Briefing Note on the Wheat Assistance {Food Aid) from the Government ofJapan to the Government of the State of Eritrea
Introduction
The Government of Japan has provided the Government of the State of Eritrea
procured wheat assistance annually for the last ten years, except the year 2009.The
last shipment of about 13,000 Metric Tons arrived at the port city of Massawa
around Mid August 2011 as an allocation of the KR 2010. The wheat assistance has
been playing the dual purpose of tackling existing shortfalls of supply at the sametime funding vital activities that enhance food production programs. The cooperation
with the Government of Japan has been complementing the Eritrean government's
efforts towards food security and the attainment of the objectives of full recovery andself-reliance.
Objectives
The Japanese food Aid (KR) support satisfies the dual purpose of meeting theimmediate food requirements and achievement of longer-term food security
objectives, avoiding the perpetuation of dependence on food handouts. It is suitable
and compatible with the government's policy of cooperation based on partnership toaddress real challenges.
Process of Implementation
Requests are prepared by the Government of the State of Eritrea annually based onassessments of the food situation in the country and submitted to the Government ofJapan. Once the request is approved for funding by the Government of Japan, anExchange of Note is signed between the two governments. This is followed byappropriate liaison and consultative meetings of the two parties. Subsequently, theprocess of procurement of the wheat through international bidding is conducted by
JICS on behalf of the Eritrean party and the delivery of the wheat assistance toEritrea is pursued.
Flow of the Wheat assistance in Eritrea
MOI.HVV(Consignee)—EGB» Receive(commodityatMassawa—►:TwoFlour VI i l l s—►

PrivateBakeries

Benefits of this Food Aid modality
The KR supplies of wheat have been instrumental in ensuring steady bread supply
at prices affordable by the majority of the poor. Target end consumers are
low-income communities most of whom are poor elderly and women headedhouseholds. Flour mills supply flour to bakeries at regulated prices.
Steps in Deposition of Counter-Part Fund (CPF)•MoLHW enters into agreement with the EGB on the sale of the product,
based on the prices according to the Exchange of Notes (2/3 FOB price)••

MoLHW opens special CPF bank account at the Commercial Bank ofEritrea
EGB deposits the sale amount in the CPF immediately after receiving theproduct.

(2) The Actual Results of Counter-Part Fund in Past Ten years
Japanes Date ofe se
E/N
Fiscal
2001
26/06/02
2002
07/03/03
2003
26/04/04
2004
07/03/05
2005
08/08/05
2006
12/09/06
2007
05/12/07
2008
04/08/08
TOTALAmountmillion JY
422
360
100
100200
350
390
630

1,532

Deposit ObligationF.O. JY
B
2/3- 203,460,224
2/3
175,094,169
2/3
45,612,821
2/3
34,394,000
2/3
81,224,000
2/3
260,034,390
2/3
197,180,000
2/3
322,216,754
996,999,604

Obligation
LocalCurrency
22,304,903
20.014,560
5,639,232
4,920.458
9,984.822
22,778,843
27,007,951
45,429,830
158,080,599

Result ofDeposit
Complete
Complete
Complete
Complete
Complete
Complete
Complete
Complete

The KR 2010 deposit obligation will be implemented once the survey report of thearrived wheat at the port city of Massawa (about 13.001 MT) is completed andhanding over to the Eritrean Grain Board is effected Quantity of Wheat Assistanceprocured under KR
Fiscal year Products
Total Quantity
(MT)
2001
Wheat
14,608.000
2002
Wheat
15,794.170
2003
Wheat
3,304.000
2004
Wheat
3,558.000
2005
Wheat
7,384.000
2006
Wheat
10,362.000
2007
2008

Wheat
Wheat

5,915.400
17,233.300

There was no food aid through KR in 2009. The KR 2010 Wheat Assistance is
expected to be about 13,001 MT. It will be included in this table once the process ofthe verifications and acceptance are finalized.
The Utilization of the Counter-Part Fund
Funds generated from the proceeds of the sale of wheat are being utilized to implement
projects that are related to food security such as horticultural development in Halhale, RuralIntegrated Development project in Berik, Community Dairy Development project in Anseba
and Korbariya, Irrigated project in F i z a and Community Forestry and Horticultural
Development Nurseries Rehabilitation Projects. It is more appropriate to expound the status of
this project by the Ministry of Agriculture. More projects are expected to be submitted forapproval to be funded from the remaining funds.

Balance Amount of Deposit of Counter-Part Fund not yet allocated for projects amounts toERN102,644,344.72.
Conclusion

The Food Aid assistance has positive impact on nourishment of beneficiaries, keeps
the price of bread flour at stable and affordable price by the majority of the poor(beneficiaries). At the same time, the generated local funds from the proceeds areplaying crucial role in funding food Security related projects sponsored by theMinistry of Agriculture. The support has also been reliable program of cooperationthat suits the Government's strategy towards food security.
The Ministry of Labour & Human Welfare would like to seize this opportunity to
express its appreciation of the sustained assistance extended by the Government ofJapan and looks forward to further cooperation in this regard.

Thank you