**USAID** **Policy Paper**

**Food and Agricultural Development**

**Bureau for Program and Policy Coordination U.S. Agency for
International Development Washington, D.C. 20523**

**May 1982**

**TABLE OF CONTENTS**

**Page**

Preface ii

Quotation from President Reagan\'s Remarks before the

Philadelphia World Affairs Council, October 15, 1981

Background 1

I. Objectives 2

II\. Elements of Policy 2

A. Improved Country Policies 4

B. Development of Human Resources and Institutional

Capacity 5

C. Expanding the Role of Developing Country and

U.S. Private Sectors 7

D. Providing Food Aid and Food Security 9

III\. Programming Implications 10

**PREFACE**

At the request of the Administrator an inter-bureau Task Force,
in­cluding IDCA and BIFAD representation, was established to review USAID
policy on food and agricultural development assistance, and to make
recommendations based on experience in developing countries and USAID

This statement constitutes the report of the Task Force. It sets forth
the overall objectives and policy elements of USAID food and
agricultural assistance funded from Development Assistance, Economic
Support Fund and PL 480 budgets. It provides the basis for development
of an USAID Strategy Paper on Food and Agricultural Development that
will delineate a strategy for linking the resources A.I. D. can draw
upon for accomplishing its policy objectives.

This statement will also form the basis for discussions with other USG
agencies, leading to the formulation of a U.S. Policy State­ment on Food
and Agricultural Development Assistance that will include policy
implications for U.S. participation in multilateral organizations that
provide food and agricultural assistance.

This statement supplements the USAID Agricultural Development Policy
Paper of June 1978 by providing a focus on major elements of USAID
policy.

The fulfillment of this policy requires long-term commitment from the
United States and other donor nations and from developing countries, as
well as from the private and public sector institutions involved. With
mutual commitment to the policy, significant ac­complishments can be
expected over the next twenty years. Hunger and suffering will not be
eliminated, but a significant number of ad­ditional countries will have
become self-reliant in food and able to assure food security for their
populations.

\"Increasing food production in developing countries is critically
im­portant-for some, literally a matter of life and death. It is also an
indispensable basis for overall development. The United States has
always made food and agriculture an important emphasis of its economic
assistance programs. We have provided massive amounts of food to fight
starvation, but we have also undertaken successful agricultural
research, welcomed thousands of foreign students for instruction and
training at our finest institutes, and helped make discoveries of the
high-yielding varieties of the Green Revolution available throughout the
world.\"

Ronald Reagan, PRESIDENT

*Remarks to the World Affairs*

*Council of Philadelphia,*

October 15, 1981

**Background**

Food production and consumption prospects are seriously deteriorating in
a number of low income, food-deficit countries. The basic causes of
continuing hunger and malnutrition in these countries are inadequate
food availability and in­ability of the malnourished to purchase or
other­wise acquire and consume the food they need.[^1] While this chronic
deficiency receives less atten­tion than outright starvation, it has a
far wider impact on human lives and productivity.

Real progress has been made toward food and agricultural self-reliance
in a number of Asian and Latin American countries, but many other
countries remain beset with serious and precarious problems. Millions in
Asia, Latin America and the Near East are still impoverished and
malnourished. A deepening food crisis with chronic famine conditions in
some areas is developing in sub-Saharan Africa, where per capita food
and agricultural production continue to decline in a majority of
countries.

Future prospects are influenced by two major factors: population growth
and income growth. About 90 percent of the almost two billion increase
in world population projected for the year 2000 will occur in developing
countries, many of which are unable to assure adequate food supplies
even for their current populations. Continuing per capita income growth
in the middle-income and advanced developing countries is expected to
generate substantial increases in the demand for basic grains for direct
human consumption and for livestock production. Unless the production of
major staples and/or other agricultural commodities in developing
countries improves significantly more than it did during the 1960-75
period, and unless the effective demand of low-income families is
increased through broad-based growth, a deterioration in per capita food
availability and consumption, especially in low-income countries, may
occur.

This is a grim picture, but it is by no means hopeless. The experience
of the last 30 years shows that carefully planned and administered
economic assistance, when combined with the fundamental efforts that a
government and its people must themselves undertake, can establish a
dynamic, self-sustaining food and agricultural system. U.S. assistance
in the form of scientific\' and management expertise, and food and
financial aid, has made critical contributions to the creation of such
systems in South Korea,

Brazil and Taiwan and to emerging self-reliance in countries such as
India, Thailand and the Philippines.[^2] Experience over the last three
decades also shows that dynamic agricultural growth is in most countries
a necessary though not sufficient condition for broadly-based overall
economic growth that permits the conquest of hunger, malnutrition and
sustained improvement in per capita living standards. Broadly-based and
shared economic growth, along with the effective provision of voluntary
family planning services, will also bring about a reduction in rapid
population growth. The United States should continue sustained support
of efforts by the entire donor and international community to help
developing countries achieve the goals. The President of the United
States has recently highlighted the importance of developing country
food and agricultural problems and the role the U.S. is prepared to play
in helping countries resolve these problems.[^3]

**I. Objectives**

The overall objective of United States bilateral economic assistance is
to stimulate in developing countries broadly-based, self-sustaining
economic growth that promotes international peace and stability and that
assists people to conquer poverty, hunger, illness and ignorance (see
Sections 101 and 531 of the Foreign Assistance Act).

The objectives of U.S. **food and agricultural assistance** are to
enable countries to become self-reliant in food, assure food security to
their populations and contribute to broadly-based economic growth.

These broad objectives entail two major ­objectives, namely:

**1. Increased food availability, through:**

  increased agricultural production, with an emphasis on increasing
and sustaining the productivity, incomes and market participation of
small farmers, with special attention to food production;

 greater economic efficiency in the marketing and distribution of
agricultural and food production, exports and imports; and

**2. Improved food consumption in rural and urban areas**, through:

 expanded productive employment and incomes of men and women who at
present-lack the purchasing power to obtain adequate food;

 increased awareness and incorporation of sound nutritional principles
in the design and implementation of production, marketing, health and
education policies and programs, including improved access to, and
utilization of, food for those at nutritional risk;

 effective direct distribution of food from domestic or external
sources to those facing severe malnutrition and temporary food shortages
(i.e., a short-run lack of food security).

USAID will seek to concentrate assistance for food and agricultural
development in countries, that share these objectives and are committed
to an appropriate policy framework as elaborated in the following
section on \"Elements of Policy.\"

In supporting the objective of food self-reliance, USAID does not
rigidly subscribe to the goal of food self-sufficiency. USAID supports a
balanced approach involving economically. viable expansion of
agricultural production, including production for export and importation
of food and agricultural products where comparative advantage
exists.[^4] As in the case of domestic food production, the employment,
consumption and nutritional implications of export expansion will also
be considered.

**II. Elements of Policy**

USAID will emphasize four major, inter-related elements to accomplish
food and agricultural development objectives:

 improve country policies to remove constraints to food and
agricultural production, marketing and consumption;

 develop human resources and institutional capabilities, especially to
generate, adapt and apply improved science and technology for food and
agricultural development, and conduct research on developing country
food and agriculture problems, expand the role of developing country
private sectors in agricultural and rural development, and the
complementary role of the U.S. private sector in assisting this
expansion; and

 employ all available assistance instruments in an integrated manner,
including provision\' of PL 480 food aid in a way that contributes to
the other three strategy elements as well as meeting food security and
nutritional needs.

Each of these elements is intended to increase the effectiveness of U.S.
economic assistance resources. While the mix of these elements will vary
according to the differing needs and problems among countries, the
achievement of lasting food security requires greater attention to each
of them in most developing countries.

The United States has strong technical competence in identifying and
solving problems in food and agriculture. Maximum utilization will be
made of this competence. A.I. D., other elements of the U.S. Government,
such as USDA, cooperating universities and private sector organizations
are prepared to make a **long-term commitment** to help those countries
prepared likewise to make the requisite policy and resource commitments.

A main thrust of the policy is on the development of a **domestic human
and institutional capacity** that permits a country to develop and apply
food and agricultural science and technology. This recognizes the
location specific requirements for the effective application of improved
agricultural technology. However, the policy also requires a more
vigorous effort by USAID to support the identification, transfer and
adaptation of **existing appropriate technologies, as well as the
carrying out of food and agricultural research** and application of
improved technologies through U.S., international, regional and national
institutions. These recommendations recognize that the continuing
advance of agricultural technology, while not sufficient in itself, is
an essential prerequisite to sustained improvement in food and
agricultural performance. The policy also envisions strengthening
institutional capability in other critical areas such as the management
of irrigation and credit systems.

In pursuing this policy, USAID will encourage countries to promote
participation in food and agricultural development by the large majority
of rural producers and workers, men and women, through:

 broadened access to production incentives and resources, including
land and water, as well as opportunity to take advantage of education
and training and other productive services;

 increased productivity, employment and incomes; and

 expanded involvement in making policy and program decisions, including
those affecting the development and operation of institutions that
affect their productivity and well-being.

The policy also includes an emphasis on effectively increasing the
productivity, incomes and market participation of small producers. These
producers comprise the great majority of rural economic units in most
countries and are thus important for both increased food production and
consumptions.[^5] Evidence indicates they tend to employ land and
purchased inputs in an economically efficient manner relative to large
farmers. Furthermore, the demand for goods and services by the bulk of
small farmers and their families who participate in market sales and
purchases may constitute an important stimulus to off-farm rural
enterprise and the generation of employment opportunities for landless
laborers and for families engaged primarily in subsistence
agriculture.[^6] Improvement of the employment opportunities of the
landless and near-landless is a crucial requirement for improved food
consumption in many countries.

**A. Improved Country Policies**

The success or failure of the development process in a country depends
heavily on its policy framework and the determination of the country
itself. External assistance, while helpful and particularly critical in
low-income countries, is \'in no case sufficient to achieve national
food and agricultural development objectives. Sound country policies are
fundamental to agricultural growth and to the efficiencies of external
economic assistance. An appropriate policy framework is one that:

1\. relies largely on free markets, the provision of adequate production
incentives and the provision of equitable access to resources so that
the broad majority of farmers, rural private sector entrepreneurs and
workers- both men and women-have productive opportunities for
employment, saving and investment; and

2\. gives sufficient priority to complementary public sector investments
in rural infrastructure and institutions that interact effectively with
rural populations and complement and encourage rather than compete with
healthy private sector growth.

Incentives are affected by direct attempts by government to influence
the prices of food or agricultural products and inputs, but in many
countries macro-economic policies affecting exchange rates, interest and
wage rates and tariffs and taxes have an even more powerful impact on
incentives to produce, employ, consume, save and invest. Furthermore, a
wide range of government-promulgated regulations and privileges affect
equitable access to such resources and services as land, water, credit,
extension and marketing facilities. **That is, distorted policies have
hampered agricultural growth and have hurt the poor by excluding them
from access to productive resources and employment**.

Essential public sector investments are generally those that yield
substantial returns to the economy but are of such a nature that the
private sector is not prepared to undertake them, especially in
low-income countries (reasons include high cost, uncertain or low
returns in the short run, and/or difficulty for an individual investor
to capture the returns). These investments usually include such major
physical infrastructure as road networks and gravity irrigation systems
as well as institutions for agricultural research, training and
extension and for basic education and health service\'s and control of
epidemic diseases. However, in some aspects of research and extension,
health services or training, for example, there may be more scope for
private sector involvement than is often acknowledged.

 As part of its development assistance programming, USAID will
critically examine country policies affecting food and agricultural
development and will seek to concentrate assistance in those countries
where an appropriate policy framework already exists or where there is
commitment to improvement.

 USAID will analyze the constraints to improved policies in countries
where it provides assistance and will engage in dialogue with countries
on changes in policies intended to improve incentives and opportunities.

 Technical assistance and training to improve a country\'s policy
analysis and planning capacity will also be provided.

As part of its concern for improving the quantity and quality of food
consumption, USAID will continue its efforts on how to integrate
effectively the implications of nutritional problems and practices into
the design, implementation and evaluation of projects and programs. This
concern includes but goes far beyond specialized efforts to correct
specific nutritional deficiencies (e.g., Vitamin A, iodine, iron). A
concern for nutritional implications will be included in dialogue on
agricultural policies and in the design of assistance for planning and
policy analysis; agricultural research and extension; education and
training; marketing and processing; and food aid and food security. It
will also be included in the formulation\' of assistance for health
services, potable water and sanitation.

The incorporation of nutritional considerations raises complex,
multi-sectoral issues that will be addressed further in an USAID
Nutrition Policy Paper in preparation.

**B. Development of Human Resources and Institutional Capacity**

A major priority of USAID policy is to assist countries to develop
and/or strengthen private and public Institutions dealing with the host
of technical, administrative, economic and social problems constraining
increased and more efficient food and agricultural production, marketing
and consumption.

Effective institutions provide a country the self­sustaining capacity to
solve critical development problems. Furthermore, they:

 enhance a country\'s ability to marshall its own human and financial
resources for food and agricultural development;

 enable individuals to obtain access to the skills, resource and
services needed to increase their productivity, incomes and well-being;
and

 increase the absorptive capacity and effectiveness of external
assistance, thereby fostering development that continues beyond the
period during which assistance is provided.

The creation and strengthening of institutional capacity, including
development of the human resources, needed for effective institutions,
often requires a long-term commitment and effort-e.g., ten years or
more-from USAID, the host country, other donors and cooperating
organizations (Universities, PVO\'s, etc.).

Missions must provide a sufficiently long-term assessment of how USAID
and other resources will be utilized to improve institutional capacities
crucial to food and agricultural development in the host country.

Effective public and/or private institutions are required in most phases
of -food and agricultural development, including planning and policy
analysis; construction, maintenance and operation of rural
infrastructure (e.g., irrigation systems and rural roads); delivery of
inputs, credit and other services; storage, marketing and processing of
farm products; and other areas such as local government and taxation,
and resource conservation and management.

Particularly vital to the establishment of self-reliant, sustainable
food and agricultural systems are national institutions that have a
country the capacity (1) to generate and only a continuing stream of
innovations designed to increase agricultural productivity and incomes;
and (2) to evaluate and adapt technologies transferred from developed
countries and international institutions. Advances in food and
agricultural science and technology have not only increased productivity
but have also facilitated the substitution of less expensive and more
abundant resources for more expensive and increasingly scarce resources.

While the economic returns to agricultural research have been extremely
high, it does take time to develop and test new technologies and to
strengthen the national and local institutions required to adapt and
apply technologies to location-specific conditions. The need to develop
new technologies and strengthen institutions is especially critical for
the large areas of the developing world that will continue to be
dependent upon rain-fed agriculture.

In view of these considerations, USAID will continue to provide direct
support for food and agricultural research, training and technical
assistance by U.S. and regional institutions, and by the system of
international agricultural research centers. Collaborative projects with
these institutions will be coordinated closely with efforts to improve
national systems; networks for sharing knowledge among these
institutions will be strengthened.

There are important interrelationships between country policies and
institutional development. Institutions develop, implement and monitor
policies that profoundly affect food and agricultural development. At
the same time, the process of institutional development and of science
and technology transfer, generation and application should be guided by
a sound economic policy environment which reflects market forces. If
this does not happen, improved agricultural technology may not be
adopted by farmers, or if adopted, it may be inappropriate to the
broader economic environment. For example, in some countries distorted
economic policies have made capital artificially cheap and labor
artificially expensive, resulting in the introduction of excessively
capital-intensive technology. By the same token, production incentives
alone are not usually sufficient to yield sustained advances in
agricultural production. A continuous stream of productivity increasing,
cost-reducing farm technology is also required

 USAID will therefore give special emphasis, with a sufficiently
**long-term commitment**, to helping countries develop the institutional
capacity for food and agricultural planning and policy analysis; basic
and adaptive research, education and training; and disseminating
unproved technology and related information in a cost-effective manner.

 Social scientists (e.g., economists, anthro­pologists, development
planners and policy analysts) and physical and biological scientists and
technicians from developing countries and the United States will work
together to conduct applied research and to develop individual and
institutional capabilities intended to increase the productivities and
incomes of the broad majority of rural producers.

 U.S. universities will marshall their best talent to play a major role
in implementing USAID assistance for food and agricultural institutional
development. Other U.S. government agencies, particularly USDA,
agribusiness enterprises, cooperatives and private voluntary
organizations will also play significant roles.

 Aspects of agricultural research to be considered will include:
innovative research to increase the genetic capabilities of plants and
animals that are used as food; research on existing and more profitable
farming and marketing systems, including their social, employment,
energy, ecological and nutritional implications (including multiple
cropping and water management); field-testing involving farmers;
research and control of debilitating human and animal diseases that
constrain agricultural productivity; and regular feedback to researchers
of farmer experience with improved technologies.

USAID will also encourage:

 an expanded role where appropriate for private enterprise in the
provision of agricultural research and the dissemination of improved
technology as well as in the processing, preservation and marketing of
agricultural commodities (see following section);

 research and other institutions that expand access by low-income,
**small producers** to improved technology, productive resources and
services; [^7] and

 voluntary institutions that mobilize local efforts for agricultural
and social development.

Local institutions, including farmer organizations and land tenure
arrangements, can also be critical in assuring that the majority of
farmers benefit from improved technology and infrastructure. Clarity of
ownership and title is critical to stimulating increased capital
investment (and therefore production) at the level of the individual
farmer.

Consequently, USAID will give favorable consideration to requests for
assistance in the form of feasible projects and programs that:

 establish wider access to agricultural assets, including land, and in
providing more secure tenure arrangements; and

 strengthen local participatory organizations of agricultural producers
that help assure access by farmers to resources and services and,
through farmer involvement, improve the efficiency of such activities as
irrigation utilization and maintenance.

**Adequate human resources development is essential if food and
agricultural institutions are to be effective**. This means adequate
training for professional and technical staff and for farmers.

USAID will support:

 in-country training of scientists, technicians, managers, extension
agents, and also farmers and skilled workers in food and nutrition, and
agricultural and rural development, with expansion as necessary, of
in-country training facilities;

 external training, in the United States or third countries.

Important in these regards, is the special role of and concern for
women, including their role as agricultural producers, workers, and
family food providers. Greater efforts are therefore required to expand
opportunities for women to serve as administrators, scientists,
technicians, extension workers and other food and agricultural
professionals. USAID will provide support to promote the enhancement of
the role of women through:

 research and analysis;

 planning and policy dialogue;

 design and implementation of institutional and management reforms that
give public enterprises

human resource development and other programs; and

 USAID staff recruitment, training and placement.

C. **Expanding the Role of Developing Country and U.S. Private Sectors**

Private sector business enterprises, including farmers and
manufacturing, trade and service firms, account for the bulk of food and
agriculture-related economic activity in many developing countries.
Non-profit private and voluntary organizations (PVO\'s) also make
significant contributions to food and agricultural development in many
countries, as do universities (some developing country universities are
entirely private; i.e., non­government, and others are perceived as
private or quasi-government, due to their largely autonomous nature,
even where mandated and funded by government).

Given an appropriate policy environment and the complementary support of
public sector institutions and physical infrastructure, the private
sector can constitute a **dynamic, efficient and innovative mainspring
for food and agricultural development**. Furthermore, most private
sector rural enterprise in developing countries tends to be relatively
small-scale and labor-intensive. It thus also has the potential for
generating substantial employment and purchasing power.

Realization of the full potential of the private sector to contribute to
food and agricultural development requires attention to:

 government policies and regulations that encourage rather than
discourage the private sector;

 programs to overcome deficiencies in management and technical skills;
and

 private sector access to market and technical information, credit,
infrastructure, services and materials.

In some countries long-established public enterprises or para-statal
organizations dominate agricultural marketing, processing, storage
and/or distribution activities. These operations are often highly
inefficient and tend to discourage food and agricultural production.
Avenues for improvement include: (1) policy and

Such enterprises often initiated for arguably laudible motives, such as
reducing sharp, seasonal fluctuations in farm prim. Performance of
public enterprises in accomplishing such objectives has been spotty,
however, and the cost has bow high. Private sector alternatives,
including increased on-farm storage capacity, need more attention, a
greater market orientation and put them on a commercial basis; (2)
encouraging greater competition from private enterprises in the same
spheres; and/or (3) turning public enterprise management and/or assets
over to the private sector.[^8]

USAID will:

 identify private and public sector institutions, such as banks,
technical institutes, and trade and marketing associations, through
which technical and financial assistance can be effectively provided to
private enterprise;

 engage in dialogue with governments on changes in policies and other
regulations to encourage and strengthen private sector development,
including small and medium-scale enterprise; and

 where appropriate, help counties improve the efficiency of public and
para-statai enterprise engaged in food and agricultural-related
activities. This is a complex issue that will be addressed further in a
separate paper.

**USAID also encourages utilization of the invaluable skills and
resources of the American private sector** - of agribusiness
enterprises, other firms and consultants, universities, cooperatives and
other farmer organizations, and private and voluntary organizations- to
stimulate broadly ­based food and agricultural development. [^9]

 A major effort will be made to involve U.S. business firms in
strengthening developing country private enterprise. USAID will develop
mechanisms and processes to facilitate the involvement of the U.S.
private business community in food and agricultural development,
including technical assistance and training as well as direct and joint
investment.

**Private and voluntary organizations (PVOs) have a number of potential
strengths** for assisting food and agricultural development. PVOs can be
effective in developing local institutions that organize local energies
to provide both development and social services and productive inputs.
Compared with the public sector, they often provide flexible, low-cost
approaches that take local attitudes and conditions into account.
Through their U.S. networks, they have the further advantage of
mobilizing private American resources and commitment for development.

 USAID will encourage and seek to strengthen PVOS that are committed to
sustained food and agricultural development consistent with USAID
policy, and that have indicated through performance or potential the
ability to provide effective developmental assistance.

D. **Providing Food Aid and Food Security**.

Food security considerations have played an increasingly important role
in international discussions of food and hunger. The concept of
international food security implies assurance world-wide of regular and
adequate basic food supplies.

In emergencies or dire food shortages, national food security requires
adequate capacity to channel available food supplies to population
groups experiencing severe food shortages so as to maintain normal
consumption levels. In the longer term, the achievement of national food
security requires a country to be self-reliant in food and agriculture,
to be capable of assuring its population a continuing, nutritionally
adequate food supply through increased domestic production, more
efficient distribution, expanded purchasing power and international
trade, and a healthier and better informed population.

While external assistance can help accomplish these objectives, the
responsibility for food security, especially in the longer term, is
fundamentally that of each country. In the short term, international
food assistance-led by the United States as the world\'s largest food
aid donor-plays a vital role in assuring food security.

The United States has agreed to back up its pledge of food aid under the
International Food Aid Convention with a national grain reserve- 4
million tons of U.S. Government-owned, privately-held wheat, of which
300,000 tons may be used for disaster relief in any one year regardless
of U.S. domestic supply conditions.[^10]

PL 480 food aid can be a valuable development resource for augmenting
local production, enhancing short- *and* long-term food security and
reducing malnutrition, providing it is made available under conditions
that support rather than discourage domestic food and agricultural
production. PL 480 food commodities can enhance food security through
augmenting domestic food sales and distribution programs and \'May also
be used to help build national food reserves. Local currency generated
from these food sales provides financial resources to assist with
development of food and agricultural institutions and infrastructure.

 USAID seeks to improve the impact of both PL 480 commodities and local
currency proceeds on food and agricultural development, including
increasing their integration with other U.S. bilateral financial and
technical assistance at both the policy and project levels. Pl. 480
resources should support A.M.\'s strategic emphases to improve country
policies, develop human and institutional capacity and enhance the role
of the private sector in.food and agricultural development.

 The negotiation of PL 480 agreements is an opportunity for discussion
of these issues with country governments and for including broader
policy issues such as agricultural pricing and overall policy toward the
private sector. Policy dialogue on Pl. 480 must reach agreement on
supplying and/or conditioning food aid in a way that avoids
disincentives to increased food and agricultural production through food
subsidies or lowered government priority to domestic production. USAID
will pursue such policy dialogue In the context of total U.S. assistance
to the country.

PL 480 Title H programs not only directly alleviate hunger and
malnutrition but also have the potential to support human resource
development and self-help efforts that increase the employment and
employability of the lowest income groups. USAID will continue to give
greater emphasis in the use of PL 480 Title H resources to programs that
have been shown to have greater nutritional impact, such as
maternal-child health combined with nutrition education programs, rather
than school-feeding programs, and encourage PVOs to design and implement
Title 11 programs so that governments and local communities eventually
assume responsibility for them and/or replace them with programs that
increase production and incomes.

**III. Programming Implications**

United States assistance strategy at the country level requires
multi-disciplinary analysis of the policy, socio-economic, institutional
and private sector settings for food and agricultural development as
well as a long-term commitment of the United States and host countries.
These will vary according to the differing needs and problems of
countries. The precise content of assistance will thus depend on the
conclusions of this analysis. The modes of assistance will be a
combination of technical, capital, commodity and food aid assistance.

Although the context of USAID\'s assistance may vary from
country-to-country for the reasons indicated above, the need to utilize
limited budget and staff resources as effectively as possible implies a
focused country assistance strategy, concentrating on a limited number
of core sectors and sub-sectors. Missions should think in terms of
long-term efforts in a few priority areas that involve joint and
collaborative efforts with host country public and/or private
institutions at every stage: identification and design, implementation,
monitoring and evaluation. This approach should also permit some
freeing-up of USAID staff for the important but relatively neglected
implementation stage. It should be recognized that long-term commitment
does imply that a certain portion of USAID\'s portfolio will be
\"mortgaged\" for periods of a decade or so. But this is \"mortgaging\"
consciously undertaken because of its positive developmental impact.

**Technical assistance in the form of training opportunities and
technical advisors will comprise a major mode of USAID support for food
and agricultural development**

The main U.S. sources of technical expertise are USAID staff, American
universities, private sector firms and organizations (agribusiness,
consultants and other firms, cooperatives, farmer and private voluntary
organizations), the Department of Agriculture and other U.S. Government
agencies. USAID will also draw upon technical assistance from other
developing countries as well as on the food and agriculture development
experience of the U.N. Food and Agriculture Organization (FAO), World
Food Council (WFC), International Fund for Agricultural Development
(IFAD), World Food Program (WFP) and other donor agencies. In the
utilization of these technical assistance resources USAID will:

 encourage and strengthen the capacities of the various sources of U.S.
and developing country technical assistance to, in turn, strengthen the
counterpart capacities of host countries to address and solve their own
food and agricultural development problems;

 give greater emphasis and importance to the Agency\'s science and
technology capabilities, including creation of a strong professional
staff; and

 enhance the role of American university expertise, as provided for by
Title XII of the Foreign Assistance Act, in the implementation of USAID
food and agricultural development policy.

USAID will also provide, under appropriate conditions, capital
assistance, food aid, agricultural or other enterprise credit and/or
commodity assistance. Such assistance can be especially critical to the
development efforts of low-income countries. Capital assistance in
particular is often closely linked to policy and/or institutional
improvement in a project-e.g., capital assistance to construct or
rehabilitate physical structures of an irrigation system linked to
technical assistance for improved water management. Similar linkages
should improve the effectiveness and lasting impact of all forms of
assistance-e.g., elimination of subsidies or converting to private
sector distribution as part of fertilizer assistance; interest rate
reform as part of assistance for agricultural credit. Therefore, USAID
will provide capital, food, credit or commodity assistance only when:

 a need for such assistance exists and other sources of financing have
first been explored, including co-financing arrangements between USAID,
other donors and/or private sources; and

 such assistance is linked to proposed changes or effective performance
in the areas of institutional development, technology transfer or
development, and/or economic policy. Country performance will be closely
monitored and evaluated to determine whether such assistance should be
continued.

For low-income countries with severe local resource constraints, USAID
will consider financing a share of recurrent costs of food and
agricultural research, education, extension or related institutions
during the project development phase (up to ten years under current
USAID procedures), providing that the policy and institutional
frameworks assure effective utilization and the country is making

maximum and/or increasing domestic resource mobilization efforts.

[^1]:     ^?^Inadequate nutrient absorption linked to disease and poor
    sanitation is a significant auxillary cause, especially among
    infants and children.

[^2]:     ^?^Self-reliance in food is defined as the ability of a
    country to assure continuing food security to its population from a
    combination of domestic production and importation of food at
    commercial terms paid from foreign exchange earnings. Short-run food
    security implies the ability to maintain normal consumption levels
    in the face of an emergency food shortage. Long-run food security is
    defined as the ability of a country to assure a nutritionally
    adequate food supply to its population on a continuing basis.
    Several of the countries mentioned above have clearly not yet
    achieved long-run food security in terms of nutritional adequacy.
    See p. 7 for further discussion.

[^3]:     ^?^Of particular relevance are the \"Remarks of the President
    to the World Affairs Council of Philadelphia\" October 15, 1981, and
    the President\'s Statement of October 24, 1981, at Andrews Air Force
    Base on his return from the \"North-South\" Summit Conference at
    Cancun, Mexico.

[^4]:     ^?^In determining a balanced approach between production for
    domestic consumption and export, a country will weigh the risks
    inherent in increased dependence on world agricultural markets.
    These risks can be reduced somewhat by diversified production for
    export.

[^5]:     ^?^The definition of a \"small producer\" will vary from
    country to country and region to region within countries.
    Influencing factors include sectoral (agriculture or industry)
    sub-sectoral or commodity mix, soil quality in the case of
    agriculture, etc.

[^6]:     ^?^Of particular interest to USAID are those small producers
    whose marketable surplus can be increased. It is recommended that a
    paper be prepared to analyze the extent to which increased
    production by commercial and/or semi-commercial farmers in
    developing countries will also meet employment and food consumption
    objectives through increased employment on such farms and indirectly
    through stimulus to off-farm rural enterprise. Although available
    evidence confirms the relatively high economic efficiency of small
    farmers, the question is complex. An analytical paper might explore
    further this question as well. In his Philadelphia World Affairs
    Council remarks, op. cit., President Reagan indicated that the focus
    of American food and agricultural development assistance will be on
    \"raising the productivity of the small farmer, building the
    capacity to pursue agricultural research and stimulating productive
    enterprises that generate employment and purchasing power.\"

[^7]:     ^?^Section 103A of the Foreign Assistance Act requires that
    agricultural research carried out under the Act take account of the
    special needs of the small farmers in setting research priorities,
    as well as support research on the various factors affecting small
    farmers and emphasize field-testing and research dissemination.

[^8]:     ^?^Such enterprises were often initiated for arguably laudible
    motives, such as reducing sharp, seasonal fluctuations in farm
    prices. Performance of public enterprises in accomplishing such
    objectives has been spotty, however, and the cost has been high.
    Private sector alternatives, including increased on-farm storage
    capacity, need more attention.

[^9]:     ^?^U.S. universities will be used principally in support of
    USAID policy to develop and strengthen institutions and train people
    serving agricultural and rural development as set forth in section B
    above. Such universities may also be utilized to support and
    strengthen the role of the private sector, including such activities
    as training, technical assistance, and joint efforts with PVO\'s and
    other public or private institutions.

[^10]:     ^?^Under the U.S. Wheat Reserve Act of 1981. The 300,000 tons
    are to be used through PL 480 Title II after existing Title II
    resources have been committed or exhausted. In addition, access by
    foreign buyers to U.S. grain reserves held for commercial purposes
    also helps to assure food security. A related question is the extent
    to which it is feasible and desirable for a developing country to
    hold food reserves as opposed to financial reserves to meet
    short-term food security problems. This is a complex question that
    depends upon a range of factors, including the size of the country,
    its location relative to international sources of supply, the nature
    of its comparative advantage for domestic food production and
    production for export, the effectiveness of its import and export
    infrastructure, its access to the recently-established IMF Food
    Financing Facility and other factors. It is recommended that
    guidelines be prepared on this question, including on the
    appropriate role for USAID assistance.