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Press Statement on Food Aid Reform from the Alliance for Global Food Security
Date: April 4, 20 ! Director .(+)0.!* 1. /his statement is 0ritten in anticipation that 0hen President -bama submits his F1 20 4 2ud3et Re4uest to "on3ress on April 0th, he 0ill propose si3nificant chan3es in 56S6 food aid pro3rams, 0hich are bein3 called 7reforms. To truly fit the meaning of that word any such changes should reflect careful consideration of what the programs are intended to achieve, then discern what is working and what is not, and ultimately maintain the effective and proven elements of the programs, while also making room for innovation. In the case of food aid the Alliance believes the stakes are very high since the decisions will affect the lives of millions of vulnerable people6 2. 8e support 3reater fle&ibility and efficiency, but do not belie%e that effecti%e food aid pro3rams, Food for Peace and Food for Pro3ress, need to be dismantled or bypassed to achie%e that 3oal, 0hich 0e understand is part of the President9s proposal :see ;! belo0 . Improvements are needed and a range of program options are necessary !see "# below , but we must remember that the $nited %tates has the most comprehensive, transparent and responsive food aid system in the world !see "& below . %ome of the criticisms leveled at food aid border on hyperbole and overlook the improvements made over time and successful systems and program approaches that are now in place !see "' below . Thus, to assure we do not lose programs that are truly having a positive impact on people(s lives, we should be wary of claims that great sums will be saved and recipients will be better served by shifting all food aid funds to a fle)ible cash account !see "* below . +. 8e ha%e heard that the President 0ill as< "on3ress to eliminate fundin3 for Food for Peace :P$ 4.0= and Food for Pro3ress based on the rationale that the 3o%ernment should not ha%e to buy 56S6 food aid commodities because purchasin3 commodities o%erseas 0ould be more efficient and offer more pro3rammin3 fle&ibility6 As we understand it, the ,resident(s proposal woulda. .liminate funding for ,/ &01 Title II !21.& billion and 3ood for ,rogress !21#1 million programs. b. Transfer 21 billion of Title II funds to the International 4isaster Assistance !I4A Account for local5regional procurement, $.%. commodity procurement and cash transfers to local populations
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,age 2 during emergencies. Apparently, this would be in addition to I4A funds already used for those purposes, which totaled 2+#' million in 3? 2112. c. It would also transfer about 2211 million to the 4evelopment Assistance !4A Account to support a @8ommunity 7eliance and 4evelopment 3und that, similar to the current Title II development programs, would provide assistance to chronically hungry and poor communities, but would not provide food aid. This would be half the siAe of the current Title II development program and there would be no additional agricultural development programs to make up for the loss of 3ood for ,rogress. d. /astly, it would create a 2#' million contingency fund for emergencies and provide 22' million to a maritimeBrelated program as a partial offset for decreased use of $.%.Bflag vessels to carry Title II and 3ood for ,rogress cargoes. 46 /he 5nited States has many options for pro%idin3 food aid, includin3 pro%idin3 56S6 commodities and buyin3 food o%erseas and access to a %ariety of commodities and fortified food products, so pro3rams can be tailored to meet local needs6 a. The $.%. food aid procurement process includes an early warning system, regulariAed tenders to buy commodities through competitive bidding, an internetBbased system for monitoring orders and deliveries, and prepositioning of commodities overseas, which enables the $.%. Covernment to contain costs and provide a steady pipeline of appropriate commodities. i. 4uring the early phase of a crisis, the approach is to use I4A(s local5regional procurement for early response, then Title II commodities that are prepositioned overseas. 8ommodities destined for overseas prepositioning warehouses are often diverted on the high seas to an emergency before reaching the warehouse and can be the first food assistance to arrive. ii. After assessing the e)tent of the needs and the types and amounts of commodities needed, arrangements are made for a steady supply of food commodities from the $nited %tates. b. There is fle)ibility, now, to increase the amount used for local5regional procurement for emergencies from the I4A Account. 3or e)ample, despite the difficult budget climate, the amount used for those purposes increased from 22+2 million in 3? 2111 to 2+#' million in 3? 2112. c. 8ommodities from the $nited %tates are greatly needed since recipient countries do not produce enough food to meet their needs, with an estimated 12 million metric ton shortfall across the #1 most food insecure countries. Add to this poverty, poor infrastructure and recurring cycles of floods and droughts and it becomes sadly apparent why one out of every seven people has too little to eat. d. The $nited %tates offers a variety of commodities, allowing programs to be tailored to meet the needs of children under the age of two who participate in maternalBchild health and nutrition programsD to provide several different staple foods as payment for work on public works proEects during the lean months, when food supplies are lowestD and to increase availability of food in lowB income countries struggling with economic challenges and food deficits. Crains, rice, dry beans, peas and lentils, as well as readyBtoB use therapeutic and supplementary foods and fortified cereals and vegetable oils are available. *6 #%en thou3h the le%el of need is no less than it 0as in 2000, the amount of food aid pro%ided by the 5nited States has decreased by one)half6 /hus, a fundamental premise of food aid reform should be to maintain the fundin3 le%el, identify 0hat 0or<s and build on lessons learned > but the proposed chan3es miss the mar<6 a. The ,resident(s proposal would cut food aid by 2'#1 million by eliminating funding for nonB emergency programs. ;owever, evaluations of Title II programs show that, besides provided food aid commodities, developmental programs hit the trifecta F they uniGuely improve child nutrition, livelihoods and resilience in poor communities. 3oods for ,rogress programs transform agricultural systems through innovative, lowBcost technical assistance.

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,age + b. The proposal only seeks to offset +'K of that funding loss by adding 2211 million to the $%AI4 4A Account, and the fact remains that food aid would no longer be available as part of the assistance package or to fill food gaps in least developed and net foodBimporting developing countries. This is much less funding and much less fle)ible than what we have today. c. There may be a flawed analysis that led to this decision, which could actually make communities less resilient and more prone to insecurity and would also cut off an avenue for supporting countries with chronic food deficits. The Alliance would welcome a discussion with the Administration, 8ongress and other practitioners in this regard. i. <ust providing food aid in response to emergency needs will not help people overcome the hunger cycle. :ver half of emergency food aid is provided to the same regions for two years or more. ii. This is why Title II has a strong nonBemergency component to help areas that are prone to food crises build resilience and move beyond subsistence. iii. As an e)ample, the Title II .thiopian productive safety net program is praised for reducing food aid needs by 2111 million during the last drought through reforestation and terracing hillsides, construction of water catchments, the adoption of conservation farming and improved access to inputs and markets through cooperatives. iv. In low income African and Asian countries, 3ood for ,rogress has strengthened cocoa, coffee and dairy food systems, benefitting communities through higher incomes, economic growth and providing essential commodities that are in short supply. ,erhaps one of the most rewarding aspects is that even after the proEect is completed, income levels and the number of people benefiting continue to grow. d. 3rom an aid effectiveness and congressional accountability standpoint, once funds are shifted to I4A and 4A accounts, it is not possible to ensure that in the future they will continue to be used for the purposes stated in the ,resident(s budget proposal. Instead, it becomes a yearBbyByear process, eliminating the surety and oversight provided by the 3ood for ,eace Act and 3ood for ,rogress Act F both of which have statutory obEectives, publiclyBvetted guidelines, procedures and regulations and a track record. >hile we understand this is not the Administration(s intent, it is discernible, for e)ample, that with the many demands on the 4A Account and the e)tended humanitarian crises in %yria, ?emen, the ;orn of Africa, northern =ali and elsewhere, these funds could easily be diverted for other purposes. *. /he proposed food aid reforms are not necessarily more efficient6 a. .)perience shows that localBregional procurement, food vouchers and cash distribution are important options, but are not necessarily less costly or more efficient than providing $.%. commodities. i. 3or 3? 2112, the cost per metric ton for the I4A local5regional purchase program was 22,0+*, while the cost per metric ton for Title II emergency food aid was 21,100. L%eehttp-55www.usaid.gov5whatBweBdo5agricultureBandBfoodBsecurity5foodBassistance5GuickB facts5fiscalByearB2112BemergencyBfoodM ii. The independent evaluation of the USDA Local and Regional Food Aid Procurement Pilot Project found that, other than vegetable oils, buying locally or regionally was generally less costly per metric ton when compared to similar commodities provided under Title II, although it was not always possible to identify imported food aid for comparison. The 21 programs evaluated were small, averaging 22,&*#,I*# and total e)penditures over four years was 2*1 million. That pales in comparison with typical Title II e)penditures for emergency programs of 21.1 billion or more per fiscal year. Thus, while the pilot provided useful information about different methodologies, the findings cannot be used make assumptions about what would happen at scale. The researchers conclude- @The relatively small number of proEects, and the limited range of conte)ts in which they were observed, mean that the evaluation results do not necessarily represent /7, e)perience beyond the observed data. L%ee p. 2' of the study at- http-55www.fas.usda.gov5info5/7,K217eportK2112B1+B12K21T:K21,7IHT.pdfM
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,age & b. The Administration may still plan to buy some commodities from the $nited %tates, but from a cost accountability standpoint, it is critical to point out that smaller shipments are much more e)pensive. (6 /herefore, durin3 the appropriations and authori?ation :7Farm 2ill@= process, the Alliance proposes the follo0in3 alternati%es to the President9s food assistance reform proposal: a. =aintain the Title II program budget and food aid pipeline for addressing emergency and chronic needs and maintain the 3ood for ,rogress program for improving agricultural systems in countries implementing economic reforms. b. .nsure a minimum budget of 2&11 million for developmental Title II programs that focus on addressing the underlying causes of chronic hunger by building selfBreliance and improving nutrition, livelihoods, land and water conservation and agricultural productivity and marketing in crisisBprone communities, thereby reducing reliance on emergency food aid and making communities more resilient to humanitarian crises. c. Improve the efficiency of monetiAation programs by assuring that both the commodity and the funds generated from the commodity sales create value, essentially increasing the return per dollar spent. i. This is achieved by choosing a commodity that is needed to fill a food shortfall in the recipient country and that will also have other benefits that cannot be derived from direct cash funding, such as addressing credit or hard currency constraints that limit procurement of sufficient food supplies on the international market. L%ee pp.'B* of @The Value of Food Aid Monetization !enefit"# Ri"$" and !e"t Practice"# Informa .conomics, Hovember 2112 at http-55foodaid.org5news5wpBcontent5uploads521125115InformaB.conomicsB%tudyB9alueBofB 3oodBAidB=onetiAationBHovemberB2112.pdf M ii. And, as now, use the funds generated from commodity sales to support development activities that improve agricultural systems and food security. d. Allow a portion of 4evelopment Assistance funds !called the @8ommunity 4evelopment 3und to be used to support Title II development programs where monetiAation is not feasible or appropriate. e. ,rovide fle)ibility for emergency response by continuing to use the I4A account for cash transfers, food vouchers and regional procurement of emergency food aid. Increase those levels, as needed. f. .stablish a @developmental localBregional purchase program to build the capacity of small farmers and processors in food insecure areas of the developing world to improve the Guality, safety and Guantity of food aid for local programs. i. 8urrent impediments to local procurement of food aid include low productivity, insufficient and substandard food processing and poor postBharvest and warehousing systems. This results in limited supplies, poor Guality products and contamination !such as aflato)in contamination, a poison produced by fungi in the soil and that is prevalent and poorly controlled in many corn, peanut and sorghum growing areas of %ubB%aharan Africa . Alliance members are private voluntary organiAations and cooperatives that are committed to addressing hunger, malnutrition and food insecurity. They operate in over 111 developing countries, implementing emergency and development programs that build the capacity of local communities, enterprises and institutions. 3or further information, please see www.foodaid.org. B""B

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