> FOOD FOR PEACE (P.L. 480, Titles II and III)
>
> \[FORMERLY USAID HANDBOOK 9\]
>
> TABLE OF CONTENTS

LIST OF ACRONYMS

DEFINITIONS

PART I - AUTHORITY, RESPONSIBILITY, POLICY AND STRUCTURE

> Chapter 1 - Authority
>
> 1A. Statutory Authority
>
> l\. Title I - Trade and Development Assistance
>
> 2\. Title II - Emergency and Private Assistance
>
> 3\. Title III - Food for Development
>
> 4\. Section 416(b)
>
> 5\. Food for Progress
>
> 1B. Executive Order No. 12752
>
> 1C. USAID Regulation 11
>
> 1D. Delegations of Authority Nos. 401 and 902
>
> Chapter 2 - Allocation and Coordination of Responsibility
>
> 2A. Coordination
>
> 1\. Food Assistance Policy Council
>
> 2\. Food Aid Consultative Group
>
> 2B. Responsibilities
>
> 1\. General
>
> 2\. The President
>
> 3\. Office of Management and Budget
>
> 4\. Department of Agriculture
>
> 5\. Agency for International Development
>
> 6\. Cooperating Sponsors
>
> Chapter 3 - Policy
>
> 3A. Statutory Policy
>
> 3B. USAID Policy Determinations
>
> 3C. Title I - Trade and Development Assistance
>
> 3D. Title II - Emergency and Private Assistance
>
> 3E. Title III - Food for Development
>
> 3F. Local Currency
>
> 3G. Title V - Farmer-to-Farmer Program
>
> Chapter 4 - Structure and Objectives
>
> 4A. Introduction
>
> 4B. Title I - Trade and Development Assistance
>
> l\. Objectives
>
> 2\. Structure
>
> 3\. Operational Responsibility
>
> 4\. Procedures
>
> 4C. Titles II - Emergency and Private Assistance
>
> 1\. Objectives
>
> 2\. Structure
>
> 3\. When to Choose Title II
>
> 4\. Procedures for Requesting Title II
>
> 5\. Reference Materials
>
> 4D. Title III - Food for Development
>
> 1\. Objectives
>
> 2\. Structure
>
> 3\. When to Choose Title III
>
> 4\. Procedures for Requesting Title III
>
> 5\. Reference Materials
>
> 4E. Section 416(b)
>
> 1\. Objectives
>
> 2\. Structure
>
> 3\. Section 416(b) Operational Responsibilities
>
> 4F. Food for Progress
>
> 1\. Objectives
>
> 2\. Structure

PART II - TITLE II - EMERGENCY AND PRIVATE ASSISTANCE PROGRAMS

> Chapter 5 - Title II Program Components and Sponsors
>
> 5A. Objectives
>
> 5B. Types of Title II Programs
>
> 1\. Emergency Food Assistance
>
> 2\. Regular Title II Programs
>
> 5C. Cooperating Sponsors
>
> 1\. Types of Cooperating Sponsors
>
> 2\. Cooperating Sponsor Eligibility
>
> 3\. Cooperating Sponsor Agreements
>
> 4\. Documents of Transfer
>
> Chapter 6 - Title II Regular Program Development
>
> 6A. Preparation and Submission of Program Proposals
>
> 1\. Operational Plans or Multi-Year Operational Plans
>
> 2\. Multi-Year Operational Plan Updates
>
> 3\. Monetization Requests
>
> 4\. Section 202(e) Proposals
>
> 5\. Annual Estimate of Requirements
>
> 6B. Roles and Responsibilities
>
> 6C. Submission Timelines
>
> 6D. Review and Approval Process
>
> Chapter 7 - Emergency Programs
>
> 7A. Authority
>
> 7B. Introduction
>
> 7C. Early Warning and Food Needs Assessment
>
> 7D. General Definition of Emergency
>
> 7E. Early Warning and Food Needs Assessments
>
> 7F. Types of Emergency Programs
>
> 1\. Short-Term
>
> 2\. Long-Term or Complex
>
> 7G. Guidelines
>
> 1\. Program Support
>
> 2\. Options for Overcoming Time Constraint
>
> 7H. Preparation and Submission of Requests
>
> 1\. Initiation of Emergency Programs
>
> 2\. Program Approval Procedure
>
> 3\. PVO and Cooperative Requests
>
> 4\. Government and International Organization Requests
>
> 7H. Project Implementation Guidelines
>
> 1\. Monitoring
>
> 2\. Liaison with Cooperating Sponsor
>
> 3\. End-Use Examinations
>
> 4\. Reporting
>
> Chapter 8 - Title II Program Support
>
> 8A. Introduction
>
> 8B. Monetization Projects
>
> 1\. Definition
>
> 2\. Authority
>
> 3\. Program Guidelines
>
> 4\. Project Proposal Submission
>
> 5\. Mission Certification
>
> 6\. Reporting Requirements
>
> 7\. Reference Materials
>
> 8C. Section 202(e) Grants
>
> 1\. Authority
>
> 2\. Priorities and Restrictions in the Use of 202(e) Funds
>
> 3\. Grant Proposal Submission
>
> 8D. Institutional Support Grants
>
> 1\. Introduction
>
> 2\. Objectives
>
> 3\. Eligibility Criteria
>
> 4\. Grant Proposal Submission
>
> 8E. Other Resources Available
>
> 1\. Grants Reserved for Registered PVOs
>
> 2\. Grants Not Reserved for Registered PVOs
>
> Chapter 9 - Title II Program Implementation
>
> 9A. Introduction
>
> 9B. Responsibilitie
>
> 9C. Title II Commodities
>
> 1\. Commodity Selection
>
> 2\. Call-Forwards (Commodity Ordering)
>
> 3\. Commodity Shipment
>
> 4\. Commodities Borrowed, Transferred, Exchanged or Diverted
>
> 5\. Commodity Packaging
>
> 6\. Publicity
>
> 9D. Title II Management and Reporting
>
> 1\. Management Procedures
>
> 2\. Title II Reporting and Documentation
>
> 9E. Suspension, Termination and Expiration of Program
>
> 1\. Termination or Suspension by A.I.D.
>
> 2\. Termination or Suspension by Cooperating Sponsors
>
> 3\. Expiration of Program
>
> Chapter 10 - Commodity Losses, Damage and Claims
>
> 10A. Introduction
>
> 10B. Prior to Loading on Ocean Vessel
>
> 1\. Fault of Cooperating Sponsor
>
> 2\. Fault of Others
>
> 10C. Marine (Ocean Carrier) Claims
>
> 1\. Responsibilities
>
> 2\. Survey and Outturn Reports
>
> 3\. Claims Against Ocean Carriers
>
> 10D. Inland Claims
>
> 1\. Surveys on Shipments to Landlocked Countries
>
> 2\. Reporting Losses to USAID or Diplomatic Posts
>
> 3\. Claims
>
> 10E. Disposition of Unfit Commodities
>
> 1\. Prior to Delivery
>
> 2\. After Delivery
>
> Chapter 11 - The World Food Program
>
> 11A. Structure
>
> 11B. Objectives
>
> 11C. Resources
>
> 11D. Types of World Food Program Assistance
>
> 11E. Guidelines
>
> 11F. Request and Approval Procedures
>
> 11G. U.S. Government Responsibilities and Coordination
>
> 1\. Appraisal of Requests for World Food Program Assistance
>
> 2\. Mission Liaison with World Food Program Representatives
>
> 3\. Implementation of U.S. Commodity Shipments

PART III - FOOD FOR DEVELOPMENT (P.L. 480, TITLE III)

> Chapter 12 - Title III Program Development
>
> 12A. Objectives
>
> 12B. Eligibility Criteria
>
> 1\. Poverty Criteria
>
> 2\. Food Deficit Criteria
>
> 3\. A.I.D. Priority Determinations
>
> 12C. Employment of Title III Resources
>
> 1\. Considerations in Program Formulation
>
> 2\. Direct Feeding
>
> 3\. Emergency Food Reserves
>
> 4\. Sale of Commodities
>
> 5\. Support of Indigenous Non-Governmental Organizations
>
> 6\. Endowment Programs
>
> 12D. Title III Program Planning
>
> 1\. Mission Responsibilities
>
> 2\. Financial Planning
>
> 3\. Cooperating Country Performance Requirements and Restrictions
>
> 4\. Amendments
>
> 5\. Single-Year Agreements
>
> 12E. Title II Program Proposal Components
>
> 1\. Executive Summary
>
> 2\. Program Description
>
> 3\. Program Justification
>
> 4\. Program Implementation
>
> 5\. Monitoring and Evaluation Arrangements
>
> 6\. Audit Plan
>
> 7\. Illustrative Annexes
>
> 8\. AID/W Review and Approval Process
>
> 9\. Submission Timing of Title III Proposals
>
> Chapter 13 - Title III Program Implementation
>
> 13A. General Management Responsibilities
>
> 13B. USAID Management Considerations
>
> 1\. Signing of Agreement
>
> 2\. Procurement and Shipping Schedules
>
> 3\. Payment of Freight Costs
>
> 4\. Sales Transactions
>
> 5\. Use of Private Sector in Sales Program
>
> 6\. Determining Sales Price
>
> 7\. Local Currency Deposits and Expenditures
>
> 8\. Indigenous NGOs and Endowments
>
> 9\. Monitoring of Local Currency Use
>
> 10\. Balance of Payments Support
>
> 11\. Direct Feeding
>
> 12\. Emergency Food Reserves
>
> 13\. Performance Indicators and Reports
>
> 13C. Cooperating Country
>
> 1\. Prior to Arrival
>
> 2\. Taking Delivery
>
> 3\. Damage, Loss or Excess Stocks
>
> 4\. Exemption from Duties and Taxes
>
> 5\. Separate Account for Sales Proceeds
>
> 6\. Monitoring and Use of Local Currencies
>
> 7\. Balance of Payments Support
>
> 8\. Direct Feeding
>
> 9\. Emergency Food Reserves
>
> 10\. Records and Reporting
>
> 11\. Audits
>
> 12\. Statutory Restrictions

PART IV - AUDITS AND EVALUATIONS

> Chapter 14 - Audits
>
> 14A. Introduction
>
> 14B. Title II - Emergency and Private Assistance
>
> 1\. Audit Requirements
>
> 2\. Audit Purposes
>
> 3\. Planning
>
> 4\. Implementation and Monitoring
>
> 5\. Evaluation and Audit
>
> 6\. Suspension, Termination and Expiration
>
> 7\. A.I.D. Inspector General Audits of Cooperating Sponsors
>
> 14C. Title III - Food for Developmen
>
> 1\. Audit Requirements
>
> 2\. Audit Purposes
>
> 3\. Planning
>
> 4\. Implementation and Monitoring
>
> 5\. Evaluation and Audit
>
> 6\. Suspension, Termination and Expiration
>
> Chapter 15 - Monitoring and Evaluation
>
> 15A. Legislation and Policy
>
> 15B. Monitoring
>
> 15C. Evaluations
>
> 15D. Data Requirements for Evaluation
>
> 15E. Title II Programs
>
> 1\. Monitoring
>
> 2\. Evaluations
>
> 15F. Title III Programs
>
> 1\. Monitoring
>
> 2\. Evaluations

PART V - APPENDICES, EXHIBITS AND REFERENCES

> Appendix A Agricultural Trade Development and Assistance Act of 1954,
> as amended (P.L. 480) \[RESERVED\]
>
> Appendix B Regulation 11 \[RESERVED\]
>
> Appendix C World Food Program Supplement (as amended) to Transfer
> Authorization
>
> Appendix D Executive Order 12752 \[RESERVED\]
>
> Appendix E Delegations of Authority \[RESERVED\]
>
> Appendix F Instructions to Voluntary Agencies and Intergovernmental
> Organizations Concerning the Filing, Pursuit, Adjudication and
> Collection of Ocean Transportation Claims Arising from Shipment of
> Title II and Title III, Public Law 480 Commodities, Food for Progress
> Program Commodities, and Section 416 Program Commodities
>
> Appendix G Instructions to All Voluntary Agencies and
> Intergovernmental Organizations Concerning the Documentation
>
> Requirements of Section 416(b) Regulation, AID Regulation 11, and
> Applicable Program Agreements as they Apply to the Discharge of Title
> II and III, Public Law 480 Commodities, Section 416 Program
> Commodities and Food for Progress Program Commodities
>
> Appendix H Title III Model Agreement Format \[RESERVED\] Exhibits:

Exhibit A Title II Transfer Authorization

> Exhibit B Food for Peace Program Agreement
>
> Exhibit C Annual Estimate of Requirements and Instructions for
> Completion
>
> Exhibit D Commodity Status Report Exhibit E Recipient Status Report
>
> Exhibit F Sample Report of Loss, Damage or misuse of Commodities
>
> Exhibit G Bill of Lading
>
> References Available from USAID/W - PPC/CDIE/DI/DISC (Document Locator
> Number)
>
> Reference 1 Food for Peace, PL 480, Title II
>
> Reference 2 Monetization Field Manual (PN ABB 486)
>
> Reference 3 A Manual for Food Needs Assessment (PN ABB 175)
>
> Reference 4 Food Aid Management Plan for USAID Missions (PN ABK 424)
>
> DEFINITIONS
>
> Lists of definitions of terms, phrases, and abbreviations as used in
> the Title II handbook.

Terms and Phrases

> Activity An arrangement for the utilization of Title II commodities
> under an approved project, in which each party to such arrangement
> (cooperating sponsor, host country government, local entity, food
> recipients) provides his/her agreed input and exercises his/her
> rights.
>
> Agreements The Food for Peace agreement between the cooperating
> sponsor and the U.S.Government. In most instances, the cooperating
> sponsor is a U.S. voluntary agency or an intergovernmental
> organization; e.g., UNICEF.
>
> AID The Agency for International Development or any successor agency.
>
> Bill(s) of
>
> Lading (B/L) A receipt for cargo signed by the vessel\'s master and
> used as a document of title to the goods by the shipper.
>
> Child Feeding The category of feeding programs and projects designed
> to reach women of child bearing age, infants, and children up to the
> age of 6. Child Feeding Programs include Maternal/Child Health and
> other child feeding programs and projects including, Preschool Child
> Feeding, institutionalized and noninstitutionalized programs.
>
> Commodities Food, transferred or available for transfer to cooperating
> sponsors under the P.L. 480 legislation.
>
> CCC
>
> The Commodity
>
> Credit Corporation, a corporate agency and instrumentality of the
> United States within the U.S. Department of Agriculture.
>
> Cooperating Sponsor Refers to the foreign government, the U.S.
> registered voluntary agency, or the intergovernmental organization
> which enters into an agreement with U.S. Government for the use of
> P.L. 480, Title II, agricultural commodities and/or funds (including
> local currencies).
>
> Coordinating Council A voluntary organization made up of
> representatives from the U.S. voluntary agencies in a foreign country.
>
> Consular Invoice An invoice prepared on a special form obtained from a
> foreign government and signed by its official to secure the
> importation of goods into that country.
>
> Container(s) The bag, box, can or other receptacle in which Title II
> commodities are packaged in the United States or repackaged elsewhere.
> It does not refer to receptacle(s) provided by carriers to accommodate
> logistics or special handling; e.g., containerization.
>
> Counterpart An entity, indigenous to the country in which a Title II
> program is conducted, which is associated with and is sometimes
> sponsored by the cooperating sponsor in the implementation of an
> approved Title II feeding program.
>
> Country Team The Country Team is headed by the Chief of Diplomatic
> Mission. Its membership for Title II activity includes the principal
> officer or his/her designee of each affected U.S. Government agency
> within the country.
>
> Delivery Survey Report The same as a Discharge Survey Report except
> that it covers the cargo when cleared through customs and/or port
> authorities or other jurisdictions, when applicable, to the point
> where custody is taken by the cooperating sponsor. (See AID Regulation
> 11, Sections 211.9(e) (1), 211.9(c)(1)(i), 211.9(c)(1)(v).
>
> Diplomatic Posts Office of the Department of State located in foreign
> countries, and may include Embassies, Legations, and Consular offices.
>
> Disaster Relief Organizations which are authorized by AID/W, a
> Organizations Mission, or by a Diplomatic Post to assist disaster
> victims.
>
> Disaster Victims Persons who, because of natural or manmade disaster,
> or extraordinary relief requirements, are in need of assistance.
>
> Discharge Survey A report prepared by an independent commercial firm
> based on a thorough examination of the cargo when it is discharged
> from the vessel at the destination port. Contains an accounting of the
> quantity discharged in sound and in damaged condition with details
> relating to the nature and extent of the damaged, as well as the
> probable cause of damage.
>
> Displaced Persons Persons in need because they fled from their homes
> as a result of civil strife and are living in a part of their country
> of nationality or residence other than that in which they normally
> earned a livelihood.
>
> Distributing Agencies Welfare agencies, disaster relief organizations,
> and public or private agencies which are sponsored by, and responsible
> to, the cooperating sponsor for handling commodities within the
> cooperating sponsor\'s distribution system.
>
> Distribution Centers The place for which commodities are issued to
> eligible recipients for consumption elsewhere (usually the
> recipient\'s home).
>
> End of Ship\'s Tackle This term indicates the point at which
> responsibilities for cargo may change to or from the carrying vessel.
> It generally refers to that point in operations where the cargo is
> picked up or placed at the vessel\'s side.
>
> Feeding Center The place where food is prepared and served to and
> consumed by a group of eligible recipients.
>
> Food for Peace The term used to describe the program authorized by the
> Agricultural Trade Development and Assistance Act of 1954 (P.L. 480),
> as amended.
>
> Food For Peace Officer Advises and assists Mission and counterpart
> personnel
>
> (FFPO) on P.L. 480 matters, and is responsible for Title II projects
> and activities. An FFPO may be assigned Regional responsibilities.
>
> Friendly Country A Country which is not \"\...dominated or controlled
> by a foreign government or organization controlling a world communist
> movement.\"
>
> General Average An ocean shipping term for the principle that both the
> vessel and its cargo share the risk of the voyage and that damage
> beyond the control of the vessel is shared by the owners of the
> surviving cargo. (See Handbook 15, Chapter 8E.)
>
> Home Office Principal office of the U.S. voluntary agency or
> intergovernmental organization.
>
> Institutions Non-penal, public, or nonprofit private establishments
> that are operated for charitable purposes.
>
> Intergovernmental Agencies sponsored and supported by the United
> Organizations Nations Organization (except the World Food Program)
> which is referred to as an intergovernmental activity) or by two or
> more nations, one of which is the United States of America.
>
> Maternal/Child Health MCH programs are those designed to provide one
> or more health related (MCH) service(s) to women of childbearing age
> and children under the age of 6. Such programs may integrate several
> services to include, inter alia, medical care, feeding, nutritional
> education, family planning, etc.
>
> Maternal Child Health Food distribution projects, preferably a segment
> of a definite (MCH) Feeding Program MCH program, in which women of
> childbearing age and infants up to one year old are the principal
> clients.
>
> Mission U.S. Government office in a foreign country which is
> responsible for AID\'s administration of Title II projects in the
> recipient country. It refers to an AID Mission or other AID country
> organization (see HB 17, Ch. 4).

Mission Director The Director of a Mission or, in the absence of a
Mission, an AID Representative, or the principal officer of the
Diplomatic Post.

> Nonprofit Means that the residue of income over operating expenses
> accruing in any activity, project, or program is used solely for the
> operation of such activity, project, or program.
>
> OMB Office of Management and Budget
>
> Other Child Feeding A feeding program designed to reach needy children
> in institutions Programs or other child feeding facilities with the
> child as the only client.
>
> Regulation In this Handbook \"The Regulation\" refers to AID
> Regulation 11, as amended, which is included as Appendix C.
>
> School Feeding Programs Programs conducted for the benefit of children
> under the age of 14 years enrolled in schools receiving formal
> education through the equivalent of the U.S. primary school.
>
> Sponsor Refers to the entity with which the U.S. Government enters
> into an agreement involving the use of Section 204, P.L. 480, funds. A
> sponsor may or may not be a cooperating sponsor.
>
> Staff Those persons who serve on a paid or volunteer basis as
> supervisors, managers, teachers, auditors, accountants, nutritionists
> or dietitians, cooks, dishwashers, janitors, or other persons who
> serve in some capacity in the management or operations of a central
> facility engaged in Title II food distribution.
>
> Third Party An entity or individual other than the U.S. Government or
> the cooperating sponsor who has assigned or contractual
> responsibilities for some aspect of an approved Title II feeding
> program, project or activity.
>
> Transfer The Food for Peace agreement between a specified
> Authorization (TA) cooperating sponsor(s) and the U.S. Government.
> Generally, Transfer Authorizations constitute government-to-government
> agreements.

USDA The U.S. Department of Agriculture.

> Voluntary Agency Refers to any voluntary nonprofit agency registered
> with, and approved by, the Agency for International Development.
>
> CFA The Committee on Food AID Policies and Programs is the governing
> body that provides general guidance on the policy, administration, and
> operation of the WFP. It, also, helps evolve and coordinate short-term
> and longer term food-aid policies recommended by the World Food
> Conference.
>
> World Food Program An intergovernmental activity sponsored by the
> United Nations and the Food and Agriculture Organization and supported
> through contributions of commodities, services, and funds by donor
> countries.

World Food Program The agreement between the World Food Program and

> Transfer Authorization the U.S. Government, as amended, which
> authorizes the transfer of Title II commodities to the World Food
> Program.
>
> **CHAPTER 1 AUTHORITY**
>
> 1A. Statutory Authority
>
> The Agricultural Trade Development and Assistance Act of 1954, as
> amended, or Public Law 480 (P.L. 480), is the primary statutory basis
> for the Food for Peace Program. In enacting the legislation, Congress
> declared it to be the policy of the U.S. to use its abundant
> agricultural productivity to promote the foreign policy of the U.S. by
> enhancing the food security of the developing world through the use of
> agricultural commodities and local currencies accruing under this Act
> to combat world hunger and malnutrition and their causes; promote
> broad-based, equitable and sustainable development; expand
> international trade; develop and expand export markets; and foster and
> encourage the development of private enterprise and democratic
> participation in developing countries.
>
> 1\. Title I - Trade and Development Assistance
>
> Title I provides for the sale of agricultural commodities to
> developing countries for dollars on credit terms, or local currencies.
> This program is implemented by the Secretary of Agriculture, who is
> granted the authority to negotiate and execute agreements with
> developing countries to finance the sale and exportation of
> agricultural commodities to such countries.
>
> 2\. Title II - Emergency and Private Assistance
>
> Title II establishes a program to provide agricultural commodities to
> foreign countries to (a) address famine or other urgent or
> extraordinary relief requirements; (b) combat malnutrition, especially
> in children and mothers; (c) carry out activities that attempt to
> alleviate the causes of hunger, mortality and morbidity; (d) promote
> economic and community development; (e) promote sound environmental
> practices; and (f) carry out feeding programs. The Administrator of
> the U.S. Agency for International Development (USAID) administers the
> program.
>
> 3\. Title III - Food for Development
>
> Title III establishes a program under which agricultural commodities
> are to be donated to least developed countries. The revenue generated
> by the sale of such commodities in the recipient country may be
> utilized for economic development activities. The Administrator of
> USAID is authorized to negotiate and execute Title III agreements with
> least developed countries which will provide commodities to such
> countries on a grant basis.
>
> 4\. Section 416(b)
>
> Section 416(b) of the Agricultural Act of 1949, as amended, authorizes
> the Secretary of Agriculture to make overseas donations of
> agricultural commodities acquired through Commodity Credit
> Corporation\'s price support to developing and friendly countries.
>
> 5\. Food for Progress
>
> The Food for Progress Act (Section 1110 of the Food Security Act of
> 1985, as amended) authorizes the use of Title I and Section 416
> resources to assist emerging democracies and developing countries that
> are committed to introducing or expanding free enterprise elements in
> their agricultural economies. The Secretary of Agriculture implements
> the program.
>
> 1B. Executive Order No. 12752
>
> Executive Order 12752 was signed by President George Bush on February
> 25, l991 to implement P.L. 480 and the Food for Progress Act. The
> Executive Order established programs under Title I, Title II and Title
> III, and delegated authority for implementation of Title I to the
> Secretary of Agriculture and Titles II and III to the Administrator of
> USAID.
>
> To ensure policy coordination of assistance provided under P.L. 480
> and the Food for Progress Act, a Food Assistance Policy Council
> comprised of senior representatives of the Department of Agriculture,
> USAID, the Department of State and the Office of Management and Budget
> was established. The consultation about commodities available under
> Section 401(a) of P.L. 480 is undertaken through this Council, and the
> Council prepares the annual report required under Section 407(g).
>
> Responsibility for determination of human rights violations is
> delegated to the Secretary of State. Responsibility for submission of
> an annual World Food Day report assessing progress toward food
> security in each country receiving U.S. food assistance is delegated
> to the USAID Administrator. The authority to waive payments of
> principal and interest due under Title I dollar sales agreements is
> delegated to the Secretary of Agriculture, in consultation with the
> Council and the Department of the Treasury. The authority to transfer
> up to 15 percent of funds available in any fiscal year from one title
> of the Act to any other title is delegated to the Director of the
> Office of Management and Budget, in consultation with the Council.
>
> The authority to administer Title V - Farmer-to-Farmer Program (FTF) -
> is delegated to the Administrator of USAID.

Authority for the Food for Progress Act is delegated to the Secretary of
Agriculture.

1C. A.I.D. Regulation 11

> USAID regulation entitled \"Transfer of Food Commodities for Use in
> Disaster Relief and Economic Development and Other Assistance\"
> (Regulation 11) (22 C.F.R. part 211) prescribe the terms and
> conditions governing the transfer of agricultural commodities to
> foreign governments, voluntary agencies, and intergovernmental
> organizations (except the World Food Program) under P.L. 480, Title
> II, as amended.
>
> 1D. Delegations of Authority Nos. 401 and 902
>
> Delegation No. 401 assigns to USAID/W-AA/Bureau for Management (M) the
> contract functions related to procurement of ocean transportation
> services and the authority to sign grants and cooperative agreements
> to implement the P.L. 480, Farmer to Farmer (FTF) program.
>
> Delegation No. 902 assigns all other food aid responsibilities to the
> following:
>
> For P.L. 480, Title II programs - the USAID/W-Bureau for Humanitarian
> Response (BHR) has the responsibility for these activities; and the
> USAID/W-Regional Bureaus, with BHR clearance, has responsibilities for
> P.L. 480, Title III activities. These are (a) authorization of the
> donation of agricultural commodities; (b) negotiation, execution and
> implementation of donation agreements in accordance with the terms of
> the authorization; (c) amendment of any authorization and of any
> donation agreement; and (d) findings, determinations and actions
> required under Title IV of P.L. 480 that relate to donations and
> agreements for specific countries and the terms and conditions
> thereof.

CHAPTER 2

> ALLOCATION AND COORDINATION OF RESPONSIBILITY
>
> 2A. Coordination
>
> 1\. Food Assistance Policy Council
>
> Under Executive Order No. 12752 of February 25, 1991 the President
> established the Food Assistance Policy Council to ensure effective
> interdepartmental policy coordination in food assistance programs
> among the Department of Agriculture (USDA), USAID, the Department of
> State, and the Office of Management and Budget (OMB). The Council is
> to advise the President on appropriate policies under the Agricultural
> Trade Development Act of 1954 (P.L. 480), as amended, the Food for
> Progress Act of 1985, and Section 416(b) of the Agricultural Act of
> 1949, as amended. (Although not mentioned in the Executive Order,
> Section 416(b) itself states that assistance will be coordinated
> through P.L. 480 mechanisms).
>
> The Council is made up of senior representatives of USDA, OMB, the
> Department of State and USAID. The Deputy Administrator represents
> USAID. Meetings of the Council shall be called by the Secretary of
> Agriculture or can be requested by any of the senior representatives.
>
> 2\. Food Aid Consultative Group
>
> Under Section 205 of P.L. 480, the Food Aid Consultative Group was
> established to regularly review the effectiveness of regulations and
> procedures governing emergency and private food assistance programs
> being implemented under Title II. It can also address other issues
> under Title II which involve private voluntary organizations (PVOs),
> cooperatives or indigenous non-governmental organizations (NGOs).
>
> The USAID Administrator (A/USAID) or his representative chairs the
> Group which is to include the USDA Under Secretary for International
> Affairs and Commodity Programs; the Inspector General of USAID; a
> representative of each PVO or cooperative participating in programs or
> receiving funds from USAID to establish programs under Title II; and
> representatives from African, Asian and Latin American indigenous NGOs
> determined appropriate by the A/USAID.
>
> 2B. Responsibilities
>
> 1\. General
>
> The Agricultural Act of 1949, P.L. 480, the Food Security Reserve Act
> of 1980, and the Food for Progress Act of 1985 delineated policy and
> operational responsibilities among all departments and agencies
> concerned with food assistance programs during the past three decades.
> These responsibilities were redefined by the 1990 amendments to P.L.
> 480.
>
> 2\. The President
>
> The Food Security Reserve Act of 1980 (Public Law 96-494, Sections 301
> and 302, as amended): the President establishes a wheat reserve that
> can be used under P.L. 480 to provide emergency food assistance to
> developing countries. The function for maintaining the reserve has
> been delegated to the Secretary of Agriculture, but the President has
> retained authority to make the findings necessary to release stocks
> for humanitarian purposes.
>
> 3\. Office of Management and Budget
>
> Executive Order No. 12752: The Director of OMB or his
> designeeparticipates in the policy coordination efforts of P.L. 480
> programs undertaken by the Food Assistance Policy Council. OMB sets
> the budget planning target for P.L. 480, makes recommendations to the
> President for the budget level of P.L. 480, and issues the OMB #mark#
> which, is the starting point for developing the President\'s budget to
> the Congress and USAID\'s Congressional Presentation. The OMB also
> determines the amount of foreign currencies generated under P.L. 480
> Title I programs to be used under Section 104(c)(8) of P.L. 480 to
> make payment of U.S. obligations abroad.
>
> 4\. Department of Agriculture
>
> Title I of P.L. 480: Effective January 1, 1991, Congress provided USDA
> all authority for the concessional sales of agricultural commodities
> to developing countries. Sales may be for dollars on long-term credit
> or for payment in local currency which is owned by the U.S. Government
> (USG) and programmed by USDA. The Secretary of Agriculture has the
> responsibility to negotiate and execute agreements under Title I.
>
> Section 416(b) of the Agricultural Act of 1949: The Secretary of
> Agriculture is authorized to donate surplus agricultural commodities
> for programs in developing countries and friendly countries.
>
> Food for Progress Act: Section 1110 of the Food Security Act of 1985,
> as amended, authorizes the use of Title I and Section 416 resources to
> assist emerging democracies and developing countries that are
> committed to expanding free enterprise undertakings in the
> agricultural sectors of their economies. Executive Order 12752,
> Section 4(g) delegates to the Secretary of Agriculture all of the
> President\'s functions under the Food for Progress Act.
>
> 5\. U. S. Agency for International Development
>
> Food aid responsibilities within USAID are established by Delegations
> of authority (Nos. 401 and 902) from the Administrator, and by the
> Functional Statements of the Bureau for Policy and Program
> Coordination (PPC), and the Bureau for Management (M). Food aid
> responsibilities are as follows:
>
> a\. Bureau for Policy and Program Coordination (PPC)
>
> The Bureau for Policy and Program Coordination (PPC) performs the same
> functions regarding food aid programs as it does with respect to other
> Agency programs. PPC must take the lead and collaborate with the - the
> Bureau for Humanitarian Response (BHR) and the Regional Bureaus - in
> preparing food aid policies and maintaining policy liaison with other
> agencies of the USG, international organizations and other donors. PPC
> will determine, based on the standards in Section 302 of P.L. 480, the
> countries that are #least developed# and therefore eligible to
> participate in the Title III program.
>
> b\. Bureau for Management (M)
>
> The Bureau for Management (M), in consultation with PPC:
>
> \~ Performs the same budget functions with respect to food aid as it
> does for other assistance resources available to USAID, including,
>
> \- preparation of guidance on the budget process;
>
> \- management of budget-year request for the Agency;
>
> \- preparation and monitoring of the Operational Year Budget (OYB);
> and
>
> -representation of USAID on budget issues.
>
> \~ Exercises all functions relating to procurement of ocean
> transportation for agricultural commodities - (OP/TRANS).
>
> \~ Signs grants and cooperative agreements for the Farmer-to-Farmer
> Program (FTF) authorized under Title V of P.L. 480.
>
> \~ Provides guidance and support to BHR/Food for Peace (FFP) in the
> administration of grants and cooperative agreements signed by BHR/FFP
> providing assistance to PVOs and cooperatives under section 202(e) of
> P.L. 480.
>
> c\. Bureau for Humanitarian Response (BHR)
>
> Within USAID/W, BHR, in consultation with M, PPC, and Regional Bureaus
> performs all other food aid functions. BHR has operational
> responsibility and monitors food aid, except Title III of P.L. 480.
> The following are BHR\'s principal responsibilities to:
>
> \~ Represent USAID on the Food Aid Consultative Group required under
> Section 205 of P.L. 480.
>
> \~ Provide support to the Administrator and Deputy Administrator who
> are the Agency\'s representatives on
>
> the Food Assistance Policy Council established under Executive Order
> 12752.
>
> \~ Coordinate regular and emergency operational food aid matters with
> USDA, State, and other federal agencies as well as with private and
> public international organizations, including the World Food Program
> (WFP).
>
> \~ Prepare and issue (with clearance from the Regional Bureaus, M and
> PPC) regulations, handbook materials and other operational guidance
> required for food aid programs, including Title III of P.L. 480,
> designed to accomplish statutory and policy objectives of these
> programs and establish Agency procedures and requirements with respect
> to accountability for food aid activities.
>
> \~ Advise Bureau for Management (M) regarding food aid budgets based
> on field submissions for Title II and Regional Bureau recommendations
> for Title III of P.L. 480, and monitor implementation of food aid
> budgets.
>
> BHR advice and recommendations for adjustments during a fiscal year
> will be based on total food aid budget availabilities, the need to
> accommodate emergencies, changes in commodity and transport
> availability and costs, liaison with USDA and the private sector
> regarding their agricultural activities, and compliance with food aid
> legislation.
>
> \~ Perform all functions and exercise all authorities under or
> relating to Title II of P.L. 480 and any other food aid program,
> except Title III of P.L. 480.
>
> The BHR memorandum approving regular and emergency Title II or other
> food aid activities should include a description of the Field Post\'s
> plan for implementing or monitoring thebe cleared by the appropriate
> Regional Bureau, activity, and identify the resources it will use for
> this purpose. If there is no Field Post in the country, the memorandum
> should include a description of how the program will be monitored,
> which is prepared by BHR in collaboration with and cleared by the
> appropriate Regional Bureau.
>
> \~ Sign and administer grants and cooperative agreements under section
> 202(e), \"Support for Private Voluntary Organizations and
> Cooperatives,\" of P.L. 480.
>
> \~ In consultation with the appropriate Regional Bureau, resolve audit
> findings and recommendations regarding Title II and other food aid
> activities and collaborate, as appropriate, with Regional Bureaus in
> the resolution of audit findings and recommendations regarding Title
> III donations.
>
> \~ Coordinate with USDA and Bureau for Management (M) in the
> procurement of agricultural commodities and ocean transportation for
> all food aid programs.
>
> \~ Implement the Farmer-to-Farmer (FTF) program authorized under Title
> V of P.L. 480.
>
> \~ As required under applicable legislation or
>
> Executive Order, prepare annual reports to Congress on food
> assistance.
>
> The following procedures are used by BHR in processing P.L. 480 Title
> II and Title III budget requests:
>
> Title II
>
> Title II - Budget Request: Based on the Annual Budget Submission (ABS)
> received from each USAID Mission or Field Post and other sources of
> information, BHR prepares the Title II budget, including an
> unallocated reserve, with clearance by the Regional Bureaus. Clearance
> of the Title II budget by a Regional Bureau means that the Bureau will
> commit the resources to implement or monitor Title II activities
> effectively in countries included in the budget for which the Bureau
> is responsible. BHR/FFP and each Regional Bureau will negotiate
> differences that might arise in the preparation of the budget. BHR
> will submit the total Title II request and country levels to M/FA/B
> for approval.
>
> Title II - Congressional Presentation: M/FA/B provides BHR with the
> final budget pass-back level. BHR will coordinate with the Regional
> Bureaus the review of country allocations within the pass-back level.
>
> Title II - Operational Year Budget: M/FA/B will establish a
> preliminary OYB for Title II programs with concurrence by BHR and the
> Regional Bureaus. Allocations during the fiscal year that are
> different from amounts in the OYB, and allocations from the Title II
> reserve, will be proposed by BHR to M/FA/B with clearance by the
> Regional Bureaus. When necessary, BHR will recommend releases from the
> emergency wheat reserve established under sections 301 and 302 of the
> Food Security Reserve Act of 1980.
>
> Title III
>
> Title III - Budget Request: After a Regional Bureau approves the ABS
> from a USAID Mission and submits it to M/FA/B, the Title III component
> will be forwarded to BHR for review and advice in the preparation of a
> proposed Title III budget. BHR review takes into account applicable
> legislation, commodity and shipping availability and liaison with the
> private sector to ensure that programs complement normal commercial
> trade, and the relationship between Title III and Title II allocations
> as well as activities conducted by USDA, including Title I sales,
> Section 416 donations and export credit and enhancement programs. BHR
> and each Regional Bureau will negotiate differences that might arise
> in this review, and Bureau for Management (M) will resolve any
> outstanding issues.
>
> Title III - Congressional Presentation: M/FA/B provides BHR and the
> Regional Bureaus with the final budget pass-back level, including
> preliminary country allocations. BHR and the Regional Bureaus review
> the allocations and will submit the proposed final levels to M/FA/B
> for approval.
>
> Title III - Operational Year Budget: M/FA/B will establish an OYB for
> Title III programs with concurrence by BHR and the Regional Bureaus.
> BHR will convene a committee consisting of a representative (the Food
> Aid Coordinator) from each Regional Bureau and a representative from
> M/FA/Budget to monitor implementation of the Title III budget. This
> committee will advise M/FA/B regarding proposed reallocations during a
> fiscal year.
>
> d\. USAID Regional Bureaus AFR/ANE/ENI/LAC
>
> Each Regional Bureau has authority and responsibility to:
>
> \~ Issue, if needed, supplementary guidance for Title III programs
> within the region, provided that it is consistent with the Title III
> operational guidance issued by BHR and that the supplementary guidance
> is cleared by BHR.
>
> \~ Participate in the food aid budget process.
>
> \~ Approve and implement Title III donations to eligible countries in
> their respective geographic areas, with clearance by BHR based on
> compliance with applicable legislation, commodity availability, and
> liaison with the private sector to ensure that programs complement
> normal commercial trade. The Regional Bureau will decide how the Title
> III donation should be integrated into the country\'s development plan
> and USAID\'s strategy for it, and any other development issues related
> to the donation.
>
> \~ Make the findings and determinations and provide the reports
> required under Title IV of P.L. 480 with respect to donations under
> Title III, subject to clearance by BHR.
>
> \~ Furnish BHR with the information needed to prepare annual reports
> required under applicable legislation and the Executive Order.
>
> \~ Review and clear all Title II and other food aid activities within
> the geographic area except those conducted by WFP and agencies of the
> UN.
>
> \~ Ensure that each USAID Mission has the resources necessary to
> implement and/or monitor food aid activities effectively in the
> country where the post is located. This should be established, in
> consultation with BHR when the Regional Bureau reviews the ABS from
> the USAID Mission and periodically thereafter as necessary when the
> food aid activity is approved and while it is being implemented.
>
> \~ Resolve, in consultation with BHR, audit findings and
> recommendations regarding Title III donations; collaborate as
> appropriate with BHR in the resolution of audit findings and
> recommendations regarding other food aid activities within the
> regional geographic area; and ensure that USAID Missions implement
> effectively the actions agreed upon to resolve and close audit
> recommendations.
>
> e\. USAID, USAID MISSIONS AND/OR FIELD POSTS Except for donations
> through WFP or other UN agencies, no food aid activity may be
> conducted in a country without the clearance of the principal USAID
> Mission or Embassy Officer in the country and the appropriate Regional
> Bureau. USAID Missions or Field Posts are responsible for preparing
> requests for P.L. 480 Title III and clearing requests for Title II
> programs. All food aid programs must include monitoring plans, and
> arrangements for audit that are acceptable to the USAID Inspector
> General (IG).
>
> Title II
>
> The ABS from each USAID Mission or Field Post will contain estimates
> of requirements for regular Title II programs anticipated in the
> country. The ABS also will include a description of the resources
> required by the USAID Mission or Field Post to implement and monitor
> Title II activities.
>
> Title II - Government-to-Government Emergency Programs:
>
> \~ Assist host government to develop program proposals for emergency
> assistance that can be submitted with the principal USAID or Embassy
> Officer\'s recommendation to USAID/W for approval.
>
> \~ Monitor host government performance under approved programs,
> particularly activities involving the generation and use of local
> currencies.
>
> \~ Ensure that agricultural commodities made available are used
> effectively and in the areas of greatest need.
>
> \~ Assure that recipient country reports on generation and use of
> local currencies are current.
>
> \~ Report to USAID/W as required on overall progress of the program.
>
> Title II - Regular Programs
>
> \~ Determine whether a Cooperating Sponsor\'s (i.e., PVO or
> cooperative) program proposal is adequately planned and financed and
> logistically sound, and whether technical and administrative skills
> are available to accomplish program objectives.
>
> \~ Guide and assist the Cooperating Sponsor as necessary in the
> preparation of workable Title II program proposals.
>
> \~ Clear Cooperating Sponsor proposals and comment on the sponsor\'s
> operational plan\'s relationship and consistency with the USAID
> Mission\'s development strategy prior to their being submitted to
> USAID/W-BHR/FFP. Along with this clearance the USAID Mission or Field
> Post sends to USAID/W-BHR/FFP a plan with a description of the
> resources it will use for monitoring the activity and accepts
> responsibility for doing so, including providing management and
> administrative support if required.
>
> \~ Report to USAID/W-BHR/FFP on the progress of the program and assure
> that Cooperating Sponsor reporting requirements are met.
>
> Title II - World Food Program/Other UN Agencies (See Chapter 10)
>
> \~ The USG makes voluntary pledges of Title II resources to global WFP
> activities biannually. USAID Mission or Field Posts are responsible
> for providing comments to BHR/FFP about proposed food aid programs
> that utilize U.S. donated commodities and are conducted by WFP or
> other UN agencies.
>
> \~ All USAID Missions or Field Posts are to notify USAID/W-BHR/FFP
> when the principal USAID or Embassy Officer perceives that WFP or
> other UN food aid programs are not being properly planned, implemented
> or monitored, or impinge upon USG bilateral food aid activities.
>
> \~ More specific guidance on monitoring and reporting upon WFP and UN
> agency food aid programs will be given to those USAID Missions or
> Field Posts where such programs constitute critical components in the
> food requirements of a given populace.
>
> Title III
>
> USAID Missions or Field Posts should:
>
> \~ First establish that the intended recipient country is an eligible
> least developed country as determined by USAID/W-PPC and that there
> are no policy considerations that would prohibit assistance under
> Title III.
>
> \~ In accordance with guidance issued by BHR and the Regional Bureau,
> document intended use of Title III resources in the Mission\'s
> Strategic Plan (Title III is viewed as a long-term development
> instrument, up to five years and renewable) and prepare the Title III
> proposals.
>
> \~ Include proposed Title III estimates of requirements in their ABS
> to Regional Bureaus.
>
> \~ Once Title III proposed programs are approved, adapt the Title III
> Agreement format developed by the General Counsel (GC) for sales of
> Title III commodities to generate and use local currency proceeds, or
> if the commodities are put to other uses, consult with the Regional
> Legal Advisor (RLA) or GC/BHR to revise the Title III Agreement
> accordingly.
>
> \~ Each year assess the recipient country\'s performance in meeting
> program and policy performance indicators and achieving the Title III
> program\'s outputs, purposes and objectives. These Annual Progress
> Reports must be submitted to USAID/W before each subsequent year\'s
> funding can be approved.
>
> Audits
>
> USAID Missions or Field Posts are to implement the actions approved to
> resolve and close audit recommendations with respect to food aid
> activities in the country, whether the action is approved by the USAID
> Mission or Field Post itself or referred
>
> to USAID/W and approved by the appropriate Regional Bureau with
> respect to Title III donations, or by BHR for Title II and other food
> aid activities.
>
> f\. USAID Inspector General (IG)
>
> The Inspector General (IG) is the principal advisor to the A/USAID
> regarding audit policy. Food aid programs must include arrangements
> for audit that are acceptable to the IG. The Administrator will decide
> any issues related to audit that cannot be resolved.
>
> 6\. Cooperating Sponsors
>
> Once the underlying Non-Governmental Organization (NGO) program
> agreement, host country agreement, and any recipient agency agreements
> are signed, responsibilities for getting Title II programs underway
> are:
>
> \~ A Non-Governmental Cooperating Sponsor such as a PVO, cooperative
> or intergovernmental organization has the responsibility of preparing
> and submitting two documents covering regular or emergency Title II
> programs for USAID Mission or Field Post approval and USAID/W review:
> the Operational Plan (OP), and the Annual Estimate of Requirements
> (AER).
>
> \~ A Governmental Cooperating Sponsor is only eligible to receive
> Title II commodities in an emergency situation. A governmental
> Cooperating Sponsor prepares and submits a program plan akin to an NGO
> Operational Plan (OP). Based upon the information in this plan, as
> approved, the USAID Mission or Field Post or BHR/FFP will then prepare
> a Transfer Authorization (TA) describing the food assistance to be
> utilized for the Cooperating Government\'s signature.
>
> Once the program is approved and is underway, the Cooperating Sponsor
> is responsible for the implementation of the terms of their approved
> plans and agreements, which include proper use and accountability of
> all Title II commodities or funds made available to meet the agreed
> requirements of eligible recipients, and a system of timely and
> thorough reporting on program implementation which lends itself to
> external audit.
>
> CHAPTER 3
>
> POLICY
>
> 3A. Statutory Policy
>
> The U.S. food aid program is primarily administered under P.L. 480.
> This act has had several amendments, the most recent being in the
> Agricultural Development and Trade Act of 1990. The three major titles
> dealing with food aid underwent major revision and changes in policy
> direction and are now entitled:
>
> Title I -Trade and Development Assistance
>
> Title II -Emergency and Private Assistance Programs
>
> Title III - Food for Development Program
>
> P.L. 480 cites enhancement of food security in the developing world as
> U.S. policy, as follows:
>
> It is the policy of the United States to use its abundant agricultural
> productivity to promote the foreign policy of the United States by
> enhancing the food security of the developing world through the use of
> agricultural commodities and local currencies accruing under the Act
> to:
>
> combat world hunger and malnutrition and their causes;
>
> promote broad-based, equitable, and sustainable development, including
> agricultural development;
>
> expand international trade;
>
> develop and expand export markets for United States agricultural
> commodities; and
>
> foster and encourage the development of private enterprise and
> democratic participation in developing countries.
>
> The 1990 legislation for the first time defines food security as:
>
> Access by all people at all times to sufficient food and nutrition for
> a healthy and productive life.
>
> 3B. USAID Policy Determinations
>
> While the foregoing statutory definition of food security is used for
> P.L. 480 Title II and Title III programs, USAID\'s Policy
> Determination No. 19 (PD-19) of April 13, 1992 incorporated the
> fundamental concepts of this and the International Bank for
> Reconstruction and Development (IBRD) and Food Agricultural
> Organization (FAO) definitions to set forth USAID\'s basic definition
> of food security as follows:
>
> \"When all people at all times have both physical and economic access
> to sufficient food to meet their dietary needs for a productive and
> healthy life.\"
>
> Within the context of this definition of food security, three distinct
> variables are recognized by USAID as central to achievement of the
> policy of enhancing food security in the developing world:
> availability, access and utilization. PD-19 explains how complementary
> programming of monetary resources under Development Assistance (DA),
> the Development Fund for Africa (DFA), and the Economic Support Fund
> (ESF) and P.L. 480 resources, as part of country program strategies,
> may overcome constraints to these variables in attaining food security
> policy objectives. Thus, both P.L. 480 and other USAID programs may
> improve the food security in countries where assistance is
> contemplated by addressing constraints such as those below which would
> impede progress toward this objective.
>
> Availability of Food: Inappropriate agricultural practices and
> technologies; inappropriate economic policies (e.g., pricing, tariffs,
> taxes); inadequate agricultural inputs; dysfunctional transportation
> and distribution systems; ineffective private sector marketing
> systems; inability to predict, assess and cope with emergency
> situations; natural disasters and climatic constraints; and population
> growth rates that offset increased production and/or imports.
>
> Access to Food: Insufficient economic growth leading to a lack of job
> opportunities and economic incentives; inadequate training or job
> skills; lack of credit or other means to improve asset and income
> status; inappropriate national economic policies; and food losses
> associated with ineffective harvesting and storage.
>
> Utilization of Food: Nutrient losses due to food preparation;
> inadequate knowledge and practice of health techniques, including
> child care and sanitation; and cultural practices that limit
> consumption by certain groups or family members.
>
> 3C. Title I - Trade and Development Assistance
>
> Title I provides for the sale of agricultural commodities on
> concessional terms to developing countries either in dollars or for
> local currencies. To qualify, a country must have a shortage of
> foreign exchange and be unable to meet all of its food needs through
> commercial channels. Under Section 104(c) proceeds from local currency
> payments can be used to support agricultural development; trade
> development and promotion; loans for agribusiness; loans for
> agricultural facilities including cooperatives; private sector
> agricultural trade development; and agricultural research; and to make
> payments for U.S. Government (USG) obligations. A.I.D. no longer has
> any operational responsibility for either P.L. 480, Title I, or
> Section 416(b) of the Agricultural Act of 1949 under which U.S.
> agricultural surpluses can be donated to assist developing countries
> and friendly countries.
>
> 3D. Title II - Emergency and Private Assistance Programs
>
> Legislative and USAID operational policies governing the planning,
> implementation and monitoring of Title II undertakings are set forth
> in USAID Regulation 11. It is USAID\'s position that it probably will
> be necessary to deviate from very few requirements of Regulation 11
> itself to accommodate any other than the most unusual situations.
>
> It is USAID policy that the services of private voluntary
> organizations (PVOs) and cooperatives are to be used as Cooperating
> Sponsors to the maximum extent practicable to carry out Title II
> regular or emergency programs. While PVOs and cooperatives no longer
> need be registered with USAID to be eligible for Title II programs, a
> nongovernmental organization is eligible to implement regular Title II
> programs only after it has entered into a Food for Peace Agreement
> with USAID that incorporates the terms and conditions of Regulation
> 11; foreign PVOs and cooperatives are also eligible to be Cooperating
> Sponsors. However, in approving proposals, preference may be given to
> registered PVOs and cooperatives over those that are not. Governments
> are to be used as Cooperating Sponsors only in emergency programs.
>
> As stated in Regulation 11, the USAID Mission or Field Post has to
> assure proper management and exercise oversight of Title II programs
> in-country as well as provide assurance of linkages between Title II
> activities and the USAID Mission\'s strategic objectives. USAID/W-BHR
> encourages a continuing dialogue between USAID Missions or Field
> Posts, voluntary agencies and responsible personnel in the recipient
> country to assure that Title II resources are integrated with other
> development resources in solving priority problems in malnutrition and
> development.
>
> USAID/W-BHR/FFP cables Title II program guidance updating for each
> fiscal year is sent to USAID Missions or Field Posts for required
> review, comment and certification on each
>
> Cooperating Sponsor\'s Title II Program submission.
>
> 3E. Title III - Food for Development
>
> Legislative policy underlying the restructuring of Title III in 1990
> concentrates this newly designed grant component of P.L. 480 on least
> developed countries (LDCs) meeting IBRD poverty criteria or having
> chronic food deficits. Those LDCs accorded priority consideration
> under Title III must have the greatest need for food; the capacity to
> use food aid effectively; a commitment to policies to promote food
> security; and a long-term plan for broad-based, equitable and
> sustainable development.
>
> As stated in the legislation, a country is eligible to receive grant
> food aid under Title III if it meets the poverty criterion established
> by the IBRD for Civil Works Preference (per capita annual income of
> \$610 or less). A country not meeting the poverty criterion is still
> eligible if it meets the following food deficit criteria:
>
> daily per capita calorie consumption of less than 2300;
>
> child mortality rate under age five greater than 100 per 1000 live
> births; and
>
> inability to meet its food security requirements from domestic
> production or from imports due to a shortage of foreign exchange
> earnings.
>
> Meeting the statutory country eligibility criteria is a first
> requirement for a Title III program. Once this is met, a Title III
> proposal must meet the criteria that USAID program policy sets for use
> of other types of assistance. These include program prioritization,
> the meeting of concentration and focus requirements, program
> integration, and proposal review and approval by the same mechanisms
> undergone by Development Assistance (DA), Development Fund for Africa
> (DFA), and Economic Support Fund (ESF) funded project proposals.
>
> Title III legislation encourages a comprehensive approach to improving
> food security citing a wide range of eligible development activities
> for which Title III donations may be used, including balance of
> payments support; promotion of specific policy reforms; establishment
> of security food stocks to meet emergencies; improvement of rural
> infrastructure; support of nutrition intervention and other child
> survival activities; privatization; support of Peace Corps activities
> that relate to agricultural production; support of non-governmental
> organizations (NGOs), PVOs, and cooperatives; and other appropriate
> food security measures.
>
> The legislation requires that at least ten percent of local currency
> generated under a Title III program be used to support indigenous NGOs
> and cooperatives active in rural development, agricultural education,
> production and other activities to assist poor people.
>
> The nature of the activities for which Title III support can be used
> are long range and therefore Title III proposals must be for
> multi-year programs - up to five years. P.L. 480 legislation
> emphasizes the integration of Title III projects into the development
> strategy, objectives and programs of the USG and the Cooperating
> Country. Accordingly, proposals should include total program needs
> over the life of the project and be incorporated into the Country
> Program Strategic Plan. Title III resources can be combined with DA,
> DFA, ESF and other food aid to maximize the developmental impact.
>
> USAID Missions or Field Posts have overall responsibility for
> designing, developing, implementing and reporting on Title III
> programs. It is USAID policy that an Annual Progress Report
>
> (APR) which assesses recipient country accomplishments in meeting
> agreed Title III project and policy performance indicators and
> achieving the project\'s outputs, purpose and objectives, be submitted
> by the USAID Mission or Field Post and reviewed by USAID/W
> (appropriate Regional Bureau, BHR, PPC) before new funding can be
> approved for a subsequent year. In view of the degree of involvement
> of USAID Missions or Field Posts in Title III programs from concept
> through development and implementation to final evaluation and audit,
> it has been Agency policy to limit Title III programs to countries
> with USAID Missions.
>
> Cabled Title III program guidance updating for each fiscal year is
> sent to USAID Missions or Field Posts.
>
> 3F. Local Currency
>
> P.L. 480 and the Agriculture Act of 1949, Section 416(b) permit the
> generation of local currency as a statutory end in itself, and not
> just a by-product of the sale of food aid. Guidelines for generation,
> use and accountability of local currency are set forth in USAID policy
> determination No. 19 and State 204855. The statutory objectives of
> monetized P.L. 480 Title III programs, as well as P.L. 480 Title II
> and Section 416(b) assistance, would not be satisfied unless the local
> currency proceeds were used for their intended purposes.
>
> These intended purposes are defined in the legislation:
>
> P.L. 480 Title III, Section 306(b), identifies 13 specific economic
> development purposes for which local currency proceeds may be used;
>
> P.L. 480 Title II regular programs require that local currencies
> generated be used for the purposes specified in Section 203(d) of P.L.
> 480.
>
> P.L. 480 Title II emergency food aid programs require that the food
> (if not distributed to needy people) may be sold, as long as the local
> currency is then used for emergency purposes;
>
> Section 416(b) stipulates that sales proceeds may be used either for
> costs incidental to moving the Section 416(b) commodities or for
> activities that are consistent with providing food assistance to needy
> people.
>
> USAID may share responsibility in the joint programming of P.L. 480
> generated local currencies, but retains the responsibility for the
> accountability (ensuring the use for agreed-upon purposes) of P.L. 480
> Title III generated funds. P.L. 480 local currency generations should
> not be commingled with other local currencies associated with U.S.
> assistance. P.L. 480-generated local currencies should be deposited in
> a special account; at a minimum, the program agreement must require
> that reports on a special account be submitted to the USAID Mission on
> a quarterly basis.
>
> Key distinguishing characteristics of policy regarding local currency
> generated from the sale of P.L. 480 and Section 416(b) commodities are
> listed as follows:
>
> P.L. 480 prohibits the use of local currency derived from the sale of
> food commodities to finance the production for export of agricultural
> commodities that would compete in the world market with similar items
> produced in the U.S. if such competition would cause \"substantial
> injury\" to U.S. producers.
>
> P.L. 480 requires 10 percent of the local currency generated under
> Title III to be used to support indigenous NGOs, but only if the Title
> III local currency is deposited into a separate account \[Section
> 306(b)\].
>
> P.L. 480 requires separate accounts for Title III programs to the
> extent determined appropriate by the Administrator. If local currency
> is generated in a food aid program, it must be deposited into a
> separate, interest-bearing account. If the requirement for a separate
> account is waived, USAID must still be able to verify that an
> equivalent amount of local currency was used for specific economic
> development purposes \[Section 304(a)\].
>
> P.L. 480 requires consultations with the International Monetary Fund
> (IMF), World Bank and other donors to ensure that the use of P.L. 480
> local currency for development purposes will not have a disruptive
> impact on the farmers or the local economy of the recipient country
> \[Section 403(b)\].
>
> Programming local currency is permissible to support (a)
> developmentally sound projects under Title III; (b) nonemergency Title
> II programs; (c) projects and programs that pertain to emergencies;
> and (d) projects that pertain to food assistance to needy people under
> Section 416(b) agreements.
>
> Programming local currency to support particular sectors of the
> government\'s budget is permissible under Title III agreements; and to
> support the agriculture sector only under Section 416(b) agreements.
> The agreement between the Cooperating Country and USAID Mission
> concerning use of local currency for specific sector support should
> specify the format and frequency of reports.
>
> Programming local currency to reduce the government\'s debt may be
> permissible under Title III if this use can be justified under one of
> the specific economic development purposes described in Section 306(a)
> of P.L. 480; this use is not permissible under Title II or Section
> 416(b).
>
> Programming local currency to establish an endowment is permissible
> under Title II and Title III, but only if established by an NGO (and
> not by a host country); this use is not permissible under Section
> 416(b).
>
> Programming local currency to help fund USAID Mission operating
> expenses is not permitted under P.L. 480 or Section 416(b).
>
> 3G. Title V - Farmer-to-Farmer Program
>
> P.L. 480 created the Farmer-to-Farmer Program (FTF). The 1990
> amendment restates the policy objectives of this program and expands
> objectives and target groups, as well as the financing to be made
> available under P.L. 480. The legislative intent is to assist
> developing countries, middle income countries and emerging democracies
> to increase farm production and the incomes of farmers.
>
> The program envisages U.S. farmers, agriculturists, agribusinesses,
> universities and non-profit farm organizations volunteering to work
> with individual farmers and farm organizations in Cooperating
> Countries to improve the operations of food systems from production
> through distribution on a people-to-people basis. P.L. 480 requires
> that not less than 0.2 percent of the amounts made available each
> fiscal year from 1991 to 1995 shall be used to carry out FTF, with not
> less than 0.1 percent to be used for this program in developing
> countries.
>
> CHAPTER 4
>
> STRUCTURE AND OBJECTIVES
>
> 4A. Introduction
>
> USAID and the U.S. Department of Agriculture (USDA) share the
> responsibility for administering five U.S. food assistance programs:
> (1) concessional loans in support of trade and development assistance
> (Title I); (2) donated agricultural commodities in support of
> emergency and non-emergency food aid programs (Title II); (3) grant
> food to the least developed countries (Title III); (4) donated surplus
> agricultural commodities to relieve temporary commodity shortfalls
> \[Section 416(b)\]; and (5) supported progress toward democracy and
> open market systems (the Food for Progress program). The following
> sections briefly discuss major elements of each program. Parts II
> through IV of Handbook 9 address in detail those programs for which
> USAID has responsibility.
>
> 4B. Title I - Trade and Development Assistance
>
> 1\. Objectives
>
> Title I of P.L. 480 focuses on the market development aspects of the
> U.S. food aid program. By investing in agriculture, trade promotion,
> and public infrastructure, and by assisting countries with temporary
> foreign exchange constraints in participating in international
> markets, USDA uses Title I programs to help countries meet their
> long-term food security requirements. Priority is given to countries
> that (a) demonstrate the greatest need for food; (b) undertake
> economic reforms to promote food security, alleviate poverty, and
> promote development; and (c) have the demonstrated potential to become
> commercial markets for competitively priced U.S. commodities in the
> future.
>
> 2\. Structure
>
> USDA has assumed full management of the Title I concessional loan
> program, under which countries pay for commodities in U.S. dollars at
> concessional interest rates with a maximum 30-year loan term and a
> maximum 7-year grace period. On an exceptional basis, the Secretary of
> Agriculture may choose to accept repayments of loans in local
> currencies, which may, in turn, be used in the recipient country to
> support activities that promote agricultural development and trade
> and/or to pay for USG obligations. Sales are made by private business
> firms usually on a bid basis in response to tenders issued in the U.S.
> by the importing country. The annual funding level is set by law. It
> is usually required that ocean freight be paid by the importing
> country except for the difference in shipping costs for the quantity
> of commodity shipped on U.S. versus foreign flag vessels. This freight
> differential is paid by the Commodity Credit Corporation (CCC). In
> contrast to previous Title I programs, the new legislation does not
> require that local currency generations be programmed.
>
> 3\. Operational Responsibility
>
> Congress has provided USDA with all authority for the concessional
> sale of agricultural commodities to developing countries. USAID no
> longer has any operational responsibility for Title I, either in
> Washington, DC or in the field. The Agency preference is that USAID
> not manage USDA programs. Any exception to this policy would call for
> extraordinary circumstances and the following criteria would apply. It
> must be understood, moreover, that meeting these criteria is a
> necessary but not sufficient condition for approval, and USAID
> concurrence should not be assumed.
>
> Criteria
>
> \(a\) The Missions\'s proposal or endorsement of a USDA request that
> USAID manage a Title I program, detailing the length of involvement
> and the specific responsibilities to be maintained, must conform with
> the \"monitoring\" section of USAID Delegation of Authority 902
> (Appendix E).
>
> \(b\) It must be determined that the Title I activity is vital for
> achieving the USAID Missions or Field Post\'s objectives in the
> country or USAID or USG interest there or in the region.
>
> \(c\) The Title I program and/or uses of local currency generations
> must fit within the Mission\'s strategic objectives and be in
> conformity with the focus and concentration mandate of the Agency.
>
> \(d\) USDA must have no or inadequate capability to manage the program
> on its own without USAID involvement.
>
> \(e\) The USAID Mission must fully explore and/or negotiate
> reimbursement by USDA to USAID for the costs of implementing or
> monitoring the USDA program.
>
> \(f\) The USAID Mission or Field Post must have a food aid management
> plan in place approved by USAID/W and have available the human and
> financial resources needed for effective management of the Title I
> program.
>
> \(g\) The impact of the proposed Title I activity on the Mission\'s
> operating expenses and/or staffing is not expected to result in a need
> for increased staff or funding.
>
> \(h\) The USAID Mission or Field Post must identify the program
> benefits related to USAID and USAID Mission objectives, expected
> program impact, detailed and measurable benchmarks and evaluation
> plans.
>
> 4\. Procedures
>
> If a USAID Mission is requesting exception to USAID\'s policy of
> non-involvement in USDA programs, the following procedure should be
> followed:
>
> A USAID Mission or Field Post will direct to the appropriate Regional
> Bureau its request to begin or continue managing a Title I program or
> indicate its concurrence in a USDA or State request for the USAID to
> do so. The USAID Mission or Field Post will describe briefly the
> proposed program including USAID\'s projected life of program
> involvement, its importance to the Mission\'s assistance strategy,
> USAID\'s management capacity in place, USDA\'s capability, and USAID
> resources needed to implement or monitor the activity effectively.
> This request should indicate, particularly for new activities, the
> proposed costs USDA may pay, if any, for the USAID Mission or Field
> Post\'s management. If the request is endorsed by the Regional Bureau,
> the Bureau will prepare an action memorandum signed by the Assistant
> Administrator that sets forth the information provided to it and its
> reason(s) for supporting the request. The signed action memorandum
> will be directed to the Assistant Administrator for Management (M),
> the Assistant Administrator for Policy and Program Coordination (PPC),
> and the Bureau for Humanitarian Response (BHR) for concurrence. BHR
> will negotiate with USDA about the arrangements for USAID
> participation.
>
> 4C. Title II - Emergency and Private Assistance
>
> 1\. Objectives
>
> The objectives of agricultural commodities provided under this title
> to foreign countries on behalf of the people of the U.S. are to (a)
> address famine or other urgent or extraordinary relief requirements;
> (b) combat malnutrition, especially in children and mothers; (c) carry
> out activities that attempt to alleviate the causes of hunger,
> mortality and morbidity; (d) promote economic and community
> development; (e) promote sound environmental practices; and (f) carry
> out feeding programs.
>
> 2\. Structure
>
> Under Title II, which is managed by USAID, the U.S. Government (USG)
> donates agricultural commodities to support emergency and development
> programs. In many cases, food is
>
> distributed to individuals through direct relief, emergency feeding
> and disaster assistance programs. In other cases, food is combined
> with other program elements and targeted to
>
> certain beneficiary groups, such as in maternal-child health (MCH),
> school feeding (SF) and food for work (FFW) programs. In still other
> programs, P.L. 480 commodities are imported
>
> and sold on the local market (monetized) providing an additional
> supply of food locally and generating local currencies which are then
> used to support local development
>
> efforts, community projects, and feeding programs. Emergency
> assistance is provided through governments and public or private
> agencies, including intergovernmental organizations such as the World
> Food Program (WFP) and other multilateral organizations. Non-emergency
> assistance is provided through private voluntary organizations (PVOs)
> or cooperatives that are, to the extent practicable, registered with
> USAID or through intergovernmental organizations, such as WFP.
>
> 3\. When to Choose Title II
>
> The United States (U.S.) P.L. 480, Title II food assistance is often
> an essential response to extraordinary emergency events affecting
> developing countries. Important elements that can contribute to the
> U.S.\'s ability to respond rapidly and responsibly to emergencies when
> they do arise are contact, cooperation and coordination with other
> donors in the host country, and on-going food needs and/or early
> warning systems. The first improves the coordination of emergency
> requests and responses and the second helps to identify, define and
> quantify the emergency food need. While some forms of emergency
> assistance can only be called forward when an emergency has officially
> been declared by the host country government, U.S. emergency food aid
> assistance can be activated without such an official declaration. The
> USAID Mission or Embassy can start the process by submission of an
> emergency request to USAID/W-BHR/FFP outlining in detail the cause,
> extent and magnitude of the emergency need as well as the appropriate
> U.S. response.
>
> Objectives (b) through (f) of the legislation (see 4C.1., above) can
> often only or most efficiently be met through regular planned
> development feeding programs implemented by PVOs and cooperatives
> operating in developing countries. In recent years the legislation has
> expanded the authority for sale or barter and for the use of the
> proceeds for economic and community development, thus broadening the
> ways in which food can contribute to meeting nutrition, relief and
> economic development needs. Grant resources are also available to
> support the programs and to increase their efficiency and impact. If
> eligible PVOs or cooperatives are available and/or have requested
> USAID support of feeding or food supported programs to meet objectives
> of the legislation and of USAID and the USAID Mission\'s development
> strategy, Title II resource support should be considered and
> requested.
>
> 4\. Procedures for Requesting Title II
>
> The Administration may make a decision to offer emergency assistance
> and inform the USAID Missions of such decision. Cooperating Sponsors
> may also make a determination that emergency assistance is needed.
> Requests for U.S. food support should in these instances be directed
> to USAID Missions for transmittal to USAID/W-BHR/FFP. As stated above,
> USAID Missions may also initiate the emergency response process by
> transmitting an emergency food request to USAID/W-BHR/FFP. These
> procedures are detailed in Chapter 7 of this Handbook.
>
> Procedures for initiating a regular Title II program are presented in
> detail in Chapters 5 and 6 of this Handbook. Regular Title II programs
> should be an integral part of the USAID Mission and host country
> development strategies, and, as such, planning should begin with the
> Country Development Strategic Statement (CDSS) and programs should be
> included in the Annual Budget Submission (ABS) and Congressional
> Presentation (CP). Cooperating Sponsors, on the other hand, are
> required to submit Operational Plans (OPs) either on a yearly or
> multi-year basis which detail the proposed program goals,
> implementation and management. (Again, see Chapters 5 through 11 of
> this Handbook for details on Title II program development, proposal
> submission, implementation, management and reporting requirements.)
>
> 5\. Reference Materials
>
> Chapters 5 through 11 of Handbook 9
>
> Regulation 11 (Appendix B)
>
> Food Aid Management Plan for USAID Missions
>
> Commodities Reference Guide
>
> Monetization Field Manual
>
> 4D. Title III - Food for Development
>
> 1\. Objectives
>
> The new Title III Food for Development Program, established by
> Congress in the 1990 Amendment to P.L. 480, focuses on the use of
> Title III commodities as a prominent, integral part of the USAID
> Mission\'s Country Assistance Strategy and the recipient country\'s
> Development Plan. The fundamental objective of Title III is food
> security. The program is grant funded; encourages multi-year
> commitments; allows USAID Missions or Field Posts to approve the
> Cooperating Country\'s negotiation of sale of the Title III
> commodities through governmental or non-governmental entities; and
> offers flexibility in the choice of programming options to achieve
> development objectives. Title III stresses three such objectives: a)
> the enhancement of food security; b) the privatization of food and
> agricultural distribution systems; and c) support of nutrition
> improvement and child survival initiatives.
>
> 2\. Structure
>
> A country is eligible to receive grant food aid under Title III if it
> meets the poverty criteria established by the International Bank for
> Reconstruction and Development (IBRD) for Civil Works Preference. A
> country not meeting the poverty criterion is still eligible if it
> meets all of the following food deficit criteria: a) daily per capita
> calorie consumption is less than 2300; b) child mortality rate under
> age 5 is greater than 100 per 1000 live births; and c) inability to
> meet its food security requirements from domestic production or from
> imports due to a shortage of foreign exchange earnings.
>
> Meeting the statutory country eligibility criteria is only the first
> requirement for a Title III program. Section 202(c) of the legislation
> further states that USAID should give priority to those countries that
> (1) demonstrate the greatest need for food; (2) demonstrate a capacity
> to use food assistance effectively; (3) have demonstrated a commitment
> to policies to reduce measurably hunger and malnutrition; and (4) have
> a long-term plan for broad-based, equitable and sustainable
> development. In addition, USAID applies programming criteria similar
> to those for requesting other USAID resources. Along with the proposed
> use of Title III commodities being documented in the Mission\'s
> Strategic Plan, these criteria include program prioritization, the
> meeting of concentration and focus requirements, program integration,
> and proposal review and approval. Unlike Title II, where the USAID
> Mission\'s role is basically one of management and oversight, USAID
> Missions are directly involved in Title III programs from concept
> through development and implementation to final evaluation and audit.
> Because of management, monitoring and reporting requirements,
> implementation of Title III programs has been limited to countries
> with USAID Missions. Title III program implementation requirements are
> detailed in Chapters 12 and 13 of this Handbook.
>
> Under Title III, the United States Government (USG) will donate
> agricultural commodities without charge and will arrange for and pay
> the costs of purchasing, processing, handling and transporting the
> commodities to the port of discharge in the recipient country, or
> point of entry in a landlocked country. The recipient country shall
> arrange for and pay the cost of handling, transporting and
> distributing Title III commodities within its borders. Local currency
> generated by sale of Title III commodities can be used to pay these
> costs.
>
> 3\. When to Choose Title III
>
> Congress purposely provided considerable flexibility to USAID in using
> Title III resources. Missions may use Title III agreements as an
> important tool for advancing policy dialogue; program the commodities
> as balance of payments assistance to support policy reform; sell the
> commodities to governmental or non-governmental entities and jointly
> program the sales proceeds for specific development activities, for
> sector support, or to support policy reform; distribute the
> commodities in direct feeding programs; use the commodities to
> establish emergency food reserves; or design the program for any
> combination of these options. USAID Missions can also combine, in one
> project, Title III resources with Development Assistance (DA),
> Development Fund for Africa (DFA), Economic Support Fund (ESF) and
> other food aid to maximize the developmental impact of U.S.
> assistance.
>
> In using Title III to pursue policy reform, priority should be given
> to policy changes in the areas of food security, private sector, and
> nutrition - including child survival ­initiatives. Policy reform
> programs should be structured in a manner commensurate with host
> country and USAID Mission implementation capabilities. Policy
> initiatives should be targeted to specific reforms, and the country\'s
> progress in implementing the reforms as well as the impacts of the
> reforms themselves should be measurable.
>
> The use of Title III resources to advance policy dialogue and reforms
> may, but need not be, linked to local currency programming. If
> commodities are sold (under Title III most are), the sale may be
> through the private or public sector; the sales proceeds may be owned
> by the host country and the sales proceeds may be used for a variety
> of economic development program and policy initiatives of which a
> listing of illustrative examples are cited in Section 306(a) of the
> Title III legislation. Title III can also be considered as Balance of
> Payments assistance to support policy reform initiatives, preferably
> in combination with some of the other suggested uses set forth in
> Section 306(a). P.L. 480 requires that, to the extent practicable, 10
> percent of local sales proceeds be used to support indigenous
> non-governmental organizations (NGOs) and cooperatives whose
> activities benefit poor people in the recipient country.
>
> 4\. Procedures for Requesting Title III
>
> USAID has sole authority and responsibility for implementing Title
> III, and the USAID Administrator (A/USAID) has delegated
> responsibility for approvals of Title III programs to the Regional
> Bureau Assistant Administrators, with clearance by the Assistant
> Administrator of BHR. Development of a Title III proposal for
> submission to the Regional Bureau is detailed in Chapter 12 of this
> Handbook. This should begin with a joint USAID Mission/recipient
> country review of the present and long-run food import needs and food
> security potential of the recipient country; the policies and programs
> aimed at meeting its food needs; the ways in which a Title III program
> could provide assistance in enhancing food security and the country\'s
> capacity to use food assistance effectively; and the manner in which
> Title III could fit into the broader development strategies of the
> USAID Mission and the recipient country.
>
> Title III proposals should flow from an analysis of the country\'s
> food security situation, including the roles that food aid and the
> private sector can play in enhancing food security. The USAID \"Manual
> for Food Needs Assessment\" (FNA) and its accompanying software has
> proven to be very useful in this analysis (available USAID/W-PPC/CDIE
> Locator Number PN ABB 175). On the basis of this analysis, the USAID
> Mission should identify the primary host country organizations
> involved in the program and the specific undertakings to be supported
> by Title III. The program proposal should be about 25 single-spaced
> pages (exclusive of annexes) and should cross-reference existing
> policy and strategy statements and program documents as much as
> possible. The current CDSS and Action Plan could be incorporated by
> reference in the Title III proposal, as could project documentation
> for approved projects to be supported by Title III resources. Program
> objectives should be clearly defined, and performance indicators
> should be plausible, independent, objectively verifiable, targeted,
> accessible, comprehensive and compatible.
>
> Title III programs also require: (a) commodity needs analysis; (b) the
> usual marketing requirements (UMR) analysis; and (c) storage and
> disincentive analysis. When a Title III project involves the sale of
> commodities, the project description should explain the organization
> designated to manage the sale, how the sale will be conducted, how the
> sales price is determined, and the acceptable terms of sale. Local
> currency proceeds will be placed in a separate interest-bearing
> account. These proceeds are to be jointly programmed by the recipient
> country and USAID Mission for project or sector support.
>
> A Title III Model Agreement has been devised for the majority of Title
> III programs which involve sales of the donated commodities and use of
> local currency proceeds for agreed upon program purposes (Appendix H).
> If a Title III program includes the donation of any or all of the
> commodities for direct feeding programs, the development of emergency
> food reserves, or solely as balance of payments assistance in support
> of policy reform measures, the model format must be further revised by
> the General Counsel of BHR (GC/BHR) prior to USAID Mission negotiation
> and signing.
>
> 5\. Reference Materials
>
> Chapters 12 and 13 of Handbook 9
>
> Food Aid Management Plan for USAID Missions
>
> USAID Manual for Food Needs Assessment (FNA)
>
> Monetization Field Manual
>
> Commodities Reference Guide
>
> 4E. Section 416(b)
>
> 1\. Objectives
>
> The intent of Section 416 of the Agricultural Act of 1949 is twofold:
> one, to prevent the waste of commodities, whether private stocks or
> acquired through price-support operations by CCC, before they can be
> disposed of in normal domestic channels without impairment to the
> price-support program or sold abroad at competitive world prices; and,
> two, in so doing, to use such commodities to feed needy persons,
> whether domestically or under Title II and the Food for Progress Act
> activities.
>
> 2\. Structure
>
> Section 416(b) authorizes the use of commodities in developing
> countries in Title II and Food for Progress programs, and for such
> other purposes as approved by the Secretary of Agriculture. USDA is
> responsible for the management and programming of the 416(b)
> commodities.
>
> 3\. Section 416(b) Operational Responsibilities
>
> All Section 416(b) program responsibilities belong to USDA and their
> country or regional agricultural attaches, as appropriate. As in the
> case of Title I, any exceptional cases that entail any use of Section
> 416(b) commodities which are to be managed by USAID Missions will be
> decided on a case-by-case basis. The same criteria as in 4B.3., above,
> are necessary, but not in themselves sufficient for approval of such
> programs by USAID/W: (a) a USAID Mission proposal or endorsement of a
> USDA request that USAID Mission manage a 416(b) program must detail
> the length of involvement and specific responsibilities to be
> maintained; (b) the proposal must show how the activity is vital for
> the field, USAID or USG interests in the country or region; (c) the
> activity must fit within the USAID Mission\'s strategic objectives;
> (d) USDA must have no on-the-ground capability to manage the program
> on its own without USAID Mission involvement; (e) reimbursement of
> costs of implementing or monitoring the program by USAID must be
> explored and/or negotiated; (f) a USAID Mission food aid management
> plan must be in place; (g) increased staff must not be required to
> manage the activity and (h) the USAID Mission must identify program
> benefits that will result from USAID management of the Section 416(b)
> food program.
>
> A USAID Mission or Field Post must direct to the appropriate Regional
> Bureau its request to begin managing a 416(b) program or indicate its
> concurrence with a USDA or Department of State request for USAID to do
> so. The USAID Mission or Field Post must describe the proposed
> program, including USAID Mission\'s projected life of program
> involvement, its importance to the USAID Mission\'s assistance
> strategy, USAID Mission\'s management capacity in place, USDA\'s
> capability and the USAID Mission\'s resources needed to implement or
> monitor the activity effectively. This request should indicate the
> proposed costs USDA will pay for USAID management of the program. If
> the request is endorsed by the Regional Bureau, the Bureau will
> prepare an action memorandum for signature by the Assistant
> Administrator which will be directed to M, PPC and BHR for concurrence
> and BHR will negotiate with USDA on the arrangements for USAID
> participation in a 416(b) activity.
>
> 4F. Food for Progress
>
> 1\. Objectives
>
> Section 1110 of the Food Security Act of 1985 covers the Food for
> Progress legislation, which authorizes the President to enter into
> agreements to provide food to countries that make commitments to
> promote the implementation of private, free-enterprise agricultural
>
> policies for agricultural development. The Food for Progress program
> provides commodity assistance in recognition of developing countries\'
> progress toward democracy and open market systems, as well as
> assistance for emerging democracies.
>
> 2\. Structure
>
> The Food for Progress program is managed by USDA and the commodities
> provided are from those budgeted for Title I and Section 416(b).
> Criteria for selection are political commitment to reform and
> implement policy decisions on free market principles and private
> sector involvement; in-country capacity to carry out agricultural
> reform; evidence of policies conducive to improvements in agriculture;
> potential for economic growth, and potential or existence of other
> donor support. The Food for Progress food assistance option is
> essentially targeted by USDA for programs in countries that can be
> classified as developing or evolving democracies.
>
> CHAPTER 5
>
> TITLE III FOOD FOR DEVELOPMENT PROGRAM
>
> 5A. [Introduction and Purpose]{.underline}
>
> This Chapter outlines the U.S. Government procedures for approving and
> administering the Public Law 480, Title III, Food for Development
> (FFD) program. It provides guidance on those phases of the program in
> which AID plays an important role.
>
> 5B. [Legislative History and Program Structure]{.underline}
>
> 1\. Congress enacted the Title III \"Food for Development\" program
> (Secs. 301-307 of P.L. 480) in 1977 to increase the developmental
> impact of P.L. 480 food aid. It did so to provide incentives to
> developing countries to use P.L. 480 food aid as a development
> resource. The key incentive for the recipient country under Title III
> is that, in return for carrying out agreed developmental activities,
> the United States Government will offset all or part of the recipient
> government\'s Title I repayment obligations.
>
> 2\. Provisions of Title III of the Act, as amended, authorize:
>
> a\. Commodities made available under Title III programs to be financed
> by CCC under the authority of Title I.
>
> b\. Multi-year Food for Development Programs with eligible countries
> that meet specified criteria. These countries would purchase specific
> annual values of agricultural commodities that would be delivered over
> a period of one to five years. Title III permits local currency
> proceeds utilized for development purposes specified in the Act to be
> credited against the dollar repayment obligation incurred by certain
> Title I sales agreements. Thus, Title I sales agreements that include
> a Title III food for development program are referred to as Title
> I/III sales agreements. In return for these multi-year commitment and
> loan forgiveness provisions, the recipient country must undertake
> development effort(s) which complement, but do not replace, other
> development assistance provided by AID, other donors, or by the
> foreign government\'s own development programs. This means that the
> effort(s) must be additional to what is currently under way, already
> committed by donors, and specifically included in the recipient
> country\'s own development budget.
>
> c\. Title III programs must support activities designed to increase
> (1) the access of the poor to a growing and improving food supply, and
> (2) the well-being of the poor in the rural sector of the society.
> These activities may include agricultural and rural development,
> nutrition programs, health services (including immunization of
> children), voluntary family planning programs and the Farmer-to-Farmer
> program.
>
> Particular emphasis should be placed on policies and associated
> programs which effectively assist small farmers, tenants,
> sharecroppers and landless agricultural laborers. Its aim is to expand
> their access to the rural economy through services and institutions at
> the local level, and provide opportunities for the poor, who are
> dependent upon agriculture and agricultural-related activities to
> better their lives through their own efforts.
>
> 5C. [Title III Eligibility Requirements]{.underline}
>
> Recipient countries with which Title I/III sales agreements are
> entered into must satisfy all of the terms and conditions applicable
> to Title I agreements (Chapter 4), plus the following additional
> eligibility requirements. Each recipient country must:
>
> 1\. Have a need for external resources to improve its food production,
> marketing, distribution, and storage systems;
>
> 2\. Meet the per capita income criterion (in Fiscal Year 1988 this was
> a maximum of \$835) necessary to qualify for development loans from
> the International Development Association of the International Bank
> for Reconstruction and Development (the World Bank);
>
> 3\. Be able to use effectively the resources made available by the
> resale of the food commodities;
>
> 4\. Indicate a willingness to take steps to improve its food
> production, marketing, distribution, and storage systems.
>
> 5D. [Development]{.underline}
>
> 1\. The Title III proposal should be brief and clearly written, and it
> should include as its centerpiece \[1\] the proposed self help
> measures, and \[2\] a plan which describes how the recipient is to
> earn offset \[i.e. through the use of commodities or through the use
> of local currency\]. Section 303\[a\] of the Act sets out the features
> which should be common to all Title III proposals. They are:
>
> An annual quantity and value of commodities to be financed under the
> Title I agreement;
>
> A plan for the uses of the commodities or the proceeds generated from
> their sale \[which will be formalized in Annex B\];
>
> A description of the nature and magnitude of the problems to be
> affected by the effort undertaken through the agreement;
>
> A list of targets to be achieved; and
>
> A description of the relationships among the various projects,
> activities, or programs to be supported.
>
> In addition, the legislation mandates that a multiyear utilization
> program must include a statement of how the proposed program will be
> integrated into
>
> and complement the country\'s overall development plan and other forms
> of bilateral and multilateral assistance.
>
> 2\. [Timing]{.underline}
>
> a\. Country teams may submit Title III Food for Development (FFD)
>
> proposals including draft Annex B at any time during the fiscal year.
> Ideally they should be submitted prior to the beginning of the fiscal
> year and no later than the end of the first quarter of the fiscal year
> in which it is to be signed. Because of the PL-480 requirement to load
> commodities at U. S. ports not later than the end of the supply period
> \[almost always the fiscal year\] and because of the complexity of
> Title III agreement negotiations, Missions should expect that
> proposals received in Washington after October 31 will be considered
> for signing and implementation in the following fiscal year, \[i.e.,
> FY 90 for proposals received after October 31, l988\].
>
> b\. Country teams should submit draft Negotiating Instruction (See
> Attachment B, Chapter 4) for DCC approval not later than 60 days prior
> to expected date of authority to negotiate. Where the intention is to
> negotiate the agreement within 60 days of the submission of the
> proposal, draft language for the self-help measures of the Title I
> portion of the agreement and a draft Negotiating Instruction must be
> included as part of that proposal. Country teams are reminded that
> each agreement\'s specific language must be approved in Washington
> before formal negotiations can be authorized. Attachment B typically
> defines policy commitments the recipient government is undertaking and
> briefly describes the projects, programs or activities to be funded by
> L/C generations, indicating by project, program or activity both
> annual budget levels and annual benchmark targets.
>
> c\. [Waiver]{.underline}
>
> For those countries that meet the criteria to qualify as \"relatively
> least developed countries,\" the President of the United States may
> waive, under Section 304 (c) of P.L. 480, the requirements with
> respect to project additionality, as well as the documentation
> requirements (i.e., the multi-year planning proposal, and the annual
> progress report). Such waivers are permissible if the President
> determines that such requirements cannot be met by a given recipient
> country, and yet Title III assistance is needed to meet important
> humanitarian or development objectives. Any such waivers, along with
> justifications, must be reported annually by the President to the
> Congress. For these countries, also, the CCC may pay the freight
> charges for transporting the Title III commodity to the port or point
> of entry in the receiving country.
>
> Waiver of Title III requirements requested by a relatively least
> developed country will be considered at the time a Title III proposal
> is presented for review and approval to the USAID or Diplomatic Post
> and AID/W.
>
> 3\. [Evaluation of Title III Programs]{.underline}
>
> a\. [Recipient Country]{.underline} . Title III legislation requires
> the recipient country to provide a report annually to the USAID
> Missions or Diplomatic Posts on the progress achieved under the
> program. This report should include:
>
> \(1\) A comparison of results with projected targets.
>
> \(2\) A description of how the commodities were used.
>
> \(3\) An accounting for funds generated and their uses.
>
> \(4\) The outstanding balances at the end of the most recent (USG)
> fiscal year.
>
> b\. [USAID Mission or Diplomatic Post.]{.underline} An annual review
> is also required by the USAID Missions or Diplomatic Posts of the use
> of proceeds and how well the country has met the terms of the
> agreement. The report and/or annual review should recommend any
> program changes or modifications necessary to accomplish the goals and
> objectives of the program. The recipient country annual report and the
> USAID Mission annual review report are to be submitted, by December
> 15, each year to AID/W-FVA/FFP.
>
> c\. [AID/W-FVA/FFP]{.underline} . The combined annual progress report
> and annual review report are the basic documents used by the
> Interagency Working Group of the Food Aid Subcommittee of the
> Development Coordinating Committee (DCC) for review and approval of
> the subsequent year\'s allocation for the Title III program. In
> addition to these reports, evaluations will be undertaken by AID/W
> where appropriate to address impact issues that transcend country
> specific concerns. The impact evaluations will provide guidance for
> improving and expanding the Title III program generally. (See also
> Chapter 17 of this Handbook dealing with evaluation.)
>
> 4\. For further guidance in developing and approving, implementing and
> administering a Title III program, See the attached \"Revised PL-480,
> Title III Program Guidance, FY 1989 and Future Years\"
>
> [(SEE END OF CHAPTER 5 HARD COPY FOR \"REVISED PL 480, TITLE III
> PROGRAM GUIDANCE, FY 1989 and FUTURE YEARS - THIS MATERIAL IS NOT ON
> DISKETTE)]{.underline}
>
> CHAPTER 6 TITLE II PROGRAM DEVELOPMENT
>
> 6A. [Types of Programs to be Considered]{.underline}
>
> 1\. [General]{.underline}
>
> AID encourages the development and submission of various Title II
> programs, direct Title II feeding activities which support development
> and nutritional objectives, programs using Title II food and/or local
> currency which contribute to economic and community development,
> emergency programs, and other innovative uses of Title II resources,
> such as but not limited to those supporting sectoral policy reform or
> economic structural adjustment. Definitions pertaining to Title II
> programs are listed in Appendix B, AID Regulation 11.
>
> 2\. [Program Activities]{.underline}
>
> a\. [Emergency Programs]{.underline}
>
> The development, submission, and processing of proposals for emergency
> programs are covered in Chapter 9, Emergency Projects.
>
> b\. [Direct Feeding Programs]{.underline}
>
> These programs are covered in Chapter 10, Direct Feeding in Support of
> Development and Nutritional Objectives, and include but are not
> limited to:
>
> \(1\) [Child Feeding and Child Survival]{.underline}
>
> \(a\) Maternal/Child Health (MCH) Feeding
>
> \(b\) Preschool-Age Child Feeding
>
> \(c\) Primary School and Other Child Feeding
>
> \(2\) [Food-for-Work Programs]{.underline}
>
> \(a\) Economic Development
>
> \(b\) Community Development
>
> \(c\) Educational Development
>
> \(d\) Health Development
>
> \(3\) [Programs in Support of Policy Reform and Structural
> Adjustment]{.underline}
>
> c\. [Section 206 Programs and Programs Involving
> Monetization]{.underline}
>
> These are covered in Chapter 11, Local Currency Projects.
>
> 3\. [World Food Program (WFP)]{.underline}
>
> The U.S. Government contributes resources to the World Food Program
> through Title II and Section 416. WFP representatives have the
> responsibility for developing projects for submission to their parent
> organization, which subsequently determines which donor country or
> countries will be requested to fulfill project resource requirements
> from existing pledges to WFP. These programs are covered in Chapter
> 12, U.N./FAO World Food Program.
>
> 6B. [Program Guidelines]{.underline}
>
> Certain limiting factors must be taken into account by U.S. Missions,
> Cooperating Sponsors, and Inter-governmental Organization
> Representatives when preparing or submitting programs to AID/W for
> review. Program proposals which require exceptions to guidelines must
> be accompanied by strong justification and Mission endorsement. These
> guidelines are:
>
> 1\. [Food Needs Assessment Emergency Direct Feeding]{.underline}
>
> A food needs assessment should be undertaken to determine the level of
> food needs and the appropriate commodities. Consideration should be
> given to both the overall consumption requirements of the recipients
> as well as the food supplies at their disposal (from production stocks
> or purchases). See both the Commodity Reference Guide and the Manual
> for Food Needs Assessment as well as Chapter 3, Item G for more
> detail.
>
> 2\. [Nondisplacement of Other Resources]{.underline}
>
> Normally commodities may not be requested if they will displace
> resources (cash, commodities, or services) which currently are
> available from other non-AID sources or can reasonably be expected in
> the absence of U.S. Title II assistance. If circumstances exist which
> justify special consideration, the U.S. Mission should seek AID/W
> guidance prior to program proposal submission.
>
> 3\. [Countries Which Export The Same or Similar
> Commodities]{.underline}
>
> Except for emergencies, commodities which are the same as those which
> a recipient
>
> country exports (on a net basis) normally will not be provided. AID/W
> may exempt a country from this condition if the country has agreed to
> provide a substantial part of such commodities from indigenous or
> external commercial sources or if other circumstances, such as the
> degree of recipient government support for Title II feeding
> activities, exist which justify special consideration.
>
> 4\. [Sales and Other Charges]{.underline}
>
> If sales or charges other than those described in Chapter 11, those
> necessary for the disposition of spoiled commodities, or token charges
> for Maternal Child Health (MCH) and School Feeding (SF), are
> contemplated, the Mission should seek AID Washington guidance.
>
> 5\. [Monitoring and Management by U.S. Missions]{.underline}
>
> When reviewing new programs, each Mission must take into account its
> ability to manage and monitor according to the Mission responsibility
> outlined in Chapter 2. If adequate support does not appear to be
> possible, AID/W must be notified.
>
> 6\. [Bellmon Requirements]{.underline}
>
> As called for under Section 401 (b) of the P.L. 480 legislation,
> proposals must address the adequacy of storage conditions and no
> agricultural commodity may be provided unless adequate storage
> facilities are available in the recipient country at the time of
> exportation of the commodity from the United States. This requirement
> is necessary to prevent the spoilage or waste of the commodity. There
> must also be a determination that distribution of the commodity in the
> recipient country will not result in a substantial disincentive to or
> interference with domestic agricultural production in that country.
> (See Appendix A-l.a. P.L. 480 legislation for specific Bellmon
> Amendment requirements.)
>
> 7\. [Nondisplacement of Sales]{.underline}
>
> As provided in Section 202(a), except in the case of emergency,
> reasonable precaution should be taken to assure that Title II
> commodities will not displace or interfere with sales which might
> otherwise be made.
>
> 6C. [Submission of Program Proposals and Supporting
> Documents]{.underline}
>
> 1\. [Government-to-Government Proposals]{.underline}
>
> Government-to-Government proposals, with the exception of emergency
> and Section 206 proposals, are submitted to AID/W in accordance with
> annual guidance from AID/W in a form similar to a Project
> Identification Document (PID) and project papers (PP\'s).
>
> 2\. [Voluntary Agency, Cooperative, and Inter-governmental
> Organization Programs]{.underline}
>
> a\. [Project Proposal and Operational Plans]{.underline}
>
> Voluntary Agencies, Cooperatives and Inter-governmental Organizations
> must submit nonemergency project proposals to Missions in compliance
> with the Operational Plan format (see Appendix B, AID Regulation 11,
> Appendix II). Under this format each cooperating sponsor shall submit
> to the USAID or Diplomatic Post for the approval of AID/W, a
> description of the program it is sponsoring or proposes to sponsor.
> Operational plans emphasize detailed descriptions of target groups,
> analysis of the problems feeding programs will address, justification
> for ration selection and size, identification of complementary
> components and services necessary for achieving project objectives,
> and monitoring and evaluation procedures.
>
> The Operational Plan must be submitted annually, or if there is
> approved multi-year strategy, at 2-, 3-, 4, or 5-year intervals
> depending on program. Within the overall objectives of the approved
> program, elements of the program may be changed by written agreement
> of the authorized representatives of the cooperating sponsor, on the
> one hand, and AID and CCC, within their respective areas of
> responsibility, on the other, without formal amendment of the
> agreement. In case of a conflict between the text of the agreement and
> the approved plan of operation the text of the agreement prevails.
>
> b\. [Timing of Operational Plans]{.underline}
>
> Operational Plans may be submitted annually, or, on a multi-year
> basis. The multi-year plan of operation will be required for all
> regular Title II PVO programs as part of the proposal submission along
> with the annual submission of an AER (see below).
>
> Operational plans are to be submitted to AID/W no later than the
> Mission Action Plan covering the following fiscal year\'s program.
> Once a multi-year operational plan has been approved, only an updating
> will be required on an annual basis, unless there has been a
> significant change from the approved plan in program directives,
> methodology, design or magnitudes. Updates should be submitted each
> year for review with the AERs.
>
> c\. [Narrative and Statistical Summary]{.underline}
>
> After the Mission has examined and concurred with the Operational
> Plan, the Mission prepares a narrative and statistical summary for the
> Title II portion of the Missions\'s Annual Budget Submission (ABS).
> This summary should relate the operational plan to the Mission\'s
> Country Development Strategy Statement (CDSS). AID/W review of the
> Mission\'s Title II program will be based on these ABS materials.
>
> d\. [Annual Estimate of Requirements (AER)]{.underline}
>
> \(1\) Subsequent to the review and approval of the Title II portion of
> the ABS, the Voluntary Agencies, Cooperatives and Intergovernmental
> Organizations submit to the Mission an Annual Estimate of Requirements
> (AER). Form AID 1550-3 (see Exhibit E), which is a statistical update
> of the Operational Plan and the ABS, and which takes into
> consideration adjustments recommended during the AID/W and Title II
> reviews.
>
> \(2\) After the Mission has examined and concurred with the AER, it is
> signed by the responsible Mission officer. The Voluntary Agency or
> Intergovernmental Organizations then forwards copies of the
> Mission-signed AER to its home office for signing and submission to
> FVA/FFP AID/Washington.
>
> \(3\) After approval of the AER and operational plan by by the
> voluntary agency headquarters office, two signed copies are forwarded
> to AID/W-FVA/FFP. These copies should arrive in AID/W-FVA Office of
> Food for Peace not later than April 15.
>
> 3\. [Emergency Programs]{.underline}
>
> For submission of emergency proposals, see Chapter 9.
>
> 4\. [Mission Responsibilities for Project Proposals]{.underline}
>
> Missions are responsible for assuring completion of all project
> proposals in the form required. Missions should discuss documentation
> requirements in detail with the cooperating sponsor, providing
> assistance as appropriate. However, the cooperating sponsor is to
> provide program information for the completion of necessary
> documentation. In the case of voluntary agencies, cooperatives and
> Inter-governmental Organizations, the cooperating sponsor provides the
> Operational Plan and AER for Mission approval.
>
> 6D. [Review of Program Proposals and Supporting Documents]{.underline}
>
> 1\. [AID/W Review]{.underline}
>
> The project proposal (i.e., a Program Plan as described above in the
> case of government-to-government proposals, and the ABS and AER in the
> case of voluntary agencies, cooperatives and Intergovernmental
> Organizations) is reviewed by:
>
> a\. (1) FVA/FFP to determine that the program as planned is consistent
> with appropriate Regulations and guidelines, is technically sound, is
> appropriate for the purpose intended, and is reasonably within the
> operating capacity of the cooperating sponsor.
>
> \(2\) FVA/FFP in compliance with Section 208 of the Agricultural Trade
> Development Assistance Act of 1954, as amended (P.L. 480), must
> respond as follows:
>
> \(A\) \"If a proposal to make agricultural commodities available under
> this title is submitted by a nonprofit voluntary agency or cooperative
> with the concurrence of the appropriate United States Government field
> Mission or if a proposal to make agricultural commodities available to
> a nonprofit voluntary agency or cooperative is submitted by the United
> States Government field Mission, a decision on the proposal shall be
> provided within 45 days after receipt by AID/W. The response shall
> detail the reasons for approval or denial of the proposal. If the
> proposal is denied, the response shall specify the conditions that
> would need to be met for the proposal to be approved.
>
> \(B\) \"Notice and Comment.\--Not later than 30 days before the
> issuance of a final guideline to carry out this title, the President
> shall (1) provide notice of the proposed guideline to nonprofit
> voluntary agencies and cooperatives that participate in programs under
> this title, and other interested persons, that the proposed guideline
> is available for review and comment; (2) make the proposed guideline
> available, on request, to the agencies, cooperatives, and others; and
> (3) take any comments received into consideration before the issuance
> of the final guideline.
>
> \(C\) Deadline for Submission of Commodity Orders.\--Not later than 15
> days after receipt of a call forward from a field Mission for
> commodities or products that meets the requirements of this title, the
> order for the purchase or the supply, from inventory, of such
> commodities or products shall be transmitted to the Commodity Credit
> Corporation.\"
>
> b\. The Geographic Bureau to assure that it is consistent with U.S.
> objectives, development policies, and other programs in the country.
>
> c\. PPC to assure that it complies with grant assistance policy and it
> is within the budget.
>
> 2\. [Interagency Review]{.underline}
>
> After AID/W has reviewed and recommended approval of a project
> proposal, the proposal is placed before the Title II DCC Food Aid
> Subcommittee Working Group by FVA for review and approval. If the
> Working Group is unable to reach agreement on a project proposal, it
> is forwarded to the full DCC Subcommittee for consideration and
> decision.
>
> 6E. [Implementation Procedures]{.underline}
>
> When the Working Group\'s (WG) review has been concluded, AID/W will
> follow one of three mechanisms leading to the final implementation of
> the proposed project:
>
> The Transfer Authorization (TA) is normally used on all
> government-to-government projects and may be used in other cases which
> require inclusion of special and detailed provisions. This process
> includes, when necessary, provision for paying the costs of inland
> transportation, destination bagging, or other related matters.
>
> For Regular P.L. 480, Title II programs, the multi-year operational
> program plan is submitted by
>
> the U.S. Voluntary Agencies and Intergovernmental Organizations. The
> Operational Plan and Annual Estimate of Requirements are the
> controlling implementation documents for this procedure.
>
> The WFP project approval is used for the commitment of commodities
> pledged to the World Food Program (see Chapter 12).
>
> 1\. [Transfer Authorization Procedure]{.underline}
>
> a\. [Transfer Authorization (TA)]{.underline}
>
> \(1\) [General]{.underline}
>
> FVA/FFP prepares a Transfer Authorization (TA) which includes the
> specific types and amounts of commodity to be shipped, the estimated
> value of the commodity and transportation costs, a description of
> program objectives, and the agreed upon terms and conditions for the
> use of the commodity. TA\'s incorporate AID Regulation 11 by
> reference.
>
> \(2\) [Purpose]{.underline}
>
> The TA serves as the Food for Peace Agreement between the U.S.
> government and the cooperating sponsor, the project authorization
> document, and the authority for the Commodity Credit Corporation to
> ship commodities.
>
> \(3\) [Format, Contents, and Approval]{.underline}
>
> The TA is prepared substantially in the format shown in Exhibit A.
> Often the AID/W-FVA/DAA and Coordinator/FFP, delegates his authority
> to sign the agreement to the USAID Director, the Ambassador or the
> Ambassador\'s designee. In this case four (4) legible certified true
> copies of all TA\'s are to be provided to AID/W, FVA/FFP/POD.
>
> \(4\) [Case Act Requirement]{.underline}
>
> U.S. agreements for \$25 million or more with foreign countries must
> be provided to the United States Congress. To comply with this Act,
> when a Title II Transfer Authorization is signed in a host country,
> the Mission or Embassy provides two (2) legible certified true copies
> to AID/W-GC for transmittal to the U.S. Department of State, Legal
> Treaty Affairs (L/T), for their Archives and submission to the U.S.
> Congress.
>
> b\. [Arrangements for Ordering and Shipping Commodities]{.underline}
>
> Request for shipments originate with the cooperating sponsors, and are
> submitted to the Mission for clearance and transmittal to AID/W (see
> Chapter 7).
>
> 2\. [Food for Peace Program Agreement Procedure]{.underline}
>
> This procedure is authorized by AID/W when the cooperating sponsor is
> a voluntary agency, cooperative or an Inter-governmental Organization.
>
> a\. [Multicountry Agreement]{.underline}
>
> AID and the cooperating sponsor enter into a Food for Peace Agreement
> covering the transfer, acceptance, and use of commodities for approved
> programs in recipient countries in accordance with specified
> legislation, delegations of authority, and the applicable Regulations,
> as amended (see Exhibit C). This Agreement between AID, as arranged by
> FVA/FFP, and the cooperating sponsor encompasses all countries within
> which the cooperating sponsor, may be authorized to implement Title II
> programs. It remains in force until modified by AID or the cooperating
> sponsor. It is not practicable for the foreign governments to sign
> this Agreement.
>
> b\. [Individual Country Agreement]{.underline}
>
> \(1\) Having entered into a multicountry agreement with AID, the
> cooperating sponsor, where practicable, is required to enter into a
> written agreement with (1) the government of the recipient country,
> and (2) the recipient agency involved in implementing the program.
> This agreement is to include the incorporation by reference or
> otherwise, the terms and conditions of AID Regulation 11.
>
> \(2\) In addition to the above, the agreement between the cooperating
> sponsor, and the government of the recipient country should specify
> and delineate matters of interest to both or either parties and should
> include but not be limited to the following:
>
> \(a\) Arrangements for duty-free entry of commodities and waiver of
> other port charges.
>
> \(b\) Arrangements for payment of program costs such as ocean freight
> if required, unloading, port fees, if any, inland transportation,
> warehousing, and the issuance of commodities to recipients.
>
> \(c\) Arrangements for the provisions of funds, equipment, personnel
> or supplies that will assist in the operations of programs.
>
> \(d\) Permission from the government of the recipient country for
> representatives of the cooperating sponsor to have freedom of
> implementation-related travel, and for such other activities as are
> needed by the cooperating sponsor to carry out its
> managerial/supervisory responsibilities.
>
> \(e\) Arrangements, where feasible, for local government confiscation
> of commodities appearing in unauthorized channels, and for their
> return to the cooperating sponsor.
>
> \(f\) Arrangements assuring the right of the cooperating sponsor to
> audit the records and operations pertaining to the receipt, storage,
> distribution, and use of the
>
> commodities including the authority to visit ports, warehouses, and
> distribution points.
>
> \(g\) Arrangements for adequate program publicity.
>
> \(h\) The inclusion of a statement of special conditions, if any,
> imposed by the host government relative to the admission, storage,
> transportation, distribution, or utilization of commodities.
>
> \(i\) Arrangement for a procedure to be followed in the condemnation
> of food no longer fit for human consumption.
>
> \(j\) Assurance that recipient will receive foods only for
> participation in AID/cooperating- sponsor approved projects.
>
> \(3\) If circumstances preclude the individual country agreement,
> voluntary agency programs may operate under the provisions of AID
> Regulation 11, Section 211.3(b), provided the U.S. Mission certifies
> that the program can and/or does operate effectively in the absence of
> such agreements.
>
> 6F. [Ordering and Shipping]{.underline}
>
> Following review and approval of the project proposals by AID/W and
> the Working Group and after the implementation procedures have been
> completed, the cooperating sponsor may, subject to clearance by the
> Mission, request USDA to deliver commodities for export (FAS U.S.
> ports).
>
> CCC Form 183, Commodity Request for Foreign Distribution, obtainable
> from the USDA, is used for this purpose. (See Exhibit H.) Orders are
> placed at quarterly intervals for quantities needed. Upon notice from
> USDA of the portside delivery schedule, the cooperating sponsor books
> the cargo and arranges for overland carriers if shipments are to
> landlocked countries.
>
> 6G. [Title II Institutional Support Grants]{.underline}
>
> The following guidance pertains to the Title II Institutional Support
> Grant Project Authority established in March l989 and extending
> through l992. This guidance is provisional and will be amended when
> the new Project Authority governing DA-funded assistance to PVOs
> implementing Title II programs is established in l992.
>
> 1\. [General Description of Title II Institutional Support
> Grants]{.underline}
>
> Title II Institutional Support Grants provide development assistance
> (DA) funds to PVO Cooperating Sponsors to assist them in defraying key
> headquarters and field costs including logistics, such as inland
> transportation and storage, that cannot be covered through the PVOs\'
> own resources, USAID Missions, or other donor funds, and to enhance
> the PVOs\' institutional capacity to design and manage programs that
> emphasize the developmental and humanitarian uses of food commodities.
> In addition, a limited amount of funds is available under this program
> for PVOs who require support for the design and initiation of Title II
> food programming.
>
> Funds are used predominantly to cover start-up costs and other
> one-time expenses not likely to be funded otherwise. Alternative
> sources of funding must be found to cover continuing operating costs.
> Cooperating Sponsors with Title II Institutional Support Grants
> provide a minimum of 25 percent of the total estimated costs of the
> program in cash or in kind from non-U.S. Government sources, excluding
> the value of food and ocean freight.
>
> Cooperating Sponsors are encouraged to optimize Title II Institutional
> Support Grant funding to leverage other resources from public and
> private sources, as well as complementary existing support from USAID
> Missions. PVOs must consult with USAIDs as they plan Title II
> Institutional Support Grant activities and prepare proposals. USAIDs
> should ensure that PVO proposals are consistent with the Title II
> Institutional Support Grant guidelines which are published annually by
> FVA/PPM, and are complementary to AID\'s development policies and
> priorities.
>
> 2\. [Goals and Objectives]{.underline}
>
> The goal of the Title II Institutional Support Grant Program is to
> provide broad support to Cooperating Sponsors, as partner
> organizatrions with AID, to achieve mutually important objectives in
> the developmental and humanitarian uses of food commodities provided
> under P.L. 480, Title II in order to alleviate the underlying causes
> of hunger and malnutrition.
>
> The program\'s primary objective, in addition to responding to unmet
> logistical requirements, is to further strengthen the institutional
> capacity of Cooperating Sponsors to:
>
> a\. design and institutionalize the disaster preparedness,
> humanitarian and developmental uses of food aid;
>
> b\. maximize the effectiveness and efficiency of existing Title II
> country programs, particularly as relates to fiscal and programmatic
> accountability;
>
> c\. enhance exiting programs or begin programs in new countries as
> appropriate with the approval of USAID Missions and the FVA Bureau;
>
> d\. enhance headquarters and field program planning, implementation,
> monitoring and evaluation capacilities; and
>
> e\. build the capacity of new U.S. PVOs and indigenous PVOs/NGOs and
> private sector organizations capable of handling and managing
> commodities.
>
> The Title II Institutional Support Grant Program also encourages joint
> country-level and area planning among Cooperating Sponsors,
> particularly to develop coordinated management of food assistance
> where possible; the use of umbrella arrangements for food management;
> provision of technical assistance in programming and management by
> established PVOs to new or \"embryonic\" PVOs desiring to become
> involved in Title II food assisted activities; and increased use of
> monetization.
>
> 3\. [Title II Institutional Support Grant Coverage]{.underline}
>
> Four categories of costs are covered by Title II Institutional Support
> Grants. These include:
>
> a\. Program Costs
>
> b\. Indirect Costs
>
> c\. Procurement Costs
>
> d\. Evaluation
>
> 4\. [Eligibility]{.underline}
>
> To be eligible for a Title II Institutional Support Grant, an
> organization must be a U. S. private voluntary organization (PVO)
> registered with AID and a qualified Cooperating Sponsor of P.L. 480,
> Title II programs in accordance with the policies and procedures
> specified elsewhere in Handbook 9, and must have an established track
> record in the planning, management, reporting and evaluation of
> food-assisted development programs, or have created the capacity for
> such, through the successful implementation of predecessor
> (Outreach/Enhancement) grant activities.
>
> CHAPTER 7
>
> EMERGENCY PROGRAMS
>
> 7A. Authority
>
> Title II of P.L. 480 authorizes as a first priority the establishment
> of programs to address famine or other urgent or extraordinary relief
> requirements. P.L. 480 goes on to statethat notwithstanding any other
> provision of law, the Administrator of USAID (A/USAID) may provide
> agricultural commodities to meet emergency food needs under Title II
> through governments and public or private agencies, including
> intergovernmental organizations such as the World Food Program (WFP)
> and other multilateral organizations, in such manner and on such terms
> and conditions as the A/USAID determines appropriate to respond to the
> emergency. Emergency assistance may be requested by or offered to any
> nation or people to meet urgent or extraordinary relief requirements
> resulting from natural or man-made disasters when that nation or its
> people lack the necessary resources to meet the urgent requirements.
>
> 7B. Introduction
>
> Emergency situations were originally perceived and defined as
> extraordinary occurrences that resulted in temporary and short-term
> (less than nine months) needs. During the 1980s disaster situations
> developed that have permanently changed this original concept. One
> perception that changed involved the dramatic difference between
> coping with an emergency caused by natural disaster (e.g., crop
> failure from drought or pests) and responding to the needs of refugees
> displaced by civil war orpolitical persecution, situations in which
> relief is much harder to achieve. Refugees and displaced persons are
> among the most vulnerable of the poor, open to hunger and malnutrition
> in their flight from violence, political upheaval or social turmoil.
> Food aid provided to refugees has grown dramatically in recent years
> and progress is being made in coordinating and focusing the delivery
> of food aid to refugee populations. With a greater understanding of
> the intrinsic extended, rather than short-term, nature of many refugee
> and displaced person situations, public voluntary organizations (PVOs)
> and development agencies are developing new approaches to provision of
> relief.
>
> Another aspect of emergency assistance that has become more fully
> understood is that donors like USAID can respond quickly to disasters
> caused by drought, pestilence or other natural causes when governments
> are stable enough to reach out for assistance to international markets
> or international donor agencies, when basic marketing and distribution
> systems are untouched by civil war and when family and community
> structures are intact. In regions like the Horn of Africa, on the
> other hand, civilian populations have endured years of suffering
> caused not only by drought and pestilence, but also by the trauma of
> civil war and political unrest. In these countries provision of
> emergency assistance is a daunting logistical task in the face of
> ongoing strife.
>
> Food aid emergencies are increasingly becoming commonplace. According
> to the World Food Program (WFP), an estimated 35.1 million people in
> 46 countries will need about 4.5 million tons of emergency food
> assistance in 1994; Africa's emergency needs in 1994 are doubled those
> of 1993. Present estimates for the Greater Horn of Africa alone for CY
> 1994 approximate 2.5 million metric tons.
>
> The growing challenge is the increasing inability of existing
> mechanisms and emergency food resources to meet the rising number of
> food emergencies.
>
> 7C. General Definition of Emergency
>
> Food aid emergencies are generally defined as: urgent situations in
> which there is clear evidence that an event has occurred which caused
> human suffering and which the government concerned has not the means
> to remedy; and it is a demonstrably abnormal event which produces
> dislocation in the life of a community on an exceptional scale.
>
> The provision of Title II emergency food assistance can be considered
> in situations where there has been a U.S. mission disaster declaration
> or a determination from a respected international organization (United
> Nations or the International Committee of the Red Cross) which
> certifies that an emergency situation exists. USAID Missions are
> reminded that the normal time frame from commodity ordering and
> procurement in the U.S. through vessel discharge at the nearest port
> of entry requires 90-120 days. To address sudden onset emergencies,
> local commodity procurement(s) and/or diversions, often employing
> other donor resources, are frequently resorted to.
>
> 1\. Characteristics of an Emergency Situation:
>
> a\. Human suffering demanding urgent action.
>
> b\. Dislocation of community economic activities, social life or both
> on an exceptional scale.
>
> c\. The suffering, disruption and food scarcity which is observed is
> clearly the result of a particular event, or a series of events, which
> is not the \"normal\" state of everyday life.
>
> d\. The Government concerned has insufficient resources to provide the
> remedy: without outside assistance the immediate physical, social and
> economic survival of the afflicted are severely at risk.
>
> 2\. Countries will qualify for emergency food assistance if:
>
> a\. Food aid is appropriate to the particular local situation.
>
> b\. Food aid cannot be supplied from other donors/programs.
>
> c\. Timely delivery of the food assistance can be distributed to the
> target areas. Delivery to the port or inland point of entry does no
> good without sufficient infrastructure to deliver commodities to the
> most needy either in urban areas or up-country.
>
> 7D. Early Warning and Food Needs Assessment
>
> While disasters obviously cannot be planned for, often the situations
> that might lead to the need for emergency foodassistance can be
> identified and monitored. Some important elements that will contribute
> to the ability to respond rapidly and responsibly to emergencies when
> they do arise are (a) ongoing contact, cooperation and coordination
> with PVOs and other donors in the host country and (b) on-going food
> needs assessments (FNAs) and/or early warning systems (EWS). The first
> improves the coordination of emergency requests and responses and the
> second helps to identify, define and quantify the emergency food need.
>
> EWS can be used to make both strategic and tactical decisions. A
> strategic early warning refers to the use of an EWS to identify at a
> general level a food deficit situation of such magnitude that internal
> resources are likely to be insufficient to meet the food needs of the
> at-risk populations. In this situation an EWS would identify food
> shortages in the following crop year based on some preselected set of
> indicators. This identification could be based on the failure of rains
> or the meteorological forecast of such a failure, poor crop yields,
> rising commodity prices in the market place, etc. Tactical uses of an
> EWS might include making more specific decisions on the size and
> location of populations at risk. EWS can be formalized, such as
> USAID\'s Famine Early Warning System (FEWS), or informal - the
> collection and analysis of information gathered from many sources,
> non-governmental organizations (NGOs) working in-country, the
> country\'sagricultural and nutritional agencies, etc.
>
> Closely tied to the EWS is the FNA methodology which has been
> developed to estimate country food availability and food deficits.
> Experience over the years has led the U.S. to attempt to
> systematically verify country food balances rather than to rely solely
> on estimates done by countries seeking food assistance or even those
> generated by other donors or international organizations. Failure to
> verify has led to over or under-provision of food aid. To assist USAID
> Missions in performing FNAs USAID/W has developed A Manual for Food
> Needs Assessment: Conceptual Framework and Software Documentation
> (document locator PN ABB 175), which is available from
> USAID/W-PPC/CDIE/DI/DISC.
>
> The manual describes the FNA methodology for determining theaggregate
> food needs of a country or region. The information generated by the
> FNA can assist in determining the aggregate level of commodity
> shortfalls or surpluses so that action can be taken.
>
> As emergency activities often include assistance from other donors as
> well as the U.S., it is important that procedures for general
> information exchange, mutual reporting and sharing of information on
> food aid needs be established whenever possible with other bilateral
> donors and multinational organizations such as the World Food Program
> (WFP). This same type of network should be established with PVOs and
> other NGOs operating programs in country.
>
> 7E. Types of Emergency Programs
>
> 1\. Short-Term
>
> Short-term emergency needs may occur as a result of manyfactors, such
> as cyclones, hurricanes, floods, limited or short-term drought, crop
> destruction by pests, etc. These types of occurrences are often the
> hardest to predict or plan for and usually call for a rapid, although
> time-limited, response. The primary objective in such cases is to
> deliver the food as rapidly as possible. Delays in response may mean
> that assistance could arrive too late to fill the original need and
> donor food could arrive as new crops are being harvested, resulting in
> a disruption in the country\'s internal markets and a competition
> between local production and donor imports. Some options and
> alternatives to avoid this in these types of emergencies are:
>
> a\. If possible, for example in the case of a drought or crop failure
> being predicted by an EWS and/or FNA, submit the request for
> assistance early. USAID Missions do not have to wait for a formal
> declaration of disaster from a country to begin the process of
> requesting food assistance. (Such a declaration is required before
> requesting assistance from the USAID/W-BHR-Office of Foreign Disaster
> Assistance (OFDA), however).
>
> b\. After the date of the program approval by USAID/W-BHR, but before
> the authorized commodities arrive at the distribution point, the
> Cooperating Sponsormay, with prior approval of USAID Mission or the
> Diplomatic Post, borrow the same or similar commodities from available
> sources or transfer commodities between approved Title II programs.
>
> c\. Immediately following the disaster occurrence, free food
> distributions to victims that lack the means to provide for themselves
> will probably be the programming choice. However, where possible
> commodity assistance in times of emergency should be channeled through
> works projects. Food assistance in such projects may be used for
> partial payment of wages to disaster or emergency victims who are
> employed on work projects, or may be used as an incentive measure and
> temporary nutritional support to people engaged in self-help
> activities. Projects should be designed to remedy the effects of the
> disaster or to alleviate the causes of emergencies.
>
> d\. In countries where PVOs or cooperatives are implementing ongoing
> regular Title II programs, their programming choice to meet the
> disaster requirements may be a retargeting or expansion of their
> ongoing programs, such as maternal-childhealth (MCH), food for work
> (FFW) or other child feeding (OCF). This type of reprogramming has the
> benefit of being a quick-response mechanism as infrastructure and
> staff are in place and commodities (which may have to be replaced or
> augmented) are already in-country.
>
> e\. Some circumstances, such as (a) the need for an extremely rapid
> response; (b) unavailability of a culturally or indigenously
> acceptable commodity in the U.S.; (c) unavailability of suitable
> commodities for transfer, borrowing or diversion; and/or (d) an
> opportunity for a large cost savings, may strongly argue for a
> trilateral food aid transaction. In these transactions, food from a
> third country could be exchanged for a commodity(ies) from the U.S.
> However, these exchanges are often intricate, involving written
> agreements from three countries (including the U.S.), shipping
> contracts, commodity inspections, etc. Approval from USAID/W-BHR to
> even begin such negotiations must be obtained as the first step and
> strong justification must exist and be presented for this mechanism of
> assistance. Also, adequate staff must be available to oversee the
> complexoperation.
>
> 2\. Long-Term or Complex
>
> Complex emergencies are those situations, such as refugee or displaced
> persons programs, protracted or cyclical drought, civil war and
> political unrest, for which there are no short-term relief solutions.
> Today approximately 20 million people are estimated to be refugees and
> another 20 million to be internally displaced within their own
> countries. In other regions the results of recurring drought and
> pestilence has been exacerbated by civil unrest. Following are some of
> the points that may pertain to programs targeted to these types of
> complex emergency needs:
>
> a\. USAID Missions should initiate and/or support EWS and FNAs, the
> first to help indicate whether there is an emergency situation
> developing and whether it is growing, the second to assist in
> determining a country\'s structural and/or emergency food deficit and
> its commercial and/or donor import needs, over both the short and
> long-term.
>
> b\. Support of regular NGO programs targeted at drought preparedness
> and famine prevention in non-emergencyyears provides sound
> infrastructures and experienced Cooperating Sponsors to help implement
> U.S. emergency responses.
>
> c\. If and as soon as possible, emergency food assistance should be
> evolved from direct food relief distributions to FFW, training
> incentive programs and/or agricultural recovery programs to try to
> avoid a dependence upon free imported donor food.
>
> d\. In some programs, where civil war and political unrest have
> compounded the effects of drought and pestilence, the emphasis will
> have to be solely or primarily on logistics, i.e., trying to get donor
> relief to the intended target populations.
>
> e\. It is U.S. established policy and practice that, when possible,
> refugee programs involving cross-border populations be handled on a
> multilateral basis, i.e., under the supervision and coordination of
> the United Nations High Commissioner for Refugees (UNHCR) and the
> World Food Program (WFP).
>
> 7F. Guidelines
>
> 1\. Program Support
>
> a\. Sales (Monetization)
>
> The sale of commodities in emergency situations is approved on a
> case-by-case basis. Any proposal for the sale of commodities in an
> emergency context must have strong justification and receive USAID/W
> approval regarding amounts and pricing. Circumstances might include
> situations where the Cooperating Sponsor has exhausted all
> possibilities of obtaining funds for movement and storage of
> commodities or where sales are the only effective distribution
> mechanism to reach the population in need. Use of proceeds from sales
> in emergencies is normally limited to the coverage of local or inland
> transportation costs or project activities directly related to
> emergency relief or rehabilitation. When proceeds are used for inland
> transportation costs, Cooperating Sponsors are expectedto augment such
> funds with funding from their own resources to the extent possible. In
> selected country situations the local currencies may be authorized for
> development, relief and rehabilitation purposes that will help
> alleviate the cause of food shortage for which the commodities are
> authorized. Cooperating Sponsors are expected to maintain records and
> accounting for such sales as stipulated in the applicable Transfer
> Authorization (TA) or Operational Plan (OP). (See Chapter 8 of this
> Handbook and the Monetization Field Manual for more details on
> monetization programs.)
>
> b\. Internal Transportation, Storage and Handling
>
> An annual dollar internal transportation, storage and handling (ITSH)
> budget is established to help defray the internal logistical costs of
> emergency programs. If other sources of support have been examined and
> are limited, a request for ITSH funds may be made with the emergency
> project proposal. This fund is limited and justification for such
> funding must be strong.
>
> c\. Office of Foreign Disaster Assistance (OFDA)
>
> OFDA grants support humanitarian activities ofCooperating Sponsors
> throughout the world when providing emergency relief and
> rehabilitation for disaster victims. Decisions to award grants are
> made on a case-by-case basis with USAID Mission participation. The
> structure and capabilities of the Cooperating Sponsors to initiate and
> carry out the anticipated disaster relief and rehabilitation
> activities are critical considerations for approval. A formal disaster
> declaration must be made before BHR/OFDA assistance can be approved.
>
> 2\. Options for Overcoming Time Constraints
>
> It is estimated that a minimum of 60 through 120 days are required to
> purchase, ship to U.S. port(s), and deliver bulk commodities to
> destination countries, and a minimum of 90 through 120 days for
> processed commodities. A longer period will be needed for processed
> commodities and/or special packaging. If the commodity is needed
> sooner, arrangements should be made to (a) borrow the same or a
> similar commodity from a local source to be replaced with the Title II
> commodity upon delivery; (b) transfer commodities between approved
> Title II programs; or (c) divert commodities in transit to another
> Title II program.
>
> a\. Borrowing Commodities
>
> After a Title II program is approved by USAID/W-BHR/FFP, but before
> commodities arrive at distribution points, a Cooperating Sponsor may
> borrow the same or similar commodities from a nearby available source
> (e.g., local supply, another PVO or multilateral program) to use in
> its Title II program. A Cooperating Sponsor must obtain approval from
> USAID Mission or the Diplomatic Post before borrowing commodities.
>
> Borrowed commodities must be used in accordance with the terms of the
> approved emergency program and, whenever possible, shall be given
> suitable publicity through the media, at distribution sites or on
> containers, as having been provided through the friendship of the
> American people through the Bureau for Humanitarian Response, Office
> of Food for Peace (BHR/FFP).
>
> The amount of commodities transferred to replace the borrowed
> commodities shall be established by mutual agreement between
> USAID/W-BHR/FFP and the Cooperating Sponsor and will be determined on
> the basis of an equivalent value at the time and place of transfer
> oron some other justifiable basis. For instance, if non-Title II
> commodities are borrowed and replaced, their value should be
> established by a qualified independent appraisal.
>
> Agreements to borrow and replace commodities must meet tests for real
> need and exclude any windfall benefits arising from adversity.
>
> b\. Transferring Commodities
>
> USAID Mission or the Diplomatic Post (or the Cooperating Sponsor with
> prior written approval from USAID Mission) may transfer commodities
> between approved Title II programs (before they are distributed) to
> meet emergency disaster requirements or to improve the efficiency of
> the program operation. Commodities should be transferred only in
> quantities necessary to sustain the Title II program until the
> authorized shipments arrive, usually a 60-day supply.
>
> Transfers are made with the concurrence of the Cooperating Sponsor
> concerned and shall not be replaced by the U.S. Government (USG)
> unless USAID/W-BHR/FFP authorizes such replacement. The Cooperating
> Sponsorof the transferred commodities should ensure that the revised
> uses of the commodities, i.e., transfer to another program, are
> properly documented for purposes of audit and reporting requirements.
>
> The transfer shall be made at no cost to the USG, but USAID Mission
> may decide to pay the costs of transfers to meet emergency relief
> purposes with its available funds. In such cases, USAID Mission shall
> advise USAID/W-BHR/FFP promptly of the details of the transfer.
>
> Since USAID/W-BHR approves emergency programs as expediently as
> possible, transfer between programs should not be necessary that
> often. Although USAID/W-BHR/FFP is not required to be informed in most
> cases, involving USAID/W-BHR/FFP from the beginning may greatly assist
> any transfer between programs, especially if additional funds or
> replacement commodities are contemplated.
>
> c\. Diverting Commodities
>
> In some circumstances diversion of commodities at U.S. ports or on
> board ship en route to another Title IIprogram may be considered. This
> involves first identifying the correct amount of commodities needed;
> obtaining release of the commodity from the regular program
> Cooperating Sponsor; and determining if the vessel involved can enter
> the desired port, if vessel stowage will permit discharge of the
> commodity and if payment of a diversion charge is necessary. Since
> diversion is difficult to accomplish, it should be considered only
> after all other sources of a commodity have proven infeasible.
>
> 7G. Preparation and Submission of Requests
>
> 1\. Initiation of Emergency Programs
>
> a\. The President, the Secretary of State or the A/USAID may make a
> determination that emergency assistance is needed and/or warranted
> under particular circumstances in a particular location and may offer,
> or instruct a Mission to offer, emergency food assistance.
>
> b\. A host-country government, PVO, cooperative or international
> organization may request food for emergency assistance. In such cases,
> requests are received by USAID Missions and are forwarded to
> USAID/W-BHR/FFP with appropriate recommendations. A perspective
> Cooperating Sponsor may also approach USAID/W-BHR/FFP seeking approval
> to start an emergency program. In such cases USAID/W-BHR/FFP will
> transmit the request to the USAID Mission for comment and
> recommendations.
>
> c\. USAID Missions may propose emergency programs for consideration by
> USAID/W-BHR/FFP prior to the required receipt of a formal request. In
> the case of a sudden disaster or emergency, a USAID Mission may
> authorize the immediate distribution of available commodities with
> concurrence of the owner of the commodities. Where the distribution of
> commodities would require replacement, the USAID Mission must obtain
> USAID/W-BHR/FFP prior approval.
>
> 2\. Program Approval Procedure
>
> In the majority of cases USAID Missions will be transmitting requests
> for emergency programs to USAID/W-BHR/FFP. When transmitting a request
> from a Cooperating Sponsor, whether governmental or non-governmental,
> USAID Missions will be responsible for evaluating and approving the
> requests and making appropriate recommendations on program content to
> USAID/W-BHR/FFP. In this process USAID Missions must make a
> determination regarding the capability and capacity of the Cooperating
> Sponsor to implement the emergency assistance and to perform the
> record-keeping required by Regulation 11. If the Cooperating Sponsor
> is a non-governmental entity, USAID Missions will assure that
> appropriate host-government approval of the emergency projects has
> been obtained. When USAID Missions transmit emergency project requests
> to USAID/W-BHR/FFP for approval the following information should be
> included:
>
> a\. a Food Needs Assessment (FNA). This assessment can be undertaken
> on a national level or disaggregated to cover a region of particular
> concern. It should compare overall food needs with existing
> orprojected food supplies from all sources (domestic production,
> stocks and imports) and quantify the remaining food deficit by
> commodity. During an emergency or disaster situation the information
> necessary for a full needs assessment may not be available on a timely
> basis. If there is clear evidence of a need for external assistance,
> USAID Missions should submit partial requests based on preliminary
> estimates of the harvest to ensure that the food arrives when needed.
> Production information can then be refined as the growing season
> progresses and food aid to fill any remaining needs can be requested
> at that time. (See the Manual for Food Needs Assessment for more
> detail.)
>
> b\. location and nature of the emergency, number of people affected,
> estimated duration of emergency project, daily ration level and total
> quantity of commodity required. (The specific Title II commodities
> required must be identified.)
>
> c\. a description of the program and proposed interventions and
> components, including the target population and areas, ration
> composition,complementary program inputs and the intervention strategy
> to alleviate the emergency needs.
>
> d\. infrastructure already existing or being planned for
> administration/implementation of the program, as well as the
> monitoring systems in place or planned (a time-phased implementation
> plan should be included).
>
> e\. Mission knowledge of other donor efforts and potential for donor
> coordination, the amounts of commodities that have already been
> transferred for emergency use and the potential for work projects in
> the disaster areas.
>
> f\. the administrative provisions for management and control of the
> emergency program. (The Cooperating Sponsor should prepare for USAID
> Mission concurrence a distribution plan or outline that shows how and
> when commodities will be moved from the point of entry to the
> geographic areas where distribution will take place; and funding or
> arrangements for intermediate storage and in-country transportation
> must be identified.)
>
> g\. USAID Mission assurance that (1) adequate storage facilities are
> available in the recipient country at the time of arrival of the
> commodity to prevent spoilage or waste and (2) the distribution of the
> commodity in the recipient country will not result in a substantial
> disincentive to domestic production of that commodity. A disincentive
> analysis may not be necessary if USAID Mission or the U.S. Department
> of Agriculture (USDA) has already completed one for another program
> relevant to the one at issue. Also, following consultation with
> USAID/W-BHR/FFP, commodities could be provided
>
> to meet emergency food needs without this analysis if necessary to
> respond to the emergency. (See Regulation 11 preamble and Section
> 211.5(m).)
>
> f\. in those instances in which specific record-keeping requirements
> cannot be followed due to emergency circumstances, the USAID Mission
> should specify exactly which essential information will be recorded in
> order to fully account for Title II commodities and comply with
> Regulation 11 requirements.
>
> 3\. PVO and Cooperative Emergency Requests
>
> Private Voluntary Organization (PVO) and cooperative requests can be
> cabled by the Mission to USAID/W-BHR/FFP for review and approval. The
> information requested in 7F.2, above, should be included. A
> supplemental Annual Estimate of Requirements (AER) and new or amended
> Operational Plan (OP), which are the required documents for approval,
> must then be forwarded through the normal channels through voluntary
> agency headquarters to USAID/W-BHR.
>
> 4\. Government and International Organization Requests
>
> As in the case of PVO and cooperative programs, the approval will be
> based on a cabled program summary containing the information requested
> in 7F.2, above. If approved, USAID/W-BHR/FFP will prepare a Transfer
> Authorization (TA) to be signed by the recipient government or
> international organization specifying terms of the program and
> reporting requirements. USAID Mission cabled program proposals for
> these sponsors should include, in addition to the information
> requested in 7F.2, above, the following:
>
> a\. the names, addresses and telex numbers of reputable local
> surveying firms capable of providing qualitative and quantitative
> ex-ship\'s tackle reports in the desired port of discharge, if
> applicable. This information is needed because USDA, Claims and
> Collection Division, usually is responsible for contracting with
> independent cargo surveying firms, on a competitive basis where
> possible, to obtain discharge reports on all Title II cargoes shipped
> under TAs (with the exception of WFP cargoes).
>
> b\. the desired shipping schedule, port of discharge, commodity
> specifications and whether the shipment should be bagged or bulk with
> bagging at destination. In order to forward Bill of Ladings (B/Ls),
> the detailed international mailing address of the consignee and
> \"Notify Party\" with exact street address are required. Any
> limitation on port capacity or known congestion that will impact on
> the discharge of the Title II commodity must be described.
>
> 7H. Project Implementation Guidelines
>
> 1\. Monitoring
>
> USAID Missions are responsible for monitoring emergency projects and
> assuring that resources are effectively used. Clearance of the program
> indicates that the USAID Mission or Field Post has developed a plan
> and identified the resources necessary for implementing and monitoring
> the activity effectively, and accepts responsibility for doing so.
> Project management includes identifying and reporting anticipated and
> actual problems and undertaking or catalyzing required actions.
> Monitoring should emphasize such activities as reviewing and
> evaluating the Cooperating Sponsor\'s performance capabilities, the
> planning process and the implementation systems employed. Cooperating
> Sponsor reports, together with USAID Mission field observations and
> evaluations, appropriately documented, are basic monitoring tools. In
> particular, USAID Missions are responsible for identifying the extent
> and type of monitoring needed to assure proper accounting for
> commodities and sales proceeds.
>
> 2\. Liaison with Cooperating Sponsor
>
> Continued close liaison with the Cooperating Sponsor can assure
> maximum effective implementation in resolving problems such as port
> logistics, warehousing, transportation and distribution. In a
> protracted or complex emergency situation, liaison with the
> Cooperating Sponsor becomes an increasingly important function as
> monitoring the constraints on and over-extension of resources of the
> Cooperating Sponsor and recipient government become critical, and/or
> attempts at rehabilitation and/or famine mitigation activity (FMA)
> projects are instituted.
>
> 3\. End-Use Examinations
>
> The capabilities of the Cooperating Sponsor and the recipient
> government, as available, are to be utilized to the extent possible
> for these purposes. USAID Mission sample checks may be a method to
> evaluate the effectiveness of the Cooperating Sponsor control systems.
>
> 4\. Reporting
>
> USAID Missions are responsible for the preparation and submission of
> interim reports and a final emergency program report. The final report
> should include a completeaccounting of the Title II assistance
> provided for the emergency. While the method of obtaining reporting
> information on commodity inventories and distribution is left to the
> discretion of the USAID Mission, taking into account the need and
> local circumstances, reporting should be as complete and comprehensive
> as possible. In protracted or complex emergency situations USAID
> Missions can anticipate that USAID/W-BHR/FFP will require periodic
> reports from the Cooperating Sponsor(s) on (a) quantity of commodities
> received (landed) or subject to claims; (b) quantities released for
> distribution; (c) quantities on hand; (d) quantities released for sale
> if authorized; (e) application of sales proceeds, if any; (f) losses
> and claims; and (g) logistical constraints, problems and solutions.
>
> CHAPTER 8
>
> TITLE II PROGRAM SUPPORT
>
> 8A. Introduction
>
> Title II of P.L. 480 contains different objectives that have evolved
> and been refined over the life of the P.L. 480 program. While there
> has been no change in the primary objectives of TitleII to meet famine
> or other urgent or extraordinary relief requirements and to combat
> malnutrition and increase food security, mechanisms for achieving
> these objectives have expanded and become more flexible. Congress and
> the Agency understand that with this flexibility there exists the need
> for increased support to enable the food emergency and development
> programs to be implemented effectively. Among the tools available to
> increase the outreach of U.S. food programs are (a) authority to
> monetize Title II food and use the local currency generated to support
> the feeding program and implement development activities; (b) Section
> 202(e) grants to assist private voluntary organizations private
> voluntary organizations (PVOs) and cooperatives to establish new
> programs or meet specific costs; and (c) Institutional Support Grants
> (ISGs) to increase PVO and cooperative management capacity at the
> headquarters level to carry out Title II food aid programs, as well as
> other grants to PVOs. These support mechanisms are discussed in detail
> below.
>
> 8B. Monetization Projects
>
> 1\. Definition
>
> Monetization is a term describing the sale of Title II donated foods
> for local currencies. Monetization is an option when local currency is
> needed to achieve objectives of the program that could not be reached
> with only the donated commodities. Monetization may be partial,
> involving sales of only a portion of the commodities allocated to a
> project or program, or full, when the entire amount of the commodity
> is sold. Monetization is authorized for Title II regular and emergency
> food aid projects carried out by private voluntary agencies and
> cooperatives.
>
> 2\. Authority
>
> Private voluntary organizations and cooperatives are allowed to
> monetize U.S. agricultural commodities under Section 203 of P.L. 480.
> The legislation provides that:
>
> An agreement may be entered into between USAID and a PVO or
> cooperative under which food may be provided for sale or barter in the
> recipient country.
>
> In carrying out such programs, USAID shall permit PVOs and
> cooperatives to sell, in recipient countries, an amount of commodities
> equal to not less than 10 percent of the aggregate amounts of all
> commodities distributed under non-emergency programs for each fiscal
> year.
>
> A PVO or cooperative submitting a proposal to enter into a
> non-emergency food assistance agreement under P.L. 480 Title II shall
> include in such proposal a description of the intended uses of any
> foreign currency proceeds that may be generated through the sale, in
> the recipient country, of any commodities provided.
>
> Foreign currencies generated from any partial or full sale or barter
> of commodities by a PVO or cooperative under a non-emergency food
> assistance agreement may be used to (a) transport, store, distribute,
> and otherwise enhance the effectiveness of the use of agricultural
> commodities provided under Title II; (b) implement income generating,
> community development, health, nutrition, cooperative development,
> agricultural, and other developmental activities within the recipient
> country; or (c) be invested, and any interest earned on such
> investment may be used for the purposes for which the assistance was
> provided to that organization.
>
> Monetized proceeds may be used to pay regional office costs that are
> allocable to Title II monetization and distribution programs in the
> region. Monetized proceeds may also be used to pay indirect
> headquarters costs. PVOs should use the same indirect cost rate for
> monetization activities that has been approved for Foreign Affairs
> Appropriation (FAA) grant projects. If a non-governmental Cooperating
> Sponsor does not have an indirect cost rate approved by USAID, it
> should consult the Bureau For Humanitarian Response, Office of Food
> for Peace (BHR/FFP) which will coordinate efforts by the Cooperating
> Sponsor and USAID\'s overhead branch to develop one. If the
> Cooperating Sponsor\'s indirect cost rate approved by USAID is applied
> to country offices as well as headquarters costs for FAA grants, the
> Cooperating Sponsor may use the same rate to calculate the amount of
> monetized proceeds that may be used for indirect costs of country
> offices that are allocable to the Title II program there. Otherwise,
> non-governmental Cooperating Sponsors should include in their
> Operational Plan (OP) an indirect cost item for each office calculated
> in accordance with the Cost Principles for Nonprofit Organizations in
> Office of Management and Budget (OMB) Circular A-122 which will be
> reviewed and approved by USAID/W-BHR/FFP as part of the Title II
> Operational Plan (OP).
>
> USAID/W-BHR/FFP may authorize monetization of Title IIcommodities at
> any time for emergency program uses, when such monetization is
> considered appropriate and essential. Use of emergency local currency
> generations is not constrained by the authority and requirements of
> Title II, Section 203, or many of the requirements of Regulation 11.
> However, local currencies generated in such cases should directly
> address the emergency food need or its underlying causes.
>
> 3\. Program Guidelines
>
> The guiding principle of partial monetization is that the sales
> proceeds generated should complement and strengthen the Title II
> program. Partial monetization should assist in achieving the
> fundamental objectives of the projects being implemented. To ensure
> this impact, funds generated by commodities for a specific project
> should be used for that project. Title II food aid is provided on a
> grant basis and is intended to focus on food security by compensating
> for distributional and structural inequities in developing countries.
> Therefore, it is targeted to selected groups that do not have access
> to adequate food supplies, including those that lack the income to
> purchase food. Full monetization programs should also complement Title
> II food aid projects to the extent possible and contribute to thegoals
> and objectives of the Cooperating Sponsor\'s overall program.
> Following are important elements to be considered in the design and
> review of any monetization program:
>
> Alternative sources of funds must be explored and found to be
> unavailable. Sales proceeds should not substitute for commitments from
> the host government, PVOs, or cooperatives.
>
> To maximize the U.S. Government (USG) resource and its impact on
> project goals, the PVO or cooperative should attempt to sell
> commodities at market value. The
>
> minimum acceptable sales price is the free alongside ship (f.a.s. -
> all costs prior to loading of the commodity) value. The USAID Mission
> or U.S. Embassy should approve the price at which the commodity will
> be sold to assure full value is received. (Note: If the local market
> price is highly subsidized, monetization at that price would not be
> acceptable.)
>
> PVOs or cooperatives must ensure that all resources generated from
> commodity sales - less estimated transaction costs - will be used to
> finance approved project costs and that they will be able to maintain
> accurate records of proceeds and uses.
>
> Depending on the volume of sales and choice of commodities to be sold,
> monetization of grant commodities could have disincentives for local
> production and marketing. Accordingly, a disincentive analysis is a
> requirement. However, if USAID or the U.S. Department of Agriculture
> (USDA) has completed such an analysis for another program that is
> relevant to the program proposed by the Cooperating Sponsor, this may
> be used in lieu of a new analysis. In addition, USAID/W-BHR/FFP has
> the authority to provide commodities to meet emergency food needs
> without a disincentive analysis if emergency needs, response time and
> conditions preclude such an analysis.
>
> The USAID Mission must certify that the volume of commodities sold
> will generally comprise such a small percentage of commercial imports
> that no Usual Marketing Requirement (UMR) computation/analysis has
> been completed. UMR means the intended tonnage to be sold does not
> threaten normal patterns of trade. In most cases where a UMR analysis
> is required, the sales of Title II commodities are subject to
> consultation in the Food and Agricultural Organization (FAO) of the
> United Nations (UN) Consultative Subcommittee onSurplus Disposal (CSD)
> based on the UMR established by USDA.
>
> For the purposes of coherent programming, projects involving
> monetization should be planned, justified and reviewed on the basis of
> life-of-project needs. Consistent with this, these projects should
> have a specific implementation timetable, with clearly defined
> starting and termination dates. As in all food aid projects, annual
> levels will be contingent on commodity availabilities and yearly
> approvals.
>
> 4\. Project Proposal Submission
>
> Monetization programs will generally be implemented by the
> participating PVO or cooperative that has title to the food. The
> participating organization must have demonstrated the capacity to
> administer the level of monetization proposed for a food aid project.
> The monetization proposal should be included or addended to the Title
> II Operational Plan (OP) or Multi-Year Operational Plan (MYOP) and,
> therefore, will or should have as its basic objectives and goals those
> of the OP or MYOP itself. Following is an outline of a monetization
> proposal.
>
> a\. Summary and Description
>
> Describe (1) how monetization will support the OP or MYOP goals and
> objectives; (2) the planned uses of the proceeds; and (3) the
> advantages of monetization. In order to ensure program impact
> Cooperating Sponsors should periodically undertake impact assessments
> of their Title II programs (every three to five years).
>
> Internal transport is one of the most important and largest costs
> associated with project food aid. These costs must be met if food is
> to reach the targeted groups. Therefore, payment of the costs of
> internal transport of grant commodities is the priority use of local
> currencies generated by monetization. Local currencies can also be
> used to support the objectives of the food aid. Some examples of this
> use would be provision of inputs such as scales, growth surveillance
> charts, nutrition education materials and teachers, and oral
> rehydration therapy (ORT) in maternal-child health (MCH) programs;
> cash supplements or payments to workers in food for work (FFW)
> programs; and inputs such as tools, supplies and materials for
> community projects. Title II local currency generations may also be
> used by the Cooperating Sponsor to cover in-country overheadoperating,
> administrative or personnel costs of project implementation.
>
> For both 100 percent monetization programs, which are to support
> development activities or special commodity sales arrangements, and
> partial monetization activities, which often support operating and
> ancillary costs of a food distribution program, the PVO/Cooperating
> Sponsor must consult with USAID/W-BHR/FFP to ensure that the proposed
> activities have Mission support.
>
> Monetization proposals should state what commodity will be sold, how
> the sale will take place (e.g., private/public sector auctions, sealed
> bids, government purchase, or open competition), and who will oversee
> the process. Proposals should also describe the uses of the local
> currency generations. The local currency proceed budget should be
> incorporated into the overall OP or MYOP budget.
>
> b\. Description of the Sales Procedures
>
> Explain the sales mechanisms and procedures, identify the buyer(s) and
> attest to the capability of thebuyer(s) to handle the sales and
> deposit the proceeds expeditiously. Specify the required tonnage over
> the life of the proposal, the estimated dollar value of the
> commodities, the proposed delivery schedule, the sales price and the
> estimated amount of local currency that will be generated in U.S.
> dollar equivalent.
>
> c\. Price and Market Analyses
>
> Based on an analysis of the market there should be a description of
> the sales price anticipated and an explanation of how the price was
> determined. Sufficient information should be included to support the
> premise that the sale will generate enough revenue to make a
> monetization program justifiable. USAID/W-BHR/FFP will review the
> proposal based on this information. When the sales agreement is
> finalized (prior to the actual call forward of the commodity), if the
> sales price is less than the originally quoted price in the OP or MYOP
> the Cooperating Sponsor must consult with the USAID Mission. The
> Cooperating Sponsor should be advised to confirm the current f.a.s.
> price (all costs prior to loading of the commodity) for the specific
> commodity to be monetized prior to negotiation of price. If the
> negotiated price is belowthe f.a.s. dollar value of the commodity,
> USAID/W-BHR/FFP must be consulted to determine what options are
> available.
>
> The commodity(ies) selected should be appropriate for the local
> market, be in demand and not be competitive with local production.
> Market demand surveys and analyses, including timing of the proposed
> sale, must be done prior to monetization proposal submission so that a
> Bellmon Certification can be made and appropriate shipping schedules
> set to guarantee proceed generations when needed for essential program
> support.
>
> The timing of the actual sale and the delivery of the commodity must
> be considered in the design of any project. The sale must be timed so
> that once the sales agreement is signed, the commodity can be called
> forward to arrive in-country at the optimal time (e.g., when buyer(s)
> liquidity position is good, when local production is not competing for
> purchase and when proceed generations are necessary).
>
> d\. Sales Proceed Management
>
> Identify the financial institution and special account in which the
> proceeds will be deposited. If possible,this should be an
> interest-bearing account. Detail the monitoring and evaluation plan
> that has been established for proceed tracking and list the reporting
> schedule for proceed deposits and expenditures.
>
> e\. Line Item Budget
>
> Include a detailed line item budget showing estimated receipts and
> expenditures over the life of the project. This line item budget
> should also be incorporated into the OP or MYOP.
>
> 5\. Mission Certification
>
> USAID Mission or the Field Post should review the financial and
> management systems and capability of the food aid sponsor and
> recipient agencies to handle the local currency generated. Adequate
> standards must be at a minimum those established for Operational
> Program Grants (OPGs). (See Handbook 13.) If adequate, the USAID
> Mission or Field Post should certify that it is. If systems are
> inadequate, the USAID Mission or Field Post should consult with the
> Cooperating Sponsor regarding the improvements required and how they
> might be achieved. These should be outlined in the OP/MYOP and the
> USAID Mission or Field Post should provideits opinion on whether the
> improvements will be in place in time for the proposed commodity sale.
> Before a call-forward of the commodity to be monetized the USAID
> Mission or Field Post should review and certify that the sponsor and
> local recipient agencies have adequate systems in place.
>
> 6\. Reporting Requirements
>
> A monetization program progress and implementation reporting section
> should be included in the Annual Progress Report (APR) due in BHR/FFP
> on December 31. (See Chapter 9 for a discussion of this reporting
> requirement.) Cooperating Sponsors should provide the following
> information: (a) quantity of commodities approved for sale in the
> fiscal year just ended; (b) amount of funds generated; (c) amount of
> local currency proceeds disbursed; (d) how the local currencies were
> used; (e) an estimate of the amount of local currency proceeds that
> will be used in current and next fiscal years; and (f) the results
> accruing from the use of the local currencies.
>
> 7\. Reference Materials
>
> For a fuller discussion of some elements discussed above, see the
> Monetization Field Manual, August 1988. Also see Section B, Comments
> and Responses of Regulation 11.
>
> 8C. Section 202(e) Grants
>
> 1\. Authority
>
> Section 202(e) of P.L. 480 states that of the funds made available in
> each fiscal year under Title II to PVOs and cooperatives, not less
> than \$10 million and not more than \$13.5 million shall be made
> available to assist such organizations and cooperatives in (a)
> establishing new Title II programs and (b) meeting specific
> administrative, management, personnel and internal transportation and
> distribution costs for carrying out Title II programs in foreign
> countries. In order to receive these funds a PVO or cooperative must
> submit a request for such funds to USAID/W-BHR/FFP. Such request shall
> include a specific explanation of (a) the program costs to be offset
> by such funds; (b) the reason why such funds are needed in carrying
> out the particular assistance program; and (c) the degree to which
> such funds will improve provision of food assistance toforeign
> countries (particularly those in sub-Saharan Africa suffering from
> acute, long-term food shortages).
>
> 2\. Priorities and Restrictions in the Use of 202(e) Funds
>
> According to USAID/W-BHR/FFP guidance, the priorities for Section
> 202(e) funding are (listed in descending order):
>
> direct program costs of a Title II program, including internal
> transport, distribution, storage and other program implementation
> costs, if other sources of funding have been considered and sought and
> are found inadequate for program operation;
>
> improvement and strengthening of program administration and management
> oversight and monitoring (commodity tracking, warehousing, transport,
> etc.);
>
> efforts to improve efficiency through evaluation;
>
> costs of implementing audit and evaluation recommendations; and
>
> dollar costs of development programs financed by monetized proceeds.
>
> Section 202(e) funding will not be approved for the following types of
> activities:
>
> costs that can be financed from other sources, such as monetization,
> Title II Institutional Support Grants (ISGs), other donor
> contributions, etc.;
>
> costs of development projects that are not supported by other Title II
> resources; and
>
> feasibility studies to explore possible new Title II activities (these
> studies are covered by ISGs).
>
> A Section 202(e) proposal will be evaluated by:
>
> how it relates to the program priorities given above;
>
> how it describes the relationship of the proposed activities to be
> funded to the overall Title II program;
>
> the clarity and completeness of the submission; and
>
> the relationship of the funding being requested tooverall program
> size.
>
> 3\. Grant Proposal Submission
>
> Because Section 202(e) funds are provided on an annual basis, a new
> proposal must be submitted each year, whether as an addendum to a new
> OP or MYOP or with submission of a Multi-Year Update. The proposal
> should not exceed ten pages in length and should include the following
> elements:
>
> a brief summary of the Title II program that the Section 202(e)
> funding will support;
>
> a detailed narrative describing activities the Section 202(e) funds
> will support, including a description of how these activities were
> covered in the past if applicable;
>
> the program costs to be offset by such funds, the reason why such
> funds are needed to carry out a particular assistance program and the
> degree to which such funds will improve the provision of food
> assistance (particularly in countries in sub-Saharan Africa);
>
> a detailed line item budget and a narrative justifyingthe level of
> funding; and
>
> for requests which include capital expenditures (e.g., vehicles,
> warehouses or computer systems), provide detailed justification (e.g.,
> describe the size of the motor pool, age of the vehicles, use of the
> vehicles by the program, plans for maintenance and replacement, and a
> cost analysis of buying versus leasing or contracting); if current
> request is only for one tranche of a long-term procurement plan,
> describe the overall plan, including projected size and cost.
>
> 8D. Institutional Support Grants
>
> 1\. Introduction
>
> Title II ISGs are made available from Development Assistance (DA)
> dollar resources appropriated under the Foreign Assistance Act to
> assist PVOs and Cooperative Development Organizations (CDOs)
> implementing (or intending to implement) programs under P.L. 480 Title
> II. They are awarded on a competitive basis and are aimed at
> supportingefforts to (a) increase internal capacity at the central or
> regional management level to carry out Title II food aid programs and
> (b) carry out feasibility studies aimed at initiating Title II
> activities in new countries. ISGs should complement (rather than
> overlap with) Title II Section 202(e) grants which fund in-country
> Title II operating costs.
>
> 2\. Objectives
>
> The overall goal of ISGs is to strengthen the capacity of PVOs/CDOs to
> make effective use of food aid resources, to enhance food security by
> addressing the key causes of hunger, malnutrition and vulnerability to
> disasters, and to improve their ability to manage Title II
> commodities. Consistent with legislation and USAID policy, the major
> objectives are to support PVO/CDO efforts to:
>
> strengthen and maintain its centralized or regional institutional
> capacity to manage and account for Title II commodities;
>
> improve and maintain centrally or regionally directed central
> management practices and build organizational expertise in the use of
> Title II food aid as aninstrument for effective emergency relief
> and/or achieving food security; and
>
> carry out feasibility studies aimed at initiating Title II activities
> in new countries.
>
> Title II ISGs may be authorized for up to a maximum of five years with
> a level not to exceed \$1 million per year for the USG contribution.
> Funding will be provided on an annual basis, subject to satisfactory
> progress reviews, availability of funds and attainment of benchmark
> indicators.
>
> 3\. Eligibility Criteria
>
> To be eligible for a Title II ISG, an organization must meet each of
> the following criteria:
>
> be a PVO/CDO registered with USAID;
>
> be a Title II Cooperating Sponsor or present evidence of its ability
> to implement a Title II food aid program; and
>
> provide at least a 25 percent contribution (cash orin-kind) toward the
> annual costs of the proposed program.
>
> 4\. Grant Proposal Submission
>
> Proposals, not including appendices, should not exceed 25 pages and
> should include the following:
>
> a\. Executive Summary
>
> Briefly describe the program to be supported, including its goal,
> purpose, focus, location, funding and management.
>
> b\. Eligibility
>
> Describe the status of the organization with regard to registration
> with USAID/W-PVC as a PVO or a CDO and as a Title II Cooperating
> Sponsor.
>
> c\. Background and Capability
>
> Briefly describe the organization and its worldwide operations,
> including its general purpose annual budget, breadth and scope of
> operations, major sectoractivities, approach and method of operation
> and organizational structure.
>
> d\. Relationship to Current Title II Program
>
> Briefly describe the relationship of the proposed Title II ISG program
> and activities to current Title II programs.
>
> e\. Program Description
>
> State the broad development objective that is being addressed and
> relate it to the Title II program. Identify the specific management
> problem(s) in relation to Title II food aid to be addressed.
>
> f\. Financial Plan
>
> This section should provide summary costs estimates and a brief
> narrative description of the financial plan. For each year, PVO/CDOs
> must provide an amount that is equal to at least 25 percent of the
> total budget from non-USG sources. Refer to Handbook 13 and OMB
> Circular A-122 for eligibility and valuation of PVO/CDO in-kind or
> cash expenditures.
>
> 8E. Other Resources Available
>
> 1\. Grants Reserved for Registered PVOs
>
> a\. Operation Program Grants
>
> OPGs enable registered PVOs to carry out specific field projects in
> individual countries and occasionally in regions. OPGs are primarily
> funded by USAID Missions and sometimes by USAID/W Regional Bureaus.
> Cofinancing or \"umbrella\" grants are a variation of the OPG program.
> Costs of all projects supported by these grants are shared by PVOs.
> USAID funding is limited to a maximum of 75 percent of total program
> costs. The remaining 25 percent must come from non-USAID sources and
> may be a combination of cash or in-kind contributions obtained by the
> PVO. USAID Missions have the authority to negotiate cash levels in
> individual cases. Since OPGs are PVO-initiated field programs,with
> USAID\'s management of the grant relationship performed at the USAID
> Mission level, PVOs should usually begin by having early consultations
> with the appropriate USAID Mission to discuss the activity to be
> undertaken - purpose and description; any preliminary indications of
> host country interest and intent; background information relevant to
> the proposed project; and a rough cost estimate and proposed source of
> the non-USAID share. An initial discussion may also be undertaken with
> the PVO liaison officer in the relevant USAID/W Regional Bureau.
>
> b\. Matching Grants
>
> Matching Grants support PVO field-oriented programs designed to be
> executed in a number of countries. Matching grants provide USAID funds
> for up to 50 percent of program costs and are available to registered
> PVOs that have proven experience in the sector and activities proposed
> for support and can raise the necessary private resources. The
> Matching Grant program is designed to consolidate multiple grant
> relationships with a PVO, provide for better program integration,
> reduce overlapping administrative procedures, and allow maximum
> program flexibility.Since the USAID Mission plays a key role in
> assessing country development priorities, proposals for this program
> should be prepared in consultation with the USAID Mission.
>
> Parallel funding of Matching Grants and OPGs to the same PVO in the
> same country is not permitted unless agreed to by the USAID Mission.
> Funding is limited to private and voluntary organizations with
> demonstrated development track records and is usually awarded for a
> multi-year period. Proposals are reviewed annually within a specified,
> common time frame and compete equally for funds available.
> Requirements stipulate that PVOs\' matching resources be cash.
>
> c\. Child Survival Grants
>
> Child Survival Grants are intended to address the special health needs
> of children and mothers by fostering the use of simple, available
> technologies that enhance child survival prospects in poor countries,
> with particular emphasis on ORT and immunizations. Proposals for these
> grants are reviewed annually and grants are awarded by the Bureau for
> Humanitarian Response, Office of Private and VoluntaryCooperation
> (BHR/PVC) in USAID/W.
>
> 2\. Grants Not Reserved for Registered PVOs
>
> a\. The Farmer-to-Farmer Program
>
> The Farmer-to-Farmer (FTF) Program envisions the transfer of
> short-term technical assistance, on a people-to-people basis, to
> farmers in host countries. The Agricultural Trade and Development Act
> of 1990 targets emerging democracies and middle-income countries as
> well as developing countries. The legislation envisions utilization of
> U.S. farmers, agriculturalists, PVOs, land grant universities,
> cooperatives, non-profit farm organizations and private
> agribusinesses. A competitive program was instituted in 1991 to
> broaden the participation of the various types of organizations and to
> elicit new creative approaches to this developmental concept.
> Inquiries on this program should be made to the BHR-Office of Private
> and Voluntary Cooperation (PVC), USAID/W.
>
> b\. Development Education Grants
>
> These grants facilitate public discussion within theU.S. on hunger and
> related issues. Funds are limited and awards are made to non-profit
> U.S. organizations with demonstrated ability or clear potential to
> carry out development education programs. All grant awards require at
> least a 50 percent match by the applicant that may include cash,
> in-kind contributions, or a combination. Inquiries on this program
> should also be made to the BHR/Office of Private and Voluntary
> Cooperation (PVC), USAID/W.
>
> c\. Cooperative Initiatives Grant Program
>
> Under this program small grants are awarded to cooperatives on a
> competitive basis to initiate new programs in developing countries
> that will strengthen the private sector through cooperative
> development, particularly the U.S. cooperative community. Inquiries
> should be addressed to the BHR/Office of Private and Voluntary
> Cooperation (PVC), USAID/W.
>
> d\. Foreign Disaster Assistance Grants
>
> Foreign Disaster Assistance Grants support the extensive humanitarian
> activities of U.S. PVOs throughout the world in providing emergency
> relief andrehabilitation for disaster victims. Decisions to award
> grants to PVOs are made on a case-by-case basis with USAID Mission
> participation. The structure and capabilities of the organizations to
> launch and carry out anticipated activities are critical
> considerations in awarding these grants. Inquiries for this assistance
> should be directed to the BHR/Office of U.S. Foreign Disaster
> Assistance (OFDA), USAID/W.
>
> CHAPTER 9
>
> TITLE II PROGRAM IMPLEMENTATION
>
> 9A. Introduction
>
> This chapter provides overall instructions for the USAID Mission and
> Cooperating Sponsors for implementing Title II programs. (World Food
> Program (WFP) activities are covered in Chapter 11and Appendix C, and
> Title III program implementation in Chapter 13.)
>
> 9B. Responsibilities
>
> The General Accounting Office (GAO) has pointed out that many problems
> in implementing food aid programs arise through a lack of proper
> identification and assignment of responsibility for monitoring the
> many phases of food aid activities overseas. Following is a break-down
> of responsibilities for program implementation:
>
> Development of private voluntary organization/Cooperative Development
> Organization (PVO/CDO) direct feeding programs such as maternal-child
> health (MCH), food for work (FFW), and school feeding (SF), and
> related support programs such as monetization and Section 202(e) grant
> requests are normally the responsibility of the concerned PVO/CDO.
> Agency participation in the process will vary from USAID Mission to
> USAID Mission and program to program depending on relative
> capabilities and size of Mission and CooperatingSponsor field staffs.
> USAID Missions will normally be more involved in the development of
> emergency programs, whether the Cooperating Sponsor is a government
> entity or a nongovernmental organization (NGO). In all cases, the
> USAID Mission should be involved in such issues as (a) commodity
> selection and mix; (b) monetization for ancillary costs and
> developmental activities; (c) evaluation and monitoring plans; (d)
> compatibility with USAID Missions\' country strategy, Development
> Assistance (DA) programs, etc; and (e) promotion of collaborative
> programs among food aid implementers. USAID Mission staff may also be
> involved in reviewing and analyzing the program design at various
> stages of its development.
>
> Operational Plans (OPs) and Multi-Year Operational Plans (MYOPs) are
> prepared for development programs, and are amended if/when necessary
> by the Cooperating Sponsor. Transfer Authorizations (TAs) will be
> prepared for emergency programs by the USAID/W-Bureau For Humanitarian
> Response, Office of Food for Peace (BHR/FFP) based on the program
> design and information submitted by the USAID Mission and Cooperating
> Sponsor. In its review and approval process, the USAID Mission will be
> responsible for such activities as (a) analyzing the Cooperating
> Sponsor\'s monetization and feeding programs; (b) coordinating and
> assuring nonduplication of the Cooperating Sponsor\'s activities with
> the USAID Mission\'s Development Assistance (DA) and other donor and
> host government programs and projects; (c) coordinating the
> Cooperating Sponsor program levels and commodities with the Annual
> Budget Submission/Annual Estimate of Requirements (ABS/AER) guidance
> from USAID/W-BHR\'s Office of Food for Peace (BHR/FFP); and (d)
> executing relevant agreements. Chapters 5, 6 and 7 describe and
> provide guidance on types of Title II programs and the program
> submission process.
>
> In most cases, it is the responsibility of the Cooperating Sponsor to
> prepare and submit call-forwards for P.L. 480 commodities as
> necessary. An exception would be overseas based Cooperating Sponsors
> where in this case, USAID Missions are responsible for notifying
> BHR/FFP of callforwards approvals on their behalf. It is the
> responsibility of the USAID Mission to review and approve call-forward
> requests within seven days of submission by Cooperating Sponsors.
> Before each call-forward is approved, it must be verified by the USAID
> Mission that a storage analysis and disincentive assessment have been
> made. It is also the responsibility of the USAID Mission, as well as
> the Cooperating Sponsor, to track shipments and arrivals.
>
> Title II compliance requirements are clearly spelled out inRegulation
> 11. Cooperating Sponsors have primary responsibility for implementing,
> monitoring, reporting on and auditing their Title II program
> activities, commodities and funds. However, USAID Missions are
> expected to monitor Cooperating Sponsor\'s management of the
> commodities and use of sales proceeds and grant funds.
>
> While Cooperating Sponsors have primary responsibility for monitoring
> commodities from the point of arrival to final distribution to
> targeted beneficiaries or sale, regulations require USAID Mission
> approval of certain actions, such as (a) loans, transfers, exchanges
> and diversions of
>
> commodities and (b) reconstitution costs over \$500.
>
> Monitoring losses and claims is a function of the USAID Mission. (See
> Chapter 10 for detailed instructions on claims procedures.)
> Regulations require that Cooperating Sponsors obtain prior USAID
> Mission approval for disposal of commodities unfit for human
> consumption. Approval is also required to waive internal loss claims
> over \$500. Procedures must be established by the Cooperating Sponsor
> and the USAID Mission for reporting damaged and missing commodities,
> filing claims and tracking claim receipts.
>
> Monitoring the use of sales proceeds from monetization forancillary
> costs and developmental activities and the fulfillment of requirements
> for the deposit and use of the proceeds are USAID Mission
> responsibilities.
>
> When grant proposals are received it is the responsibility of the
> USAID Mission to assess the Cooperating Sponsor\'s systems, procedures
> and infrastructure and to develop monitoring and reporting
> requirements, ensure compliance, arrange reimbursement procedures and
> ensure reconciliation of reported disbursements with expenditures.
>
> No food aid activity may be conducted in a country without the
> clearance of the principal USAID Mission officer or U.S. Government
> (USG) representative in the country. Such clearance will indicate that
> the USAID Mission or Field Post has developed a management plan and
> has identified and will use the resources necessary for implementing
> and monitoring the activity. When it clears a food aid activity, the
> USAID Mission or Field Post will send to BHR/FFP and the Regional
> Bureau a copy of the plan for implementing and monitoring the activity
> and a description of the resources it will use for this purpose. The
> USAID Mission or Field Post\'s management plan is required
> notwithstanding any implied commitment of resources by the approval of
> a MYOP or AER. (See the Food Aid Management Plan (FAMP) for USAID
> Missionsfor assistance.)
>
> 9C. Title II Commodities
>
> 1\. Commodity Selection
>
> The U.S. Department of Agriculture (USDA) provides an annual docket
> which lists the types of commodities and tonnages available for each
> title of P.L. 480. This docket varies from year to year depending on
> availability of U.S. produce.
>
> When formulating a ration or selecting commodities for distribution or
> sale, certain factors should be considered by the Cooperating Sponsor
> and USAID Mission:
>
> When appropriate, especially for emergency programming, a food needs
> assessment (FNA) should be undertaken to determine the level of food
> needs and the appropriate commodities. Consideration should be given
> to both the overall consumption requirements of the recipients aswell
> as the food supplies at their disposal (from production stocks or
> purchases). (See both the Commodities Reference Guide and the Manual
> for Food Needs Assessment for assistance.)
>
> Normally, commodities may not be requested if they will displace
> resources (cash, commodities or services) that currently are available
> from other non-USAID sources or can reasonably be expected in the
> absence of U.S. Title II assistance.
>
> Except for emergencies, commodities that are the same as those that a
> recipient country exports
>
> (on a net basis) normally will not be provided. However, a country may
> be exempt from this condition if the country has agreed to provide a
> substantial part of such commodities from indigenous or external
> commercial sources or if other circumstances, such as the degree of
> recipient government support for Title II feeding activities, justify
> special consideration.
>
> As provided under P.L. 480, except in the case of emergencies,
> reasonable precaution should be taken to assure that Title II
> commodities will not displace or interfere with sales that might
> otherwise be made.
>
> BHR/FFP\'s Program Operations Division (FFP/POD) will either answer or
> refer to the USDA any questions on nutritional components of
> commodities that cannot be resolved by reference to the Commodities
> Reference Guide and/or the Official United States Standards for Grain
> and Rice. The former may be obtained from USAID/W-PPC/CDIE and the
> latter from the Federal Grain Inspection Service, USDA, P.O. Box
> 96454, Washington, DC 20090-6454.
>
> 2\. Call-Forwards (Commodity Ordering/Shipping)
>
> Normally, call-forwards are submitted to cover project requirements
> for three months. However, Cooperating Sponsors or USAID Missions may
> justify and recommend call-forwards for shorter or longer periods.
> Call-forwards should be made only for commodity amounts authorized on
> the AER and should confirm details as to commodity type,
> specifications, packaging, amounts, and ports of delivery, and
> delivery timeframe. There are basically two procedures for calling
> forward commodities under Title II programs, one applicable to
> Cooperating Sponsors who have their own freight forwarder and the
> other to bilateral emergency or other programs for which
> USAID/W-M/OP/TRANS will contract shipping.
>
> a\. Cooperating Sponsor Shipments \[Regulation 11, Section
> 211.4(e)(1)\]
>
> Under the first procedure, requests for shipment of commodities
> originate with the Cooperating Sponsor and are submitted to USAID
> Mission or the Diplomatic Post for review and clearance. This request
> should include a statement on the adequacy of storage facilities
> available to accommodate the commodities being called forward. USAID
> Mission or the Diplomatic Post promptly reviews the call-forward
> request, providing a dated clearance in writing, and returns the
> request to the Cooperating Sponsor. USAID Mission must advise the
> Cooperating Sponsor of approval or disapproval within seven (7)
> working days of receipt of the request. USAID Mission or the
> Diplomatic Post also promptly advises BHR/FFP of the approved or
> disapproved call-forward request and whether internal transport and
> storage facilities are available to accommodate the call-forward.
> BHR/FFP subsequently advises the appropriate Cooperating Sponsor
> Headquarters of this action. At the same time, after receiving USAID
> Mission or Diplomatic Post clearance, the Cooperating Sponsor is
> responsible for notifying its headquartersoffice of the USAID-approved
> call-forward request.
>
> Once the Cooperating Sponsor\'s field office notifies their respective
> Headquarters office or nominated, U.S. freight agent of the USAID
> Mission\'s call forward approval, the Cooperating Sponsor\'s
> Headquarters office or freight agent, as applicable, submits the call
> forward request to FFP/POD.
>
> All Cooperating Sponsor program calls forward for a given export
> period should be received by BHR/FFP on or far in advance of the
> fourth day of each month for subsequent submission to USDA no later
> than the fourth day of the month. However, if the fourth day falls on
> a weekend or is a Federal holiday, then Cooperating Sponsors should
> submit call forward requests to BHR/FFP no later than the preceeding,
> third weekday of the month that is not a Federal holiday.
>
> Upon BHR/FFP\'s receipt of the USAID Mission\'s call-forward approval
> and the Cooperating Sponsor\'s call forward request, and provided the
> Cooperating Sponsor\'s program has been formally approved by BHR/FFP,
> FFP/POD must promptly submit the Cooperating Sponsor\'s call forward
> request to USDA no later than 15days from the date of receipt. FFP/POD
> provides copies of processed call forward requests to the Cooperating
> Sponsor\'s Headquarters office or freight agents after submission to
> USDA. In cases where the Cooperating Sponsor\'s program is not
> approved, and BHR/FFP had not received the USAID Mission\'s call
> forward approval, FFP/POD notifies the cooperating sponsor\'s
> Headquarters office and the USAID Mission that the Cooperating
> Sponsor\'s call forward request would be held pending formal approval
> of their program and receipt of the Mission\'s call forward approval.
> In addition, FFP/POD notifies the Cooperating Sponsor that the 15-day
> processing requirement of their call forward request does not take
> effect until their program is formally approved by BHR/FFP.
>
> USDA\'s Kansas City Commodity Office (KCCO) procures commodities for
> P.L. 480 programs on a monthly basis. Once purchases are completed,
> KCCO notifies FFP/POD, Cooperating Sponsor Headquarters and freight
> forwarders, and M/OP/TRANS, as appropriate, of commodity purchases
> including commodity type and tonnage, port declarations, and estimated
> times of arrival at U.S. ports(s). The Cooperating Sponsor is then
> responsible for booking a vessel to transport thecommodities in
> accordance with guidelines promulgated by OP/TRANS. In cases where
> bids for commodities are above constructed price or no bids are
> received, KCCO either re-tenders for the required commodity, or
> requests BHR/FFP and Cooperating Sponsors to prioritize commodity
> purchases to assure that immediate purchase requirements are met,
> particularly for emergency programs. BHR/FFP and KCCO may also examine
> commodity swaps within program call forward approvals as alternatives
> for meeting emergency food aid prepositioning requirements when
> commodity purchases are not possible due to commodity supply or cost
> constraints, or when the minimum 45-day lead time required by KCCO to
> complete procurement of commodities is not practical for emergency
> programs. It is estimated that a minimum of 60 through 120 days are
> required to purchase, ship to U.S. port(s), and deliver bulk
> commodities to destination countries, and a minimum of 90 through 120
> days for processed commodities. The following example illustrates the
> procurement process from the time of call forward submission to USDA
> through delivery overseas: (a) FFP/POD submits a cooperating
> sponsor\'s call forward request to USDA on July 2nd; (b) KCCO
> schedules the commodity procurement in August; (c) venders ship
> thecommodities to U.S. port(s) in October; (d) and under optimum
> conditions, the requested commodities arrive overseas by mid-October
> through November.
>
> Cooperating Sponsor\'s freight forwarders, and OP/TRANS, as
> appropriate for emergency bilateral shipments, are responsible for
> booking vessels for commodity export. Further, Cooperating Sponsors
> initiating P.L. 480, Title II programs for the first time must
> nominate a U.S.-based freight agent to assist with the management of
> the respective Cooperating Sponsor\'s freight forwarding requirements.
> Cooperating Sponsors\' freight agents, or as appropriate, OP/TRANS
> furnishes Cooperating Sponsor Headquarters offices with commodity
> shipment details such as the estimated times of arrival overseas,
> vessels, metric tons, and type of commodity being shipped. The
> Cooperating Sponsors\' Headquarters office then conveys the shipping
> details to their respective field office, who in turn, shares the
> information with the USAID Mission or Diplomatic Post representative.
> Exceptions to this process include indigenous Cooperating Sponsors who
> have requested the USDA Commodity Credit Corporation (CCC) to conduct
> discharge surveys on their behalf, or where M/OP/TRANS arranges the
> ocean transportation requirements. In those instances, FFP/POD and
> M/OP/TRANS, as appropriate, provide cable notification to USAID
> Missions of scheduled Cooperating Sponsor shipments and other
> pertinent shipping details prior to export. At the time of export, or
> unless otherwise stipulated, ocean bills of lading are issued by the
> Cooperating Sponsors\' freight agents and OP/TRANS, as applicable, and
> are forwarded to the Cooperating Sponsors Headquarters and field
> offices and/or consignees, and the USAID Mission or Diplomatic Post
> representative. (See Exhibit G)
>
> In addition, Cooperating Sponsors\' freight agents must submit copies
> of Bills of Ladings (B/Ls) to M/OP/TRANS for purposes of maintaining
> records relating to cargo preference requirements and reporting to the
> U.S. Maritime Administration.
>
> b\. USAID Shipping \[Regulation 11, Section 211.4(e)(2)\]
>
> For those programs for which USAID/W will arrange the ocean
> transportation through OP/TRANS, primarily bilateral emergency
> programs operating under a Transfer Authorization (TA), the
> call-forward procedure differs in some respects. In these cases, USAID
> Missions should discuss project requirements and assist the
> Cooperating Sponsor in developing a commodity shipping schedule.
> BHR/FFP and M/OP/TRANS are advised of the appropriate shipping
> instructions, which should include in the call forward request:
>
> the name of the project, the TA number, and the name of the
> Cooperating Sponsor;
>
> the commodity specifications, bagging instructions if applicable and
> metric tons desired;
>
> the name of the consignee and the full international mailing address,
> including the exact street address in the country of destination, the
> telephone number of consignee and, if applicable, the name and address
> of Notify Party . This information is needed to assure timely arrival
> of ocean B/Ls; and
>
> the name of port or ports of discharge with the quantity to be
> unloaded at each port and the exact shipping schedule desired.
>
> FFP/POD will coordinate the call-forward with USDA/KCCOand M//OP/TRANS
> which will arrange purchase and shipment of the requested commodities.
> M/OP/TRANS will provide the name of the vessel, estimated time of
> arrival (ETA) and other pertinent information regarding shipments
> booked by the M/OP/TRANS appointed freight forwarder.
>
> At the time of export (i.e., loading on ocean carrier) applicable B/Ls
> are sent to the Mission, the consignee and others, as specified in the
> TA and/or by the USAID Mission in the call-forward. (See Exhibit G.)
>
> c\. Bellmon Determination
>
> Section 403 of P.L. 480 requires that before P.L. 480 food aid can be
> supplied, it must be determined that (1) adequate storage facilities
> will be available in the recipient country at the time of the arrival
> of the commodity to prevent spoilage or waste and (2) the distribution
> of the commodity in the recipient country will not result in a
> substantial disincentive to or interference with domestic production
> or marketing in that country. Sufficient information to make a
> determination on these two conditions must be included in every
> call-forward approval submitted by theMission. Making the
> determination based on this information is the responsibility of
> BHR/FFP. Refer to \"Background Paper and Guide to Addressing Bellmon
> Amendment Concerns on Potential Food Aid Disincentives and Adequacy of
> Storage Facilities\" included as part of the Monetization Field Manual
> (1988) for assistance.
>
> 3\. Commodity Shipment
>
> a\. Transfer of Title \[Regulation 11, Section 211.4 (b)\]
>
> Title to the Title II commodities is transferred to non-governmental
> Cooperating Sponsors at the point where the ocean carrier takes
> possession of the cargo (generally free alongside ship (f.a.s.) or
> free on board (f.o.b.) vessel at U.S. port). Governmental Cooperating
> Sponsors take title at the destination port of entry, upon completion
> of discharge by the ocean carrier, or at the destination point of
> entry for landlocked countries upon completion of delivery by the
> inland carrier. Except as USAID Mission or BHR/FFP may otherwise agree
> in writing, the Cooperating Sponsor must retain title to commodities,
> monetized proceeds and program income transferred to a recipient
> agencyfor distribution or use. If a Cooperating Sponsor wishes to
> transfer title to a recipient agency, the Cooperating Sponsor must
> demonstrate that it and the recipient agency have established
> appropriate and effective procedures for pursuing claims against third
> parties for loss, damage or misuse of the commodities, monetized
> proceeds or program income. The quantity of commodity delivered by the
> U.S. to the Cooperating Sponsor at the point of title transfer must be
> within 5 percent (2 percent in the case of shipments over 10,000
> metric tons), plus or minus, of the amount called forward. Such
> amounts are regarded as completion of
>
> delivery. There is no tolerance allowed with respect to the ocean
> carrier\'s responsibility to deliver the entire cargo loaded as cited
> on the B/L. Bulk cargo to be bagged at its destination shall be
> subject to standards and specifications prescribed by BHR/FFP, as
> appropriate.
>
> b\. Arrival at Port of Entry \[Regulation 11, Section 211.7)\]
>
> Commodities, except when being imported to be monetized, are to be
> admitted duty free and exempt from all taxes in the recipient country.
> Except asotherwise agreed upon by BHR/FFP and provided in the
> applicable shipping contract, the Cooperating Sponsor is responsible
> for all costs other than those assessed by the delivery carrier,
> either in accordance with its applicable tariff for delivery to the
> discharge port or in accordance with the applicable charter or booking
> contract. The Cooperating Sponsor or its designated agent or consignee
> is also responsible for distributing the commodity as provided in the
> agreement; and depending on the type of transportation arrangements
> made between the Cooperating Sponsor and their freight forwarders and
> ocean carriers, the Cooperating Sponsor is responsible for demurrage,
> detention and overtime charges by the delivery carrier; for wharfage,
> taxes, dues and port charges assessed against the cargo whenever
> assessed and collected by local authorities from the consignee; and
> for lighterage (when not a practice of the port) and lightering costs
> when assessed as a charge separate from the freight rate.
>
> Cooperating Sponsors make all necessary arrangements for reception,
> storage and maintenance of commodities from time of delivery at port
> of entry. Before recommending approval of a proposal to BHR/FFP, the
> USAID Mission obtains from the Cooperating Sponsorassurance that
> adequate provisions have been made for internal transportation,
> storage and handling (ITSH).
>
> For shipments to landlocked countries, Cooperating Sponsors are
> responsible for arranging the transportation and adequate provision
> for commodity security to a point of entry designated by the
> Cooperating Sponsor and the USAID Mission, unless other provisions for
> those requirements are stipulated in the Cooperating Sponsor\'s
> program agreement, TA, or other dully authorized program approval
> document. Further, when through bills of ladings (TBLs) are utilized
> by
>
> Cooperating Sponsors to ship commodities through landlocked countries
> to final destination points, ocean carriers are held responsible and
> accountable for transport, security, and delivery of commodities from
> the point of export in the U.S. through final delivery overseas.
>
> c\. Survey Reports \[Regulation 11, Section 211.9(c)\]
>
> In order to fully satisfy the requirements for documenting incidents
> of unfit commodities and/or assessing the need for instituting claims
> action, survey reports are required. (See Chapter 10 fordetails on
> claim and loss procedures.) Nongovernmental Cooperating Sponsors shall
> arrange for an independent cargo surveyor to attend the discharge of
> the cargo and to count or weigh the cargo and examine its condition,
> unless USAID Mission, BHR/FFP or the Diplomatic Post determines that
> such examination is not feasible or if Commodity Credit Corporation
> (CCC) has made other provisions for such examinations and reports. CCC
> will reimburse a non-governmental Cooperating Sponsor for the costs
> incurred by it in obtaining the services of an independent surveyor to
> conduct examinations of the cargo and render the required reports.
> Reimbursement by CCC will be made upon receipt by CCC of the survey
> report and the surveyor\'s invoice or other documents that establish
> the survey cost. However, CCC will not reimburse a non-governmental
> Cooperating Sponsor for the costs of only a delivery survey, in the
> absence of a discharge survey, or for any other survey not taken at
> the time of discharge unless such deviation is fully justified to the
> satisfaction of CCC.
>
> CCC normally will contract for the survey of cargo on shipments for
> which M/OP/TRANS contracts for the ocean transportation services. In
> order to develop acompetitive bid situation and in an attempt to
> reduce the cost of surveys, Missions should cable names, addresses and
> telex number of reputable local surveying firms capable of providing
> qualitative and quantitative ex-ship\'s tackle reports in the desired
> port of discharge. Also, if the USAID Mission or a Diplomatic Post
> desires that CCC limit its consideration to only certain selected
> surveyors, the USAID Mission or the Diplomatic Post should furnish
> FFP/POD with a list of eligible surveyors to be forwarded to CCC.
> Surveyors may be omitted for consideration, for instance, for foreign
> relations considerations, conflicts of interest and/or lack of
> demonstrated capability to carry out surveying responsibilities
> properly. USAID/W-FFP/POD will furnish CCC\'s surveying requirements
> to the USAID Mission or a Diplomatic Post upon request. Alternatively,
> if CCC is unable to find a surveyor at a port to which a shipment has
> been consigned, CCC may request that FFP/POD contact the USAID Mission
> or the Diplomatic Post to arrange for a survey. The surveyor\'s bill
> for such services shall be submitted to USAID Mission or the
> Diplomatic Post for review.
>
> In the unlikely event that the surveying company is unable to have a
> representative present at discharge,it will be necessary for
> Cooperating Sponsors or Embassies or USAID Missions to take one of the
> following alternative steps:
>
> Cooperating Sponsor (or Embassy or USAID Mission) personnel should
> observe the discharge, prepare an in-depth analysis of what took place
> and obtain copies of official port documents. The in-depth analysis
> should contain a report on the time of vessel arrival and the time of
> all examinations made. There should also be a cargo count and a
> comparison with the B/L. Note should be made of overages and shortages
> and any damaged cargo should be reported, as to both quantity and
> apparent cause of damage (e.g., torn bags, water damage, oil damage,
> etc.). The cooperation, or lack thereof, received from the carrier or
> its agents should be reported and any other significant information
> regarding the discharge and handling of the commodity should be noted.
> An effort should be made to obtain documents issued in the particular
> port, such as port authority reports, customs receipts, port tally
> sheets, port health officer\'s documents, landing certificates and
> other documents of that nature. If it is not feasible for Cooperating
> Sponsor (U.S. Embassy or USAID Mission) personnel to observe the
> discharge of the cargo, as a minimum the preceding documents should be
> obtained.
>
> If it is not possible to send a representative to observe the
> discharge or to obtain any port documents, USAID/W-BHR/FFP should be
> advised that the conditions at the discharge port are such that it is
> not possible to obtain discharge documents or to observe discharge.
>
> 4\. Commodities Borrowed, Transferred, Exchanged or Diverted
>
> a\. Diversion
>
> Emergency or other urgent needs may call for the diversion of Title II
> commodities from one Title II program to another either prior to
> loading or on board ship. USAID/W-BHR/FFP will seek concurrence from
> all parties involved when requests are received to divert commodities.
>
> b\. Borrowed and Exchanged Commodities
>
> After the date of program approval by BHR/FFP, but before authorized
> commodities arrive at the distribution point, the Cooperating Sponsor
> may, with prior approval of USAID Mission or the Diplomatic Post,
> borrow the same or similar commodities from available sources to meet
> program requirements provided that (1) borrowed commodities that are
> used in accordance with the terms of an OP or TA will be replaced with
> commodities transferred by BHR/FFP (the amount of commodities
> transferred to replace borrowed commodities shall be established by
> mutual agreement between the Cooperating Sponsor and USAID Mission or
> the Diplomatic Post and will be determined on the basis of equivalent
> value at the time and place of transfer or on some other justifiable
> basis proposed by the Cooperating Sponsor and acceptable to USAID
> Mission or the Diplomatic Post); (2) packaged commodities that are
> borrowed are appropriately identified as having been provided by the
> people of the U.S.; and (3) suitable publicity is given to the
> exchange of commodities and containers are marked, to the extent
> practicable, with the USAID emblem. \[Regulation 11, Section
> 211.5(n)\]
>
> c\. Transfers
>
> After the date of program approval by BHR/FFP, but before distribution
> of the commodities, USAID Mission or the Diplomatic Post (or the
> Cooperating Sponsor with prior approval of USAID Mission or the
> Diplomatic Post) may transfer commodities between approved Title II
> programs to meet emergency disaster requirements or to improve
> efficiency of operation, such as to meet temporary shortages due to
> delays in ocean transportation or provide for rapid distribution of
> stocks in danger of deterioration. Commodity transfers shall be made
> at no cost to the U.S. Government (USG) and with the concurrence of
> the Cooperating Sponsor. BHR/FFP shall be advised promptly of the
> details of the transfer. Commodities will not be replaced by the USG
> unless BHR/FFP authorizes such replacement. \[Regulation 11, Section
> 211.5(o)\]
>
> d\. Disposal of Excessive Stock \[Regulation 11, Section 211.5(p)\]
>
> If commodities are on hand that cannot be utilized in accordance with
> the approved OP or TA, the Cooperating Sponsor shall promptly advise
> USAID Mission or the Diplomatic Post of the quantities, location
> andcondition of such commodities, and where possible, shall propose an
> alternate use of the excess stocks. USAID Mission or the Diplomatic
> Post shall determine the most appropriate use of the excess stocks,
> and with prior BHR/FFP concurrence, shall issue instructions for
> disposition. Transportation costs and other charges attributable to
> transferring commodities from one program to another within the
> country shall be the responsibility of the Cooperating Sponsor, except
> that in cases of disaster or emergency, BHR/FFP may authorize the use
> of disaster or emergency funds to pay for the costs of such transfers.
>
> Following are the terms and conditions applicable to the above:
>
> Approval by BHR/FFP and the USAID Mission of borrowed, transferred or
> exchanged commodities will be withheld until all parties have agreed.
> In the case of Cooperating Sponsor commodities, USAID/W BHR/FFP
> agreement will be subject to Cooperating Sponsor Headquarters
> concurrence.
>
> Advance approval by the USAID Mission is required for all transactions
> involving commoditiesborrowed, transferred and exchanged and advance
> approval by BHR/FFP is mandatory when (1) replacement of commodities
> borrowed, transferred or exchanged is required; (2) reason for
> transfer or exchange is that commodities are in excess of project
> needs; (3) expenditure of U.S. funds is required; or (4) commodities
> are to be transferred from one country to another.
>
> When commodities are to replace non-Title II commodities, the relative
> value of the commodities borrowed or exchanged are to be established
> by qualified independent appraisal. The relative values are to be
> mutually agreed upon by the Mission, with guidance from BHR/FFP, and
> the Cooperating Sponsor. The replacement arrangements must provide for
> delivery to the project of commodities equal in value to those
> provided by the U.S., and the prices established must be fair to both
> parties without \"windfall\" benefits to either. Generally, the
> pricing formula should be based on the most favorable value at the
> place of exchange. Non-U.S. packaged commodities borrowed or exchanged
> are to be appropriately identified as having been made available by
> the people of the U.S.
>
> 5\. Commodity Packaging
>
> a\. Packaging in the U.S.
>
> Unless otherwise specified in the Cooperating Sponsor\'s OP or TA, or
> other approved program documentation, Title II commodities will be
> packaged using either standard or abbreviated markings depending on
> the end use of the commodity and program design. For example, for
> commodities to be used for free distribution overseas, Cooperating
> Sponsor call forward requests generally indicate standard markings
> should be displayed on the commodity packaging which consists of the
> following:
>
> 1\. Commodity name
>
> 2\. Net weight (in kilograms and pounds)
>
> 3\. Contract number
>
> 4\. The letters \"USA\"
>
> 5\. The USAID emblem
>
> 6\. The words \"Not To Be Sold Or Exchanged\"
>
> 7\. Use no hooks (for bags only)
>
> 8\. Geometric symbols (for multiwall paper bags only)
>
> Cooperating Sponsors\' call forward requests for commodities that are
> to be sold overseas for monetization programs will generally indicate
> abbreviated markings to be displayed on packaging which consists of
> the following:
>
> 1\. Commodity name
>
> 2\. Net weight (in kilograms and pounds)
>
> 3\. Contract numbers
>
> 4\. Use no hooks (for bags only)
>
> b\. Repackaging Commodities in Foreign Countries
>
> (Regulation 11, Section 211.6)
>
> Cooperating Sponsors or their designees may arrange for processing
> commodities into different end products and for packaging or
> repackaging commodities prior to distribution. Commodities may be
> bartered, or monetized proceeds or program income may be used to
> offset such costs if provided for in the OP or TA or approved by USAID
> Mission or the Diplomatic Post. When commercial facilities are used
> for processing, packaging or repackaging, Cooperating Sponsors or
> their designees shall enter into written agreements for such services
> and copies of the agreements must be providedto USAID Mission or the
> Diplomatic Post. Except as BHR/FFP otherwise agrees, the executed
> agreements shall provide as a minimum that the party providing such
> services shall: (1) fully account to the Cooperating Sponsor for all
> commodities; (2) be liable for the value of all commodities not
> accounted for; (3) return or dispose of the containers in which the
> commodity is received according to instructions from the Cooperating
> Sponsor; and (4) plainly label new containers with the USAID emblem
> and, insofar as practicable, with the following information in the
> language of the country: (a) name of commodity; and (b) \"Not to be
> sold or exchanged\" (where applicable). Emblems or other
> identification of non-governmental Cooperating Sponsors also may be
> added. When the usual practice in a country is not to enclose the end
> product in a container, the Cooperating Sponsor shall, to the extent
> practicable, display and imprint on individual recipient
> identification cards the same information.
>
> When Cooperating Sponsors utilize their own facilities to process,
> package or repackage commodities into different end products, and when
> such products are distributed for consumption off the premises of the
> Cooperating Sponsor, the Cooperating Sponsor shallplainly label the
> containers as instructed above and include this same information on
> banners, posters or similar media displayed at the distribution
> center.
>
> If, because of damage, it is determined by a Cooperating Sponsor or
> intergovernmental organization that commodities must be repackaged to
> ensure that the commodity arrives at the distribution point in a fit
> condition, agencies and organizations may incur expenses for such
> repackaging up to \$500 and such costs will be reimbursed to the
> Cooperating Sponsor or organization by the CCC. If costs will exceed
> \$500, the authority to repackage and incur the costs must be approved
> by the USAID Mission or the Diplomatic Post in advance of repackaging.
> (See 211.7(e) of Regulation 11.)
>
> c\. Disposal of Containers
>
> Cooperating Sponsors may dispose of containers, other than containers
> provided by carriers, in which commodities are received in countries
> having approved Title II programs by sale or exchange or by
> distribution free of charge to eligible recipients for their personal
> use. If the containers are to be used commercially, the Cooperating
> Sponsor must arrange for the removal or obliteration of the USG
> markings. Income from sales may be used only for the purposes
> described in the OP or TA, or otherwise approved by the USAID Mission
> or Diplomatic Post.
>
> 6\. Publicity
>
> The objective of publicity is to assure that the recipients know
> commodities they receive have been donated by the people of the U.S.
> Since programs represent the cooperative efforts of the U.S., the host
> country and the Cooperating Sponsor, it is appropriate that publicity
> be given to all entities involved. Program information may be released
> by the USAID Mission, public and private entities of the host country
> and the Cooperating Sponsor. The following should be stressed: (1) the
> commodities are furnished by the people of the U.S.; (2) the
> distribution is a result of the cooperation of the U.S. and all
> parties concerned; and (3) eligible recipients receive commodities
> without restriction or discrimination as to nationality, race or
> political or religious beliefs.
>
> 9D. Title II Management and Reporting
>
> 1\. Management Procedures
>
> Establishment of oversight and monitoring procedures by the USAID
> Mission is essential to good food aid management, as is establishment
> of an atmosphere of day-to-day consultation and collaboration with
> Cooperating Sponsors and other food donors. Collaboration might
> include periodic meetings of donors and Cooperating Sponsors to
> discuss the country\'s
>
> current and short- and long-term food security prospects. Oversight
> and monitoring should include establishment of agreed-to procedures
> for loss reporting and tracking, regularly scheduled visits to
> distribution centers and warehouses, and established time tables for
> submission of required reports and program documentation.
>
> In order to effectively implement their Title II program, Cooperating
> Sponsors shall provide adequate supervisory personnel for the
> efficient operation of the program, including personnel to (a) plan,
> organize, implement, control and evaluate programs involving
> distribution of commodities or use of monetized proceeds and program
> income;(b) make warehouse inspections, physical inventories and
> end-use checks of food or funds; and (c) review books and records
> maintained by recipient agencies that receive monetized proceeds
> and/or program income.
>
> Cooperating Sponsors and recipient agencies shall cooperate with and
> assist USG representatives to enable them at any reasonable time to:
>
> Examine activities and records of the Cooperating Sponsor, recipient
> agencies, processors, or others, pertaining to the receipt, storage,
> distribution, processing, repackaging, sale and use of commodities by
> recipients;
>
> Inspect commodities in storage, or the facilities used in the handling
> or storage of commodities;
>
> Examine and audit books and records, including financial books and
> records and reports pertaining to storage, transportation, processing,
> repackaging, distribution, sale and use of commodities and the deposit
> and use of any monetized proceeds and program income;
>
> Review the overall effectiveness of the program as it relates to the
> objectives set forth in the OP or TA; and
>
> Examine or audit the procedures and methods used in carrying out the
> requirements of legislation and Regulation 11.
>
> 2\. Title II Reporting and Documentation
>
> Attachment B of the Food Aid Management Plan for USAID Missions
> (PN-ABK-424), February 1992, provides a framework and an illustrative
> list of documentation and reporting requirements for Title II food aid
> programs, which would be useful in assigning responsibility and
> scheduling submissions. Following is a listing and brief explanation
> of required Title II reporting.
>
> a\. Operational Plans and Multi-Year Operational Plans
>
> Each Cooperating Sponsor shall submit to the USAID Mission for its
> review, comment and transmittal to BHR/FFP an OP describing the
> program it is sponsoring or proposing to sponsor. (See Chapter 6 of
> this Handbook for a complete explanation of the content andprocedures
> for submission, processing and approval.)
>
> b\. Annual Estimate of Requirements (AER)
>
> An AER, which is the statistical breakdown of the annual Title II
> commodity requirements must also be submitted with the OP or MYOP.
> (See Chapter 6.)
>
> c\. Commodity and Recipient Status Reports
>
> The Commodity Status Report (CSR) is a statistical report covering
> commodity receipt and distribution on a monthly basis and the
> Recipient Status Report (RSR) delineates the number of recipients
> provided with food in each program category. Attached to the CSR is a
> \"Commodity Loss Status Report\" which lists quantities and types of
> commodity losses. (See Exhibits D and E.) These reports are to be
> submitted quarterly to the USAID Mission and BHR/FFP.
>
> d\. Loss Reports
>
> Cooperating Sponsors are to submit on a quarterly basis reports
> regarding loss, damage or misuse of commodities or monetized proceeds
> in the country of distribution.(See Chapter 10 of this Handbook for
> details on reporting and handling losses and claims.)
>
> e\. Unfit Commodity Reporting
>
> Whenever it is determined that commodities are unfit for authorized
> use they shall be disposed of in accordance with the priorities
> established in Regulation 11. (See Chapter 10 for details on this
> procedure and reporting.)
>
> f\. Annual Progress Report
>
> Cooperating Sponsors operating under approved OPs or MYOPs are
> required to submit an annual report by December 31 of each year to
> BHR/FFP summarizing how the program is progressing against planned
> objectives and benchmarks. The Annual Progress Report (APR) should
> first be submitted to the Mission for review and comment. The
> reporting cycle should be on a fiscal year basis. While the APR need
> not be lengthy, the following subjects should be covered:
>
> Program Objectives (as listed in the MYOP);
>
> Program Benchmarks (what benchmarks or targets wereestablished);
>
> Program Progress/Constraints. Discuss progress and achievements as
> compared with stated objectives and benchmarks. Discuss results and
> impact and any constraints encountered in achieving objectives or
> benchmarks;
>
> Logistics Operations. Identify any particular problem in delivery of
> food to intended recipients;
>
> Other Issues. Discuss any of the following as appropriate: targeting
> strategies, rations, project components, adequacy of funding/manpower,
> integration with USAID Mission and host country priorities, and
> involvement of program beneficiaries;
>
> Linkage to and Impact on Food Security;
>
> Budget Balance Sheet. This balance sheet should reflect all funds and
> in-kind contributions used to support the Title II program during the
> year. Overages or shortfalls in planned expenditures should be
> explained;
>
> Follow-Up Actions to Evaluation Recommendations and Audit Findings;
>
> Outstanding Claims and Major Losses;
>
> Any Modifications to Program Planned;
>
> Data Collection Systems in Place;
>
> Section 202(e) Grant Implementation (if appropriate); and
>
> Monetization Program Implementation (if appropriate).
>
> g\. Audits
>
> \(1\) Non-Governmental Cooperating Sponsors \[Regulation 11, Section
> 211.5(e)\]
>
> A non-governmental Cooperating Sponsor shall arrange for periodic
> audits to be conducted in accordance with Office of Management and
> Budget (OMB) Circular A-133. Non-governmental recipient agencies shall
> be treated as sub-recipients underthis Circular. The Cooperating
> Sponsor may satisfy these audit responsibilities with respect to
> recipient agencies by (a) relying on independent audits of recipient
> agencies or on appropriate procedures performed by the Cooperating
> Sponsor\'s internal audit or program staff; (b) expanding the scope of
> the independent financial and compliance audit of the Cooperating
> Sponsor to encompass testing of recipient agency charges; or (c) a
> combination of these procedures. The Generally Accepted Commodity
> Accounting Principles (GACAP) issued by Food Aid Management (FAM), an
> association of Cooperating Sponsors, may be used for commodity
> accounting. If the Cooperating Sponsor elects to use GACAP, the
> independent public accountant retained to perform the audit under OMB
> Circular A-133 may find it necessary to make certain disclosures in
> the Cooperating Sponsor\'s financial statement noting the departure
> from Generally Accepted Accounting Principles.
>
> \(2\) Governmental Cooperating Sponsors
>
> A governmental Cooperating Sponsor shall ensure that an audit
> satisfactory to USAID/BHR or theAgency is conducted annually with
> respect to donated commodities and monetized proceeds. The audit shall
> be a financial audit performed by the country\'s principal government
> audit agency or another audit agency or firm acceptable to the Agency.
> Both the auditor and the auditing standards to be used by the
> Cooperating Sponsor must be acceptable to USAID. Recipient agencies
> that receive less than \$25,000 of donated commodities and/or
> monetized proceeds are excluded from the Cooperating Sponsor\'s audit
> responsibility. (See 211.5(c)(2) of Regulation 11.)
>
> Chapter 14 of this Handbook covers audit responsibilities and
> requirements in detail.
>
> 9E. Suspension, Termination and Expiration of Program
>
> 1\. Termination or Suspension by USAID
>
> All or any part of the assistance provided under the program,
> including commodities in transit, may be terminatedor suspended by
> USAID at its discretion if BHR/FFP or the USAID Mission determines
> that a Cooperating Sponsor has failed to comply with the provisions of
> the approved OP or TA or Regulation 11, or that the continuation of
> such assistance is no longer necessary or desirable.
>
> If the USAID Mission is proposing such action, a cable should be sent
> to BHR/FFP explaining the reason(s) for the proposed termination or
> suspension. Such communication should indicate that the proposed
> action has been discussed with the principal U.S. Embassy Officer and,
> if appropriate, with the Cooperating Sponsor and the host country.
> Embassy/Cooperating Sponsor/host country reactions and views of the
> proposed action should be communicated to USAID/W-BHR/FFP, along with
> an analysis and commentary on any possible negative foreign policy or
> domestic repercussions that may result from the termination or
> suspension. BHR/FFP will review the proposal and make a judgment on
> the appropriateness and rationale of the termination or suspension,
> seeking concurrence from the Regional Bureau concerned. If BHR/FFP is
> proposing such action, it will notify the USAID Mission of the
> proposed termination or suspension and the reason(s) therefor.
>
> In such instances and if possible, BHR/FFP will provide
> anon-governmental Cooperating Sponsor with written notice of the
> Agency\'s intention to terminate or suspend the program, together with
> an explanation of the reason(s) for the Agency\'s action at least 30
> days prior to the date, indicated in the notice, when the program will
> be terminated or suspended. Comments provided by the non-governmental
> Cooperating Sponsor prior to the effective date of the termination or
> suspension shall be considered by BHR/FFP in determining whether to
> rescind the notice.
>
> When a program is terminated or suspended, title to commodities that
> have been transferred to the Cooperating Sponsor, or monetized
> proceeds, program income and real or personal property procured with
> monetized proceeds or program income shall, at the written request of
> USAID Mission, the Diplomatic Post or USAID/W-BHR/FFP, be transferred
> to the USG by the Cooperating Sponsor or shall otherwise be
> transferred by the Cooperating Sponsor as directed by USAID/W-BHR/FFP.
> Any excess commodities still on hand at the time the program is
> terminated shall be disposed of in accordance with Section 211.5(o)
> and (p) of Regulation 11 (Appendix B) or as otherwise instructed by
> USAID Mission or the Diplomatic Post. If it is determined that any
> commodity authorized to be supplied under the OP or TA is no longer
> available for BHR/FFP programs, suchauthorization shall terminate with
> respect to any commodities which, as of the date of such
> determination, have not been delivered f.o.b. or f.a.s. vessel,
> provided that every effort will be made to give adequate advance
> notice to protect Cooperating Sponsors against unnecessarily booking
> vessels. \[Regulation 11, Section 211.11(a)\]
>
> 2\. Termination or Suspension by Cooperating Sponsors
>
> Circumstances may arise that compel a Cooperating Sponsor to make a
> determination that, because of a specific cause, continuation of Title
> II assistance is no longer necessary, desirable or possible. In such
> instances, the Cooperating Sponsor should provide BHR/FFP, USAID
> Mission and/or the Diplomatic Post with an explanation of the
> reason(s) it believes the program must be terminated or suspended and
> its proposed plans, procedures and time frame for such termination or
> suspension. If the justification is compelling, and BHR/FFP and the
> USAID Mission concur with the planned termination or suspension,
> instructions as to disposition of programmed commodities, monetized
> proceeds, program income and real or personal property procured with
> monetized proceeds or program income will be provided to the
> Cooperating Sponsor.
>
> 3\. Expiration of Program
>
> Upon expiration of the approved program under circumstances other than
> those discussed above, the Cooperating Sponsor shall deposit any
> remaining monetized proceeds or program income, with instructions to
> credit the deposit to CCC Account No. 2OFT401, with the U.S.
> Disbursing Officer (USDO), American Embassy, or the Cooperating
> Sponsor shall obtain approval from BHR/FFP for the use of such
> monetized proceeds or program income, or real or personal property
> procured with such proceeds or income, for purposes consistent with
> those authorized for support from BHR/FFP.
>
> \[Regulation 11, Section 211.11(b)\]
>
> CHAPTER 10
>
> COMMODITY LOSSES, DAMAGE AND CLAIMS
>
> 10A. Introduction
>
> This chapter sets forth the procedures for reporting, handling and
> monitoring losses, damage or improper utilization and distribution of
> Title II commodities donated for programs in Cooperating Countries,
> along with the claim procedures and regulations related thereto.
>
> 10B. Prior to Loading on Ocean Vessel
>
> 1\. Fault of Cooperating Sponsor
>
> A Cooperating Sponsor and USAID/W-BHR/FFP shall agree on a schedule
> for shipping commodities. A non-governmental Cooperating Sponsor that
> books cargo for ocean transportation must notify the U.S. Department
> of Agriculture (USDA/Kansas City, Agricultural Stabilizatiion and
> Conservation Service (ASCS)), Commodity Credit Corporation (CCC)
> immediately if the vessel does not arrive at the U.S. port of export
> in accordance with the agreed-on shipping schedule. USDA/ASCS/CCC will
> then determine whether the commodity shall be (a) moved to another
> outlet; (b) stored at port until a vessel is available; or (c)
> alternately used. When the Commodity Credit Corporation (CCC) incurs
> additional expenses because the nongovernmental Cooperating Sponsor,
> or its agent, fails to meet the agreed-on shipping schedule or to make
> necessary arrangements to accept commodities at the points of delivery
> and CCC determines that the expenses were incurred because of fault or
> negligence, the Cooperating Sponsor will have to reimburse CCC for
> such expenses. \[Regulation 11, Section 211.9(a)\]
>
> 2\. Fault of Others
>
> A non-governmental Cooperating Sponsor shall immediately notify CCC if
> there is loss or damage of commodities that is caused by the act of a
> third party between the time title is transferred to the Cooperating
> Sponsor and the time the commodities are loaded. The Cooperating
> Sponsor shall assign to CCC any claim it has against the third party
> and forward to CCC all documents relating to the loss. \[Regulation
> 11, Section 211.9(b)\]
>
> 10C. Marine (Ocean Carrier) Claims
>
> 1\. Responsibilities
>
> Under programs for which the Cooperating Sponsor books cargo, the
> Cooperating Sponsor is responsible for initiating and pursuing claims
> for loss and damage of commodities incurred while in the custody of
> the ocean carrier. The Cooperating Sponsor will promptly inform
> USDA/Kansas City, Agricultural Stabilization and Conservation Service
> (ASCS) Commodity Office of all claims action and will actively pursue
> collection, using every reasonable effort short of litigation. CCC
> will initiate appropriate action for filing of legal action if
> necessary.
>
> Under programs for which USAID books cargo, USAID/W-BHR/Office of Food
> for Peace (FFP) and U.S.Department of Agriculture (USDA-ASCS/CCC)
> retain responsibility for monitoring and handling claims arising from
> loss or damage of commodities while in the custody of ocean carriers.
> Cooperating Sponsors for which USAID/W-BHR/FFP books shipping should
> promptly forward reports and documentation to the Mission for
> transmittal to USDA-ASCS/CCC and USAID/W-Bureau for Humanitarian
> Response, Office of Food for Peace, Program Operations Division (POD).
>
> 2\. Survey and Outturn Reports
>
> Non-governmental Cooperating Sponsors shall arrange for an independent
> cargo surveyor to attend the discharge of the cargo and to count or
> weigh the cargo and examine its condition, unless the Mission or
> Diplomatic Post determines that such examination is not feasible, or
> if CCC has made other provision for such examinations and reports. If
> practicable, the examination of the cargo shall be conducted jointly
> by the surveyor, the consignee and the ocean carrier and the survey
> report shall be signed by all parties. Whenever a damaged commodity
> appears unfit for its intended use, the Cooperating Sponsor shall
> obtain (l) a certification by a public health official, or similar
> competent authority, regarding the condition of the commodity and (2)
> a certificate of disposition if the commodity is determined to be
> unfit for its intended use. A narrative chronology and other
> commentary to assist in the adjudication of ocean transportation
> claims should be provided to CCC if possible. This statement is
> mandatory where the loss is estimated to be in excess of \$5,000.
> Cooperating Sponsors shall send to USDA/ASCS/CCC copies of all reports
> and documents pertaining to the discharge of commodities. For those
> surveys arranged by CCC, the Cooperating Sponsor may obtain a copy of
> the report from the local USAID Mission. CCC will reimburse a
> nongovernmental Cooperating Sponsor for the costs incurred by it in
> obtaining the services of an independent surveyor to conduct
> examinations of the cargo and render the report. However, CCC will not
> reimburse a non-governmental Cooperating Sponsor for the costs of only
> a delivery survey, in the absence of a discharge survey, or for any
> other survey not taken at the time of discharge, unless such deviation
> is justified to the satisfaction of CCC.
>
> CCC normally will contract for the survey of cargo on shipments for
> which USAID contracts for the ocean transportation services. Survey
> contracts normally will be let on a competitive bid basis. However, if
> USAID Mission or a Diplomatic Post desires that CCC limit its
> consideration to only certain selected surveyors, USAID Mission or the
> Diplomatic Post should furnish USAID/W-BHR/FFP with a list of eligible
> surveyors for forwarding to CCC. Surveyors may be omitted from the
> list based on foreign relations considerations, conflicts of interest
> and/or lack of demonstrated capability to carry out surveying
> responsibilities properly. USAID/W-BHR/FFP will furnish CCC\'s
> surveying requirements to the USAID Mission or a Diplomatic Post upon
> request. If CCC is unable to find a surveyor at a port to which a
> shipment has been consigned, CCC may request USAID/W-BHR/FFP to
> contact USAID Mission or the Diplomatic Post to arrange for a survey.
> CCC will pay the cost of the survey.
>
> It is essential that Cooperating Sponsors and USAID Missions act
> promptly to obtain discharge documents so that all necessary action to
> obtain restitution for loss and damage may take place promptly. (See
> Section 211.9(c)(1) of Regulation 11 for details on survey and outturn
> report procedures and requirements, as well as Chapter 9C.3. of this
> Handbook.)
>
> 3\. Claims Against Ocean Carriers
>
> Whether or not title to commodities has transferred from CCC to the
> Cooperating Sponsor, if USAID/W-BHR/FFP contracted for the ocean
> transportation CCC shall have the right to initiate, prosecute and
> retain the proceeds of all claims against ocean carriers for cargo
> loss and/or damage.
>
> Unless otherwise provided in the Operational Plan (OP) or Transfer
> Authorization (TA), when Cooperating Sponsors contract for the ocean
> transportation, they shall file notice of any cargo loss and/or damage
> with the ocean carrier immediately upon discovery of any such loss
> and/or damage, promptly initiate claims against the ocean carrier for
> cargo loss and/or damage, take all necessary action to obtain
> restitution for losses within any applicable periods of limitations,
> and transmit to CCC copies of all such claims. However, the
> non-governmental Cooperating Sponsor need not file a claim when the
> cargo loss and/or damage is not in excess of \$100 or when the loss is
> between \$100 and \$300 and it is determined by the non-governmental
> Cooperating Sponsor that the cost of filing and collecting the claim
> will exceed the amount of the claim. Amounts collected by
> non-governmental Cooperating Sponsors on claims against ocean carriers
> not in excess of \$200 may be retained by the non-governmental
> Cooperating Sponsor. On claims having a value in excess of \$200,
> \$200 plus 10 percent of the difference between \$200 and the total
> amount collected on the claim, up to a maximum of \$500, or, if
> approved by CCC, actual administrative expenses incurred in collection
> of the claim, may be retained. All amounts collected in excess of the
> amounts authorized shall be remitted to CCC.
>
> When non-governmental Cooperating Sponsors fail to file claims, permit
> claims to become time barred, or fail to provide for the right of CCC
> to assert such claims, and it is determined by CCC that such failure
> was due to the fault or negligence of the non-governmental Cooperating
> Sponsor, the agency or organization shall be liable to the U.S. for
> the cost and freight value of the commodities lost.
>
> USAID will initiate and prosecute claims against ocean carriers and
> defend claims by such carriers arising from or relating to
> affreightment contracts booked by USAID where the claims involve
> entitlement to freight and related costs from the U.S. Government
> (USG). Proceeds of such claims received by USAID shall be returned to
> CCC.
>
> See Section 211.9(c) (2) of Regulation 11 for regulations and
> requirements pertaining to claims against ocean carriers. Also see
> Appendices F and G, Instructions to All Voluntary Agencies and
> Intergovernmental Organizations Concerning the Filing, Pursuit,
> Adjudication and Collection of Ocean Transportation Claims Arising
> from Shipment of Title II and Title III Public Law 480 Commodities and
> Instructions to All Voluntary Agencies and Intergovernmental
> Organizations Concerning the Documentation Requirements and Applicable
> Program Agreements as They Apply to the Discharge of Title II and
> Title III Public Law 480 Commodities.
>
> 10D. Inland Claims
>
> 1\. Surveys on Shipments to Landlocked Countries
>
> In addition to survey and/or outturn reports to determine ocean
> carrier loss and damage, the Cooperating Sponsor should, in the case
> of landlocked countries, arrange for an independent survey at the
> point of entry into the recipient country and make a report containing
> basically the same type of information as is to be contained in a
> discharge report. (See Section 211.9(c)(1) of Regulation 11.) CCC will
> reimburse the Cooperating Sponsor for the costs of the survey.
> USDA/ASCS/CCC will contract for independent surveyors to perform such
> a survey in the case of those shipments for which USAID has contracted
> the ocean transportation.
>
> 2\. Reporting Losses to USAID or Diplomatic Posts
>
> a\. Cooperating Sponsor Responsibility
>
> The Cooperating Sponsor is responsible for providing USAID Mission or
> the Diplomatic Post with a quarterly report regarding any loss, damage
> or misuse of commodities, monetized proceeds or program income. The
> report must be provided within 30 days after the close of the calendar
> quarter and shall contain the following information, except for
> commodity losses of less than \$500: (a) who had possession; (b) who
> might be responsible; (c) kind and quantity of commodity; (d) size and
> type of containers; (e) time and place of the loss; (f) current
> location of commodities; (g) project name and number; (h) CCC contract
> number; (i) identifying numbers printed on the commodity containers;
> (j) action taken or being taken by the Cooperating Sponsor with
> respect to recovery or disposal; and (k) the estimated value of the
> loss. If any of this information is not available, the Cooperating
> Sponsor shall explain why it is not. (See Exhibit F.)
>
> The report simply may identify separately commodity losses valued at
> less than \$500 and indicate the estimated value of the commodities
> lost, damaged or misused and the action taken by the Cooperating
> Sponsor with respect to recovery or disposal. However, the Cooperating
> Sponsor shall inform USAID Mission or the Diplomatic Post if it has
> reason to believe there is a pattern or trend in the loss, damage or
> misuse of such commodities. USAID Mission or the Diplomatic Post may
> require additional information about any commodities lost. A copy of
> any claim made by the Cooperating Sponsor during the reporting period
> should be attached to the loss report. (See section on claims, 11D.3.,
> below.)
>
> If any commodity, monetized proceeds or program income is lost or
> misused under circumstances that give a Cooperating Sponsor reason to
> believe that the loss or misuse has occurred as a result of criminal
> activity, the Cooperating Sponsor shall promptly report these
> circumstances to the USAID/W Inspector General (IG) through
> USAID/W-BHR/FFP, USAID Mission or the Diplomatic Post and,
> subsequently, to the appropriate authorities of the Cooperating
> Country, unless instructed not to do so by USAID Mission and
> USAID/W-BHR/FFP.
>
> b\. Mission Responsibility
>
> It is the responsibility of USAID Mission or the Diplomatic Post to
> review the reports of loss, damage and improper distribution submitted
> by the Cooperating Sponsors, including the actions being taken by the
> Cooperating Sponsor for restitution or rectification, such as claims
> against third parties. The reports should be commented on, agreement
> given, if appropriate, to the actions being taken, and a system
> established for follow-up of reported losses and claims. Instances of
> loss, especially in the case of landlocked countries or widely
> scattered programs, can be numerous. A ledger system for tracking
> these reported losses and regularly scheduled meetings with
> Cooperating Sponsors to review status of outstanding claims are good
> management tools for monitoring Title II commodity losses or misuse.
>
> 3\. Claims
>
> a\. Fault of Others (Third Party Claims)
>
> If a Cooperating Sponsor determines that it has basis for a claim
> against a person or a governmental or nongovernmental organization
> based on an event for which the person or organization is responsible
> that resulted in the damage, loss or misuse of any commodity,
> monetized proceeds or program income, the Cooperating Sponsor shall
> file a claim against the liable party or parties for the value of the
> commodities, monetized proceeds or program income lost damaged or
> misused, and shall make every reasonable effort to collect the claim.
> Reasonable attempts to collect a claim shall not be less than the
> follow-up of the initial billing with three progressively stronger
> demands at not more than 30-day intervals. If these efforts fail to
> elicit a satisfactory response, legal action in the judicial system of
> the Cooperating Country should be pursued unless: (l) liability of the
> third party is not provable; (2) the cost of pursuing the claim would
> exceed the amount of the claim; (3) the third party would not have
> enough assets to satisfy the claim after a judicial decision favorable
> to the Cooperating Sponsor; (4) maintaining legal action in the
> country\'s judicial system would seriously impair the Cooperating
> Sponsor\'s ability to conduct an effective program in the country; or
> (5) it is inappropriate for reasons relating to the judiciary or
> judicial system of the country.
>
> The Cooperating Sponsor must review each and every loss to make a
> determination if a claim is warranted against a third party, and loss
> reports when submitted should include the reason(s) for either
> instituting or not instituting claim action. It becomes extremely
> important that consultation and discussions with the USAID Mission
> take place on a regular basis to review the criteria that are being
> used to determine if claim action is justified. The individual country
> and program circumstances, of course, will vary, but should be agreed
> upon and a working framework should be established for making
> decisions on claims actions. For example, bandit attacks on trucks or
> small amounts of a commodity lost because of minor in-transit damage,
> might be, and in the case of the bandit attacks, would be unclaimable.
> However, in other instances, even small amounts of loss, particularly
> on a continuing basis because of inefficient handling by recipient
> agencies, would call for claim or restitution action and/or suspension
> of shipments to that center or intensive training of center personnel.
>
> A copy of the claim and related documents shall be provided to USAID
> Mission or the Diplomatic Post. Cooperating Sponsors who fail to file
> or pursue such claims shall be liable for the value of the
> commodities, monetized proceeds or program income lost, damaged or
> misused. If a decision has been made not to file a claim the
> Cooperating Sponsor must give a full and satisfactory justification
> for not filing. If the USAID Mission disagrees, they should consult
> and discuss the matter with the Cooperating Sponsor until a mutually
> satisfactory course of action is agreed upon.
>
> Cooperating Sponsors may elect not to file a claim if the loss is less
> than \$500 and such action is not detrimental to the program.
> Cooperating Sponsors may retain \$150 of any amount collected on an
> individual claim. In addition, Cooperating Sponsors may, with the
> written approval of USAID Mission or the Diplomatic Post, either
> retain special costs such as reasonable legal fees that they have
> incurred in the collection of a claim, or pay such legal fees with
> monetized proceeds or program income. Calculation of the amount of a
> claim against a third party is based on the value of the commodities,
> monetized proceeds or program income lost, damaged or misused as a
> result of a specific event. An individual claim may not be broken down
> artificially to enlarge the amount that may be retained as an
> administrative allowance. For example, if a Cooperating Sponsor has a
> contract with a carrier to transport commodities, and losses occur
> during a single shipment of commodities from points A to B, the
> Cooperating Sponsor has one claim against the carrier and the amount
> of the claim will be based on the total value of the commodities lost
> during the shipment from A to B even though some of the loss might
> have occurred on each of several trucks or by subcontractors used by
> the carrier to satisfy its contract responsibility to transport the
> commodities.
>
> Any proposed settlement for less than the full amount of the claim
> must be approved by USAID Mission or the Diplomatic Post prior to
> acceptance. When the Cooperating Sponsor has exhausted all reasonable
> attempts to collect a claim, it shall request that USAID Mission or
> the Diplomatic Post provide further instructions. The principal USAID
> Mission or Embassy Officer, with the advice of the officer responsible
> for P.L. 480 Title II programs and the officer responsible for fiscal
> management, should approve or disapprove any proposed settlement of a
> Cooperating Sponsor\'s claim against a third party for less than the
> full amount due, regardless of the amount of the claim or the amount
> relinquished. Third-party claims need not be referred to
> USAID/W-BHR/FFP for action regardless of the amount unless USAID
> Mission or the Diplomatic Post has accepted assignment of a claim or
> claims from a Cooperating Sponsor. (See below.)
>
> If a Cooperating Sponsor has made a decision not to take legal action,
> the reasons must be submitted in writing to USAID Mission or the
> Diplomatic Post for review and approval. USAID Mission or the
> Diplomatic Post may ask that the Cooperating Sponsor obtain and submit
> the opinion of competent legal counsel to support its decision. A
> Cooperating Sponsor also may request approval to terminate legal
> action after it has commenced if it is apparent that any of the
> circumstances described in the first paragraph of this section are
> applicable or if, for some other reason, it appears appropriate to
> terminate legal action prior to judgement. In each instance, USAID
> Mission or the Diplomatic Post must provide the Cooperating Sponsor
> with a written explanation of its decision on the matter within 45
> days from the date the request is received, or inform the Cooperating
> Sponsor, in writing, of the reasons why USAID Mission or the
> Diplomatic Post will need more time to make a decision. If USAID
> Mission or the Diplomatic Post approves a Cooperating Sponsor\'s
> decision not to take further action on a claim because maintaining
> legal action in the country\'s judicial system would seriously impair
> the Cooperating Sponsor\'s ability to conduct an effective program in
> the country, or it is inappropriate for reasons relating to the
> judiciary or judicial system of the country, the Cooperating Sponsor
> shall assign the claim to USAID Mission and shall provide to USAID
> Mission all documentation relating to the claim. When USAID Mission or
> the Diplomatic Post takes an assignment of a claim or claims from a
> Cooperating Sponsor, USAID Mission or the Diplomatic Post shall
> consult USAID/W-BHR/GC regarding the appropriate action to take on the
> assigned claim(s) unless standing guidance is in effect.
>
> As an alternative to legal action in the judicial system of the
> country with regard to claims against a public entity of the
> government of the Cooperating Country, the Cooperating Sponsor and the
> Cooperating Country may agree to settle disputed claims by an
> appropriate administrative procedure and/or arbitration. This
> alternative may be established in the Country Food for Peace (FFP)
> Agreement or by a separate formal understanding and must be submitted
> to USAID Mission or the Diplomatic Post for review and approval.
> Resolution of disputed claims by any administrative procedure or
> arbitration agreed on by the Cooperating Sponsor and the Cooperating
> Country should be final and binding on the parties.
>
> b\. Fault of the Cooperating Sponsor \[Regulation 11, Section
> 211.9(d)\]
>
> If a commodity, monetized proceeds or program income is used for a
> purpose not permitted under the program Operational Plan (OP),
> Transfer Authorization (TA) or Regulation 11, or if a Cooperating
> Sponsor causes loss or damage to a commodity, monetized proceeds or
> program income through any act, omission or failure to provide proper
> storage, care and handling, the Cooperating Sponsor shall pay to the
> U.S. the value of the commodities, monetized proceeds or program
> income lost damaged or misused, unless USAID determines that such
> improper distribution or use, loss or damage could not have been
> prevented by proper exercise of the Cooperating Sponsor\'s
> responsibility under the OP, TA and Regulation 11. In determining
> whether there was a proper exercise of the Cooperating Sponsor\'s
> responsibility, USAID/W-BHR/FFP and the USAID Mission should consider
> normal commercial practices in the country of distribution and the
> problems associated with carrying out programs in developing
> countries. If these circumstances do not mitigate or apply to the
> losses sustained, and such losses appear to be clearly caused by the
> Cooperating Sponsor\'s failure to adequately protect or handle the
> Title II commodities, proceeds or income that has been transferred to
> it for agreed-to purposes, issuance of a Bill of Collection shall be
> considered. Payment by the Cooperating Sponsor shall be made in
> dollars or USAID Mission or the Diplomatic Post may agree to permit a
> Cooperating Sponsor to replace commodities lost, damaged or misused
> with similar commodities of equal value.
>
> The USAID Mission initially has the authority and responsibility for
> determining the validity or propriety of claims against Cooperating
> Sponsors. Missions are cautioned not to automatically issue a Bill of
> Collection against a non-governmental Cooperating Sponsor. It is
> suggested that they consult with USAID/W-BHR/GC prior to such issuance
> to examine the options for restitution (e.g., enhancement activities,
> commodity replacement, project amplification, increased Cooperating
> Sponsor shared support of projects). It is often easier and of more
> value to the field program to agree on a solution before a Bill of
> Collection is issued. When a Bill of Collection has been issued, but
> USAID Mission or the Diplomatic Post is considering compromising such
> claim against a Cooperating Sponsor, the claim should be forwarded to
> USAID/W-BHR/GC only if the amount of the claim determined to be valid
> by the Mission exceeds \$20,000, or the amount of the valid claim to
> be relinquished exceeds \$10,000. In other words, the claim amount
> subject to these limits is not the initial amount of the potential
> claim based on the total value of lost, damaged or misused
> commodities, but rather only the amount of the claim determined by the
> Mission to be valid.
>
> Whether a claim for inland losses, which is normally pursued by the
> Cooperating Sponsor against the negligent third party, should also be
> asserted by USAID Mission against a Cooperating Sponsor through a Bill
> of Collection, depends on whether the USAID Mission has determined
> that the Cooperating Sponsor is responsible, at least in part, for
> such losses or has failed to make every reasonable effort to pursue
> collection of claims against the negligent third party. For example,
> the Cooperating Sponsor may have been negligent in selecting
> disreputable transport or warehousing companies, in storing
> commodities or in supervising or correcting employees of recipient
> agencies, or the Cooperating Sponsor may have let third-party claims
> languish to the point that enforcement is difficult or impossible, as
> where statues of limitations applicable to such claims have run out or
> the negligent companies have gone bankrupt or been dissolved. As with
> all potential claims
>
> against Cooperating Sponsors, USAID Mission or the Diplomatic Post
> should take no action against the Cooperating Sponsor unless they have
> determined that the loss could have been prevented by proper exercise
> of the Cooperating Sponsor\'s responsibilities under the terms of the
> pertinent agreement, giving due consideration to, among other things,
> (1) normal commercial practices in the country of distribution; (2)
> the humanitarian objectives of the program; (3) limitations inherent
> in the administrative capabilities and financial resources of the
> Cooperating Sponsor; and (4) difficulties inherent in distributing
> food within less developed countries.
>
> c\. Claim Proceeds
>
> Claims against ocean carriers shall be collected in U.S. dollars (or
> in the currency in which freight is paid, or a pro rata share of each)
> and shall be remitted (less amounts authorized to be retained) by
> non-governmental Cooperating Sponsors to CCC.
>
> Claims against non-governmental Cooperating Sponsors shall be paid to
> CCC or USAID/W-BHR/FFP for transmittal to USDA/ASCS/CCC in U.S.
> dollars.
>
> Amounts paid by third parties in the country of distribution shall be
> deposited with the U.S. Disbursing Officer (USDO), American Embassy,
> preferably in U.S. dollars, with instructions to credit the deposit to
> Treasury sales account 12X4336, or in local currency with instructions
> to credit the deposit to CCC Account No. 20FT401. Any conversion
> required for these deposits shall be at the highest rate of exchange
> legally obtainable on the date of deposit unless USAID agrees
> otherwise in writing.
>
> With respect to monetized proceeds and program income, amounts
> recovered should be deposited into the special interest-bearing
> account established for the monetized proceeds, if applicable, and may
> be used for purposes of the approved program.
>
> Value of the commodity(ies) for claim purposes may be established by
> the per unit Bill of Lading (B/L) value at the time of shipment, which
> is the commodity plus freight value, unless justification for a
> depreciated or appreciated value is given and accepted by
> USAID/BHR/FFP.
>
> 10E. Disposition of Unfit Commodities
>
> 1\. Prior to Delivery
>
> If the commodity is damaged prior to delivery to a governmental
> Cooperating Sponsor at the discharge port or point of entry overseas,
> USAID Mission or the Diplomatic Post shall immediately arrange for
> inspection by a public health official or other competent authority. A
> nongovernmental Cooperating Sponsor shall arrange for such an
> inspection under these circumstances. A commodity that is determined
> to be unfit for authorized use shall be disposed of in accordance with
> the priorities set forth in Section 10E.2, below. Expenses incidental
> to the handling and disposition of the damaged commodity shall be paid
> by USAID Mission or the Diplomatic Post from the sales proceeds, from
> CCC Account No. 20FT401, or from the Title II account. The net
> proceeds of sales shall be deposited with the USDO, American Embassy,
> for the credit of CCC Account No. 20FT401.
>
> 2\. After Delivery
>
> If after arrival in a foreign country it appears that all or part of
> the commodities may be unfit for the use authorized in the OP or TA,
> the Cooperating Sponsor shall immediately arrange for inspection of
> the commodity by a public health official or other competent authority
> approved by USAID Mission or the Diplomatic Post. If no competent
> local authority is available, USAID Mission or the Diplomatic Post may
> determine whether the commodities are unfit and, if so, may direct
> disposal.
>
> A Cooperating Sponsor shall dispose of commodities determined to be
> unfit for authorized use in the following order of priority:
>
> Sale for the most appropriate use (e.g., animal feed, fertilizer,
> industrial use) at the highest obtainable price. When the commodity is
> sold, all USG markings shall be obliterated, removed or crossed out.
>
> Transfer to an approved FFP program for use as livestock feed.
> USAID/W-BHR/FFP shall be advised promptly of any such transfer so that
> shipments from the U.S. to the livestock feeding program can be
> reduced an equivalent amount.
>
> Donation to a governmental or charitable organization for use as
> animal feed or other non-food use.
>
> If the commodity is unfit for any of the disposal priorities listed
> above, the commodity shall be destroyed in such a manner as to prevent
> its use for any purpose. Commodities valued at \$500 or more shall be
> destroyed under the observation of a representative of USAID Mission
> or the Diplomatic Post if practicable. When the Cooperating Sponsor
> informs USAID or the Diplomatic Post of its intention to destroy
> commodities, the Cooperating Sponsor shall indicate the kind and
> amount of commodities that will be destroyed, the manner of
> destruction, the representative(s) of local authorities who will
> witness the destruction, and the date when the commodities will be
> destroyed.
>
> The concurrence of USAID Mission or the Diplomatic Post should be
> requested for disposition of commodities valued at \$500 or more. If
> USAID Mission or the Diplomatic Post does not respond to the
> Cooperating Sponsor\'s request for concurrence within 15 days, the
> Cooperating Sponsor may dispose of the commodities in the manner
> described in its request and inform USAID or the Diplomatic Post of
> its action.
>
> Expenses incidental to the handling and disposition of the damaged
> commodity shall be paid by the Cooperating Sponsor unless it is
> determined by USAID Mission or the Diplomatic Post that the damage
> could not have been prevented by the proper exercise of the
> Cooperating Sponsor\'s responsibility under the terms of the OP or TA.
> Actual expenses incurred, including third party costs in selling the
> commodities, may be deducted from the sales proceeds and, except for
> monetization programs, the net proceeds shall be deposited with the
> USDO, American Embassy, with instructions to credit the deposit to CCC
> Account No. 2OFT401. In monetization programs, net proceeds shall be
> deposited in the special account used for the approved program.
>
> The Cooperating Sponsor shall furnish USAID Mission or the Diplomatic
> Post with a written report on the unfit commodities, containing as
> much detail as possible on causes, and identifying the commodity kind
> and quantity and the time and place of damage, if ascertainable. The
> report shall enclose a certification by a public health official or
> other competent authority of the exact quantity of the damaged
> commodity disposed of, because it was determined to be unfit for any
> use, and the manner in which the commodities were destroyed.
>
> CHAPTER 11
>
> THE WORLD FOOD PROGRAM
>
> 11A. Structure
>
> The World Food Program (WFP) is a joint activity of the United Nations
> (UN) and the Food Agricultural Organization (FAO), having been
> established in April 1962 under separate resolutions of the Conference
> of the FAO and the General Assembly of the UN. Participation in WFP is
> open to UN member countries and to FAO member and associate member
> countries.
>
> The governing body of the WFP is the Committee on Food Aid Policies
> and Programs (CFA), which is jointly established by the UN and FAO
> through the election of members. It is composed of 42 countries that
> are members of the UN or FAO. Twenty-seven members are from developing
> countries and fifteen members are from economically developed
> countries. The U.S. is always a member. The CFA, which meets every six
> months, provides general guidance on the policy, administration and
> operation of WFP. It also examines and approves the administration and
> execution of approved projects and other WFP activities.
>
> The WFP Secretariat is located in Rome and is responsible for program
> planning, operations and evaluation. It consists of a staff headed by
> an Executive Director appointed for a five-year term by the Secretary
> General of the UN and the Director General of the FAO after
> consultation with the CFA. To the extent possible, WFP relies on the
> existing staff and facilities of the FAO, the UN and its specialized
> agencies, such as the UN International Children\'s Emergency Fund
> (UNICEF), and other international agencies. WFP assigns project
> officers to recipient countries when major projects or a group of
> projects are undertaken. WFP\'s senior representative in each country
> in which there is a program is the Director of Operations.
>
> 11B. Objectives
>
> WFP uses food aid as a capital input to support economic and social
> development efforts targeted toward those most in need. Projects are
> designed with three major objectives in mind: (1) national capacity
> building, (2) sustainability of projects and (3) protection of the
> environment. WFP also coordinates multilateral responses to emergency
> situations, whether they be
>
> natural or man-made. Since May of 1993 WFP has been the sole UN agency
> with a mandate to deliver food. The UN High Commissioner for Refugees
> (UNHCR) is in the process of transferring all food aid planning and
> delivery responsibilities to WFP.
>
> 11C. Resources
>
> WFP resources are obtained through voluntary pledges by UN and FAO
> member countries. Pledges are met with contributions in the form of
> commodities, services (principally ocean shipping) and cash. An
> attempt is made to obtain at least one third of the total
> contributions in cash. The U.S. Government (USG) contributions to WFP
> are made through P.L. 480 Title II, Office of Foreign Disaster
> Assistance (OFDA) cash grants, State/Refugee Programs (RP) cash
> grants, State/Bureau for International Organization (IO) cash grants
> for administrative expenses and USDA Section 416. Title II resources
> are transferred to WFP through a WFP/USG Transfer Authorization (TA).
> Contributions to WFP are pledged at conferences summoned jointly by
> the UN and FAO. Pledging conferences are convened at two year
> intervals (one year before the old pledges expire) when pledges for an
> additional two years are made. WFP has at least one year to plan
> projects against pledged resources.
>
> 11D. Types of World Food Program Assistance
>
> WFP is authorized to provide on a multilateral basis assistance for
> economic and social development projects, including human resource
> development, protection of the environment, health and disaster
> planning and mitigation.
>
> WFP has become increasingly involved in the task of coordinating
> multilateral emergency shipments and programs, particularly in
> response to international appeals by the UN. As part of this growing
> role, WFP manages a separate emergency account, the International
> Emergency Food Reserve (IEFR) which is made up of voluntary
> contributions from donor countries. These are separate from the
> biannual pledges which make up the general WFP budget. The USG is
> committed to providing 25 percent of the IEFR (125,000 metric tons)
> and has regularly exceeded that amount. This contribution comes from
> the P.L. 480 Title II emergency reserve. USG commodity contributions
> to the IEFR are provided under the terms of special TAs that control
> the types of commodity and specify required documentation procedures.
> As part of the IEFR, the CFA has authorized creation of an Immediate
> Response Account (IRA). The IRA is a cash account that WFP can utilize
> to purchase emergency food as close as possible to the site of
> emergencies. In addition, each year an emergency resource reserve is
> established for use in emergency programs that are approved by the
> Director General of FAO. When depleted, additional amounts may be made
> available by the CFA.
>
> At the biannual pledging conference donors are asked to indicate the
> level of resources they will make available to WFP for development
> programs, the IEFR and protracted refugee operations (PROs).
>
> 11E. Guidelines
>
> Commodities are provided by WFP to recipient countries on a grant
> basis.
>
> Ocean freight is paid to ports of entry and, where necessary, inland
> transport to borders of landlocked recipient countries. WFP cannot
> contribute technical assistance, capital or foreign exchange to
> participating countries.
>
> Primary responsibility for project execution rests with the recipient
> country. However, WFP shares responsibility for supervision and
> execution and attempts to ensure that food supplied under the project
> reaches its destination and that waste and losses are kept to a
> minimum.
>
> WFP has taken several positive steps to improve project management,
> monitoring and accountability. For example, WFP has developed a new
> project implementation tracking system that involves quarterly reports
> to headquarters; has secured technical assistance from UNDP and other
> UN agencies in the implementation of projects; and has reorganized its
> staff to focus more on strategic analysis and planning and to delegate
> more implementation responsibility to the geographic bureaus. In
> conjunction with this reorganization, WFP is carrying out management
> improvement training programs. WFP is also developing a rapid disaster
> response capability that will involve a cadre of 15 disaster
> coordination officers who will be able to travel immediately anywhere
> in the world to assess needs and organize emergency response
> activities.
>
> Sales of WFP commodities are approved by the CFA. In general, sales
> are excluded from a proposal if commercial sales would knowingly be
> displaced. In projects where sales of commodities are proposed and
> approved by the FAO Consultative Subcommittee on Surplus Disposal
> (CSD), WFP applies the following guidelines: (a) when WFP commodities
> are sold on the open market, the WFP Secretariat analyzes the
> recipient country\'s supply pattern for each of the commodities
> involved and determines whether special safeguards to assure against
> displacement of commercial marketings are necessary; (b) when WFP
> commodities are sold below prevailing local prices, the channels
> through which such commodities move should be isolated from the usual
> commercial channels, as far as possible, and information should be
> provided that supports this type of sale; (c) proceeds from sales are
> typically used to finance activities related to the project, such as
> payment of wages; purchase of local tools, equipment, and local
> ingredients; and internal transportation, storage and handling (ITSH).
> Information on the use and control of proceeds is to be provided.
>
> 11F. Request and Approval Procedures
>
> 1\. Applications for food aid emanate from and are prepared by the
> government of the recipient country pursuant to instructions and a pro
> forma prescribed by WFP. Prior to submission of the application,
> locally available technicians of the UN, FAO, International Labor
> Organization (ILO) and other specialized agencies of the UN may be
> drawn upon for preliminary technical evaluation and project proposal
> refinement. Although not covered in its regulation, WFP has agreed to
> consult with and seek the views of USAID Missions at this stage. In
> some cases, WFP may send a technical team to the country to assist in
> the formulation of the project application. Official requests for WFP
> assistance are submitted through the UNDP Resident Representative to
> the
>
> Executive Director.
>
> 2\. Upon receipt in WFP Headquarters/Rome, the request is evaluated by
> the WFP Secretariat with the assistance, advice and recommendations of
> technicians of the UN, FAO and other specialized agencies of the UN.
> If considered necessary, technical teams may be sent to the requesting
> country to review the proposed project in greater detail.
>
> 3\. When the WFP Secretariat is satisfied that the proposed project
> has good possibilities for development, it forwards a Project Summary
> to the Consultative Subcommittee on Surplus Disposal (CSD) in
> Washington, DC, for examination by its members to assure that current
> and developing markets will not be adversely affected. The CSD
> Secretariat consults its members, including the USG, and subsequently
> notifies WFP either that the project has been cleared or that members
> have objected.
>
> 4\. At approximately the same time that WFP submits the \"Project
> Summary\" to the CSD, it requests one or more of the donor countries
> to agree to supply the commodities. The USG is provided at this time
> with three copies of the Project Summary.
>
> 5\. When a proposed project has been cleared technically and by the
> CSD and when commodities have been tentatively committed by donors,
> the project is ready for WFP approval under one of the following
> procedures:
>
> The Executive Director may approve projects with a food value not
> exceeding \$1.5 million. This must be confirmed after the fact by the
> CFA.
>
> Projects with a food value of over \$1.5 million require the approval
> of the CFA before being submitted by the Executive Director to the
> Committee for consideration.
>
> In periods between the biannual sessions of the CFA, a project with a
> food value of over 1.5 million may be submitted to the members of the
> CFA for their approval by correspondence. If no member objects within
> 45 days from the date the project proposal is dispatched, the project
> is considered to be approved. If any member questions the project, the
> Executive Director is required to hold it for consideration by the CFA
> at its next session.
>
> 6\. Upon approval of a project as outlined in a., b. and c., above,
> the recipient country is notified and a Project Agreement is
> negotiated and signed by a representative of the recipient country and
> the Executive Director or his designee. Such agreements may provide
> for WFP assistance during a maximum of five years subject to the
> availability of resources after the end of the then-current pledging
> period.
>
> 7\. Following signature of the Project Agreement, the government of
> the recipient country is given time to prepare for the initiation of
> the project pursuant to the terms of the Agreement. When it has
> arranged the necessary details, it submits a Letter of Readiness to
> the Executive Director. If in doubt, the Executive Director may
> require field staff to investigate and assure that all essential
> arrangements have been completed. Thereafter, the commodities are
> called forward by WFP from the donor governments as they are needed.
>
> 11G. U.S. Government Responsibilities and Coordination
>
> 1\. Appraisal of Requests for World Food Program Assistance
>
> WFP is encouraged to consult with USAID Missions at an early stage in
> the development of projects. It is at this point, when a recipient
> country submits a request to WFP, that the U.S. can exert its greatest
> influence on the technical aspects of the project. Because WFP has the
> responsibility for assuring that projects are technically sound and
> carefully planned, it is in the best interest of the USG to assist in
> the development of such projects.
>
> The purpose of the consultation is not to seek the USAID Mission\'s
> approval, but to exchange information. USAID Missions should discuss
> freely any unclassified information that may have an influence on
> WFP\'s subsequent decision, including problems, if any, that the WFP
> proposed project might create. On this point, USAID Missions should
> assure that WFP is not duplicating, overlapping, or impinging upon
> other projects. However, care should be taken to avoid any implication
> that the U.S. is attempting to restrict the activities of WFP. Another
> area that might be examined is whether the recipient country can
> continue the project\'s objectives after WFP aid has ceased.
>
> 2\. USAID Mission Liaison with World Food Program Representatives
>
> It is essential that member nations of international organizations and
> UN specialized agencies respect the independence and multilateral
> character of these agencies. This policy guides the U.S. in its
> relations with WFP.
>
> As a permanent member of the CFA, the U.S. is able to make its
> influence felt in WFP policies and operations. Under established
> procedures, AmEmbassy Rome (FODAG) forwards one copy of the \"Project
> Summary\" to USAID Missions with a request for comments and
> recommendations. Missions are requested to keep USAID/W-BHR/FFP
> informed of all significant developments on WFP matters in their
> countries. It is particularly important that a report be dispatched
> promptly when the USAID Mission learns that WFP is considering a
> program in-country. This report should include (a) as much information
> as is available on the nature of the proposal and commodity
> requirements; (b) the country team\'s views on its desirability; (c)
> whether the project, if approved, conflicts or supplements U.S.
> objectives and existing or proposed Cooperating Sponsors\' programs or
> adversely affects current and developing markets, particularly with
> regard to U.S. exports; (d) whether the recipient government has the
> capability to manage the proposed project and the WFP field staff have
> the capacity to monitor it. USAID/W-BHR/FFP relies heavily on USAID
> Mission comments on WFP project proposals and field operations in
> developing the U.S. position for the CFA on such matters. It is not
> always possible, however, for USAID/W-BHR/FFP to follow a USAID
> Mission\'s recommendations because other considerations may be
> involved in determining the U.S. position on a particular WFP project.
> All reports and other communications on WFP operational matters are to
> be in the cable series and are to include \"World Food Program\" in
> the subject. All messages are to be addressed to USAID/W-BHR/FFP and
> copied for information to AmEmbassy/Rome \"For FODAG\". FODAG is the
> U.S. Mission to the UN Food and Agriculture Agencies in Rome.
>
> U.S. relations with WFP should be viewed primarily in terms of its
> membership on the WFP governing board rather than as a co-implementer
> of individual project activities. It is in this context that the USAID
> Mission role should be viewed as one concerned primarily with assuring
> coordination with ongoing bilateral programs. This includes general
> knowledge of how the WFP/host-country program is functioning as well
> as developing a close working relationship with WFP representatives to
> assure reasonably uniform distribution policies and host country
> relationships. This may extend to regular discussion meetings, not
> only to discuss WFP program operations, but to serve as a framework
> for donor coordination on development assistance and emergency
> preparedness. It is in the early stages of project development,
> preferably before the host country submits a formal request to WFP,
> that the Mission can have its greatest influence on the project.
>
> Missions have no responsibilities concerning control, management or
> financial accounting on any WFP activity. Questions of commodity
> distribution, monitoring and project control are the responsibility of
> WFP and the host government. Missions are encouraged to be alert to
> any WFP program or commodity management shortcomings and call to the
> attention of WFP representatives any suspected program irregularities
> or misuse of commodities in connection with WFP projects. If the USAID
> Mission has reason to believe that a problem is not receiving adequate
> attention, then the matter should be reported to USAID/W-BHR/FFP. Such
> reports are taken up promptly with WFP/Rome by USAID/W-BHR.
>
> 3\. Implementation of U.S. Commodity Shipments
>
> The USG implements its commodity and ocean freight commitments to WFP
> under the authority contained in Title II of P.L. 480. Within USAID/W,
> Bureau for Humanitarian Response, Office of Food for Peace (BHR/FFP)
> has primary responsibility for the coordination of the WFP program.
> Implementation documents include a Commodity Transfer Authorization
> (TA) for all or part of each biannual U.S. pledge to WFP, and a
> Memorandum of Understanding (MOU) on transportation and related
> matters, both signed by the Assistant Administrator, BHR. The
> commodity TA, when signed by an officially designated representative
> of WFP, the Memorandum of Understanding (MOU) and the Supplement to
> the TA, as amended (see Appendix C), constitute the official
> agreements between the USG and WFP.
>
> Under the arrangement described above, WFP becomes responsible to the
> USG for fulfillment of the agreement, but it may, and probably will,
> contract separately with the recipient country for part or all of the
> following: (a) cost of discharge of berthline and charter vessels,
> lighterage, net demurrage and any dues or charges levied against the
> cargo; (b) all internal costs of the program, including, but not
> limited to, warehousing, transportation and distribution; (c) use of
> commodities for purposes specified; (d) avoidable losses due to
> improper actions or inept handling within the recipient country; (e)
> filing and following through on claims against vessels, carriers,
> warehousemen, etc. after arrival at port of destination; and (f)
> arrangements to ensure that recipients know that U.S. commodities were
> furnished to WFP by the people of the U.S.
>
> The following information must be provided by WFP to enable the USG to
> implement shipments:
>
> a statement covering the location and nature of the program, the
> purpose for which the U.S. commodities are to be used, and the
> executing agency in the host country;
>
> a statement on any possible disincentives for domestic production
> resulting from WFP food assistance, as well as a statement that WFP
> reconfirms that adequate storage facilities will be provided by the
> recipient country;
>
> the quantity of each commodity requested;
>
> shipping instructions; and
>
> port(s) of destination, name(s) and address(es) of consignee(s),
> delivery period, packaging specifications, and document distribution
> (Bill of Ladings (B/Ls), charter parties, etc.).
>
> PART III
>
> FOOD FOR DEVELOPMENT (P.L. 480, TITLE III)
>
> CHAPTER 12
>
> TITLE III PROGRAM DEVELOPMENT
>
> 12A. Objectives
>
> The overall goal of the Title III program is the enhancement of food
> security in those regions of the world where insufficient access to
> basic food staples has become a critical and chronic problem for
> impoverished people. The legislative intent underlying passage of the
> 1990 Title III legislation was to develop a food aid instrument that
> could permeate to the poorest echelons of the populace in least
> developed nations. Congress stressed three fundamental Title III
> objectives: the enhancement of food security; the privatization of
> food and agricultural distribution systems; and the support of
> nutrition improvement and child survival initiatives. Accordingly,
> these are the priority areas to be first scrutinized for the inherent
> merits of Title III proposals.
>
> P.L. 480 defines food security as \"Access by all people at all times
> to sufficient food and nutrition for a healthy and productive life.\"
> The legislation emphasizes the integration of the Title III program
> into the development strategy, objectives and programs of the U.S.
> Government (USG) and the recipient country so that it will be used as
> a catalyst in bringing other resources to bear on meeting a
> population\'s basic food requirements, and not as a supplementary or
> single undertaking to attain this objective.
>
> 12B. Eligibility Criteria
>
> Section 302 of P.L. 480, as amended in 1990, sets forth the criteria
> for a country to be eligible for P.L. 480, Title III Food for
> Development program funding. A prospective recipient country must
> first of all be determined to be a \"least developed country\" by
> meeting either of the following two sets of criteria:
>
> Poverty Criteria - Criteria used by the International Bank for
> Reconstruction and Development (IBRD) to determine eligibility for
> Civil Works Preference for providing financial assistance; or
>
> Food Deficit Criteria - A least developed country is a food deficit
> country characterized by high levels of malnutrition that meets all
> three of the following indicators:
>
> per capita consumption of less than 2,300 calories per day;
>
> child (under 5 years) mortality rate in excess of 100 per 1000 live
> births; and
>
> inability to meet food security requirements (undefined) from domestic
> production or
>
> from imports because of lack of foreign exchange for commercial
> purchases.
>
> 1\. Poverty Criteria
>
> The poverty criteria for Title III eligibility are based on IBRD\'s
> \"Per Capita Income Guidelines for Operational Purposes\" covering the
> Civil Works Preference. In some countries experiencing changing
> economic conditions, IBRD per capita income guidelines become outdated
> or highly uncertain. In cases where such uncertainties exist, USAID
> Missions, through their Regional Bureaus, may request USAID\'s Bureau
> For Policy and Program Coordination (PPC) to review the latest
> available data. USAID/W-Bureau for Policy and Program Coordination
> (PPC) has been assigned responsibility to determine annually which
> countries meet the minimum statutory eligibility test based on
> standards in Section 302 of P.L. 480. Where there is any doubt
> regarding poverty or food deficit data, USAID Missions, through their
> Regional Bureaus, should request that PPC review the data available
> and make a new determination regarding eligibility. Countries with
> ongoing multi-year Title III agreements do not have to re-establish
> eligibility for the duration of an approved agreement.
>
> 2\. Food Deficit Criteria
>
> USAID/W uses the caloric consumption data provided at two levels: the
> actual data from the Food and Agriculture Organization of the United
> Nations (FAO); and the FAO data adjusted to reflect a 10 percent
> margin of error. The child mortality data are also provided at two
> levels: the actual data from the UN International Children\'s
> Emergency Fund (UNICEF); and the UNICEF data adjusted to reflect a 10
> percent margin of error.
>
> NOTE: Given the uncertainty of accuracy of statistics in many least
> developed countries (LDCs), USAID, FAO and UNICEF all recognize that
> there needs to be a certain degree of flexibility in interpreting the
> data for countries falling just outside the threshold criteria. Based
> on further consultations, USAID works with a 10 percent margin of
> error in the foregoing data to encompass countries that may otherwise
> fall outside the caloric and child mortality thresholds. The USAID
> \"Manual for Food Needs Assessment\" (FNA) with its accompanying
> software is very useful in undertaking this analysis.
>
> The food security criterion can be satisfied if it can be shown that a
> country is experiencing food shortages that cannot be offset by
> domestic production or imports, the latter being constrained by lack
> of foreign exchange. The statute does not define these terms nor is
> there any guidance on how they can be measured.
>
> There is no universally accepted formula that signifies a foreign
> exchange shortage which would fulfill this indicator of a food deficit
> country. However, a working definition is that a country will have a
> shortage if the ratio of foreign exchange reserves to the monthly
> level of imports is less than 3 to 1. This import coverage measure
> also could miss situations where the government knows it has a foreign
> exchange problem, but the problem does not show up immediately.
> Unfortunately, such exchange data is not available from the World Bank
> for all developing countries.
>
> The preferred indicator would show that a country was experiencing a
> shortfall in export earnings from the effects of unexpected external
> disruptions. This could be due to a variety of factors: balance of
> payments problems owing to temporary declines in commodity export
> earnings; sharp increases in the costs of agricultural imports
> (cereals) or petroleum products, or shortfalls in receipts from
> tourism or worker remittances. The key is that shortfalls in receipts
> must be temporary and largely beyond the control of the member
> country.
>
> An alternative measure is whether a country has an agreement with the
> International Monetary Fund (IMF) that allows the IMF to oversee
> macroeconomic and structural policies as these influence the exchange
> rate. The existence of an IMF agreement, which covers balance of
> payments support programs, is a strong indication that the host
> country\'s economy lacks the short to medium-term ability to adjust to
> economic conditions. The existence of such balance of payments support
> programs also implies that sufficient steps are being taken to address
> underlying problems.
>
> 3\. USAID Priority Determinations
>
> Although a country may be eligible in meeting either the poverty
> criteria or the food deficit criteria, it does not automatically
> qualify for Title III food aid. In addition, the USAID/W review of any
> Title III proposal will take into account a prospective recipient
> country\'s policies that either sought to avoid or may have been
> instrumental in bringing about a critical shortage of foreign
> exchange. For example, there are some countries with long histories of
> inflation and financial imbalances. There also are countries that have
> maintained financial discipline and adopted policies to achieve
> economic reform, but nevertheless have experienced problems due to
> external factors. Accordingly, in apportioning annual levels of Title
> III availabilities on a comparative basis among eligible recipients,
> additional consideration will be given to those countries which have
> pursued policy reform and structural adjustment programs.
>
> The Title III legislation \[Section 302(c)\] lists major factors to be
> taken into account in the priority ranking of prospective recipients,
> stating that the USAID Administrator (A/USAID) shall give priority to
> countries that:
>
> demonstrate the greatest need for food;
>
> demonstrate the capacity to use food assistance effectively;
>
> have demonstrated a commitment to policies to promote food security,
> including policies to reduce measurably hunger and malnutrition
> through efforts such as establishing and institutionalizing
> supplemental nutrition programs targeted to reach those who are
> nutritionally at risk; and
>
> have a long-term plan for broad-based, equitable, and sustainable
> development.
>
> Other criteria, similar to those for programming and use of other
> USAID resources, are also employed in the USAID/W review of Title III
> proposals. These include program prioritization, the meeting of
> concentration and focus requirements, program integration, and the
> technical and programmatic merits of the proposal itself.
>
> 12C. Employment of Title III Resources
>
> 1\. Considerations in Program Formulation
>
> The uses of Title III resources outlined in the program proposal
> should be the outcome of a joint Mission-Cooperating Country review of
> (a) immediate and long-range food import needs in the context of the
> food security potential of the recipient country; (b) the policies and
> programs undertaken to meet food needs; (c) the ways in which the
> Title III program proposed could provide assistance in enhancing food
> security and the country\'s capacity to use food assistance
> effectively; and (d) the manner in which Title III fits into the USAID
> Mission\'s strategic plan and the broader development strategy of the
> recipient country.
>
> Title III proposals should flow from analysis of the country\'s food
> security situation, including the roles that food aid and the private
> sector can play in enhancing food security. On the basis of this
> analysis, the USAID Mission should identify the primary host country
> organizations involved in the program and the specific undertakings to
> be supported by Title III.
>
> Title III program proposals should take into account the institutional
> capacity of the recipient country\'s private and public sector
> organizations and agencies to manage the sale and distribution of the
> commodity; implement approved reforms, programs, projects; program and
> monitor the use of local currencies; undertake direct feeding
> programs; and handle and administer emergency reserves.
>
> Section 404(b) of P.L. 480, as amended in 1990, states that Title III
> agreements include the following terms and conditions which bear upon
> a proposal\'s design and content:
>
> \(1\) include an estimate of the annual value or volume of
> agricultural commodities proposed to be made available to the country
> or eligible organization under the agreement;
>
> \(2\) include a statement of the manner in which the agricultural
> commodities provided under the agreement or the revenues generated by
> the sale of such commodities (if such commodities are sold) will be
> integrated into the overall development plans of the country to
> improve food security and agricultural development, alleviate poverty,
> and promote broadbased, equitable, and sustainable agriculture;
>
> \(3\) include a statement of the manner in which competitive private
> sector participation within the recipient country in the storage,
> marketing, transportation, and distribution of agricultural
> commodities made available under this Act will be encouraged;
>
> \(4\) include a statement that such agreement shall be subject to the
> availability, during each fiscal year to which the agreement applies,
> of the necessary appropriations and agricultural commodities; and
>
> \(5\) contain such other terms and conditions as the Administrator
> determines to be necessary.
>
> There is purposeful flexibility in the Title III legislation and in
> USAID policy regarding use of this category of food aid. It may be
> programmed as project, sector, or non-project assistance. Title III
> commodities may be:
>
> used as balance of payments assistance to support national policy
> reform;
>
> sold for use of sales proceeds to finance specific economic
> development activities or sector support;
>
> distributed in direct feeding programs;
>
> used to establish emergency food reserves; or
>
> used in any combination of the foregoing options.
>
> USAID Missions are encouraged to combine, in one project, Title III
> resources with Development Assistance (DA), Development Fund for
> Africa (DFA), Economic Support Fund (ESF) or other food aid to
> maximize the developmental impact of U.S. assistance.
>
> USAID Missions using Title III programs as balance of payments
> assistance to support policy reform initiatives, should design such an
> activity to be carried out in conjunction with other Title III
> supported development activities. If a USAID Mission proposes a Title
> III program for balance of payments support exclusively, it would have
> to be fully justified by exceptional circumstances. In pursuing policy
> reform, priority should be accorded policy changes in areas of food
> security, private sector, and nutrition - including child survival
> ­initiatives. The USAID/W Policy Paper, \"Approaches to the Policy
> Dialogue\" (USAID/W-PPC/CDIE - PN-AAM-431) provides useful guidance on
> pursuing policy reform initiatives.
>
> Design requirements for Title III proposals depend largely on the
> manner in which the resources are to be utilized. If Title III food
> aid is to be used as balance of payments support, then the program
> requirements for use of these resources in such macroeconomic support
> undertakings should be followed. If Title III resources are used in a
> non-project sector assistance program, then the same guidelines for
> use of other USAID resources in this mode are to be used. When using
> Title III resources in a traditional project mode, the design
> requirements for project assistance are to be followed.
>
> Whatever the use, all proposals for use of Title III commodities must
> be accompanied by the following analyses: (See Section 12E3C for
> details.)
>
> Commodity Needs Analysis, which assesses the demand for and supply of
> the commodity(ies) requested;
>
> Usual Marketing Requirements (UMR), which ensures that reasonable
> precautions have been taken not to disrupt world prices or normal
> patterns of commercial trade for agricultural commodities (per Section
> 403(E) of P.L. 480);
>
> Storage and Disincentive Analysis, to confirm that adequate storage
> facilities will be available for the commodities requested, and that
> distribution of these commodities will not result in disincentives for
> domestic production or marketing (per Section 403(A) of P.L. 480.
>
> The USAID Mission also must have the ability to devote the staff and
> resources necessary to assist a recipient country in pursuing a policy
> reform dialogue; monitor the impact of policy reforms in balance of
> payments assistance; program the use of the commodities and/or local
> currencies; track and report on program progress; and meet the
> standards outlined in USAID\'s Supplemental Guidance on Programming
> and Managing Host Country-Owned Local Currency (contained in State
> 204855) and USAID PD-18 on local currency.
>
> 2\. Direct Feeding
>
> Title III commodities may be used for direct feeding programs,
> including programs that deal with the special health needs of children
> and mothers. Direct feeding initiatives can also support or complement
> child survival program activities including improved and expanded
> immunization programs, oral rehydration programs to combat diarrheal
> diseases, and education programs aimed at improving nutrition and
> sanitation and promoting child spacing.
>
> 3\. Emergency Food Reserves
>
> USAID Missions may use Title III commodities to establish Emergency
> Food Reserves. The costs of storing and managing such reserves should
> be weighed against alternative approaches to enhancing short-term food
> security, such as accumulating foreign exchange reserves or requesting
> emergency food aid. USAID Missions should continue to rely mainly on
> Title II resources for establishing such reserves unless the
> developmental context of the program would support the use of Title
> III resources.
>
> 4\. Sale of Commodities
>
> If a Title III program involves the sale of commodities, the sale may
> be through the private sector or the public sector as determined by
> the Cooperating Country with USAID Mission approval. The project
> proposal should describe:
>
> the organization designated to manage the sale;
>
> how the sale will be conducted;
>
> how the sales price is determined; and
>
> the acceptable terms of the sale.
>
> When a Title III program involves the sale of commodities, local
> currency sales proceeds must be used for specific economic development
> purposes. Unless otherwise justified and approved by USAID/W, these
> proceeds will be owned by the recipient country and jointly programmed
> with the USAID Mission. The recipient country must establish a
> separate interest-bearing account for the deposit of local currency
> sales proceeds. The amount of local currency deposit will be the
> amount of local currency proceeds derived from a free market sale.
> Deposits are to be made into the account promptly after title passes
> to the purchaser. The project proposal should describe and justify any
> modifications to these requirements. If the requirement for a separate
> account is waived, the Mission must still be able to verify that an
> equivalent amount of local currency was used for specific economic
> development purposes in the Title III agreement.
>
> It is USAID policy for the recipient country to own the local currency
> except in extraordinary circumstances. For example, U.S. ownership may
> be justified in country situations where it is necessary to program
> sales proceeds for private sector support, or when more rigorous U.S.
> accountability standards are appropriate and the USAID Mission can
> demonstrate that it has the staff capacity to manage the U.S. owned
> local currency and comply with those standards.
>
> The statutory objectives of monetized P.L. 480, Title III programs
> would not be satisfied unless the local currency proceeds were used
> for their intended purposes. Such intended purposes are largely
> defined in the legislation itself; P.L. 480, Title III \[Section
> 306(a)\] identifies 13 specific economic development purposes for
> which local currency may be used. While illustrative, they do cover a
> broad spectrum of activities that Congress considers highly
> instrumental in achieving the objectives of the Title III legislation:
>
> the promotion of specific policy reforms to improve food security and
> agricultural development within the country and to promote
> broad-based, equitable, and sustainable development;
>
> the establishment of development programs, projects, and activities
> that promote food security, alleviate hunger, improve nutrition, and
> promote family planning, maternal-child health (MCH), oral rehydration
> therapy (ORT), and other child survival objectives;
>
> the promotion of increased access to food supplies through the
> encouragement of specific policies and programs designed to increase
> employment and income within the country;
>
> the promotion of free and open markets through specific policies and
> programs;
>
> support for U.S. private voluntary organizations (PVOs) and
> cooperatives and encouragement of the development and utilization of
> indigenous non-governmental organizations (NGOs).
>
> the purchase of agricultural commodities (including transportation and
> processing costs) produced in the country:
>
> to meet urgent or extraordinary relief requirements in the country or
> in neighboring countries; or
>
> to develop emergency food reserves;
>
> the purchase of goods and services (other than agricultural
> commodities and related services) to meet urgent or extraordinary
> relief requirements;
>
> the payment, to the extent practicable, of the costs of carrying out
> the program authorized in the Farmer-to-Farmer Program (FTF);
>
> private sector development activities designed to further the policies
> set forth in Section 2 of P.L.480, including loans to financial
> intermediaries for use in making loans to private individuals,
> cooperatives, corporations, or other entities;
>
> activities of the Peace Corps that relate to agricultural production;
>
> the development of rural infrastructure such as roads, irrigation
> systems, and electrification to enhance agricultural production;
>
> research on malnutrition and its causes, as well as research relating
> to the identification and application of policies and strategies for
> targeting resources made available to address the problem of
> malnutrition; and
>
> support for research (including collaborative research that is
> mutually beneficial to the U.S. and the recipient country), education
> and extension activities in agricultural sciences.
>
> Title III requires consultations with the IMF, World Bank, and other
> donors to ensure that use of P.L. 480 local currency for development
> purposes will not have a disruptive impact on the farmers or the local
> economy of the Cooperating Country. Programming local currency to
> support particular sectors of the government\'s budget is permissible
> under Title III agreements. Programming local currency to reduce the
> recipient government\'s debt may be permissible under Title III if
> this can be justified under one of the foregoing economic development
> activities.
>
> 5\. Support of Indigenous Non-Governmental Organizations (NGOs)
>
> The 1990 P.L. 480 amendment requires that to the extent practicable,
> Missions shall program 10 percent of the local currency sales proceeds
> deposited into a separate account to support indigenous NGOs and
> cooperatives. Eligible organizations should be active in rural
> development, agricultural education, sustainable agricultural
> production, environmental protection and other activities that benefit
> poor people in the recipient country. Assistance may be provided to
> develop the institutional capability of an indigenous NGO as well as
> to implement activities of NGOs in these areas.
>
> The law defines an indigenous NGO as \"an organization that operates
> under the laws of the Cooperating Country, or has its principal place
> of activity in such country, and works at the local level to solve
> development problems in the Cooperating Country.\" This definition
> excludes an organization that is primarily an agent or instrumentality
> of the recipient government but does not exclude non-governmental,
> profit-making organizations. If such an allocation to eligible
> indigenous NGOs is not practicable, Title III proposals must explain
> the reasons why and what will be done in the future to increase the
> support to foster indigenous NGOs under the program.
>
> 6\. Endowment Programs
>
> Programming of local currency to establish an endowment is permissible
> under Title III, but only if such an endowment is established by an
> NGO and not the host country. Such endowments are most effective
> where:
>
> there is a stable political and economic order that allows legal and
> institutional systems to assume a level of independence and integrity;
>
> the endowment has a high level of organizational entrepreneurship to
> perform development tasks;
>
> there is a politically astute leadership that is sensitive to
> government concerns.
>
> USAID Missions contemplating the use of Title III resources to support
> endowment programs should first obtain the Center for Development
> Information and Evaluation (CDIE) paper entitled \"Terms of Endowment:
> A New USAID Approach to Institutional Development\" (Document No.
> PN-ABG-001) for guidance.
>
> 12D. Title III Program Planning
>
> 1\. USAID Mission Responsibilities
>
> All Title III activities emanate from USAID Missions or Field Posts.
> Unlike Title II, where the Mission\'s role is basically one of
> management and oversight, USAID Missions are directly involved in
> Title III programs from concept through development and implementation
> to final evaluation and audit. Along with the host government, USAID
> Missions have overall responsibility for designing, developing and
> supervising the implementation of Title III programs. Given this range
> of responsibilities, USAID has restricted consideration of Title III
> programs to USAID Missions or Field Posts where there are fully
> staffed USAID Missions.
>
> In the drafting of Title III program proposals, as well as in
> considering staff requirements for undertaking such programs, USAID
> Missions should assign the following responsibilities:
>
> U.S. commercial interests;
>
> economic policy considerations including private enterprise promotion
> and policy and structural reforms;
>
> commodity considerations:
>
> -demand side (host country requirements)
>
> -supply side (commodity availability);
>
> adequacy of handling, storage and distribution facilities;
>
> disincentives;
>
> supply and distribution data;
>
> UMR/export limitations;
>
> utilization of commodities and locally generated currency;
>
> Title III program development;
>
> monetary management plan;
>
> deposit of sale proceeds/special account requirements;
>
> reporting and monitoring;
>
> evaluation and review;
>
> purchase and shipment;
>
> drafting of proposal and other documents;
>
> assuring adherence to USAID documentation requirements;
>
> review and analysis; and
>
> submission to USAID/W.
>
> 2\. Financial Planning
>
> a\. Multi-Year Commitment
>
> USAID Missions should be aware of the annual Agency Title III Program
> Guidance which is supplemented by additional Title III Guidance from
> each Regional Bureau. P.L. 480 mandates that USAID make Title III
> assistance available on a multi-year basis which, it is believed,
> gives the Cooperating Country greater incentive as well as sufficient
> time to undertake meaningful programs or policy reforms. Multi-year
> proposals should project total Title III commodity requirements for up
> to a five-year Life of Project. Once approved, resource requirements
> for multi-year programs will have priority over new Title III
> proposals.
>
> As stated in Section 404(b)(4) of P.L. 480 legislation, USAID Missions
> should take special note that future year funding of Title III
> multi-year undertakings is subject to the availability of
> appropriations and commodities. For instance, unanticipated needs of
> funds and commodities in other P.L. 480 programs, especially Title II
> emergencies, can often affect the outyears of a multi-year program.
> This was the case during the first two years of the new Title III
> program when unforeseen circumstances created annual shortfalls
> necessitating reductions in the levels of approved Title III programs
> following the 1990 amendment to P.L. 480. Proposals should retain
> sufficient flexibility to allow for such possible reductions, and
> there should be clear understanding by the Cooperating Country that
> funding levels for multi-year agreements are the maximum amount
> approved by USAID and subject to availability of both funds and
> commodities in any given year. The Title III agreement is amended
> annually to reflect the actual funding approved and available that
> fiscal year.
>
> b\. Financial Estimates and Tables
>
> When developing financial plans, estimates should be made for the
> annual commodity tonnage requested; local currency generations; and
> the contributions being made by the USG, the recipient country, and
> other donors. The financial tables should clearly show estimates for
> the sales proceeds, and an illustrative budget by fiscal year of the
> projected disbursements of sales proceeds to the designated
> development activity. If a commodity distribution program is proposed,
> there should be detailed estimates of commodity use at least for the
> first 12 months of implementation.
>
> c\. Costs of Transportation
>
> The USG pays the costs of purchasing, processing, handling and
> transporting commodities to the designated port or point of entry in
> the Cooperating Country. Thereupon the Cooperating Country is
> responsible for handling, transporting and distributing the
> commodities within the country. USAID Missions should be aware that
> local currency generated by Title III commodity sales may be used to
> pay for handling, transportation and distribution of these commodities
> within the Cooperating Country.
>
> 3\. Cooperating Country Performance Requirements and Restrictions
>
> USAID/W will review progress towards achieving program objectives
> annually in making judgements about program continuation for each
> succeeding year. In making such a determination, USAID/W will consider
> the extent to which a country is meeting the specific program and
> policy performance indicators contained in the Title III Agreement.
> Also considered are performance standards set forth in Section 404(d)
> of the Title III legislation which may or may not be reflected in
> these performance indicators. These standards include the extent to
> which a country is:
>
> making significant economic development reforms;
>
> promoting free and open markets for food and agricultural producers;
> and
>
> fostering increased food security.
>
> Specific statutory restrictions (e.g., the host government cannot
> resell commodities to another country; food must be distributed
> without regard to political affiliation, geographic location, ethnic,
> tribal or religious identity, etc.) are included in the Standard
> Provisions of Title III Agreements. (See Section 14C.12.)
>
> 4\. Amendments
>
> The Title III Agreement should be amended annually to confirm the
> availability of the actual funding and estimated commodity levels for
> that fiscal year and the mutual agreement of the Cooperating Country
> and USAID to proceed; to update the UMR and other export limitation
> information; to revise uses of commodities or local currency proceeds
> beyond that stated in the agreement; or to make any other changes to
>
> the approved program not otherwise permitted. Amendments that increase
> available financing beyond amounts originally approved should be based
> on updated Title III proposal and budgets that explain the rationale
> for additional resources, and what, if any, additional policy and
> program performance will occur as a result.
>
> Program Implementation Letters (PILS) may be used to confirm USAID
> Mission\'s and the Cooperating Country\'s mutual understanding of
> implementation matters or to record revisions or exceptions permitted
> by the agreement (e.g., revision of the Plan of Operations in Annex A,
> or Commodity Specifications or Shipping Terms in Annex B of the Model
> Title III Agreement) but may not otherwise amend the agreement text.
>
> 5\. Single-Year Agreements
>
> Missions wishing to submit a proposal for only a single year of Title
> III programming should include appropriate justification for such
> reasons as permitted under Section 404(c)(2), allowing assistance to
> be provided on an annual basis because:
>
> the past performance of the country or organization in meeting program
> objectives does not warrant a multi-year agreement;
>
> it is anticipated that the need of a country or organization for food
> aid does not extend beyond one year; and
>
> other circumstances as determined by the Administrator, as
> appropriate, indicate there is only a need for a one-year agreement.
>
> 12E. Title III Program Proposal Components
>
> The Title III Program Proposal should consist of about 25
> single-spaced pages -
>
> exclusive of annexes, statistical tables, charts and graphs - and
> should cross-reference existing policy and Mission strategy statements
> and program documents as much as possible. For example, the current
> approved Mission Strategy Statement and Action Plan could be
> incorporated by reference in the Title III Proposal, as could project
> documents that involve activities to be supported by the Title III
> Program. Such supporting documents could be included as annexes, as
> could the proposed draft of the agreement and a logical framework
> matrix. A suggested outline for the proposal follows.
>
> 1\. Executive Summary
>
> Succinctly describe the need for food aid; why this program is being
> undertaken; the proposed program in terms of commodities, estimated
> costs, and duration; what the program will seek to accomplish; how the
> program furthers the Cooperating Country\'s commitment to policies
> that promote food security; how the program will attain its objectives
> with the resources requested; the program\'s relationship to the USAID
> Mission\'s strategy and portfolio; and the implementing agencies and
> their major responsibilities.
>
> 2\. Program Description
>
> a\. Problems Addressed
>
> Describe the problem(s) addressed by the proposed program, based on an
> analysis of the country\'s constraints to enhancing its food security
> status, expanding private sector participation in the marketing and
> production of food and agricultural commodities, combatting
> malnutrition and its causes, and otherwise promoting broad-based
> equitable and sustainable development, including agricultural
> development.
>
> b\. Program Objectives and Performance Indicators
>
> Describe the goals, purpose and outputs of the program, stating
> specific performance indicators and results that are to be achieved
> during and at the end of the proposed agreement. A logical framework
> matrix is desirable but not required. Missions should select
> performance indicators that are:
>
> Plausible - A credible relationship, direct or indirect, must be
> established such that the indicator varies with change toward the
> desired condition;
>
> Independent - If a hierarchy of objectives is used, indicators at each
> level of the stated objectives must be distinct from, and independent
> of, indicators at other levels; no event may be used as an indicator
> for two levels;
>
> Objectively Verifiable - The indicator must be so stated that both a
> proponent and an informed skeptic of the activity being measured would
> agree that progress has or has not been as planned;
>
> Targeted - Indicators must be explicit in terms of magnitude, time
> and, when appropriate, locale (e.g., crop yield up 1.5 tons per
> hectare in the four eastern provinces by June 1996);
>
> Accessible - Information sources must be available or accessible to
> assess progress. If not, the program should ensure that funds and
> skilled personnel are available to conduct studies to produce the
> necessary data.
>
> Comprehensive - All major aspects of the activity must be measured so
> that no additional indicators will be needed; and
>
> Compatible - Indicators must be in agreement with or compatible with
> other indicators that the Mission has established for reaching the
> same or similar program objectives with other resources.
>
> The kinds of performance indicators selected will depend on the type
> of program and the way the support is provided. For example, if
> commodities are donated for balance of payments purposes or in support
> of policy reform without requiring distribution or sale, the
> performance indicators would relate to the policy objectives
> supported.
>
> If commodities are sold and local currency proceeds are used to
> provide budget support for a Ministry, the performance indicators
> would demonstrate that the budget, or mutually agreed line items, has
> been increased or maintained by an appropriate amount. If local
> currencies are jointly programmed for specific projects or activities,
> the performance indicators would relate to the outputs and
> accomplishment of the projects or activities. In any event, it is not
> necessary to track the local currency to the achievement of the
> performance indicators; it is necessary only to ensure that the
> mutually agreed-on events have occurred.
>
> Performance indicators need not be included in the agreement itself
> but can be put in a separate Memorandum of Understanding (MOU) signed
> at the same time as the agreement. If some specific indicators cannot
> be determined before signature of the agreement, a procedure and
> schedule can be set out in the agreement or the MOU for determining
> the specific indicators that can be identified later in a PIL.
> Missions should link Title III performance objectives and indicators
> to the Mission\'s overall Strategic Program objectives.
>
> For further guidance on developing indicators, see USAID Handbook 9,
> Chapter 15F.; USAID Handbook 3, Appendix 3K, \"Elements of an
> Evaluation Plan\"; Handbook 4, Chapter 9, \"Evaluation Guidelines for
> Commodity Import Programs (CIPs) and CIP-Like Activities\"; State
> 210025, which provides information on USAID\'s Program Performance
> Information System for Strategic Management (PRISM); the Reports:
> \"Guidelines for Data Collection, Monitoring, and Evaluation Plans for
> USAID-Assisted Projects\", and \"Indicators for Measuring Changes in
> Income, Food Availability and Consumption, and the Natural Resource
> Base.\" Missions can obtain the latter reports by requesting documents
> Nos. PN-AAL-089 and PN-AAX-223 from the USAID/W-PPC/CDIE Reference
> Center.
>
> c\. Program Elements
>
> Describe the nature and scope of the program elements that will be
> carried out to achieve the program objectives.
>
> Identify program participants and beneficiaries; describe the extent
> to which they are to take part in and benefit from the program. The
> relationship(s) between program elements and objectives and the extent
> to which participants and beneficiaries have been involved in the
> program design should be made clear.
>
> If the program involves the donation of commodities as balance of
> payments assistance in support of policy reform, without requiring
> distribution of commodities or their sale and use of local currency
> sales proceeds, describe the policy reforms or initiatives the country
> will undertake, the country\'s need for balance of payments assistance
> as well as the policy reforms, the effect they will have on the
> economic development of the country, and the beneficiaries of these
> policy actions.
>
> If the program includes a component for the sale of commodities and
> programming of local currency, describe how the proceeds will be used
> to support food security, privatization, and nutrition including child
> survival initiatives. Section 306(a) of P.L. 480 cites 13 illustrative
> examples of possible uses for Mission consideration. Describe how the
> program will allocate 10 percent of the sales proceeds to support
> indigenous NGOs as required by Section 306(b) of P.L. 480; if this is
> not a program element, justify the exception and explain what will be
> done in the future to do so.
>
> If the program includes a direct feeding component, identify the
> target population; the economic/nutrition characteristics that will
> qualify beneficiaries for participation in the program; and the
> geographic areas where the programs will be implemented. Also describe
> the ration composition and complementary program components such as
> education, growth monitoring, training, etc. needed to achieve and
> measure program impact.
>
> If the program includes a component to establish an emergency food
> reserve, describe the justification for establishing a food reserve;
> the government agency that will manage the food program; the purpose
> of the food reserve; and how the reserve will operate and be monitored
> by the host country.
>
> d\. Integration
>
> Describe the manner in which the Title III Program will be integrated,
> both broadly and in the context of the Mission\'s Strategic Plan and
> the recipient country\'s development plans; and more precisely in the
> context of how the components of the Title III Program will be
> integrated with non-food aid resources to achieve specific program
> objectives. Also describe the relationship of the Title III Program to
> programs of other bilateral and multilateral donors.
>
> 3\. Program Justification
>
> a\. Country Commitment
>
> Provide and comment upon relevant aspects of the country\'s longterm
> plans to alleviate poverty and promote broad-based, equitable and
> sustainable development; and the country\'s commitment to policies
> that promote food security, including policies to reduce hunger and
> malnutrition measurably through efforts such as establishing and
> institutionalizing supplemental nutrition programs targeted to reach
> those nutritionally at risk.
>
> b\. Constraints Analysis
>
> Present or reference existing analyses of the constraints identified
> in the Problems Addressed section. These may include various analyses
> depending upon the nature of the problem(s) addressed. Examples
> include a food security analysis; food consumption and nutritional
> analysis; market analysis; balance of payments analysis; or economic,
> technical and social analysis.
>
> Analyses of such constraints undertaken by the World Bank, IMF,
> Regional Development Banks, or United Nations (UN) specialized
> agencies such as the World Health Organization (WHO), UNICEF, the Food
> and Agriculture Organization of the United Nations (FAO) and the World
> Food Program (WFP), and the United Nations Development Program (UNDP),
> would be good points of departure in this exercise, and may be
> sufficiently thorough as to require only updating.
>
> c\. Commodity Analyses
>
> \(1\) Commodity Needs Analysis
>
> Justify the country\'s need for food aid; describe the volume, type,
> estimated value and estimated time of arrival (ETA) of the commodities
> requested; assess the potential for using an alternative commodity
> should the commodity of choice be in short supply or not available;
> and evaluate the country\'s capacity to use food aid effectively.
> Include an analysis of the supply and demand of the commodity(ies)
> requested, including five-year historical data on production and
> imports, as well as pricing and other marketing information (if the
> latter are not addressed in a market analysis).
>
> USAID Missions will find the USAID Food Needs Assessment Manual and
> software to be very useful in estimating these needs; copies are
> available from the USAID/W-PPC/CDIE Reference Center -request document
> No. PN-ABB-175 (English), No. PN-ABF-673 (French) or PN-ABG-312
> (Spanish).
>
> Two guides published by USDA\'s Federal Grain Inspection Service,
> United States Standards for Rice and United States Standards for
> Grains provide the type of information required. These guides are
> available from the resident or regional Agricultural Attache, or can
> be requested from the following address:
>
> U.S. Department of Agriculture Printing and Distribution Branch Room
> 110, Federal Building Hyattsville, MD 20782
>
> \(2\) Usual Marketing Requirements
>
> Section 403(e), the UMR provision of P.L. 480, requires that
> reasonable precautions be taken to assure that commodities supplied
> under Title III will not unduly disrupt world prices for agricultural
> commodities or normal patterns of commercial trade with foreign
> countries. The UMR is the minimum quantity of a commodity that the
> importing country must purchase commercially to maintain the U.S. and
> friendly countries\' exports to the importing country. It is based on
> actual commercial imports of the Cooperating Country during the
> preceding five years, with possible adjustments according to import
> trends and the country\'s current financial ability to import. A UMR
> is defined globally and is not expressed as imports from specific
> countries. Missions must state in Annex B to the Title III Sales
> Agreement that the recipient country will meet the UMR.
>
> The USAID Mission, in consultation with the resident or regional
> Agricultural Attache, is responsible for providing UMR data in the
> Title III proposal. UMR data must be updated annually. Each commodity
> should be identified for the fiscal year for which the data is being
> provided, with the five-year metric ton average of commercial imports
> for each commodity. USAID/W will consult with USDA and advise the
> Department of State to undertake required consultations regarding
> program requests prior to authorizing the signing of Title III
> agreements.
>
> \(3\) Storage and Disincentive Analysis
>
> A Title III proposal should include a preliminary assessment regarding
> the adequacy of commodity storage and handling facilities, and the
> possibility of disincentive effects. The proposal should note the
> average share of program food aid - both USG and other donor food
> aid - to the total staple food consumption over the past five years.
>
> Section 403(a) of P.L. 480 provides that no agricultural commodity
> shall be made available under this Act unless it is determined that:
>
> Adequate storage facilities will be available in the recipient country
> at the time of arrival of the commodity to prevent the spoilage or
> waste of the commodity; and
>
> The distribution of the commodity in the Cooperating Country will not
> result in a substantial disincentive to or interference with domestic
> production or marketing in that country.
>
> NOTE: The USAID Mission provides the foregoing information and the
> Regional Bureau makes the final determination as part of the USAID/W
> approval process. The USAID \"Background Paper and Guide to Addressing
> Bellmon Amendment Concerns on Potential Food Aid Disincentives and
> Storage\" dated July 1985 is a useful guide on how to address these
> questions. The paper was most recently issued to USAID Missions as
> Annex J of the \"Field Monetization Manual\" and can be requested from
> the USAID/W-
>
> PPC/CDIE Reference Center Document No. PN-ABB-486.
>
> d\. Donor Consultation
>
> State how the USAID Mission has consulted or intends to consult with
> the IMF, IBRD, and other multilateral and bilateral donors to ensure
> that the importation of commodities and the use of local currencies
> will not have a disruptive impact on local farmers or on the economy
> of the recipient country. The proposal should indicate whether
> technical support or follow-up consultation is required to satisfy
> this requirement.
>
> 4\. Program Implementation
>
> a\. Management Responsibilities
>
> Describe the responsibilities and analyze the capability of the
> private sector and/or governmental organizations that will carry out
> the program. Explain how the USAID Mission will coordinate, manage and
> monitor the program, giving special emphasis to local currency and
> commodity use, control, and accountability, as appropriate. For direct
> feeding activities, assess the administrative capabilities of the
> distribution mechanisms and the management vulnerability of the
> implementing institution. The implementation plan also should
> demonstrate that sufficient staff and budgetary resources will be
> allocated to support management and monitoring activities by the
> Mission and the Cooperating Country.
>
> b\. Implementation Schedule
>
> Include an implementation schedule that identifies dates when key
> implementation actions, including the achievement of program policy
> benchmarks, are to be met.
>
> c\. Cost Estimate and Financial Plan
>
> Present the best estimate of program cost, including the annual
> commodity tonnage, the local currency generations, and the
> contribution, in human and financial resource terms, of the USG, the
> recipient government, and other donors if appropriate. Include a table
> with estimates of the sales proceeds to be generated, and a table
> providing an illustrative budget by fiscal year of the projected
> disbursements of sales proceeds to the program, project or specific
> activity. Also include amounts of local currency costs necessary for
> baseline data collection, monitoring systems and evaluations. If a
> commodity use program is proposed, present detailed estimates of
> commodity use for at least the first 12 months of implementation.
> These tables should show that there are adequate eligible uses to
> which proceeds (or commodities) may be allocated, and that resources
> will be available to fund these activities on a timely basis.
>
> For programs that involve the sale of commodities and use of local
> currencies, describe:
>
> the private-sector or government organization that will sell the
> commodities;
>
> how the sale will be conducted (i.e., auction, private traders,
> millers, etc.);
>
> how the sales price is determined (e.g., auction, limited open market
> auction, negotiated price, official fixed prices, world market prices,
> etc);
>
> acceptable terms of sale;
>
> a strong justification in exceptional circumstances where the proposal
> includes a request for consideration of commodity sales at subsidized
> prices;
>
> how and by whom deposits will be made to the separate account;
>
> where the separate account will be maintained and the rate of interest
> that will be paid;
>
> the agency that will be responsible for the deposits to and
> disbursements from the separate account;
>
> the kinds and frequency of reports that the Mission will receive from
> the account manager;
>
> if the USAID Mission plans to request a waiver of the separate account
> requirement, the agency responsible for programming and accounting for
> the equivalent amount of local currency to be made available by the
> Cooperating Country, the kinds and frequency of reports that the USAID
> Mission will receive from the local currency administrator,
>
> and the Audit Plan for such local currency programming; and
>
> who will prepare the reports required in Annex C, Section C5.2 of the
> Title III Agreement.
>
> 5\. Monitoring and Evaluation Arrangements
>
> a\. Monitoring and Evaluation Plan
>
> Describe the plan the USAID Mission and host country will follow to
> monitor the program and evaluate or assess its impacts. Describe the
> monitoring and reporting system that will be used or established to
> collect, analyze and report data on the performance indicators
> established in the Agreement. Include a schedule for external
> evaluations and identify funding (which may include Title III
> generated local currency) for executing them.
>
> Evaluation of Title III programs will assess objectives attained in
> individual programs within the context of fundamental objectives
> outlined in the Title III legislation. The foremost of these is the
> enhancement of food security in the Cooperating Country. This will be
> the focus of the biannual evaluations that the legislation requires be
> undertaken by the General Accounting Office (GAO) on Title III
> activities. Title III also places special emphasis on increasing the
> nutritional impact of all U.S. food aid, giving particular emphasis to
> improving the design and implementation of child survival programs.
> Enhancement of nutritional and child survival interventions will also
> be a major factor in GAO evaluations of Title III programs. In
> addition, there should be integration of Title III programs with other
> activities in the Mission\'s Strategic Plan and the country\'s
> development strategy. P.L. 480 also gives special emphasis to using
> Title III resources to promote the privatization of food production
> and agricultural distribution systems.
>
> b\. Annual Progress Report
>
> Each year the USAID Mission will submit an Annual Progress Report
> (APR) that shall include, but not be limited to:
>
> an assessment of Cooperating Country performance in meeting the
> program and policy performance indicators and achieving the program\'s
> outputs, purpose and objectives; and
>
> the most recent quarterly report on local currency accountability as
> required under Annex C, Section C5.2 of the Title III Agreement.
>
> The APR must be available for review at USAID/W before new funding can
> be approved for a subsequent year of a multi-year program.
>
> 6\. Audit Plan
>
> Describe the plan the USAID Mission and Cooperating Country will
> follow to audit the program. Describe the auditing system that will be
> used to collect, analyze and report data on the audited activity.
> Include a schedule for audits and identify funding (which may include
> Title III generated local currency) for executing them. Records
> maintained on use and sale of Title III commodities and use of local
> currencies generated by such sales must meet international accounting
> standards. Accounting records should be agreed upon when negotiating
> Title III agreements.
>
> For programs that involve the sale of commodities and use of local
> currencies, describe the audit plan for the separate account (at least
> annual audits are required) and how the audit will be funded.
>
> 7\. Illustrative Annexes
>
> Annexes A and B of draft Title III Agreement
>
> logical framework matrix
>
> other supporting program analysis
>
> Annexes A and B of the draft Title III Agreement should be provided
> with USAID Mission proposals if possible, as well as any suggested
> changes in the text of the Agreement or the Standard Terms in Annex C
> that the USAID Mission believes are absolutely necessary to implement
> a successful program. The modifications of the language in the
> Agreement could clarify Mission intentions and thereby facilitate
> USAID/W review.
>
> 8\. USAID/W Review and Approval Process
>
> The Regional Bureaus will organize an USAID/W technical review of a
> Title III proposal within fourteen (14) days of receipt. If the USAID
> Mission\'s Title III Proposal is approved by the Regional Bureau
> Assistant Administrator, the relevant Regional Bureau will cable
> instructions and the authority to the USAID Mission to negotiate the
> Title III Agreement. If the Proposal is not approved, USAID/W
> (relevant Regional Bureau) will inform the USAID Mission within ten
> (10) days following the review of the shortcomings perceived and
> inform the USAID Mission of what additional data, analysis, language,
> etc. is required.
>
> 9\. Submission Timing of Title III Proposals and Call Forwarding
>
> Title III Proposals for the first fiscal year in which agricultural
> commodities are to be shipped should be submitted to USAID/W (relevant
> Regional Bureau) no later than August 31 of the preceding fiscal year
> so that agreements can be signed by the November 30 deadline set in
> Section 407(f) of P.L. 480. Requests for any exceptions should be sent
> to USAID/W (relevant Regional Bureau) prior to August 31, include the
> reasons for the delay, and state the estimated date that the proposal
> will be submitted.
>
> For approved, signed Title III program agreements, Title III program
> calls forward must be submitted to BHR/FFP/POD on or before August 8th
> of each year to enable USDA and M/OP/TRANS to complete commodity and
> freight procurement and contracting prior to September 30th of each
> year. Commodities approved for procurement under Title III programs
> must be exported from U.S. port(s) no later than December 31 of each
> year.
>
> Follow-on year requests should accompany the Annual Progress Reports
> (APRs), which are due by July 31 at USAID/W.
>
> CHAPTER 13
>
> TITLE III PROGRAM IMPLEMENTATION
>
> 13A. General Management Responsibilities
>
> This chapter focuses on five major Title III program implementation
> issues at the country level:
>
> USAID Mission management and resource requirements;
>
> Commodity choices and timing of shipments;
>
> Implications of different modes of Title III assistance;
>
> Evaluation and monitoring of program impact; and
>
> Cooperating Country responsibilities.
>
> Although certain responsibilities in Title III Program implementation
> must by their nature be delegated to the Cooperating Government and
> the private sector, depending upon the latter\'s capabilities and
> involvement, the USAID Mission is nonetheless responsible for seeing
> that the overall Title III program is implemented as it was approved
> by USAID/W.
>
> P.L. 480 legislation allows for Title III commodities to be utilized
> in four ways, each of which entails different management and
> monitoring requirements on the part of the USAID Mission, the
> Cooperating Country, the private sector, or non-governmental
> organizations (NGOs). These are:
>
> sell the commodities and generate local currencies and then, with the
> Cooperating Government, jointly program the local currency proceeds
> for special projects or programs, sectoral activities, or budget
> support;
>
> donate the commodities as balance of payments assistance;
>
> direct distribution of commodities either by an entity of the
> Cooperating Government or an NGO that is delegated this task; here the
> Cooperating Government or NGO assumes direct responsibility for
> program implementation with the USAID Mission in a monitoring role;
> and
>
> establish Emergency Food Reserves, with the Cooperating Government
> responsible for administration and the USAID Mission in a monitoring
> role.
>
> The USAID Mission should develop four types of plans with those
> branches of the Cooperating Government concerned with a Title III
> program, as well as with the private sector entities and whatever NGOs
> are involved, to adequately control and synchronize every component
> and phase of a Title III Program:
>
> General Management Plan - provides a description of the respective
> roles of USAID Mission, the recipient country, the private sector, and
> any other agencies involved in implementation; reporting requirements
> of each; an overall timetable that depicts the phasing of activities;
> and a detailed schedule of tasks for the first year of the Title III
> program;
>
> Delivery, Distribution and Local Currency Generation Plan ­provides a
> shipment and delivery plan for both ocean and inland points of
> delivery specifying size and composition of shipments; the amounts and
> dates of distributions or local currency generations needed from sale
> of these Title III commodities; deadlines for call-forwards and
> deliveries; equipment and storage facilities by whatever dates and at
> whatever locations required by delivery schedules;
>
> Monitoring Plan - tracks the inputs and outputs of Title III
> activities planned; describes the use and accountability arrangements
> for the Title III commodities distributed and stored as reserve
> stocks, or the local currencies generated by their sale; and
>
> Evaluation Plan - describes systems for assessing the effectiveness of
> Title III activities, identifying indicators, collecting data,
> measuring progress toward planned targets, and analyzing the overall
> impact of the Title III Program on achieving the objectives for which
> it was designed within USAID Mission\'s Strategic Plan.
>
> 13B. USAID Management Considerations
>
> 1\. Signing of Agreement
>
> Section 407 (F) of P.L. 480 establishes November 30 as the deadline
> for signing Title III Agreements in order for commodities to be
> shipped in that same fiscal year. Therefore the Mission\'s Title III
> Program Proposal should be submitted no later than August 31 of the
> preceding fiscal year.
>
> Approval of the Title III Proposal is communicated by the responsible
> Regional Bureau to the Mission with instructions and the authority to
> negotiate the Title III Agreement. Negotiations should be undertaken
> immediately thereafter to make any allowance for the possibility that
> these might be protracted. This and other steps to avoid any delay in
> the initial call-forward should be taken, particularly when the timing
> of initial arrivals of Title III commodities is to coincide with
> seasonal limited availabilities of foodstuffs on local markets.
>
> Use of local currencies generated is normally a primary part of the
> program to be negotiated. However, in cases where the negotiation of
> these uses might cause an undue delay in the signing of a Title III
> Agreement, the general parameters for such usage should be identified
> with the details deferred to be incorporated into a separate Program
> Implementation Letter (PIL) to be signed subsequently. Likewise,
> performance indicators can also be identified in a subsequent
> Memorandum of Understanding (MOU).
>
> 2\. Procurement and Shipping Schedules
>
> The Mission must have made available to USAID/Bureau for Humanitarian
> Response (BHR)/Food for Peace (FFP) the following information in steps
> (a) through (d) prior to submitting the initial call-forward in step
> (e):
>
> a\. Commodity Specifications
>
> Guidance on the standard specifications of commodities procured for
> P.L. 480 programs has been sent to all USAID Missions and is updated
> periodically; is contained in 7 Code of Federal Regulations (CFR) Part
> 810, \"Official U.S. Standards for Grain of the USDA/Federal Grain
> Inspection Service\"; is in the USAID \"Commodities Reference Guide\";
> and can be requested for specific foodstuffs from
> USAID/W-BHR/FFP/Program Operations Division (POD).
>
> Missions should be as specific as possible to meet the needs of the
> agreement, being mindful that the more narrow or unusual a
> specification, the greater the possibility that either no bids will be
> received for the commodity tender or that bids will be much higher
> than the U.S. Department of Agriculture\'s (USDA\'s) constructed price
> range. Either of these circumstances will cause program delays as it
> will be necessary for FFP to request USAID Missions to clarify or
> modify stated specifications. For example, Hard Amber Durum, Hard Red
> Winter, Northern Spring Dark, Soft Red Winter, Soft White Spring, and
> Soft White Winter are all classes of wheat grown in the U.S. The
> hardness or softness of these classifications and the gradations
> within them may or may not conform to the hardness or softness of
> wheat from other grain producing regions of the world. If it is not
> necessary to specify a certain class of wheat in the commodity tender,
> commodity bids will reflect lower prices due to supply and demand,
> thereby providing more of a commodity to the program within the
> agreement\'s dollar program limit.
>
> Any known importation documentation requirements should also be noted.
> Packaging information must be included as part of the commodity
> specifications; bulk, bagged or bulk with bags, needles and twine
> should be indicated. Bags for the Title III program are 50Kg (110
> lbs.) woven polypropylene type for wheat, wheat flour, rice, sorghum,
> and corn. Multiwall, 25Kg paper bags are used for Cornmeal, Corn-Soya
> Blend, S.F. Cornmeal, and other processed commodities. No other types
> of bags are available.
>
> b\. Quantity to be Called Forward
>
> The Mission must specify the quantity of metric tons for each
> call-forward submitted. It should be understood that quantities are
> approximate and will be determined after commodity and freight bids
> have been received.
>
> c\. Identification of Discharge Port(s)
>
> All discharge ports must be identified as well as all inland delivery
> sites, if applicable. Exact quantity to be delivered to each
> discharge/delivery site must also be specified.
>
> d\. Consignee and/or \"Notify Parties\"
>
> Name and complete address information of the consignee and/or \"Notify
> Party\" along with telephone or telex numbers must be provided.
>
> e\. Call-Forward
>
> Immediately upon signing the Title III Agreement the USAID Mission
> must submit a call-forward cable to FFP/POD to trigger the procurement
> process. Considering the time frame required for procurement and
> delivery to a U.S. port of loading (50 to 60 days), then loading and
> sailing time, with the possibility of other ports-of-call or
> transhipment en route, followed by discharge and overland transport,
> it is readily apparent that time is at a premium in assuring that
> individual shipments arrive according to schedules set for delivery,
> distribution or local currency generation.
>
> USAID Missions should be aware that even when commodity specifications
> conform to commodities readily available, the call-forward triggers a
> schedule of actions for procurement of commodities and freight that
> cannot be compressed. These actions,
>
> with the time frames based on experience, are:
>
> Action Period to Complete
>
> FFP/POD has all required data per foregoing steps (a) through (d) and
> receives Call Forward cable. Starts Clock
>
> Action (continued)
>
> FFP/POD submits call-forward to USDA Agricultural 1 working day
>
> Stabilization and Conservation Service (ASCS)
>
> USDA/ASCS transmits callforward to USDA Kansas City 1 working day
>
> Commodity Office (KCCO)
>
> Period to Complete
>
> KCCO coordinates shipping schedule with USAID/W 1 working day
>
> Bureau for Management Office of Procurement/Transportation Division
> (M/OP/TRANS)
>
> KCCO solicits commodity offers for 15 working day
>
> delivery of commodities free alongside ship (f.a.s.)
>
> at U.S. ports or intermodal points
>
> M/OP/TRANS receives transportation freight rate quotes on same working
> day
>
> and submits information to KCCO
>
> KCCO receives commodity offers and submits bid completed on same
> information to M/OP/TRANS working day
>
> M/OP/TRANS performs lowest landed cost completed on same
>
> evaluations working day
>
> After consultation and agreement, KCCO contracts completed on same
> working day
>
> for commodities and OP/TRANS contracts for freight
>
> KCCO arranges surveys and sends survey 1 working day
>
> notifications to USAID Mission Period to Complete
>
> M/OP/TRANS cables USAID Mission giving 1 working day
>
> shipping schedule and loading information
>
> Commodities delivered to U.S. Port of Loading 25 to 30 working days
>
> NOTE: There can be variations brought about by seasonal demands or a
> number of other factors that could prolong the time required to
> complete any of the actions in the foregoing schedule. For example,
> KCCO may consider the prices in all the commodity offers it receives
> in an initial tendering as too high and not accept any. In such cases
> it issues a new call for tenders the following week or after a longer
> period until it receives what is considered a fair price. Accordingly
> there can be no calendar of the foregoing sequential events
> constructed with sufficient accuracy to serve for planning purposes.
> USAID Missions should not consider any dates firm in these projected
> actions until they receive the shipping schedule and loading
> information cable from M/OP/TRANS.
>
> The Mission will receive the original Bill of Ladings (B/Ls) for each
> shipment. It should provide these to the Cooperating Country
> immediately upon receipt to allow the latter to prepare for and take
> delivery of the Title III commodities in a timely manner.
>
> 3\. Payment of Freight Costs
>
> The U.S. Government (USG) pays for the ocean freight of Title III
> commodities, which means that this cost is included in the overall
> dollar amount of the Title III Agreement. Therefore, if ocean freight
> costs should rise or fall between the time the Agreement is signed and
> when the commodities are actually shipped, the quantity of
> commodities, and consequently the amount of local currency generated,
> will be affected. The local currency generations are also affected by
> fluctuations in the recipient country\'s currency.
>
> If the Cooperating Country desires the U.S. dollar authorization to
> purchase the maximum amount of Title III commodities, it can
> underwrite total freight costs (leaving the U.S. contribution to pay
> only the freight differential to meet the U.S.-flag shipping
> requirement), or any part of the ocean freight costs. The Cooperating
> Country must make such a contribution 60 days prior to the required
> f.o.b. port of export date.
>
> The Cooperating Country can request that local currency generated by
> Title III commodity sales be used to offset the costs of handling,
> transportation and distribution of Title III commodities within the
> country. If it is a landlocked country, local currency generations can
> be used as well to pay the overland freight from port of discharge to
> point of entry in the country. Depending upon the state of the
> internal transportation infrastructure, these costs can be very high
> and correspondingly decrease the amount of local currency available.
>
> 4\. Sales Transactions
>
> Sales transactions for commodity transfers can be undertaken in a
> number of ways. The most commonly practiced and practicable is for the
> Cooperating Country to issue an Invitation for Bid to private firms.
> This is the simplest method from the standpoint of management and also
> the one that best assures a competitive price.
>
> When submitting its proposal for a Title III Sales Program, the USAID
> Mission should have explored the possibility of negotiating the sale
> of Title III commodities directly with NGOs or private traders. For
> example, the Mission could execute a Donation Agreement with the
> Cooperating Country authorizing USAID to negotiate sales agreements
> with private firms, or sign a Tripartite Agreement with the
> Cooperating Country and a local importer permitting USAID to sell
> commodities directly to that importer. Such arrangements are much more
> management intensive and are eligible only in Cooperating Countries
> with a competitive private sector where competitive sales procedures
> can be employed or where this type of sales transaction is a component
> of a broader USAID Mission initiative to promote private sector
> initiatives.
>
> 5\. Use of Private Sector in Sales Program
>
> Missions are encouraged to use Title III programs to strengthen the
> private sector, not only in the initial stages of the sales
> transaction involving importers, but throughout the food marketing
> chain, extending to the ultimate consumer.
>
> Depending upon the capability and experience of the private sector in
> the Cooperating Country, private trade channels could be used
> exclusively. This would include private business entities handling the
> transport and storage, with distribution and local sales being made
> through wholesale and retail channels of existing or new
> entrepreneurs. To the extent possible, local currencies generated by
> sales proceeds should also be used to promote private enterprise
> initiatives, including those associated with internal handling of
> Title II commodities.
>
> The USAID Mission staff responsible for implementing private-sector
> transactions should be identified in the proposal; it is desirable
> that one person be identified for each defined area of responsibility.
> An estimate should be made of the level of total staff time required
> to achieve private-sector trade linkages and to monitor these
> transactions.
>
> It is the responsibility of the USAID Mission to demonstrate that
> small businesses within the private sector of the recipient country
> have an adequate and fair opportunity to participate in sales
> transactions for Title III commodities.
>
> 6\. Determining Sales Price
>
> In open market economies, an open competitive bidding process or
> auction generally yields the highest return. In controlled or less
> competitive economies, negotiations are required to arrive at a
> suitable sales price, especially when domestic prices are kept below
> world market prices through price controls, government subsidies or
> over-valued exchange rates. Under these conditions, Missions should
> attempt to negotiate a price that would at least be equivalent to the
> landed cost of the commodity procured by a private-sector importer at
> the projected world market price from the country\'s most competitive
> supplier. This price should include the cost of commodities,
> insurance, ocean freight, customs tariffs, local handling charges and
> other costs incurred by the importer in connection with the sale. This
> information can be obtained and cross-checked from a number of sources
> including the local or regional U.S. Agricultural Attache, local
> private food importers, processors and distributors, and the Ministry
> of Agriculture.
>
> If the sales price proposed is to be derived on any other basis than
> the foregoing methods of transaction, then the USAID Mission must
> explain and justify its means of computation, including how the dollar
> value of the commodities will be determined, the exchange rate
> proposed to be used, and the date it will be applied.
>
> 7\. Local Currency Deposits and Expenditures
>
> Since most Title III commodities are sold on local markets, management
> of local currencies has become a key issue in Title III Program
> implementation. When Title III commodities are sold, the USAID Mission
> is responsible to see that local purchaser(s), private or government,
> deposit local currencies promptly and directly into an interestbearing
> special account. Unless otherwise justified to and approved by
> USAID/W, all local currency generated from Title III commodity sales
> will be owned by the benefiting country and will be jointly
> programmed.
>
> If the use of a separate account would be illegal or deemed
> counterproductive in the Cooperating Country, the USAID Mission may
> request the Regional Bureau Assistant Administrator to waive the
> requirement for such an account. This approach is justified only where
> there is confidence in the government\'s budgetary and financial
> accountability. In such cases the Mission must demonstrate that the
> Cooperating Country will make available an equivalent amount of local
> currency, account for it appropriately, and use it for the purposes
> set forth in the Grant Agreement or in the local currency agreements
> executed by USAID and the Cooperating Country. In these instances
> local currencies go directly into the Economic Development Budget,
> Sectoral Budgets, or line items in these budgets. When local
> currencies go directly into such budgets, local currency tracking
> stops at the point where the local currency is transferred to the
> agreed use. Sectoral Budget attribution may be the optimal solution
> for Missions with limited personnel since it demands the least
> management/accountability time yet usually gives adequate assurance of
> appropriate developmental use.
>
> 8\. Indigenous NGOs & Cooperatives/Endowments
>
> The USAID Mission must demonstrate that the Cooperating Country is
> attempting to allocate at least 10 percent of local currency proceeds
> from the Grant Agreement to support indigenous NGOs as required in
> Section 306(b) of P.L. 480. An indigenous NGO is defined per Section
> 402(6) as an organization that operates under the laws of the
> recipient country, or has its principal place of activity in such
> country, and that works at the local level to solve development
> problems in the foreign country in which it is located. However, the
> term does not include an organization that is primarily an agent or
> instrumentality of the foreign government. The legislation states that
> not less than 10 percent of local currency in special accounts be used
> to support the development and utilization of indigenous NGOs and
> cooperatives that are active in rural development, agricultural
> education, sustainable agricultural production, or other measures to
> assist poor people and protect the environment within the Cooperating
> Country. If this 10 percent target is not being met, the Mission must
> explain why and what will be done in the following year to provide
> such support to indigenous, newly created if need be, NGOs and
> cooperatives under the program. Other NGOs/private voluntary
> organizations (PVOs)
>
> can receive local currencies, but only indigenous NGOs are counted for
> the 10 percent goal.
>
> Indigenous NGOs may request, and the Mission may grant, permission to
> invest Title III local currency proceeds to use the interest earned as
> an endowment for such an organization. Such an endowment would be used
> for whatever purposes the Title III assistance originally served. Such
> endowments can be instrumental in developing much needed institutional
> capacities that will continue to address essential activities after
> conclusion of Title III programs.
>
> 9\. Monitoring of Local Currency Use
>
> USAID Mission monitoring of the progress of any local
> currency-financed activities should include:
>
> setting of benchmarks;
>
> periodic reporting requirements;
>
> tracking financial expenditures through reports received;
>
> tracking of progress (budget sector account expenditures, policy
> reforms, specific local
>
> currency financed activities);
>
> field visits;
>
> review of documents and records; and
>
> scheduled joint reviews, discussions, and consultations.
>
> 10\. Balance of Payments Support
>
> Use of Title III commodities for balance of payments support is
> usually undertaken in conjunction with policy reform initiatives
> focused on enhanced food security. Implicit in the USAID Mission\'s
> having designed a Title III intervention at this macroeconomic level
> is the assumption that there is an inherent capability in USAID
> Mission program management to assess its effects at that level,
> usually in conjunction with interventions that World Bank or
> International Monetary Fund (IMF) are also making. In addition,
> USAID/W approval of balance of payments assistance is usually premised
> on the use of local currency generations in a developmental context
> that the Mission would be monitoring. Mission reporting would focus on
> the perceived results of such policy reforms.
>
> 11\. Direct Feeding
>
> A direct feeding program places program implementation
> responsibilities on the ministry or agency of the Cooperating Country,
> or the NGO designated by it, whose management capabilities were
> assessed by the USAID Mission in its Title III Proposal. The first
> year of a Title III direct feeding program will put to the test the
> assumptions regarding the professional, managerial and logistical
> capabilities of the organizations implementing it. Therefore it
> requires particularly close monitoring in its initial phases to see if
> these assumptions are supported in practice.
>
> With the emphasis given in Title III legislation on dealing with the
> special health needs of children and mothers, a direct feeding program
> must address mutually agreed-on criteria by which its impact will be
> measured. Data to adequately assess some of these criteria will be
> difficult to gather and quantify, particularly in the initial years of
> such a program. During this phase anecdotal evidence should be
> submitted to supplement whatever paucity of more scientifically
> available data there may be for the USAID Mission\'s Annual Progress
> Report (APR). The methodology to do this and the personnel to carry it
> out should be in place at the outset of such programs. While direct
> feeding is a fundamental component of most maternal-child health (MCH)
> programs, it is virtually impossible to isolate and measure its impact
> alone. It should therefore be part of an orchestrated approach in
> which a direct feeding component supports and complements other
> elements of MCH programs.
>
> 12\. Emergency Food Reserves
>
> The USAID Mission must assure that Title III commodities used for
> emergency food reserves are properly stored, treated as required over
> long periods of storage, and periodically inspected. A system of
> regular reports and site visits should be established as part of such
> a program. Use of such food reserves should take place in conformity
> with previously agreed-on national plans dealing with the most likely
> scenarios of food shortages in which Title III reserves would be one
> of a series of responses.
>
> Normally, P.L. 480 Title II resources would be used to establish
> emergency food reserves per se. Employment of Title III commodities
> for this purpose would be with such reserves being established and
> drawn upon in a developmental context as one component of a more
> comprehensive program to enhance food security. Assessment of the
> benefits and the reporting required on use of Title III food reserves
> would be on the perceived results of its employment in such a mode.
>
> 13\. Performance Indicators and Reports
>
> While Title III objectives should be integrated into the Mission\'s
> Strategic Plan, it is advisable for the USAID Mission to develop a
> separate set of annual performance indicators for its Title III
> program. The continuity of Title III activities depends upon
> achievement of its own performance indicators, as the USAID Mission is
> required to report annually. By making the Title III performance
> indicators distinct from those for the dollar-funded programs, though
> mutually reinforceable in their objectives, the USAID Mission can
> provide positive support for good performance and withhold Title III
> resources when performance falters.
>
> For each of the programs authorized under the Title III Grant
> Agreement, the USAID Mission must submit an APR and a well-defined
> plan for monitoring and evaluation. The evaluative criteria contained
> in the report must be derived from the previous agreement between the
> USAID Mission and the Cooperating Country regarding baseline data,
> performance indicators, and the methodologies used for assessing each
> program\'s impact, particularly how each enhances the country\'s food
> security.
>
> 13C. Cooperating Country
>
> 1\. Prior to Arrival
>
> Before Title III commodities are shipped, the Cooperating Country
> shall designate adequate personnel for the efficient operation of the
> program, including personnel to:
>
> plan, organize, implement, control and evaluate programs involving the
> distribution or sale of foodstuffs and the use of local currency
> proceeds;
>
> make internal reviews including equipment for overland transport,
> warehouse or other storage facilities, and physical inventory of the
> commodities provided; and
>
> review books and records of all those concerned with distribution of
> commodities and/or the local currency proceeds derived from their
> sale.
>
> Also prior to the arrival of Title III commodities at port of
> discharge, the Cooperating Country shall provide to USAID Mission
> assurance that all necessary arrangements for receiving the
> commodities have been made, and shall assume full responsibility for
> storage and maintenance of the commodities that is adequate by local
> commercial standards from time of delivery at port(s) of entry abroad
> until these commodities are distributed or sold within the country.
> The USAID Mission is to obtain such assurances prior to issuing each
> call-forward.
>
> Some of the following Cooperating Country responsibilities are
> detailed in the Title III Agreement or Annexes thereto; they should be
> reiterated to those responsible prior to the arrival of commodities to
> minimize any misinterpretation or delays as the program evolves.
>
> 2\. Taking Delivery
>
> The Cooperating Country takes title to Title III commodities according
> to the terms of the freight contract, which are either:
>
> Full Berth Discharge - When the commodities are discharged alongside
> the vessel or into the receiver\'s conveyances; or
>
> Free Out Discharge - When the ocean vessel receives confirmation that
> the Notice of Readiness to discharge has been accepted.
>
> Thereafter the Cooperating Country is responsible to pay for discharge
> from the vessel, wharfage, lighterage, port charges, detention,
> demurrage, overtime, receiving, handling, and packaging (such as
> bagging if the commodities were shipped in bulk).
>
> If USAID has agreed to arrange for and pay the costs of inland
> transportation from the designated port abroad to a point or points of
> entry in a landlocked Cooperating Country, a through B/L will indicate
> these places of delivery where title passes to the Cooperating
> Country.
>
> At the port of discharge the Cooperating Country must agree to
> cooperate fully with the independent cargo surveyors contracted by
> Commodity Credit Corporation (CCC) to attend and report on the
> discharge and delivery of commodities. Should there be any dispute
> concerning quality, quantity or other matters relating to the
> commodity, the commodities are still to be discharged with such
> disputes resolved subsequently according to the terms of the Title III
> Agreement.
>
> 3\. Damage, Loss or Excess Stocks
>
> The Cooperating Country will make every effort to minimize loss or
> damage in transport of these commodities overland and assure that they
> will be delivered to the destinations set forth in the Title III
> Agreement, or in the Program Implementation Letter (PIL) or Memorandum
> of Understanding (MOU) issued in conjunction with that Agreement. As
> set forth in Annex C of the Title III Model Agreement Format (Sections
> 4.1; 4.2; 4.3), if after transfer to title, damage or losses become
> known that took place prior to transfer to title, the USG (acting
> through the CCC) will initiate the claims required against the ocean
> carriers involved. If there are preventable losses or damage to Title
> III commodities prior to their sale or ultimate use, or if such
> commodities or the local currencies generated by their sale are deemed
> to have been used improperly, then the Cooperating Country is required
> to pay the value of the commodities or the local currencies in
> question. The Cooperating Country is also responsible for pursuing any
> claims against a Third Party that is accountable for any loss, damage
> or misuse of Title III commodities or the sales proceeds accruing from
> them.
>
> If after transfer of title it appears that any Title III commodities
> may be unfit for human consumption, the Cooperating Country shall
> immediately notify USAID and arrange for inspection by a competent
> authority approved by USAID If any commodities are determined unfit,
> USAID Mission will approve the method of disposal (e.g., sale for the
> most appropriate use; donation for non-food use; destruction) and the
> Cooperating Country shall pay the expenses incurred.
>
> The Cooperating Country is to notify USAID Mission immediately
> regarding any loss, damage or misuse of commodities valued over \$500.
> Such occurrences amounting to less than \$500 shall be reported at
> least quarterly if the Cooperating Country perceives these as part of
> a trend.
>
> If Title III commodities are found on hand that cannot be utilized in
> accordance with the terms of the Agreement or Plan of Operations, the
> Cooperating Country is to promptly advise USAID Mission regarding the
> quantities, location and condition of such commodities and propose an
> alternative use, if this seems feasible. USAID Mission shall make the
> final determination on appropriate use of excess stocks.
>
> 4\. Exemption from Duties and Taxes
>
> The Cooperating Country is to exempt from all taxes and duties all
> commodities provided under a Title III Agreement. Also, except as
> USAID may otherwise agree in writing, goods or services procured by
> the Cooperating Country or government recipient agencies shall be
> exempt from all identifiable taxes and levies. If not, at the request
> of USAID Mission the Cooperating Country will deposit into the
> separate account an amount equal to the taxes or levies paid on such
> goods and services from local currency proceeds.
>
> 5\. Separate Account for Sales Proceeds
>
> In Title III sales agreements, the Cooperating Country shall establish
> a separate interest-bearing account for the deposit of local currency
> sales proceeds of Title III commodities. Deposits must be made into
> the account promptly, unless USAID/W agrees otherwise. Interest earned
> on such deposits shall be treated as local currency proceeds. The
> Cooperating Country shall designate an Account Manager from one of its
> ministries or agencies who shall maintain books, records and whatever
> other documentation is deemed adequate to show deposits to the
> separate account and disbursements from the separate account for the
> purposes mutually agreed upon by the Cooperating Country and USAID
> Mission. In addition, the Account Manager shall provide USAID Mission
> with a quarterly report regarding deposits to, withdrawals from and
> disposition of local currency from the separate account, and shall
> direct the bank at which the account is maintained to provide account
> statements to USAID Mission, as well as to the Account Manager.
>
> 6\. Monitoring and Use of Local Currencies
>
> The Account Manager, or a Program Monitor selected by the Cooperating
> Agency and approved by the USAID Mission, shall monitor the programs,
> projects or activities financed with Title III generated local
> currency proceeds. The Cooperating Country shall provide to the USAID
> Mission a written description of how monitoring and reporting
> responsibilities will be shared by the Account Manager and Program
> Monitor, including the type and frequency of reports to be provided
> about the use of local currency proceeds for purposes agreed upon with
> USAID and progress made toward achieving performance indicators. The
> Account Manager or Program Monitor shall obtain and verify reports
> regarding the use of local currency proceeds for activities mutually
> agreed upon by USAID and the Cooperating Country. The Cooperating
> Country is responsible for determining that the recipient agencies to
> whom it distributes local currency proceeds have the capabilities to
> undertake the activities planned and are eligible to do so under the
> terms of the Title III Agreement.
>
> 7\. Balance of Payments Support
>
> The Cooperating Country should see that program food aid under Title
> III adds to the food supply available for consumption and does not
> just finance imports that would have probably taken place in any case.
> In addition, the savings realized in such a program should serve as an
> inducement for the Cooperating Country to help create an environment
> for meaningful policy changes, particularly in its agricultural
> sector, by encouraging allocation of these additional financial
> resources for undertaking new policies or needed policy reforms, such
> as market liberalization.
>
> The Cooperating Country must be fully aware that the reforms agreed
> upon must be implemented effectively. The measurement of the host
> government\'s commitment is the translation of any agreement on
> reforms into actual changes these reforms bring about. The success of
> any balance of payments program is measured only by the impact of
> these reforms.
>
> 8\. Direct Feeding
>
> As the basis for its strategy in a direct feeding program, the
> Cooperating Country should have developed a population vulnerability
> map that identifies those regions, communities, households and
> individuals that do not have access to adequate diets, and quantifies,
> insofar as possible, the extent and magnitude of their food insecurity
> deficits. In such a context, more country-specific methods can be
> utilized in devising the most appropriate food intervention strategy.
> Such a strategy could then address the specific regional needs within
> the country.
>
> Once the population vulnerability map has been developed, the
> following data it contains can be updated each year:
>
> estimates of the vulnerable population;
>
> estimates of the coverage of the vulnerable population with food
> assistance programs;
>
> estimates from local data sources of the absolute health and
> nutritional status of the vulnerable population; and
>
> programming targets based upon expectations to increase coverage
> and/or decrease total numbers through the use of food aid via any
> number of different interventions.
>
> NOTE: Mali and Senegal have developed such maps in conjunction with
> the Famine Early Warning System (FEWS); the World Food Program (WFP)
> also has a methodology that can be used by the Cooperating Country to
> devise population vulnerability maps.
>
> 9\. Emergency Food Reserves
>
> The Cooperating Country must have ready, prior to shipment, the
> facilities where emergency food reserves are to be stored. Bulk grain
> can be treated for storage with certain pesticides prior to shipment;
> USDA should be made aware of this intended use. If they are not
> treated, or if local varieties of pests and rodents require other
> measures, the Cooperating Country should see that these are provided.
> Reserve stocks will have to be rotated or treated periodically. The
> Cooperating Country should have made provision in advance for this to
> be done on a scheduled basis.
>
> 10\. Records and Reporting
>
> The Cooperating Country shall maintain records and documents in a
> manner that will accurately reflect all transactions pertaining to the
> receipt, storage, inspection and sale of commodities, the receipt and
> disbursements of any local currency proceeds, and the operation of the
> program. Such records shall be retained for a period of three (3)
> years from the close of the U.S. fiscal year to which they pertain, or
> longer, upon request by USAID for cause, such as in the case of
> litigation of a claim or an audit concerning such records. The
> Cooperating Country shall transfer to USAID any records, or copies
> thereof, requested by USAID.
>
> A semiannual commodity logistics report covering the receipt and sale
> of commodities donated by USAID will also be submitted by the
> Cooperating Country.
>
> For the supply period during which Title III commodities were
> imported, the Cooperating Country will compile a report that contains
> statistical data on imports by country of origin to assess whether the
> usual marketing requirements (UMR) has been met; a statement of
> measures taken to guard against resale and export of donated
> commodities; and statistical data on exports of the same type of
> commodities as those received by country of destination.
>
> The data in all of the foregoing reports is to be substantiated by
> accompanying documents specified by the Mission in a PIL that will
> also list the documents to be retained by the Cooperating Country for
> future reference. Ministry officials should be assisted in making
> reports as substantive as possible. Also, to the degree that it can be
> accommodated, the timing and format of such reports should fit the
> Cooperating Country\'s reporting and accounting system in order to
> minimize the additional workload.
>
> 11\. Audits
>
> The Cooperating Country shall ensure that an audit satisfactory to
> USAID is completed annually of the Food for Development Program
> conducted by the Cooperating Country and recipient agencies. This
> shall be a financial audit performed by the principal audit agency of
> the government of the Cooperating Country or another audit agency or
> firm acceptable to USAID, to determine whether books and records
> regarding the receipt and use of donated commodities and local
> currency proceeds have been maintained in accordance with generally
> accepted accounting principles and whether commodities and local
> currency proceeds have been used in accordance with the Food for
> Development Donation Agreement and recipient agency agreements. The
> audit shall be conducted in accordance with auditing standards that
> have been prescribed by the laws of the Cooperating Country or adopted
> by public accountants in the country, or Auditing Standards
> promulgated by the International Organization of Supreme Audit
> Institutions or International Auditing Practices Committee of the
> International Federation of Accountants, or generally accepted
> government auditing standards issued by the U.S. General Accounting
> Office (GAO). Both the auditor and the auditing standards proposed to
> be used by the Cooperating Country must be acceptable to USAID. The
> Cooperating Country may satisfy its audit responsibility with respect
> to recipient agencies by relying on independent audits of the
> recipient agency or on appropriate procedures performed by internal
> audit or program staff of the Cooperating Country by expanding the
> scope of the independent financial audit of the Cooperating Country to
> encompass testing of recipient agency charges of actions, or by a
> combination of these procedures. Recipient agencies that receive less
> than \$25,000 of donated commodities and/or local currency proceeds
> are excluded from the Cooperating Country\'s audit responsibility.
> USAID may, at its discretion, perform the audit required under this
> subsection on behalf of the Cooperating Country using local currency
> proceeds generated under this agreement or other resources available
> to USAID for this purpose.
>
> The Cooperating Country shall cooperate with and give reasonable
> assistance to representatives of USAID Mission to enable them at any
> reasonable time to examine activities, records and supporting
> documentation of the Cooperating Country, recipient agencies,
> processors, or others, pertaining to the receipt, storage, processing,
> repackaging, and sale of commodities; to inspect commodities in
> storage or the facilities used in the handling or storage of
> commodities prior to sale; to inspect and audit books including
> financial books and records and reports pertaining to storage,
> transportation, processing, prepackaging, and sale of commodities and
> to the deposit and/or use of any local currency proceeds; to review
> the overall effectiveness of the program as it relates to the
> objectives set forth in the Title III Agreement, Plan of Operations
> and local currency agreements; and to examine or audit the procedure
> and methods used in carrying out the requirements of the Agreement.
>
> 12\. Statutory Restrictions
>
> The following Statutory Restrictions are included in the Standard
> Provisions of Title III Agreements, and USAID Missions and host
> governments should be aware of them from the outset of a Title III
> Program\'s development:
>
> SECTION 403 (C). The host government must provide a commitment that
> there will be no resale (i.e., resold to another country) or
> transshipment of Title III commodities out of the recipient country,
> once received.
>
> SECTION 403 (F). The host government must widely publicize to the
> extent practicable that the commodities are provided through the
> friendship of the American people as food for peace.
>
> SECTION 403 (I) (1). Food must be distributed without regard to
> political affiliation, geographic location, or ethnic, tribal or
> religious identity of the recipient or other extraneous factors.
>
> SECTION 403 (I) (2). Military forces and insurgent groups may not
> participate in food handling, distribution or allocation except under
> extraordinary circumstances approved by USAID/W.
>
> SECTION 403 (J). Countries determined to have violated human rights
> are ineligible unless this restriction is waived because the proposed
> assistance is to be targeted to the most needy in the country and is
> not to be provided through the host government.
>
> SECTION 414. Except for major illicit drug-producing countries, local
> currency may not be used to finance the production for export of
> agricultural commodities (or products thereof) that would compete in
> the world market with similar agricultural commodities (or products
> thereof) produced in the U.S., if such competition would cause
> substantial injury to U.S. producers.
>
> PART IV
>
> AUDITS AND EVALUATIONS
>
> CHAPTER 14
>
> AUDITS
>
> 14A. Introduction
>
> In describing audits, this chapter addresses the possible uses and
> major aspects of the programs utilizing P.L. 480 Title II and Title
> III resources. Its purpose is not to present an overwhelming listing
> of controls and surveillance expected. It is to highlight principal
> shortcomings observed in the past and those most likely to occur in
> the future in each particular program area. It cannot be all
> inclusive. Moreover, the controls expected as well as the audit
> objectives will, of course, vary with each country setting, the
> environments in which programs are administered, and the demonstrated
> capabilities of those public and private sector personnel
> participating.
>
> The Inspector General (IG) of USAID is responsible for auditing all
> food assistance programs conducted under P.L. 480. Provisions for
> planning and implementing audits must be included in all Title II and
> Title III Program Agreements. The USAID Mission, Cooperating Country
> and any Cooperating Sponsors participating in these programs must
> agree at the time of signing the Title II or Title III Agreements on
> the auditing system that will be used to collect, analyze and report
> commodity utilization and local currency sales proceeds expenditure
> data to assess if activities are being carried out according to the
> terms and meeting the objectives specified in these agreements. At the
> outset of any Title II and Title III program, a schedule for audits
> will be established and agreed upon, as will the way in which audits
> will be funded and local currencies generated under Title II and Title
> III agreements for this purpose as required. It should be noted that
> P.L. 480, Titles II and III activities increasingly will focus on
> program results.
>
> The Office of Program Planning and Evaluation within the Bureau for
> Humanitarian Response (BHR/PPE) is the designated focal point for
> receipt and distribution for action and coordination of responses for
> all IG, General Accounting Office (GAO), and other reports pertaining
> to P.L. 480 Title II and Title III programs directed to the BHR.
> BHR/PPE has the responsibility for tracking responses on all audit
> report findings and recommendations whether directed to USAID/W-BHR or
> USAID Mission to assure that proper action is taken. This includes
> BHR/PPE receiving copies of correspondence to and from private
> voluntary organization (PVOs) on P.L. 480, Title II audit matters.
> BHR/PPE will track and follow-up on all outstanding audit matters,
> maintaining close
>
> liaison with the IG, GAO, M/OP and the Agency\'s follow-up office,
> M/MPI/MIC until all audit issues are adequately addressed and all
> audit recommendations closed.
>
> 14B. Title II - Emergency and Private Assistance
>
> 1\. Audit Requirements (Sections 211.5(c)(1-2) A.I.D. Regulation 11)
>
> PVOs and other non-governmental Cooperating Sponsors should arrange
> for periodic audits, conducted in accordance with the Office of
> Management and Budget (OMB) Circular A-133, of commodities received,
> monetized proceeds and interest income, funding received under Section
> 202(e) and institutional grants provided by the Office of Food for
> Peace (FFP). Nongovernmental entities receiving commodities or funding
> from a Cooperating Sponsor should be treated as subrecipients under
> OMB Circular A-133. That is, Cooperating Sponsors may satisfy audit
> requirements with respect to subrecipients by:
>
> relying on independent audits performed of the subrecipient agencies
> or on appropriate procedures performed by the Cooperating Sponsor\'s
> internal audit or program staff;
>
> expanding the scope of the independent financial and compliance audit
> of the Cooperating Sponsor to encompass testing of subrecipient agency
> charges; or
>
> a combination of these procedures.
>
> Governmental entities that receive commodities or monetized proceeds
> from a Cooperating Sponsor should provide the sponsor with an audit
> performed by the principal government audit agency or another audit
> agency or firm acceptable to USAID. (See Section 211.5(c), A.I.D.
> Regulation 11.)
>
> Governmental Cooperating Sponsors should ensure that annual audits are
> conducted of commodities and monetized proceeds, if sale of
> commodities is authorized under the agreement with USAID. The audit
> should include funds transferred to or used by recipient agencies. The
> audit should be conducted in accordance with:
>
> generally accepted government auditing standards issued by the U.S.
> GAO;
>
> auditing standards that have been prescribed by the laws of the
> country or adopted by public accountants in the country; or
>
> auditing standards promulgated by the International Organization of
> Supreme Audit Institutions or Internal Auditing Practices Committee of
> the International Federation of Accountants.
>
> Both the auditing organization and the auditing standards must be
> acceptable to USAID.
>
> A governmental Cooperating Sponsor may satisfy its audit
> responsibility with respect to subrecipient agencies by:
>
> relying on independent audits of the subrecipient sponsor;
>
> expanding the scope of the independent financial audit of the
> Cooperating Sponsor to encompass testing of subrecipient agency
> charges or actions; or
>
> a combination of these procedures.
>
> Subrecipient agencies that receive less than \$25,000 of donated
> commodities and/or monetized proceeds are excluded from the
> Cooperating Sponsor\'s audit responsibility.
>
> 2\. Audit Purposes
>
> For audit purposes, P.L. 480 Title II activities can be divided into
> the following areas:
>
> Planning for Title II programs;
>
> Implementation and Monitoring of Title II programs;
>
> Evaluation and Audit of Title II programs; and
>
> Suspension, termination and expiration of Title II programs.
>
> USAID Missions should be aware of the audit objectives, internal
> control objectives, and audit concerns in every facet of planning and
> implementing of Title II programs that the experience of the IG over
> the years has brought into focus.
>
> 3\. Planning
>
> a\. Emergency Program Planning
>
> The audit objective for this element is to ensure that the USAID
> Mission and participating private and voluntary organizations follow
> Agency policies and procedures in planning and initiating Emergency
> Programs under Title II. The internal control objective is to give
> reasonable assurance that the USAID Mission and Cooperating Sponsors
> efficiently and effectively plan and initiate commodity assistance
> programs in response to emergency situations.
>
> b\. Regular or Non-Emergency Program Planning
>
> The audit objective for this element is to ensure that projects and
> programs under Title II are authorized in accordance with Agency
> policies and procedures. The internal control objectives are to ensure
> that Operational Plans (OPs) and Transfer Authorizations (TAs) specify
> the goals and purposes of Title II programs and the procedures for
> program accounting, monitoring, implementation, and evaluation, and
> that estimates of types and amounts of commodities for the programs
> are prepared.
>
> c\. Monetization of Commodities
>
> The audit objective for this element is to ensure that the USAID
> Mission sees to it that Cooperating Sponsors follow USAID policies and
> procedures in using proceeds, including interest income, from
> monetized commodities in meeting development objectives. The internal
> control objective is to ensure that Cooperating Sponsors use proceeds
> from monetized sales for authorized purposes.
>
> d\. Assistance to Non-Governmental Organizations Under Section 202(e)
> of Title II
>
> The audit objective for assistance to non-governmental organizations
> (NGOs) is to ensure that the USAID Mission and Cooperating Sponsors
> follow Agency policies and procedures in planning for financial
> assistance under P.L. 480 Title II, Section 202(e). The internal
> control objectives are to ensure that the Multi-Year Operational Plans
> (MYOP) for Title II programs are revised in accordance with Agency
> requirements when Cooperating Sponsors submit requests for Section
> 202(e), and that these funds do not replace funding from other
> sources.
>
> e\. Institutional Support Grants
>
> The audit objective for this element is to ensure that PVOs and
> Cooperative Development Organizations (CDOs) follow Agency policies
> and procedures in requesting institutional grant funds and
> implementing activities supported by these funds. The internal control
> objectives are to ensure that grant proposals prepared by PVOs and
> CDOs are in accordance with Agency guidance and that activities
> supported by grant funds are implemented in accordance with the terms
> of funding grants.
>
> 4\. Implementation and Monitoring
>
> Implementation and monitoring is divided into the following elements
> for audit purposes:
>
> requests for shipments of Title II commodities;
>
> entry and handling in the recipient country;
>
> authorization for reimbursement of packaging costs;
>
> disposition of commodities unfit for use;
>
> liability for loss, damage or improper distribution of commodities;
> and
>
> monitoring requirements.
>
> a\. Requests for Shipments of Title II Commodities
>
> The audit objective for this element is to ensure that theCooperating
> Sponsors follow USAID policies and procedures in shipping Title II
> commodities. The internal control objective is to ensure that adequate
> storage space is available in the recipient country before commodities
> arrive and that the U.S. Government (USG) pays only those
> transportation costs authorized in the OP or TA.
>
> b\. & c. Entry and Handling in the Recipient Country and Reimbursement
> for Repackaging Costs
>
> The audit objective for these elements is to ensure that the USAID
> Mission and Cooperating Sponsors follow USAID policies and procedures
> concerning entry and handling of commodities in the recipient country.
> The internal control objectives are to ensure that, unless otherwise
> approved, the Cooperating Sponsor bears costs associated with the
> entry and handling of commodities in the recipient country, and to
> ensure that costs of repackaging commodities, when required, are paid
> in accordance with USAID policies and procedures.
>
> d\. Disposition of Commodities Unfit for Use
>
> The audit objective for this element is to ensure that the USAID
> Mission and Cooperating Sponsors follow USAID policies and procedures
> in disposing of Title II commodities that are unfit for use. The
> internal control objective is to ensure disposal methods are applied
> in order of priority and that reporting requirements are met.
>
> e\. Liability for Loss, Damage or Improper Distribution of Commodities
>
> The audit objective for this element is to ensure that the USAID
> Mission and the Cooperating Sponsor process claims for loss, damage or
> improper distribution of commodities or misuse of monetized proceeds
> in accordance with USAID policies and procedures. The internal control
> objective is to ensure that costs resulting from the loss, damage or
> improper distribution of commodities or misuse of monetized proceeds
> are borne by the responsible party.
>
> f\. Monitoring Requirements
>
> The audit objective for this element is to ensure that the USAID
> Mission and Cooperating Sponsors meet monitoring, records maintenance
> and reporting requirements as specified in Agency regulations. The
> internal control objective is to ensure that Title II programs are
> implemented in accordance with OPs or TAs by assessing USAID Mission
> monitoring of Title II programs and Cooperating Sponsor records
> maintenance and reporting procedures.
>
> 5\. Evaluation and Audit
>
> The audit objectives for this area are to see to it that the USAID
> Mission and Cooperating Sponsors ensure that evaluations and audits of
> Title II programs are conducted in accordance with Agency policies and
> procedures. The internal control objective is to ensure that both are
> conducted in accordance with Agency requirements.
>
> 6\. Suspension, Termination and Expiration
>
> The audit objective for this area is to ensure that the USAID Mission
> and Cooperating Sponsors follow Agency policies and procedures in
> suspending and terminating Title II programs and in handling remaining
> commodities and monetized proceeds when programs expire. The internal
> control objective is to ensure that remaining Title II commodities and
> monetized proceeds are handled in accordance with Agency policies and
> regulations when programs are suspended or terminated or when they
> expire.
>
> 7\. USAID Inspector General Audits of Cooperating Sponsors
>
> Each year the IG will select certain Title II Programs to test the
> integrity of planning, procedures and controls. An Audit Notification
> Letter will be issued to the principal A.I.D. Officer advising of the
> date when IG auditors will arrive and to notify and make necessary
> arrangements with non-governmental or governmental Cooperating
> Sponsors. When the auditors arrive, these sponsors should be included
> in an Entrance Conference to set out the scope of the audit, the
> support required, and the documents needed for review. Sponsors should
> likewise be included in the Exit Conference when the audit is
> completed and audit findings set forth.
>
> Draft audit reports will be distributed to Cooperating Sponsors for
> comments to be taken into account along with those of the USAID
> Mission in the final audit report. Comments and suggested replies to
> audit findings and recommendations should be transmitted to BHR/PPE
> for discussion with the IG prior to the latter\'s issuance of the
> final audit report.
>
> Corrective actions in response to audit recommendations should be
> undertaken immediately. USAID Missions should assist Cooperating
> Sponsors as required in responding to the recommendations contained in
> IG audit reports. Responses by PVOs will be transmitted via their
> headquarters to BHR/PPE to be incorporated in the overall response to
> IG. All responses must address:
>
> deficiencies noted by the IG that have been corrected;
>
> corrective actions planned and underway addressing deficiencies that
> cannot be corrected immediately; and
>
> reasons for not taking corrective actions along with alternative
> proposals deemed suitable to remedy deficiencies.
>
> Any recommendations that have not been acted upon within six (6)
> months following an IG audit will be the subject of a special report
> from the USAID Mission. These will be taken into account in future
> consideration of the program in question.
>
> 14C. Title III - Food for Development
>
> 1\. Audit Requirements (Model Title III Agreement, Annex C, Section
> C-5.3)
>
> The Cooperating Country shall ensure that an audit satisfactory to
> USAID is completed annually of the Food for Development Program
> conducted by the Cooperating Country and recipient agencies. This
> shall be a financial audit, performed by the principal audit agency of
> the government of the Cooperating Country or another audit agency or
> firm acceptable to USAID, to determine whether books and records
> regarding the receipt and use of the donated commodities and local
> currency proceeds have been maintained in accordance with generally
> accepted accounting principles and whether commodities and local
> currency proceeds have been used in accordance with the Food for
> Development Donation Agreement and recipient agency agreements. The
> audit shall be conducted in accordance with auditing standards that
> have been prescribed by the laws of the Cooperating Country or adopted
> by public accountants in the country; or Auditing Standards
> promulgated by the International Organization of Supreme Audit
> Institutions or the International Auditing Practices Committee of the
> International Federation of Accountants; or generally accepted
> government auditing standards issued by the U.S. GAO. Both the auditor
> and the auditing standards proposed to be used by the Cooperating
> Country must be acceptable to USAID.
>
> The Cooperating Country may satisfy its audit responsibility with
> respect to recipient agencies by:
>
> relying on independent audits of the recipient agency or on
> appropriate procedures performed by the internal audit or program
> staff of the Cooperating Country;
>
> expanding the scope of the independent financial audit of the
> Cooperating Country to encompass testing of recipient agency charges
> or actions; or
>
> a combination of the foregoing procedures.
>
> Recipient agencies that receive less that \$25,000 of donated
> commodities and/or local currency proceeds are excluded from the
> Cooperating Country\'s audit responsibility.
>
> USAID may, at its discretion, perform the audit required on behalf of
> the Cooperating Country using local currency proceeds generated under
> this agreement or other resources available to A.I.D. for this
> purpose.
>
> The Cooperating Country shall cooperate with and give reasonable
> assistance to representatives of USAID to enable them at any
> reasonable time to examine activities, records, and supporting
> documentation of the Cooperating Country, recipient agencies,
> processors, or others, pertaining to the receipt, storage, processing,
> repackaging, and sale of commodities; to inspect commodities in
> storage or the facilities used in the handling or storage of
> commodities prior to sale; to inspect and audit books and records of
> the Cooperating Country and recipient agencies, including financial
> books and records and reports pertaining to storage, transportation,
> processing, prepackaging, and sale of commodities and to the deposit
> and/or use of any local currency proceeds; to review the overall
> effectiveness of the program as it relates to the objectives set forth
> in the Agreement, Plan of Operations and local currency agreements;
> and to examine or audit the procedure and methods used in carrying out
> the requirements of the Title III Agreement.
>
> 2\. Audit Purposes
>
> For audit purposes, P.L. 480 Title III activities can be divided into
> the following areas:
>
> planning for Title III programs;
>
> implementation and monitoring of Title III programs;
>
> evaluation and audit of Title III programs; and
>
> Termination and expiration of Title III programs.
>
> 3\. Planning
>
> a\. Analysis and Integration
>
> The audit objectives for this element are to see if the statutory
> poverty and food deficit criteria have been met, and examine the USAID
> policy determinations that further delineated the Cooperating
> Country\'s eligibility. The internal control objective is to give
> reasonable assurance that the goal of the Title III program
> effectively enhances the food security of the Cooperating Country.
>
> b\. Commodity Needs/Usual Marketing Requirements/Storage and
> Disincentive Analyses
>
> The audit objective for this segment is to see if the determinations
> required by P.L. 480 have been properly made. The internal control
> objective is to give reasonable assurance that the USAID Mission and
> Cooperating Country have thoroughly assessed requirements for the
> commodities requested; that these will not disrupt normal patterns of
> trade or prices; and that adequate storage facilities are available.
>
> c\. Designation of Title III Program Responsibilities within the USAID
> Mission and Cooperating Country
>
> The audit objectives for this element are to ensure that the USAID
> Mission has devoted the staff and resources necessary to manage the
> Title III Program and pursue its goals, and that personnel within the
> Cooperating Country accept and carry out their responsibilities. The
> internal control objective is to give reasonable assurance that all
>
> personnel within the USAID Mission and Cooperating Country understand
> what they must do for the success of the program.
>
> d\. Sales of Title III Commodities
>
> The audit objective for this element is to see if the organization,
> conduct, terms and price realized in sale of Title III commodities is
> in keeping with Agency policy and prescribed procedures. The internal
> control objective is to give reasonable assurance that the best price
> is realized in the sale of Title III commodities and that adequate
> accounting and management practices are established to control the
> separate account into which sales proceeds are deposited.
>
> e\. Activities Funded by Local Currencies Generated from Sales of
> Title III Commodities
>
> The audit objective for this element is to see if activities supported
> improve food security. The internal control objective is to give
> reasonable assurance that the local currencies generated are accounted
> for, are earmarked for activities enhancing food security, and are
> expended in a timely manner.
>
> f\. Balance of Payments Assistance
>
> The audit objectives for this element are to ensure that proper
> macroeconomic analysis and coordination with other donors is
> undertaken as a basis for this program and that Agency policies are
> followed in its implementation. The internal control objective is to
> see to it that the USAID Mission and Cooperating Country effectively
> plan the utilization of such assistance and that agreed-on policy
> reforms have measurable impact.
>
> g\. Direct Feeding Programs
>
> The audit objective for this element is to see if statutory and Agency
> policies are followed in the planning of these programs. The internal
> control objective is to provide reasonable assurance that the USAID
> Mission and Cooperating Country undertake thorough analysis and
> establish a rational strategy with realistic objectives in undertaking
> a direct feeding program.
>
> h\. Emergency Food Reserves
>
> The audit objectives for this element are to ensure that the USAID
> Mission and the Cooperating Country thoroughly analyze the costs and
> logistical requirements of such reserves, and that these reserves are
> one component of a comprehensive plan. The internal control objective
> is to give reasonable assurance that these reserves are adequately
> maintained and drawn upon to enhance food security.
>
> i\. Indigenous Non-Governmental Organizations and Endowments
>
> The audit objective for this element is to see if the USAID Mission
> meets the statutory requirement that 10 percent of local currency
> generated from sale of Title III commodities be used to finance
> indigenous NGOs or cooperatives engaged in developmental activities.
> The internal control objective is to give assurance that the USAID
> Mission makes a reasonable effort either to contribute such an amount
> to an existing NGO or cooperative, or to encourage the creation of one
> with a charter and activities to qualify for such funding.
>
> 4\. Implementation and Monitoring
>
> a\. Procurement and Shipping of Title III Commodities
>
> The audit objective for this element is to see if the USAID Mission
> undertakes measures to assure the procurement of Title III commodities
> in a timely, efficient and effective manner that allows the program to
> proceed as planned. The internal control objective to ensure proper
> commodity specifications, arrangements for port discharge and overland
> transport, and prompt callforwards.
>
> b\. Sales of Title III Commodities
>
> The audit objectives for this element are to see if the USAID Mission
> seeks to involve the private sector, obtains a competitive sale price
> and establishes accounting, reporting and auditing procedures for
> local currency deposits in accordance with policy and program
> guidelines. The internal control objective is to ensure that the USAID
> Mission undertakes or obtains proper Cooperating Government assurances
> regarding the sale, accounting and deposit of Title III local currency
> proceeds.
>
> c\. Monitoring
>
> The audit objective for this element is to see if the USAID Mission
> and Cooperating Country exercise prudent oversight of Title III
> activities. The internal control objective is to ensure that adequate
> systems and sufficient personnel are in place to track the transport
> and storage of commodities, their sale and local currency generation,
> and the activities they support.
>
> 5\. Evaluation and Audit
>
> The audit objective for this element is to see if USAID and the
> Cooperating Country follow Agency Evaluation and Audit Policies in
> implementing Title III activities. The internal control objective is
> to ensure that personnel in the USAID Mission and Cooperating Country
> are delegated specific responsibilities for these activities and that
> these are carried out in a systematic and professional manner as a
> basis for the Annual Progress Report (APR) required for USAID/W
> consideration in annual renewal of each Title III program.
>
> 6\. Audits of Suspension, Termination and Expiration
>
> The nature of the long-range goals sought by P.L. 480 dictates that,
> except for very unusual circumstances, Title III resources be used in
> multi-year programs. Use of this food resource is a complex
> undertaking which makes systematic evaluations and audits during each
> year\'s activities all the more important as a basis for review and
> amending programs underway.
>
> Certain program goals could be met sufficiently prior to the time
> originally calculated, or food aid can prove to be too cumbersome or
> costly a resource to employ in trying to attain them. If at USAID\'s
> discretion it is decided that continuation of Title III assistance is
> no longer necessary or desirable, or if USAID determines that the
> Cooperating Country fails to comply with the terms of the Title III
> Agreement, then a Title III program may be suspended or terminated.
>
> Based on the APRs, audits, GAO or other evaluations, the A/USAID can
> terminate a Title III Agreement if a determination is made that the
> Cooperating Country is not fulfilling the requirements of P.L. 480.
> Such a determination takes into account the extent to which the
> country is:
>
> making significant economic development reforms;
>
> promoting free and open markets for food and agricultural producers;
> and
>
> Fostering increased food security.
>
> All authorizations of commodities not yet delivered to a ship will be
> terminated concurrently with USAID\'s termination of a Title III
> agreement. Under such circumstances USAID can request in writing that
> title to Title III commodities delivered, but not yet distributed, or
> to local currencies generated, but not yet disbursed, be transferred
> to USAID. Any commodities on hand at the time of program termination
> shall be disposed of as instructed by USAID. If the Cooperating
> Country agrees, any local currencies reverting to USAID may be used
> for economic development activities incountry as USAID considers
> appropriate.
>
> A program can be suspended when the USAID Mission feels that the
> Cooperating Country can and will take corrective actions to rectify
> deficiencies in its failure to comply with the terms of the Title III
> Agreement or accompanying Memorandum of Understanding (MOUs) or
> Program Implementation Letters (PILs). Such actions must be undertaken
> promptly to minimize the effects that delay in procurement and ocean
> shipment of Title III commodities will have on activities scheduled.
>
> When a multi-year Title III Agreement expires, or when it is mutually
> determined that the Title III program under the Agreement is
> completed, the Cooperating Country is to deposit with the U.S.
> Disbursing Office (USDO) any remaining local currency proceeds. The
> Cooperating Country can also request USAID\'s approval for use of such
> proceeds, or any properties procured with such proceeds, for purposes
> authorized by USAID.
>
> If there are any Title III commodities remaining upon expiration of a
> Title III program, the Cooperating Country is to advise the USAID
> Mission on the quantities, condition and location of these, whereupon
> USAID shall issue instructions for appropriate use or disposition.
>
> The audit objective for this element is to establish if statutory
> requirements and Agency policies are followed in the termination,
> suspension or expiration of a Title III Program. The internal control
> objectives are to ensure that the decisions made are supported by
> evaluation or audit findings and recommendations of which the
> Cooperating Country is aware and that subsequent actions follow
> prescribed procedures.
>
> REF DOCUMENTS:
>
> 1\. OMB CIRC MEMO A-133
>
> 2\. USAID REG 11
>
> 3\. A.I.D. HANDBOOK 19, Chap 5
>
> 4\. A.I.D. POLICY DETERMINATION NO. 18
>
> 5\. TITLE III MODEL GRANT AGREEMENT
>
> 6\. IG AUDIT GUIDANCE MANUAL, PL 480 TITLE II
>
> 7\. IG AUDIT GUIDANCE MANUAL, PL 480 TITLE III
>
> 8\. FOOD AID MANAGEMENT\'S GENERALLY ACCEPTED COMMODITY ACCOUNTING
> PRINCIPLES (FAM 711)
>
> CHAPTER 15
>
> MONITORING AND EVALUATION
>
> 15A. Legislation and Policy
>
> Within the Executive Branch, the Office of Management and Budget (OMB)
> has articulated evaluation policy in Circular-117 which states:
>
> \"All agencies of the Executive Branch of the Federal Government will
> assess the effectiveness of their programs and efficiency with which
> they are conducted, and seek improvements on a continuing basis so
> that Federal management will reflect the most progressive practices of
> both public and business management and result in improved service to
> the public.\"
>
> P.L. 480, as amended in 1990, calls for a periodic evaluation of the
> effectiveness of projects undertaken under Title II. Under Title III
> an Annual Progress Report (APR) is required, which evaluates
> activities as the basis for USAID\'s authorization of each subsequent
> year\'s allotment of commodities. In addition, P.L. 480 requires that
> every two years the General Accounting Office (GAO) evaluate five
> Title II programs and five Title III programs in three geographic
> regions.
>
> USAID Mission Evaluation Officers are to include ongoing P.L. 480
> Title II and Title III programs in their Annual Evaluation Plan.
> Efforts should be made to engage local institutions or individuals in
> the Cooperating Country to make these evaluations a collaborative
> effort, to bring their knowledge of local conditions and practices to
> bear, and to develop their professional proficiencies in this domain.
> Yearly performance reviews by the USAID Mission should be timed to
> coincide with submission dates of the Annual Estimate of Requirements
> (AERs) required for Title II programs and the APR for Title III
> programs. Mid-project, or at least every three years, a more formal
> evaluation should be undertaken by a visiting team with competencies
> in the areas described by program goals.
>
> USAID Evaluation and Project Design Officers should be aware of the
> World Food Program\'s (WFP\'s) Evaluation and Monitoring Plan, 1991,
> considered by a number of donors to be the most complete in the field
> of food aid. It cites a review of World Bank, International Fund for
> Agricultural Development (IFAD) and WFP evaluations noting the
> characteristics of organizations able to sustain sound monitoring and
> evaluation systems. These are:
>
> \"The existence of a strong national organization with a favorable
> approach to monitoring and evaluation.
>
> A strong interaction between country agency staff and donor agency
> staff especially to establish systems.
>
> Projects where the design was building on experience from preceding
> projects; and
>
> Appropriate design for the country organization\'s capacity. In
> general monitoring was more successful than evaluation.\"
>
> 15B. Monitoring
>
> Monitoring of food aid is a constant activity, required on a daily
> basis by the Cooperating Sponsor engaged in Title II programs, and
> weekly or several times monthly by personnel within the USAID Mission
> responsible for Title III programs. Monitoring should provide
> assurance that program management is being carried out in a systematic
> and orderly manner to achieve stated objectives. Food aid monitoring
> should be a process that provides continual feedback.
>
> By the nature of Title II programs and the responsibilities delegated
> to them, the Cooperating Sponsors are expected to carry out the
> monitoring required of their undertakings. Where it is apparent that
> this is not being done sufficiently, or where circumstances or
> situations inhibit a Cooperating Sponsor\'s ability to monitor its
> activities, the USAID Mission should provide such oversight or see
> that it is provided from other sources. Systematic monitoring will
> highlight whatever shortcomings require particular attention in the
> next scheduled evaluation. Evaluations will be made more focused,
> relevant and valuable by having as a basic point of departure a
> comprehensive assessment of the monitoring that preceded them.
>
> 15C. Evaluations
>
> Evaluation is distinguished from monitoring by two important features;
> namely, evaluation is the principal source of information about
> progress toward intended results and of explanations for the level of
> results achieved. Food aid, by its nature, is one of the more complex
> assistance instruments in a development portfolio. The P.L. 480 Title
> II and Title III resources are to benefit recipients categorized as
> the most food-insecure. The design of P.L. 480 activities should
> include the criteria to assess the results of such efforts with
> sufficient accuracy so that programs can be modified as experience is
> gained. It is recognized that the original planning for many of these
> endeavors probably will have to be adjusted subsequently, and the only
> basis for undertaking such changes is the issues that objective
> evaluations reveal.
>
> Evaluations are to be carried out within the context of the planned
> long-range impacts of food aid programs. By their nature most
> long-range impacts will require five (5) years or more to realize in
> achieving measurable positive results in food supply, access,
> consumption or utilization. Program should be designed so impact
> results are measurable in a 3-5 year time span. The baseline data
> required for the design of food aid interventions should be the point
> of departure for the benchmarks to measure yearly progress toward
> long-range impacts in whichever areas of vulnerability at which the
> program is directed. Attainment of such benchmarks is a fundamental
> assessment in an evaluation. Also, evaluations should demonstrate that
> food aid is the most appropriate instrument to accomplish such
> impacts.
>
> Monitoring and Evaluation Guidelines \*
>
> Monitoring Evaluation
>
> On-going process Discrete, episodic
>
> Conducted by program Conducted by an outside evaluation team
>
> management team
>
> Uses only monitoring data Uses monitoring information to
>
> to supplement evaluation data supplement evaluation data
>
> Examines short-term change Examines changes over the life of project
>
> Uses less sophisticated data Uses sophisticated data analysis
> techniques
>
> analysis techniques
>
> Accepts validity of program and Examines the validity of goals,
> progress towards
>
> measures output toward program goals program goals and program impact
>
> Uses information to guide Uses information to guide corrective program
>
> corrective program actions actions and to affirm or challenge
> organizational strategies
>
> \* Table from CARE\'s Food Evaluation Module
>
> 15D. Data Requirements for Evaluation
>
> If the needed baseline data required for benchmark measurements is not
> contained in the original program design, the following sources should
> be explored for key indicators needed for an evaluation system of food
> aid:
>
> Data Available from USAID/W - USAID/Center for Development Information
> and Evaluation (CDIE) has a comprehensive set of macroeconomic data
> that would be useful in compiling macrolevel indicators of food
> security. USAID/W-Bureau for Global Programs, Field Support and
> Research (M), Center for Population, Health and Nutrition (G/PHN) has
> supported incountry Demographic and Health Surveys (DHS) and a
> worldwide Food and Nutrition Monitoring Project (IMPACT).
>
> Data Available from Current USAID\'s Collected and Routine Monitoring
> Data - The USAID Mission country analysis data required for its own
> program submissions is usually drawn from the most reliable social and
> economic data from government and private institutions in-country.
>
> Data Routinely Collected by Other Multilateral and Bilateral Donors -
> WFP attempts to maintain a current database in all countries where it
> has programs which would probably provide the most relevant base line
> data for food aid programs. WFP has also developed a low cost method
> of developing a Population Vulnerability Map of countries with food
> deficits drawn for most part from data already available. The World
> Bank reports, done every three to five years on each of its clients,
> now contain considerable data on populations at risk and food security
> as the bank moved into the social and agricultural sectors during the
> past decade. United Nations International Children\'s Emergency Fund
> (UNICEF), United Nations Development Program (UNDP), IFAD and Food and
> Agricultural Organization (FAO) of the United Nations have both data
> and useful documents for monitoring and evaluating food aid,
> particularly FAO\'s \"Approaches to Monitoring Access to Food and
> Household Security\" (FAO, CFS:92/3, Feb.1992). The Cooperating
> Country or local UNDP Resident Representative should have or be able
> to obtain the reports or documents published by any United Nations
> (UN) member organization. In the Sahel Region of Africa, the Famine
> Early Warning System (FEWS) maintains a current database readily
> available for planning food aid to any of the countries it covers.
>
> Data Already Collected by the Cooperating Country - Government and
> private institutions within the Cooperating Country usually have a
> wealth of information and statistics from which relevant data can be
> extracted. Useful sources are:
>
> \- Census data - These data are collected from all individual entities
> that comprise the unit of analysis. For example, population census
> measures all the individuals in a population; agricultural censuses
> measure all farms.
>
> \- Data emanating from routine administrative reporting systems for
> various sectors - These data are collected regularly as part of the
> administrative functioning of programs. For example, in many countries
> health ministries collect age/weight data for all preschool children
> visiting clinics; agriculture ministries commonly collect price data
> for staple foods; labor ministries collect labor statistics.
>
> \- Survey data - These data are characterized by the fact that they
> are designed to produce population estimates of the measures they are
> assessing. They generally entail household interviews.
>
> Project monitoring/information systems - Increasingly, projects
> sponsored by donors are developing their own information systems that
> may be modified to regularly collect data on food and nutrition
> measures. Countries that have received food aid from other sources may
> have a database that can be updated.
>
> Data Collected by Private Voluntary Organizations and Non-Governmental
> Organizations - Concerns over population growth, ecological
> deterioration and decreasing availabilities of food have led a number
> of private voluntary organizations (PVOs) and non-governmental
> organizations (NGOs) to do extensive and useful research on
> populations that are vulnerable or at risk, and maintain databases
> that are updated regularly. Some of these are: the International Food
> Policy Research Institute; the Worldwatch Institute; the World
> Resources Council; the Overseas Development Council; the Overseas
> Development Institute, London; and the Institute of Development
> Studies, Brighton, Sussex, England.
>
> Non-Standard Types of Data - Satellite data on crop production,
> rainfall, and pest infestation is available on request and could
> assist in identifying vulnerable areas sufficiently in advance to take
> timely measures. FEWS uses Landsat data in this regard.
>
> Data gathered to establish baselines for food aid evaluation should be
> reviewed subject to the following criteria:
>
> representativeness;
>
> accuracy;
>
> periodicity (when data is collected);
>
> timeliness with respect to collection, processing and
>
> analysis; and
>
> Whether the data can be disaggregated relative to a food aid project.
>
> 15E. Title II Programs
>
> 1\. Monitoring
>
> As part of a Cooperating Sponsor\'s Multi-Year Operational Plan (MYOP)
> cycle and AER review by USAID/W-BHR/FFP, annual reports must be
> prepared. These reports should be based, in large part, on data
> collected as part of the monitoring systems. The annual report will
> include the following information:
>
> statement of objectives and benchmarks for the past year;
>
> assessment of the project\'s progress in reaching
>
> benchmarks and objectives;
>
> discussion of the status, adequacy and effectiveness of the
> project\'s:
>
> -coverage of the target population
>
> -targeting strategies
>
> -logistics systems
>
> -adequacy of rationing
>
> -complementary components
>
> \- complementary support from the Cooperating Country, USAID, and
> other donors;
>
> constraints; and
>
> recommendations (if any)
>
> 2\. Evaluations
>
> Title II evaluations are scheduled by the USAID Mission in conjunction
> with USAID/W-BHR/PPE and BHR/FFP. Periodic (every 3 years) evaluations
> should emphasize measurable impacts on food security of poor, food
> insecure groups. Evaluations are intended to:
>
> clarify current objectives of the programs;
>
> review and evaluate the programs in terms of their contributions to
> planned accomplishments and objectives;
>
> confirm the validity of program objectives at the implementation and
> impact levels; and
>
> recommend changes in program direction or implementation that would
> increase benefits.
>
> Evaluations of Title II programs should:
>
> identify the nature and causes of problems being addressed by the
> program and target groups;
>
> identify the major uses of Title II commodities by the Cooperating
> Sponsor;
>
> analyze the objectives of the program as perceived by the Cooperating
> Sponsor;
>
> evaluate the role and responsibility of the Cooperating Sponsor in
> implementing the program;
>
> analyze the policy and program priorities of participating entities
> and the fit between these priorities and the existing uses of food
> aid;
>
> assess the design and organization of the Title II program and make
> comparisons to design criteria for a sound program;
>
> assess the extent to which programs and projects are meeting intended
> objectives;
>
> examine factors associated with successes and failures of specific
> programs;
>
> distinguish program impacts on target groups from general changes and
> trends in the country and regions where programs are focused, and
>
> propose redesign of existing programs when necessary to meet
> development priorities.
>
> Evaluation reports should present study findings, methodology and
> recommendations and solicit and document feedback from organizations
> participating in the program. An evaluation should not be considered
> complete until comments from the USAID Mission, cognizant offices at
> USAID/W, and voluntary agencies have been included.
>
> The following factors should be considered in designing Title II
> evaluations:
>
> Information Needs
>
> \- the range of study questions that program decision makers need
> answered;
>
> -the level and quality of the information; and
>
> \- the immediacy with which the information is required.
>
> Availability and Access to Data
>
> \- the extent to which data needed for the study have already been
> collected;
>
> \- the cost of collecting unavailable data; and
>
> \- the availability of evaluation resources, funds, staff, equipment,
> and transportation needed for the study.
>
> The USAID Mission develops the Scope of Work for each evaluation in
> consultation with the Cooperating Sponsor and host government. The
> draft Scope of Work is sent to the Bureau for Humanitarian Response
> (BHR) for review, approval and assistance in finding qualified
> contractors. In instances of very high order priority evaluations,
> scopes of work may be developed by USAID/W-BHR.
>
> The evaluation team selected reviews the Scope of Work, applicable
> chapters of USAID Handbook 9, and documentation relative to the
> country program being evaluated, including relevant portions of the
> country\'s development plan, the USAID Mission Country Development
> Strategic Statement (CDSS) and Annual Budget Submission (ABS), the
> PVOs\' MYOPs and AERs, and any other documents, studies and reports
> available from CDIE or other sources that familiarize team members
> with the country setting and prevailing economic and social
> conditions.
>
> Prior to each evaluation, the USAID/W-BHR/FFP and BHR/PPE holds a
> pre-evaluation conference with the evaluation team and representatives
> of USAID/W Regional Bureaus, PVOs, and other U.S. Government (USG)
> agencies, as appropriate, to coordinate the study and to assure that
> the viewpoints and needs of the Agency and other government agencies
> are understood by the evaluation team members.
>
> The USAID Mission, with Cooperating Sponsor and host government
> personnel, will have prepared the evaluation team\'s schedule
> including the logistical support required for field trips. If at all
> possible, host country personnel should be invited to participate in
> the evaluation so that it is a collaborative effort and
> recommendations prescribed are mutually agreeable.
>
> A draft report of the team\'s findings, conclusions and
> recommendations is to be prepared and presented prior to the team\'s
> departure. A pre-departure meeting with the team and all interested
> parties is recommended for this purpose.
>
> The USAID Mission, Cooperating Sponsor, and host government will be
> given time to review the report and submit their comments for
> consideration in the final version of the Evaluation Report.
>
> PVO field representatives will normally submit their comments via the
> headquarters, which in turn will transmit them with possible
> additional comments to USAID/W-BHR. The final Evaluation Report will
> be distributed to all interested parties.
>
> 15F. Title III Programs
>
> Article VII, Annex A, the Plan of Operations of the Title III Model
> Agreement format, reads as follows:
>
> \"Monitoring and Evaluation Plan
>
> Describe Mission monitoring contacts. For each of the programs
> authorized under this Agreement, there must be an annual assessment of
> progress and a well-defined plan for monitoring and evaluation.
> Describe the agreement of USAID and the Cooperating Country regarding
> baseline data, performance indicators, and the schedule and
> methodologies to be used for monitoring and evaluation of the
> program\'s impact, including its effect on enhancing food security.\"
>
> 1\. Monitoring
>
> The USAID Mission has full responsibility for monitoring Title III
> programs. The degree of involvement and number of personnel required
> is determined largely by the nature of the program. Sale of Title III
> commodities via the private sector and use of local currency proceeds
> generated to finance specific project undertakings probably will
> require the most intensive monitoring. Balance of payments assistance
> to support policy reforms probably would require the least manpower in
> monitoring since its effects on a country\'s balance of payments can
> be measured by the USAID Mission, the host country ministries
> concerned, or the International Bank for Reconstruction and
> Development (IBRD) and International Monetary Fund (IMF), and the
> reforms by their perceived impact. However, policy reforms require
> much greater coordination with the Cooperating Country and other
> donors since these are decisions taken at the highest level of
> government and implemented nationwide.
>
> However it is accomplished, the USAID Mission has full responsibility
> for monitoring Title III programs from inception to completion. It can
> request assistance from Cooperating Country public and private
> institutions, but it must verify whatever information is received from
> other sources. A good portion of the Annual Progress Report (APR) on
> Title III programs will be obtained through effective monitoring of
> the activities the Missions support during the course of the year.
>
> 2\. Evaluations
>
> The nature of the APR requires the input from an evaluation undertaken
> by USAID Mission personnel, assisted as required by temporary duty
> (TDY) personnel with competencies needed to assess the progress of
> undertakings supported by Title III resources. Under P.L. 480, as
> amended in 1990, the GAO will evaluate five Title III programs in
> three geographic regions every two years. In countries where GAO
> evaluations take place, the need for an outside evaluation team would
> seem to be satisfied. In those countries where there is no GAO
> evaluation, a formal evaluation by a team recruited by the appropriate
> Regional Bureau and BHR would be in order every three years.
>
> The spectrum of activities allowed by the legislation to be addressed
> with Title III resources does not allow a prescribed format or listing
> of common factors to be assessed as can be done for Title II
> evaluations. The make-up of the competencies required by a Title III
> evaluation team will be determined by the macroeconomic, sectoral,
> program or project undertakings supported by this food aid. As all of
> these programs are carried out with the Cooperating Government and
> could have far-reaching effects on the functioning of the economy or
> agricultural sector, a particular effort should be made to have
> Cooperating Government personnel participate in these evaluations. Any
> modifications of a Title III program emanating from the
> recommendations in an evaluation will require a full collaborative
> effort between the Cooperating Country and USAID Mission.
>
> In a Title III evaluation, the following are issues to be assessed
> depending upon the nature of the program.
>
> a\. Balance of Payments Assistance
>
> To what extent is balance of payments assistance the primary purpose
> underlying the program? What evidence can be presented to determine
> whether import levels would have changed in the absence of Title III
> Food for Development assistance? What proportion of total imports and
> total food availability is provided by Title III? What proportion of
> the total balance-of-payments deficit is financed by Title III
> assistance?
>
> b\. Government Spending
>
> What role did Title III Food for Development assistance play in
> maintaining or increasing total investment and development
> expenditures; maintaining or increasing expenditures in the
> agricultural sector; ensuring counterpart funds for USAID projects;
> providing an alternative source for revenues with fewer negative
> effects on macroeconomic or sectoral performance; and funding other
> programs with net positive benefits?
>
> c\. Nutrition
>
> What was the contribution of Title III Food for Development assistance
> to the nutrition of disadvantaged groups within the Cooperating
> Country?
>
> d\. Disincentives
>
> What impact did Title III Food for Development assistance have on
> domestic prices, domestic production levels, the policy environment
> for agriculture, and taste preferences or demand for local products?
>
> e\. Project Impacts
>
> What impact did projects funded by local currencies generated by sale
> of Title III commodities have on national or local development? What
> role did Title III generated local currencies play in financing these
> projects? How would the projects in question have been affected if
> Title III generated local currencies were not available?
>
> f\. Policy Impacts
>
> How has Title III Food for Development assistance been used to promote
> market liberalization or other policy changes important for
> agricultural development? What progress has been made in these areas?
> How important has Title III assistance been in achieving this
> progress?
>
> g\. Management
>
> Has Title III Food for Development assistance imposed a significant
> management burden on the Cooperating Government or on the USAID
> Mission? How have the management requirements of Title III affected
> other government or USAID programs?
>
> APPENDIX C
>
> TABLE OF CONTENTS
>
> WORLD FOOD PROGRAM
>
> SUPPLEMENT (as amended) To Transfer Authorization
>
> Page
>
> SECTION I. General Purpose and
> Scope\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
> C-1
>
> \(a\) Terms and
> Conditions\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
> C-1
>
> \(b\)
> Legislation\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
> C-1 - C-3
>
> SECTION II.
> Definitions\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-3 - C-5
>
> SECTION III. Contribution of Commodities and Ocean
> Transportation\...\...\...\...\...\..... C-5
>
> \(a\) Distribution and use of
> commodities\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-5
>
> \(b\) Transfer of title and
> delivery\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-5
>
> \(c\) Processing, handling, transportation,
>
> and other
> costs\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-6
>
> \(d\) Transportation
> Authorization\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-6
>
> \(e\) General
> average\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-7
>
> \(f\) Shipping
> instructions\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-7
>
> \(g\)
> Tolerances\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-7
>
> SECTION IV. Obligations of the World Food
> Program\...\...\...\...\...\...\...\...\...\...\...\...\..... C-7
>
> \(a\) Plan of
> operation\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-7
>
> \(b\) Program
> supervision\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-7
>
> \(c\) Determination of
> eligibility\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-8
>
> \(d\) No
> discrimination\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-8
>
> \(e\) Public
> recognition\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-8
>
> \(f\)
> Containers\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
> C-8
>
> \(g\) Use of
> funds\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-8
>
> \(h\) No displacement of
> sales\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-9
>
> \(i\) Commodities borrowed or
> exchanged\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-9
>
> \(j\) Disposal of excessive stock of
> commodities\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-9
>
> SECTION V. Processing, Repackaging and
> Labeling\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
> C-10
>
> \(a\) Commercial processing and
> repackaging\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
> C-10
>
> \(b\)
> Labeling\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-10
>
> \(c\) Where commodity containers are not
> used\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-10
>
> SECTION VI. Arrangements for Entry and Handling in Recipient
> Country\...\...\...\.... C-11
>
> \(a\) Costs at discharge
> ports\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-11
>
> \(b\) Duty, taxes and consular
> invoices\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-11
>
> \(c\) Storage facilities and transportation in recipient
> countries\...\...\...\...\...\...\...\...\...\..... C-11
>
> \(d\) Inland transportation in intermediate
> countries\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
> C-11
>
> Page
>
> SECTION VII. Disposition of Commodities Unfit for
>
> Authorized Use After Delivery to the World Food
> Program\...\...\...\...\...\...\...\...\...\...\... C-11 - C-12
>
> SECTION VIII. Liability for Loss and Damage or Improper Distribution
> of
> Commodities\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-12
>
> \(a\) Ocean carrier loss and damage, general average and salvage\....
> C-12
>
> \(1\) Outturn reports for claims against ocean
> carriers\...\...\...\...\... C-12 - C-13
>
> \(2\) Claims against ocean
> carriers\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-13
>
> \(3\) General average and
> salvage\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-13
>
> SECTION IX Records and Reporting Requirements of the World Food
> Program\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
> C-14
>
> SECTION X. Waiver, Amendment or
> Termination\...\...\...\...\...\...\...\...\...\...\.... C-14
>
> \(a\) Waiver and amendment
> authority\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
> C-14
>
> \(b\) Termination of
> program\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
> C-14 - C-15
>
> APPENDIX C
>
> WORLD FOOD PROGRAM
>
> SUPPLEMENT AS AMENDED TO STANDARD TITLE II
>
> TRANSFER AUTHORIZATION
>
> I. [General Purpose and Scope]{.underline}
>
> \(a\) [Terms and conditions]{.underline}. This Supplement contains the
> regulations prescribing the terms and conditions governing the
> transfer of agricultural commodities to the World Food Program
> pursuant to Title II, the Agricultural Trade Development and
> Assistance Act of 1954, as amended (Public Law 480, 83rd Congress, as
> amended) (1) to meet famine or other urgent or extraordinary relief
> requirements; (2) to combat malnutrition especially in children; (3)
> to promote economic and community development in friendly developing
> areas; (4) for needy persons, nonprofit school lunch programs and
> preschool feeding programs outside the United States.
>
> \(b\) [Legislation]{.underline}. The legislation implemented by the
> regulations in this part is as follows:
>
> \(1\) Section 201 of the Agricultural Trade Development and Assistance
> Act of 1954, as amended, provides as follows:
>
> \"The President is authorized to determine requirements and furnish
> agricultural commodities, on behalf of the people of the United States
> of America, to meet famine or other urgent or extraordinary relief
> requirements; to combat malnutrition, especially in children; to
> promote economic and community development in friendly developing
> areas; and for needy persons and non-profit school lunch and preschool
> feeding programs outside the United States. The Commodity Credit
> Corporation shall make available to the President such agricultural
> commodities determined to be available under Section 401 as he may
> request.\"
>
> \(2\) Section 202 of the Agricultural Trade Development and Assistance
> Act of 1954, as amended, which provides as follows:
>
> \"The President may furnish commodities for the purpose set forth in
> Section 201 through such friendly governments and such agencies,
> private or public, including intergovern mental organizations,
> intergovernmental activities such as the World Food Program and other
> multilateral organizations in such manner and upon such terms and
> conditions as he deems appropriate. The President shall, to the extent
> practicable, utilize nonprofit voluntary agencies registered with, and
> approved by, the Advisory Committee on Voluntary Foreign Aid. Insofar
> as practicable, all commodities furnished hereunder shall be clearly
> identified by appropriate marking on each package or container in the
> language of the locality where they are distributed as being furnished
> by the people of the United States of America. The assistance to needy
> persons, shall insofar as practicable be directed toward community and
> other self-help activities designed to alleviate the causes of the
> need for such assistance. Except in the case of emergency, the
> President shall take reasonable precaution to assure that commodities
> furnished hereunder will not displace or interfere with sales which
> might otherwise be made.\"
>
> \(3\) Section 203 of the Agricultural Trade Development and Assistance
> Act of 1954, as amended, which, as applicable to WFP, provides as
> follows:
>
> \"The Commodity Credit Corporation may, in addition to the cost of
> acquisition, pay with respect to commodities made available under this
> title costs of packaging, enrichment, preservation, and fortification;
> processing, transportation, handling, and other incidental costs up to
> the time of their delivery free on board vessels in United States
> ports and ocean freight charges from United States ports to designated
> ports of entry abroad; and charges for general average contributions
> arising out of the ocean transport of commodities transferred pursuant
> thereto.\"
>
> \(4\) Section 205 of the Agricultural Trade Development and Assistance
> Act of 1954, as amended, provides as follows:
>
> \"It is the sense of the Congress that the President should encourage
> other advanced nations to make increased contributions for the purpose
> of combating world hunger and malnutrition, particularly through the
> expansion of international food and agricultural assistance programs.
>
> It is further the intent of the Congress that as a means of achieving
> this objective, the United States should work for the expansion of the
> United Nations World Food Program beyond its present established
> goals.\"
>
> \(5\) Section 401 of the Agricultural Trade Development and Assistance
> Act of 1954, as amended, which provides as follows:
>
> \"After consulting with other agencies of the Government affected and
> within policies laid down by the President for implementing this Act,
> and after taking into account productive capacity, domestic
> requirements, farm and consumer price levels, commercial exports, and
> adequate carryover, the Secretary of Agriculture shall determine the
> agricultural commodities and quantities thereof available for
> disposition under this Act., and the commodities and quantities
> thereof which may be included in the negotiations with each country.
> No commodity shall be available for disposition under this Act if such
> disposition would reduce the domestic supply of such commodity below
> that needed to meet domestic requirements, adequate carryover, and
> anticipated exports for dollars as determined by the Secretary of
> Agriculture at the time of exportation of such commodity.\"
>
> \(6\) Section 402 of the Agricultural Trade Development and Assistance
> Act of 1954, as amended, which provides as follows:
>
> \"The term \'agricultural commodity\' as used in this Act shall
> include any agricultural commodity produced in the United States or
> product thereof produced in the United States; Provided however, That
> the term \'agricultural\' commodity shall not include alcoholic
> beverages, and for the purposes of Title II of this Act, tobacco or
> products thereof. Subject to the availability of appropriations
> therefor, any domestically produced fishery product may be made
> available under this Act.\"
>
> \(7\) Section 404 of the Agricultural Trade Development and Assistance
> Act of 1954, as amended, which provides as follows:
>
> \"The programs of assistance undertaken pursuant to this Act
>
> shall be directed toward the attainment of the humanitarian objectives
> and national interest of the United States.\"
>
> \(8\) Section 405 of the Agricultural Trade Development and Assistance
> Act of 1954, as amended, which provides as follows:
>
> \"The authority and funds provided by this Act shall be utilized in a
> manner that will assist friendly countries that are determined to help
> themselves toward a greater degree of self-reliance in providing
> enough food to meet the needs of their people and in resolving their
> problems relative to population growth.\"
>
> II\. [Definitions]{.underline}
>
> \(a\) \"AID\" means the Agency for International Development or any
> successor agency, including, when applicable, each USAID. \"USAID\'
> means an office of AID located in a foreign country. \"AID/W\" means
> the Office of AID located in Washington, D.C.
>
> \(b\) \"Commodities\" means food or feed transferred or available for
> transfer to cooperating sponsors under any of the legislation referred
> to in this part and food or feed exchanged for such transferred
> commodities as provided in this Supplement.
>
> \(c\) \"CCC\" means the Commodity Credit Corporation, a corporate
> agency and instrumentality of the United States within the U.S.
> Department of Agriculture.
>
> \(d\) \"WFP\" means the World Food Program which enters into an
> agreement with the U.S. Government for the use of agricultural
> commodities and which is directly responsible under the agreement for
> administration and implementation of programs involving the use of the
> commodities made available to meet the requirements of eligible
> recipients.
>
> \(e\) \"WFP Project Agreement\" means the WFP/Host Country agreement
> which incorporates the obligations of the WFP and of the recipient
> government. It may have the form of a single project agreement or of a
> Basic Agreement supplemented by a Plan of Operations.
>
> \(f\) \"USDA\" means the U.S. Department of Agriculture.
>
> \(g\) \"Diplomatic Posts\" means the offices of the Department of
> State located in foreign countries, and may include Embassies,
> Legations, and Consular Offices.
>
> \(h\) \"Disaster relief organizations\" means organizations which are
> authorized by UN/WFP, AID/W, USAID, or by a Diplomatic Post to assist
> disaster victims.
>
> \(i\) \"Disaster victims\" means persons who, because of flood,
> drought, fire, earthquake, other natural or man-made disasters, or
> extraordinary relief requirements, are in need of food or feed
> assistance.
>
> \(j\) \"Maternal child feeding, school and other child feeding
> programs\"
>
> \(1\) Maternal and preschool feeding programs means programs conducted
> for women of childbearing age and for children below the usual
> enrollment age for the primary grade at public schools.
>
> \(2\) School feeding programs refers to programs conducted for the
> benefit of children enrolled in schools.
>
> \(3\) Other child feeding programs refers to programs designed to
> reach preschool or school age needy children in summer camps, child
> care centers, orphanages, day playgrounds, nurseries, and similar
> activities.
>
> \(k\) \"Needy persons\" means individuals who are in need of food
> assistance because of their economic condition.
>
> \(l\) \"Nonprofit\" means that the residue of income over operating
> expenses (exclusive of administrative expenses) accruing in any
> activity, project, or program is used solely for the operation of such
> activity, project, or program.
>
> \(m\) \"Recipients\" means persons who are eligible to receive
> commodities for their own use in accordance with the terms and
> conditions of the WFP Project Agreement, the TA and this Supplement.
>
> \(n\) \"Refugees\" means persons who are in need because (1) they fled
> or were expelled from their country of nationality or residence and
> are living in a country other than the one in which they held or have
> held citizenship, or (2) they fled from their homes as a result of
> civil or international strife and are living in a part of their
> country of nationality or residence other than that in which they
> normally earned a livelihood.
>
> \(o\) \"School\" means a public or nonprofit private facility, or an
> activity within such facility, which has as its primary purpose the
> education (except theological education) of children at educational
> levels which are comparable to high school or under in the United
> States.
>
> \(p\) \"Transfer Authorization (TA)\" constitutes the agreement
> between the WFP and the U.S. Government. The TA lists the kinds and
> quantities of commodities to be supplied, program objectives, criteria
> for eligibility of recipients, and other specific program provisions
> in addition to the provisions set forth in this Supplement.
>
> \(q\) \"Voluntary Agency\" means the American National Red Cross and
> any U.S. voluntary nonprofit agency registered with, and approved by,
> the Advisory Committee on Voluntary Foreign Aid of the Agency for
> International Development.
>
> \(r\) \"Institutions\" means nonpenal, public or nonprofit private
> establishments that are operated for charitable or welfare purposes
> where needy persons reside and receive meals, including, but not
> limited to, homes for the aged, mentally and physically handicapped,
> refugee camps, and leprosy asylums.
>
> \(s\) \"Welfare agencies\" means public or nonprofit private agencies
> that provide care, including food assistance, to needy persons who are
> not residents of institutions.
>
> \(t\) \"Recipient agencies\" means schools institutions, welfare
> agencies, disaster relief organizations, and public or private
> agencies whose food distribution functions are sponsored by WFP and
> who receive commodities for distribution to eligible recipients.
>
> \(u\) \"World Food Program\" is an intergovernmental activity
> sponsored jointly by the United Nations and the Food and Agriculture
> Organization and supported through contributions of commodities,
> services and funds by the United States and other donor countries.
> U.S. commodities and services to the World Food Program are provided
> under the authority of Section 202 of the Agricultural Trade
> Development and Assistance Act of 1954, as amended.
>
> III\. [Contribution of Commodities and Ocean
> Transportation]{.underline}
>
> \(a\) [Distribution and use of commodities]{.underline}. Commodities
> shall be available for distribution and use in accordance with the
> provisions of the WFP Project Agreement, the TA and this Supplement..
>
> \(b\) [Transfer of title and delivery]{.underline}. Unless the TA
> provides otherwise title to the commodity shall pass to the WFP at the
> time and place of delivery f.o.b. or f.a.s. vessels at U.S. ports.
>
> \(c\) [Processing, handling, transportation and other
> costs]{.underline}. The United States will pay processing, handling,
> transportation, and other incidental costs incurred in making
> commodities available to the WFP free on board (f.o.b.) or free along
> side (f.a.s.) vessel at U.S. ports and such costs and expenses will be
> charged to the U.S. Commodity Pledge to the WFP.
>
> All costs and expenses incurred subsequent to the transfer of title in
> the United States to the WFP shall be borne by the WFP, except all or
> part of ocean transportation costs from U.S. ports to be designated
> ports of entry abroad.
>
> \(d\) [Transportation Authorization]{.underline}. A transportation
>
> authorization will be issued to cover the ocean freight paid directly
> by the United States. When CCC contracts for ocean carriage,
> disbursement to the carriers shall be made by CCC upon presentation of
> Standard Form 1113 and three copies of 1113A (Public Voucher for
> Transportation Charges), together with three copies of the related
> on-board ocean bill of lading, one copy of which must contain the
> following certification signed by an authorized representative of the
> steamship company:
>
> I CERTIFY THAT THIS DOCUMENT IS A TRUE AND CORRECT COPY OF THE
> ORIGINAL ON-BOARD OCEAN BILL OF LADING UNDER WHICH THE GOODS HEREIN
> DESCRIBED WERE LOADED ON THE ABOVE-NAMED VESSEL AND THAT THE ORIGINAL
> AND ALL OTHER COPIES THEREOF HAVE BEEN CLEARLY MARKED AS NOT TO BE
> CERTIFIED FOR BILLING.
>
> \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> (Name of Steamship Company)
>
> BY: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
>
> (Authorized Representative)
>
> Such vouchers should be submitted to:
>
> Director, Ocean Transportation Division
>
> Foreign Agricultural Service
>
> U.S. Department of Agriculture
>
> Washington, D.C. 20250
>
> Ocean transportation costs will be charged to the U.S. shipping pledge
> to the WFP.
>
> \(e\) [Losses prior to ocean transit]{.underline}. CCC retains the
> authority to make or authorize any disposition of commodities which
> have not commenced ocean transit and receive and retain any monetary
> proceeds resulting from such disposition. As reimbursements are
> received, the United States reduces the charge against the U.S. pledge
> to the WFP by the amount of such collections applicable to items
> charged as U.S. contributions.
>
> \(f\) [Shipping instructions]{.underline}. Shipments booked by CCC.
> Requests for shipment of commodities shall originate with WFP/Rome and
> shall be submitted to AID/W. AID/W, shall, through cables, airgrams or
> letters to WFP/Rome and USAID or Diplomatic Posts, provide names of
> vessels, expected time of arrival (ETAs), and other pertinent
> information on shipments booked by CCC. At the time of exportation of
> commodities, applicable ocean bills of lading shall be sent air mail
> or by the fastest means available by the freight forwarder,
> representing CCC, to USDA, to USAID or Diplomatic Posts, to WFP/Rome
> and to the consignee in sufficient time to advise of the arrival of
> the shipment.
>
> \(g\) [Tolerances]{.underline}. Delivery by the United States to the
> WFP at point of transfer of little within a tolerance of 5 percent (2
> percent in the case of quantities over 10,000 metric tons) plus or
> minus, of the quantity ordered for shipment shall be regarded as
> completion of delivery. There shall be no tolerance with respect to
> the ocean carrier\'s responsibility to deliver the entire cargo
> shipped and the United States assumes no obligation for failure by an
> ocean carrier to complete delivery to port of discharge.
>
> IV\. [Obligations of the WFP]{.underline}
>
> \(a\) [Plan of operation]{.underline}. The WFP shall submit to AID/W
> within such times and on the forms prescribed, a description of the
> programs it is sponsoring or proposes to sponsor. This description
> will provide basic information for USG clearance as to project
> objectives, possible displacement of U.S. commercial markets, possible
> conflict with U.S. objectives and/or U.S. P.L. 480 programs in the
> recipient country, or applicable U.S. laws and AID regulations.
>
> \(b\) [Program supervision]{.underline}. The WFP shall be represented
> by a person appointed by and responsible to WFP for the supervision
> and control of the program in the country of
>
> distribution in accordance with the provisions of the TA and this
> Supplement. The WFP representative may be resident or regional.
>
> \(c\) [Determination of eligibility]{.underline}. WFP shall be
> responsible for determining that the recipients agencies to whom they
> describe commodities are eligible in accordance with the terms and
> conditions of the WFP Project Agreement, the TA and this Supplement.
> WFP shall impose upon recipient agencies responsibility for
> determining that the recipients to whom they distribute commodities
> are eligible.
>
> \(d\) [No discrimination]{.underline}. The WFP shall distribute
> commodities only to eligible recipient agencies and eligible
> recipients without regard to nationality, race, color, or religious or
> political beliefs, and shall impose similar conditions upon
> distribution by recipient agencies.
>
> \(e\) [Public recognition]{.underline}. To the maximum extent
> practicable, and with the cooperation of the host government, adequate
> public recognition shall be given by the press, radio, and other media
> that the commodities have been furnished by the people of the United
> States. To the extent feasible, the information prescribed for
> containers in Section V.(b) should be publicized at distribution
> centers by display banners, posters or similar media.
>
> \(f\) [Containers]{.underline}.
>
> 1\. [Markings]{.underline}. Unless otherwise specified in the TA, when
> commodities are packaged for shipment from the United States, bags and
> other containers shall be marked with the CCC Contract Number or other
> identification, the AID emblem, and the following information stated
> in English and, as far as practicable, in the language of the country
> receiving the commodity:
>
> \(1\) Name of the commodity
>
> \(2\) World Food Program
>
> \(3\) Furnished by the people of the United States of America
>
> \(4\) Not to be sold or exchanged (where applicable).
>
> 2\. [Disposal of containers]{.underline}. The WFP may dispose of Title
> II containers, other than containers provided by carriers, in which
> commodities are received in countries having approved WFP programs, by
> sale or exchange, or distribute the containers free of charge to
> eligible food or feed recipients for personal use of the recipients.
> If the containers are to be used commercially, WFP must arrange for
> the removal or obliteration of U.S. Government markings from the
> containers prior to such use.
>
> \(g\) [Use of funds]{.underline}. In addition to funds accruing to the
> WFP from the sale of containers, funds may also be available from
> charges made in maternal, preschool, school, and other child feeding
> programs where payment by the recipients may be encouraged on the
> ability to pay. Funds from these sources shall be used for payment of
> project costs such as transportation, storage, handling, insect and
> rodent control, rebagging of damaged or infested commodities and other
> program expenses specifically authorized by AID/W to carry out the
> objectives of the program for which the commodities were furnished.
> Funds may also be used for payment of indigenous and/or third country
> personnel including those employed to make internal audits and
> inspections. However, such funds may not be used to purchase land, to
> acquire or construct buildings, or to make alterations in existing
> buildings. Actual out-of-pocket expenses incurred in effecting any
> sale of containers may be deducted from the sales proceeds.
>
> \(h\) [No displacement of sales]{.underline}. The donation of
> commodities furnished for WFP programs shall not result in increased
> availability for export by the recipient country of the same or like
> commodities and shall not interfere with or displace sales in the
> recipient country which might otherwise take place. This requirement
> may be waived by AID/W to meet emergency or disaster situations.
>
> \(i\) [Commodities borrowed or exchanged.]{.underline} After the date
> of program approval by AID/W, but before arrival at foreign
> destination of commodities authorized in the TA, the WFP may, with
> prior approval of the USAID or Diplomatic Post, borrow same or similar
> commodities from any local sources to meet program requirements
> provided that: (1) such commodities are used in accordance with the
> terms of the applicable TA and will be replaced on an equivalent value
> basis at the time and place, that the exchange takes place, as
> determined by mutual agreement between the WFP and the recipient
> country; (2) packaged commodities which are borrowed shall be
> appropriately identified in the language of the country of
> distribution as having been furnished by the people of the United
> States; and (3) suitable publicity shall be given to the exchange of
> commodities as provided in paragraph (e) of this section and
> containers for borrowed commodities shall be marked to the extent
> practicable in accordance with paragraph (f) 1. of this section.
> Transfers of commodities may be made between approved Title II
> programs to meet emergency disaster requirements or to improve
> efficiency of operation (for example, to meet temporary shortages due
> to delays in ocean shipments or inland transportation, or to provide
> for more rapid distribution of stocks in danger of deterioration).
> Such transfers must be made at no cost to the U.S. Government and with
> the concurrence of the WFP and the approval of the USAID or Diplomatic
> Post. Commodities transferred as described above shall not be replaced
> by the U.S. Government unless AID/W authorized such replacement in
> advance.
>
> \(j\) [Disposal of excessive stock of commodities]{.underline}. If
> commodities are on hand which cannot be utilized in accordance with
> the applicable WFP Project Agreement, the WFP shall promptly advise
> USAID or the Diplomatic Post of the quantities, location, and
> condition of such commodities, and, where possible shall propose an
> alternate use of the excess stocks. USAID or Diplomatic Post shall
> determine the most appropriate use of the excess stocks, and with
> prior AID/W concurrence, shall issue instructions for disposition.
> Transportation cost and other charges attributable to transferring
> commodities from one program to another within the country shall be
> the responsibility of the agencies involved.
>
> V. [Processing, Repackaging, and Labeling Commodities]{.underline}
>
> \(a\) [Commercial processing and repackaging]{.underline}. The WFP may
> arrange for processing commodities into different end products and for
> repackaging commodities prior to distribution. When commercial
> facilities are used for processing, packaging, or repackaging, the WFP
> shall enter into written agreements for such services which shall
> provide as a minimum that:
>
> \(1\) No part of the commodities delivered to the processing,
> packaging, or repackaging company shall be used to defray processing,
> packaging, repackaging, or other costs, except as provided in
> subparagraph (2) of this paragraph.
>
> \(2\) When the milling of grain is authorized in the cooperating
> country, the United States will not pay any part of the processing
> costs, directly or indirectly, except that the value of the offal may
> be used to offset such part of the processing costs as it may cover.
>
> \(3\) The party providing such services shall:
>
> \(i\) Fully account to the WFP for all commodities delivered to the
> processor\'s possession and shall maintain adequate records and submit
> periodic reports pertaining to the performance of the agreement;
>
> \(ii\) Be liable for the value of all commodities not accounted for;
>
> \(iii\) Return or dispose of the containers in which the commodity is
> received from the WFP according to instructions from the WFP;
>
> \(iv\) Plainly label cartons, sacks, or other containers containing
> the end product in accordance with paragraph (b) of this section.
>
> \(b\) [Labeling]{.underline}. If prior to distribution the WFP
> arranges for packaging or repackaging donated commodities, the
> containers in which the commodities are packed shall be plainly
> labeled with the AID emblem and in the language of the country inwhich
> the commodities are to be distributed, with the following information:
>
> \(1\) Name of commodity.
>
> \(2\) World Food Program.
>
> \(3\) Furnished by the people of the United States of America.
>
> \(4\) Not to be sold or exchanged (where applicable).
>
> In case this is not feasible or practicable (c) applies if approved in
> advance by the USAID or the Diplomatic Post.
>
> \(c\) [Where commodity containers are not used]{.underline}. When the
> usual practice in a country is not to enclose the end product in a
> container, the WFP shall, to the extent practicable, display banners,
> posters, or other media, similar to that prescribed in paragraph (b)
> of this section.
>
> VI\. [Arrangements for Entry and Handling in Recipient
> Country]{.underline}
>
> \(a\) [Costs at discharge ports]{.underline}. Except as otherwise
> agreed upon by AID/W and provided in the applicable shipping contract,
> the WFP shall be responsible for all costs (1) beyond the end of
> ship\'s tackle in the case of packaged cargo, (2) beyond the discharge
> end of discharge spout in the case of bulk cargo discharged
> mechanically, (3) accruing from the time discharging commences in the
> case of bulk cargo bagged in the ship\'s hold, or discharged in bulk
> by slings, (4) for distributing the commodity as provided in the WFP
> Project Agreement, the TA and this Supplement to end users and (5) for
> demurrage, detention, and overtime. The WFP shall also be responsible
> for wharfage, taxes, dues, and port charges assessed against the cargo
> whenever stated separately in the applicable tariff or shipping
> contract, and for lighterage (when not a custom of the port) and
> lightening costs when assessed as a charge separate from the freight
> rate.
>
> \(b\) [Duty, taxes and consular invoices]{.underline}. Commodities
> shall be admitted duty free and exempt from all taxes. Consular
> invoices shall not be required unless specific provision is made in
> the WFP Project Agreement and the TA. If required,
>
> they shall be issued without cost to the WFP or to the Government of
> the United States.
>
> \(c\) [Storage facilities and transportation in recipient
> countries]{.underline}. The WFP shall make all necessary arrangements
> for receiving the commodities and assume full responsibility for
> storage and maintenance of commodities from time of delivery at port
> of entry abroad and shall be responsible for the maintenance of
> commodities in such manner as to assure distribution of the
> commodities in good condition to recipient agency or eligible
> recipients.
>
> \(d\) [Inland transportation in intermediate countries]{.underline}.
> In the case of landlocked countries, transportation costs in the
> intermediate country to designated inland point of entry in the
> recipient country shall be arranged by the WFP which shall report all
> loss and damage in the intermediate country as provided in Section VII
> (b).
>
> VII\. [Disposition of Commodities Unfit for Authorized Use After
> Delivery to the WFP]{.underline}
>
> \(a\) If after arrival in a foreign country it appears that the
> commodity, or any part thereof, may be unfit for the use authorized in
> the WFP Project Agreement and the TA, the WFP shall immediately
> arrange for inspection of the commodity by a public health official or
> other competent authority. If no competent local authority is
> available, WFP and the USAID or Diplomatic Post may determine whether
> the commodities are unfit for human consumption, and if so may direct
> disposal in accordance with subparagraphs (1) through (4) of this
> paragraph. The WFP shall arrange for the recovery for authorized use
> of that part designated during the inspection as suitable for program
> use. If, after inspection, the commodity (or any part thereof) is
> determined to be unfit for authorized use, the WFP shall notify the
> USAID or the Diplomatic Post, the commodity determined to be unfit for
> authorized use, the WFP shall notify the USAID or the Diplomatic Post
> of the circumstances pertaining to the loss or damage as prescribed in
> paragraph VIII.(b) With the concurrence of USAID or the Diplomatic
> Post, the commodity determined to be unfit for authorized use shall be
> disposed of in the following order or priority:
>
> \(1\) By transfer to an approved WFP or bilateral Food for Peace
> Project for use as livestock feed. AID/W shall be advised promptly of
> any such transfer so that TAs from the United States to the livestock
> feeding program can be reduced by an equivalent amount.
>
> \(2\) Sale for the most appropriate use, i.e. animal feed, fertilizer,
> or industrial use, at the highest obtainable price. When the commodity
> is sold all U.S. Government markings shall be obliterated.
>
> Proceeds from such sales shall be deposited in a special account and
> utilized with the concurrence of WFP and the USAID or the Diplomatic
> Post to further the objectives of the project.
>
> \(3\) By donation to a governmental or charitable organization for use
> as animal feed or for other non-food use.
>
> \(4\) If the commodity is unfit for any use, or if disposal in
> accordance with subparagraph (1), (2), or (3) of this paragraph is not
> possible, the commodity shall be destroyed, under the observation of a
> representative of the WFP and USAID
>
> Diplomatic Post if practicable, in such manner as to prevent its use
> for any purpose.
>
> \(b\) Expenses incidental to the handling and disposition of the
> damaged commodity shall be paid by the recipient country or WFP.
> Actual expenses incurred in effecting any sale may be deducted from
> the sales proceeds. The WFP shall promptly furnish AID/W and USAID or
> the Diplomatic Post a written report of all circumstances relating to
> the loss and damage and shall include in this report, or a
> supplemental report, a certification by a public health official or
> other competent authority of the exact quantity of the damaged
> commodity disposed of because it was determined to be unfit for human
> consumption.
>
> VIII\. [Liability for Loss and Damage or Improper Distribution of
> Commodities]{.underline}
>
> \(a\) [Ocean carrier loss and damage, general average and
> salvage]{.underline}
>
> \(1\) [Outturn reports for claims against ocean carriers]{.underline}.
> The WFP shall obtain an outturn report immediately following each
> vessel\'s discharge. The report shall show the quantity and condition
> of the commodities delivered and the amount of shortage or damage, if
> any. Wherever possible, reports showing damage or short outturn must
> be certified by an independent cargo surveyor. The WFP shall obtain a
> certification by a public health official or similar competent
> authority of the condition of the commodity in any case where a
> damaged commodity appears to be unfit for its intended use and a
> certificate of disposition of any commodity determined to be unfit for
> its intended use.
>
> \(2\) [Claims against ocean carriers]{.underline}
>
> \(i\) WFP shall have the right to initiate, prosecute and collect for
> its own use all claims against ocean carriers for cargo loss and
> damage on shipments for the WFP and will not look to the U.S.
> Government for replacement under the pledge.
>
> \(ii\) In order that claims against ocean carriers may be filed
> promptly by WFP, USDA shall furnish to WFP:
>
> \(A\) Copy of Form CCC-512, Notice of Commodity Availability, stating
> the export value per pound, f.o.b. or f.a.s. vessel at the U.S. port
> of export, of the commodity delivered to WFP pursuant to the TA.
>
> \(B\) Copy of ocean bill of lading on the applicable shipment.
>
> \(C\) Copy of paid freight voucher for the applicable shipment.
>
> \(D\) Such other similar documents that may be required for pursuance
> of claims against ocean carriers.
>
> \(3\) [General average and salvage]{.underline}. WFP shall be
> responsible for settling and paying any general average and marine
> salvage claims and shall receive and retain any allowance in general
> average and any salvage proceeds.
>
> This amendment shall be effective as of May 1, 1972, and shall apply
> to Cargo Booking Confirmations (Form EMS-393) issued by USDA on and
> after May 1, 1972, on WFP shipment and Charter Party Agreements
> entered into by USDA on and after such date in connection with WFP
> shipments. The terms and conditions of the Supplement to TA signed by
> WFP and AID, on September 19, 1969, shall remain in full force and
> effect
>
> except as amended herein.
>
> IX\. [Records and Reporting Requirements of the WFP]{.underline}
>
> The WFP shall undertake to ensure that the commodities contributed by
> the USG are distributed and utilized in a manner consistent with the
> provisions set forth in the TA and this Supplement, that losses due to
> improper actions and/or handling within the recipient country are
> avoided, and that adequate records are developed for this purpose and
> maintained by WFP or recipient country. Upon its request, the USG
> shall be given access to and the right to examine WFP records. Should
> the USG find at any time that WFP reports to the CFA on this program
> are inadequate for U.S. purposes, the WFP shall undertake to provide
> the U.S. Government with such additional information as the U.S.
> Government may request relating to the handling and disposition of the
> commodities authorized. It is expected that the foregoing normally
> will satisfy U.S. review requirements. However, should special
> circumstances arise which appear to the U.S. Government to warrant
> additional review and/or audit of the program, the U.S. Government
> then may seek WFP\'s concurrence in the implementation of the required
> action by either WFP or U.S. Government personnel.
>
> X. [Waiver, Amendment, or Termination]{.underline}
>
> \(a\) AID may waive, withdraw, or amend, at any time, any or all of
> the provisions of this Supplement if such provision is not statutory
> and if AID determines it is in the best interest of the U.S.
> Government to do so.
>
> \(b\) All or any part of the assistance provided under the program,
> including commodities in transit, may be terminated by AID at its
> discretion if the WFP fails to comply with the provisions of the TA
> and this Supplement, or if it is determined by AID that the
> continuation of such assistance is no longer necessary or desirable.
> Under such circumstances title to commodities which have been
> transferred to the WFP shall, at the written request of AID/W, be
> retransferred to the U.S. Government by the WFP. Any excess
> commodities on hand at the time the program is terminated shall be
> disposed of in accordance with Section IV.(f)2.(j). If it is
> determined that any commodity to be supplied under the Food for Peace
> Program Agreement is no longer available for Food for Peace projects,
> such authorization shall terminate with respect to and commodities
> which, as of the date of such determination, have not been delivered
> f.o.b. or f.a.s. vessel.
>
> [19 September 1969]{.underline} [s/ Irwin R. Hedges]{.underline}
>
> Date Irwin R. Hedges
>
> Acting Assistant Administrator
>
> For War on Hunger
>
> (Signed by Irwin R. Hedges and Signature for the Administrator
>
> Francisco Aquino,
>
> as amended July 3, 1972)
>
> [/s/ Francisco Aquino]{.underline}
>
> For the World Food Program
>
> APPENDIX D
>
> DELEGATION OF AUTHORITY NO. 401
>
> TO: Associate Administrator for Finance and Administration Associate
> Administrator for Operations
>
> SUBJECT: Food Aid Functions
>
> Pursuant to my authority as Administrator, it is ordered to follows:
>
> A. Delegation. I hereby delegate
>
> 1\. to the Associate Administrator for Finance and Administration the
> functions and authorities in section 407(d) of the Agriculture Trade
> Development and Assistance Act of 1954, as amended (P.L. 480), with
> respect to the purchase of ocean transportation services and authority
> to sign, on behalf of AID, U.S. Government contracts under section
> 407(d) and grants and cooperative agreements under Title V of P.L.
> 480; and
>
> 2\. to the Associate Administrator for Operations all other food-aid
> functions, including the authority to sign grants and cooperative
> agreements under section 202(e) of P.L. 480.
>
> B. General Conditions. The General Provisions of Chapter 1 of Handbook
> 5 apply to this Delegation of Authority.
>
> C. Revocation. The Associate Administrators have the authority to
> modify or revoke, in a manner consistent with this delegation, any
> delegations of authority previously issued by the Administrator or
> other AID officers regarding food-aid functions.
>
> D. Effective Date. This Delegation of Authority is effective
> immediately.
>
> /s/ Ronald W. Roskens Administrator
>
> Dated: April 8, 1992
>
> DELEGATION OF AUTHORITY NO. 902
>
> TO: Assistant Administrators for Regional Geographic Bureaus Assistant
> Administrator for Food and Humanitarian Assistance
>
> SUBJECT: Food Aid Functions
>
> Pursuant to the authority conferred on me under Delegation of
> Authority No. 401, it is ordered as follows:
>
> A. Delegation. I hereby delegate
>
> 1\. to the Assistant Administrator for Food and Humanitarian
> Assistance all food-aid functions and authorities delegated by the
> Administrator to me, except as provided in paragraph 2;
>
> 2\. to the Assistant Administrators for the Regional Geographic
> Bureaus, in their respective area of responsibility and with clearance
> by the Assistant Administrator for Food and Humanitarian Assistance,
> the authority for the following actions with respect to Title III, of
> the Agriculture Trade Development and Assistance Act of 1954, as
> amended (P.L. 480):
>
> \(a\) authorization of the donation of agricultural commodities;
>
> \(b\) negotiation, execution and implementation of donation agreements
> in accordance with the terms of the authorization;
>
> \(c\) amendment of any authorization and of any donation agreement;
> and
>
> \(d\) findings, determinations and actions required under Title IV of
> P.L. 480 that relate to donations and agreements for specific
> countries and the terms and conditions thereof.
>
> B. Redelegation.
>
> 1\. The Assistant Administrator for Food and Humanitarian Assistance
> may redelegate (a) all functions and authorities to Deputy Assistant
> Administrators for that Bureau, (b) the functions and authorities in
> Title V to the Director of the Office of Private and Voluntary
> Cooperation, and (c) all other food-aid functions and authorities to
> the Director of the Office of Food for Peace who may redelegate
> further such authorities and functions as the Director deems
> appropriate.
>
> 2\. Assistant Administrators for Regional Geographic Bureaus may
> redelegate (a) all authority conferred on them to their Deputy
> Assistant Administrators, (b) the authority to negotiate, execute and
> implement agreements, including amendments, to the principal AID
> officer in the country where the donation is made, and (c) the
> authority to execute agreements, and amendments, to the principal
> United States diplomatic officer in the country where the donation is
> made. The authority to implement agreements may be redelegated in such
> manner as the principal AID officer deems appropriate, but other
> authorities may not be redelegated further.
>
> C. Monitoring. Except for donations through the World Food Program and
> other agencies of the United Nations, no food-aid activity may be
> conducted in a country without the clearance of an officer of the
> appropriate Regional Bureau and the principal AID officer in the
> country who then will be responsible for monitoring all food-aid
> activities in the country, unless other arrangements for monitoring
> are approved by the Assistant Administrator for Food and Humanitarian
> Assistance and the Assistant Administrator for the Regional Bureau or
> are approved by the Associate Administrator for Operations.
>
> D. General Provisions. Concurrent authority and the other General
> provisions of Chapter 1 of Handbook 5 apply, except to the extent
> modified herein.
>
> E. Other Delegations. Delegations of Authority No. 427, dated December
> 28, 1962, and 902, dated November 8, 1983, as amended, are hereby
> revoked.
>
> F. Effective Date. This Delegation of Authority is effective
> immediately.
>
> /s/ Scott M. Spangler Associate Administrator for Operations
>
> Dated: April 8, 1992
>
> APPENDIX F
>
> INSTRUCTIONS TO VOLUNTARY AGENCIES AND INTERGOVERNMENTAL ORGANIZATIONS
> CONCERNING THE FILING, PURSUIT, ADJUDICATION AND COLLECTION OF OCEAN
> TRANSPORTATION CLAIMS ARISING FROM SHIPMENT OF TITLE II, PUBLIC LAW
> 480 COMMODITIES FOOD FOR PROGRESS PROGRAM COMMODITIES, AND SECTION 416
> PROGRAM COMMODITIES
>
> HEADQUARTERS SECTION
>
> PART 1 GENERAL PROVISIONS
>
> 1\. PURPOSE AND COVERAGE
>
> To provide instructions to all voluntary agencies and
> intergovernmental organizations for the control, adjudication,
> collection, or other authorized disposition of ocean carrier cargo
> loss and/or damage claims involving Commodity Credit Corporation owned
> commodities transferred to agencies for various uses authorized by
> Title II and Title III, Agricultural Trade Development and Assistance
> Act of 1954, Public Law 480, as amended; Section 416 Program,
> Agricultural Act of 1949, as amended; and Food for Progress Program
> Agreements, Food for Progress Act of 1985, as amended.
>
> 2\. AUTHORITIES FOR ASSIGNED CLAIMS RESPONSIBILITIES
>
> A. [TITLE II AND TITLE III PROGRAMS]{.underline}
>
> Agricultural Trade Development and Assistance Act of 1954, as amended.
>
> TITLE II:
>
> Agency for International Development, Department of State Regulation
> 11, Transfer of Food Commodities for Use in Disaster Relief, Economic
> Development, and Other Assistance, as Amended.
>
> TITLE III:
>
> Currently governed by individual shipment agreements.
>
> B. [SECTION 416 PROGRAM]{.underline}
>
> Agricultural Act of 1949, as amended.
>
> Section 416(b) Regulations
>
> C. [FOOD FOR PROGRESS PROGRAM]{.underline}
>
> Food For Progress Act of 1985, as amended.
>
> 3\. DEFINITIONS, ABBREVIATED TERMS, NAMES, ETC., USED IN THIS
> INSTRUCTION
>
> A. [Administrative Allowance.]{.underline}
>
> Amount authorized to be retained from claim recoveries by voluntary
> agencies or intergovernmental organizations.
>
> B. [Agency for International Development, Department of
> State]{.underline} .
>
> AID, USAID, or AID/W, as applicable; Diplomatic Post in Countries
> where there is no USAID.
>
> C. [Applicable Regulations]{.underline} .
>
> AID Regulation 11, Section 416(b) Regulation.
>
> D. [Applicable Agreements]{.underline} .
>
> Individual shipment agreements relative to Title III, Section 416 and
> Food for Progress shipments.
>
> E. [Commodity Credit Corporations]{.underline} .
>
> CCC
>
> F. [Chief, Debt Management Division, Kansas City Financial Management
> Office]{.underline} .
>
> Chief, DMD NOTE: Chief, DMD is a Claims Official of CCC
>
> G. [Voluntary Agencies and Intergovernmental
> Organizations]{.underline} .
>
> Agency or Agencies.
>
> H. [Carriage of Goods by Sea Act]{.underline} .
>
> COGSA
>
> I. [Claim Value]{.underline} .
>
> CCC\'s monetary interest in the claim.
>
> J. [Commodities/Cargoes]{.underline} .
>
> Commodities shipped under any of the following relief programs:
>
> \(1\) Title II
>
> \(2\) Title III
>
> \(3\) Section 416
>
> \(4\) Food for Progress
>
> 4\. ADDRESS OF CHIEF, DMD
>
> Chief, Debt Management Division
>
> Kansas City Financial Management Office
>
> P.O. Box 419205 Kansas City, Missouri 64141-6208
>
> PART 2 INITIAL DISTRIBUTION TO CCC OF DOCUMENTATION
>
> BEFORE CLAIM IS FILED
>
> 5\. BILL OF LADING
>
> A. Send two copies to the Kansas City Commodity Office, Export
> Operations Division, PROMPTLY after vessel lifting of commodities.
>
> B. [Do not]{.underline} send additional copies to Chief, DMD.
>
> PART 3 DETERMINATION OF OCEAN CARRIER LIABILITY
>
> 6\. SUPPORTING DOCUMENTATION
>
> A. Obtain the necessary documentation from your overseas mission.
> Documentation requirements are enumerated in the Field (or Mission)
> Section of these Instructions.
>
> B. Promptly evaluate the documentation and determine if a loss
> occurred. If a loss has been sustained, determine if it is an ocean
> carrier (marine) loss or an inland loss, bearing in mind the burden of
> proof is on the [claimant]{.underline}. Under the provisions of COGSA,
> the ocean carrier is generally responsible only for those losses which
> occur while the cargo is in the custody and control of the vessel (or,
> in some cases, lighters or barges). Any losses occurring after the
> cargo leaves the vessel\'s control and custody (such as those
> occurring in Customs or Port Authority warehouses, in transit from
> quay to shed, etc.) should be treated as inland losses.
>
> 7\. COMPUTATION OF OCEAN CARRIER CLAIMS
>
> A. Use the delivered value of the commodity, computed as follows:
>
> 1\. Determine the FAS value of the shipment.
>
> 2\. Add the freight paid on the shipment.
>
> 3\. Divide such sum by the number of net pounds in or kilograms in the
> shipment to arrive at a price per pound or kilogram delivered value.
>
> 4\. Multiply the price per pound or kilogram delivered value by the
> number of pounds or kilogram lost or damaged.
>
> B. Include, at agency\'s option and as a separate item, special
> charges authorized by applicable regulations.
>
> C. Include, as a separate item, any costs incurred by the agency or
> USAID to reconstitute cargo damaged by the ocean carrier.
>
> 1\. Applicable regulations authorize direct reimbursement to agency by
> CCC of costs incurred for repackaging. (See Paragraph 10.)
>
> 2\. When ocean carrier is determined by agency to have caused damage
> which requires such costs, these costs should be included in the claim
> filed against the ocean carrier, unless collected directly from the
> carrier or its agents.
>
> D. If commodities are damaged and determined by competent authority to
> be unfit
>
> for human consumption and the commodities are sold or otherwise
> disposed of pursuant to the Regulations, credit the claim by the U.S.
> dollar equivalent of the NET proceeds of the sale. If the unfit
> commodity is not sold but is donated for some useful purpose, allow
> the carrier a credit of \$.02 per pound for the amount donated to the
> extent the quantity is included in the claim.
>
> E. [Do not]{.underline} allow salvage credit for unfit commodities
> which are disposed of by destruction.
>
> F. [Do not]{.underline} allow salvage allowances other than those
> shown above without authorization from Chief, DMD.
>
> G. Excess-landed cargo, if utilized in the program, may be applied
> against shortlanded cargo of the same commodity only. (Same voyage of
> same vessel).
>
> 8\. FILING CLAIMS AGAINST OCEAN CARRIER
>
> A. File claims PROMPTLY in the name of the agency in every instance
> when a marine loss has been sustained EXCEPT:
>
> 1\. When general average has been declared (See Part 8).
>
> 2\. When the agency chooses not to file for losses and damages valued
> at \$100 or less or in any case when the loss and/or damage is between
> \$100 and \$300 and it is determined that the cost of filing and
> collecting the claim will exceed the amount of the claim. (See
> applicable regulation or agreement).
>
> B. File claims in writing setting forth the pertinent facts in such
> manner and in sufficient detail to clearly show a reasonable basis for
> the conclusions reached.
>
> C. Support the claim with the required documentation including, but
> not limited to:
>
> 1\. Ocean Bill of Lading.
>
> 2\. Survey Report.
>
> 3\. Carrier\'s Outturn Report, if available.
>
> 4\. Shortlanding Certificates, if applicable.
>
> 5\. Unfitness Certificate or Chemical Analysis Report, if applicable.
>
> 6\. Disposition Certificate, if applicable.
>
> 7\. Notice of Protest to carrier or its agents. (See Exhibit 5).
>
> 8\. Tally sheets, if applicable.
>
> D. Preferably, file ONE claim for each voyage of the same vessel to
> the same ocean port of discharge, regardless of the kinds of program
> commodities shipped, regardless of the number of different bills of
> lading issued by the carrier, and regardless of the country of
> distribution.
>
> E. Promptly transmit a copy of the Claim with supporting documentation
>
> (and all subsequent amendments) to the Chief, DMD, at time of filing
> with carrier. A copy of the survey invoice or certified statement that
> payment of the survey fees was made by your agency and documents
> supporting the claim (or any amendments) should accompany the copy of
> the claim. Also forward any narrative analysis received from your
> overseas missions which has a bearing on the particular claim or which
> contains pertinent information about port conditions. Show the name of
> the vessel and CCC contract number on the copy of the claim
> transmitted. Also, notify Chief, DMD, when no claim is to be filed.
> (See Subparagraph 8 A 2).
>
> F. If the original Survey Report, Public Health Certificate,
> Certificate of Disposition and the Shortlanding Certificate cannot be
> obtained, submit a legible signed copy of these documents with a
> statement that the originals could not be obtained.
>
> 9\. REIMBURSEMENT FOR SURVEY FEES PAID
>
> A. All survey fees for discharge surveys on voluntary agency shipments
> will be reimbursed to the agency by CCC.
>
> B. CCC will also reimburse agencies for the cost of delivery surveys
> which the agency determines necessary to control cargo and/or prevent
> losses in the port area.
>
> C. Eligible reimbursement for survey fees will be made by CCC upon
> receipt of:
>
> 1\. Claim statement [or]{.underline} advice that no claim will be
> filed, and the dollar loss, if any; and
>
> 2\. Original or signed duplicate copy of the survey report and
> invoices or certified statements (See Exhibit 1), stating the amount
> of the survey fee which was paid by the agency.
>
> D. CCC will not reimburse agencies for the cost of only a delivery
> survey, in the absence of a discharge survey, or for any other survey
> not taken contemporaneously with the discharge of the vessel, or
> assessment of quantity and condition of goods at manifested
> destination, unless such deviations from the documentation
> requirements relative to applicable regulations or agreements is
> justified to the satisfaction of CCC.
>
> 10\. REIMBURSEMENT FOR COSTS OF REPACKAGING OF CARGOES IN DESTINATION
> COUNTRY REQUIRED BECAUSE OF DAMAGE CAUSED BY OCEAN CARRIER
>
> A. See applicable regulation and agreements (Title II, Title III,
> Section 416, Food for Progress).
>
> B. If cargo is damaged while in the control and custody of ocean
> carrier and repackaging costs must be incurred to ensure that the
> commodity remains wholesome until it reaches the destination point,
> CCC will reimburse the agencies for such costs upon receipt of proper
> documentation.
>
> 1\. If costs are \$500 or less, forward invoices or other documents to
> support such costs.
>
> 2\. If costs are more than \$500, also forward written authorization
> (or waiver) by USAID or Diplomatic Post authorizing payment of costs.
> Such authorization must be obtained prior to incurring costs in excess
> of \$500.
>
> C. Include the cost of repackaging cargoes as a separate item in
> claims filed against the ocean carrier. (See Paragraph 7 C).
>
> D. Documents set forth in subparagraphs B1 and B2 above should be
> forwarded to Chief, DMD, at the time claim documents are submitted or
> as soon thereafter as possible. If expenses were paid in a currency
> other than U.S. dollars, include information as to the exchange rate
> at the time the expenses were incurred.
>
> 11\. REIMBURSEMENT FOR COSTS OF REPACKAGING CARGOES IN DESTINATION
> COUNTRY BECAUSE OF DAMAGE CAUSED AFTER DISCHARGE OF THE CARGO FROM THE
> OCEAN CARRIER
>
> A. If cargo is damaged after discharge and such damage is not the
> responsibility of the ocean carrier, and it is necessary to repackage
> the cargo to insure its arrival at the destination point in wholesome
> condition, CCC, Washington, will reimburse agencies for such costs
> upon receipt of proper documentation.
>
> 1\. If costs are \$500 or less, forward invoices or other documents to
> support costs.
>
> 2\. If costs are more than \$500, also forward written authorization
> by USAID or Diplomatic Post authorizing payment of costs. Such
> authorization must be obtained prior to incurring costs in excess of
> \$500.
>
> B. Submit documents listed in Subparagraph B1 and B2 above to:
>
> Director, Financial Management Division U.S. Department of
> Agriculture, ASCS P.O. Box 2415 Washington, D.C. 20250
>
> Paragraphs 12 - 14 (RESERVED)
>
> PART 4 COLLECTION OF CLAIMS
>
> 15\. GENERAL COLLECTIONS RESPONSIBILITY OF AGENCY
>
> A. Agencies must actively and aggressively pursue collection of marine
> claims, using every reasonable effort short of litigation. Such active
> and aggressive pursuit of claims not only includes timely follow-ups
> with the ocean carrier, or its agents, but also requires a concerted
> effort to obtain all the facts, and clarify discrepancies.
>
> B. Agencies may be held liable for losses sustained by CCC as provided
> in applicable regulations if a claim becomes time-barred or sufficient
> time is not allowed for CCC to initiate appropriate action for filing
> of legal action, or if agency fails to pursue claims or fails to
> provide for the right of CCC to assert such claims.
>
> 16\. CONTROL OF CLAIMS
>
> Keep claims under follow-up control.
>
> A. [Expiration of Time Within Which to File Suit]{.underline}.
>
> 1\. If collection is not received within eight months after discharge
> of the commodity at foreign port of destination, obtain at least a six
> month VALID extension of suite time from the carrier in the format
> prescribed in the Notice to the Trade dated May 15, 1990. (See Exhibit
> 4).
>
> 2\. Agency shall obtain extensions of suit time at such intervals as
> will assure that CCC has, at all times, at least three months within
> which to file suit against the carrier. CCC will not police the
> obtaining of such time extensions.
>
> B. [Pursuit of Claims]{.underline}
>
> 1\. Follow-up 60-90 days after initial letter of demand.
>
> 2\. Follow-up every 45-60 days thereafter unless facts warrant
> otherwise.
>
> 17\. CARRIER IGNORES CLAIM OR DISPUTES CLAIM IN WHOLE OR IN PART
>
> A. If agency determines upon review that the claim is valid in the
> full amount as filed, reassert the claim. It is not necessary to
> consult with CCC.
>
> B. If agency determines that the claim should be reduced or
> redetermined to zero in its entirety on the basis of facts or
> information not considered when the initial determination of liability
> was made by the agency, it is not necessary to consult with CCC:
>
> 1\. Reassert claim in the reduced amount. (If reduced to carrier
> accordingly.)
>
> zero, advise the
>
> 2\. Request carrier to acknowledge the claim and to promptly submit
> its check for the reduced amount.
>
> 3\. Promptly notify Chief, DMD, of the action taken in 1 and 2 above.
>
> C. If carrier ignores claim or otherwise refuses to pay and all
> reasonable efforts have been made to obtain all available
> documentation and facts and to effect collection, handle as provided
> in Part 7. EXCEPTION: On claims valued at \$600 or less, agencies may
> terminate collection activity without approval of CCC. However, Chief,
> DMD, should be notified when collection activity on a claim has been
> terminated.
>
> D. Agency shall resolve questions of fact with the carrier to the
> extent possible. If agency is unable to resolve factual disputes,
> attempt to obtain a compromise offer. Submit all compromise offers on
> claims in excess of \$5,000 to Chief, DMD, along with agency
> recommendations as to acceptability as provided in Part 6. When such
> compromise offers are forwarded, also ensure that all correspondence
> and additional documentation which CCC may not have is also forwarded.
>
> 18\. REQUEST FOR STATUS
>
> A. CCC may, from time to time, request the status of individual
> claims. Upon receipt of such a request, the agency shall advise CCC of
> the progress of their settlement negotiations, as well as any monetary
> changes in the claim which have arisen from additional information or
> documentation which may have been received.
>
> PART 5 DISPOSITION OF COLLECTIONS
>
> 19\. COLLECTIONS RECEIVED BY AGENCY
>
> A. [In U.S. Dollars]{.underline}.
>
> Remit PROMPTLY to Chief, DMD, the full amount received less deductions
> authorized by applicable regulations. Transmit the check with an
> explanatory letter identifying claim(s) and deduction(s).
>
> B. [In Foreign Currency in Which Freight is Paid]{.underline}.
>
> 1\. Deposit with the U.S. Disbursing Officer, American Embassy, as
> provided in paragraph 211.9(g) of the Regulations.
>
> 2\. CCC will, upon receipt of advice of deposit, remit to the agency
> any amount due the agency.
>
> 20\. [ADMINISTRATIVE ALLOWANCE]{.underline}
>
> A. As of May 7, 1992, under applicable regulations, an administrative
> allowance of \$200 per manifested port may be retained by the agency
> from the proceeds of a claim. For the purpose of determining
> administrative allowances, a claim is defined as those losses
> occurring on the same voyage of the same vessel to the same port.
>
> B. If separate claims are filed by agencies for losses from the same
> voyage of the same vessel to the same port, only one administrative
> allowance is allowed.
>
> C. If claim proceeds are less than \$200, retain full amount of claim
> proceeds.
>
> 21\. COLLECTION ALLOWANCE
>
> A. For claims collected after May 7, 1992, retain from CCC\'s interest
> in the collection 10 percent of the difference between the
> administrative allowance of \$200 and the total amount collected on a
> claim, up to a maximum of \$500, or
>
> B. Retain the actual administrative expenses incurred to collect the
> claim.
>
> 1\. Authorization must be requested from Chief, DMD, and approval must
> be obtained prior to retention of actual expenses.
>
> 2\. Do not delay transmittal of claim recovery to CCC pending approval
> by CCC of actual administrative expenses.
>
> 3\. Upon approval of amounts due an agency for actual expenses, CCC
> will issue a check to the agency.
>
> 22\. SPECIAL CHARGES
>
> A. Applicable regulations provide that agencies may include charges
> such as insurance, packing, handling, etc., as a separate item when
> claims are filed.
>
> B. These special charges [shall not]{.underline} include expenses
> incurred for repackaging or reconstitution of damaged cargo in the
> destination country. (See Paragraph 23.)
>
> C. Special charges included in a claim and paid by the liable party
> may be retained by agency.
>
> D. If the claim is compromised, retain an amount representing the
> percentage of the special charges as the compromised amount is to the
> full amount of the claim. EXCEPTION: If the carrier specifically
> refuses to pay such special charges or the claim is compromised by the
> amount of such charges, [NO]{.underline} portion of such charges may
> be retained by the agency.
>
> 23\. EXPENSES INCURRED IN DESTINATION COUNTRY FOR REPACKAGING AND/OR
> RECONSTITUTION
>
> A. Reconstitution expenses incurred which have not been properly
> supported to allow for direct reimbursement by CCC are expenses to the
> agency. If these expenses are included in a claim against the ocean
> carrier and are included in the claim collection, a percentage of
> these expenses may be retained by the agency to the same extent as the
> final collection amount is to the final claim amount. For purposes of
> determining the amount to be retained, treat reconstitution expenses
> as a Special Charge (See paragraphs 22 B, C, and D and Column E of
> Exhibit 2).
>
> B. Reconstitution expenses incurred which have not been properly
> documented, are eligible for 100 percent reimbursement to the agency
> by CCC. See paragraph 10. If these expenses have been properly
> supported and if these expenses have been reimbursed to the agency by
> CCC, these costs are an asset of CCC. If so, the agency may not retain
> any amounts collected for such costs (except 10 percent collection
> allowance) since total reimbursement by CCC will have been previously
> made. Thus for the purpose of determining amounts to be retained by
> the agency, do not include these previously reimbursed reconstitution
> costs in either columns of E or F of Exhibit 2.
>
> C. If a claim includes reconstitution expenses and documentation has
> been forwarded to CCC requesting reimbursement and, prior to the
> actual receipt of the reimbursement from CCC, the claim is paid by the
> carrier:
>
> 1\. Compute collection allowances as shown in B above, and
>
> 2\. Advise CCC of above action again requesting reimbursement of the
> reconstitution expenses.
>
> 24\. COLLECTIONS RECEIVED BY CCC ON CLAIMS ASSIGNED TO CCC
>
> A. Will be deposited by CCC and amounts owing the agency for allowable
> deductions will be remitted by CCC to the agency.
>
> NOTE:
>
> CCC will endeavor to collect the full amount of the claim including
> the handling and miscellaneous expenses claimed by the agency.
> However, if the carrier refuses to pay these additional charges and
> the agency is unable to support the charges to the satisfaction of the
> carrier or, in the case of litigation, to the satisfaction of the
> court, these unpaid charges will not be remitted to the agency.
>
> B. See Subparagraph 37 B concerning the payment of 10 percent
> collection allowance.
>
> C. CCC reserves the right to deny payment of all allowances in cases
> where CCC determines that the documentation requirements of the
> applicable regulations have not been fulfilled, and the failure to
> provide such documentation has not been justified to the satisfaction
> of CCC.
>
> 25 - 29 (RESERVED)
>
> PART 6 REFERRAL OF CLAIM TO CCC
>
> CLAIM RIGHTS NOT ASSIGNED
>
> 30\. REFERRED FOR ADVICE ON FURTHER HANDLING
>
> A. Although the agency is expected to resolve questions of fact with
> the carrier to the extent possible, it is recognized that there will
> be instances when the agency will be in doubt as to the course of
> action to take in a particular case.
>
> B. Referrals should set forth a complete description of the claim, the
> problem involved, the carrier\'s position in the matter, and the
> agency\'s comments and recommendations. Pertinent documents which CCC
> may not have should also be forwarded.
>
> 31\. REFERRED FOR CONSIDERATION OF COMPROMISE OFFER
>
> A. Agency should keep the following factors in mind in negotiating
> compromise settlements with carriers:
>
> 1\. [Collection Policy of CCC]{.underline}. In general, to collect
> claims in full through administrative action.
>
> 2\. [Authority to Compromise Claims]{.underline}. Limited to the
> following:
>
> a\. Debtor\'s inability to pay.
>
> b\. Real doubt as to the Government\'s ability to prove its claim in
> court for the full amount because of the legal issues involved.
>
> c\. A [bona fide]{.underline} dispute as to the facts.
>
> B. Request carrier to support any compromise offer with documentary
> evidence to support its contention that it is not liable for the full
> amount of the claim.
>
> C. Submit applicable correspondence and documentation and agency\'s
> recommendation as to acceptability of a compromise offer on ALL
> referrals to CCC.
>
> D. Do not refer a compromise offer to CCC if the claim value is
> \$5,000 or less except in unusual or unique situations. Agency has
> authority to settle such claims without obtaining the approval of CCC.
> However, CCC should be promptly notified when such a compromise offer
> is accepted.
>
> 32\. WHERE TO REFER
>
> Chief, DMD
>
> 33\. RESPONSIBILITY OF AGENCY AFTER REFERRAL OF CLAIM TO CCC
>
> A. Agency has the overall responsibility to collect a claim until such
> time as its claims rights are assigned to CCC.
>
> B. Agency shall take the necessary action to ensure that the claim
> does not become time-barred during the period in which CCC has a claim
> under consideration.
>
> 34 - 35 (RESERVED)
>
> PART 7 ASSIGNMENT OF CLAIMS RIGHTS TO CCC
>
> 36\. WHEN TO ASSIGN
>
> A. Assign after agency has exhausted all reasonable efforts short of
> litigation to effect collection. This should include efforts to
> compromise claims where compromise settlements are warranted.
>
> B. Assign if collection has not been effected within TWENTY-FOUR (24)
> MONTHS following the date the claim was filed. EXCEPTIONS:
>
> 1\. No useful purpose would be served by deferring referral until
> twenty-four months have elapsed.
>
> 2\. Twenty-four months have elapsed and settlement is expected to be
> completed within the immediate future.
>
> 37\. WHAT TO REFER
>
> A. Assignment of agency\'s claims rights to CCC properly completed in
> the format shown in Exhibit 3.
>
> B. Assignment of agency\'s file. [NOTE]{.underline}: CCC will review
> this file upon receipt of an assignment of claim rights to determine
> if the file contains evidence that the claim was actively and
> aggressively pursued by the agency. This review and the documentation
> in the file shall be the basis on which a determination is made by CCC
> whether or not the agency shall receive the additional 10 percent
> collection allowance upon collection by CCC.
>
> 38\. WHERE TO REFER
>
> Chief, DMD.
>
> 39\. RESPONSIBILITY OF AGENCY AFTER CLAIMS RIGHTS ASSIGNED TO CCC
>
> A. Do not take any further action on the claim unless requested to do
> so by CCC.
>
> B. If the carrier incorrectly submits funds to agency after rights
> have been assigned, agency should **NOT** deposit such collections. In
> such cases, notify Chief, DMD, and take action in
>
> accordance with his/her instructions.
>
> 40\. (RESERVED)
>
> PART 8 GENERAL AVERAGE
>
> 41\. CCC RESPONSIBILITY
>
> A. CCC is responsible for general average contributions on all
> commodities shipped by agencies.
>
> B. CCC is responsible for filing and pursuit of cargo loss and/or
> damage claims in all cases when general average has been declared.
>
> 42\. AGENCY RESPONSIBILITY
>
> When general average has been declared, the agency\'s responsibility
> is limited to **PROMPTLY** transmitting the following documents to
> Chief, DMD:
>
> A. Copy(s) of ocean bill(s) of lading, along with copy(s) of the
> booking contract(s). If there is no written booking agreement, provide
> CCC with advice as to whether freight was prepaid or collect.
>
> B. Original survey report and originals of all documentation
> pertaining to any loss or damage. If originals cannot be obtained,
> send legible, signed copies with a statement that originals cannot be
> obtained. Do not delay transmittal of copies to CCC pending receipt of
> original documents.
>
> C. Assignment of agency\'s claims rights to CCC properly completed in
> the format shown in Exhibit 3.
>
> 43 - 44 (RESERVED)
>
> PART 9 AGENCY RESPONSIBILITY FOR OBTAINING
>
> DOCUMENTATION AT THE DISCHARGE PORT
>
> 45\. GENERAL
>
> The most important facet in a successful claims program is the
> timeliness, clarity and adequacy of the documentation upon which the
> claim is based. In properly documenting a marine claim, it is
> imperative that proof be obtained which shows the quality and quantity
> of cargo at the time the carrier\'s liability ends normally at the
> time of discharge (ex-ship\'s tackle). It is also
>
> equally important that agencies promptly mitigate damages and provide
> documentation, taken on a timely basis, which supports shortlandings,
> unfitness, remaining contents in reconstituted bags, amounts of cargo
> donated for animal feed or sold for salvage, etc. In short, the
> success or failure of efforts by agencies and/or CCC to pursue claims
> from a position of strength depends upon the efforts and actions of
> agency personnel at ports of discharge.
>
> 46\. SUGGESTED HEADQUARTERS ACTION
>
> A. Carefully read and understand the documentation requirements set
> forth in the applicable regulations or shipment agreements and in the
> Field (or Mission) Section of these Instructions.
>
> B. Transmit the Field (or Mission) Section of these Instructions to
> all agency overseas posts utilizing cargoes under any of the subject
> four relief programs (Title II and Title III, Public Law 480; Section
> 416; and Food for Progress). NOTE: The Instructions may be
> supplemented and/or elaborated upon by agency headquarters.
>
> C. Ensure that overseas posts understand the requirements of
> regulations and instructions.
>
> D. Review documentation submitted from overseas posts for compliance
> with instructions.
>
> E. When applicable, advise overseas posts of inadequacies in
> documentation submitted by them and reiterate necessity for timely
> detailed documentation.
>
> F. Require overseas posts to furnish complete narrative analyses in
> situations where proper documentation cannot be obtained.
>
> G. Advise Chief, DMD, of situations which prohibit overseas posts from
> compliance with applicable regulations and/or instructions.
>
> H. Request the assistance of Chief, DMD, in any instance where the
> proper documentation of marine losses appears to warrant such action.
>
> I. Ensure that correspondence from Chief, DMD, which requests
> clarification of documents or which notes inadequacies in
> documentation is promptly forwarded to overseas posts, and that
> overseas posts take prompt and affirmative action.
>
> 47 - 50 (RESERVED)
>
> APPENDIX G
>
> INSTRUCTIONS TO ALL VOLUNTARY AGENCIES AND INTERGOVERNMENTAL
> ORGANIZATIONS CONCERNING THE DOCUMENTATION REQUIREMENTS OF SECTION
> 416(b) REGULATION, AID REGULATION 11, AND APPLICABLE PROGRAM
> AGREEMENTS AS THEY APPLY TO THE DISCHARGE OF TITLE II AND III, PUBLIC
> LAW 480 COMMODITIES, SECTION 416 PROGRAM COMMODITIES AND FOOD FOR
> PROGRESS PROGRAM COMMODITIES
>
> FIELD (OR MISSION) SECTION
>
> PART I GENERAL PROVISIONS
>
> 1\. PURPOSE AND COVERAGE
>
> To provide instructions and to supplement existing procedures
> concerning the documentation requirements of AID Regulation 11 and
> Section 416(B) Regulation as it applies to the discharge and delivery
> of Title II, Public Law 480 commodities, Section 416 Program
> commodities, and Title III commodities as governed by individual
> program agreements, and Food for Progress Program commodities. In
> short, these instructions provide valuable information regarding the
> type of documentation necessary to pursue marine claims from a
> position of strength.
>
> 2\. AUTHORITIES FOR ASSIGNED CLAIMS RESPONSIBILITIES
>
> A. Agricultural Trade Development and Assistance Act of 1954, as
> amended.
>
> B. Agency for International Development, Department of State
> Regulation 11, Transfer of Food Commodities for Use in Disaster
> Relief, Economic Development, and Other Assistance, as amended.
>
> C. Agricultural Act of 1949, as amended. D. Section 416(b) Regulation.
> E. Food for Progress Act of 1985, as amended.
>
> 3\. DEFINITIONS, ABBREVIATED TERMS, NAMES, ETC., USED IN THIS
> INSTRUCTION
>
> A. Agency for International Development, Department of State.
>
> AID, USAID, or AID/W, as applicable. Diplomatic Post in countries when
> there is no USAID.
>
> B. AID Regulation 11.
>
> The federal regulations which are printed in the Federal Register and
> have the effect of law. These regulations are made a part of these
> Instructions, most references to the regulations will be to Paragraph
> 211.9(c) which sets forth the requirements for documenting ocean
> carrier cargo losses and damages.
>
> C. Commodities/Cargoes.
>
> Commodities shipped under any of the following relief programs:
>
> \(1\) Title II
>
> \(2\) Title III
>
> \(3\) Section 416
>
> \(4\) Food for Progress
>
> D. Marine Loss
>
> A loss of commodities which occurs while the cargo is in the custody
> and control of the ocean carrier or its servants or agents. Losses
> assessed against the ocean carrier NORMALLY must be noted upon
> discharge, and elaborated upon when cargo can be reconstituted.
>
> E. Inland or Interior Loss
>
> A loss of commodities which occurs after the cargo leaves the custody
> and control of the ocean carrier.
>
> F. Carriage of Goods by Sea Act.
>
> COGSA. Statutory law which covers all ocean carrier shipments of
> commodities from United States ports.
>
> G. Commodity Credit Corporation
>
> CCC\.
>
> H. Overseas Offices or Missions of Voluntary Agencies and
> Intergovernmental Organizations.
>
> Agencies.
>
> Part 2 SURVEY AND SURVEY REPORTS
>
> 4\. SURVEY AND SURVEY REPORTS
>
> A. As used in the Regulations and these Instructions, a survey is an
> examination or inspection of Title II, Public Law 480 cargo made by an
> independent expert to determine the quality and quantity of
> commodities at the time of examination.
>
> B. As used in the regulations and these Instructions, a report is the
> written evaluation, or report of the examination of cargo which
> factually states conditions at the time of examination, and accurately
> and independently states the quality and quantity of cargoes at the
> time of examination.
>
> 5\. PURPOSE
>
> Survey Reports document the quality and quantity of cargo to fix
> responsibility for losses occurring while cargo is in the custody and
> control of the vessel so that claims for such losses may be pursued
> from a position of strength and knowledge.
>
> 6\. AUTHORITY AND RESPONSIBILITY TO OBTAIN
>
> A. Agencies are given the authority under applicable regulations to
> engage the services of an independent cargo surveyor to document the
> quality and quantity of cargo discharged from the vessel.
>
> B. Agencies are required under applicable regulations to engage the
> services of an independent cargo surveyor and to obtain discharge
> survey reports on all shipments of applicable cargo unless:
>
> 1\. USAID or the Diplomatic Post determines, in writing, that such
> surveys are not feasible in the specific port area, or
>
> 2\. CCC has made other provisions for such examinations and reports.
> NOTE: If CCC makes such arrangements, USAID and agencies have or will
> be notified of such arrangements in writing.
>
> C. In addition to (but not as a substitute for) a discharge survey,
> agencies are given the option to engage an independent cargo surveyor
> to supervise clearance and delivery of cargo and to issue survey
> reports thereon.
>
> 7\. COSTS OF SURVEYS
>
> A. Agencies should determine the costs to be charged by surveyors in
> advance of their employment. Agencies should determine if such fees
> are equitable for such services in the particular port area.
>
> B. Upon receipt of an invoice from the surveyor, agencies should
> determine that the report furnished is acceptable for the purpose
> intended and, if so, pay the bill and so advise agency headquarters of
> the amount of the survey fee paid.
>
> C. CCC will reimburse agency headquarters for the cost of discharge
> surveys.
>
> D. CCC will also reimburse agency headquarters for the cost of a
> delivery survey which the agency determines is necessary to control
> cargo and/or to prevent losses in the port area.
>
> E. CCC will not reimburse agency headquarters for the cost of only a
> delivery survey, in the absence of a discharge survey, or for any
> other survey not taken contemporaneously with the discharge of the
> vessel or assessment of quantity and condition of goods at the
> manifested destination, unless such deviation from documentation
> requirements under applicable regulations and/or agreements is
> justified of CCC.
>
> F. In the case of cargoes moving into landlocked countries, agencies
> shall arrange for an independent survey at the point of entry into the
> country. CCC will reimburse agency headquarters for the cost of this
> survey PROVIDED that a timely discharge survey at the ocean port was
> prepared and forwarded.
>
> 8\. APPLICATION FOR SURVEY
>
> A. Agencies should notify surveyors in advance of vessel arrival and
> instruct surveyors to survey a specific quantity of cargo for the
> account of the agency. The surveyor should understand that if cargo in
> excess of the bill of lading quantity is discharged, such cargo should
> also be surveyed.
>
> B. Such notification should be, if at all possible, in writing.
>
> 9\. TIME AND PLACE OF SURVEY
>
> A. In order to fix responsibility for losses occurring while in the
> custody and control of the vessel (its agents or servants), it
> behooves the surveyor to examine cargo immediately before (if
> possible), during, and immediately after cargo is discharged from the
> vessel.
>
> B. COGSA states that the ocean carrier\'s liability ends
> \"\...ex-ship\'s tackle\...\"; it is therefore imperative that the
> quantity and condition of cargo be evaluated \"\...ex-ship\'s
> tackle\...\".
>
> C. The survey should continue through the time of reconstitution of
> damaged commodity, if any, to ensure that specific quantities lost
> from slack and torn containers may be properly and accurately
> recorded.
>
> 10\. FORMAT OF DISCHARGE SURVEY REPORTS
>
> A. The format of the surveyor\'s report is relatively unimportant as
> long as facts, figures and dates are shown, and are shown in a logical
> presentation.
>
> B. The surveyor\'s report should correspond in length to the severity
> of losses. For instance, if the surveyor observed the discharge of a
> shipment and no losses were noted, the surveyor\'s report would be
> quite short. On the other hand, if considerable losses and damages are
> noted, the surveyor\'s report should elaborate in full detail.
>
> 11\. CONTENT OF SURVEY REPORTS
>
> A. Data Regarding the Shipment
>
> 1\. Name of the Vessel,
>
> 2\. Manifested Quantity,
>
> 3\. Name of Commodity,
>
> 4\. Stowage Location,
>
> 5\. Port of Discharge.
>
> B. Dates, Times and Places of:
>
> 1\. Vessel Arrival,
>
> 2\. Vessel Commencing Discharge,
>
> 3\. Request by Agency for Survey,
>
> 4\. Surveyor Viewing Cargo,
>
> 5\. Cargo Reviewed By Customs,
>
> 6\. Cargo Delivered to Consignee,
>
> 7\. Reconstitution of Damaged Commodity.
>
> C. Amount of Cargo
>
> 1\. Discharged from the Vessel in Sound Condition (bags, cartons,
> etc.),
>
> 2\. Discharged from the Vessel in Torn and Slack (T&S) condition
> (bags, cartons, etc.),
>
> 3\. Estimated quantity (pounds or kilograms) in T&S bags,
>
> 4\. Discharged from the Vessel in Damaged Condition (bags, cartons
> etc.),
>
> 5\. Not Discharged from the Vessel (bags, cartons etc.),
>
> 6\. Remaining in T&S bags after reconstitution,
>
> 7\. Slack from T&S bags after the reconstitution,
>
> 8\. Determined Unfit for Human Consumption (bags, cartons, pounds,
> etc.),
>
> 9\. Destroyed or Donated/Sold for Animal Feed.
>
> D. Narrative Analysis of Who Did What When.
>
> E. Narrative Analysis of How, When and Where Losses Occurred.
> Surveyor\'s opinions are solicited; however, they should be clearly
> noted as such. For example, if the surveyor notes 119 bags of cargo
> wet at discharge, the surveyor\'s report should contain information
> similar to the following:
>
> 1\. Upon discharge of corn soy blend from Hatch No. 4 on November 16,
> 1991, we noted 119 bags (as per attached tally) discharged wet. These
> bags were segregated and samples gave a positive saline reaction. No
> explanation was given by vessel personnel or is advanced by surveyors
> as to how bags became wet. Commodity was analyzed by the Health
> Authorities on November 18, 1991, and declared unfit for human
> consumption. Unfitness Certificate No. 123456 is attached to this
> report. The remaining contents of 119 bags weighing 860 pounds were
> fit for animal consumption and donated to the XYZ pig breeding farm,
> or
>
> 2\. Upon discharge of bags of sorghum grits from Hatch No. 4 on
> November 16, 1991, 119 bags were discharged wet, torn and slack. These
> bags were segregated and tests gave a negative saline reaction. Vessel
> personnel advised that the bags could have been loaded wet as heavy
> showers occurred at the loading port of Corpus Christi. In our opinion
> the bags became wet because of inadequate dunnage to protect the
> cargo. Bags were lying on the hatch floor and what little dunnage was
> available was green and oozing. A representative sample of damaged
> cargo was drawn by surveyors, in the presence of ship\'s agents, on
> November 16, 1991, and forwarded to independent chemists, Jones &
> Jones, for analysis. Their report has yet to be received.
>
> F. Comments and Analysis of:
>
> 1\. Quality of Stevedore Labor,
>
> 2\. Quality of Discharging Techniques,
>
> 3\. Acceptability of Dock and Storage Area for Foodstuffs,
>
> 4\. Quality of Stowage On Board Vessel.
>
> 5\. Discharge in Accordance with the Customs of the Port/Country.
>
> G. Stroke Tallies substantiating quantity shown in C 5.
>
> H. List of Persons who witnessed vessel discharge and/or who can
> testify as to the factual situation when the vessel\'s liability
> ended.
>
> 12\. AGENCY COMMUNICATION AND CONTRACT WITH SURVEYOR
>
> A. Agencies should employ independent professional surveyors who will
> not only observe discharge and prepare a report, but who will also
> provide other services which will be of major worth. For instance, a
> surveyor should \"supervise\" the discharge of cargo rather than
> simply observe it. This does not imply that he should attempt to tell
> all concerned what to do, but it does imply that he would not stand
> idly by allowing cargoes to be damaged through destructive practices.
>
> B. The surveyor should be the eyes and ears of the agencies at the
> ports of discharge and should make recommendations to the agencies
> which could possibly result in fewer losses to the program.
> Surveyor\'s should or could (depending upon the discretion of the
> agency) be given the responsibility of ensuring that suspect cargoes
> are promptly analyzed by proper Health Authorities, and be given the
> responsibility for obtaining various Port Certificates for unfitness,
> donations, shortlandings, etc.
>
> C. A professional job is expected from a professional firm. The port
> area is the surveyor\'s work area and he should know better than
> anyone what actions or inactions should be taken to ensure the cargo
> moves through the port with the fewest losses possible and, when
> losses do occur, what actions, inactions, statements or documents are
> available and need to be obtained to substantiate a claim against the
> liable party.
>
> D. Agencies should make surveyors aware that their reports will be
> utilized to document marine claims against steamship companies.
> Surveyors should be made to understand that they may be called upon in
> the future:
>
> 1\. To clarify certain unclear issues with regard to the discharge of
> cargo and/or their report.
>
> 2\. To furnish depositions for use in litigation of cargo loss and
> damage claims.
>
> 3\. To appear, in rare instances, as a witness in a United States
> court.
>
> E. Agencies should work closely with the surveying firm to ensure that
> all services expected by the agency are understood by the surveyor,
> and to ensure that the surveyor is providing the timely high quality
> service for which funds are being expended.
>
> F. It is necessary that the agencies exercise leadership in ports of
> discharge and insist that the independent surveyor prepare reports
> that are complete as to the losses sustained, the nature and cause of
> the loss, how the loss was determined, and most importantly to ensure
> that the reports are based on examination of the cargo which was done
> no later than ex-ship\'s tackle.
>
> G. If agencies are unable to locate an independent surveying firm in
> or near the port of discharge, or if agencies have reason to question
> the integrity or competency of the only surveyor in the area, agencies
> should consult with USAID as to how best to comply with the
> Regulations relating to the documenting of marine losses. The results
> of such discussion should be forwarded in detail to agency
> headquarters.
>
> 13\. JOINT SURVEY
>
> A. A joint survey, arranged for in advance by the agency and local
> agents of the carrier, is acceptable and, in some cases, desirable.
> The cost of the survey should be shared by the agency and the
> carrier\'s agent. Such joint surveys should eliminate factual disputes
> regarding losses sustained ex-ship\'s tackle.
>
> B. In no case is a document prepared solely on behalf of the carrier
> to be substituted in lieu of the independent survey prepared on behalf
> of the agency.
>
> C. If agencies enter into joint survey agreements, the headquarters
> office should be made aware of details.
>
> 14\. IMPORTANT CONCERNS OF CCC
>
> A. The regulations specifically provide that agencies will engage an
> independent surveyor to determine the amount and condition of the
> cargo upon discharge from the vessel. Generally speaking, we have
> found that agencies have not always employed an independent surveyor
> and/or that the documentation obtained is not contemporaneous with the
> discharge of the vessel. We have found, for example, that some
> agencies depend upon the carrier to furnish them with survey or
> outturn reports. In other cases, agencies have obtained only customs
> or port authority reports. While we are in favor of obtaining all
> possible information concerning a loss, including the carrier\'s
> survey or outturn reports, statements from the consignees, statements
> from port authorities, customs authorities or any other such
> supporting documentation, the furnishing of these documents does not
> negate the agencies\' responsibility to obtain an independent survey.
> Documentation as discussed above should be considered as additional
> information instead of as a substitute for an independent survey
> report. It is imperative that agencies exert aggressive action to
> engage independent surveyors, at each port of discharge, who are
> competent, well recognized experts in preparing and/or obtaining
> proper documentation.
>
> B. The importance of timely independent documentation cannot be over
> emphasized. Applicable maritime law provides that the ocean carrier
> cannot be held liable for losses occurring after the cargo leaves the
> control and custody of the carrier. Documentation prepared upon
> delivery of cargo, subsequent to the cargo leaving control and custody
> of the carrier, creates a number of problems. Normally such
> documentation includes losses that occurred in the port area and/or in
> customs clearance. The inclusion of such losses in claims against the
> ocean carrier creates severe factual disputes which delay settlement
> of the claims to the monetary disadvantage of the Government and the
> agencies. In addition, it results in a reduction of the interior
> losses which agencies are required to report to the USAID Mission
> inaccordance with the provisions of the Regulations. Therefore, the
> USAID Missions are deprived of accurate loss information which is
> necessary for them to properly carry out their responsibilities with
> regard to the program.
>
> C. Notwithstanding Item B, the most important problem with untimely
> documentation is that it results in a claims prosecution program that
> is less than ideal. The burden of proof is upon the claimant to prove
> that the losses claimed are the liability of the carrier. In the
> absence of firm evidence to prove that the losses occurred when the
> cargo was in the control and custody of the carrier, successful
> litigation is virtually impossible. When we are denied the possibility
> of legal action to enforce collection, we are deprived of one of our
> most important tools of collection. Our many years of claims
> experience have proven vividly that the best loss prevention device is
> a strong and effective claims collection program. In other words, if
> we are given the tools in the way of timely complete documentation to
> aggressively and effectively collect claims for losses from ocean
> carriers, carriers will take more care and concern in the stowage,
> carriage, and discharge of cargo, and agency programs will benefit by
> receiving more usable commodities in the recipient countries.
>
> Paragraphs 15 and 16 (Reserved)
>
> Part 3 MITIGATION OF DAMAGES
>
> 17\. DEFINITION
>
> A. Dictionary defines \"to mitigate\" as:
>
> 1\. To lessen in force or intensity,
>
> 2\. To moderate the severity of anything distressing.
>
> B. With reference to these Instructions, mitigation of damages applies
> to the expending of prompt and proper efforts to ensure that losses
> caused by the ocean carrier are kept to a minimum by the
> reconstruction and utilization of as much good commodity as possible.
>
> 18\. PURPOSE
>
> A. Applicable program commodities are made available to relieve human
> suffering and for the feeding of indigent and starving people. From a
> humanitarian and program point of view, damages must be mitigated to
> ensure that as much commodity reaches the intended
>
> program participant as possible.
>
> B. In any claim situation, and specifically concerning the pursuit and
> adjudication of ocean transportation claims, a commonly accepted
> premise of applicable law is that the injured party must take
> reasonable actions to ensure that the loss does not increase. If
> damages increase because of the injured party\'s failure to take
> actions which a normally reasonable and prudent man would take in
> similar circumstances, such increased damages are not legally
> claimable against the ocean carrier. From a claims point of view,
> damages must be promptly mitigated to determine exact losses
> attributable to the ocean carrier.
>
> 19\. RESPONSIBILITY FOR
>
> A. Agencies have the primary responsibility to ensure that damages are
> promptly mitigated.
>
> B. Agencies may utilize the services of an independent surveyor to
> assist in mitigation of damages.
>
> 1\. This aspect of the surveyor\'s services should be specifically
> agreed upon between agency and surveyor in advance. (See Paragraph 12
> of these Instructions.)
>
> 2\. The cost of reconstitution materials and contract labor shall not
> be included in the cost of the survey report. The above expenses shall
> be reported separately to agency headquarters for inclusion in the
> claim against the ocean carrier.
>
> C. The agencies\' responsibility for prompt and proper mitigation of
> damages in the applicable Program must be taken very seriously in view
> of:
>
> 1\. The fact that foodstuffs are susceptible to spoilage.
>
> 2\. The fact that most port areas do not have sophisticated equipment
> and facilities.
>
> 3\. The fact that port areas are generally unclean areas.
>
> 4\. The fact that pilferage by humans and destruction
>
> of cargo by animals is a way of life in some port areas.
>
> 20\. COSTS OF REPAIRING PACKAGING DAMAGE
>
> A. If agencies determine that repackaging is necessary to ensure that
> commodities arrive at the distribution point in wholesome condition,
> costs up to and including \$500 may be incurred without prior approval
> of USAID or the Diplomatic Post.
>
> B. Costs in excess of \$500 may be incurred with the prior approval of
> USAID or the Diplomatic Post.
>
> C. Invoices or other documents supporting these costs should be
> forwarded to the headquarters\' office of the agency. In accordance
> with applicable regulations, properly supported costs will be
> reimbursed to agency headquarters by CCC.
>
> D. Agencies should clearly distinguish between reconstitution costs
> incurred because of damage caused by the ocean carrier and
> reconstitution costs incurred because of damage at a subsequent time.
>
> 21\. EXAMPLES OF PROPER AND IMPROPER MITIGATION OF DAMAGES
>
> A. Ocean carrier discharged 300 bags of corn soy blend in slack and
> torn condition on November 18, 1991. At discharge, the surveyor
> estimated that the slack and torn bags were missing 1/6th of their
> contents. Cargo remaining in torn and slack bags was not contaminated
> with foreign substance and not suspected to be unfit for human
> consumption. Remaining cargo was reconstituted into 230 bags (50
> pounds each) on November 20, 1991. Damages in this situation were
> properly mitigated. The loss of 70 bags of cargo due to slackage is
> well documented as being for the account of the ocean carrier.
> Collection of such a claim should not pose any problem.
>
> B. Ocean carrier discharged 300 bags of corn soy blend in slack and
> torn condition on November 18, 1991. At discharge the surveyor
> estimated that the slack and torn bags were missing 1/6th of their
> contents. Cargo remaining in torn and slack bags was not contaminated
> with foreign substance and was not suspected to be unfit for human
> consumption. Remaining contents in torn and slack bags were not
> reconstituted until December 20, 1991, when such remaining contents
> (which are determined fit for human consumption) were filled into 200
> bags (50 pounds each). Damages in this situation were not promptly and
> properly mitigated as 33 days elapsed between the time the carrier\'s
> liability ended and the time cargo was reconstituted. The loss of 100
> bags of cargo due to slackage will be claimed and pursued against the
> ocean carrier. Such a claim, however, would probably be compromised
> as:
>
> 1\. We do not know the exact amount of slackage loss at time of
> discharge, and
>
> 2\. Additional losses to the 300 bags of cargo could have easily
> occurred after the cargo left the custody of the vessel.
>
> C. Ocean carrier discharged 300 bags of corn soy blend in slack and
> torn condition on November 18, 1991. At discharge the surveyor
> estimated that the slack and torn bags were missing 1/6th of their
> contents. Cargo remaining in torn and slack bags was not contaminated
> with foreign substance and was not suspected to be unfit for human
> consumption. Remaining contents of the slack and torn bags were not
> reconstituted until January 5, 1992. At that time, the local health
> authorities condemned the cargo as unfit for human consumption. The
> loss of 50 bags of commodity due to slackage is properly claimable
> against the ocean carrier. The loss of the remaining contents which
> were unfit for human consumption is not properly claimable against the
> ocean carrier as damages in this situation were not promptly and
> properly mitigated.
>
> 22\. CCC CONCERNS AND PAST DEFICIENCIES
>
> A. In the past, too many situations similar to the example shown in
> Paragraph 21 C of these Instructions have been noted. In many of these
> instances, cargo remained unreconstituted in slack and torn bags for
> as long as six months before any action was taken. Such failure on the
> agencies\' part to promptly and properly mitigate damages deprives
> indigent people of badly needed food, and places agency headquarters
> in a position of justifying to CCC why a claim for such additional
> losses arising from agency fault and negligence should not be pursued
> by CCC against the agency. We have no desire to file and pursue claims
> against an agency. We do, however, have a firm commitment to reducing
> losses to a minimum and to being in a position to pursue claims
> against liable parties from a position of strength. We request on
> current shipments that the agencies\' responsibilities regarding
> mitigation of damages be kept firmly in mind and that agencies take
> actions which would, under the circumstances, be attributable to a
> reasonable and prudent man.
>
> B. In some instances, extenuating circumstances occur which prevent
> agencies from promptly and properly mitigating damages. It is also
> possible that, because of actions or inactions of the ocean carrier or
> its agents that the ocean carrier could conceivably remain liable for
> the entire 300 bag loss detailed in the example in Paragraph 21 C. In
> these instances, it is imperative that agencies provide a narrative
> commentary and chronology of events which either:
>
> 1\. Justifies why losses could not be properly mitigated and/or
>
> 2\. Explains circumstances which would allow the claimant to sustain
> the burden of proof against the ocean carrier for the loss.
>
> 23\. AGENCY DECISIONS REGARDING UTILIZATION OF COMMODITIES
>
> A. Agencies have the final decision as to whether to utilize cargoes
> in approved programs.
>
> B. NOTHING in these Instructions should be construed as requiring or
> even suggesting that less than wholesome food products be placed into
> distribution channels.
>
> Paragraph 24 - 25 (RESERVED)
>
> PART 4 DOCUMENTATION NECESSARY TO PROVE
>
> COMMODITIES UNFIT FOR HUMAN CONSUMPTION
>
> 0 The following Instructions relate to the documentation necessary to
> prove the ocean carrier liable for the loss of commodities which
> arrive in a condition which renders them unfit for human consumption.
> Commodities which deteriorate and become unfit for human consumption
> after they leave the custody of the vessel are considered as interior
> losses and are not discussed herein. It is imperative that the
> determination of unfitness of commodities be issued by an individual
> or entity who is legally qualified either by position or education to
> make such a determination. For instance, a good faith statement by an
> agency representative or even a surveyor does not, in and of itself,
> prove unfitness because such persons are not legally qualified to make
> a statement.
>
> 26\. CERTIFICATION BY PORT HEALTH AUTHORITIES
>
> If the discharge port employs an individual whose responsibility is to
> make determinations of fitness and unfitness of incoming cargoes,
> agencies should:
>
> A. Promptly notify him of the discharge of suspect commodities,
>
> B. Request that he review and analyze such suspect commodities,
>
> C. Obtain a written statement or certificate from the health
> authorities which includes, but need not be limited to:
>
> 1\. Name of the vessel,
>
> 2\. Date of discharge from the vessel,
>
> 3\. Date of examination of suspect cargo,
>
> 4\. Place of examination,
>
> 5\. Amount (bags, cartons, pounds, etc.) of cargo examined,
>
> 6\. Amount of cargo fit for human consumption,
>
> 7\. Amount of cargo unfit for human consumption,
>
> 8\. Reason(s) why cargo is unfit for human consumption,
>
> 9\. Advice as to whether cargo is fit for animal consumption,
>
> 10\. Signature and title of person making determinations.
>
> 27\. ANALYSIS BY INDEPENDENT CHEMIST OR PRIVATE LABORATORY
>
> If the discharge port does not employ a health official, or if the
> agency deems it appropriate, employ (or have the surveyor employ) an
> independent chemist or private laboratory to analyze suspect cargoes.
>
> A. Samples of suspect cargoes:
>
> 1\. Must be representative of the quantity of suspect cargo. For
> instance, a one or two pound sample taken from one bag of commodity
> would not be representative for an analysis which could result in the
> contents of 50 bags not being utilized in the program,
>
> 2\. Should, if at all possible, be drawn jointly by the agency (or
> surveyor) and the vessel\'s agents,
>
> 3\. Should be properly identified as to which samples came from which
> cargoes,
>
> 4\. Should be properly sealed to protect the integrity of the sample,
>
> 5\. Should be properly forwarded to the chemist or laboratory.
>
> B. The report from the chemist or private laboratory should clearly
> identify each of the samples analyzed, and should contain similar
> information to that enumerated in Paragraph 26 C.
>
> C. The cost of such an analysis and report from the chemist or private
> laboratory will be reimbursed to the agency headquarters by CCC.
> Therefore, this cost could be included in the cost of the survey
> report.
>
> 28\. CARGOES \"OBVIOUSLY\" UNFIT FOR HUMAN CONSUMPTION
>
> What is obvious to one individual at a point and place in time is not
> similarly obvious to another some six months later and thousands of
> miles away. It is therefore necessary that even \"obviously\" unfit
> cargoes be documented as such.
>
> A. Agencies should obtain documentation as detailed in Paragraph 26 or
> 27 or
>
> B. Obtain a statement similar to that required in Paragraph 26 C which
> is signed by an agency representative and a representative of the
> vessel which specifically states that both individuals agree that the
> cargo is unfit for human consumption.
>
> 29\. TIMELINESS OF DOCUMENTATION
>
> As has been stated throughout these Instructions, the MOST IMPORTANT
> element of a successful claims prosecution program is the obtaining of
> documentation which is based upon the analyses of cargo at the time
> the ocean carrier\~s liability ends, i.e., at ship\'s tackle. This is
> especially true in documenting a claim for unfitness. Survey reports
> should state that a certain quantity of cargo is suspected as being
> unfit for human consumption.
>
> A. If possible, cargo should be reviewed and analyzed by proper
> authorities in vessel\'s holds or immediately upon discharge.
>
> B. If port conditions or customs do not allow for such prompt review,
> analyses should be made as soon as possible after discharge.
>
> C. In cases where cargoes are noted by the surveyor as being damaged
> on board the vessel and where such cargoes are later declared unfit
> for human consumption, a cause-effect relationship exists between
> damage and declaration of unfitness. The key to this cause-effect
> relationship is the time involved between discharge and the
> declaration of unfitness. For instance:
>
> 1\. If damaged cargo is discharged on November 20, 1991, and the same
> cargo is declared unfit for human consumption on November 25, 1991,
> the cause-effect relationship can normally be established, and
> collection for such losses can be pursued from a position of strength.
>
> 2\. If the same damaged cargo is declared unfit on December 15, 1991,
> the cause-effect relationship grows thin and collection possibility
> decreases considerably.
>
> 3\. If the damaged cargo is not determined unfit until January 25,
> 1992, the cause-effect relationship is gone and little if any hope
> exists for collection. In both the latter examples, the question
> arises as to whether the agency properly and promptly mitigated the
> damages. A narrative statement should be forwarded in these cases to
> agency headquarters explaining why damaged cargoes were not promptly
> analyzed and/or reconstituted.
>
> Paragraph 30 - 33 (RESERVED)
>
> PART 5 CARGOES MANIFESTED BUT NOT DISCHARGED
>
> 34\. SHORTLANDING OF CARGO
>
> The failure of an ocean carrier to discharge cargo which was loaded
> onto the vessel is a serious breach of the contract of carriage
> between the agency and the ocean carrier. Losses of cargo due to
> shortlanding are vigorously pursued, and full payment for such losses
> is demanded.
>
> A. Various documents are issued at ports which document shortlandings.
> Some are appropriately called Shortlanding Certificates; others have
> less descriptive titles. Agencies (or surveyors acting on behalf of
> agencies) should obtain copies of such official port certifications
> which show the quantity of cargo shortlanded.
>
> B. Paragraph 11 describes the contents of a survey report. Specific
> quantities of cargo discharged should be noted and tallies verifying
> the quantity discharged should be included. The surveyor should be
> specifically advised of this responsibility and should ensure
> sufficient labor is engaged to obtain an accurate discharge tally.
>
> C. In the event that cargo reported as shortlanded is subsequently
> located, documentation to show the recovery of such cargo should be
> issued and forwarded to agency headquarters on the earliest possible
> date. Documentation to reflect such recovery is required so that the
> carrier\'s liability may be appropriately reduced and so that agency
> headquarters and/or CCC will not be pursuing a claim for shortages
> where shortages no longer exist.
>
> PART 6 MISCELLANEOUS DOCUMENTS AND REQUIREMENTS
>
> SPECIALIZED SITUATIONS
>
> 37\. NOTICE OF PROTEST
>
> A. COGSA requires that the agency notify the ocean carrier, within
> three (3) days after discharge, that shortages and/or damages to the
> cargo have occurred.
>
> B. Agencies shall notify the carrier or its agents in writing.
>
> C. See Attachment 1. Such notification should include:
>
> D. Date of Notification, Name of the Vessel, Description of Cargo,
> Estimation of Quantity Lost or Damaged.
>
> 38\. BULK CARGOES
>
> A. Documenting shortages on shipments of whole grains and edible oil
> in bulk has long been a major problem because most discharge ports do
> not have adequate facilities to properly measure the quantity of cargo
> discharged from the vessel. Thus, the determination of the amount
> discharged is generally made after discharge, and after cargo is
> bagged. With non-standardized quantities of bulk grain being loaded
> into bags at a time and place subsequent to the time when the
> vessel\'s liability ends, shortage claims are very difficult to
> collect. Additional factors such as the fact that bulk grains will
> gain or lose weight depending upon relative moisture in the air, and
> the fact that discharge port scales are often not properly maintained
> and therefore are of questionable accuracy make the pursuit of such
> shortage claims far from a rewarding task.
>
> B. Notwithstanding the above, agencies remain responsible for ensuring
> that survey reports and applicable port documents are obtained on each
> shipment in accordance with applicable regulations or shipment
> agreements. Agencies should insist that the surveyor prepare a
> narrative stating, in its opinion, when, where and how shortages may
> have occurred.
>
> 39\. CONTAINERIZED CARGOES
>
> Many ocean carriers are now shipping cargoes in containers rather than
> break bulk. Generally speaking, the use of containers reduces the
> amount of handling that individual bags of cargo must receive thereby
> reducing the possibility of losses. When cargoes arrive in container
> vans, the agency shall:
>
> A. Require the surveyor to list the container van numbers and the
> appropriate seal numbers,
>
> B. Require the surveyor to advise whether the container vans were in
> any way damaged,
>
> where the seals on the vans are broken and by whom,
>
> D. Request that the surveyor attend the discharge of the container
> vans from the vessel, if possible, as well as at the time cargo is
> removed from the container van, and C. Forward information (either in
> the survey report or in a narrative statement) as to when and
>
> E. Ensure that the surveyor prepares a survey report in accordance
> with Paragraph 11.
>
> 40\. EXCESS-LANDED CARGOES
>
> A. Definition: Cargoes which are discharged at port in excess of the
> manifested Bill of Lading quantity.
>
> B. When agencies are made aware of excess-landed cargo, take
> appropriate action to ensure that sound cargo is utilized in the
> Program. In many cases, agencies must communicate with local agents of
> the steamship company to have entry documents changed. Also, in many
> cases the agency is called upon to spend additional time to obtain the
> use of such commodity. Such additional time and effort is required to
> ensure that wholesome foodstuffs do not sit rotting in a port area for
> want of proper documents.
>
> C. Document the receipt of such excess-landed cargo and advise agency
> headquarters noting the following:
>
> 1\. First notification of excess cargo (date, time, how notified), 2.
> All actions taken to obtain excess cargo, 3. Date and place when
> commodity made available to agency, Condition of cargo, Disposition of
> cargo.
>
> 41\. DISPOSITION OF CARGOES DETERMINED UNFIT FOR HUMAN CONSUMPTION
>
> A. Ensure that commodities are utilized neither for human consumption
> nor for purposes contrary to the best interests of the United States.
>
> B. Obtain a statement showing the disposition of commodities in any
> case where commodities are not utilized for the purpose intended. The
> statement should include the date, quantity of commodity and name of
> purchaser or donee, along with the following:
>
> 1\. If sold, a copy of the sales invoice, showing the sales price and
> the rate of exchange plus documentation showing that the sales
> proceeds were deposited with the U.S. Disbursing Officer to CCC
> Account Number 20FT401.
>
> 2\. If donated, a copy of the receipt signed by donee.
>
> 3\. If destroyed, a copy of the destruction certification showing the
> names of the individual witnessing the destruction.
>
> 42\. LIGHTERAGE
>
> Lighterage is a method of discharging cargoes from a heavy draft
> vessel which cannot (because of shallow-draft port conditions) or does
> not (for whatever reasons) come into the port area and discharge
> cargoes onto the dock area. When cargoes are lightened ashore, the
> mother vessel discharges cargo into a smaller vessel (a lighter) and
> the lighter carries the cargo ashore and places the cargo onto the
> docks. Generally speaking, the discharge of cargoes via lighter
> carriers should be avoided, if possible, because individual bags of
> cargo are handled one additional time, thus increasing the possibility
> of damage. Also, in some ports, lighterage vessels do not provide
> adequate security for cargoes either from the elements or from
> pilferage. Over the years, records show considerably increased damage
> to cargo when it is necessary to discharge via lighters.
>
> A. Responsibility for lighterage losses must be determined by the
> local laws and customs of the port. As a general rule, the person
> requesting and paying for lighters is responsible for lighterage
> losses. Thus, if the ocean carrier chooses to discharge cargo into
> lighters, the ocean carrier is responsible for all losses until cargo
> is placed upon a fit wharf. Thus, the losses would be considered a
> marine loss and such losses should be documented in the normal manner
> and forwarded to agency headquarters. If the agency chooses to have
> cargoes discharged into lighters and pays for the services of the
> lighterage company, losses on board lighters would be considered as
> interior losses and claims should led against the lighterage company
> by the field or mission and reported to USAID.
>
> If the ocean carrier is responsible for lighterage losses, obtain
> survey reports and other applicable documents discussed herein at the
> time cargo is discharged from the lighters.
>
> C. If the ocean carrier is not responsible for lighterage losses,
> obtain survey reports to document marine losses showing the conditions
> of the cargo when it is discharged into lighters.
>
> D. At ports where lighterage is a commonly utilized method of
> discharge, it is imperative that agencies determine, under local law,
> who is responsible for lighterage losses and proceed accordingly.
> Agencies should prepare a statement of the results of their
> investigation and decision in this regard, discuss the situation with
> USAID, if necessary, and forward the statement of conditions to the
> agency headquarters.
>
> 43\. CARRIER OUTTURN REPORT
>
> A. Definition: A document prepared by the vessel or the vessel\'s
> agents showing, in their opinion, the quality and quantity of cargo
> discharged from the vessel.
>
> B. Agencies should attempt to obtain a copy of the outturn report.
>
> C. Agencies should compare the outturn report with the independent
> survey report, note discrepancies, and, through communication with the
> surveyors and the vessel\~s agents, attempt to resolve discrepancies.
> If discrepancies cannot be resolved, communications should be
> initiated to determine why discrepancies exist.
>
> D. Agencies should advise agency headquarters of the results of such
> communications.
>
> E. Agencies should not substitute the vessel\~s outturn report for the
> required independent survey report.
>
> 44\. OFFICIAL PORT RECORDS
>
> A. Some ports of discharge prepare a complete set of documents showing
> the quantity and quality of cargo when it is received by the port.
>
> B. When such documents can be obtained, agencies should obtain and
> forward such documents.
>
> C. Agencies should not substitute official port records for
> independent survey report. EXCEPTION: See Paragraph 6 B 1.
>
> PART 7 TRANSMISSION OF DOCUMENTS
>
> 45\. WHAT AND WHERE TO SUBMIT
>
> A. Forward the originals of all documents, if available, including,
> but not limited to, survey reports, carrier outturn reports and
> various port documents to agency headquarters along with any documents
> required by agency headquarters, but not covered herein. If originals
> are not available, forward legible signed copies.
>
> B. When forwarding documents or correspondence prepared in a language
> other than English, also forward a literal English translation.
>
> 46\. WHEN TO SUBMIT
>
> A. To the extent practicable, all documentation concerning the marine
> loss and damage to the cargo should be submitted as a package to
> agency headquarters as soon as all such documents are available.
>
> B. In all cases, submit whatever documentation has been obtained
> within three (3) months after the discharge of the vessel. If
> documentation is not complete as of this date, advise agency
> headquarters of reasons for delay and advise which documents are yet
> to be submitted.
>
> PART 8 GENERAL
>
> 47\. CCC RESPONSIBILITY AND GOALS
>
> CCC Debt Management Division is concerned firstly with preventing
> losses; secondly, with keeping losses (when they do occur) to a
> minimum with prompt and proper salvage and reconstitution to the
> extent practicable; and thirdly, with collecting for marine losses.
> When the agencies communicate with surveyors and tell them what is
> necessary, and when the receipt of timely detailed accurate survey
> reports becomes the rule in the various programs, we believe the
> amount of losses to the program will be considerably smaller than we
> have today. We believe that when these comprehensive reports are
> received on all discharges of applicable program commodities, we will
> have sufficient information to correctly identify the party
> responsible for causing losses to cargo, and will have the wherewithal
> to pursue such losses (if they are marine losses) from a position of
> strength. If losses are determined to be inland losses, AID will have
> specific information upon which to take whatever action they deem
> necessary.
>
> In summary, timely detailed complete and accurate documentary evidence
> at discharge is necessary to pursue claims from a position of
> strength. When this type of documentation is obtained, steamship
> companies are going to become well aware that any damages they cause
> to commodities will be recovered through the claims process. When this
> occurs, cargoes are going to receive better care and custody and more
> cargo will be available to feed hungry and indigent people. That is
> the purpose of the program, and that is what we are striving for.
>
> DATE: January 1, 1993