Food for Peace
   Table of Contents
       

          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.  Title 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)

        ______________________________________________________


  Food for Peace
   Definitions
       


                           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              Nonpenal, 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,
prefer-
                               ably 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.


       
_________________________________________________________________
_______


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 1: Authority
     1A: Statuatory Authority
      Title I - Trade and Development Assistance
       


                            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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 1: Authority
     1A: Statuatory Authority
      Title II - Emergency and Private Assistance
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 1: Authority
     1A: Statuatory Authority
      Title III - Food for Development
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 1: Authority
     1A: Statuatory Authority
      Section 416 (b)
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 1: Authority
     1A: Statuatory Authority
      Food for Progress
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 1: Authority
     1B: Executive Order No. 12752
       

     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.


    
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 1: Authority
     1C: AID Regulation 11
       

     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.


    
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 1: Authority
     1D: Delegations of Authority Nos. 401 and 902
       

     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.



    
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 2: Allocation and Coordination of Responsibility
     2A: Coordination
      Food Assistance Policy Council
       
                            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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 2: Allocation and Coordination of Responsibility
     2A: Coordination
      Food Aid Consultative Group
       

          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.

    
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 2: Allocation and Coordination of Responsibility
     2B. Responsibilities
      General
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 2: Allocation and Coordination of Responsibility
     2B. Responsibilities
      The President
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 2: Allocation and Coordination of Responsibility
     2B. Responsibilities
      Office of Management and Budget
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 2: Allocation and Coordination of Responsibility
     2B. Responsibilities
      Department of Agriculture
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 2: Allocation and Coordination of Responsibility
     2B. Responsibilities
      U.S. Agency for International Development
       

          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.

         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 3: Policy
     3A. Statutory Policy
       

                              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.


    
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 3: Policy
     3B. USAID Policy Determinations
       

     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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 3: Policy
     3C. Title I - Trade and Development Assistance
       

     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.



    
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 3: Policy
     3D. Title II - Emergency and Private Assistance Programs
       

     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.


                                       
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 3: Policy
     3E. Title III - Food for Development
       

     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.


                                       
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 3: Policy
     3F. Local Currency
       

     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) non-
         emergency 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).


                                       
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 3: Policy
     3G. Title V - Farmer-to-Farmer Program
       

     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.

                                       
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4A: Introduction
       

                           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.


         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4B. Title I - Trade and Development Assistance
      Objectives
       

     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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4B. Title I - Trade and Development Assistance
      Structure
       

         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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4B. Title I - Trade and Development Assistance
      Operational Responsibility
       

         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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4B. Title I - Trade and Development Assistance
      Procedures
       

         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.


                                  
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4C. Title II - Emergency and Private Assistance
      Objectives
       

     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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4C. Title II - Emergency and Private Assistance
      Structure
       

         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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4C. Title II - Emergency and Private Assistance
      When to Choose Title II
       

         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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4C. Title II - Emergency and Private Assistance
      Procedures for requesting Title II
       

         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.)
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4C. Title II - Emergency and Private Assistance
      Reference Materials
       

         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


         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4D. Title III - Food for Development
      Objectives
       

     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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4D. Title III - Food for Development
      Structure
       

         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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4D. Title III - Food for Development
      When to Choose Title III
       

         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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4D. Title III - Food for Development
      Procedures for Requesting Title III
       

         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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4D. Title III - Food for Development
      Reference Materials
       

         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



    
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4E. Section 416(b)
       

     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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4D. Title III - Food for Development
      Structure
       

         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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4D. Title III - Food for Development
      Section 416(b) Operational Responsibilities
       

         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.


    
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4F. Food for Progress
      Objectives
       

     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.
         
_____________________________________________________________


  Food for Peace
   Part I: Authority, Responsibility, Policy and Structure
    Chapter 4:  Structure and Objectives
     4F. Food for Progress
      Structure
       

         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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 5: Title III Food For Development Program
     5A: Introduction and Purpose
       

                              CHAPTER  5

                               TITLE III
                     FOOD FOR DEVELOPMENT PROGRAM


5A.  Introduction and Purpose

     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.


    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 5: Title III Food For Development Program
     5B: Legislative History and Program Structure
       

5B.  Legislative History and Program Structure

     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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 5: Title III Food For Development Program
     5C: Title III Eligibility Requirements
       

5C.  Title III Eligibility Requirements

     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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 5: Title III Food For Development Program
     5D: Development
       

5D.  Development

     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

          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

               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

          a.   Recipient Country.  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.  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.  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"

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 6: Title II Program Development
     6A: Types of Programs to be Considered
       

                              CHAPTER  6

                     TITLE II PROGRAM DEVELOPMENT


6A.  Types of Programs to be Considered

     1.   General

          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

          a.   Emergency Programs

               The development, submission, and processing of
proposals for
     emergency programs are covered in Chapter 9, Emergency
Projects.

          b.   Direct Feeding Programs

               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

                    (a)  Maternal/Child Health (MCH) Feeding

                    (b)  Preschool-Age Child Feeding

                    (c)  Primary School and Other Child Feeding

               (2)  Food-for-Work Programs

                    (a)  Economic Development

                    (b)  Community Development

                    (c)  Educational Development

                    (d)  Health Development


               (3)  Programs in Support of Policy Reform and
Structural
                    Adjustment

          c.   Section 206 Programs and Programs Involving
Monetization

               These are covered in Chapter 11, Local Currency
Projects.

     3.   World Food Program (WFP)

          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.


    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 6: Title II Program Development
     6B: Program Guidelines
       

6B.  Program Guidelines

     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

          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

          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

          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

          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

          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

          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

          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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 6: Title II Program Development
     6C: Submission of Program Proposals and Supporting Documents
       

6C.  Submission of Program Proposals and Supporting Documents

     1.   Government-to-Government Proposals

          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

          a.   Project Proposal and Operational Plans

               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

               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

               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)

               (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

          For submission of emergency proposals, see Chapter 9.

     4.   Mission Responsibilities for Project Proposals

          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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 6: Title II Program Development
     6D: Review of Programs Proposals and Supporting Documents
       

6D.  Review of Program Proposals and Supporting Documents

     1.   AID/W Review

          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

          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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 6: Title II Program Development
     6E: Implementation Procedures
       

6E.  Implementation Procedures

     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

          a.   Transfer Authorization (TA)

               (1)  General

                    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

                    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

                    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

                    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

               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

          This procedure is authorized by AID/W when the
cooperating sponsor is a
     voluntary agency, cooperative or an Inter-governmental
Organization.

          a.   Multicountry Agreement

               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

               (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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 6: Title II Program Development
     6F: Ordering and Shipping
       

6F.  Ordering and Shipping

     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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 6: Title II Program Development
     6G: Title II Institutional Support Grants
       

6G.  Title II Institutional Support Grants

     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

          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

          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

          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

          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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7A: Authority
       


                                 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 state
that 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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7B: Introduction
       

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 or
political 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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7C: General Definition of Emergency
       

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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7D: Early Warning and Food Needs Assessment
       

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 food
assistance 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's
agricultural 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 the
aggregate 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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7E: Types of Emergency Programs
      Short-Term
       


7E. Types of Emergency Programs

    1.   Short-Term

    Short-term emergency needs may occur as a result of many
    factors, 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 Sponsor
             may, 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-child
             health (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 complex
             operation.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7E: Types of Emergency Programs
      Long-Term or Complex
       

    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-emergency
             years 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).



    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7F: Guidelines
      Program Support
       

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 expected
         to 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 of
         Cooperating 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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7F: Guidelines
      Options for Overcoming Time Constraints
       

    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 or
         on 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 Sponsor
         of 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 II
         program 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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7G: Preparation and Submission of Requests
      Initiation of Emergency Programs
       

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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7G: Preparation and Submission of Requests
      Program Approval Procedure
       


    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 or
             projected 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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7G: Preparation and Submission of Requests
      PVO and Cooperative Emergency Requests
       

    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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7G: Preparation and Submission of Requests
      Government and International Organization Requests
       


    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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7H: Project Implementation Guidelines
      Monitoring
       

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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7H: Project Implementation Guidelines
      Liaison with Cooperating Sponsor
       

    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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7H: Project Implementation Guidelines
      End-Use Examinations
       

    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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 7: Emergency Programs
     7H: Project Implementation Guidelines
      Reporting
       

    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 complete
    accounting 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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 8: Title II Program Support
     8A. Introduction
       


                                      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
Title
     II 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.
         
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 8: Title II Program Support
     8B. Monetization Projects
       

     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
II
              commodities 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
the
         goals 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 on
              Surplus 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
overhead
              operating, 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 the
              buyer(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
below
              the 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
provide
         its 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.

         
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 8: Title II Program Support
     8C. Section 202(e) Grants
       

     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 to
         foreign 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 to
              overall 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
justifying
              the 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.

         
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 8: Title II Program Support
     8D. Institutional Support Grants
       

     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
supporting
         efforts 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 an
              instrument 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 or
              in-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
sector
              activities, 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.

         
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 8: Title II Program Support
     8E. Other Resources Available
       

     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.  Co-
              financing 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
Voluntary
              Cooperation (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
the
              U.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
and
              rehabilitation 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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 9: Title II Program Implementation
     9A. Introduction
       


                                 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 11
and Appendix C, and Title III program implementation in Chapter
13.)
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 9: Title II Program Implementation
     9B. Responsibilities
       

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 Cooperating
    Sponsor 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 non-
    governmental 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 non-
    duplication 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 call-
    forwards 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 in
    Regulation 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 for
    ancillary 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 Missions
    for assistance.)

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 9: Title II Program Implementation
     9C. Title II Commodities
       

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 as
         well 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 headquarters
         office 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 15
         days 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 the
         commodities 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 the
         commodities 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/KCCO
         and 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 the
         Mission.  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 agency
         for 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 as
         otherwise 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 Sponsor
         assurance 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 for
         details on claim and loss procedures.)  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 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 a
         competitive 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 and
         condition 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 commodities
             borrowed, 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 provided
         to 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 shall
         plainly 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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 9: Title II Program Implementation
     9D. Title II Management and Reporting
       

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 and
         procedures 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 were
             established);

             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 under
             this 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 the
             Agency 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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 9: Title II Program Implementation
     9E. Suspension, Termination and Expiration of Program
       

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 terminated
    or 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 a
    non-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, such
    authorization 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)]
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10A. Introduction
       

                                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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10B. Prior to Loading on Ocean Vessel
      Fault of Cooperating Sponsor
       

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 non-
     governmental 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)]
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10B. Prior to Loading on Ocean Vessel
      Fault of Others
       

     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)]

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10C. Marine (Ocean Carrier) Claims
      Responsibilities
       

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).
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10C. Marine (Ocean Carrier) Claims
      Survey and Outturn Reports
       

     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 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 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.)
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10C. Marine (Ocean Carrier) Claims
      Claims Against Ocean Carriers
       

     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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10D. Inland Claims
      Surveys on Shipments to Landlocked Countries
       

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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10D. Inland Claims
      Surveys on Shipments to Landlocked Countries
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10D. Inland Claims
      Claims
       

     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 non-
          governmental 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
          Missio7n 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.


    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10E. Disposition of Unfit Commodities
      Prior to Delivery
       

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 non-
     governmental 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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 10: Commodity Losses, Damage and Claims
     10E. Disposition of Unfit Commodities
      After Delivery
       

     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.


    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11A. Structure
       

                                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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11B. Objectives
       

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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11C. Resources
       

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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11D. Types of World Food Program Assistance
       

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).

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11E. Guidelines
       

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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11F. Request and Approval Procedures
       

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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11G. U.S. Government Responsibilities and Coordination
      Appraisal of Requests for World Food Program Coordiniation
       

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.

    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11G. U.S. Government Responsibilities and Coordination
      USAID Mission Liaison with World Food Program
Representatives
       

    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.
    
_____________________________________________________________


  Food for Peace
   Part II: Title II - Emergency and Private Assistance
    Chapter 11: The World Food Program
     11G. U.S. Government Responsibilities and Coordination
      Implementation of U.S. Commodity Shipments
       

    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.).


    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12A. Objectives
       


                                 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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12B. Eligibility Criteria
      Eligibility Criteria
       

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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12B. Eligibility Criteria
      Food Deficit Criteria
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12B. Eligibility Criteria
      USAID Priority Determinations
       

     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.

    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12C. Employment of Title III Resources
      Considerations in Program Formulation
       

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 broad-
               based, 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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12C. Employment of Title III Resources
      Direct Feeding
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12C. Employment of Title III Resources
      Emergency Food Reserves
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12C. Employment of Title III Resources
      Sale of Commodities
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12C. Employment of Title III Resources
      Support of Indigenous Non-Governmental Organizations (NGOs)
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12C. Employment of Title III Resources
      Endowment Programs
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12D. Title III Program Planning
      USAID Mission Responsibilities
       

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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12D. Title III Program Planning
      Financial Planning
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12D. Title III Program Planning
      Cooperating Country Performance Requirements and
Restrictions
       

     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.)
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12D. Title III Program Planning
      Amendments
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12D. Title III Program Planning
      Single-Year Agreements
       

     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.

    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      Executive Summary
       

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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      Program Description
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      Program Justification
       

     3.   Program Justification

          a.   Country Commitment

          Provide and comment upon relevant aspects of the
country's long-
          term 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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      Program Implementation
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      Monitoring and Evaluation Arrangements
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      Audit Plan
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      Illustrative Annexes
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      USAID/W Review and Approval Process
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 12: Title III Program Development
     12E. Title III Program Proposal Components
      Submission Timing of Title III Proposals and Call
Forwarding
       

     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.

    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13A. General Management Responsibilities
       

                                     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.

    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Signing of Agreement
       

     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).
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Procurement and Shipping Schedule
       

          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)                     Period to
Complete

               FFP/POD submits call-forward
               to USDA Agricultural
               Stabilization and
               Conservation Service (ASCS)                     1
working day

               USDA/ASCS transmits call-
               forward to USDA Kansas City
               Commodity Office (KCCO)                         1
working day

               KCCO coordinates shipping
               schedule with USAID/W-Bureau for Management
                Office of Procurement/Transportation
               Division (M/OP/TRANS)                           1
working day

               KCCO solicits commodity offers for
                delivery of commodities free alongside
               ship (f.a.s.) at U.S.
               ports or intermodal points                      15
working days

               M/OP/TRANS receives transportation
                freight rate quotes and submits                on
same working day
               information to KCCO

               KCCO receives commodity offers                 
completed
               and submits bid information                     on
same
               to M/OP/TRANS                                  
workingday

               M/OP/TRANS performs lowest landed cost
                evaluations                                   
completed
                                                               on
same
                                                              
working day

                After consultation and
               agreement, KCCO contracts for                  
completed
               commodities and OP/TRANS                        on
same
               contracts for freight                          
working day

               KCCO arranges surveys and
               sends survey notifications
               to USAID Mission                                1
workingday

               M/OP/TRANS cables USAID Mission
               giving shipping schedule and
               loading information                             1
workingday

               Commodities delivered to U.S.                   25
to 30
               Port of Loading                                
workingdays


                    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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Payment of Freight Costs
       

          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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Sales Transactions
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Use of Private Sector in Sales Program
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Determining Sales Price
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Local Currency Deposits and Expenditures
       

               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
interest-
          bearing 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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Indigenous NGOs & Cooperatives/Endowments
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Monitoring of Local Currency Use
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Balance of Payments Support
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Direct Feeding
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Emergency Food Reserves
       

          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13B. USAID Management Considerations
      Performance Indicators and Reports
       

          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.

    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Prior to Approval
       

     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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Taking Delivery
       
          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Damage,Loss or Excess Stocks
       
          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Exemption from Duties and Taxes
       
          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Separate Account for Sales 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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Monitoring and Use of Local Currencies
       


          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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Balance of Payments Support
       

          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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Direct Feeding
       


          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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Emergency Food Reserves
       


          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.
    
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Records and Reporting
       
          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Audits
       
          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.
         
_____________________________________________________________


  Food for Peace
   Part III: Food For Development (P.L. 480, Title III)
    Chapter 13: Title III Program Implementation
     13C. Cooperating Country
      Statutory Restrictions
       
          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.

    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14A. Introduction
       



                                  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.

    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14B. Title II - Emergency and Private Assistance
      Audit Requirements
       

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).  Non-
   governmental 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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14B. Title II - Emergency and Private Assistance
      Audit Purposes
       

   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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14B. Title II - Emergency and Private Assistance
      Planning
       

   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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14B. Title II - Emergency and Private Assistance
      Implementation and Monitoring
       

   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 the
      Cooperating 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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14B. Title II - Emergency and Private Assistance
      Evaluation and Audit
       

   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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14B. Title II - Emergency and Private Assistance
      Suspension,Termination and Expiration
       

   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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14B. Title II - Emergency and Private Assistance
      USAID Inspector General Audits of Cooperating Sponsors
       

   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.

    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14C. Title III - Food for Development
      Audit Requirements
       

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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14C. Title III - Food for Development
      Audit Purposes
       

   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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14C. Title III - Food for Development
      Planning
       

   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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14C. Title III - Food for Development
      Implementation and Monitoring
       

   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 call-
      forwards.

      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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14C. Title III - Food for Development
      Evaluation and Audit
       

   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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 14: Audits
     14C. Title III - Food for Development
      Audits of Suspension,Termination and Expiration
       

   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 in-
   country 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)

    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 15: Monitoring and Evaluation
     15A. Legislation and Policy
       


                                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."
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 15: Monitoring and Evaluation
     15B. Monitoring
       

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.

    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 15: Monitoring and Evaluation
     15C. Evaluations
       

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
     management team                    evaluation team

     Uses only monitoring data          Uses monitoring
information
     to supplement evaluation             to supplement
evaluation
     data                                 data

     Examines short-term change         Examines changes over the
                                        life of project

     Uses less sophisticated            Uses sophisticated data
     data analysis techniques           analysis techniques

     Accepts validity of program        Examines the validity of
     and measures output toward         goals, progress towards
     program goals                      program goals and program
                                        impact

     Uses information to guide          Uses information to guide
     corrective program actions         corrective program
                                        actions and to affirm
                                        or challenge
organizational
                                        strategies

     *  Table from CARE's Food Evaluation Module

    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 15: Monitoring and Evaluation
     15D. Data Requirements for Evaluation
       

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 macro-
     level 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 in-
     country 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.

    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 15: Monitoring and Evaluation
     15E. Title II Programs
      Monitoring
       

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)
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 15: Monitoring and Evaluation
     15E. Title II Programs
      Evaluations
       

     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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 15: Monitoring and Evaluation
     15F. Title III Programs
      Monitoring
       

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.
    
_____________________________________________________________


  Food for Peace
   Part IV: Audits and Evaluations
    Chapter 15: Monitoring and Evaluation
     15F. Title III Programs
      Evaluations
       

     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?
    
_____________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    Table of Contents
       



                            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

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    I. General Purpose and Scope
       



                                APPENDIX C

                            WORLD FOOD PROGRAM

                SUPPLEMENT AS AMENDED TO STANDARD TITLE II
                          TRANSFER AUTHORIZATION


     I.    General Purpose and Scope

           (a)  Terms and conditions.  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.  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,
transporta-
           tion, 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."

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    II. Definitions
       


     II.   Definitions

           (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.

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    III. Contribution of Commodities and Ocean Transportation
       

     III.  Contribution of Commodities and Ocean Transportation

           (a)  Distribution and use of commodities.  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.  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.
           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.  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.  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.  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.  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.

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    IV. Obligations of the WFP
       

     IV.   Obligations of the WFP

           (a)  Plan of operation.  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. 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.  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.  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.  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.

                1.   Markings.  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.  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.  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.  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.  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.  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.

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    V. Processing, Repackaging, and Labeling Commodities
       

     V.    Processing, Repackaging, and Labeling Commodities

           (a)  Commercial processing and repackaging.  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.  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.  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.

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    VI.   Arrangements for Entry and Handling in Recipient
Country
       

     VI.   Arrangements for Entry and Handling in Recipient
Country

           (a)  Costs at discharge ports.  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.  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.  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. 
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).

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    VII. Disposition of Commodities Unfit for Authorized Use
After
Delivery to the WFP
       

     VII.  Disposition of Commodities Unfit for Authorized Use
After
           Delivery to the WFP

           (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.

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    VIII. Liability for Loss and Damage or Improper Distribution
of
Commodities
       

     VIII. Liability for Loss and Damage or Improper Distribution
of   Commodities

          (a)  Ocean carrier loss and damage, general average and
               salvage


                (1)  Outturn reports for claims against ocean
           carriers.  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

                (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.  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.

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    IX. Records and Reporting Requirements of the WFP
       

     IX.   Records and Reporting Requirements of the WFP

          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.

       
_______________________________________________________________


  Food for Peace
   Appendix C: World Food Program Supplement as Amended to
Standard Title II, Transfer Authorization
    X. Waiver, Amendment, or Termination
       

     X.    Waiver, Amendment, or Termination

          (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                    /s/ Irwin R. Hedges
     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
                                          For the World Food
Program

        
_______________________________________________________________


  Food for Peace
   Appendix D
    Delegation of Authority No. 401
       



                             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

        
_______________________________________________________________


  Food for Peace
   Appendix D
    Delegation of Authority No. 902
       



                               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

        
_______________________________________________________________


  Food for Peace
   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
    Part 1: General Provisions
       

                            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

               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

               Agricultural Act of 1949, as amended.

               Section 416(b) Regulations

          C.   FOOD FOR PROGRESS PROGRAM

               Food For Progress Act of 1985, as amended.


     3.   DEFINITIONS, ABBREVIATED TERMS, NAMES, ETC., USED IN
THIS
          INSTRUCTION

          A.   Administrative Allowance.

               Amount authorized to be retained from claim
recoveries
               by voluntary agencies or intergovernmental
               organizations.

           B.  Agency for International Development, Department
of State.

               AID, USAID, or AID/W, as applicable; Diplomatic
Post in
               Countries where there is no USAID.

           C.    Applicable Regulations.

               AID Regulation 11, Section 416(b) Regulation.

           D.    Applicable Agreements.

               Individual shipment agreements relative to Title
III,
               Section 416 and Food for Progress shipments.

           E.  Commodity Credit Corporations.

               CCC

           F.    Chief, Debt Management Division, Kansas City
Financial         Management Office.

                 Chief, DMD          NOTE:  Chief, DMD is a
Claims
                                             Official of CCC

           G.    Voluntary Agencies and Intergovernmental
Organizations.

                 Agency or Agencies.

           H.    Carriage of Goods by Sea Act.

                 COGSA

           I.    Claim Value.

                 CCC's monetary interest in the claim.

           J.    Commodities/Cargoes.

                 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


         
_______________________________________________________________


  Food for Peace
   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
    Part 2: Initial Distribution to CCC of Documentation Before
Claim is Filed
       


     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 send additional copies to Chief, DMD.


        
_______________________________________________________________


  Food for Peace
   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
    Part 3: Determination of Ocean Carrier Liability
       

              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.  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 allow salvage credit for unfit
commodities which are
                 disposed of by destruction.

          F.     Do not 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 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)

        
_______________________________________________________________


  Food for Peace
   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
    Part 4: Collection of Claims
       


                     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.

                 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

                 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
                     zero, advise the carrier accordingly.)

                 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.

        
_______________________________________________________________


  Food for Peace
   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
    Part 5: Disposition of Collections
       

                     PART 5      DISPOSITION OF COLLECTIONS


     19.   COLLECTIONS RECEIVED BY AGENCY

           A.     In U.S. Dollars.

                 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.

                 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

           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 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 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)


        
_______________________________________________________________


  Food for Peace
   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
    Part 6: Referral of Claim to CCC Claim Rights Not Assigned
       

         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.  In general, to
collect
                     claims in full through administrative
action.

                 2.  Authority to Compromise Claims.  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 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)

        
_______________________________________________________________


  Food for Peace
   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
    Part 7: Assignment of Claims Rights to CCC
       

                 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:  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)

        
_______________________________________________________________


  Food for Peace
   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
    Part 8: General Average
       

                   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)

        
_______________________________________________________________


  Food for Peace
   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
    Part 9: Agency Responsibility For Obtaining Documentation At
The
Discharge Port
       


           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)

        
_______________________________________________________________


  Food for Peace
   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
    Part 1: General Provisions
       


                              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.

        
_______________________________________________________________


  Food for Peace
   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
    Part 2: Survey and Survey Reports
       


                 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
documenta-
                tion, 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)

        
_______________________________________________________________


  Food for Peace
   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
    Part 3: Mitigation of Damages
       

                    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)

        
_______________________________________________________________


  Food for Peace
   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
    Part 4: Documentation Necessary to Prove Commodities Unfit
for
Human Consumption
       



                    PART 4      DOCUMENTATION NECESSARY TO PROVE

                       COMMODITIES UNFIT FOR HUMAN CONSUMPTION

          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)

        
_______________________________________________________________


  Food for Peace
   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
    Part 5: Cargoes Manifested But Not Discharged
       

                    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.

        
_______________________________________________________________


  Food for Peace
   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
    Part 6: Miscellaneous Documents and Requirements Specialized
Situations
       

                   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,

          C.   Forward information (either in the survey report
or in
               a narrative statement) as to when and 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

          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.

        
_______________________________________________________________


  Food for Peace
   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
    Part 7: Transmission of Documents
       

                          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.

        
_______________________________________________________________


  Food for Peace
   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
    Part 8: General
       

                                   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

         
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