**Testimony of**

**John Gillcrist**

**Bartlett Milling Company**

**Before the**

**United States House of Representatives Committee on Agriculture**

**Subcommittee on**

**Specialty Crops, Rural Development, and Foreign Agriculture Programs**

Mr. Chairman and Members of the Subcommittee, my name is John Gillcrist.
I am the chairman of Bartlett Milling Company, former chairman and a
current director of the North American Millers' Association. Thank you
for holding this hearing today on food aid and trade, two important
elements of the 2007 Farm Bill.

I am here today on behalf of both NAMA and a broad coalition of groups
representing American farmers, food processors, and agribusiness called
the Agricultural Food Aid Coalition. NAMA is comprised of 48 wheat, corn
and oat milling companies several of whom have been involved in PL 480
since its inception over 50 years ago.

I'm here to express my strong support for the continuation of our
time-tested and effective US produced food commodity donation programs.
They are reaching millions of malnourished people all over the globe
every year. Our great agricultural bounty should continue to be used as
a powerful force for the good of food insecure people worldwide.

I have seen these programs in action and they are remarkable. In-kind
food donations are a source of pride for American taxpayers, farmers,
food processors and agribusinesses and express our sincere and long-term
commitment to humanitarian assistance. Our food, clearly labeled "Gift
of the People of the United States," is the most visible manifestation
of the good will of the United States in the developing world. We also
need to recognize that these programs are an essential part of our
national security structure.

The Agricultural Food Aid Coalition has drafted principles on food aid
for Congress to consider when writing the Farm Bill. I would like to
submit those for the record, including the names of the organizations
that support these principles. In short, we strongly support the current
structures of US food aid programs.

However, the members of the Agricultural Food Aid Coalition oppose the
Administration's proposal to authorize the use of up to 25% of PL 480
Title II resources for regional and local purchases of food aid
commodities. We believe that diverting such a significant amount of
limited Title II resources for these purposes would be
counterproductive. We must defend our in-kind donations because if the
US does not supply the food, who will? The US currently provides over
50% of the world's food aid, yet there is still a global shortfall of
food aid for the 850 million people who do not have enough food to lead
healthy, productive lives. EU food donations have dropped significantly
since they converted their food donations to cash. The World Food
Program already purchases significant quantities of local and regionally
produced food in emergencies. We must be certain that such large
purchases of scarce foods don\'t actually harm the people we are
intending to help. The law of unintended consequences can produce
disastrous results in these largely unmonitored situations.

Our in-kind donation system is working. Currently, humanitarian
donations of US grown, processed, and inspected agricultural products
have insured that [safe]{.underline} and uniform foodstuffs reach
disaster victims, refugees, people living with HIV and AIDS, mothers,
children and communities in need. Furthermore, the US government,
private voluntary organizations and the World Food Program take great
care when they distribute or monetize our food to avoid commercial
disruptions. Purchasing food locally and regionally has the potential to
be both more market distorting and less rigorously regulated than food
shipped from the US.

We believe that in-kind food aid is the most dependable form of food aid
and the least susceptible to fraud or misuse. Programs such as
pre-positioning of food commodities and processed products closer to
recipient countries and expedited procurement and shipping procedures
can increase the efficiency of in-kind food aid and cut down on the time
and costs of responding to emergencies.

Yes, American farmers, food processors and transportation companies
benefit from the current programs. Indeed, the Farm Bill is intended to
strengthen the US farm economy; scarce agricultural budget resources
should benefit US farmers and secure US jobs. One billion dollars of
processed Title II commodities donated generates \$2.7 billion in US
economic activity. If that same one billion dollars were donated in
cash, the US would lose \$2.7 billion in economic activity and all of
the benefits accrued to that, including the tax revenues it would
generate.

I traveled to Ethiopia and saw with my own eyes how the food produced in
American mills was making a difference in people's lives. We visited a
WFP land reclamation project near Nazeret. A group of Ethiopian
villagers proudly described their project which consisted of terracing
and planting the hills around their village in a successful effort to
stem erosion, retain top soil, grow trees, attract wild life, and grow
grass essential to building their roofs and feeding their cattle.

US food aid was key in providing the sustenance that allowed them to
complete this physically challenging project over three years. They
thanked us repeatedly for the food we provided. They were immensely
proud of the fact that they [no longer]{.underline} relied on or
received food aid due to the success and sustainability of their
conservation project.

We also visited a water catchment project south of Addis Ababa.
Villagers had hand dug a large water retention basin to capture water
during the rainy season and to hold it throughout the year. This
development project provided clean water for the village and reduced the
time and energy women and children spent carrying water every day when
they no longer needed to walk 12 miles. US aid provided food during the
construction of this catchment.

Development programs like these are critical to the goal of reducing
chronic hunger and addressing the underlying causes of hunger and
poverty, which is the intended focus of PL 480 Title II. In fact,
Congress requires that of the 2.5 million metric tons of commodities
that must be procured for food aid, 75% or 1.875 million metric tons
must be committed to development programs in areas such as child
nutrition, agricultural development, HIV/AIDS and micro-enterprise. In
recent years, however, the PL 480 Title II development programs have not
had a stable and secure funding stream because the Administration is
waiving this Congressional mandate routinely instead of using their
waiver authority, as it was intended, on rare occasions. We suggest that
the Administration only be permitted to waive up to 675,000 metric tons
of their development-tonnage requirements so that it can be assured that
1.2 million metric tons will be used for these critical programs. The
crippling impact of HIV and AIDS in African communities makes the need
for stable sources of funding for multi-year programs that much more
imperative.

Development dollars are being redirected to fund an ever-increasing
number of emergencies. Although we cannot predict where these natural
and man-made emergencies will occur, we know that they will occur. The
Bill Emerson Humanitarian Trust, now serving as a last-resort, should be
used as a more predictable and viable response mechanism for
emergencies. To do that a robust mechanism to replenish the Trust must
be in place.

In addition to PL 480 Title II and the Bill Emerson Humanitarian Trust,
other US food aid programs play an important role. The McGovern-Dole
International Food for Education and Child Nutrition Program provides
food to school children in the world's poorest countries and has
established a proven track record of fighting hunger and promoting
education. In countries where school feeding programs are offered,
enrollment and attendance rates increase significantly, especially for
girls. It is widely known that school attendance by girls has long-term
benefits for them, their future children and their communities. A school
meal is often the only one these children get, and the primary reason
that parents send their children to school. We applaud Congress for
funding this program and hope full funding will be available in the
future.

PL 480 Title I has operated very successfully for more than 50 years. We
support reauthorizing Title I, both in its original concessional sales
role and as an additional funding tool for Food for Progress. Title I's
concessional sales assist eligible governments' hungry and malnourished
with humanitarian food aid resources and its Food for Progress program
supports economic and agricultural development. Demand for Title I
concessional sales and Food for Progress assistance continues through
annual requests from eligible foreign countries and other applicants.
Title I concessional sales should be reauthorized and offered to
countries that can afford its terms.

The Food for Progress program operates under a number of constraints
which Congress could address if funding were available. Perhaps the
greatest funding constraint on Food for Progress currently is the lack
of funds appropriated for the Title I portion of PL 480. We urge
Congress to maintain authorization for Title I so that it continues to
be an available food aid resource in the future for governments who are
seeking US food aid commodities and so the Food for Progress program can
be maintained as a viable funding source for organizations seeking to
promote private enterprise in emerging democracies.

The agriculture community has been and remains committed to working with
the government to actively address issues to increase the efficiency and
effectiveness of US in-kind food aid. One way to achieve this goal is to
improve the current systems that the US government uses to procure and
transport food aid commodities overseas as pointed out in the Government
Accountability Office's recent report.

It is clear to me that the United States needs to expand foreign food
aid programs to best demonstrate our true intentions and deeply held
humanitarian beliefs to the rest of the world. Thank you for inviting me
to participate in this hearing.