ AIDS Epidemic

    The HIV/ AIDS epidemic has strained already- diminished food supplies by
    Exacerbated Food

    decreasing affected households* food production and increasing nutritional
    Shortages

    requirements. In addition, the epidemic limits households* access to food
    by decreasing income and increasing household expenses. According to the
    Joint United Nations Program on HIV/ AIDS (UNAIDS), adult HIV/ AIDS
    infection rates in 2001 were approximately 31 percent for Lesotho, 15

    percent for Malawi, 13 percent for Mozambique, 33 percent for Swaziland,
    22 percent for Zambia, and 34 percent for Zimbabwe. Infection rates are

    higher among women, who generally account for 70 percent of the
    agricultural labor force and 80 percent of food production in Africa.

    HIV/ AIDS Reduces Food HIV/ AIDS has decreased household food production
    by attacking people in

    Supplies their most productive working years, thus reducing the labor
    force. Around

    three- fourths of HIV/ AIDS cases in southern Africa are among adults
    between the ages of 20 and 40. The percentage of agricultural labor force
    lost due to HIV/ AIDS deaths by 2000 was nearly 6 percent for Malawi and
    10 percent for Zimbabwe. Recent studies on specific rural areas show, for
    example, that each adult death in Zambia was associated with a 16 percent
    reduction in the amount of land planted by the household, and 72 percent
    of households affected by chronic illness in selected rural areas of
    Malawi experienced an agricultural production decrease. 13 In addition, a
    person infected with HIV/ AIDS requires up to 50 percent more protein and
    15

    percent more calories than a noninfected person. These extra needs put a
    further strain on the already limited food supplies. HIV/ AIDS Decreases
    Access to

    HIV/ AIDS has lowered household incomes, making it more difficult to Food

    access what food is available. Recent studies estimate that GDP growth in
    southern Africa is currently around 1 percent to 2 percent lower due to
    HIV/ AIDS. 14 For the six affected countries, 1 percent of GDP in 2001
    amounted to around $200 million. Recent studies in the region also show
    large monetary impacts at the household level. For example, in Zambia,
    HIV/ AIDS- affected households reported annual income levels of 30 percent
    to 35 percent less due to the disease. In Zimbabwe, households with
    orphans had 42 percent less income per capita than households without
    orphans. In addition, medical care and funeral expenses are significant:
    In Zambia, 42 percent of households with chronically ill members reported
    unusually high health care expenses compared with 14 percent of households
    without chronically ill members, while in Zimbabwe, funeral costs can be
    as much as twice the annual per capita poverty line.

    13 A 1992 study in Malawi found that a person infected with HIV/ AIDS was
    estimated to work only 9.7 years out of a potential 25.3 years. 14 To
    estimate this reduction, most studies rely on simulations of projected
    income growth in a case with HIV/ AIDS and in a (hypothetical) case
    without HIV/ AIDS. The results of these

    studies vary, primarily due to assumptions about how HIV/ AIDS affects
    savings and investment rates and the skill composition of the labor force.

    Food Needs Not Fully By the end of the April 2002- March 2003 crisis
    period, approximately 93 percent of the regional cereal gap appeared to
    have been met. 15 Met, but Famine Was

    Commercial cereal imports were reported as 1.72 million MT, while the
    Averted

    food aid effort achieved at least 0.73 million MT (60 percent of the
    planned food aid amount). The commercial cereal imports and food aid
    prevented large- scale famine and death but did not reach parts of the
    region early enough throughout most of the crisis period to avert
    widespread hunger. Many people resorted to coping mechanisms, such as
    rationing their food intake, reducing their expenditures on nonfood items,
    and selling household assets to obtain food. The limited data available on
    nutritional status generally do not show a significant impact on acute
    malnutrition in the countries of the region. In addition to problems with
    timely delivery of food, U. N. agencies were only able to fund about 25
    percent of urgent, nonfood emergency humanitarian needs.

    Approximately 93 Percent The May/ June 2002 FAO/ WFP crop and food supply
    assessments (CFSAM)

    of the Cereal Gap Met for each of the six countries estimated the cereal
    gap for the region at 4.1

    during the Crisis Period million MT or 43 percent of domestic requirements
    for the April 1, 2002,

    through March 31, 2003, period. However, by the end of March 2003, the
    cereal gap had been revised downward substantially*- to 2.6 million MT or
    31 percent of domestic requirements. 16 Based on the plan that evolved
    from the CFSAMs, the cereal deficit was to be offset by a combination of

    commercial imports and emergency food aid. The assessments identified an
    emergency cereals need of 1.2 million MT for the crop year, and this
    amount was adopted as a goal in the United Nations* July 2002 emergency
    appeal for food aid for the region. Although later analyses projected more
    people at risk of famine, the goal for emergency cereals needs was not

    15 The Vulnerability Assessment Committees, WFP, and others collected,
    analyzed, and reported considerable information on the cereal gap.
    However, complete data were unavailable because the VACs found it
    difficult to gather information on food aid provided

    by nongovernmental organizations. 16 The May/ June 2002 FAO/ WFP CFSAM
    initially determined the annual cereal deficit for each country based on
    estimates of domestic cereal consumption and stock requirements and
    production. Subsequent VAC and other assessments revised these estimates,
    resulting in changes to cereal deficit estimates. A requirement to
    replenish 473,000 MT of cereal stocks by the end of the crop year was
    dropped, estimates of cereal production and opening stocks were revised
    upward by 539,000 MT, and estimates of domestic consumption needs were
    lowered by 425,000 MT; the latter revision was partly due to reduced
    population figures for Zambia and Zimbabwe.

    increased. As shown in figure 2, if the emergency goal of 1.2 million MT
    were fully met, the estimated need for commercial cereal imports would be
    1.4 million MT. 17 Figure 2: Revised Estimate of the Cereal Gap in the Six
    Countries and Plan for Addressing the Deficit (March 2003)

    Figure 3 indicates the extent to which food aid and commercial imports
    helped offset the cereal gap in each country and the region over the April
    1, 2002, to March 31, 2003, period. As the figure shows, the region as a
    whole

    met at least 93 percent of its need. In two countries* Malawi and Zambia*
    food aid and commercial imports combined considerably exceeded the cereal
    gap, while the other four had unmet gaps ranging from between 9 percent to
    50 percent. However, the numbers reported by the Vulnerability

    17 Given that the U. N. regional emergency food aid appeal used the
    original CFSAM emergency food aid targets, we derived the annual
    commercial import requirement by subtracting planned emergency food aid
    from the March 2003 revised cereal deficit, as provided to us by WFP.

    Assessment Committees (VAC), WFP, and others do not allow us to precisely
    define total food aid and commercial import levels. The figures are
    estimates and should be interpreted with caution. Food aid figures
    probably underestimate actual values because it was difficult for the VACs
    and WFP to collect comprehensive food aid data from NGOs. Thus, total NGO
    contributions could be considerably higher. Regarding commercial imports,
    some countries had experienced a considerable amount of informal trade in
    cereals, but the VACs and WFP did not always have access to reliable
    figures on informal trade. In the case of Zimbabwe, commercial imports may
    be exaggerated, since the VAC expressed skepticism about the data that
    were reported. According to some observers, Zimbabwe*s price controls may
    have encouraged a substantial outflow of cereals to neighboring countries
    where controls did not exist. Thus, the gap in Zimbabwe may have been much
    greater than shown in the figure.

    Figure 3: Extent to Which Cereal Food Aid and Commercial Imports Met the
    Cereal Gap (April 1, 2002, through March 31, 2003)

    Percentage 160

    140 120 100

    80 60 40 20

    0 Malawi

    Zambia Zimbabwe

    Lesotho Swaziland

    Mozambique Regiontotal

    Percentage of gap filled by commercial imports Percentage of gap filled by
    food aid

    Source: GAO analysis of information provided by WFP and USAID.

    The data in figure 3 do not address the extent to which different parts of
    a country were served. Although Zambia appears to have offset its cereal
    gap by a large amount, the January VAC assessment reported serious cereal
    supply problems at local markets in rural areas. 18 In addition, Malawi,
    which offset its cereal gap to an even greater extent, reported maize to
    be available in most markets, but vulnerable households had limited
    ability to

    pay for the food. (See app. V for additional information on commercial
    imports.)

    18 According to WFP, private traders operate primarily in urban markets.
    Sales are limited in rural markets due to low purchasing power among rural
    populations.

    Food Aid Did Not Reach the The overall commercial cereal imports and food
    aid averted widespread

    Region Early Enough to famine, according to WFP, USAID, and other
    observers in the region.

    Avert Widespread Hunger However, because food supplies to the region were
    less than planned

    during the July through December period, far fewer people received food
    aid than expected. Many people in vulnerable areas went without meals and
    resorted to other coping mechanisms as well. Limited data available on
    nutritional status generally do not show a significant impact on acute
    malnutrition.

    Food Supplies from World Food Between July and December 2002, WFP
    distributed only 48 percent of the

    Program cereal it planned to provide to beneficiaries during that period.
    While

    Malawi and Swaziland received 87 percent and 76 percent, respectively, of
    their planned deliveries, the other four countries fell below the 40
    percent mark. In addition to cereal, WFP planned to provide several other
    foods (principally pulses, vegetable oil, and corn/ soya blend) for added
    nutrition as well as to meet the special needs of some of its recipients.
    WFP realized only 17 percent of its planned distribution of these foods
    for July through

    December 2002. WFP deliveries in three countries* Mozambique, Zambia, and
    Zimbabwe* each represented less than 10 percent of its plans (1 percent in
    the case of Zambia). In Malawi, which had the best performance, WFP
    achieved 40 percent of its planned distribution.

    Figure 4 shows WFP*s monthly performance in achieving its plans for
    delivery of cereals and noncereal commodities in the region. In general,
    WFP*s performance gradually improved between July and December. It

    improved substantially in January, achieving 97 percent for cereals and 74
    percent for noncereals. Deliveries declined during the next 2 months, to a
    low in March of 81 percent for cereal and 53 percent for noncereals.

    Figure 4: Extent to Which WFP Monthly Food Delivery Targets Were Met (July
    2002 through March 2003)

    Food Supplies from Independent of WFP*s program, NGOs were to provide
    about 402,000 MT of

    Nongovernmental Organizations cereals, or one- third of the emergency
    cereal need for the region. NGOs

    obtained or financed food for their efforts from donor countries as well
    as other voluntary contributions. The United States funded a World Vision
    program that provided 19,710 MT of cereal food aid to Zimbabwe. In
    addition, the United States contracted with an NGO consortium, called
    CSAFE (Consortium for the Southern Africa Food Security Emergency), to
    deliver food into the region. According to U. S. officials, the program
    was part of a longer- term strategy that targeted the most vulnerable
    populations that the WFP program might miss. USAID, which began
    discussions withCSAFE members (CARE, Catholic Relief Services, and World
    Vision) in July 2002, did not approve a program for the consortium until
    January 15,

    2003. 19 However, under a November pre- authorization agreement, C- SAFE
    began delivering food into the region in late December 2002. As of the end
    of March 2003, the consortium had delivered about 57,000 MT of cereal food
    aid to Malawi, Zambia, and Zimbabwe. (See app. IV for additional
    information on C- SAFE.) Data provided to us by WFP indicate NGOs provided
    at least another 16,200 MT of cereals food aid into the region.

    Beneficiaries Fewer than Between July and December 2002, WFP averaged only
    3.9 million

    Intended beneficiaries per month, compared with a planned average of 10.4
    million

    people per month (for both cereal and noncereal food aid). 20 Figure 5
    shows how the shortfall in food aid during the July through December 2002
    period affected WFP beneficiary levels in each country. In four of the six
    countries, fewer than 45 percent of planned beneficiaries were served.

    19 The USAID- approved program authorized 160,000 MT of food aid to be
    provided during fiscal year 2003 to three of the six countries. The
    program did not establish a target amount of food aid to be distributed by
    the end of March 2003.

    20 On average for the 6- month period, WFP planned to assist 8 million
    people through largescale general food and food- for- work distributions.
    This aid would go to families living in rural areas affected by adverse
    weather and whose coping strategies were depleted because of stress
    factors, including the increased burden of caring for family members
    affected by HIV/ AIDs. WFP also planned to provide supplementary support
    to another 2.4 million people during the period, such as malnourished
    children, school- age children, and

    expectant and/ or nursing women who had needs above and beyond the levels
    needed to qualify for general food and food- for- work assistance.

    Figure 5: Percent of WFP Total Planned Beneficiaries Who Received at Least
    Some Food Aid (July through December 2002)

    Note: According to USAID officials, Malawi and Swaziland did better than
    the other countries, at least in part because they placed fewer or no
    restrictions on biotech food aid.

    In addition, many people who did receive food aid did not receive a full
    ration. 21 For example, WFP officials in Malawi told us that during
    November they were only able to provide cereal to many of their
    beneficiaries. Beans and vegetable oil were unavailable to provide a
    balanced diet.

    Reduced Food Intake, Other Studies show that people in vulnerable
    communities reduced food intake

    Coping Strategies as their major coping strategy, and this approach has
    increased since the

    crisis began. For example, as of December 2002, more than 60 percent of
    the population in all regions of Malawi reduced the amount of food and
    number of meals they ate, according to the VAC.

    The Southern African Development Community (SADC) identified other coping
    strategies including reducing expenditures on nonfood items, selling or
    trading household assets to get food (e. g., sale of livestock),
    increasing consumption of wild foods, migrating to find work or food,

    21 According to WFP, the food baskets were incomplete largely because of
    when pledged resources arrived as well as donor preferences for in- kind
    contributions of certain commodities. Beans, oils, and corn/ soya blend
    are often under- resourced.

    stealing, and resorting to prostitution. Table 2 shows the extent to which
    surveyed households in Zambia relied on reduced food consumption and other
    coping strategies from between August and December 2002.

    Table 2: Frequency of Household Coping Strategies in Zambia (August
    through December 2002) Percent of households Coping Strategy engaged in
    each

    Reduced number of meals 78 Reduced amount at meal times 72 Skipped food
    for an entire day 58 Reduced expenditures on alcohol and tobacco 57
    Increased consumption of wild foods 38 Reduced expenditures on non- food
    items 34 Above- normal livestock sales 32 Borrowed from friends and
    relatives 30 Borrowed from nonfamily members 27 Borrowed from money
    lenders 5 Source: Zambia National Vulnerability Assessment Committee,
    Zambia Emergency Food Security Assessment (Lusaka, Zambia: January 2003).

    Nutritional Impacts Mixed Between 1999 and 2001, acute malnutrition rates
    in countries of the region for children under 5 years of age were between
    1.2 percent and 6.4 percent. Some assessments conducted between May and
    October 2002 found an increase in acute malnutrition rates compared with
    earlier studies but did

    not find rates consistent with a severe food crisis, which would be 10
    percent to 15 percent. However, these studies did not exclude possible
    pockets of severe malnutrition or hunger- related deaths in the region.
    Also, adult malnutrition and malnutrition in urban areas were not
    surveyed. 22 More recent assessments (December 2002 through January 2003)
    of acute

    malnutrition for children under age 5 in select districts of Malawi,
    Mozambique, Swaziland, and Zambia found rates generally ranging between 2
    percent and 8 percent. However, the rate was 11.2 percent in one province
    of Mozambique.

    22 The Malawian VAC*s July- August household survey found that adults were
    eating less than children and thus might experience a more rapid decline
    in nutritional status.

    According to a recent internal U. S. government report, anecdotal evidence
    from the field in late 2002 indicates that in certain districts in
    Zimbabwe, children were being admitted to some health care facilities in
    increasing numbers for malnutrition. At one facility, three to five
    children were reported to have died of malnutrition during each month of
    2002. More formal nutrition surveys within the country have demonstrated
    acute malnutrition rates of 6.4 percent and 7.3 percent in May and August
    2002, respectively. Results from a nutrition survey conducted in early
    2003 are still pending.

    Nonfood Emergency Needs In addition to requesting $507 million for
    emergency food aid for July 2002

    Severely Underfunded through March 2003, U. N. agencies also requested
    $143.7 million 23 to address urgent and related humanitarian needs that
    increased people*s

    vulnerability to famine for the July 2002 through June 2003 period. As of
    April 9, 2003, less than 25 percent of the total identified requirements
    had been funded, according to an April 22 U. N. southern Africa
    humanitarian crisis update. Principal objectives of the request were to:

     prevent, contain, and address the outbreak of disease through enhanced
    health and nutritional surveillance;  address the needs of people living
    with HIV/ AIDS and seek to prevent

    new infections;  ensure an adequate and timely provision of agricultural
    inputs for the

    next planting season as well as emergency veterinary inputs;  maintain
    the capacity for planning recovery efforts in food selfsufficiency,
    education, and health services; and

     prevent marginal populations from falling into a downward spiral that
    could lead to prolonged dependency in the future.

    A longer- term objective was to phase out emergency humanitarian
    assistance and move toward a development agenda focused on poverty
    reduction, HIV/ AIDS prevention and control, and support for food security

    23 The initial request for nonfood needs was for $104 million. However,
    specific requests for some countries and sectors were revised upward or
    downward during the year. As of early April 2003, the overall request was
    for $143.7 million.

    by increasing food production and strengthening foreign exchange earnings.
    (For additional information on nonfood emergency needs, see app. VI.)

    Slow Donations, Poor Major obstacles to the food aid effort*s success were
    the lack of sufficient,

    Infrastructure, timely food donations; poor infrastructure in recipient
    countries; and

    concerns associated with biotech food. Although the United States made
    Concerns Associated

    substantial, early donations, aggregate commitments from donor countries
    with Biotech Food

    were 18 percent below what WFP needed for the July through December Were
    Major Obstacles

    period. The shortfall was actually higher given the lag in time between
    when food is committed and when it arrives in- country. Poor
    infrastructure

    to an Effective in recipient countries and related logistical constraints
    impeded efficient

    Response delivery of food aid and in some cases prevented food from
    reaching

    beneficiaries. Concerns over biotech food led Zambia to reject U. S.
    donated maize and other countries to impose costly processing
    requirements. These actions reduced or delayed food aid, increased costs,
    and complicated the logistics of the emergency operation. Lack of
    Sufficient, Timely

    By the end of June 2002, the United States had delivered more than 41,000
    Donations Contributed to

    MT of food aid to ocean ports in the southern African region. U. S.
    deliveries Food Aid Shortfalls

    to these ports between July and December 2002 represented approximately 50
    percent of the food WFP needed to arrive in- country during that period.
    (See app. IV for additional information on U. S. food aid donations.)
    Nonetheless, in aggregate, donors did not make sufficient, timely
    donations

    to WFP. WFP needed about 855,000 tons of food (cereals and noncereals) to
    arrive in the six countries from July through December 2002 to support its
    planned food distributions. During that period, donors advised WFP that
    they would contribute about 701,000 tons* a shortfall of 18 percent.
    However, the shortfall was actually greater because of the considerable
    lag

    time between when WFP was advised in writing that a contribution would be
    made and when food arrived in a beneficiary country. WFP officials
    estimate that in- kind contributions take 3 to 5 months from the time
    donors confirm the contribution to the arrival of food aid at its final
    distribution

    sites. 24 However, according to WFP officials, when contributions are made
    in cash and procurement is done within the region, the process can be
    reduced to 1 to 3 months.

    Table 3 shows the countries that gave the most to WFP*s regional emergency
    food aid operation and when they advised WFP of their intended donations.
    Some of the major donors, including the United States and the United
    Kingdom, gave large amounts early to the crisis. Others, including the
    European Union, South Africa, and Japan, waited several months or longer
    before confirming what they would contribute.

    24 According to USAID officials, depending on the availability of
    commodities and shipping, as well as need in an affected country, USAID
    in- kind contributions can be provided in as short a time as 6 weeks.

    Table 3: Contributions to WFP and Their Timing

    Food in metric tons

    Cumulative Confirmed Donations a to WFP*s Southern Africa Regional EMOP by
    End of March 2003 Jul 2002 Aug 2002 Sep 2002 Oct 2002 Nov 2002 Dec 2002
    Mar 2003

    United States 194,350 197,550 248,403 248,403 326, 553 326, 553 326, 553
    European Union 139, 854 139, 854 139, 854 179, 531 South Africa 100, 000
    United Kingdom 62, 515 65, 385 65, 385 65, 231 65, 231 65, 231 70, 231
    Japan 35, 295 35, 450 54, 386 56, 662 Algeria 31, 000 Germany 6,113 14,
    539 15, 344 15, 344 24, 256 22, 775 Australia 6,185 14, 335 14, 597 14,
    597 18, 098 18, 248 Finland 4,075 6,149 8,377 8, 377 14, 575 14, 934
    Canada 1,661 1,661 6,779 6,697 6, 697 12, 573 12, 573 OPEC 12, 411
    Netherlands 1,097 10, 797 10, 797 10, 797 10, 797 10, 797 10, 625 All
    others b 7,133 12, 961 12, 789 14, 471 14, 471 35, 097 36, 549

    Total 266, 756 304,727 379,176 559,066 637, 371 701, 420 892, 092

    Source: GAO analysis based on WFP data. a A confirmed donation (in kind or
    in cash) is when a donor has notified WFP in writing of what it will

    donate. b There were 29 other donors, some of which were private or
    multilateral entities. Together, they accounted for 4.1 percent of all
    donations, with an individual range from 0. 001 percent to 0.7 percent.

    WFP acknowledged that the early months of the regional EMOP would indeed
    have benefited from more rapid mobilization of resources. At the same
    time, WFP said, as of mid- May 2003, the operation had been 93 percent
    resourced, by 41 institutional donors-- which represented an

    unusually supportive response. Poor Infrastructure

    The flow chart shown in figure 6 illustrates WFP*s logistics process of
    Hampered Efficient Food

    delivering food, from the time it is shipped by suppliers to the time food
    is actually distributed to the recipients at the village level. 25 Food
    aid Delivery

    25 In addition, NGOs that were directly funded by the U. S. government
    carried out a similar operation.

    commodities are either purchased by WFP regionally or shipped to the
    region through one of five ports of entry: Beira, Nacala, and Maputo in
    Mozambique; Durban in South Africa; or Dar es Salaam in Tanzania. (See
    fig. 7 for a map of the transportation network.) From these points of
    entry, food is transported by truck or rail to intermediate storage
    facilities, or

    transshipment points, which are strategically located in various districts
    within the country to streamline the flow of deliveries. From these
    strategic locations, food is then transported to extended delivery points*
    storage facilities generally located at the district level* from which the
    food aid allocations for each final distribution site are dispatched. WFP
    manages this process, including transporting the food to the extended
    delivery points. Wherever possible, nongovernmental organizations that are
    designated as the implementing partners are responsible for the secondary
    transport of food from the extended delivery points to the final
    distribution points.

    Figure 6: Steps in the Logistics Process Extended delivery points

    Secondary transport 5

    4 Points of entry (ports of Beira, Final distribution Suppliers

    Maputo, Nacala, Dar es points

    of food Salaam, Durban)

    commodities 1

    3 Primary transport

    6 2

    Village (beneficiaries)

    Transshipment point

    Sources: GAO and MapArt, based on World Food Program information; all
    photos GAO, except primary transport, WFP. Note: The flow chart does not
    reflect the additional step of milling. In addition, the chart does not
    show monitoring of the flow of food deliveries throughout the process to
    ensure proper receipt and dispatches of food.

    Figure 7: The Transportation Network for Moving Food in the Region

    Derailment showing problems

    Nacala railway with the Nacala

    tracks with new railway tracks in

    locomotives in Mozambique

    operation

    CONGO

    Dar es

    Mbeya

    Salaam

    Luanda

    TANZANIA ANGOLA

    Lake Malawi

    MOZAMBIQUE ZAMBIA

    Lilongwe

    Nacala

    Lusaka MALAWI

    Blantyre Harare

    Mozambique Victoria

    ZambeziRiver Channel Falls

    ZIMBABWE

    Basin

    Poor roads

    Beira

    BOTSWANA

    Walvis

    Windhoek

    Bay

    NAMIBIA

    Gaborone Pretoria

    Mbabane

    Maputo

    Luderitz

    SWAZILAND Maseru

    De Aar

    LESOTHO

    Durban

    From the port,

    SOUTH

    food is moved

    AFRICA

    overland by rail or

    East London

    road Limited trucking

    Cape Town 0

    500 miles Port Elizabeth

    capacity Parallel scale at 0 o 0 o

    Road routes in use

    Ports in use

    Countries in food crisis Rail routes in use

    Ports not in use

    Countries with transport routes to countries in food crisis Road routes
    not in use

    Other ports

    Adjacent countries Rail routes not in use

    Capitals Intermediate cities

    Source: Map: GAO and MapArt, based on World Food Program information;
    Photos: GAO, except Nacala railway, WFP.

    Long- standing weaknesses in transportation infrastructure across the
    region hampered timely delivery of food aid where it was needed. Much of
    the transportation infrastructure (including ports, railways, and roads)
    had deteriorated since the 1991/ 92 drought. For example, the port of
    Maputo, which is ideally situated for moving food commodities to
    landlocked countries, such as Swaziland and Zimbabwe, cannot be used
    optimally

    because of the lack of adequate port warehouse and storage facilities.
    However, even when ports are full, there is a limit to the amount of food
    that can be transported over land to landlocked countries, like Zambia,
    due to rail and trucking capacity and other logistical considerations.

    According to WFP officials, the port of Nacala was in better condition
    than the port of Maputo. But its rail system* the sole transport link
    between Malawi and the nearest port in Mozambique and the shortest,
    cheapest route into Malawi and eastern Zambia* was in such poor condition
    it had to be fixed during the crisis. In late 2002, the United Kingdom and
    Canada

    gave WFP $6.4 million and $256,000, respectively, to rehabilitate a 48-
    milelong track on the Nacala railway and to lease locomotives and wagons.
    While these locomotives and ongoing repairs to the rail corridor
    represented a major breakthrough, unexpected setbacks continued to mire
    operations. For example, in Malawi, heavy rains in January 2003 completely
    destroyed one bridge on the Nacala rail line, thus impeding the

    movement of commodities for at least 10 days. In late summer 2002, a
    donation of 200 trucks from the government of Norway and the International
    Federation of Red Cross and Red Crescent Societies helped ease access to
    places that are particularly hard to reach. However, many village roads in
    these countries routinely become impassable when the rainy season
    (September to March) begins, thus isolating beneficiaries from food
    deliveries.

    Recipient Country Concerns In the middle of 2002, Zambia and Zimbabwe
    debated whether to accept

    about Biotech Food U. S.- donated maize 26 based on concerns that it might
    contain biotech

    Compromised Food products that could adversely affect (1) the health of
    food aid recipients, (2) the countries* agricultural biodiversity, 27 and
    (3) their ability to export

    Pipeline agricultural commodities. 28 Despite some earlier concerns over
    U. S. biotech food aid and Zimbabwe*s objections to biotech whole kernel
    maize

    dating back to the middle of 2001, 29 the United States and international
    agencies did not have a ready alternative to biotech food aid in the
    southern Africa crisis. 30 The United States was only partly successful in
    its efforts to persuade southern African country governments to allow

    26 Crop varieties developed through the application of biotechnology to
    agriculture were first marketed in the United States in 1994. Because the
    U. S. grain handling system typically combines biotech and conventional
    maize varieties (for efficiency purposes), all U. S. food aid corn
    shipments possibly contained biotech maize. In 2002, roughly 35 percent of
    U. S. food aid could be considered as having varying degrees of biotech
    content. See appendix VII for further discussion.

    27 Whole kernel maize, unlike its processed counterpart, has the
    possibility, if planted, of introducing engineered genes into conventional
    maize plants. 28 There is no worldwide, harmonized approach to assessing
    the safety of biotech foods and regulating their trade. Given the novelty
    of agricultural biotech products, many countries especially developing
    countries have no approval process for these products at all. The

    Cartagena Protocol on Biosafety, an international environmental treaty,
    will regulate transboundary movements of living genetically modified
    organisms after it is ratified by 50 countries, which may occur in late
    2003. Countries that ratify the protocol may establish their own national
    systems for assessing and regulating biotech foods.

    29 In 1999, media in Orissa, India, claimed the United States had dumped
    biotech food aid commodities on developing countries because European and
    Japanese markets would not buy them. In 2000, Sudanese politicians accused
    the NGO community of distributing biotech food aid and poisoning the
    Sudanese people. In 2001, the Ugandan government raised concerns about a
    program to distribute corn/ soya blend rations to 60,000 people living
    with HIV/ AIDS. In 2001, the Bolivian government seized biotech food aid
    following a decree forbidding imports of products derived from biotech
    crops. According to USDA, in each of these instances, USDA and/ or USAID
    addressed the recipient country government*s concerns and ensured that
    food aid reached those in need. In December 2001 and May 2002, Zimbabwe
    rejected U. S. offers to provide shipments of corn that could not be
    certified as 100 percent biotech free. According to ACDI/ VOCA, an NGO
    specializing in development

    and food aid issues, through early 2002 most problems relating to biotech
    food aid had been resolved relatively quickly and amicably. See ACDI/
    VOCA, Genetically Modified Food: Implications for U. S. Food Aid Programs
    (Washington, D. C.: Revised February 2002).

    30 According to USAID officials, the United States did not anticipate the
    biotech issue, since Mozambique and Zambia had accepted U. S. corn food
    aid for years. USDA officials said that it was difficult to determine with
    certainty those food aid recipient countries in southern Africa that would
    accept or reject food aid containing biotech commodities because of
    nontransparent, evolving decision- making processes.

    unrestricted import and distribution of food aid, including biotech
    products, on an emergency basis for the duration of the crisis. Efforts
    included providing information about agricultural biotechnology and the
    safety of biotech food aid to Zambia and the other countries.
    Nevertheless, Zambia rejected all food aid that could have included
    biotech

    commodities. 31 Zimbabwe implemented stringent grain handling procedures,
    including milling of whole grain maize, that significantly slowed
    distribution of food aid. Malawi, Mozambique, and Lesotho also debated
    what to do and eventually imposed milling requirements on whole grain
    maize that were enforced with varying degrees of rigor. 32 Toward the end
    of August 2002, FAO, WHO, and WFP issued a common statement on biotech
    food aid, as did the European Union. Both statements

    indicated that biotech food aid was unlikely to present a risk to human
    health and suggested milling the maize as a way to overcome environmental
    and trade concerns. However, U. S. officials from State, USAID, and USDA
    believe that, given the severity of the crisis and existing scientific
    evidence, U. N. agencies and the European Union did not speak out early or
    forcefully enough on the issue.

    The United States rejected the option of donating only milled maize,
    citing increased costs and limited U. S. milling capacity that would cause
    delays in getting food aid to needy people. U. S. officials estimate that
    U. S.- based milling would double the costs of its food aid, thus reducing
    the amount of aid it could provide. Additionally, according to U. S.
    officials, agreeing to mill all of the maize could have promoted the idea
    that unprocessed maize was unsafe. (App. VII provides further discussion
    of issues related to biotech food.)

    Despite the United States* early and large donations, the impasse over
    biotech food significantly compromised the food pipeline in several ways:
    31 The United States provided about 280,000 MT of whole kernel maize;
    about 77,000 MT of

    corn meal; about 43,000 MT of corn soy blend and corn soy milk; and about
    21,000 MT of vegetable oil made from either corn or soybeans. Altogether,
    about 84 percent of the donated U. S. tonnage could have contained biotech
    commodities.

    32 According to USAID, in practice Malawi has preferred that whole kernel
    maize be milled prior to distribution but has not allowed its requirement
    to slow deliveries of food aid in any way and has only milled
    comparatively small quantities.

     Food aid was reduced and delayed. On September 3, 2002, Zambia*s
    Agriculture Minister, in a statement to the press, demanded that 19,000 MT
    of biotech maize that had been delivered to storage facilities inside the
    country be sent to a country that was willing to accept it. (WFP was
    officially notified on October 29, 2002.) According to U. S. officials, by
    early November, Zambia had rejected an additional 57,000 MT of biotech
    maize intended for its food aid beneficiaries. The combined 76,000 MT of
    maize considerably exceeded WFP*s cereal shortfall for Zambia for the July
    through December period and would have fed 1.5 million Zambians for 3
    months. 33 In the case of Zimbabwe, there were delays while the government
    debated whether to accept whole grain maize and then negotiated,
    developed, and put in place restrictions it deemed suitable. According to
    a U. S. official, at one point, more than 80,000 MT of U. S. whole kernel
    maize imports destined for Zimbabwe were delayed in South Africa and
    Mozambique port warehouses awaiting permits* while the food aid pipeline
    lacked cereal.

     Costs of food aid operations increased. WFP, national governments, and
    other donors have borne the additional costs associated with requirements
    to mill some or all of the U. S.- donated maize. These costs include the
    milling itself, added charges for transporting whole grain maize to mills
    and for shipping milled product, added storage costs because of limited
    milling capacity, and grain losses associated with the milling process. 34
    WFP estimates that when it has to mill the product in South Africa,
    regional distribution costs could total up to $80 per metric ton more than
    for unmilled U. S. maize. 35

     Logistics of the food aid effort were complicated. Logistics became more
    complex because of (1) U. S. whole kernel maize piling up in ports as
    governments debated whether to accept biotech maize and, if so, under what
    conditions, (2) limited milling capacity, (3) added transportation and
    storage requirements, and (4) the short shelf life of maize milled
    regionally (3 months compared with 12 months for whole

    33 According to WFP, 1 MT of cereal feeds approximately 60 people per
    month. 34 Milling reduces the volume of the product. As a result, more
    whole grain maize must be supplied to meet the food needs of the
    beneficiaries. 35 WFP*s estimate of $80 per MT represents the rule of
    thumb for maximum costs, which include extraction rates during milling,
    additional transport, bagging, fumigation, and drying, as well as
    additional oversight. Actual total costs for milling, however, could not
    be calculated because milling is integrated into the overall procurement
    and logistics network.

    maize). Because food is distributed to households on a monthly basis, WFP
    had to ensure that milled maize would not take more than 2 months to
    arrive at final distribution sites.

    U. S. officials said that recipient countries in southern Africa did not
    make timely, informed decisions about whether to accept or reject biotech
    food aid. These officials also said the U. S. government does not have
    comprehensive data on which recipient countries are likely to accept or
    reject biotech food aid, nor does the U. S. government have a strategy for
    providing alternatives to biotech food to countries that may reject it.
    According to officials from State, USAID, and USDA, these problems are not
    confined to the southern Africa region but also have a global reach.
    Declining Support for

    The major challenges to emerging from the current food crisis into
    Agricultural Sector and

    sustained recovery include (1) a decline in agriculture sector
    investments; (2) limited scope of existing programs in agricultural
    development; and (3) the HIV/ AIDS Epidemic

    the negative impact of the HIV/ AIDS epidemic. Recognizing the need to
    Pose Challenges to

    address numerous challenges to move out of this crisis into recovery, the
    Emerging from Crisis

    U. N. Secretary- General and several other key stakeholders have called
    for a comprehensive and targeted approach to break the pattern of
    recurrent

    into Sustained food crises in Africa. The food outlook for the next crop
    year has improved,

    Recovery but without continuing efforts to respond to the region*s
    problems,

    recurring food crises may be difficult to avoid.

    Agriculture Sector Since agriculture accounts for 70 percent of the labor
    force in Africa,

    Investments by Donors and investments that improve productivity in the
    agricultural sector have

    Governments Have significant implications for food security and overall
    rural development.

    Declined According to the International Food Policy Research Institute, a
    1 percent

    increase in agricultural productivity would help 6 million more Africans
    raise their incomes above $1 per day. However, data show declining
    investments in the agricultural sector as agricultural lending by the
    World Bank, the African Development Bank, and the International Fund for
    Agricultural Development has fallen. Similarly, agricultural spending by
    national governments and U. S. bilateral assistance for agricultural
    programs in the affected countries have declined. 36 Agricultural Lending
    by Selected

    Total lending to the agriculture sector by selected international
    financing International Financing

    organizations declined during the 1990s. For example, measured in 2003
    Organizations

    dollars, the African Development Bank approved about $873 million in loans
    for agriculture in 1990 compared with $236 million in 2000, as shown in
    figure 8. Similarly, the World Bank approved $4.7 billion in loans for
    agriculture in 1990 compared with $1.4 billion in 2000. Bank officials
    noted that the World Bank now approaches the agricultural sector in the
    context of the Bank*s overall rural development strategy that includes,
    among other things, lending for rural infrastructure, rural health, and
    environment and natural resource management. For this reason, starting in
    2001, the World Bank began to include agricultural investments as part of
    its rural development lending. However, this does not negate the overall
    declining trend in agricultural lending between 1990 and 2000.

    36 The private sector is also a source of agricultural investment in terms
    of capital (farm machinery and equipment) and technology (seed,
    irrigation, and soil conservation). However, little or no data are
    available to determine the size, growth, and impact of private sector
    investments on agricultural production in these countries.

    Figure 8: Agricultural Lending by the World Bank, the African Development
    Bank, and the International Fund for Agricultural Development* 1990
    through 2000

    Note: IFAD provides strictly agricultural development loans.

    Our review of World Bank agricultural loans to the six affected countries
    since 1990 found that 15 had been made* with 9 of them approved between
    1990 and 1993. There were no loans recorded for Swaziland. As shown in
    figure 9, in 2002, the downward trend in World Bank agricultural lending
    to

    the affected region reversed with two $50 million emergency drought
    recovery loans for Zambia and Malawi. These loans included an agricultural
    component but also comprised health, social services, and

    other emergency programs.

    Figure 9: World Bank Agricultural Sector Loans Approved for the Affected
    Countries* 1990 to 2002

    Agricultural Spending by In general, national governments have been
    spending a declining share of

    National Governments their budgets on agriculture, as shown in figure 10.
    Real spending on agriculture has declined for two countries* Lesotho and
    Zambia* whereas

    total government spending has increased for all six affected countries.
    For the remaining countries, national government spending on agriculture
    has been stagnant or has grown at a slower rate than total government
    spending.

    Figure 10: Agricultural Spending as a Percentage of Total Government
    Spending* 1996/ 97 through 2001/ 02 (in 2003 dollars)

    Note: 2001/ 2002 data for Lesotho, Malawi, and Zimbabwe were not
    available. We did not calculate the percentage of government spending for
    agriculture for Mozambique. The IMF provided us with the percentage data.

    U. S. Bilateral Assistance for Although the levels of U. S. bilateral
    assistance for agriculture by country

    Agricultural Sector have been mixed, overall assistance to the region*s
    agricultural sector has

    declined from $27 million in 1998 to $20.6 million in 2003. The largest
    reductions were for Malawi, which went from $10.3 million in 1998 to $3.2
    million in 2003, while assistance to Mozambique went from $14.5 million in
    1998 to $12. 8 million in 2003 (see fig. 11).

    Figure 11: USAID Bilateral Assistance in the Agricultural Sector to Four
    Countries a * 1998 to 2003

    a USAID does not have bilateral programs in Lesotho and Swaziland.
    However, these two countries do benefit from some regional assistance and
    limited funding support through other U. S. government agencies. b The
    combined figure includes Malawi, Mozambique, Zambia, and Zimbabwe. It does
    not include Regional Center funding.

    Existing Programs Are To promote agricultural development and work toward
    achieving food

    Helpful but Limited in Scope security, FAO, IFAD, and WFP advocate an
    approach that helps support

    small farmers, enhances the ability of the poor to access food, and aids

    recovery efforts (fig. 12 describes examples of some of the current
    programs). Several U. N. and USAID officials told us that while many of
    the programs they have funded have demonstrated promising results, the
    programs are limited in scope due to resource constraints and would need
    to be implemented on a much wider scale for greater impact and
    effectiveness.

    Figure 12: Examples of Existing Programs Related to Food Security
    Improving crop diversification

    Agricultural experts have promoted programs to diversify crops that are
    good alternatives to maize, particularly in areas with erratic rainfall
    and adverse conditions. For example, in Malawi, FAO and USAID are
    supporting programs, such as the Southern Africa Root Crops Research
    Network, designed to multiply and distribute improved varieties of sweet
    potatoes and cassava. In addition, USAID- supported farmer associations
    throughout the country are promoting

    higher- value crops such as groundnuts and aromatic rice.

    Cassava multiplication program (Malawi). Rebuilding assets

    Many farmers depleted their livestock and other assets during the crisis
    and have limited access to credit. During the crisis, several countries
    experienced shortages in agricultural inputs such as fertilizer, seed, and
    tools. Nonetheless, some governments and major donors did have programs to
    deliver basic agricultural inputs to small farmers to help boost
    agricultural production for the next growing season. For example, in
    Malawi, the government targeted 2 million farmers for free "starter packs"
    (primarily seeds). In addition, the United Nations reported distributing
    more than 177,000 packs of seed and tools but noted that funding
    constraints limited the amount of seeds distributed. Representatives of
    nongovernmental organizations, which focus their activities at the village
    level,

    Seed input fair (Mozambique).

    stressed the effectiveness of such mitigation measures. Developing better
    water management schemes

    Because the region lacks irrigation schemes, drought- affected areas
    included many villages that were close to significant water sources, such
    as Lake Malawi and the Zambezi river basin. FAO officials believe that,
    with better water management schemes, such villages should be able to
    collect and save water to mitigate drought. As part of its program of
    assistance, FAO helps farmers identify water management techniques and
    implement suitable low- cost solutions to increase agricultural
    production. FAO also promotes water users associations and appropriate
    irrigation support services to make water management sustainable.

    FAO- sponsored joint irrigation schemes (Mozambique). Rehabilitating rural
    infrastructure

    The lack of a functioning rural infrastructure often prevents farmers from
    marketing their crops. Donor and government officials in the region stress
    the need to rehabilitate the rural infrastructure. In Mozambique, USAID
    has programmed resources to rehabilitate farm- to- market roads and to
    construct the long- delayed final segment of the north- south trunk road.
    As a result, farmers and other residents along the road have found better
    access to markets. In 2001, according to a USAID

    Food for work programs help build rural

    report, sales of beans, maize, and cotton in some areas along the road
    alignment increased 20

    infrastructure such as schools (Zambia).

    percent over the previous year. Improving emergency preparedness and
    disaster management

    In light of erratic weather conditions in the region, numerous officials
    cited the need to prepare for emergencies and manage disasters more
    effectively. According to many USAID, U. N., and host government
    officials, Mozambique has been better able to respond to the current food
    crisis than it was to the disastrous 2000- 2001 floods because it
    developed a national plan that was put into effect at the national,
    provincial and district, and local community levels at the onset of the
    crisis. Among

    High water mark of the 2000- 2001 flood on food

    other things, the plan coordinated efforts in various sectors;
    prepositioned food stocks in strategic

    warehouse wall (Mozambique).

    locations; and provided information to people in vulnerable areas.
    Sources: GAO; photos, GAO (top and bottom 2 photos), all other photos,
    FAO.

    Negative Impact of In addition to being a significant factor that
    contributed to the food crisis,

    HIV/ AIDS on Food Security HIV/ AIDS will continue to affect food security
    in the region by decreasing

    Will Grow food production, lowering household income, and increasing
    household

    expenses, according to numerous experts. These effects will increase as
    the HIV/ AIDS epidemic worsens. For example, by lowering the productivity
    of agricultural labor in its food supply model, USDA estimated that HIV/
    AIDS will cause a 3. 3 percent reduction in grain output in sub- Saharan
    Africa over the next decade relative to the region's baseline projections.
    As a result, the projected food deficit will grow by 13 percent. 37
    According to an IMF study, HIV/ AIDS will also lower gross domestic

    product (GDP). Figure 13 shows the projected decrease in growth rates of
    GDP per capita attributable to HIV/ AIDS in 10 to 15 years: Estimates
    range from minus 4 percent in Mozambique to about minus 7 percent in
    Zimbabwe. Projected average per capita GDP growth rates without HIV/ AIDS
    range from 1.5 percent for Lesotho to 3.9 percent for Mozambique,
    indicating that the HIV/ AIDS effect will significantly reduce national
    income. 38 In fact, for a typical sub- Saharan African country with HIV/
    AIDS prevalence of 20 percent, national income is estimated to be 67
    percent lower at the end of a 20- year period than without the disease.

    37 The projected food deficit is defined as the gap between projected
    domestically produced food supplies and projected food needs based on a
    basic nutritional requirement and projected population. 38 GDP projections
    are from Global Insight*s 2000 forecast and indicate annual growth rates
    from 2006 to 2020.

    Figure 13: Projected Impact on GDP Due to HIV/ AIDS

    Note: Estimates are for an economy open to trade and are for a 10- to 15-
    year period with 2000 as the base year.

    U. N. Secretary- General and Although the international response was
    sufficient to avoid famine in past

    Others Cite Need for food crises in the region* as well as the current
    one* food security

    Integrated Response continues to be a significant development challenge.
    U. N. and U. S. officials

    acknowledge that food aid and humanitarian assistance alone will not
    prevent future crises without a comprehensive recovery strategy that
    addresses the underlying causes of food insecurity. In our review, we
    found no evidence of such a strategy.

    In March 2003, the U. N. Secretary- General noted that the devastating
    impact of HIV/ AIDS requires an integrated response that may include
    longterm measures even when addressing short- term emergencies and called
    for a more systematic, targeted approach to break the pattern of recurrent
    food crises in Africa. Many other authoritative experts and key
    stakeholders have echoed the U. N. Secretary- General*s call for an
    integrated response. For example, in December 2002, SADC* the principal
    organization for regional cooperation in food and agriculture and related

    economic and social issues* acknowledged the need for political commitment
    at all levels within the region and for coordinated support from SADC,
    national governments, donors, nongovernmental organizations, and civil
    society to ensure food security in the future. Among those calling for a
    comprehensive response to address food security* one that integrates
    agricultural development, HIV/ AIDS, natural disaster management, and
    other appropriate interventions* are the U. N. Office for the Coordination
    of Humanitarian Affairs, the International Food Policy Research Institute,
    and the Partnership to Cut Hunger and Poverty in Africa.

    In recent years, international donors have announced major initiatives
    related to food security. These include plans not only to enhance food
    availability by increasing agricultural production but strategies to
    increase food accessibility by reducing poverty. For example, the United
    Nations*

    2001 Millennium Development Goals pledged to help cut hunger in Africa in
    half by 2015. 39 The World Bank and IMF have worked with countries
    eligible for debt relief* Malawi, Mozambique, and Zambia* to ensure that
    food security and agriculture are central themes in these countries*
    Poverty Reduction Strategy Papers. 40 Among other measures, these strategy
    papers emphasize promoting small- scale irrigation, reducing land
    degradation, and improving access to credit and agricultural inputs. In
    early 2002, USAID

    introduced its Agricultural Initiative to Cut Hunger in Africa, which is
    designed to accelerate agricultural growth and reduce vulnerability to
    hunger and poverty. However, as of April 2003, of the six affected
    countries, only Mozambique was proposed for funding ($ 3.9 million in
    2003) under the initiative.

    39 One of the key Millennium Development Goals is the eradication of
    extreme poverty and hunger and cutting in half between 1990 and 2015 the
    proportion of people whose income is less than $1 a day and the proportion
    of people who suffer from hunger.

    40 These countries are required to develop Poverty Reduction Strategy
    Papers (PRSP) as the basis for assistance from the World Bank and IMF
    under the Initiative for Highly Indebted Poor Countries, where official
    creditors agree to help the most indebted countries obtain debt relief. In
    addition to these three countries, Lesotho has prepared an Interim PRSP
    and should issue a full PRSP this year.

    Regional Food Outlook Despite improved weather conditions and a better
    harvest beginning in

    Remains Tenuous; April 2003, food security conditions in the region are
    still tenuous. As of the

    Sustained Efforts Seen as end of March 2003, early warning systems were
    forecasting that some parts

    Necessary of the region may have better harvests than last year; however,
    they also

    note that food insecurity and the need for emergency aid persist* and may
    worsen* in some areas, particularly in Zimbabwe and parts of southern
    Mozambique. In February 2003, the U. N. Office for the Coordination of
    Humanitarian Affairs stated that, because the response to improve

    agricultural inputs has been inadequate, recovery by the next agricultural
    season is unlikely and the need for food aid prolonged. In fact, the
    current emergency operations, which were for the crop year that concluded
    March 2003, have been extended through June 2003. Beyond that, according
    to

    WFP and USAID officials, the need for food aid will likely continue,
    particularly for many of the poorest and most vulnerable households.

    Conclusions The current food crisis is complicated by disruptive
    agricultural and governance policies in the affected countries and the
    HIV/ AIDS epidemic.

    While the WFP, the United States, some donor governments, and NGOs
    provided enough food to prevent a famine, overall donor response was
    insufficient in terms of food quantities and timeliness to prevent
    widespread hunger. In addition, other obstacles* including poor

    infrastructure in the affected countries and concerns associated with
    biotech food* hampered an effective response. The controversy about
    biotech food aid, in particular, significantly complicated logistics,
    increased costs, and delayed food aid reaching beneficiaries. Concerns
    about agricultural biotechnology may be an obstacle to addressing future
    emergency food aid needs around the world, partly because the United
    States accounts for about half of global food aid and because several U.
    S.

    food aid commodities are genetically modified. Action is needed to reduce
    the likelihood of biotech food aid becoming a serious problem in future
    crises. Furthermore, in a region where agricultural production is critical
    to national economies and food security, there is a need for viable
    agricultural policies and funding by national governments, as well as
    adequate agricultural assistance and related strategies from multilateral
    organizations and donors, including the United States. Without a concerted

    strategy that integrates, among other things, agricultural development,
    the impact of HIV/ AIDS, and natural disaster management, destabilizing
    food crises are likely to recur.

    Recommendations for To maximize the effectiveness of the U. S. response to
    future food crises in

    Executive Action the southern Africa region as well as in other parts of
    the world, we

    recommend that the Secretaries of State and Agriculture and the
    Administrator of USAID initiate a comprehensive review of the issues
    pertaining to biotech foods in emergency food aid. In anticipation of
    future food crises, this review could consider measures such as (1)
    encouraging recipient countries to enhance their capacity to make informed
    decisions regarding agricultural biotechnology and offering technical
    assistance in this endeavor; (2) identifying which countries are likely to
    accept, restrict, or reject biotech food aid; and (3) determining ways
    that the United States can contribute to emergency food aid needs in
    countries that decide to restrict or reject biotech food aid.

    To further food security in the region, we recommend that the Secretaries
    of State and Agriculture and the Administrator of USAID work with
    international organizations, donors, and national governments to develop a
    comprehensive, targeted strategy to ensure sustained recovery that (1)
    integrates agricultural development, HIV/ AIDS awareness and action,
    natural disaster management, and other appropriate interventions; (2)
    estimates costs and resource requirements; and (3) establishes a plan for
    mobilizing resources, a timetable for achieving results, and indicators
    for measuring performance.

    Agency Comments and The Department of State, USDA, USAID, and WFP provided
    written

    Our Evaluation comments on a draft of our report. These comments are
    reprinted in appendixes VIII, IX, X, and XI, along with our responses to
    specific points.

    In general, the Departments of State and Agriculture, USAID, and WFP
    agreed with our overall conclusions and recommendations. However, they
    expressed technical concerns, primarily related to our discussion of
    biotech food, which we have addressed in the text as appropriate.

    USDA objected to our use of the term *biotech food,* saying it prefers
    *foods which may contain the products of agricultural biotechnology.* USDA
    also said that it opposes the use of the term *genetically modified
    organisms* and the acronym *GMO* because these terms carry negative
    connotations. According to the department, modern agricultural

    biotechnology is simply the next step in plant breeding technology.
    Notwithstanding USDA*s comments, FAO, WHO, and WFP use the terms
    genetically modified food, GM food, and biotech food. In fact, after

    receiving USDA*s comments, we found that USDA was still using the terms
    *biotech plants* and *biotech crops* in some of its publicly available
    informational materials. USAID objected to our use of the term *biotech
    food aid,* noting that the United States provides food aid from the
    general

    U. S. food supply, which may contain biotech crops. In certain places, we
    now refer to U. S. food aid as aid that may contain biotech crops.

    In commenting on our recommendation to initiate a comprehensive review of
    the issues associated with biotech foods in emergency food aid, USDA said
    that it agrees that all relevant parts of the U. S. government must
    continue to review and engage other countries regarding their biotech
    policies, including those related to food aid. USDA said it will continue
    to

    support developing countries* efforts to enhance their capacity for making
    science- based and transparent decisions regarding products of modern
    agricultural biotechnology. At the same time, USDA said it is difficult to
    accurately identify countries that might accept or reject products of
    modern agricultural biotechnology because many developing countries*
    policies depend upon the specific political, economic, and social
    circumstances at the time.

    The Department of State said that an interagency review on how to manage
    the presence of bioengineered foods in food aid might be useful for
    developing a strategy. However, the department said that such a review
    should be narrowly focused to ensure better coordination among food aid,
    development, trade policy and regulatory agencies. USAID said it supports

    further interagency discussion and coordination on the dimensions of
    biotechnology in food aid. USAID noted that it is actively engaged in
    supporting the development of capacity in a number of food aid recipient
    countries to make informed decisions, but said in practical terms this is
    a long- term strategy and unlikely to assist in emergency situations such
    as we saw in southern Africa. USAID said it believes that the most
    practical

    solution will be to work with recipient governments and partners involved
    in the delivery of food aid to build confidence in the existing safety
    evaluations of these products, including evaluations done in the United

    States and by other countries, scientists, and international organizations
    such as FAO and WHO.

    Regarding our recommendation to develop an integrated recovery strategy,
    the Department of State, USAID, and WFP fully support the need for a
    comprehensive, coordinated approach to help address the underlying causes
    of food insecurity. State cited U. S. efforts to work with major donor
    countries to create a multilateral framework for improving long- term food

    security throughout the world. USAID said that, along with an interagency
    working group formed by the sub- policy planning committee to coordinate
    the U. S. government response to the food crisis, it is in the process of
    drafting a recovery strategy and action plan, which will guide the
    development and review of new USAID country strategies in the region. WFP
    emphasized the need for the international community to remain

    engaged within the region and to help national governments address medium-
    to longer- term issues related to food insecurity. We agree that such
    efforts must be sustained if destabilizing food crises are to be avoided.

    In addition, we provided FAO, IMF, and the World Bank an opportunity to
    review parts of a draft of this report for technical accuracy, and we
    incorporated their comments as appropriate.

    We are sending copies of this report to appropriate congressional
    committees, the Secretaries of State and Agriculture, and the USAID
    Administrator. Copies will be made available to others upon request. In
    addition, this report will be available at no charge on the GAO Web site
    at http:// www. gao. gov.

    If you or your staff have any questions about this report, please contact
    me on (202) 512- 3149. Other GAO contacts and staff acknowledgments are
    listed in appendix XII. Sincerely yours,

    David Gootnick Director, International Affairs and Trade

    Appendi Appendi xes I x Scope and Methodology To determine what factors
    contributed to the current crisis in southern Africa, we met with and
    analyzed information from government officials at the U. S. Agency for
    International Development (USAID) and the Departments of Agriculture
    (USDA) and State in Washington, D. C., and U. S. missions in Botswana,
    Malawi, Mozambique, Zambia, Zimbabwe, and South

    Africa. We also met with officials and reviewed information from the World
    Food Program (WFP), the Food and Agriculture Organization (FAO), and the
    International Fund for Agricultural Development (IFAD) at their
    headquarters in Rome and in the southern African countries we visited. In
    addition, we gathered information from and met with representatives of the

    World Bank and the International Monetary Fund (IMF), other U. N.
    agencies, other donor governments, and host government ministries. We also
    gathered information and met with representatives of early warning systems
    and interagency food security assessment teams. In addition, we gathered
    information and met with representatives of nongovernmental organizations
    (NGO), including Africare, Bread for the World, the Coalition for Food
    Aid, CARE, Catholic Relief Services, the Coalition for Food Aid, Save the
    Children, World Vision, and ACDI/ VOCA. We also reviewed studies from
    public and private research institutions on the causes of the current and
    past food crises in southern Africa.

    To determine how well the populations* overall food needs were met during
    the crisis period, we met with officials and reviewed information from
    WFP, FAO, host governments, the private sector, donor governments, NGOs,
    and the Southern African Development Community (SADC). We also met with
    and gathered information from representatives of interagency famine early
    warning and vulnerability assessment teams. In addition, we analyzed
    country- specific and regional WFP food aid data tracking food aid flows
    from donors (through WFP and NGOs) to the country level and, for WFP food
    aid, to the beneficiary level. Because of southern Africa*s infrastructure
    and technology problems, our collection and analysis of agricultural
    supply and demand information had inherent limitations. We observed food
    aid distribution at various stages including at

    the points of entry and storage facilities at the extended delivery points
    and final distribution points. We met with WFP, NGO, donor, national
    government, and local government officials responsible for managing and
    monitoring the food aid distribution process. We reviewed WFP*s real time
    logistics information system including its monitoring and loss reports. We
    also reviewed U. S. and other donor financial contributions to determine

    similar information on nonfood aid- related assistance. We verified the
    accuracy of data and reports, to the extent possible, by tracing the flow
    of

    information and obtaining comparable data from multiple government,
    international organization, NGO, and private sector sources. To determine
    the major obstacles to the food aid effort, we met with key officials and
    gathered and examined data from governments and the private sector in
    recipient countries, WFP, donor governments, NGOs, and

    SADC on the rate and amount of donor contributions, infrastructure, and
    biotech food aid and its impact on food aid distribution in the current
    crisis. We examined U. S. and other donor funding of WFP*s EMOP, reviewing
    actual country donations against pledges to determine the sufficiency and
    timeliness of donations. We reviewed and examined data on the
    transportation network for moving food in the region and identified and
    confirmed transportation and infrastructure obstacles during our fieldwork
    in country. We verified and confirmed the general accuracy of these data
    through multiple private sector and governmental organizations. With the
    assistance of the National Academy of Sciences, we had seven U. S.
    scientists provide an independent perspective on the Zambian

    Scientists* biotech report. To determine the challenges to emerging from
    the crisis into sustained recovery, we met with numerous NGOs, the World
    Bank, the IMF, USAID, and the Departments of Agriculture and State and
    analyzed information on the decline in agricultural sector investment, the
    limited scope of existing programs in agricultural development, and the
    negative impact of the HIV/ AIDS epidemic. In addition, we reviewed
    studies from private and public research institutions, such as the
    International Food Policy Research Institute, on the challenges to moving
    from crisis into recovery. We also analyzed agricultural funding data of
    the six southern African

    national governments. To analyze World Bank agricultural lending, we
    reviewed World Bank annual reports and its Web site from 1990 to 2002 to
    determine the amount and nature of loans made to the six affected southern
    African countries. After identifying the loans, we calculated an average
    deflator for each fiscal year (July to June) and calculated the 2003 value
    of each of these loans. To analyze the percentage of government budgets
    expended for agriculture, we gathered fiscal data for each of the

    six countries from the IMF country statistical appendices for 1997 through
    2002. We then calculated the current and capital expenditures from
    agriculture as a share of the total current and capital expenditures in
    the government budget. We also calculated the real growth rate using least
    square regression methodology for agricultural and total spending.
    Finally, to determine the impact of HIV/ AIDS on food security among the
    six

    affected countries, we reviewed USDA and IMF studies that quantified the
    food security situation and its economic implications.

    The information on foreign laws in this report does not reflect our
    independent legal analysis but is based on interviews and secondary
    sources.

    We conducted our review from August 2002 through May 2003 in accordance
    with generally accepted government auditing standards.

    Appendi I I x Timeline of the Southern Africa Food Crisis Figure 14 is a
    chronology of key events (political actions, alerts, and emergencies) that
    occurred in the region and in some of the affected countries during the 2-
    year period from July 2001 through April 2003.

    Figure 14: Timeline of the Southern Africa Food Crisis 2001

    2002 2003 U. S. government

    C- SAFE consortium C- SAFE consortium

    begins donating formed among World

    approved by food aid to region

    Vision, CRS, and CARE USAID

    U. N. consolidated appeal mid- term review

    Drought- like Excessive rains

    weather in in Lesotho,

    U. N. Regional

    southern northern

    consolidated EMOP

    Mozambique, Zambia, and

    appeal extended

    southern Zambia, Malawi

    launched through

    Swaziland, Frost in

    and Zimbabwe Lesotho

    (regional June

    EMOP) 2003

    Save the GIEWS warns that

    First Crop First

    Second Children- UK

    four million people and Food

    Emergency Emergency

    warns of in southern Africa

    Supply Food Security

    Food Security impending

    face severe food Assessments

    Assessment Assessment

    crisis shortages

    conducted Report released

    Report released Expected weather

    Rainy Dry Rainy patterns Normal crop

    Fallow Growing Harvest Fallow Growing Harvest year

    Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
    Jan Feb Mar Apr Hungry Hungry Season Season Hungry Hungry Season

    Season Zimbabwe Zambia Malawi Mozambique Lesotho, Swaziland Swazi

    Last of Malawi AntiCorruption

    government Zambia

    Malawi declares

    suspends Strategic

    Bureau receives urgent need

    biotech food Grain

    complaint about for food aid

    distribution Zambian

    Reserves possible grain

    scientists sold

    hording Zimbabwe

    trip Nacala Railroad

    declares abroad

    Bridge destroyed a food

    by heavy rain emergency

    Deadline for Zambia

    commercial reaffirms

    farmers to decision to

    Lesotho vacate land in

    reject biotech Malawi declares

    Early warnings and assessments

    declares a Zimbabwe

    food a flood emergency

    food

    Political actions or NGO events

    emergency

    Severe or abnormal weather

    Malawi Zambia

    Riots over

    Emergencies

    declares declares

    food food

    national availability in

    emergency disaster on

    Balawayo,

    WFP launches emergency operation

    food security Zimbabwe

    Source: GAO.

    Early Warning Systems and Vulnerability

    Appendi I I I x Assessment Methods Two types of data collection systems
    tracked the food crisis in southern Africa: (1) early warning systems,
    which monitor factors that affect food supply to provide decision makers
    with notice of potential crises; and (2) assessment systems, which monitor
    the nutritional needs of vulnerable populations in order to design or
    assess interventions. Early Warning Systems Famine early warning systems
    are designed to provide decision makers

    with information of an impending food crisis or famine. These systems
    compile various indicators of food security at a regional, national, or
    subnational scale, including information on weather and household
    purchasing power. While early warning systems are useful, preventing food
    crises depends on timely responses to the information they disseminate.

    For this report, we reviewed two early warning systems:  FEWS NET: The
    Famine Early Warning System (FEWS) is a specialized

    Information Network (NET) based in 17 African countries contending with
    chronic food insecurity. 1 FEWS NET is a partnership- based program
    initiated and funded by USAID. The goal of FEWS NET is to strengthen the
    ability of African countries and regional organizations to manage risk of
    food insecurity by providing timely and analytical early warning and
    vulnerability information. FEWS NET monitors information from multiple
    technologies, such as satellites and field observations, and seeks to
    facilitate timely access to that information; identifies specific, acute
    food security threats; and provides regular information assessments to
    decision makers that reflect the best judgment of the food security
    community.

     GIEWS: FAO*s Global Information Early Warning System on Food and
    Agriculture (GIEWS) is an information system based in Rome that includes
    116 governments, 3 regional organizations, and 61 nongovernmental
    organizations. The goal of GIEWS is to provide the international community
    with warning of imminent food crises to ensure timely interventions in
    countries or regions affected by natural or man- made disasters. The
    system seeks to monitor all aspects of food supply and demand in all
    countries on a continuous basis at the global, regional/ subregional,
    national, and subnational levels. It reports to the

    1 Burkina Faso, Chad, Eritrea, Ethiopia, Kenya, Mali, Malawi, Mauritania,
    Mozambique, Niger, Rwanda, Somalia, Southern Sudan, Tanzania, Uganda,
    Zambia, and Zimbabwe.

    international community through its system of regular and ad hoc reports.

    FEWS NET and GIEWS often contribute to the WFP/ FAO Crop and Food Supply
    Assessment Missions. Additionally, FEWS NET supplies GIEWS with the major
    proportion of its remote- sensing data for monitoring agricultural
    production. However, according to USAID, these two early warning systems
    differ in three main areas:

     Geographic scope: FEWS NET has a 17- country scope in Africa, whereas
    GIEWS has a global mandate.  Level of detail: FEWS NET reports on the
    subnational level based on information gathered by field staff located
    throughout their scope,

    whereas GIEWS reports on the national and global levels from their
    headquarters in Rome with few field staff.

     Technical focus on food security: FEWS NET focuses on food availability,
    access, and utilization, while GIEWS focuses on food production and
    availability.

    Early Warning Systems in The famine early warning systems produced
    relevant information regarding the Southern Africa Food

    the southern Africa food crisis. FEWS NET and GIEWS reported on such
    Crisis

    food security indicators as adverse weather events, current food
    shortages, the status of cereal imports, the status of strategic grain
    reserves, the status of grain prices, and forecasts for the 2001/ 02
    harvest.

    In particular, in late 2001 and early 2002 the early warning systems
    reported questionable food security in parts of the six countries,
    accounting for the poor 2000/ 01 harvest and anticipating future cereal
    gaps based on a poor outlook for the 2001/ 02 harvest. In November 2001,
    FEWS NET reported that the 2000/ 01 cereal harvest from earlier that year
    would likely be insufficient to fill food needs in each country except
    Mozambique. After

    FEWS NET highlighted these potential maize shortages, the U. S. government
    began carefully monitoring the situation in southern Africa, according to
    a Department of State cable. By mid- February 2002, GIEWS warned that
    impending severe food shortages threatened some 4 million people in the
    southern African countries, including parts of each of the six countries.
    That same month, however, FEWS NET reported that although

    there were localized areas of concern at the national and subnational
    levels, there was no reason for serious concern over production prospects

    from a regional perspective at that point in the growing season. In April
    2002, closer to the harvest period, GIEWS warned of a looming food crisis
    in southern Africa, with conditions in several countries set to worsen. By
    May 2002, FEWS NET also warned of the potential for a food security crisis
    of regional magnitude if appropriate and timely action were not taken.

    Nevertheless, the early warning systems did not anticipate the severity of
    the situation in Malawi. Although the systems did report serious maize
    (corn) production shortfalls in Malawi during the 2000/ 01 harvest caused
    by mid- season floods and late- season drought, flawed agricultural
    statistics provided by the government of Malawi 2 indicated that the
    production shortfall would be covered by other food crops, especially
    cassava.

    According to the IMF, the data error only became apparent in February 2002
    when Malawi began experiencing severe food shortages.

    Assessment Systems For this report, we reviewed the following assessments:
     VAM: The Vulnerability Analysis and Mapping Unit (VAM) analyzes,

    maps, and reports on populations and geographic areas experiencing food
    insecurity to inform WFP food aid operations in 43 countries. VAM uses
    state- of- the- art mapping techniques to pinpoint the people most
    vulnerable to hunger and target their needs. VAM and FEWS NET work in
    close collaboration in the African countries where they are both present.
    VAM relies on FEWS NET for early warning analyses in most African
    countries. VAM also has a global mandate in supporting internal WFP
    operations, whereas FEWS NET attempts to build assessment capacity within
    the countries.

     CFSAM: Crop and Food Supply Assessment Mission (CFSAM) is a rapid
    assessment of information generated in an affected country used to fill in
    information gaps and to provide an early forecast of production and

    the emerging food supply situation of that country. This is done only at
    the request of the host country government. A mission may also collect
    information on household food security, vulnerability, coping mechanisms,
    and social welfare programs. GIEWS/ FAO coordinates such missions in
    conjunction with WFP and other stakeholders such as host country
    ministerial staff, FEWS NET staff, and the Southern 2 Early warning
    systems often rely on data supplied by the governments of the countries in

    question.

    African Development Community*s (SADC) Regional Early Warning Unit (REWU).
    CFSAM targets a wider audience than WFP*s internally focused VAM unit. The
    international community uses the CFSAM information to calculate how much
    food aid and other relief assistance is needed to assist the most
    vulnerable people.

     VAC: SADC and some of its member states established vulnerability
    assessment committees (VAC) to better assess and address food security
    issues. 3 The purpose of VAC assessments is to (1) provide additional
    information to help adjust response programs to better meet the needs of
    vulnerable populations; (2) rapidly investigate and characterize or verify
    suspected crises in local areas; and (3) better understand the causes of
    the emergency and their implications for a return to food security. The
    committees use a coordinated, collaborative process that integrates the
    most influential assessment and crisis

    response players into the effort to help gain privileged access to
    national data sets and expert technicians and increase the likelihood of
    reaching consensus among national governments, implementing partners, and
    major donors. Key players include the SADC Regional Early Warning Unit and
    national VACs, VAM, FEWS NET, GIEWS, and several NGOs. The assessment
    methodology included sample surveys at the district, community, and
    household levels and incorporated household food economy and nutritional
    surveys.

    Use of Assessments in the Several of the above assessments have been used
    to prepare for and

    Southern Africa Food Crisis monitor the southern Africa food crisis (see
    app. II for timeline). FAO

    conducted a series of CFSAMs starting in May 2002. The missions estimated
    cereal requirements and cereal production for each of the six countries
    and the extent to which the gap could be offset by commercial imports.
    (See app. V for more on commercial sector imports and their role in the
    crisis.) The remaining deficit was identified as requiring emergency food
    aid. The regional and national VACs built assessment capacity in the

    region and increased the breadth and depth of food security monitoring 3
    The SADC Vulnerability Assessment Committee, established in early 1999, is
    a committee of national professionals working at the regional level to
    enhance food security and livelihood conditions within the SADC member
    states. In August 2001, SADC Ministers of Agriculture encouraged member
    states to establish cross- sectoral and interagency vulnerability
    assessment groups to better understand food security and livelihood
    conditions of vulnerable communities and better target emergency and
    development interventions. The SADC VAC coordinates and backstops the
    national committees.

    during the crisis. To this end, the committees conducted assessments and
    prepared reports on their results in September 2002 and January 2003. A
    third assessment occurred in May 2003.

    Appendi V I x U. S. Donations By early 2002, the United States had
    recognized the seriousness of the developing food crisis in southern
    Africa and initiated actions to donate substantial quantities of food aid
    to the region. For example, in midFebruary 2002, USAID arranged a loan of
    8,470 metric tons (MT) of maize to southern Africa from stocks held in
    Tanzania; the commodity began arriving in the region in mid- March. On
    March 15, 2002, USAID authorized

    World Vision to provide 14,310 MT of food aid to Zimbabwe (the amount was
    later increased to 19,710 MT). On March 21, USAID authorized the purchase
    of 35,330 MT of commodities* from existing stocks in New Orleans* to be
    shipped to southern African ports; these stocks arrived by the end of June
    2002.

    Overall, between late April 2002 and March 31, 2003, the United States
    donated and delivered nearly 500, 000 MT of food aid to the region valued
    at about $275 million. The food represented approximately 68 percent of
    the total food aid delivered into the region between April 1, 2002, and
    March 31, 2003. 1 U. S. deliveries included:

     81,950 MT for precursor WFP emergency programs in each of the six
    countries* Lesotho, Malawi, Mozambique, Swaziland, Zambia, and Zimbabwe,
    valued at $43 million; 2  19,710 MT for the World Vision program in
    Zimbabwe, valued at $12.8

    million;  326,553 MT for the WFP regional operation, valued at $165.4
    million; and  71, 600 MT for the C- SAFE operation, valued at $53.5
    million. Table 4 provides a breakout of the U. S. food aid by country and
    commodity. As the table shows, Zimbabwe, Malawi, and Zambia received the
    largest amounts of aid. Maize (corn) and maize meal accounted for more
    than 70 percent of the donated commodities. About 84 percent of all the
    donated

    food represented biotech commodities (i. e., maize, maize meal, oil, and
    corn soya blend (CSB)/ corn soya milk( CSM)).

    1 The U. S. contribution to the southern African region was consistent
    with its global food aid performance in recent years. For example,
    from1992 through 2001, the United States accounted for an average 58
    percent of global food aid deliveries, ranging between 45.9 percent in
    1995 and 68.8 percent in 1999.

    2 Together, the six operations were designed to assist 4.8 million people.

    Table 4: U. S. Government Food Aid Response to the Southern Africa Crisis
    Corn soy Corn

    blend/ corn Country Corn meal Beans Oil

    soy milk Sorghum Bulgur Total

    Lesotho 23,500 2,510 800 950 27, 760

    Malawi 114,650 8,500 8.720 4, 720 14,905 151, 495

    Mozambique 13,000 2,680 2, 860 1,250 19, 790

    Swaziland 11,500 700 725 2,617 15, 542

    Zambia 26,500 9,600 7,900 100 400 15,000 15,000 74, 500

    Zimbabwe 90,800 56, 510 17, 120 11, 946 24,030 10,000 215, 406 Total
    279,950 77, 120 37, 920 21, 301 43,202 15,000 25,000 499, 493

    Source: USAID.

    Appendi V x Commercial Imports The extent and availability of commercial
    cereal food supplies during the food crisis 1 are difficult to assess for
    a number of reasons. Early concerns about the progress of commercial
    imports stemmed from the large amounts of cereal imports needed, the high
    regional prices for maize, 2 and the lack of sufficient foreign exchange
    resources for governments and private sector entities to purchase the
    required imports. 3 Nonetheless, data available in mid- May 2003 indicated
    that 1.72 million MT of commercial cereal imports had been received in the
    six countries between April 1, 2002, and March 31, 2003. 4 However, the
    regional Vulnerability Assessment Committee September 2002, December 2002,
    and January 2003 reports

    indicated some serious problems with food availability during the year.
    (See app. III for a detailed description of the VACs.) Factors
    contributing to the uncertainty over commercial cereal food supplies
    included the lack of time frames indicating when imports needed to be
    purchased, data

    reliability issues, problems between urban and rural distribution of food
    supplies, and government policies that provided disincentives to the
    private sector to import food or that, once imports were received in
    country, discouraged the efficient supply of those goods to the local
    market.

    In contrast to WFP*s food aid effort, the CFSAMs did not identify the
    monthly rate at which imports needed to occur, making it difficult to
    judge

    1 One factor that reportedly affected the availability of commercial
    imports was the drop in maize production in South Africa, a primary
    supplier of maize to regional markets. South Africa's average maize
    production in 2001 and 2002 was 9 percent lower than the previous 5year
    average (from 1996 to 2000).

    2 Maize prices fluctuated throughout the season and region. In Malawi,
    maize prices reached unprecedented levels during the pre- harvest period.
    In Zimbabwe, the price of maize on the black market rose by 167 percent
    from August to December. In Mozambique, November 2002 prices were
    generally higher than 2001 prices in four of seven provinces surveyed, but
    the same or lower in the other three provinces.

    3 The January 2003 VAC regional report concluded that Zimbabwe faced the
    greatest challenge of the six countries for purchasing required imports.
    Zimbabwe has been experiencing an economic crisis as its annual inflation
    rate has reached 180 percent and its gross domestic product has declined
    by 12 percent in 2002.

    4 The May 2002 FAO/ WFP CFSAM initially estimated the annual cereal
    deficit for each country and how much of that could be met by commercial
    imports, with the remainder to be offset by emergency food aid. Subsequent
    VAC reports updated estimates of the cereal

    deficit as well as domestic cereal and stock requirements and production.
    Given that the U. N. regional emergency food aid appeal used the original
    CFSAM emergency food aid targets, we derived the annual commercial import
    requirement by subtracting planned emergency food aid from the March 2003
    revised cereal deficit.

    the timeliness of commercial imports. The September VAC report for Zambia
    indicated concern that it could be difficult for importers to find maize
    in regional markets (as several countries in the region had large deficits
    and would be competing to buy from the same suppliers), which in turn
    could delay purchases. According to the December VAC report for Lesotho,
    maize, wheat, and sorghum were generally not available for purchase at the
    end of the year in communities across that country. In Swaziland, maize
    was reported to be readily available in retail outlets nationwide even
    though there had been no commercial imports between July and November.
    However, there were fears that a shortfall in maize imports would occur
    between December and March, causing another round of price hikes.

    Once data on commercial cereal imports began to be available, data
    reliability became an issue in some cases. For example, according to the
    December Zimbabwe VAC report, figures on the combination of commercial
    imports, food aid imports, and available national production should have
    resulted in a surplus of 200,000 MT at the national level. However, the
    report indicated there was something seriously wrong with the numbers,
    since 41 percent of communities surveyed reported that cereal grains were
    not or were rarely available from the government*s grain

    marketing board and the other 59 percent reported that the grains were
    only occasionally available. U. S. government officials noted that there
    have been numerous anecdotal reports of the government*s politicizing food
    aid, which may partly explain some of the discrepancy.

    While commercial cereal imports may have been provided to urban markets,
    shortages were reported in many rural areas, indicating problems with the
    distribution of commercial cereal supplies. The December VAC report for
    Lesotho indicated that maize meal maize that has undergone the milling
    process was said to be available, though very expensive, in the various
    urban centers but generally not available in the rural areas, which were
    characterized as experiencing a serious food crisis. The January VAC
    report for Zambia said there was no commercial shortfall in urban areas
    and millers did not expect one through February and beyond. However, most
    of the maize that had been imported (officially or via cross- border

    trade) was reportedly only servicing the urban markets, leaving the rural
    areas with a severe commercial grain shortfall that drastically pushed up
    prices. Of 48 villages surveyed, fewer than 10 percent said maize was
    readily available and fewer than 30 percent said maize was occasionally
    available.

    Finally, some national governments implemented subsidies and price
    controls that raised concern about private sector imports and whether
    imports received would be supplied to local markets efficiently. For
    example, in response to the crisis, Malawi implemented a countrywide
    subsidy on the consumer price of maize to make it more affordable to the
    public. However, this policy, combined with high interest rates that
    inhibited the private sector from borrowing to cover its purchases, meant
    that the private sector could not profit from importing maize and selling
    it at the subsidized price. In Zambia, the government encouraged a program
    whereby a private sector group, the Millers Association, would import

    300,000 MT of maize without having to pay import duties and the government
    would import 155, 000 MT of maize to begin a strategic reserve. However,
    the Zambian government reportedly provided conflicting information about
    the amount of food it was to import for relief versus strategic reserves,
    thus causing confusion about planned imports,

    uncertainty over market prices, and conditions favorable for market
    speculation. In Zimbabwe, the government banned all private sector imports
    and implemented price controls on maize. This policy reportedly encouraged
    traders with food supplies to stockpile them or sell them at a much higher
    price on black markets in country or across borders.

    Appendi VI x Nonfood Emergency Needs U. N. agencies requested $143.7
    million to address urgent, nonfood humanitarian needs that increased
    people*s vulnerability to famine for the July 2002 through June 2003
    period. As of April 9, 2003, less than 25 percent of the total identified
    requirements had been funded. Figure 15 compares the sectors and dollar
    amounts for which the U. N. agencies requested funding to actual
    contributions. As the figure shows, the largest amounts were requested for
    health, agriculture, and economic recovery. Only five of the nine sectors
    received any funding and four of these were only partially funded. The
    four sectors with the highest rates of funding were: multisector, 583
    percent of the requested amount; coordination and support services, 49
    percent of the requested amount; agriculture, 35 percent; and health, 21
    percent. Figure 15: U. N. Nonfood Emergency Appeals and Contributions by
    Sector

    Funding requests were tied to specific projects. For example, the World
    Health Organization (WHO) asked for $2.9 million for projects in Malawi to
    enable earlier detection of epidemics, improve response to disease
    outbreaks in emergency situations, and strengthen emergency health
    coordination. FAO requested funding for an $8.5 million project in
    Zimbabwe to (1) increase agricultural production among 400,000 vulnerable
    households by providing inputs such as seeds and fertilizer, (2)
    facilitate tillage, (3) rehabilitate local water sources, and (4) develop
    opportunities to market agricultural products.

    Biotech Food and the Southern Africa Food

    Appendi VI x I

    Crisis This appendix provides additional information on crops and foods
    produced with modern agricultural biotechnology, how concerns about
    agricultural biotechnology developed in southern Africa, and how issues
    surrounding agricultural biotechnology affected delivery of U. S. food aid
    during the southern Africa food crisis.

    Modern Agricultural Modern agricultural biotechnology refers to various
    scientific techniques

    Biotechnology used to modify plants, animals, or microorganisms by
    introducing in their

    genetic makeup genes for specific desired traits, including genes from
    unrelated species. Genetic engineering techniques allow development of new
    crop or livestock varieties, since the genes for a given trait can be
    introduced into a plant or animal species to produce a new variety

    incorporating that specific trait. Additionally, genetic engineering
    increases the range of traits that can be introduced in new varieties by
    allowing genes from totally unrelated species to be incorporated into a
    particular plant or animal variety. 1

    Crops and foods containing or derived from genetically modified (GM)
    plants have been characterized by various users as biotech, GM,
    genetically modified organisms (GMO), and bioengineered crops and foods.
    Biotech crops currently on the market are mainly aimed at increasing crop

    protection by introducing resistance against plant diseases caused by
    insects or viruses or by increasing tolerance to herbicides. Biotech crops
    have lowered pest management costs and enhanced yields. By the end of
    2000, such crops had been planted on nearly 100 million acres worldwide.
    As of 2000, the United States had 76.7 million acres of biotech crop
    varieties: 26 percent of all maize planted, 68 percent of cotton, and 69
    percent of soybeans.

    The United States and a number of other countries have established
    regulatory processes for assessing whether foods derived from agricultural
    biotechnology are as safe for humans, animals, other plants, and the
    environment as their traditional counterparts. Safety assessments of GM
    foods investigate direct health effects (toxicity), tendencies to provoke
    allergic reaction, nutritional effects, and any unintended effects that
    could

    1 U. S. General Accounting Office, International Trade: Concerns Over
    Biotechnology Challenge U. S. Agricultural Exports, GAO- 01- 727
    (Washington, D. C.: June 15, 2001).

    result from gene insertion. 2 Environmental assessments consider the
    ability of the GMO to escape and potentially introduce the engineered
    genes into wild populations; susceptibility of nontarget organisms (e. g.,
    insects that are not pests) to the gene product; loss of biodiversity; and
    increased use of chemicals in agriculture. The environmental aspects vary
    considerably according to local conditions.

    GM food such as whole kernel maize seed contains living modified organisms
    (LMO) that are capable of transferring or replicating genetic material. If
    maize is milled, this is no longer the case. Whole kernel maize seed can
    be eaten as a food or planted to grow a new crop.

    Challenges to U. S. U. S. agricultural biotech exports have faced several
    significant challenges

    Agricultural Exports in international markets. First, as the single, major
    producer of biotech

    Containing Biotech products, the United States has been relatively
    isolated in its efforts to

    maintain access for these products. 3 Second, in many parts of the world,
    Commodities

    consumer concerns about the safety of biotech foods have increased,
    leading key market countries to implement or consider regulations that may
    restrict U. S. biotech exports. Third, in the United States, biotech and
    conventional varieties are typically combined in the grain handling system

    for more efficient use of crops from multiple sources. 4 Thus, foreign
    regulations on biotech could affect all U. S. exports of these commodities
    as well as food products containing or derived from biotech crops.
    Specifically, regulations limiting or banning the importation of foods
    containing biotech products present serious challenges to U. S. exporters
    of corn and soy products, according to Department of State and USDA
    officials.

    2 In May 2002, GAO reported on biotechnology experts* views on the
    adequacy of tests used to evaluate potential health risks associated with
    genetically modified foods. Experts we contacted agreed that the regimen
    of tests used is adequate in assessing the safety of such foods. See U. S.
    General Accounting Office, Genetically Modified Foods: Experts View
    Regimen of Safety Tests as Adequate but FDA*s Evaluation Process Could Be
    Enhanced, GAO- 02- 566 (Washington, D. C.: May 23, 2002).

    3 According to USDA officials, more than 17 countries currently produce
    biotech agricultural commodities. According to a USAID official, an
    estimated 20 percent of the Brazilian soy crop and 20 percent of South
    Africa*s yellow maize are bioengineered.

    4 Once a product of modern agricultural biotechnology is determined to be
    as safe as its conventional counterpart, it is allowed to circulate freely
    in the U. S. market.

    Several international organizations are involved in developing guidance on
    biotech food and its regulation. The Codex Alimentarius Commission (Codex)
    a joint FAO/ WHO body responsible for an international food code* has been
    developing principles for the human health risk analysis of biotech foods.
    These principles are based on a premarket assessment, performed on a case-
    by- case basis, that evaluates both direct effects (from the inserted
    gene) and unintended effects that may arise from inserting the new gene.
    The principles are in the final stage of an eight- step international
    agreement process. Draft language under consideration includes an option

    for mandatory labeling based on the method of production, even if there is
    no detectable presence of DNA or protein in the end product resulting from
    genetic modification. The United States and several other countries have
    opposed mandatory processed- based labeling for foods, which may contain
    the products of agricultural biotechnology. They favor mandatory labeling
    only with regards to allergic reactions, changes in nutritional content,
    and changes in handling requirements. Codex has been deadlocked on the
    labeling issue for several years.

    The Cartagena Protocol on Biosafety, an international environmental
    treaty, regulates transboundary movements of LMOs. Biotech foods are
    within the scope of the protocol only if they contain LMOs. The protocol
    requires exporters to get consent from importing countries before the
    first shipment of LMOs intended for release into the environment. This
    requirement does not apply to LMOs intended for direct use as food, feed,
    or for processing. 5 The protocol will enter into force 90 days after the
    50 th country has ratified it, which may be in late 2003, according to a
    USAID

    official. The United States is not a signatory to the agreement. However,
    according to U. S. officials, as a practical matter U. S. exporters will
    need to observe and comply with local regulations implementing the
    protocol.

    U. S. Versus EU Approval The United States and the European Union (EU)
    have very different Process

    regulatory frameworks for approving new agricultural biotech products. 5
    For these products, the protocol establishes procedures for countries to
    exchange information. According to the protocol, the initial documentation
    should clearly identify that the shipment *may contain* LMOs that are not
    intended for intentional introduction into the environment and contain a
    point of contact for further information. Subsequent

    information that will be placed on an international data base should
    contain information such as the characteristics of LMOs; any national
    laws, regulation, or guidelines on LMOs; and other related information.

    The United States generally applies existing food safety and environmental
    protection laws and regulations 6 to biotech products and approves them
    based on their characteristics rather than on whether they are derived
    from biotechnology. To evaluate new products, U. S. regulators require
    sufficient evidence to determine their safety or risk. Under this
    approach, the United States has approved most new biotech varieties.

    The EU follows the *precautionary principle,* under which the EU maintains
    that approval of new biotechnology products should not proceed if there is
    *insufficient, inconclusive, or uncertain* scientific data regarding
    potential risks. The EU has not approved any new biotech foods for
    marketing since 1998. 7 This stance has affected the viability of biotech
    trade in other parts of the world. For example, given the importance of
    the EU market, U. S. soybean producers have been reluctant to introduce
    new biotech varieties not approved for marketing in the EU. Similarly,
    maize growers in Argentina, who export to the EU, are deferring planting a
    biotech variety known as *Round- up Ready* corn because the EU has not
    approved it. They are only planting biotech varieties approved by the EU.

    Biotech Issues in Zimbabwe According to U S. officials, Zimbabwe raised
    concerns about the potential adverse environmental and commercial/ trade
    impacts of unmilled biotech

    products as early as the summer of 2001, a year before the U. N. *s
    southern Africa appeal. It did not want planting of whole kernel biotech
    seeds or feeding of livestock on biotech products. In December 2001, the
    United States offered to provide 14,300 MT of maize to Zimbabwe, but the
    government refused, since it could not be certified as GMO- free. In
    January 2002, the United States agreed to provide 8,500 MT of fortified
    corn meal to Zimbabwe as an initial contribution to a WFP program launched
    in November 2001. Since this was a milled product that did not contain any
    living GMOs, the government accepted it.

    In May 2002, the United States offered an additional shipment of 10,000 MT
    of whole kernel maize for the WFP program. The government again said it
    would only accept contributions that included assurances that the food

    6 The U. S. system involves coordination among USDA, the Environmental
    Protection Agency, and the Food and Drug Administration. 7 According to a
    U. S. official, the EU has had a moratorium on new approvals, which goes a
    step beyond merely applying precaution to each regulatory decision.

    was not derived from GMOs. As a result, the maize was reallocated to
    Zambia, Malawi, and Mozambique. Near the end of July 2002, Zimbabwe
    proposed to accept a U. S. offer of 17, 500 MT of maize that might contain
    biotech commodity. However, the maize would be temporarily stored in silos
    to be milled and subsequently distributed. In the meantime, the government
    would use its own maize for distribution, which would be packed into USAID
    food bags and distributed. This proposal became known as *the swap.* Near
    the end of August, the United States approved the swap arrangement.
    However, on September 1,

    the Agriculture Minister of Zimbabwe was quoted as emphatically rejecting
    biotech food assistance. 8 Four days later, though, the President approved
    accepting biotech maize, subject to special shipping, milling, and
    distribution requirements. 9 Biotech Issues in Zambia In February and
    March 2002, WFP and U. S. officials notified Zambia that

    U. S. donations to that country would likely include maize containing
    biotech varieties. In June 2002, Zambia*s Vice President said the country
    would gladly accept the U. S. maize Zimbabwe refused. However, during

    June and July a public debate on biotech food began and appeared to be
    backed strongly by the opposition political party. In August, a 6- hour
    town meeting on the issue was held, and on August 16, the government
    decided to suspend all biotech imports and distributions.

    After this announcement, the USAID Administrator invited seven Zambian
    scientists to visit the United States on a fact- finding mission regarding
    the biotech issue. The scientists came to the United States in September
    and subsequently visited South Africa and several European countries as
    well. Their report concluded that:

     distributing biotech maize carries a high risk of eroding local maize
    varieties; 8 The swap never took place because the Zimbabwe government did
    not fulfill its part of the

    agreement, according to USAID officials. 9 According to U. S. officials,
    as of late February 2003, WFP had milled more than 41,000 MT of U. S.
    maize in Zimbabwe and some U. S. maize destined for Zimbabwe in South
    Africa.

    WFP was expecting that all U. S. corn stored in the region would be milled
    and transported to end sites by the end of March or early April.

     the safety aspects of biotech foods are not conclusive; 10 and  there
    is a potential risk of biotech maize, if planted, affecting the export

    of baby corn and honey in particular and organic foods in general to the
    EU.

    They recommended that the government continue its policy of not accepting
    biotech foods. On October 29, the Zambian government agreed.

    Seven experts in the field of modern agricultural biotechnology reviewed
    the Zambian scientists* report for us. With regard to human health and
    safety issues, two experts found the report to be fair, accurate, and
    factbased; two experts disagreed with this assessment; and three did not
    respond. Concerning environmental issues, three experts said the report
    was fair, accurate, and fact- based; two experts disagreed; one expert was
    not certain; and one did not respond. The experts generally agreed that
    cross- pollination, or gene flow, would occur between biotech and
    conventional maize plants, but disagreed about whether this warrants a ban
    on biotech maize. Four experts suggested that milling of biotech maize was
    a viable option for maintaining safety while simultaneously feeding the
    hungry; the other three did not comment on this issue. Overall, the
    experts supported the need for Zambia and other southern African countries
    to be able to assess GMOs in their environments.

    U. S. Views and Approach During June 2002, the United States planned how
    it would respond to the biotech issue. It recognized that (1) Zimbabwe*s
    rejection of whole kernel

    maize was a problem that had to be addressed, (2) other affected
    countries* positions on the import and transport of biotech food needed to
    be determined, and (3) it was important to provide information about
    biotech food. By early July, the United States was planning to use private
    and, if

    necessary, public diplomacy to get the affected countries to accept the
    biotech food aid. It would work with and through SADC and its members to
    remove barriers to biotech food aid and would support WFP in asking for
    humanitarian exceptions to current and proposed biotech regulations. When
    feasible, the United States would attempt to provide alternative food aid
    to countries that had bans on agricultural biotechnology in place.
    However, if recipient countries placed special regulations on biotech

    10 Issues include concerns related to toxicity, allergenicity, and
    antibiotic resistance.

    products for example, milling or labeling requirements they themselves
    would have to pay to implement these requirements. The U. S. government
    opposed agreeing to provide only milled biotech food aid because the
    process added costs and delayed shipments.

    On July 25, 2002, the State Department directed its embassies in the six
    affected states and Botswana to stress to host governments the importance
    of addressing the region*s immediate needs rather than engaging in
    protracted debate on the merits or supposed dangers of biotech food. State
    warned that recent decisions by some recipient and transit countries not
    to accept whole kernel biotech maize risked endangering the lives of
    millions of people. State advised U. S. missions to urge SADC member
    states to immediately adopt an agreement allowing unrestricted import and
    distribution of food aid, including biotech produce, on an emergency basis
    for the duration of the crisis. State*s background and guidance to its
    overseas posts on biotech food aid included the following:  Food that is
    exported from the United States, whether commercially or

    through food aid, is the same food eaten by Americans in terms of its GMO
    content.

     To date, there is no scientific evidence to suggest that commercially
    available biotech commodities and processed foods are any less safe than
    their conventional counterparts.  Commercially produced bioengineered
    plant varieties in the United

    States have been reviewed under the U. S. regulatory process, which sets
    rigorous standards for human, animal, and plant health and for
    environmental safety. These varieties have received safety approval in a
    number of countries.

     Developing countries are concerned that genetically engineered genes may
    contaminate other farmers* fields or wild plants in the centers of origin,
    but this occurrence would not necessarily be negative or damaging. Genes
    naturally flow (through cross- pollination) between

    traditionally developed varieties and modern hybrids.  Some African
    countries are concerned that if farmers plant whole grain

    U. S. food aid, their trade with the EU may be affected. At this point in
    time, the only whole grain in food aid that might contain biotech
    varieties is maize. If whole maize is planted, it is possible biotech
    varieties co- mingled in food aid could cross- pollinate with local

    varieties. However, it is unlikely that the biotech grain will grow well
    as it is made from hybrid seed and not well- adapted to conditions in
    southern Africa.

    U. N. Response In May 2002, WFP*s Executive Director raised the issue of
    biotech food aid with the U. N. Secretary General and in June briefed him
    on why biotech food aid was an impediment for operations in southern
    Africa. By early July 2002, the U. N. Under Secretary- General for
    Humanitarian Affairs had sought guidance from FAO, WHO, and WFP regarding
    food aid with biotech components. The FAO Director- General responded with
    a letter incorrectly

    citing the Cartagena Protocol as recommending that all food aid that might
    contain biotech products be subject to an *advanced informed agreement*
    and be milled before distribution to avoid the possibility of germination.
    However, the Cartagena Protocol expressly states that advanced informed
    agreement does not apply when the shipment is for direct use as food or

    feed, or for processing, nor does it suggest that grain shipments
    containing living biotech components be milled. After the United States
    raised concerns about this misinformation, the Director- General issued a
    correction letter. 11 Nonetheless, the FAO representative in Malawi
    repeated the same erroneous recommendations to Malawi*s Ministry of
    Agriculture. The United States again cited the error, but in August, the
    FAO

    representative in Zimbabwe gave similar inaccurate advice. This time, when
    the United States alerted FAO, the problem was quickly corrected,
    according to FAO.

    On August 23, 2002, FAO, WHO, and WFP issued a joint U. N. statement on
    the use of biotech foods as food aid in southern Africa. 12 Its key points
    included the following:

     Although there are no existing international agreements in force
    regarding trade in biotech food or food aid, WFP policy is that all
    donated food must meet the safety standards of both the donor and

    11 The Director- General advised U. S. officials that it was still
    possible that material imported for food, feed, or processing purposes
    could be used as seed or that spillage could occur, which might lead to
    propagation of the GMO in the country of import or transit. Processes

    such as milling, he noted, make germination impossible. 12 According to
    WFP officials, WFP*s Executive Director was tasked to negotiate drafting
    of the statement.

    recipient countries and all applicable international standards,
    guidelines, and recommendations.

     FAO and WHO are confident that the principal country of origin (i. e.,
    the United States) has applied its national food safety risk assessment
    procedures to its food aid and has fully certified that these foods are
    safe for human consumption. Based on national information from a variety
    of sources and current scientific knowledge, FAO, WHO, and WFP believe the
    consumption of biotech food now being provided as food aid in southern
    Africa is unlikely to present human health risk.

     Any potential risks to biological diversity and sustainable agriculture
    from inadvertent introduction of GMOs have to be judged and managed by
    countries on a case- by- case basis. In the case of maize, processing
    techniques such as milling or heat treatment may be considered to avoid
    inadvertent introduction of biotech seed. However, U. N. policy does not
    require that biotech grain used for food, feed, or processing be treated
    this way.  Governments must carefully consider the severe and immediate

    consequences of limiting the food aid available for millions so
    desperately in need.

    European Union Statement Several of the southern African countries were
    concerned that if whole kernel biotech maize were planted and used as feed
    for their cattle, their ability to export grain and cattle to the EU would
    be hampered. On August 28, 8 days after Zambia announced it would not
    accept biotech foods, the delegation of the European Commission in Zambia
    issued a press release to clarify its position, which stated the
    following:

     The United States, the EU, and others have evaluated several biotech
    maize varieties, and some have been authorized for use, including
    planting. Given the serious food shortages in the region, governments may
    want to use these evaluations rather than wait for them to be repeated
    locally.

     The fact that a country grows biotech maize has no impact on its ability
    to export other agricultural products to the EU.

     The importation and use of biotech maize in a form other than grain
    should eliminate concerns about negative biodiversity effects and trade
    consequences. 13  EU scientists have found no evidence that the biotech
    maize varieties

    they have assessed are harmful to human health. 13 Although the EU
    statement indicated Zambia*s acceptance of biotech maize would not legally
    undermine its ability to export biotech maize to the EU, private entities
    could add restrictions that might affect such exports..

    Appendi VI x I I

    Comments from the Department of State Note: GAO comments supplementing
    those in the report text appear at the end of this appendix.

    See comment 1. See comment 2.

    See comment 3. See comment 4. See comment 5.

    See comment 6.

    See comment 7. See comment 8.

    See comment 9.

    See comment 10. See comment 11.

    The following are GAO*s comments on the State Department*s letter dated
    June 3, 2003.

    GAO Comments 1. We recognize that the United States is taking steps to
    help improve long- term food security in the region that include, among
    others, the

    Agricultural Initiative to Cut Hunger in Africa, which was introduced
    early last year. However, as noted in figure 11, overall assistance to the
    region's agricultural sector has declined between 1998 and 2003; and as

    of April 2003, only one out of the six countries (Mozambique) was proposed
    to receive funding under the new initiative. We also recognize that U. S.
    bilateral assistance in several of the affected countries has funded a
    number of programs related to food security over the years, including
    ongoing programs on agricultural development, HIV/ AIDS, and disaster
    management. While all these programs do help to promote food security, U.
    N. and U. S. officials told us that to have broad impact, these programs
    need to be implemented on a much larger scale. Our recommendation that U.
    S. agencies work with international organizations, donors, and national
    governments to develop a comprehensive, targeted strategy for sustained
    recovery would, if implemented, help coordinate efforts, integrate
    approaches, and leverage limited resources as necessary to achieve greater
    effectiveness.

    2. We modified the text on pages 3 and 23 to note that the United States
    anticipated the crisis at the outset. Although the United States acted
    early so that food would arrive in a timely way, USAID officials advised
    us that no food was prepositioned in any of the countries. We modified the
    text on page 18 to reflect the point on the C- SAFE program.

    3. We modified the text on pages 10- 11 to reflect this information. 4.
    According to USAID officials, available quantities of sorghum and

    bulgur were limited. 5. We noted this view on page 46. 6. We modified our
    discussion of Malawi*s policy on page 31. 7. We modified the text on pages
    31 to reflect this point.

    8. We replaced the definition, cited from a World Health Organization
    publication, with an alternative. See pages 3 and 65. We modified the
    discussion of safety issues on pages 64- 65.

    9. We modified the text on these several issues on page 67. 10. We
    clarified this footnote, on page 67, to indicate what information

    would be required in the initial documentation and what information would
    be required in subsequent exchanges of information.

    11. On page 68, we changed our reference to the precautionary principle to
    clarify that the statements represent the EU*s arguments under the
    principle.

    Appendi X I x Comments from Department of Agriculture Note: GAO comments
    supplementing those in the report text appear at the end of this appendix.

    See comment 1. See comment 2.

    The following are GAO*s comments on USDA*s letter dated June 3, 2003. GAO
    Comments 1. We modified the text on page 30 to reflect this point.

    2. We modified the text on page 66 to reflect the first point. Our draft
    report noted that the biotech and conventional varieties are typically
    combined in the U. S. grain handling system. Regarding the use of the term
    biotech, see pages 45- 46.

    Comments from the U. S. Agency for

    Appendi X x International Development Note: GAO comments supplementing
    those in the report text appear at the end of this appendix.

    See comment 1.

    The following are GAO*s comments on USAID*s letter dated June 9, 2003. GAO
    Comments 1. Currently in draft form, the recovery strategy/ action plan
    USAID

    outlines in its comments represents a beginning. USAID notes that its
    draft strategy has already been useful as a planning tool in developing
    USAID*s country strategies for the region. As such, the recovery strategy/
    action plan will help target U. S. efforts. However, our recommendation
    goes beyond U. S. efforts. To ensure sustained recovery in an environment
    of constrained resources, we believe there is a need for a comprehensive
    strategy that pulls together the efforts of international organizations,
    donors, and national governments; integrates approaches; and leverages
    limited resources.

    Appendi XI x Comment from the World Food Program Note: GAO comments
    supplementing those in the report text appear at the end of this appendix.

    See comment 1. See comment 2.

    See comment 3. See comment 4. See comment 4.

    The following are GAO*s comments on the WFP*s letter dated June 2, 2003.
    GAO Comments 1. We agree with WFP*s support for further collaboration with
    the U. S. government and other partners in defining and implementing a

    sustainable recovery strategy. 2. We further highlighted the problems of
    extreme poverty and regional

    economic decline on page 11. 3. We further highlighted Zimbabwe*s economic
    problems on page 11. 4. We reflected these points on page 25.

    Appendi XI x I

    GAO Contacts and Staff Acknowledgments GAO Contacts Phillip J. Thomas
    (202) 512- 9892 Wayne Ferris (202) 512- 5169 Acknowledgments In addition
    to the persons named above, Joy Labez, Miriam Carroll, Kendall

    Schaefer, and Janey Cohen made key contributions to this report. Nathan
    Anderson, Nima Edwards, Etana Finkler, Chase Huntley, Bruce Kutnick,
    Jeremy Latimer, Barbara Shields, and Eve Weisberg provided technical
    support.

    (320145)

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    U. S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D.
    C. 20548

    Report to the Ranking Minority Member, Subcommittee on African Affairs,
    Committee on Foreign Relations, U. S. Senate

    June 2003 FOREIGN ASSISTANCE Sustained Efforts Needed to Help Southern
    Africa Recover from Food Crisis

    GAO- 03- 644

    Letter 1 Results in Brief 2 Background 4 Multiple Factors Contributed to
    the Food Crisis 7 Food Needs Not Fully Met, but Famine Was Averted 13 Slow
    Donations, Poor Infrastructure, Concerns Associated with Biotech Food Were
    Major Obstacles to an Effective Response 23

    Declining Support for Agricultural Sector and the HIV/ AIDS Epidemic Pose
    Challenges to Emerging from Crisis into Sustained Recovery 33 Conclusions
    44 Recommendations for Executive Action 45 Agency Comments and Our
    Evaluation 45

    Appendixes

    Appendix I: Scope and Methodology 48

    Appendix II: Timeline of the Southern Africa Food Crisis 51

    Appendix III: Early Warning Systems and Vulnerability Assessment Methods
    53 Early Warning Systems 53 Assessment Systems 55

    Appendix IV: U. S. Donations 58

    Appendix V: Commercial Imports 60

    Appendix VI: Nonfood Emergency Needs 63

    Appendix VII: Biotech Food and the Southern Africa Food Crisis 65 Modern
    Agricultural Biotechnology 65

    Appendix VIII: Comments from the Department of State 75 GAO Comments 80

    Appendix IX: Comments from Department of Agriculture 82 GAO Comments 85

    Appendix X: Comments from the U. S. Agency for International Development
    86 GAO Comments 88

    Appendix XI: Comment from the World Food Program 89 GAO Comments 92

    Appendix XII: GAO Contacts and Staff Acknowledgments 93

    GAO Contacts 93 Acknowledgments 93

    Tables Table 1: Cereal Production by Country 9 Table 2: Frequency of
    Household Coping Strategies in Zambia

    (August through December 2002) 21 Table 3: Contributions to WFP and Their
    Timing 25 Table 4: U. S. Government Food Aid Response to the Southern
    Africa Crisis 59

    Figures Figure 1: Population at Risk of Famine in the Affected Southern
    African Countries 6

    Figure 2: Revised Estimate of the Cereal Gap in the Six Countries and Plan
    for Addressing the Deficit (March 2003) 14 Figure 3: Extent to Which
    Cereal Food Aid and Commercial

    Imports Met the Cereal Gap (April 1, 2002, through March 31, 2003) 16
    Figure 4: Extent to Which WFP Monthly Food Delivery Targets

    Were Met (July 2002 through March 2003) 18 Figure 5: Percent of WFP Total
    Planned Beneficiaries Who

    Received at Least Some Food Aid (July through December 2002) 20 Figure 6:
    Steps in the Logistics Process 27 Figure 7: The Transportation Network for
    Moving Food in the

    Region 28 Figure 8: Agricultural Lending by the World Bank, the African

    Development Bank, and the International Fund for Agricultural Development*
    1990 through 2000 35 Figure 9: World Bank Agricultural Sector Loans
    Approved for the

    Affected Countries* 1990 to 2002 36 Figure 10: Agricultural Spending as a
    Percentage of Total

    Government Spending* 1996/ 97 through 2001/ 02 (in 2003 dollars) 37 Figure
    11: USAID Bilateral Assistance in the Agricultural Sector to

    Four Countries* 1998 to 2003 38 Figure 12: Examples of Existing Programs
    Related to Food

    Security 40 Figure 13: Projected Impact on GDP Due to HIV/ AIDS 42 Figure
    14: Timeline of the Southern Africa Food Crisis 52

    Figure 15: U. N. Nonfood Emergency Appeals and Contributions by Sector 63

    Abbreviations

    CFSAM Crop and Food Supply Assessment Mission C- SAFE Consortium for the
    Southern Africa Food Security Emergency EMOP Emergency Operations EWS
    early warning systems FAO Food and Agriculture Organization FEWS NET
    Famine Early Warning Systems Network GIEWS Global Information Early
    Warning System IFAD International Fund for Agricultural Development IFPRI
    International Food Policy Research Institute IMF International Monetary
    Fund NGO nongovernmental organization OFDA Office of Foreign Disaster
    Assistance SADC Southern African Development Community UNAIDS Joint United
    Nations Program on HIV/ AIDS UNICEF United Nations Children*s Fund USAID
    United States Agency for International Development USDA United States
    Department of Agriculture VAC vulnerability assessment committee VAM
    vulnerability assessment mapping WFP World Food Program WHO World Health
    Organization

    This is a work of the U. S. Government and is not subject to copyright
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    a

    GAO United States General Accounting Office

    Multiple factors contributed to the food crisis. Erratic weather reduced
    maize (corn) production. A poorly functioning agricultural sector caused
    food supply shortages. Government actions including the sale of Malawi*s
    grain reserve and Zimbabwe*s land reform further cut available food.
    Widespread poverty contributed to food

    insecurity and the HIV/ AIDS epidemic exacerbated food shortages by
    reducing the labor force. Food aid averted famine, but the overall
    response did not

    prevent widespread hunger. About 93 percent of the total cereal gap the
    difference between domestic needs and production was met by the end of the
    April 2002- March 2003 crisis period. However, food aid deliveries fell
    short in several countries, and vulnerable households had limited ability
    to purchase commercial maize. Plan for Addressing Cereal Needs in the Six
    Countries 67%

    33% 14%

    22% 48% Zimbabwe

    Malawi, 5%

    Mozambique Zambia, 3%

    Nongovernmental organizations

    World Food Program Swaziland, 8% Lesotho

    Commercial imports Food aid

    Total Cereal a Requirements 8.5 Million Metric Tons

    Commercial Import Needs by Country

    Plan for Cereal Food Aid

    Production and opening stock levels

    Source: GAO analysis of information provided by WFP.

    69% 14% 17%

    Cereal gap 31% Cereal gap 31%

    a Cereal includes maize and other grains suitable for food.

    Slow donations, poor infrastructure, and concerns about biotech food were
    major obstacles to an effective response.

    Excluding the United States, most donors did not make sufficient, timely
    donations to the World Food Program. Poor transportation systems and
    storage facilities hampered efficient food delivery. Zambia rejected food
    aid because of concerns regarding biotech food; other countries required
    milling maize for the same reason. This compromised the food aid pipeline
    given the United States was the region*s key donor and its aid may contain
    biotech food.

    Declining investments in agriculture and the HIV/ AIDS epidemic pose
    challenges to emerging from crisis into sustained recovery. U. N. and U.
    S. officials cite the need to reverse declining trends in agricultural
    investments by international financing organizations, national
    governments, and donors. Without a strategy that integrates, among other
    things, agricultural development, the impact of HIV/ AIDS, and natural
    disaster management, food crises will recur. The southern Africa food
    crisis threatened 15.3 million people in

    six countries (Lesotho, Malawi, Mozambique, Swaziland, Zambia, and
    Zimbabwe) with famine. GAO

    was asked to look at (1) factors that contributed to the crisis, (2) how
    well the populations* needs were met, (3) obstacles to the food aid
    effort, and (4) challenges to emerging from crisis. GAO recommends that
    the

    Secretaries of State and Agriculture and Administrator of the U. S. Agency
    for International Development review issues related to biotech

    foods in emergency food aid* such as health, trade and environment
    concerns* in anticipation of future crises; and

    work with international donors and national governments on a recovery
    strategy integrating, among others, agricultural development, HIV/ AIDS,
    and

    natural disaster management. The Departments of State and Agriculture,
    USAID, and WFP generally agreed with our recommendations. Their technical
    comments were incorporated as

    appropriate.

    www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 644. To view the full product,
    including the scope and methodology, click on the link above. For more
    information, contact David Gootnick (202) 512- 3149 (gootnickd@ gao. gov).
    Highlights of GAO- 03- 644, a report to the

    Ranking Minority Member, Subcommittee on African Affairs, Committee on
    Foreign Relations, United States Senate

    June 2003

    FOREIGN ASSISTANCE

    Sustained Efforts Needed to Help Southern Africa Recover from Food Crisis

    Page i GAO- 03- 644 Foreign Assistance

    Contents

    Contents

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    Appendix I

    Appendix I Scope and Methodology

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    Appendix I Scope and Methodology

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    Appendix II

    Appendix II Timeline of the Southern Africa Food Crisis

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    Appendix III

    Appendix III Early Warning Systems and Vulnerability Assessment Methods

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    Appendix IV

    Appendix IV U. S. Donations

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    Appendix V

    Appendix V Commercial Imports

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    Appendix V Commercial Imports

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    Appendix VI

    Appendix VI Nonfood Emergency Needs

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    Appendix VII

    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VII Biotech Food and the Southern Africa Food Crisis

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    Appendix VIII

    Appendix VIII Comments from the Department of State

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    Appendix VIII Comments from the Department of State

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    Appendix VIII Comments from the Department of State

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    Appendix VIII Comments from the Department of State

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    Appendix VIII Comments from the Department of State

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    Appendix VIII Comments from the Department of State

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    Appendix IX

    Appendix IX Comments from Department of Agriculture

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    Appendix IX Comments from Department of Agriculture

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    Appendix IX Comments from Department of Agriculture

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    Appendix X

    Appendix X Comments from the U. S. Agency for International Development

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    Appendix X Comments from the U. S. Agency for International Development

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    Appendix XI

    Appendix XI Comment from the World Food Program

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    Appendix XI Comment from the World Food Program

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    Appendix XI Comment from the World Food Program

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    Appendix XII

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