Food Aid: Private Voluntary Organizations' Role In Distributing Food Aid
(Letter Report, 11/23/94, GAO/NSIAD-95-35).

The United States has provided food assistance to developing countries
since the passage of the Agricultural Trade Development and Assistance
Act of 1954.  Congress has directed that at least 76 percent of the
legislated minimum amounts of agricultural commodities provided under
the act be used for nonemergency development activities of U.S. private
voluntary organizations or such multilateral organizations as the World
Food Program.  GAO reviewed private voluntary organization food aid
projects in Ghana, Honduras, and Indonesia, and extensively reviewed the
literature on private voluntary organizations' food aid and development
efforts.  This report describes (1) the role of private voluntary
organizations in distributing food aid and (2) the impact of direct
feeding programs on enhancing the long-term food security of recipient
countries, including how well projects are targeted to people vulnerable
to malnutrition and whether food-for-work projects significantly improve
infrastructure.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-95-35
     TITLE:  Food Aid: Private Voluntary Organizations' Role In 
             Distributing Food Aid
      DATE:  11/23/94
   SUBJECT:  International food programs
             Food supply projections
             Food relief programs
             International relations
             Foreign governments
             Developing countries
             Federal aid to foreign countries
             International cooperation
             Volunteer services
             Non-government enterprises
IDENTIFIER:  UN World Food Program
             Honduras
             Ghana
             Indonesia
             
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Cover
================================================================ COVER


Report to the Chairman, Subcommittee on Foreign Agriculture and
Hunger, Committee on Agriculture, House of Representatives

November 1994

FOOD AID - PRIVATE VOLUNTARY
ORGANIZATIONS' ROLE IN
DISTRIBUTING FOOD AID

GAO/NSIAD-95-35

Food Aid


Abbreviations
=============================================================== ABBREV

  ADRA - Adventist Development and Relief Agency
  AID - Agency for International Development
  CARE - Cooperative for American Relief Everywhere, Incorporated
  CRS - Catholic Relief Services
  GNP - gross national product
  NCBA - National Cooperative Business Association
  PVO - Private Voluntary Organization

Letter
=============================================================== LETTER


B-259032

November 23, 1994

The Honorable Timothy J.  Penny
Chairman, Subcommittee on Foreign
 Agriculture and Hunger
Committee on Agriculture
House of Representatives

Dear Mr.  Chairman: 

As requested, we are providing information about food aid granted by
the United States to private voluntary organizations (PVO) to support
development activities in foreign countries.  Specifically, the
report describes (1) the role of PVOs in distributing food aid and
(2) the impact of direct feeding programs on enhancing the long-term
food security of recipient countries, including how well projects are
targeted to people vulnerable to malnutrition and whether
food-for-work projects significantly improve infrastructure. 


   BACKGROUND
------------------------------------------------------------ Letter :1

The United States has provided food assistance to developing
countries since the passage of the Agricultural Trade Development and
Assistance Act of 1954 (P.L.  480).  Title II of the act, as amended,
authorizes grants of agricultural commodities to meet relief
requirements and for activities to alleviate the causes of hunger,
disease, and death.  The 1990 amendments to Public Law 480,\1

emphasize food security of developing countries, defining food
security as "access by all people at all times to sufficient food and
nutrition for a healthy and productive life."\2

Congress also directed that at least 76 percent of the legislated
minimum amounts of commodities provided under title II be used for
nonemergency development activities of U.S.  PVOs or cooperatives\3
or intergovernmental and multilateral organizations such as the World
Food Program.  The title II program is the responsibility of the
Agency for International Development (AID).  We reviewed PVO food aid
projects in Ghana, Honduras, and Indonesia and conducted an extensive
review of relevant literature on PVOs' food aid and development
activities. 


--------------------
\1 Agricultural Development and Trade Act (title XV of P.L.101-624). 

\2 The Agency for International Development has administratively
refined the definition to highlight three variables influencing food
security:  (1) availability, (2) access, and (3) utilization of food. 

\3 For purposes of this report, we refer to U.S.-based private
voluntary organizations and cooperatives as PVOs.  Cooperatives are a
special category of nongovernmental organizations that were formed to
provide business services and develop cooperatives in developing
countries. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

PVOs, working with local governmental and nongovernmental
organizations overseas, generally address food security at the
community or individual level.  PVOs engage in (1) food distribution
(known as direct feeding projects), which provides immediate access
to food and (2) selling (monetizing) commodities to generate local
currencies for other types of projects that address the primary cause
of lack of food security--poverty.  PVOs have developed considerable
expertise in handling food aid and have well-established distribution
networks in developing countries that enable them to provide aid to
remote areas.  Their use of food aid is generally consistent with
legislative requirements and objectives.  Although some losses are
still occurring, PVOs have taken steps to improve their management
and accounting for title II commodities. 

The impact of direct feeding projects on advancement toward national-
or community-level food security is not clear.  Economic, cultural,
and environmental factors beyond the control of a PVO may hamper a
nation's long-term food security.  At the community level, the
long-term impact of direct feeding projects depends on the projects'
design and implementation.  PVO and AID evaluations of some specific
direct feeding projects have shown some positive impacts on health,
nutrition, and income generation at the community or individual
level.  However, AID and the PVOs have not systematically collected
relevant data or developed appropriate methodologies to assess the
impact of food aid on food security.  According to AID, to do so, in
some cases, would be cost prohibitive and extremely difficult. 

PVOs have had difficulty targeting the most vulnerable populations,
and some projects serve people who may not be the least food secure. 
Food-for-work projects, usually directed at small, community-based
infrastructure improvements, seem to have the potential for improving
the community, as some beneficiaries reported significant
improvements in their lives.  However, some of the infrastructure
projects we reviewed did not include plans for sustainability. 


   PVOS' ROLE IN DISTRIBUTING FOOD
   AID HAS BEEN TO CONDUCT
   COMMUNITY-BASED PROJECTS
------------------------------------------------------------ Letter :3

PVOs have established a unique role in delivering nonemergency food
aid by working with local organizations to support community-based
projects.  Their food aid activities have evolved from primarily
charitable relief activities to projects aimed at alleviating poverty
and improving health, education, or community development.  These
activities are consistent with the legislative purposes of title
II--to alleviate the causes of hunger, disease, and death.  PVOs
distribute donated commodities to meet the immediate needs of poor
people or sell the commodities to generate local currencies to
support nonfood projects. 

PVOs have (1) proven experience in the complexities of food shipment,
storage, and distribution; (2) distribution networks in developing
countries; and (3) the ability to work with communities and local
nongovernmental organizations.  In fiscal year 1993, PVOs distributed
almost 1.2 million metric tons of U.S.-donated food aid, not
including emergency aid, to 58 countries.  PVOs sold about 13 percent
of the title II commodities in 1993 to generate currency to pay costs
associated with direct feeding projects and to conduct nonfood
projects.  For example, a project in Indonesia monetized 100 percent
of the donated commodities and used the local currencies generated
from the sale to support local cooperatives' efforts to expand export
of nontraditional crops such as vanilla and cinnamon.  A project in
Ghana used monetization funds to develop small palm-oil processing
operations that would enable beneficiaries to earn increased incomes. 

AID and PVOs are taking steps to improve the PVOs' track record in
accounting for title II commodities; however, problems remain. 
Evaluations of PVO projects by AID's Inspector General and others
have found instances of waste, mismanagement, and theft of
commodities. 


   IMPACT OF DIRECT FEEDING
   PROJECTS ON FOOD SECURITY
------------------------------------------------------------ Letter :4

The impact of direct feeding projects on community- or national-level
food security is not clear.  First, food security is a complex issue
that involves many factors, such as economic barriers, environmental
situations, and natural or man-made disasters.  Second, according to
AID officials and food aid policy experts, direct feeding programs
alone will not achieve long-term food security in a country where
national-level economic and social policy reform is needed.  In
addition, some food experts believe that long-term direct feeding
projects may create dependency, lessening the prospects for long-term
food security.  However, there is some evidence that at the community
level, direct feeding programs that are well-designed have the
potential to make small but important changes in the food security of
some communities and individuals.  For example, a well dug in a
food-for-work project in Africa provided clean water, which
beneficiaries reported had decreased the incidence of guinea worm
disease.  According to AID and PVO evaluations of specific projects,
some well-designed and well-implemented direct feeding programs
appear to enhance some food security indicators at the community or
individual level.  However, the impact of direct feeding projects at
the national level is less clear. 

Determining the effectiveness of direct feeding projects on enhancing
long-term food security relies on systematic evaluation, that is, the
application of appropriate evaluation methodologies and collection of
baseline data.  AID and PVOs have generally evaluated food aid
projects based on commodity management and outputs, such as numbers
of children fed or miles of road constructed, but have not assessed
the impact of their projects on long-term food security.  AID has
stated that it and the PVOs are fully committed to doing a better job
at evaluating the impact of food aid development projects on
long-term food security and are making progress in developing and
applying methodologies.\4


--------------------
\4 We are currently reviewing AID's progress in implementing the
recommendations made in our 1993 report and will issue a report in
early 1995. 


      TARGETING FOOD TO REACH THE
      MOST VULNERABLE TO
      MALNUTRITION IS DIFFICULT
---------------------------------------------------------- Letter :4.1

All projects we reviewed were designed to reach poor populations, but
not necessarily the people most vulnerable to hunger and
malnutrition.  We found targeting problems in each of the countries
we visited.  In Honduras and Ghana, large food aid programs served
major portions of the countries, and there was no process in place to
identify individuals who were the least food secure.  In Indonesia,
at least one food-for-work project employed workers that were not
necessarily food insecure.  We also found a slightly different
problem in Indonesia.  There were no PVO food aid projects in some of
the poorest areas of the country, including East Timor, in part
because of political reasons. 

Moreover, PVOs sometimes use food aid to support development
objectives not related to nutrition.  For example, in Honduras, the
primary purpose of school meals is to encourage attendance and
increase educational levels of the population.  All children in the
school receive a ration, even if they are not among the poorest. 
Similarly, a maternal and child health project we visited in
Indonesia provided food rations as an incentive for mothers to bring
their children to health centers for routine care.  The project did
not screen participants by nutritional status or degree of food
security. 


      FOOD-FOR-WORK PROJECTS CAN
      MAKE SMALL-SCALE
      IMPROVEMENTS IN
      INFRASTRUCTURE
---------------------------------------------------------- Letter :4.2

PVOs sometimes use food aid to support small-scale community and
infrastructure projects.  We found that small capital improvements
such as a well, latrine, or school, can make a significant
improvement in participants' lives.  For example, in a village where
a PVO had completed a food-for-work sewer project in Honduras,
residents reported fewer instances of malaria and dengue fever. 
However, planning for maintenance, which is critical to
sustainability of project benefits, has not always been part of the
PVOs' project designs. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :5

This report builds on the results of our recent work on food aid.\5
We conducted an extensive literature search on previous experience in
delivering food assistance through direct feeding programs and the
PVOs' development activities.  We interviewed officials from AID, the
Department of Agriculture, and food policy experts at the
International Food Policy Research Institute.  We also discussed food
aid objectives and projects with PVO representatives, including
Cooperative for American Relief Everywhere, Incorporated (CARE), and
Catholic Relief Services (CRS), the PVOs with the largest food
programs.\6

Overseas, we interviewed AID mission officials, World Food Program
officials, PVO representatives, and host country government officials
to discuss food security needs and the impacts of food aid projects. 
We visited project sites in Ghana, Honduras, and Indonesia to get
information on their objectives and how they might contribute to food
security.  When possible, we spoke with project beneficiaries. 

We chose to visit Ghana, Honduras, and Indonesia because they
represent a range of food security problems.\7 The case studies from
these three countries provide examples of how food aid is used in
direct feeding and monetization projects; however, the results cannot
be generalized to the entire title II program.  We discussed issues
related to controls over food aid with mission and PVO officials, but
we did not independently audit PVOs' food aid accounting and
management systems. 

Our review was performed from February to August 1994 in accordance
with generally accepted government auditing standards.  We did not
obtain formal comments on this report from AID.  However, we
discussed its contents with cognizant AID officials and have
incorporated their comments where appropriate. 

Appendix I includes more information on our analysis of the PVOs'
role in distributing food aid.  Appendix II summarizes information on
direct feeding projects and their impact on food security.  Appendix
III details the uses of food aid in the countries we visited. 


--------------------
\5 Food Aid:  Management Improvements Are Needed to Achieve Program
Objectives (GAO/NSIAD-93-168, July 23, 1993) and Foreign Assistance: 
Inadequate Accountability for U.S.  Donations to the World Food
Program (GAO/NSIAD-94-29, Jan.  28, 1994). 

\6 In fiscal year 1994, CARE and CRS made up roughly 72 percent of
the PVOs' regular title II programs, based on the approved commodity
amounts.  CARE's regular programs comprised 45.5 percent and CRS'
regular programs made up 26.2 percent of these commodities. 

\7 AID uses five basic indicators to establish a country category of
food security, including gross national product (GNP) per capita,
average daily per capita calories availability, under-5 mortality
rate, gross foreign exchange earnings, and gross domestic food
production.  On this basis, AID has classified Ghana as most food
insecure.  Honduras is classified as borderline food insecure, and
Indonesia is classified as relatively food secure. 


---------------------------------------------------------- Letter :5.1

We are sending copies of this report to the Administrator, AID, and
other interested congressional committees.  We will also make copies
available to others upon request. 

This report was prepared under the direction of Benjamin F.  Nelson,
Associate Director, International Affairs Issues.  If you have any
questions concerning this report, please call us at (202) 512-4128. 
Other major contributors to this report are listed in appendix IV. 

Sincerely yours,

Joseph E.  Kelley
Director-in-Charge
International Affairs Issues


PRIVATE VOLUNTARY ORGANIZATIONS'
ROLE IN DISTRIBUTING FOOD AID
=========================================================== Appendix I

The United States provides agricultural commodity assistance, or food
aid, to foreign countries to meet emergency needs, combat hunger and
malnutrition, encourage development, and promote U.S.  foreign policy
goals.  The Agricultural Trade Development and Assistance Act of
1954, as amended, widely known as Public Law 480, provides the
primary legal framework for food aid.  Title II of the act directs
that at least 76 percent of the legislated minimum amount of
commodities provided under that title go to support nonemergency
development activities of private voluntary organizations (PVOs) or
intergovernmental organizations, such as the World Food Program.\1
Commodities may be distributed to needy people or sold (monetized) in
the country to generate local currency to support development
activities. 

The 1990 Agricultural Development and Trade Act (title XV of
P.L.  101-624) made several changes in food aid, including
emphasizing the objective of enhancing the "food security" of needy
countries.  The legislation authorized PVOs to use food for a variety
of activities to achieve this objective, including addressing the
causes of malnutrition and disease, promoting economic development,
and promoting sound environmental practices.  Management of the title
II program is the responsibility of the Agency for International
Development (AID). 


--------------------
\1 This minimum allocation of commodities for nonemergency activities
may be waived by the Administrator of AID to meet emergency needs or
if the food cannot be effectively used.  The requirement has been
waived each year since fiscal year 1991 because of emergency needs
for food aid. 


   PVOS FILL DEVELOPMENT NICHE BY
   IMPLEMENTING GRASSROOTS
   PROJECTS
--------------------------------------------------------- Appendix I:1

PVOs implement grassroots-level projects using commodities and local
currencies generated from their sale.  They are responsible for
planning, organizing, implementing, controlling, and evaluating food
aid programs.  While major donors have tended to focus on creating a
policy environment conducive to sustained economic development, PVOs
generally focus their efforts on small development projects that will
have an immediate impact on poor populations at the local level. 

With the passage of Public Law 480 in 1954, PVOs began distributing
U.S.  food aid worldwide.  PVOs historically have provided food aid
through relief activities that were not designed for long-term
impact.  During the 1980s, AID encouraged PVOs to move from simply
distributing food to conducting development activities supported by
food aid resources.  Such projects may involve direct feeding of
beneficiaries or other types of development activities supported by
the proceeds from sale of the donated commodities. 

In fiscal year 1993, PVOs distributed about 1.2 million metric tons
of U.S.-donated food aid, not including emergency assistance, in 58
countries worldwide.  The Cooperative for American Relief Everywhere,
Incorporated (CARE) and Catholic Relief Services (CRS) are the major
PVOs distributing food aid.  Together, they distributed over 568,000
metric tons, or about half of the title II nonemergency food aid in
fiscal year 1993. 

PVOs generally do not dispense commodities to beneficiaries
themselves, but instead work with governmental or nongovernmental
organizations.  Over the years, PVOs have established networks of
local governments, local development organizations, churches, and
schools, among others, to dispense the commodities to beneficiaries
and conduct development activities.  This arrangement enables PVOs to
implement food aid programs that may be larger or more geographically
dispersed than otherwise would be possible. 

PVOs' work with local organizations also is designed to build the
in-country capacity to provide services or conduct development
activities.  For example, in Ghana, the Adventist Development and
Relief Agency (ADRA) works with the Ghanaian Forestry Department and
a local nongovernmental organization on a forestry project.  In
Honduras, CARE works through the Ministries of Health and Education,
and the National Social Welfare Board to operate direct feeding
activities for school feeding and maternal and child health programs. 
CARE also works with the local municipalities to improve municipal
infrastructure through its food-for-work project.  In Indonesia, CRS
works with several local nongovernmental organizations, notably one
local-level CRS counterpart in Lombok, which appeared economically
self-sufficient and had its own rural credit bank.  This
counterpart's officials indicated that it would continue development
work after CRS funding ended.  Appendix IV provides more specific
information about the PVOs' title II projects in the countries we
visited. 


   PVOS' FOOD AID PROJECTS ARE
   CONSISTENT WITH LEGISLATED
   PURPOSES
--------------------------------------------------------- Appendix I:2

Public Law 480 directs that PVOs use food aid provided under title II
to conduct activities to enhance the food security of people in
developing countries.  This goal is consistent with the goal of most
PVO overseas activities, that is, working to alleviate the hardships
caused by poverty, the primary cause of food insecurity. 

PVOs use food aid to support projects in many different development
sectors, including health, education, small business development, and
democracy building.  In the countries we visited, the PVOs supported
projects in health, education, environment, income generation, water
and sanitation, and others (see app.  III).  Figure I.1 shows
different sectors of development supported by food aid worldwide in
1993. 

   Figure I.1:  Sectors of
   Development Supported by U.S. 
   Food Aid for Fiscal Year 1993

   (See figure in printed
   edition.)

Source:  Food Aid Management, Directory of Food-Assisted Projects,
1993. 

PVOs have used food to support the following types of direct feeding
projects: 

maternal and child health projects that provide supplementary food to
children and pregnant and lactating women to ensure that they have an
adequate diet and to improve their nutrition;

food-for-work projects that provide take-home rations or on-site
meals to unemployed or underemployed individuals who participate in
community construction projects, such as building schools, roads, and
irrigation systems, or land improvement projects, including
reforestation or terracing; and

school feeding programs that provide meals to students to improve
their health, learning capability, attendance, and nutrition and to
adults who attend training courses. 

In addition, PVOs have distributed food through emergency programs to
provide relief to civilians displaced by wars, floods, famines, and
other man-made and natural disasters. 

Commodities supplied through title II nonemergency programs may also
be sold (monetized), and local currencies generated from the sale may
be (1) used to transport, store, or distribute commodities; (2) used
to finance development activities; or (3) invested, with the interest
earned used to support relief and development activities.  We found
at least one example of projects supported by selling 100 percent of
the title II commodities in each of the countries we visited:  a
palm-oil processing program in Ghana, a housing sanitation program in
Honduras, and a cooperative development program in Indonesia (see
fig.  I.2).  Many development officials told us that projects
supported by monetization may be preferable to direct feeding in some
cases because of (1) the difficulties of moving and storing food and
(2) concerns about dependency on donated food and detrimental effects
on local production.  In commenting on a draft of this report, AID
officials stated that AID is starting an evaluation of monetized
programs. 



(See figure in printed edition.)Figure I.2:  Furniture Cooperative in
Indonesia Supported by Title II Monetized Funds


      EFFORTS TO IMPROVE
      ACCOUNTING FOR COMMODITIES
------------------------------------------------------- Appendix I:2.1

Although PVOs work through local organizations to distribute food to
remote locations, they are accountable for ensuring that food is used
according to agreed-upon purposes.  PVOs have historically had
difficulty managing and accounting for title II commodities.  AID
Inspector General reports and other evaluations have identified
instances of food aid losses due to inadequate management controls,
theft, and fraud.  An association of nine U.S.  PVOs formed Food Aid
Management in 1989 with a grant from AID to improve the management
and accountability of food aid.  Among its activities, Food Aid
Management has developed PVO guidelines and operating standards such
as the Generally Accepted Commodity Accountability Principles.  In
addition, requirements for independent audits\2 have imposed more
discipline in managing food resources.  AID officials and development
experts agree that PVOs are making progress toward improving their
handling and accounting for commodities over the last decade. 

Despite these efforts, we reviewed documents indicating losses in
each country we visited.  For example, a 1991 AID Inspector General
audit report on the Ghana title II program noted evidence of theft,
but the auditors could not verify the extent of losses.  The audit
report stated that PVOs' loss reports to the mission were often
incorrect and their reporting systems did not account for losses
resulting from thefts.  In Indonesia in 1992, a case occurred in
which the U.S.  PVO counterpart could not account for
47 metric tons of rice.  The loss was attributed to malfeasance on
the part of the warehouse supervisor.  To attempt to prevent losses
from recurring, CRS introduced the end-use check function and
incremental improvements in their accountability systems.  The
Honduran title II program also experienced instances of losses and
difficulties in accounting for commodities. 


--------------------
\2 Office of Management and Budget Circular A-133, Audits of
Institutions of Higher Education and Other Nonprofit Organizations. 


IMPACT AND TARGETING OF DIRECT
FEEDING PROJECTS
========================================================== Appendix II


   IMPACT OF DIRECT FEEDING
   PROJECTS
-------------------------------------------------------- Appendix II:1

The impact of PVOs' direct feeding projects on food security at
either the national or community levels is uncertain.  Determining
the impact of PVOs' direct feeding projects involves complex
methodological issues.  Further, data on countrywide social
conditions that could be useful in constructing indicators of food
security, such as infant mortality and household income, are not
often readily available in developing countries.  (Evaluation is
discussed more fully on pp.  25-26.) According to food aid and
development experts, while food security is often affected by
national-level social and economic policies, PVOs' local development
activities supported by food aid can complement national-level
changes by providing assistance to the needy until economic growth
can raise incomes.  Mission officials in the three countries we
visited told us that direct feeding activities were a way to remedy
immediate needs, but were not sufficient to attain food security
without necessary policy reform.  Some well-designed and
well-implemented PVO direct feeding projects appear to enhance food
security at the community or individual level.  Beneficiaries of some
projects indicated that the projects have improved their lives. 

Some experts believe that food aid actually fosters dependency.  They
argue that at the national level, food aid enables governments to
divert resources to other priorities than feeding their populations
and may make it unnecessary for them to enact needed food policy
reforms.  Some critics of food aid also argue that the presence of
donated commodities acts as a disincentive to increased local food
production. 


      FOOD AID IN GHANA, HONDURAS,
      AND INDONESIA TO BE
      RETARGETED
------------------------------------------------------ Appendix II:1.1

In Ghana, Honduras, and Indonesia, we found that either the AID
mission or the PVOs were trying to phase out or retarget direct
feeding activities to improve the impact of food aid projects on the
people who are least food secure, without contributing to dependency. 
In Ghana, AID officials were assessing the need for continuing direct
feeding programs.  AID/Ghana officials told us that (1) direct
feeding projects were mismanaged and did not contribute to
development and (2) the Ghanaian government should only establish and
fund emergency or short-term relief programs to vulnerable groups. 
The Ghanaian Ministry of Agriculture's plans for achieving food
security do not include long-term continuation of PVOs' direct
feeding programs for persons not considered to be in a vulnerable
group, such as disabled persons, refugees, pregnant women, and
children.  The Ministry's plans focus instead on increasing food
production and raising the income of Ghanaians. 

Similarly, in Honduras, AID, CARE, and Honduran government officials
were reassessing the need for continuing direct feeding projects
because they asserted that the food security situation in the country
has not improved significantly over the 40 years of direct feeding
projects.  According to AID, CARE, and Honduran government officials,
the current direct feeding activities are too geographically
dispersed, and the projects have not always reached the most
vulnerable people.  In addition, AID and CARE officials noted the
long-term feeding programs may have created disincentives to local
food production.  CARE's planning documents indicate that the number
of projects should be reduced and the projects' objectives redefined
to target the most needy.  However, AID officials stated that direct
feeding activities or a direct subsidy of some sort is important for
the most vulnerable groups, such as malnourished children and rural
poor. 

Despite the pockets of food insecurity in Indonesia, AID/Indonesia
and CRS officials suggested that the food distribution program should
not continue because the country is relatively food secure. 
According to the mission director, the amounts of title II commodity
imports are relatively small and the impact of providing food to
Indonesia on a national level is insignificant.\1 Both AID and PVO
officials preferred to conduct development activities using funds
from monetization rather than continuing direct feeding projects. 


--------------------
\1 The 1993 title II allocation was about 10,000 metric tons of rice,
and the World Bank estimated that in 1991 Indonesia produced about 44
million tons of rice domestically. 


   DESIGN AND IMPLEMENTATION ARE
   IMPORTANT TO PROJECTS'
   LONG-TERM IMPACT
-------------------------------------------------------- Appendix II:2

How projects are designed, implemented, and maintained determines
whether direct feeding projects will have a long-term impact.  Among
the projects we reviewed, some appeared to have successfully met
their objectives.  In Ghana, for example, a PVO scholarship program
was successful in raising school attendance rates by providing
take-home rations as an incentive for parents to keep their children
in school, and a PVO cooperative in Indonesia, funded through sale of
commodities, had increased the incomes of participants. 

Other projects appeared to be less successful in meeting stated
objectives because of design and implementation problems.  For
example, implementors of maternal and child health projects that
provided dry rations that mothers took home to prepare could not be
sure that malnourished mothers and children consumed the food so that
their nutritional status was improved rather than sharing the food
with other family members.  Implementation was also a problem in a
maternal and child health project in Honduras.  Growth monitoring
varied among project sites and was inadequate in some cases, so the
PVO could not track whether the children's nutritional status
improved because of the food received.  In this case, the PVO's
project was designed to rely on persons that did not have the skills
to implement the project adequately.  For example, nearly all the
women who prepared meals and monitored children's growth at the
community centers had little or no formal education and so they had
difficulty keeping accurate records. 


      DIRECT FEEDING PROGRAMS
      GENERALLY TRY TO TARGET THE
      POOR
------------------------------------------------------ Appendix II:2.1

The direct feeding projects targeted the poor in the countries we
visited, and the beneficiaries receiving the food were generally
considered poor, but not necessarily the most vulnerable populations. 
The targeting of the food projects in the countries we visited varied
by type and objective.  School feeding projects provide meals to
students to improve their health, learning capability, attendance,
and nutrition.  The objective of the school feeding projects in
Honduras and Ghana was to increase school attendance, but the
projects had no specific nutritional objectives.  In Honduras, for
example, the schools that received the supplemental food were chosen
by region, not by the individual student's nutritional need.  Since
the goal was to increase attendance, the projects measured
attendance, not nutritional impact on the children.  Schools in 9 of
the
18 departments in Honduras were recipients of food aid through the
school feeding project, and the food was distributed to 3,800 schools
(see fig.  II.1).  CARE, the PVO managing the project, AID, and
Honduran officials are reassessing the program and redesigning the
projects to meet the food needs of the most vulnerable people, such
as pregnant and lactating women, and children under 6 years old. 



(See figure in printed edition.)Figure II.1:  School Feeding Project
in Honduras

Maternal and child health projects generally target children and
pregnant and lactating women because of their nutritional
vulnerability
(see fig.  II.2).  However, rather than having nutritional goals,
projects in all the countries we visited used food as an incentive
for mothers to bring children to health centers for inoculations and
preventive care.  In some projects, nutritional problems were not
criteria for participation.  For example, in Indonesia, according to
PVO and local officials, PVOs have established projects where the
government of Indonesia had not provided adequate health coverage. 
The community health centers used food as an incentive for women to
attend classes in nutrition and family planning.  According to
project officials, although the women served were poor, they were not
screened for nutritional status and were not necessarily the poorest. 
Maternal and child health projects sponsored by PVOs in Honduras and
Ghana provided food to poor mothers.  The Honduran project provided
food to persons who were not eligible under the project criteria,
according to a recent evaluation and local project officials.  PVO
officials told us the project in Ghana may not have served the
poorest mothers because they lacked the status to join the informal
socializing of mothers who came to the centers. 



(See figure in printed edition.)Figure II.2:  Maternal and Child
Health Direct Feeding Project in Honduras

In commenting on a draft of this report, AID said it recognizes, as
the PVOs do, that it is not always possible to reach the most
vulnerable groups in a society.  It also stated that

     ".  .  .the goal of food aid programs under Title II must be to
     assist the poor and hungry.  However, there are many factors
     which go into designing a successful sustainable development
     project.  For example, it is often essential that recipients
     bring some small personal resources to an activity, even if only
     their labor.  Some level of receptivity to change is usually
     important.  Simple access can be a problem in some countries. 
     All these factors make it difficult for a PVO to identify and
     target groups and individuals that are absolutely the most needy
     in a country."

Food-for-work projects are usually considered self-targeting to the
poorest because the work is difficult and wages are low.  The
objectives of food-for-work projects were generally to offer
short-term employment and improve infrastructure, such as roads or
sewers.  Rations are usually based on the amount and difficulty of
the work performed and are not usually calculated to improve
nutritional status for the workers and their families. 
Infrastructure improvement projects are based on the assumption that,
in addition to short-term employment provided through the project,
the workers benefit from community improvements. 

In most projects we visited, the participants were considered poor
but did not have to be among the most vulnerable populations to
participate.  For example, in Ghana, the food-for-work project
targeted seasonally employed agricultural laborers between harvests. 
In Indonesia, a food-for-work project was constructing a dam and an
irrigation system for a community that had not been served by the
government.  Although these villagers were not food insecure, rice
was provided in payment for labor.  Project officials said that the
workers could sell the rice and use this income to purchase other
types of foods.  However, the PVO did not track how the rice was
used. 


      INFRASTRUCTURE IMPROVEMENTS
      ARE USUALLY SMALL AND
      COMMUNITY-BASED
------------------------------------------------------ Appendix II:2.2

Food-for-work projects are usually small-scale, local infrastructure
improvement efforts.  For example, in Honduras, food-for-work
projects supported the construction of sewage lines, drainage
ditches, and sidewalk and street construction and repairs.  In Ghana,
water wells, latrines, and schools were completed, and in Indonesia,
food-for-work projects upgraded irrigation systems and built a small
dam. 

Although many of the infrastructure projects were small in scale, the
beneficiaries told us that the projects had significantly improved
their living conditions.  In Ghana, prior to the completion of a
well-digging food-for-work project (see fig.  II.3), the villagers
used unclean water from a river about 1 kilometer away from the
village.  One beneficiary told us that since the villagers had
started using the well water, the children's health had improved
greatly and the incidence of guinea worm disease had sharply
declined.  In Honduras, beneficiaries told us that the sewage and
drainage improvements kept the latrines from filling up during heavy
rains and reduced the incidence of malaria, dengue fever, and
illnesses among the children (see fig.  II.4). 



(See figure in printed edition.)Figure II.3:  Well Built by
Food-for-Work Project in Ghana



(See figure in printed edition.)Figure II.4:  Drainage Ditch Built by
Food-for-Work Project in Honduras

Many of the PVOs' infrastructure projects also produced results in
addition to the planned infrastructure.  For example, an Indonesian
dam and reservoir project enabled the local farmers to increase their
crop production from one crop of rice to two crops per year.  After
the dam was completed, the villagers not only increased their crop
production, but also used the reservoir for raising fish (see fig. 
II.5). 



(See figure in printed edition.)Figure II.5:  Dam Built by
Food-for-Work Project in Indonesia

In Honduras, a community project coordinator told us that besides
constructing a sewage drainage system, the community, with the PVO's
help, had resolved other problems with the municipality, such as land
titling, electricity, and water hook-up.  The coordinator did add,
however, that he had encountered problems keeping "trained" workers
(i.e., bricklayers).  The trained participants were able to get jobs
at the government public works program making over three times the
daily ration.  Although unplanned, one of the long-term impacts may
be enabling workers to get higher-paying jobs. 


      PLANNING FOR MAINTENANCE IS
      CRITICAL TO SUSTAINABILITY
------------------------------------------------------ Appendix II:2.3

Whether a project leads to improvements over the long term depends on
how well it is maintained.  If an infrastructure project is
well-designed, a maintenance plan is part of the project design.  We
saw evidence that some PVOs plan for maintaining projects.  For
example, in Indonesia, a PVO had assisted in the design and building
of a small dam.  The PVO helped the local nongovernmental
organization design a local maintenance fund and a plan for
maintaining the dam.  On the other hand, some PVO projects did not
include planning for the project's maintenance.  Project officials in
Honduras told us they had not completed a maintenance plan yet,
although the municipal infrastructure project providing food-for-work
had been ongoing for 4 years. 

Field site visits and past evaluations suggest that projects'
implementation can be improved.  For example, in Ghana, we observed a
food-for-work project where two wells were to be built; however, only
one well was completed.  The unfinished well, which was started in
1991, had collapsed during construction. 

PVOs' project evaluations we reviewed recommended several things that
PVOs can do to improve project design and implementation, such as the
following: 

Design the project on the community's perceived needs. 

Begin with an agreed-upon plan to phase out food-for-work in an area. 

Plan for project maintenance, including the constraints and possible
contingency actions. 

Increase the amount of money available for tools and other supplies
for construction. 

Provide better training for the local communities. 

Long-term impact of direct feeding projects also may depend on the
continuing support of the community or the recipient government.  We
saw projects where the PVOs had planned for the project's
maintenance, but the community had difficulties maintaining the
project as planned.  For example, in Honduras, one community
encountered problems with the drainage ditches, completed under a
food-for-work project, not draining properly.  According to PVO
officials, they had provided instruction to this community for
maintaining the ditches.  To maintain the proper drainage, residents
had to keep the ditches free of debris.  However, according to local
residents, not all of the residents had maintained the system
properly.  In Ghana, a PVO had assisted the community in digging a
well in 1991.  However, at the time of our visit in 1994, debris had
filled the holes in the well's sides where the water entered so that
the well had dried up.  According to PVO officials, although the
villagers had been taught how to unplug the well, the villagers had
not unplugged the holes and were instead waiting for the PVO or the
government to unplug the sides and make the well functional again. 
Without the well, the villagers were using a mountain stream that
during the dry season was considered unclean.  At the time of our
visit, no action had been taken to make the well operational. 

Some PVOs have been successful in overcoming some of these obstacles
to ensure long-term impacts of their projects.  In the three
countries we visited, we saw successful projects where PVOs have
encouraged village or community participation, used appropriate
technologies, provided education and training, planned for
sustainability, and strengthened local institutions. 


   DATA ON PROJECT IMPACTS LACKING
-------------------------------------------------------- Appendix II:3

As we reported in our 1993 report,\2 AID is implementing its food aid
programs without empirical evidence that they enhance food security. 
AID has not yet developed methodologies for measuring what the
long-term impacts of its food aid programs are or whether food aid is
an efficient method for achieving or sustaining the food security
objective.  Further, it has not gathered data to support its
assumptions about the positive long-term impacts of food aid
programs, even where an impact might be measurable. 

Until recently, AID and the PVOs' evaluations of direct feeding
activities have centered on improving management accountability for
the food resources.  Evaluations have measured outputs, such as the
number of children fed or miles of road paved, rather than the
project's impacts.  PVO officials agreed that baseline data measuring
the degree of food insecurity were not usually gathered.  Officials
from one PVO acknowledged that baseline data were available in only
about 15 percent of their food projects. 

In the three countries we visited, most PVOs' projects lacked
baseline data or recent evaluations, making it difficult to assess
the impact of the direct feeding programs on long-term food security. 
In Indonesia, the PVOs' most recent evaluations of the maternal and
child health and food-for-work programs were in 1989 and 1990.  In
Honduras, the PVOs' food-for-work and housing sanitation projects did
not have baseline data to measure the community's present situation
in order to demonstrate any future impact that these projects might
have.  In Ghana, the PVOs' food-for-work projects measured the number
of trees planted, schools built, and wells dug; however, the PVOs did
not assess the impact of these activities.  In a food-for-work
project in Ghana that built wells, the PVO tracked the number of
wells constructed.  However, the PVO does not generally follow up to
determine if after the well was completed the villagers had used it,
whether they maintained it, or whether it had collapsed. 

Discussions are underway between AID and the PVOs on what data to
collect and how to monitor and assess projects' impact.  For example,
a rapid appraisal assessment process is being tested that would
determine food security status in a cost-effective manner by
identifying and collecting a few key indicators.  In commenting on a
draft of this report, AID said that it agrees with our observation
that AID and the PVOs must do a better job evaluating the impact of
title II development projects, and it has taken steps toward
developing and applying methodologies.  Among other efforts, in
February 1994, AID circulated to PVOs a report that recommended means
for improving design and evaluation of title II programs; and in
spring 1994, a multidisciplinary team of PVOs and AID evaluation
experts conducted a comprehensive evaluation of the CARE India
project, the largest title II program in the world, with a goal of
more comprehensive assessment of impact.  According to food policy
experts, when such indicators are developed and tracked, PVOs will
have more than anecdotal evidence to evaluate a project's success. 


--------------------
\2 Food Aid:  Management Improvements Are Needed to Achieve Program
Objectives (GAO/NSIAD-93-168, July 23, 1993). 


CASE STUDY SUMMARIES
========================================================= Appendix III


   TITLE II FOOD AID IN GHANA
------------------------------------------------------- Appendix III:1


      FOOD NEEDS
----------------------------------------------------- Appendix III:1.1

AID's World Food Day Report classifies Ghana as food insecure.\1

More than one-third of Ghana's population faces some food insecurity
problems.  Some households, especially the urban poor, are food
insecure throughout the year, although for most households food
insecurity is mainly a seasonal occurrence.  Ghana's northern and
coastal savannah regions, particularly in certain remote areas of the
country, are the least food secure regions.  In contrast to several
other African countries where the diet is often only one or a few
staples, Ghana's food production and consumption pattern is widely
diverse and varies by region.  Ghana is self-sufficient in many of
the locally produced food crops, with the major exception of rice. 
Ghana imports about 50 percent of its rice. 

Key problems contributing to Ghana's food insecurity are poverty,
compounded by a poor distribution system, and the inefficient use of
resources.  Ghana's high annual population growth rate of 3.1 percent
adds to the country's food insecurity.  With an average income of
about $400 per year, in 1992, households spent an average of 49
percent of their income for food.  With a population of over 16
million, more than 36 percent of the population is chronically
malnourished.  Although Ghana's trend for total food production has
been positive since 1983, the extent of Ghana's food security is
still highly dependent on climatic conditions, such as droughts,
insects, and crop pests. 


--------------------
\1 AID uses five basic indicators for the reported countries,
including GNP per capita, average daily per capita calorie
availability, under-5 mortality rate, gross foreign exchange
earnings, and gross domestic food production. 


      PVOS' ACTIVITIES USING FOOD
      AID IN GHANA
----------------------------------------------------- Appendix III:1.2

Three PVOs received title II food in Ghana in fiscal year 1994:  CRS,
ADRA, and Technoserve.  CRS and ADRA both have direct feeding
programs and monetization programs.  Technoserve's title II program
sold (monetized) 100 percent of the donated commodities to generate
local currency for an income-generation project.  Table III.1
indicates the title II commodity amounts that AID has approved for
PVOs' nonemergency projects in Ghana.  The commodities approved for
Ghana were rice, bulgur, wheat soy blend, sorghum grits, and wheat. 



                         Table III.1
           
           Title II-Approved Nonemergency Projects
           for Sponsors in Ghana (Fiscal Year 1994)

                    (Dollars in thousands)

                          Metric       Commodity     Freight
Sponsor                     tons           value        cost
---------------------  ---------  --------------  ----------
ADRA
Food-for-work                981         $ 288.1     $ 122.6
Other                     10,559         1,514.7       819.9
============================================================
Subtotal                  11,540         1,802.8       942.5
CRS
Food-for-work                346            72.0        43.2
Maternal and child         1,946           519.6       243.3
 health
School feeding             1,005           209.0       125.6
Other                     12,063         1,769.4       972.4
============================================================
Subtotal                  15,360         2,570.0     1,384.5
Technoserve                8,000         1,080.0       600.0
============================================================
Total                     34,900     $5,452.7 \a    $2,927.1
                                                          \a
------------------------------------------------------------
\a Figures do not add due to rounding. 


         CATHOLIC RELIEF SERVICES
--------------------------------------------------- Appendix III:1.2.1

CRS established its mission in Ghana in 1956.  CRS's primary direct
feeding projects include maternal and child health activities;
institutional feeding (preschool and school lunch programs) and other
child feeding; farmer training; and general relief for disaster
victims, the elderly, and other vulnerable or needy groups.  The most
recent evaluation noted that in fiscal year 1990, CRS assisted about
160,000 beneficiaries using food aid in Ghana. 

In Ghana, CRS provides take-home rations to girls who enroll and
attend school.  CRS's premise is that educating females will reduce
poverty through greater economic opportunity, improve productivity of
women, and ease population pressure by delaying childbearing.  In
October 1991, CRS began collecting data to determine whether the
take-home rations were, in fact, increasing girls' enrollment and
attendance.  At the end of the second year, attendance at schools
providing rations was approximately 9 percent higher than attendance
at schools providing no rations. 


         ADVENTIST DEVELOPMENT AND
         RELIEF AGENCY
--------------------------------------------------- Appendix III:1.2.2

ADRA's involvement in the title II program in Ghana dates from
Ghana's 1983-84 food shortage.  In 1985, using the infrastructure it
had developed during the food shortage period, ADRA began
development-oriented activities.  ADRA's projects provide food
through the following activities:  agro-forestry (tree seedling and
food crop planting); school, latrine, and well construction; and
general relief to disaster victims, elderly, and other vulnerable or
needy groups.  According to the most recent evaluation, ADRA assisted
over 42,000 beneficiaries in Ghana in fiscal year 1990. 

Since 1988, ADRA has provided food-for-work as part of an
agro-forestry project in which selected rural communities plant tree
seedlings for later harvest and sale as firewood.  Another component
of the project is growing food crops on the same land that has been
cleared for planting trees, before the trees grow large enough to
shade the crops.  According to ADRA officials, these projects have
resulted in increased food harvests and income generation to farmers
through the sale of firewood.  According to AID officials, this
project did not promote sustainable development because the long-term
demand for firewood is declining due to the increased use of propane
gas and charcoal in Ghana. 


         TECHNOSERVE
--------------------------------------------------- Appendix III:1.2.3

Technoserve's monetization program in Ghana is intended to enhance
food security through agricultural income-generating activities. 
Technoserve has used monetization funds to assist rural businesses in
palm-oil processing and marketing, cereals marketing, and
nontraditional export development. 

In Ghana, Technoserve provides assistance and training to 18
cooperatives that are operating, or are in the process of installing,
village-based, fee-for-service palm-oil processing mills.  The mills
provide an alternative to state-owned mills that are located long
distances from producing areas and generally pay the producers very
little for their palm fruits.  The cooperatives provide rural
employment and income for farmers, processors, transporters, and
numerous others, enabling them to stay in their villages instead of
moving to urban areas in search of employment.  According to AID,
Technoserve's activities promote rural income generation and national
food security and offer innovative ways to effectively sustain
development programs in rural communities. 


         OTHER FOOD PROGRAMS
--------------------------------------------------- Appendix III:1.2.4

In addition to these PVOs, the World Food Program also has emergency
and nonemergency feeding programs in Ghana.\2 The World Food Program
activities include food-for-work projects for railway, port, highway,
and feeder road construction; supplementary feeding and nutritional
education projects; and emergency food distribution for Togolese
refugees. 


--------------------
\2 The World Food Program did not receive title II commodities for
Ghana programs in fiscal year 1994. 


   TITLE II FOOD AID IN HONDURAS
------------------------------------------------------- Appendix III:2


      FOOD NEED
----------------------------------------------------- Appendix III:2.1

According to the 1993 World Food Day report, Honduras is considered
borderline food insecure.  Problems contributing to food insecurity
include poor farming practices, as well as poverty, all leading to
insufficient diets and lack of sanitation.  The government of
Honduras has limited access to hard currency with which to purchase
food commercially.  Environmental degradation of the land from
traditional farming practices and deforestation has also produced
declining crop yields.  Honduras is a net importer of food crops,
especially in the basic commodities of corn, beans, and rice,
although its exports of nontraditional agricultural products have
increased. 

Honduras is considered one of the poorest countries in the western
hemisphere, with an estimated population of 5.4 million in 1993 and
1992 gross national product of $634 per capita.  According to AID,
approximately 62 percent of the Honduran population does not consume
the recommended caloric level per day.  Poverty has also contributed
to the lack of sanitation, which is one of the worst problems facing
Honduras.  Thirty-eight percent of the households lack appropriate
excreta disposal, and 36 percent do not have access to safe water. 
Honduras' poverty problem is aggravated by the rapid population
growth of about 2.8 percent per year. 


      PVOS' ACTIVITIES USING FOOD
      AID IN HONDURAS
----------------------------------------------------- Appendix III:2.2

CARE is the only U.S.  PVO conducting title II direct feeding
programs in Honduras.  The Cooperative Housing Foundation sold its
title II commodities to fund a project to improve housing sanitation. 
In addition to U.S.  food assistance, several other food aid donors,
including the World Food Program, have programs in Honduras.  Table
III.2 indicates the approved title II amounts for nonemergency
projects in Honduras in fiscal year 1994 by sponsor and project type. 
The approved commodities for Honduras included red beans, yellow
corn, corn soy masa flour, bulgur, vegetable oil, corn soya blend,
and wheat. 



                         Table III.2
           
           Title II-Approved Nonemergency Projects
            for Sponsors in Honduras (Fiscal Year
                            1994)

                    (Dollars in thousands)

                          Metric       Commodity     Freight
Sponsor                     tons           value        cost
---------------------  ---------  --------------  ----------
CARE
Food-for-work                808         $ 379.4      $ 88.7
Maternal and child         5,979         3,273.7       727.7
 health
School feeding             2,813           791.7       351.6
============================================================
Subtotal                   9,600         4,444.8     1,168.0
Cooperative Housing        3,000           405.0       225.0
 Foundation
World Food Program         4,800           647.3       377.5
============================================================
Total                     17,400        $5,497.1    $1,770.5
------------------------------------------------------------

         CARE
--------------------------------------------------- Appendix III:2.2.1

CARE's direct feeding activities in Honduras, administered through
the Ministries of Health and Education and the National Welfare
Board, include school feeding, maternal and child health, and urban
food-for-work projects.  CARE began working in Honduras in 1954 to
respond to the emergency needs of flood victims.  CARE/Honduras,
through its counterpart agencies, has developed an extensive direct
feeding program.  Through the Ministry of Education, CARE supplies
snacks to about 300,000 students and a school breakfast to about
2,300 students in primary schools throughout the country.  In its
maternal and child health projects, CARE works with (1) the Honduran
Ministry of Health to provide dry rations at 302 health centers with
44,000 beneficiaries and (2) the National Social Welfare Board to
provide daily meals to 72,500 beneficiaries at 1,100 on-site feeding
centers. 

CARE has been active in training local nongovernmental organizations
and strengthening its counterpart institutions so that the
responsibility for administering the school feeding and maternal and
child health projects can be transferred to the government of
Honduras.  The latest evaluation of the school feeding and maternal
and child health projects reviewed how well the counterparts were
able to administer the direct feeding activities.  It found that the
government counterparts must learn a variety of tasks, principally
administrative, in order to assume total management.  In addition,
this evaluation made several recommendations to promote greater
accountability and improve logistics.  In certain cases, the
management of the food itself has required the formation of village
groups, which have organized community activities, such as school
gardens, tree nurseries, and animal husbandry projects, all of which
helped to sustain local programs. 

CARE's Municipal Infrastructure and Technical Assistance project is
an urban sanitation and infrastructure food-for-work project in
northern Honduras.  The project provides technical assistance and
training to municipalities for improving basic services on a
cost-recovery basis.  The project targets urban communities
characterized by high rates of unemployment and limited public
services.  Project participants construct or improve basic
infrastructure, including potable water systems, storm and sewage
drainage, and sidewalk/street repairs within the participants'
community.  CARE has worked with the local communities and
municipalities to develop the skills to (1) improve local
infrastructure, (2) increase community participation, and (3)
strengthen the municipal governments' ability to provide basic
services.  CARE project staff have conducted workshops and on-site
training in administration, supervision, and construction techniques,
which CARE reported had improved teamwork and technical skills in the
community and municipal governments.  CARE also reported that the
infrastructure project completed 20 improvements, out of a target of
21, in 10 municipalities in fiscal year 1993.  These projects
included latrines, potable water systems, and sewage- and
water-drainage systems. 


         THE COOPERATIVE HOUSING
         FOUNDATION
--------------------------------------------------- Appendix III:2.2.2

The Cooperative Housing Foundation monetizes 100 percent of title II
commodities to fund a project to improve housing sanitation in
Honduras.  With the proceeds from the commodity sale, the Cooperative
Housing Foundation is expanding an ongoing sanitation and housing
improvement project.  These funds will be added to an existing
revolving fund through which local nongovernmental organizations'
activities make small loans to families for housing-sanitation
improvements, such as building a latrine, shower, or water storage
unit.  Although the sale of title II commodities had not been
completed when we were in Honduras, we observed housing improvements
completed through this project, and beneficiaries reported
improvements in sanitation.  The Cooperative Housing Foundation plans
to expand to other communities in Honduras by using the proceeds from
the commodity sale. 


         OTHER FOOD PROGRAMS
--------------------------------------------------- Appendix III:2.2.3

The World Food Program also receives title II funds and conducts
food-for-work and maternal and child health direct feeding activities
through the government of Honduras. 


   TITLE II FOOD AID IN INDONESIA
------------------------------------------------------- Appendix III:3


      FOOD NEED
----------------------------------------------------- Appendix III:3.1

AID considers Indonesia a relatively food secure country.  Since
1984, the country has maintained self-sufficiency in rice.  Indonesia
imports less than 10 percent of its rice needs and exports about
similar quantities.  Although Indonesia has reached food security on
a national basis, some regions still suffer from food insecurity
because of poor distribution and low income.  Some areas of Indonesia
have limited water supplies, poor agricultural practices, and suffer
from deforestation.  The northern and eastern islands, in particular,
have limited access to food supplies due to transportation, storage,
and distribution problems.  According to AID, poverty has declined
roughly 50 percent in Indonesia from 54 million in 1976 to an
estimated 27 million people in 1990.  However, about 15 percent of
the population remains below the poverty line.  AID/Indonesia
reported that a recent Indonesian government survey found that 30
percent of Indonesian villages are still poor.  AID estimates that
the average per capita income is about $600. 


      PVOS' ACTIVITIES USING FOOD
      AID IN INDONESIA
----------------------------------------------------- Appendix III:3.2

Three PVOs conduct Public Law 480 title II projects in Indonesia,
although only one PVO has a project with a direct feeding component. 
CRS manages both direct feeding and monetized development activities,
while the other two PVOs--CARE and the National Cooperative Business
Association (NCBA)--manage projects funded through monetization of
title II commodities.  In addition to the World Food Program, CRS has
been the only PVO to receive title II assistance since fiscal year
1989.  Table III.3 lists the approved quantities under title II
nonemergency programs for CRS and World Food Program projects in
Indonesia.  The commodities approved were rice, wheat, and wheat soy
blend.  Both CARE and NCBA operate their projects from the proceeds
of commodities sold in fiscal year 1989. 



                         Table III.3
           
           Title II-Approved Nonemergency Projects
            for Sponsors in Indonesia (Fiscal Year
                            1994)

                    (Dollars in thousands)

                          Metric       Commodity     Freight
Sponsor                     tons           value        cost
---------------------  ---------  --------------  ----------
CRS
Food-for-work              3,695        $1,662.8      $461.9
Maternal and child         1,555           634.0       194.4
 health
Other                      8,000         1,080.0       600.0
============================================================
Subtotal                  13,250         3,376.8     1,256.3
World Food Program         5,200           702.0       390.0
============================================================
Total                     18,450        $4,078.8    $1,646.3
------------------------------------------------------------

         CATHOLIC RELIEF SERVICES
--------------------------------------------------- Appendix III:3.2.1

CRS has been providing food assistance in Indonesia for over 30
years.  CRS manages its title II assistance in three program areas: 
(1) maternal and child health care, (2) food-for-work, and (3)
enterprise development.  Through local counterparts, CRS' maternal
and child health project supports improved health care for mothers
and children at health centers in poor, rural villages.  The project
uses food as an incentive for mothers to bring their children for
preventive care but claimed no nutritional goals.  In the health
centers we visited, participants were selected on the basis of income
and background (social and religious).  Project officials considered
the food incentive successful in improving health coverage.  They
told us that many more women participate in the health program than
those who have received food because word of the health services had
spread from those who receive the food supplement to other women of
the village.  In fiscal year 1993, the CRS counterparts conducted
health activities at
736 community health centers and served 42,291 participants. 
However, according to the project officials, this project did not
reach the poorest villagers because they could not afford
transportation to the village health center. 

The goal of CRS' food-for-work project is to improve income from
agricultural production.  Activities include (1) water resource
development projects, such as dams, reservoirs, irrigation systems,
and drainage canals; (2) soil conservation projects, such as
terracing; and (3) agricultural intensification, such as swamp
reclamation.  The food-for-work program completed 301 infrastructure
and agricultural projects in fiscal year 1993.  Improvements include
construction of drainage ditches, irrigation canals, terraced
farmland, 4 small dams, and over 891 hectares of new farmland opened. 
Over 122,900 recipients received rice rations. 

CRS' goal for the microenterprise project is to increase off-farm
income generation opportunities for the rural poor.  Through local
counterparts, CRS provides funds from monetized title II commodities
to establish local savings and loan networks for the rural poor. 
These projects focus on poverty alleviation, but not on food security
specifically.  Mission and CRS officials agree that the size of the
title II distribution program in Indonesia is too small to affect
national-level food security.  Nevertheless, CRS officials told us
that the title II program has had a positive impact on the local
level. 


         CARE
--------------------------------------------------- Appendix III:3.2.2

CARE has been working in Indonesia since 1967.  CARE currently
manages a water and sanitation project under a title II no-cost
extension until July 22, 1996.  With monetization proceeds, CARE
helps communities work together to design, organize, build, and
maintain village water and sanitation systems.  CARE provides
technical assistance on the design and construction of the systems. 
CARE also provides community training on (1) how to finance projects
through user fees and (2) health and hygiene education.  This project
was part of a community-based water and sanitation project funded
through AID/Washington called Water and Sanitation for a Healthier
Environmental Setting project, which ended in fiscal year 1991.  This
project increased rural communities' access to reliable and safe
water supplies and sanitation facilities. 


         THE NATIONAL COOPERATIVE
         BUSINESS ASSOCIATION
--------------------------------------------------- Appendix III:3.2.3

NCBA has managed two title II monetization projects during the last 5
years.  NCBA, through cooperative-building efforts, uses monetization
proceeds to expand Indonesia's nontraditional exports, such as
processed cinnamon, vanilla, and cocoa.  One project was designed to
improve the indigenous capacity to develop production and marketing
services for food crops, livestock, and fishery production.\3 The
project targeted small farmers who had the potential to increase
their production.  By the end of the project, in mid-1992, economic
activity developed under the project provided full-time employment to
about 11,000 people and part-time employment to an additional 5,000
people.  The other NCBA monetization project is designed to create a
cooperative that will provide financing for the agribusiness
sector.\4


--------------------
\3 The Cooperative Agribusiness Enterprise Development Project was
approved as a $2,838,194 title II monetization project. 

\4 This project, the Indonesia Enterprises and Trade Development
Project, was approved as a $4,629,770 title II monetization project. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

Ronald A.  Kushner, Assistant Director
Margaret Gaddy Morgan, Evaluator-in-Charge
Debra R.  Johnson, Senior Evaluator

EUROPEAN OFFICE

George A.  Taylor, Jr., Site Senior
Jodi McDade-Prosser, Evaluator

FAR EAST OFFICE

Dennis Richards, Site Senior
Kimberly M.  Gianopoulos, Evaluator

