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80–603 PDF 2003

S. Hrg. 107–556

HALF A LOAF—THE IMPACT OF EXCLUDING SURPLUS COMMODITIES FROM AMERICA’S RESPONSE TO GLOBAL HUNGER

HEARING

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT,

RESTRUCTURING, AND THE DISTRICT OF COLUMBIA

SUBCOMMITTEE

OF THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

JUNE 4, 2002

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

JOSEPH I. LIEBERMAN, Connecticut, Chairman

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

THOMAS R. CARPER, Delaware

JEAN CARNAHAN, Missouri

MARK DAYTON, Minnesota

FRED THOMPSON, Tennessee

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

THAD COCHRAN, Mississippi

ROBERT F. BENNETT, Utah

JIM BUNNING, Kentucky

PETER G. FITZGERALD, Illinois

JOYCE A. RECHTSCHAFFEN, Staff Director and Counsel

RICHARD A. HERTLING, Minority Staff Director

DARLA D. CASSELL, Chief Clerk

OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING, AND

THE DISTRICT OF COLUMBIA SUBCOMMITTEE

RICHARD J. DURBIN, Illinois, Chairman

DANIEL K. AKAKA, Hawaii

ROBERT G. TORRICELLI, New Jersey

THOMAS R. CARPER, Delaware

JEAN CARNAHAN, Missouri

MARK DAYTON, Minnesota

GEORGE V. VOINOVICH, Ohio

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

THAD COCHRAN, Mississippi

PETER G. FITZGERALD, Illinois

MARIANNE CLIFFORD UPTON, Staff Director and Chief Counsel

CHARLES F. HUNTER, Congressional Fellow

ANDREW RICHARDSON, Minority Staff Director

JOHN SALAMONE, Minority Professional Staff Member

BRIAN MCLAUGHLIN, Staff Assistant/Acting Clerk

(III)

C O N T E N T S

Opening statement: Page

Senator Durbin ................................................................................................. 1

WITNESSES

TUESDAY, JUNE 4, 2002

Hon. George McGovern, former U.S. Senator, and former U.S. Ambassador

to the Food and Agriculture Organization ......................................................... 4

Hon. James P. McGovern, a Representative in Congress from the State of

Massachusetts ...................................................................................................... 6

Loren Yager, Director, International Affairs and Trade Group, U.S. General

Accounting Office ................................................................................................. 11

Hon. A. Ellen Terpstra, Administrator, Foreign Agricultural Service, U.S.

Department of Agriculture .................................................................................. 13

Hon. Roger Winter, Assistant Administrator, Bureau of Democracy, Conflict

and Humanitarian Assistance, U.S. Agency for International Development .. 15

Ellen S. Levinson, Government Relations Director, Cadwalader, Wickersham

and Taft, and Executive Director, Coaliton for Food Aid ................................. 17

Jason Phillips, Country Director, International Rescue Committee, Kenya ...... 19

ALPHABETICAL LIST OF WITNESSES

Levinson, Ellen S.:

Testimony .......................................................................................................... 17

Prepared statement .......................................................................................... 85

McGovern, Hon. George:

Testimony .......................................................................................................... 4

Prepared statement .......................................................................................... 33

McGovern, Hon. James P.:

Testimony .......................................................................................................... 6

Prepared statement .......................................................................................... 39

Phillips, Jason:

Testimony .......................................................................................................... 19

Prepared statement .......................................................................................... 99

Terpstra, Hon. A. Ellen:

Testimony .......................................................................................................... 13

Prepared statement .......................................................................................... 66

Winter, Hon. Roger:

Testimony .......................................................................................................... 15

Prepared statement .......................................................................................... 78

Yager, Loren:

Testimony .......................................................................................................... 11

Prepared statement .......................................................................................... 45

APPENDIX

‘‘Indonesia School Feeding Conference Trip Report—May 13–17, 2002,’’ submitted by James P. McGovern ............................................................................ 108

Article entitled, ‘‘Shaping Young Islamic Hearts and Hatreds,’’ The New York

Times, October 14, 2001, submitted by James P. McGovern ........................... 113

Article entitled, ‘‘In Pakistan’s Squalor, Cradles of Terrorism,’’ The Washington Post, March 14, 2002, submitted by James P. McGovern ..................... 115

‘‘Afghanistan Food Aid,’’ submitted by Roger Winter ........................................... 117

(1)

HALF A LOAF—THE IMPACT OF EXCLUDING

SURPLUS COMMODITIES FROM AMERICA’S

RESPONSE TO GLOBAL HUNGER

TUESDAY, JUNE 4, 2002

U.S. SENATE,

OVERSIGHT OF GOVERNMENT MANAGEMENT, RESTRUCTURING,

AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE,

OF THE COMMITTEE ON GOVERNMENTAL AFFAIRS,

Washington, DC.

The Subcommittee met, pursuant to notice, at 2:27 p.m., in room

SD–342, Dirksen Senate Office Building, Hon. Richard J. Durbin,

Chairman of the Subcommittee, presiding.

Present: Senator Durbin.

OPENING STATEMENT OF CHAIRMAN DURBIN

Senator DURBIN. Good afternoon, and welcome to this hearing. I

apologize for the tardiness in starting. Occasionally, the leadership

just does not call me to coordinate these votes with our planned

Subcommittee hearings, but I am sure that both Senator and Congressman McGovern are aware of that problem from their public

service.

I am pleased to welcome you today to this hearing before the

Senate Subcommittee on Oversight of Government Management,

focusing on ‘‘Half a Loaf—The Impact of Excluding Surplus Commodities from America’s Response to Global Hunger.’’ Where is my next meal coming from? It is a question that not

many people in this room have ever had to ask, but for hundreds

of millions of people around the world, it is a reality of everyday

life. Today, Tuesday, June 4, 2002, over 20,000 people will die from

hunger and related causes. Most of them will be children under the

age of 5. The same will be true tomorrow, and the day after that

and every day for the foreseeable future, 20,000 victims a day.

Out on the margins, the scourges of poverty, natural disaster,

armed conflict, lack of education, and poor infrastructure keep

great numbers on the edge of starvation. The cruel irony is that the

world’s farmers produce more than enough food to nourish every

man, woman and child on the planet. It is impossible not to be

moved by images and stories of malnourished children and despairing parents, and it is very natural to want to help them, and help

them we do, as a government and as individuals.

Many people remember collecting coins for themselves and their

kids for UNICEF with Halloween candy. Washington’s response is

on a considerably larger scale, roughly $2 billion worth of food aid

2

this year alone. We provide about half of the world’s humanitarian

food donations, but hunger is not going away.

Next week’s review conference on the 1996 world food summit is

likely to conclude that progress toward the target of reducing by

half the number of hungry people in the world by the year 2015

is woefully behind the pace needed to reach that goal. There is no

easy answer to this challenge. What is certain is that America’s

values and our bounty compel us to lead the way in trying to meet

it.

The food aid programs we have developed over the years have

lengthened and improved the lives of countless numbers of people

in every region of the world. A daily ration as small as this can

mean the difference between life and death, and our farmers

produce enough to fill millions of these a day. U.S. farmers work

hand-in-hand with nongovernmental organizations like those represented here today and with the U.S. Department of Agriculture

and the U.S. Agency for International Development to channel

grains, and dairy products, oilseeds, and other products to food aid

recipients around the world. But even the best-run and most effective programs can benefit from regular oversight.

The Bush Administration’s review of U.S. food aid policy and activities provides an opportunity to step back for a moment and ask

important questions about our objectives, our organizational structure and the impact of our current programs. We should start by

asking what our ultimate goal is in providing food aid and the degree to which food aid should be integrated with other programs

we are using in pursuit of development goals. If we do not know

our goal, it is difficult to know how to reach it.

The ideal, I think everyone would agree, is achieving a state of

food security in which everyone has enough to eat so they can live

a healthy and productive life. In the post-September 11 world, it

is not too difficult to see how food security would contribute to

America’s homeland security if more people around the world saw

the United States as a compassionate helper of the less fortunate.

Well, we are not quite there yet, either in terms of having the

goal of food security in our grasp or receiving credit for the good

things we do. It is also true that our commitment to fighting global

hunger does not necessarily translate into reliable, overall levels of

assistance on a year-to-year basis.

Part of the fluctuation is beyond our control. Surpluses are simply larger in some years than others. But another part of the unpredictability of our program comes from conscious decisions here

in Washington. We need to seriously address the management side

of that challenge. For example, when the quantity of food provided

through the Section 416(b) program, which relies on surplus commodities, goes from more than 3.5 million metric tons in 1993 to

zero in 1996, 1997, and 1998, and it mushrooms to over 6 million

tons in 1999, that is a problem.

When the global school lunch program we will hear about shortly

begins raising the hopes and the nutritional levels of students, especially young girls, around the world and their parents in dozens

of countries, but then faces a steep cut in funding, that is a problem.

3

Our witnesses will give us their views on solutions that are within reach for our food aid programs. Our dialogue today may touch

on policy decisions, organizational diagrams, but ultimately our

goal is to have more people every day know the answer to the question, where is my next meal coming from?

I would like to welcome, as our first panel, two witnesses that

have at least three things in common: Their surnames, their outstanding service as elected officials, and their strong dedication to

ensuring that America does the right thing by sharing its bounty

with hungry people around the world.

First, the distinguished former Senator from South Dakota, and

former Ambassador to the Food and Agricultural Organization in

Rome, the Hon. George McGovern. Senator McGovern, you may

want people to believe that you are retired and living quietly in

Montana, but we know better. [Laughter.]

Whether you are advocating support for the Global Food for Education Initiative that Congress has renamed for you and your

former colleague, Senator Robert Dole, serving with me on the

board of the Friends of the World Food Program or continuing to

write and speak on a variety of subjects, you are an inspirational

example of how a life can be lived in service to others.

Your involvement with food aid dates back to the beginning,

more than 4 decades ago, as President Kennedy’s choice to direct

the Food for Peace Program, and from that time forward you have

been a tireless advocate for adequate nutrition, both in the United

States and around the world. We are honored to have you here

today.

Representative Jim McGovern of Massachusetts and I both look

back happily on 1996 as the year when we moved up in the world,

he to the House and I to the Senate. Since coming to Washington,

he has followed his namesake’s example in urging fellow House

members to recognize the importance of giving food aid programs

the resources they need to carry out their vital work.

I want to thank you both for coming, and I am looking forward

to your testimony. I will just recount to you one experience, and I

am sure each of you have similar ones in your private and public

life, of visiting a dusty little village outside of Calcutta in India,

and it was a time when the children were gathering for lunch. And

lunch for these kids was some sort of a mixture of grains, with a

little bit of water added to it, which there is not a kid in America

who would look at with a smile. You would have to force them to

eat it. These kids were jumping at it like it was Baskin-Robbins’

ice cream because this was basically what they had to eat for the

day.

Two things about that I remember in particular. When I went to

look at the bag of grain sent by U.S. AID to this little village in

India, I realized it had been packaged in Peoria, Illinois, from my

home State. The second thing I remember is that before they could

reach down and start eating, and they did voraciously, they had to

pause and for a moment say a Hindu prayer in thanksgiving for

whoever it was that was kind enough to send them that day’s food.

I will never forget that as long as I live: That our bounty out of

the Midwest made its way halfway around the world to a little village and kept children alive.

4

1The prepared statement of Senator McGovern appears in the Appendix on page 33.

Senator McGovern, more than anyone I can think of, you are responsible for our Nation’s consciousness of that responsibility. I

welcome you here today, and I invite your testimony.

TESTIMONY OF HON. GEORGE McGOVERN,1 FORMER U.S. SENATOR, AND FORMER U.S. AMBASSADOR TO THE FOOD AND

AGRICULTURE ORGANIZATION

Senator MCGOVERN. Well, thank you very much, Chairman Durbin, for your very generous words and for your own leadership on

this effort to combat hunger. When I first started talking in Rome

about a universal school lunch program some 2 years ago, you were

the first member of Congress who called my office and told me that

you wanted to do everything you could to move that program along,

and that is precisely what you have done in helping to bring about

the passage this year of the McGovern-Dole International Food for

Education and Child Nutrition bill.

When I was here as a Senator, Senator Durbin, I had trouble

getting bills through with my name on it, but now that I have

left—— [Laughter.]

Senator MCGOVERN [continuing]. People who are more effective,

like yourself, get these bills through. So I am grateful for that. I

think it helps being teamed up with Bob Dole, who is a great

champion of feeding the hungry, both in this country and abroad.

I am glad to be here with Congressman Jim McGovern. I wish

I could tell you he is my son, but I can tell you that we have been

colleagues in this effort from the very beginning. He has been the

obvious leader in the House of Representatives in carrying forward

this legislation.

Like you, I have had these experiences with children in dusty villages around the world and even in this country. I never tire of

telling about a little youngster in South Carolina that I saw on television in a school lunch room at a time when the American Federal School Lunch Program did not provide for free or reduced-price

lunches for poor kids. If you did not have the money to pay, you

did not eat. And in this particular incident, the television camera

zeroed in on this one little guy standing over along the edge of the

cafeteria wall, and they asked him what he thought when he had

nothing to eat and had to watch the other children eat. I thought

he would say that he was angry or that he was disgusted. He said,

‘‘I am ashamed.’’

And the reporter said, ‘‘Why is that?’’

And he said, ‘‘Because I have not got any money.’’

Well, that is the problem in so many parts of the world today.

We have straightened that out in the United States with the free

or reduced-price lunches that Senator Dole and I sponsored here

many years ago, but it is not straightened out in most of the countries of the Third World, where youngsters do not have enough to

eat.

Three hundred million school-age kids, by school age I mean the

first grade through the sixth grade—we will have to worry about

the middle school and the high school people later—three million

of those little folks, ages 6 to 12, that go to school that have nothVerDate 11-MAY-2000 07:48 Jan 28, 2003 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 80603.TXT SAFFAIRS PsN: SAFFAIRS
5

ing to eat. Actually, 130 million of them do not go to school, and

most of those are girls because of the favoritism towards males.

But this program that we are considering here today, and that

you co-sponsored, Senator Durbin, addresses that problem. It

would provide, under U.N. sponsorship, with the United States taking the lead, for school lunches for these youngsters who are not

now being fed. That has an immediate result in increasing enrollment. It brings the girls in, as well as the boys, and why should

it not? Once parents hear that their children can get a good nutritious meal every day just by showing up at the village school, they

are going to see to it that more children come to school. The grades

are going to go up, the academic performance, the athletic performance, the overall health of these youngsters.

Girls who do not go to school, many as early as 10 or 12 years

of age, and have an average, according to United Nation’s studies,

of 6 children. Whereas, the ones that go to school even for 6 years,

have a better understanding of what life is all about, marry later

and delay marriage for several years, and have an average of 2.9

children. Education cuts the birth rate in half, without abortions

or surgical procedures of any kind—the power of education. It is

facts like that that keep me awake nights trying to figure out how

we can advance this program more swiftly.

Now I appreciate, as does Senator Dole, the fact that Congress

authorized an initial $100 million for this program. Even if they

had only authorized $1, it would have been worthwhile because it

means that Congress has said it is OK for the United States to go

ahead with this program within the United Nations.

We previously received $300 million for this current year that

was decided on by President Clinton before he left office. The Congress has now come forward with an additional $100 million. I

wish, with all my heart, that had been $500 million, but I am glad

we got $100 million.

I know that one of the reasons why we are told that money is

tight is because of the so-called ‘‘war on terrorism,’’ and I am not

against going after the terrorists. I do not criticize the administration and the Congress for this, but I would say that we need to be

asking ourselves why is it that so many of these young men in the

Third World are so angry at us? What is it about us that makes

people want to blow down our buildings. I wonder if there is not

some relationship to that problem from the fact that half the people

around the world are in poverty?

We are told that these young followers of Osama bin Laden, a

wealthy misguided zealot, that the reason impoverished young

men, by the tens of thousands, sign up for his cause is because

they are told they can fly into the arms of Allah. I do not believe

that. I think that people that have a decent life are not all that

eager to fly into the arms of Allah or into heaven or anywhere else.

I would like to go to heaven someday, but not now. I am having

too good a time here on this earth, but a lot of people are not having a good time. They are miserable. They are hungry. They are

homeless. They cannot find a sanitary glass of water, and so when

a zealot like Osama bin Laden comes along and says, ‘‘follow me,’’

they are vulnerable to that kind of appeal.

6

1The prepared statement of James P. McGovern appears in the Appendix on page 39.

1The information provided by James P. McGovern with articles appear in the Appendix on

pages 108, 113, and 115 respectively.

The President says he thinks that they are attacking us because

they hate our freedom. In all due respect to the President, whom

I want to be successful, I would like to see him be a great President, as I would every President, I do not think he is right about

that. I do not think the people that flew those airplanes into the

World Trade Center did that because they hate our freedom. I

think there is something else behind it that is not that simple. It

is a more complicated matter of anger, and resentment and feeling

of helplessness and powerlessness.

Is it just possible that some young guy sitting out there in Calcutta or Saudi Arabia or Afghanistan heard of this murderous attack on the Trade Center in New York, and instead of being horrified as were all Americans and much of the world’s people, said to

himself, ‘‘we showed these rich people, we showed these people

with all of the military power that we are not to be ignored? ’’ I can only tell you that it is my own deep-held conviction that

if this country would take the lead at the United Nations, with the

help of our friends there, to provide a good nutritious lunch every

day for every school child in the world, I cannot help but think that

that would help us, in terms of our dealing with these Third World

countries around the globe. So I hope and pray that the Congress will take this $100 million

and add to it, from time to time, to keep this program going. I

think it is a good investment for us.

Thanks ever so much.

Senator DURBIN. Thank you very much, Senator.

Congressman Jim McGovern, you have been a great ally. You

called me during one of our breaks when the farm bill was being

considered in conference, and we were both on the phone begging

the conferees not to kill this program. We kept it alive. I am sure

you feel, as Senator McGovern does, that it is a great idea. I wish

it had more funding, but at least we are going to proceed from this

point forward, and I thank you for your support in joining us today.

TESTIMONY OF HON. JAMES P. McGOVERN,1 A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. MCGOVERN. Why thank you, Mr. Chairman. Before I begin

my remarks, I ask that my entire written testimony be in the

record.

Senator DURBIN. Without objection.

Senator MCGOVERN. And I would ask the same, Mr. Chairman.

Senator DURBIN. Without objection.

Mr. MCGOVERN. I also ask that an attachment by Land O’Lakes

describing a recent conference in Indonesia on U.S.-funded food

feeding programs and two articles about what happened in Pakistan during the 1990’s, when the United States and other donors

cut off food aid and development aid, be included in the record as

well.1

Senator DURBIN. Without objection.

Mr. MCGOVERN. Mr. Chairman, I thank you very much for holding this hearing. I thank you for inviting me here today. It is an

7

honor to appear on a panel next to Senator George McGovern,

whose leadership to end world hunger is legendary. I am proud to

work with him, and you, and Senator Dole, on the House side, in

trying to see that the Global Food for Education Initiative becomes

a reality. I think it is an incredibly important bill that has added

significance in the aftermath of September 11.

I should add one thing. In addition to George McGovern and I

sharing a passion about ending hunger and sharing the same last

name, we do have another thing in common, and that is that we

both carried Massachusetts. [Laughter.]

So I would add that to the list.

I should say that my knowledge of agriculture and food aid

issues are nowhere near what yours are or Senator McGovern’s or

some of the PVOs and other experts that are going to be testifying

here today. But as you know, because we have worked closely together on these matters, I have taken a special interest in ending

hunger among the world’s children. This is not a simple matter,

but I strongly believe that our failure thus far is mainly a failure

of political will and a failure to dedicate the resources required to

achieve success. This is a failure not just of the United States, but

of the international community.

Mr. Chairman, I believe that this is a moment when the United

States should be expanding and not constricting food and development aid abroad. I believe doing so promotes and protects our national interests, including our national security. I believe such aid

is a tangible demonstration of America’s values, character and priorities. I believe that the programs supported by our surplus commodities are not only needed to combat global hunger, they are an

integral part of a strategy to defeat global terrorism, as Senator

McGovern has outlined.

We have no problem finding money to increase our defense budget. We have no problem finding money for homeland security. We

have no problem finding money for increased border security or for

our intelligence budget. But when we talk about using surplus commodities to support programs that reduce hunger and attack the

root causes of hunger, poverty, illiteracy, the lack of economic opportunity, we are told we simply cannot afford it.

Well, Mr. Chairman, hunger, poverty, illiteracy, and the lack of

economic opportunity may not be the root causes of terrorism, but

they certainly provide the fertile ground that terrorists use to exploit and justify their actions.

President Bush just signed the new farm bill into law. Under

that bill, our hardworking farmers are likely to continue to produce

surplus commodities. Yet the White House recommends that we

eliminate surplus commodity donations abroad, reduce our overall

outlays for food aid and sharply reduce monetization of commodities. The President’s budget provided no new funding for the Global Food for Education Initiative, which is a program that, as you

know, is designed to make sure that every child in this world gets

one nutritious meal a day in a school setting, not only promoting

the cause of ending hunger, but also promoting the cause of universal education.

But I was very pleased that in the farm bill, in that reauthorization, there is $100 million in fiscal year 2003 to help bridge the gap

8

during the transition of the GFEI from a pilot program to a permanent program. However, substantially greater funds will be required in the President’s fiscal year 2004 budget to continue, let alone expand this program. This $100 million we are all grateful

for, but it is nowhere near what we need to do the kind of job that

all of us know needs to be done.

The President’s budget also shifted commodity, supported food

and development programs carried out by private voluntary organizations and the World Food Program, from USDA’s jurisdiction

over to USAID. This shift alone creates a substantial shortfall in

resources for development and emergency food aid programs.

At a time when the United Nations is predicting that 18 million

metric tons of food aid will need to be imported by the poorest

countries just to meet basic needs, a significant increase, Mr.

Chairman, we are cutting back on the very programs that have

proven effective in addressing those needs.

In Monterrey, Mexico, the President announced that he intends to provide an additional $5 billion in development aid over the next

few years. I welcome the President’s announcement, but these

funds genuinely need to be in addition to our existing emergency

humanitarian development and food aid programs. I do not want

to have to draw upon those ostensibly new monies to make up for

cutbacks that are mainly the result of a prejudice against off-budget commodity surplus programs.

Mr. Chairman, I want to bring to the Subcommittee’s attention

just one set of programs currently funded through USDA’s Section

416(b) surplus commodity allocations, one of the programs the administration recommends be eliminated.

In Indonesia, over 900,000 needy school children receive nutritious food through school feeding programs carried out by Land

O’Lakes, ACDI/VOCA, Mercy Corps International and International Relief and Development. You have samples of fortified

milk and wheat biscuits provided to these children, these little containers here with the American flag, and the Indonesian flag, and

these little biscuits here, the same thing. A soy beverage and wheat

and soy noodles are provided in other schools.

I have pictures over there of some children who benefit from

these Section 416 programs. These children, Mr. Chairman, are the

future of Indonesia, and we have a role to play in what kind of future that will be. If reducing hunger were the only accomplishment

of these programs, I would find that sufficient reason for continuing them. But USDA, and the U.S. PVOs, and cooperatives do

a great deal more. These groups work with PTAs, school administrators and elected officials to build local capacity and involvement

in the programs.

Workshops are held on nutrition and health. All of the products

are processed locally, developing a more viable commercial dairy

and food-processing sector and creating jobs and income from more

families.

The beverage packets can be recycled, and teachers and students

are actually involved in an environmental awareness program.

These programs have also created interest in U.S. agricultural

products, increasing our commercial exports to Indonesia, and

there is more detail about some of these programs, and their many

9

impacts in my written testimony. It takes a great deal of time,

work and personal capital to get these programs up and running.

What are we supposed to tell these children when this program

ends because we have eliminated Section 416(b) and no longer provide surplus commodity donations abroad? What are we to say to

their parents and their teachers? How will the local dairy and food

processors judge us as partners? Will the Indonesian Government

see us as a reliable partner in reducing hunger and malnutrition

when we stop our programs at the very point in time when Indonesia hopes to expand them to several of the outer islands? What

do you say to the U.S. PVOs and cooperatives that have put their

reputations on the line for us?

Mr. Chairman, other witnesses will be providing the Subcommittee with concrete facts and figures about how these changes

in policy and funding will affect our food and development programs in the field, but I would like, however, for you to remember

the faces of these children while I end on a cautionary note.

What kind of future do we court if we reduce our efforts to end

global hunger? This is not the time, Mr. Chairman, to abandon programs that have done us good service for many, many years. How

can we possibly make up the shortfall if they are eliminated? Improve them? Yes. Strengthen them? Yes. We need to exploit every

available tool to meet the challenges posed by global hunger and

poverty. As you rightly put it, Mr. Chairman, we cannot do that by

providing a half a loaf.

I would just say, in conclusion, that there are differences on some

of these issues between the Congress, and the administration, and

some of the PVOs, and other organizations that are trying to combat hunger. We need to work these issues out. We need to work

our differences out without reducing the amount of resources that

are available to deal with this problem. This is a huge problem,

and I worry that what the administration has put forth, you know,

makes less resources available and makes this challenge that we

are all committed to of trying to end hunger in the world much

more difficult.

Thank you, Mr. Chairman.

Senator DURBIN. Thank you, Congressman McGovern.

Let me ask only one question of both of you, if you have the time.

You may have a vote or something you have to go to, Congressman,

but if you can.

Senator McGovern, when you first wrote the article for the Washington Post, one of the things that intrigued me was not just the

idea of a new approach, the idea of an initiative from the United

States, but also kind of an invitation or challenge to the rest of the

word to come join us. We are not going to do this alone. There are

a lot of children out there. We can all do a little bit of it and come

together in a global effort from the developed countries to the Third

World and underdeveloped countries with this kind of approach.

Now you were in a position, as an ambassador in Rome, to see

it in terms of other participants and nations getting involved. I

want to commend President Bush for naming, as your successor,

our great friend, Congressman Tony Hall, who has devoted his career to fighting world hunger. But tell me about this involvement

of other nations so that we can even expand on a small investment,

10

like $100 million, considering the global challenge, to make it

stretch even further.

Senator MCGOVERN. Mr. Chairman, when I learned that Congress had authorized $100 million for this coming year, the thought

went through my mind that it is going to be very painful to see this

program cut back that far from the $300 million we have been operating on in the current year and that there might be two alternatives to building that up. No. 1 would be to go to other countries

and make clear to them that Congress has authorized this program

for a forward period of a number of years and that we have to have

the help of other countries, either in the form of commodities or

cash. A country like Japan presumably would offer cash, rather

than commodities. Canada and Australia might come forward with

commodities. Other countries might be the source, I would think,

of $100 million.

And it may be possible to raise another $100 million from private

corporations and foundations in this country. In a sense, that

makes the United States contribute more than its share. The usual

U.N. formula is one-fourth from the United States, three-fourths

from the rest of the world. But to get this program rolling, I think

the United States is going to have to be out in front in a bold way.

I have not yet had the opportunity to go to work on the foundations and corporations, but I know some of them that may be favorable to this, and it is just possible that we could raise another $100

million there, which if we got that much from other countries, that

gets us back up to the $300 million that we are operating on in the

current year.

Countries have all kinds of excuses for not wanting to do this,

and they suspect, some of them, that we are doing this to get rid

of our farm surpluses. I have tried to explain to every ambassador

in Rome and every head of state I could reach that we do not dump

surpluses on international markets. We will operate this program

with great care. We are the leading commercial exporter in the

world. We have a self-interest in not disrupting commercial markets. We do not want to disrupt the markets of local producers in

the receiving countries, and we take care not to do that.

Senator DURBIN. Congressman McGovern.

Mr. MCGOVERN. If I could just build on that. I agree with Senator McGovern that we, in the United States, need to demonstrate

the leadership that we are serious about this program, and we

need to be out front asking other countries to participate. At G–8

summits, at other kinds of international conferences, I think the

President of the United States needs to raise this issue and say

this is a priority of the United States of America, and we want you

to be a partner in this. Every foreign leader I meet with I raise the

issue, but I do not have the persuasive powers of the President of

the United States, none of us do. I mean, we need it to be at that

level.

It is frustrating to me that we have not demonstrated more leadership because, as Senator McGovern pointed out, this concept that

all of us are behind, and it is a bipartisan effort, not only deals

with issues of hunger, but also addresses a whole bunch of other

social challenges around the world. You cannot talk about real economic development, you cannot talk about empowering women, you

11

1The prepared statement of Mr. Yager appears in the Appendix on page 45.

cannot talk about tolerance or dealing with some of these dreaded

diseases without education. This is a way to get kids into school.

In the pilot program that is going on, all of the evidence is that

when we do this, we introduce food in these school settings, two

things happen: Class attendance increases, attendance among girls,

in particular, increases. I regret that, well, because one of the pilot

programs that we had is in Pakistan, aimed at getting more women

into school. I think our U.S. ambassador should have been there for

the opening of this program. I think we should have sent out whoever we could to say that this is what we are about. The Pakistani

Government now is talking about a school lunch program throughout the country because they understand, as we all now know, is

that one of the reasons why a lot of young children go to schools

that are run by extremist groups is because they feed them. I

mean, something as simple as a meal can make the difference here.

So I think we need to persuade the administration to join with

the rest of us and to get out there and to fight for us, not just say

they are sympathetic, but to put some real money behind this and

to get out there and talk about it when they are at these international settings.

Senator DURBIN. I think that is good advice, and I think we all

want to take on a task of calling our friend, Tony Hall, and asking

for his help, and guidance, and advice, and counsel, in terms of expanding the reach of this and involving other nations in this effort.

Thank you both for joining us. I appreciate it, and your testimony is going to be part of our record as we proceed.

I want to welcome our second panel. It includes Dr. Loren Yager,

Director of the International Affairs and Trade Group with the U.S.

General Accounting Office; the Hon. Ellen Terpstra, Administrator

of the U.S. Department of Agriculture’s Foreign Agricultural Service; the Hon. Roger Winter, Assistant Administrator of the U.S.

Agency for International Development in the Bureau of Democracy,

Conflict and Humanitarian Assistance; Ellen Levinson, Executive

Director of the Coalition for Food Aid; and from Highland Park, Illinois, Jason Phillips, who is the Country Director for Kenya Programs with the International Rescue Committee.

Before you all get comfortable, I will tell you that the custom of

the Subcommittee is to swear you in as witnesses. So, if you would

not mind rising and raising your right hand.

[Witnesses sworn en masse.]

Senator DURBIN. Thank you very much.

Let the record note that the witnesses answered in the affirmative, and I will ask you now if you would please be kind enough

to make your oral statements. If you could keep them around 5

minutes, that will give me a chance to ask a few questions after

you have completed your testimony.

Dr. Yager, would you please proceed.

TESTIMONY OF LOREN YAGER,1 DIRECTOR, INTERNATIONAL

AFFAIRS AND TRADE GROUP, GENERAL ACCOUNTING OFFICE

Mr. YAGER. Thank you, Mr. Chairman.

12

Mr. Chairman, I am pleased to appear again before the Subcommittee at this time to discuss the management and operation

of U.S. food aid programs. The United States is, by far, the largest

provider of food aid in the world, and U.S. food aid programs account for a considerable portion——

The United Nations Food and Agriculture Organization estimates that about 800 million people are chronically undernourished in the developing world and that there has been limited

progress in meeting the 1996 World Food Summit goal.

My written statement covers the full set of food aid programs,

but in my testimony this afternoon, I will concentrate on food aid

surplus programs. My observations are based on recent interviews

with and documents from administration officials and from GAO’s

series of reports on food aid over the last 10 years.

Specifically, I will discuss three topics:

First, the structure of surplus-related food aid programs; second,

the contribution of surpluses to the fluctuations in U.S. food aid;

and, finally, observations on the management of surplus programs.

In terms of the structure, U.S. food aid is provided through six

programs administered by two different agencies. These programs

are summarized in the large poster that I have provided in the

front of the room. This poster is also included as Table 1 in my

written testimony.

However, the program of the six shown that has historically been

used to provide food aid through surplus commodities is Section

416(b). This program is administered by the Agriculture Department and can use these commodities to fund Food for Progress, as

well as Title II and Title III-type programs. Even though Title II

and Title III are typically run by USAID, when they are funded by

Section 416(b) commodities, the programs are managed by USDA.

The other program that exists to fund food aid through surpluses

is the Emerson Reserve, which was formally known as the Food Security Humanitarian Reserve. It exists to meet humanitarian food

needs in developing countries and can hold up to 4 million metric

tons of grains. In any fiscal year, up to 500,000 tons can be used

for urgent humanitarian relief.

The second issue I will discuss is the role of surpluses in the fluctuations in U.S. food aid since 1990. I have also brought a graph

of these expenditures, but it is also included as Figure 1 in my

written testimony.

As I mentioned in my written statement, these fluctuations or

the fluctuations in these shipments have been the result of three

factors: U.S. food aid policies, U.S. agricultural surpluses, and

international events.

As you mentioned in your opening statement, Mr. Chairman,

surpluses were particularly important during two periods since

1990, the years 1990 to 1993 and from 1999 through 2002. It is

shown by the medium-gray box labeled Section 416(b). It disappears, as you also mention in your opening statement, from the

years 1996 through 1998. Over this entire period, the Section

416(b) program contributed $2.4 billion, which made it the thirdlargest of the six food aid programs funded by the U.S. Government.

13

1The prepared statement of Ms. Terpstra appears in the Appendix on page 66.

An additional observation on the use of surpluses in food aid relates to the volume of commodities rather than the level of food aid

funding. As shown in Figure 2 of my written testimony, the volume

of food aid shipments fluctuates even more sharply than the spending itself. The reason is that commodity prices tend to be lower

during periods of surplus so that the quantity of grain that can be

purchased with the same dollars increases.

Finally, I will address two policy implications of the use of surpluses in food aid programs. One is that the effective use of surpluses creates significant management challenges due to the highly

variable nature of the shipments from year to year. For example,

our recent study of the Global Food for Education Initiative suggests that surpluses are not well-suited to programs that are designed to achieve long-term goals.

On the other hand, the existence of surpluses presents a difficult

trade-off. In surplus years, it is possible to purchase and distribute

significantly more food aid because of the lower prices.

However, it raises particular challenges because of the on-again/

off-again nature of these surpluses, and there is also no guarantee

that the surpluses will be available in those situations when the

needs are the greatest around the world.

Mr. Chairman, thank you for the opportunity to appear before

the Subcommittee to address this important topic. As you have

mentioned, it is particularly timely, given that the Food Summit:

Plus Five Years, is scheduled to begin in Rome next week.

This concludes my statement. I would be happy to answer any

questions that you might have.

Senator DURBIN. Thank you. I will have some questions after the

panel is completed.

Ms. Terpstra, thank you for joining us.

TESTIMONY OF HON. A. ELLEN TERPSTRA,1 ADMINISTRATOR,

FOREIGN AGRICULTURAL SERVICE, U.S. DEPARTMENT OF

AGRICULTURE

Ms. TERPSTRA. Thank you very much, Mr. Chairman. I am

pleased to be here with you this afternoon to discuss the food aid

programs operated by the U.S. Department of Agriculture.

As a leader in agricultural production, the United States has

long recognized its responsibility to assist in alleviating world hunger through food donations, financial aid, and technical assistance.

The United States began providing food aid in the 1920’s. It was

not until 1954 that legislative authority created the P.L. 480 or

Food for Peace Program.

Over the years, the goals of our programs have changed in response to varying economic, financial, political, and agricultural

conditions at home and abroad. Today’s recipients include countries

that did not exist in the 1950’s, countries that have been struggling

after major upheavals.

Other more traditional developing countries, such as Bangladesh

and Ethiopia, also continue to see their people benefit from P.L.

480 and two other food aid authorities—the Food for Progress Act

and Section 416(b) of the Agricultural Act of 1949. The United

14

States continues to be the world’s chief provider of food aid, although other developed countries now play a more active role. We

are actively encouraging other countries to join us in this effort.

We are always seeking to improve the effectiveness and efficiency

of our programs. To that end, in 2001, the administration undertook a comprehensive review of U.S. foreign food aid programs. The

review reemphasized that the broad objective of U.S. food aid is to

use the agricultural abundance of the United States to meet humanitarian and foreign policy objectives related to global food security, while enhancing global agricultural trade.

In addition, U.S. food assistance programs should increasingly

target the most food-insecure populations. The administration supports increased direct distribution and continues to support development programs.

The review identified several areas of concern:

First, the number of U.S. food aid programs and the agencies involved in administering them has inevitably resulted in inefficiencies.

Second, expanded use of surplus commodities has led to uncertainties about future food aid availability on the part of both recipient countries and distributing agencies.

As a result of the review, the administration developed a series

of recommendations:

First, end the use of the CCC Charter Act to purchase commodities that are then donated through Section 416(b);

Second, increase the funding requested for Title II;

Third, increase reliance on the Bill Emerson Humanitarian

Trust;

Fourth, improve the focus of our food aid programs; and,

Fifth, provide better service to our partners.

With that background, let me now turn to some of your specific

questions. The administration believes that the food aid review proposals I outlined will increase food aid reliability and allow for a

greater focus on direct feeding of needy people, an administration

priority. The administration plans to increase the amount of food

available under Title II for emergencies and for direct feeding.

The administration also hopes to increase nonfood development

assistance to make up for part of the decrease in development programs from monetized food aid. Based on these shifts, U.S. food aid

will focus more on direct distribution to needy people and on U.S.

Government funding for development programs.

In addition, the administration plans to eliminate redundant

functions of USDA and AID to allow each agency to focus its efforts. Overall, I think we can be proud of our record on providing

food aid to the most needy citizens of the world. The United States

has, and continues to be, the largest donor of food aid, providing

more than half of all global food aid. We have a history of stepping

forward to respond to crises wherever they exist.

Our infrastructure is the envy of the world. We can procure and

ship our products in a timely way so that private voluntary organizations and the World Food Program know they can count on us.

Today, USDA and AID together are providing food assistance to

help meet food needs in about 80 countries around the world.

15

1The prepared statement of Mr. Winter appears in the Appendix on page 78.

You also asked about whether the USDA will be retaining oversight of the McGovern-Dole International Food for Education and

Child Nutrition program. The Farm Security and Rural Investment

Act of 2002 gives the President the authority to designate one or

more Federal agencies to implement the program.

USDA appreciates the opportunity to have implemented the

Global Food for Education pilot program and is currently evaluating the initial projects. This evaluation will be used to assist in

developing a recommendation for the President on how the program should be structured in the future.

Mr. Chairman, we recognize the magnitude of the problems we

face in our efforts to alleviate hunger and suffering around the

world. The Food and Agriculture Organization recently estimated

that about 800 million people in the world are suffering from hunger and that number is not declining as hoped.

Every year, in addition to chronic problems related to poverty,

the world faces new hunger emergencies. Yet, in relation to the

current needs, the resources available are limited. In this era of

tight national budgets, the United States and other food donor nations all face difficult decisions about where to allocate our precious

resources.

Next week, Secretary Veneman will be leading the U.S. delegation to the World Food Summit: Five Years Later. There she will

be reaffirming the continuing U.S. commitment to reducing the

number of people suffering from chronic hunger. But food aid is

just one part of achieving world food security. Food aid efforts must

work hand in hand with development efforts, sharing technology,

expanding trade, and promoting economic reform. These factors all

help produce growth and reduce poverty, the keys to food security.

Mr. Chairman, that concludes my statement, and I would be

happy to answer any questions.

Senator DURBIN. Thank you. Mr. Winter.

TESTIMONY OF HON. ROGER WINTER,1 ASSISTANT ADMINISTRATOR, BUREAU OF DEMOCRACY, CONFLICT AND HUMANITARIAN ASSISTANCE, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

Mr. WINTER. Chairman Durbin, thank you for having me here.

I appreciate it.

I am going to make comments, particularly focusing on the perspective of USAID. Let me just reiterate, though, what my colleague just indicated, and that is the United States provides about

50 percent of food aid worldwide, and that is far more than any

other country. The administration is committed to maintaining this

leadership position and affirms the World Food Summit’s goal of

cutting in half by 2015 the number of undernourished people.

We spoke a moment ago about the food aid review conducted by

the administration. USAID was an active participant in that food

aid review and agrees with its results. The food aid review’s principal aspect of replacing reliance on Section 416(b) with a sustained

increase in Title II budget levels for food aid will provide us, at

16

USAID, a more dependable source of funding and enable USAID

programs to be managed more rationally.

USAID also agrees with the realignment of responsibilities between USAID and USDA. This realignment will allow both agencies to specialize, will streamline the process and will improve

management of U.S. Government food aid programs. The increase requested in the USAID budget of $335 million in

Title II resources will, if appropriated by the Congress, position us

well to respond to food needs in fiscal year 2003, as compared to

the average response levels over the last decade. I will come back

to that point.

If for some unforeseen reason, the appropriation proves inadequate, we would seek additional resources from the Bill Emerson

Humanitarian Trust. Our requested increase of $335 million in

Title II funds will establish a new floor for Title II food aid, but

will undoubtedly require adjustments in future years based on our

actual experience in implementing the new approach.

You asked the question, ‘‘what impact would phasing out of surplus commodities have on USAID’s food programs.’’ As I indicated,

USAID was an active participant in the administration’s food aid

review, and we agree with the results. These results, when taken

together, will, when fully implemented, we believe, strengthen our

food aid and food security programs.

Specifically, however, to the question, we believe these changes

will improve feeding effectiveness by ensuring more dependable

levels of food aid. Assuming congressional approval of at least the

$335 million bump-up that we requested for fiscal year 2003, our

appropriation would actually slightly exceed the resources we have

had available on the average over the last 10 years for food aid,

if you combine the availability of Section 416(b) and Title II appropriations.

In addition, the changes in the program, we believe, will improve

our ability to manage these programs. Our resources will be known

to us as we begin a fiscal year. The process will be more transparent as we seek to plan our programs and, in fact, we will be

able to plan them better, we will be able to target them better, and

we will be able to evaluate them better.

If, in fact, the appropriation, even with these benefits of the

changes, proves, to some degree, inadequate, the surge capacity

continues to exist. The Bill Emerson Humanitarian Trust is available. In fact, we are seeking, given the lateness in the fiscal year,

to draw down on the Bill Emerson Humanitarian Trust for the

emerging situation in Southern Africa right now.

Of course, the Section 416(b) authority remains if, for some reason, the President wished to consider its utilization. On balance,

this administration is not out of touch with the humanitarian realities of the world, and the increasing commitments that we are

making to humanitarian assistance, as well as development assistance, I think, are an indication of that. However, this new approach to food aid is a work in progress. The commitment this administration has to the underlying goal of reaching food security

globally is a real commitment, and it is, to some degree, a story we

will continue to tell for the next couple of years. Thank you.

Senator DURBIN. Thanks, Mr. Winter. Ms. Levinson.

17

1The prepared statement of Ms. Levinson appears in the Appendix on page 85.

TESTIMONY OF ELLEN S. LEVINSON,1 GOVERNMENT RELATIONS DIRECTOR, CADWALADER, WICKERSHAM AND TAFT,

AND EXECUTIVE DIRECTOR, COALITION FOR FOOD AID

Ms. LEVINSON. Thank you very much, Mr. Chairman. I am Ellen

Levinson, Government Relations Director at the firm Cadwalader,

Wickersham and Taft. I also am Executive Director of the Coalition

for Food Aid, which is comprised of private voluntary organizations

and cooperatives—I guess we always call them PVOs—that conduct

overseas food aid programs.

We have a very fundamental disagreement with the gentleman

and the woman to my right, both of whom I adore and think highly

of. I think we have a good administration team on food aid and development. But we have fundamental differences.

We are very disappointed in the administration’s food aid review

and its conclusions. We feel very strongly that it is somewhat superficial and also does not look at the basic types of needs that food

aid is supposed to be addressing.

First of all, what GAO was saying earlier, and we agree with

this, is that Section 416 is a source of surplus commodities and is

not a reliable mechanism for food aid. You cannot get the right

types, and you cannot get the adequate amounts when you need

them. So, in that sense, we all agree, I think, that Section 416

should not be relied upon for either chronic needs, meaning Food

for Education, mother-child health care, agriculture development,

nor for emergencies. What if we do not have surpluses, like in 1996

and 1997, when we have emergency needs? So, we are all in agreement on that, I believe.

However, when you break down to the next level, what do we do

then as a fundamental way to deal with food aid needs? There are

two types: Chronic needs—there are about 800 million people in

the world who are hungry and do not have enough food day in and

day out. The people you see when you go to the field, these are not

emergencies. They live like that.

Those people can be helped with American food aid, and have

been over the years. It is not just through direct feeding. For example, Food for Education programs often have a take-home ration because it is the reward mechanism, in a sense. You send your kid

to school, we will give you something to take home for the betterment of the whole family.

Food for Work programs, those are take-home rations. The same

with agriculture development. Oftentimes, there is monetization,

the sale of the commodity. What do we end up with at the end of

that? We end up not just with food delivered, but rather a household that only had 3 months’ worth of food during the year now has

9 months of food during the year. I call that progress and success.

That happens under P.L. 480 Title II. It is not ‘‘feeding,’’ but these

are programs that work.

What we are trying to say is do not forget we are working with

local communities. We have to adapt programs to meet local needs.

Just food handouts or what the administration calls ‘‘feeding’’ does

not do it. However, it is very important to have emergency feeding

18

and to have access to commodities above the amount of food aid

that is provided for P.L. 480. Just funding P.L. 480 is not adequate.

It is wonderful that the administration asked for increases in

P.L. 480, Title II. That could be used immediately. But, I have a

question. If they asked for these increases, why, in the fiscal year

2003 program cycle, are my members, the PVOs, being told by

USAID that there will not be enough food for development programs? PVOs are being asked to cut back on their proposals because the administration is holding back Title II food aid in order

to keep it in reserve for emergencies.

Well, the Bill Emerson Humanitarian Trust is for emergencies,

why do you not use it for emergencies? Why are they taking food

away from developmental Title II programs? Seventy-five percent

of Title II food aid, according to the law, is for developmental programs, not emergency. When the 25 percent of Title II that is for

emergencies is used, the administration should go to the Trust,

which is a reserve of commodities. The problem with the Trust is

that when you draw down on those commodities and use them for

an emergency, you have to pay back the Trust in the future.

USAID has to pay CCC for those commodities that were used.

What the administration wants to do, basically, is to draw it

down, and encumber future funding for P.L. 480 to pay it back.

That is not sufficient. All you are doing is taking it out today and

then taking away from food aid in the future. If Congress appropriates $900 million, let’s say, for Title II or a billion dollars, but

that money will not go to Title II. It is going to go to pay back the

Trust in the future.

This reserve has to be set up in such a way that USAID does not

have to pay it back by encumbering future Title II funds or P.L.

480 Title I funds. That is really important.

The second problem with the Trust is that when you take commodities out, you have to fill it back up. The money USAID pays

back to the Trust does not go to buy more commodities. It just goes

back to the Treasury, except for $20 million. That is all they can

use, and that will buy, maybe, 140,000 metric tons of wheat. That

is all.

There needs to be a mechanism to put the commodities back in.

There is a mechanism. Right now, USDA could, through CCC

Charter Act authority, buy commodities off the market because

prices are low. There is definitely abundance of availability, which

I know you hear from your constituencies regularly. USDA could

buy commodities off the market, taking them into CCC inventory

and then designate them as part of the Trust and replenishing the

Trust.

I think the administration’s food aid policy is a half loaf. It definitely is not a full loaf. Congress tried to make some changes in

the Farm Bill, calling for improved management at AID and

USDA, which should be terrific. But, the administration really

needs to think again, about how we address chronic needs, as well

as emergency needs. Thank you.

Senator DURBIN. Thank you. Mr. Phillips.

19

1The prepared statement of Mr. Phillips appears in the Appendix on page 99.

TESTIMONY OF JASON PHILLIPS,1 COUNTRY DIRECTOR,

INTERNATIONAL RESCUE COMMITTEE, KENYA

Mr. PHILLIPS. Mr. Chairman, thank you for inviting me to testify

today.

As the International Rescue Committee’s Country Director for

Kenya, I spend a good deal of my time managing IRC’s health and

feeding programs in Kenya’s Kakuma refugee camp.

I would like to offer some brief observations on the problems in

the camp related to food security and ask that my more detailed,

written testimony be submitted for the record.

Senator DURBIN. Without objection.

Mr. PHILLIPS. There is a high rate of malnutrition in Kakuma,

reflective of an abandonment of minimum international humanitarian standards in food assistance. According to the United Nations High Commissioner for Refugees and World Food Program

guidelines introduced in 1998, the minimum caloric requirement

for one person for 1 day is 2,100 kilocalories.

For the past 2.5 years, the Kakuma general ration has fallen

woefully short of these standards. In the year 2000, the average

twice-monthly general ration distributed was 1,877 kilocalories. In

2001, it was 1,770. Since January 2002, the situation has deteriorated even further and can only now be described as critical. The

average ration distributed from January to mid-May 2002 was

1,449 kilocalories. This is perhaps best graphically illustrated on

the chart that is here for your review.

According to the last camp-wide nutrition survey conducted in

Kakuma in April 2001, the global malnutrition rate stood at 17.3

percent. While alarming, in and of itself, what is more alarming is

that these rates in Kakuma have not significantly deviated from

this level for the last 6 years.

Since 1995, the rate has not dropped below 14 percent and was

as high as 18.3 percent in May 1999. These are rates that one

would expect to see in nutritional emergencies and represent levels

in excess of what one would find in protracted, stable refugee

camps in neighboring countries. While, fortunately, the rate of severe malnutrition, which requires therapeutic intervention to save

life, is very low, the high global rate suggests there are many vulnerable people in Kakuma who, under continuing poor or deteriorating general rations, stand to slide into a life-threatening situation.

IRC has been running supplementary and therapeutic feeding

programs to cater for the needs of the malnourished, particularly

the most vulnerable members of this refugee community, children

under five and pregnant and lactating women. As long as the general ration remains compromised, it is impossible to envision an

end to what should be temporary feeding programs.

In April 2001, IRC, in conjunction with the United Nations High

Commissioner for Refugees and the Institute of Child Health in

London, undertook a micronutrient survey in Kakuma. The results

suggest that the composition, as well as the amount, of the general

ration leaves a lot to be desired. According to the analysis, the general ration was deficient in three of six key micronutrients. Overall,

20

Vitamin A deficiency was found in 47.2 percent of children under

five, and anemia was present in 61.3 percent of children. The latter

was flagged as a situation of high public health significance.

To some extent, the picture I have just given you is the good

news. The entire World Food Program food pipeline for the protracted refugee operation in Kenya has been consistently

underresourced throughout the year and remains in critical condition.

As of 15 May, WFP reported that wheat flour stocks are only expected to last through May, although a U.S. pledge sufficient to

cover 5 to 6 months has been made, but not arrived yet.

Pulses, such as lentils, have not been distributed since mid-April

and only a 3-month supply is in the pipeline. Oil has run out completely in Kakuma, and there is nothing in the pipeline, and salt

is only sufficient until June.

What is particularly notable about this situation I have recounted is that this is happening not in an acute emergency

setting, but in a care and maintenance camp that has been in existence for over 10 years. The cruel irony is that a nutritional

emergency in Kakuma will not only lead to a loss of life, but also

significant financial cost to donors above and beyond the costs of

meeting minimum food assistance standards, to treat and rehabilitate the victims of increasing severe malnutrition.

Given all of the circumstances I have described, what would be

the implications of a further reduction in food assistance to

Kakuma? The short- to medium-term impact would be an increase

in hardship and a decrease in household food security leading to

increased malnutrition for the vast majority of the 64,000 refugees

living in Kakuma. The effects of this reduction will be felt first and

most acutely by the most vulnerable members of the community.

The condition of children under five in supplementary feeding programs will deteriorate, leading to increases in admissions in therapeutic feeding.

Pregnant women stand an increased risk of delivering low-birthweight babies. Malnutrition makes one more susceptible to other

diseases and, thus, malnutrition-related morbidity will increase.

Depending on the severity and the duration of the reductions in the

general ration, one would expect this cycle to eventually lead to a

rise in malnutrition-related deaths.

Reductions in food aid to refugees in Kakuma could also be expected to lead to an increase in insecurity. Evidence shows that

under worsening conditions, there are other coping strategies that

refugees can, and will, resort to when all others are exhausted.

These include theft, banditry, and violent conflict with neighbors in

order to access food.

Finally, I want to touch on the special role that the United

States plays in Kakuma and review some of the options going forward. To speak of an international community in support of refugee assistance in Kenya is a bit misleading. This is because, by

and large, it is the U.S. Government that is financing the care and

maintenance of refugees there. The Bureau of Population, Refugees

and Migration itself provides over 50 percent of the International

Rescue Committee’s $3 million annual budget for Kakuma and

21

makes sizable contributions to other organizations such as Lutheran World Federation, CARE and UNHCR.

Nowhere, however, are Kenya refugee operations more dependent on U.S. assistance than in the area of food aid. According to

statistics provided by the World Food Program, the United States

provided 68.3 percent of donor food assistance to refugees in Kenya

during the period October 1, 2000, to March 14, 2002. Were it not

for a very recent sizable cash contribution from the Japanese Government, that figure would have stood at approximately 80 percent.

This represents a significant shift in the overall financing of the

refugee food assistance program in Kenya from 4 years ago. From

October 1, 1998, to September 20, 2000, the U.S. contributed 39

percent of the total resources. Refugee food aid in Kenya has gone

from a multilateral to almost a unilateral affair.

As I have tried to outline in my testimony, cutting back on food

at this stage is neither cost-effective nor humane. From my experience in the camp, I would make the following recommendations

aimed at reducing the U.S. share of assistance to Kenya and providing more durable solutions for the refugees.

No. 1, engage in multilateral diplomacy with the rest of the

donor community to share the burden of caring for refugees in

Kenya.

Two, engage in bilateral diplomacy with the Government of

Kenya to expand opportunities for local integration and remove

fundamental barriers to self-reliance.

Three, continue to generously support and fast track resettlement for those for whom repatriation is not an option and for those

who face protection problems in the country of asylum.

Four, explore with the U.N. High Commissioner for Refugees

more aggressive and creative opportunities to support voluntary repatriation, not just to Sudan, but for all nationalities resident as

refugees in Kenya.

Five, continue and increase assistance to developmental projects

in Southern Sudan to make it an attractive place to go home.

Finally, six, continue and expand the U.S. role in bringing peace

to countries generating refugees in Kenya, particularly Sudan and

Somalia. Peace is the most durable solution to the plight of the refugee.

Mr. Chairman, thank you very much, again, for giving me the

opportunity to appear before you today.

Senator DURBIN. Thank you, Mr. Phillips.

Let me follow up on your last comment, and from what I hear,

if you do not have basic food security, you are fomenting instability,

individually, by family, by community, and inviting the very problems that we are worrying about around the world. This is the kind

of instability in societies that lead to violent conduct by young people and extremism being an appeal to the poorest of the poor. Is

that what you have seen? I do not want to take it any further than

you want me to, but that is a conclusion which I find inescapable

from what you just said.

Mr. PHILLIPS. Well, I think evidence definitely shows that under

conditions of poor resourcing for these types of programs, that violence is one option that people resort to, when you have scarce resources that have to be divided among a growing population, and

22

I think we have heard testimony today to the fact that these problems are not diminishing; in fact, they are increasing. When we

have scarce resources, those often become the subject of competition. And certainly in a very micro-local context like the one camp

that I work in, we see evidence of that on a daily basis.

Senator DURBIN. I have a number of questions. You are going to

help to educate a Senator, which is no mean feat, on some questions that have been on my mind for a while. Let me just preface

it by saying that I hope to go to the floor this afternoon or first

thing in the morning to offer an amendment to the supplemental

to make a rather substantial increase in our contribution to the

global AIDS crisis.

To put this in some context, we talked a lot about food here. I

do not think we can discount this from health care, and the problems that are facing these same people are not just starvation, but

AIDS, and malaria, and tuberculosis and so many other things that

also can compromise an ordinary life and make it very difficult to

survive.

We spent last year $300 million on the global AIDS effort. This year we will spend $200 million. If you think the AIDS epidemic

is under control and that is why we are spending less, just the opposite is true. The estimates are 40 million infected people in the

world. Ninety-five percent of them do not know it. Twenty-five million in Africa is the last figure I heard, some 15 million AIDS orphans in Africa. Mr. Wolfensohn, at the World Bank, says that in

the next 5 years we will have 20 million infected people in India

alone.

So take this food discussion to a health discussion and try to visualize what this world starts looking like 2, 3, 4, 5 and 10 years

from now, when our children are looking for some stability and absence of fear in their daily lives. I think that is part of this discussion.

I hope we all concede as a starting point that we are not making

sufficient progress, in terms of world hunger, to reduce our commitment. Is there anyone who quarrels with that premise, for what I

am about to ask? I do not believe anyone does.

Let me ask you then, Ms. Terpstra and Mr. Winter, I understand

what you are saying, and your terminology, from a management

viewpoint is, Mr. Yager agrees and we all agree, using surplus

commodities is totally unpredictable. You just do not know what

you are going to have, and when you are going to have it, and you

try to build a program around a surplus, it may come pouring in

at a time when you do not need it and be absent when you do.

I think what you have suggested is, from a management viewpoint, you have used words like dependable, transparent, rationalized process, streamlined, and all of that suggests that if you are

not dependent on surplus, you can manage better what you are

dealing with and know where to allocate it and the impact it is

likely to have.

Am I putting words in your mouth or is that the conclusion that

you are bringing to us, in terms of moving away from Section

416(b)?

Ms. Terpstra, is that fair?

Ms. TERPSTRA. Yes, I would say that sums it up very well.

23

Senator DURBIN. But then let me ask you, in fairness now, I

mean, if you eliminate the surplus, you are, clearly, at least in the

good times, eliminating food aid to some people. Let us assume

that you have a group of 30 children somewhere in the Third

World, and the United States is feeding 15 of them, since we provide about half of the aid there, but in a great year, with a great

surplus, we may feed 25. Now we are in a situation where we have

eliminated that surplus, so the best we can do is 15, even in the

bad years, because I do not see the overall spending for food aid

going up, I just see the elimination of the surplus.

Mr. Winter, is that a fair characterization of where we are headed?

Mr. WINTER. Well, I mean, at least for USAID, we will have a

significant increase in the coming year, if appropriated. Our request is quite substantial. In addition, I think you have to take

food aid in the context of a whole series of other factors that relate

to it. For example, within USAID, agriculture and improving agriculture in these food-deficit countries is a high priority for us. As

a matter of fact, it is USAID’s major priority area right now. We

have already reprogrammed this year from the appropriation an

additional $30 million to improve agricultural productivity in the

countries that we are talking about. We have asked for a 25-percent increase in our agricultural programs for next year. We expect

to continue to do that.

If you take the country that Jason was talking about, in terms

of Sudan, we have just made a $22.5-million commitment to agricultural extension services and a whole range of compatible efforts

to help those countries actually begin to produce more so it is not

just food aid, it is food in the context of an overall development program that we are——

Senator DURBIN. Can we go there next? Because I could not

agree with you more, but I want to make that the second phase of

the question.

The first phase of the question relates to direct food aid to people

who are hungry. Now development—I want to get into next because I think that is a critical issue, but in terms, I want to make

sure I understand what you are saying. You are saying if the administration’s request is approved by Congress, there will be more

money spent on food aid in the next fiscal year than is being spent

this year?

Mr. WINTER. No, because the last couple of years have been

atypical. There have been the Section 416(b) resources that have

been very high. There was a big spike that occurred in 1999, as we

were discussing earlier in 1999, 2000, and 2001. So the last several

years have been atypical even for the pattern of the last decade or

so.

What I am saying is, if you take the average of Section 416(b)

availability in the last decade and Title II availability, and package

them together, you will find out that what is budgeted solely to

USAID in Title II funds is in line with the 10-year average. Now

that does not mean we think that is the end of the story, because

we are just beginning to implement the administration’s new packages now, and there are going to have to be adjustments in subsequent years as we do it. So I think you should not take the immeVerDate 11-MAY-2000 07:48 Jan 28, 2003 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 80603.TXT SAFFAIRS PsN: SAFFAIRS
24

diate budget as the be-all and end-all. We have a lot of sorting out

still to do.

Senator DURBIN. At least in the first year, there will be less food

aid available, less money available for food aid for feeding hungry

people around the world than this year.

Mr. WINTER. Because of the atypical highness of Section 416(b)

for the last couple of years.

Senator DURBIN. Ms. Terpstra, do you disagree with that or is

that the way you see it as well?

Ms. TERPSTRA. My impression was that it is just a slight decrease.

Senator DURBIN. Do you have any idea what the number might

be, the reduction, perhaps?

Ms. TERPSTRA. No, we are still estimating that you are going to

have about 3.7 million tons of commodities available. Perhaps we

could give you more information in writing to clarify the situation.

Senator DURBIN. I wish you would.

Mr. Yager, could you make some observations on that?

Mr. YAGER. Yes, Mr. Chairman. I think that what we have done

in Figure 1 in our testimony, as well as in the board here, is show

the actual dollars that are being expended from 1990 through the

year 2003. Now I should also comment that these are real dollars.

So this is the buying power of these dollars in 2002.

So you can see that the planned expenditures for the year 2003

are not the low point for the 13-year period, but they are certainly

not the high point either. So this represents the planned expenditures for the current year. As you see the Title II share is the dominant share during this last year.

Senator DURBIN. Now our numbers that we have from the USDA

suggest that fiscal year 2001, total food aid from the United States,

$2.29 billion. This year, fiscal year 2002, total food aid from the

United States, $1.97 billion. Budget request for the next fiscal year,

total food aid, $1.4 billion. Now that is a substantial decrease from

this year to the next, but these figures, I believe, are from the

budget summary from the U.S. Department of Agriculture. If someone here has different figures, please tell me right now because it

looks to me like the amount of money we are putting into total food

aid is going to be substantially less next year, from $1.97 billion

to $1.4 billion.

Mr. WINTER. My figures are not displayed like that. I apologize

for that. What I can tell you is, for USAID it is actually obviously

a substantial increase that would be taking place in 2003.

Senator DURBIN. So perhaps it is between the two agencies

where the difference is.

Ms. Levinson, the point you have made is not just the decrease

in the total amount of food aid, but also is this new administrationproposed accounting wrinkle, where they have to replenish from

the surplus, the Emerson surplus, from future Title II? Is that a

new approach?

Ms. LEVINSON. Well, actually, the Bill Emerson Humanitarian

Trust is imperfect in the way that it was developed in the law.

Senator DURBIN. Though he was a pretty good guy.

Ms. LEVINSON. He was a good guy. That is why it is named for

him. But, the way that it was developed over time is the problem.

25

Remember back in 1979, when we had the embargo on grain from

Russia? You will never forget that because everybody in agriculture

was furious at President Carter because he said we are not going

to ship anything to the Soviet Union during the Afghan war. What

that meant is that wheat sales, 4 million metric tons of wheat

sales, fell out that were supposed to go to the Soviet Union.

Instead, the Congress established something called the Food Security Wheat Reserve and bought 4 million metric tons of wheat off

the market and established this reserve.

The reserve had a purpose, and the purpose was a back-up to

P.L. 480, a back-up emergency reserve for food aid. In years when

USDA could not buy commodities off the market. For example, in

1996–1997 when there were very high prices in wheat and a tight

market, and the Secretary did not want to buy wheat off the market. Secretary Glickman bought food aid from the Wheat Reserve,

which was then called the Grain Reserve because it’s name has

changed over time.

The Secretary used P.L. 480 money and bought right from the

Reserve.

The law has been changed over the years so that now up to

500,000 metric tons in any year can be withdrawn without having

just to pay for it.

Senator DURBIN. This is for emergencies that come up.

Ms. LEVINSON. For emergencies, and that has to be for urgent

emergencies; emergent needs. When that occurs, though, the Trust

has to be repaid in future years. So, what USDA does is basically

wait a year or two and pay back the Reserve with money that has

been appropriated for P.L. 480.

Senator DURBIN. So let me stop you there——

Ms. LEVINSON. So that is in the law.

Senator DURBIN. Let me go back to Mr. Winter, and perhaps this

is more USDA than USAID or Ms. Terpstra. So, if we run into— not only do we see an overall reduction in total food aid, what I

hear is that if we run into an unanticipated emergency in some

part of the world, and we have to draw down from the Emerson

Surplus, it is going to jeopardize Title II funding, P.L. 480 Title II

funding in the next fiscal year. It is a payback.

One of the first things you have to do is not only fund the program, but pay back what you borrowed from it in the previous

year. Is that your understanding too?

Ms. TERPSTRA. You would need to go to Congress for appropriations. You could seek additional appropriations.

Senator DURBIN. So not only would the overall amount come in

the next year, if we run into an unanticipated emergency, the following year may be worse. So, I mean, we cannot predict. It could

be wonderful and no problems, it could be an emergency, and we

find ourselves really starting to see a steady decline in U.S. food

aid around the world, if that happened.

Ms. TERPSTRA. Well, it is up to congressional appropriations.

Senator DURBIN. Sure, I know where the buck stops.

Mr. WINTER. Mr. Chairman, if I understand it correctly, there is

no limitation in the law that says it has to be paid back in the subsequent year. We have a number of cases where there have been

draw-downs from the Emerson Trust that have not, in fact, been

26

reimbursed at all at this point in time. So I would just say the idea

of talking about next year we get cut, is not necessarily the case.

There is a provision in the law that basically does indicate it does

need to be paid back at some point, but it does not say when.

Senator DURBIN. Mr. Phillips, your testimony, on the ground,

how long have you been in Kenya?

Mr. PHILLIPS. I have been personally in Kenya for the last almost

2 years.

Senator DURBIN. But the testimony you have given us talks

about the caloric intake over a longer period of time. So someone

has kept track of it. When we are in a position where the United

States is a major donor and you said 60 to 80 percent, depending

on Japan and other countries coming forward, and so the United

States starts cutting back in Kakuma refugee camp, and so you see

the caloric intake for the refugee families going down, in terms of

the amount of nutrition and sustenance they are receiving, what

impact does this have on actual people that you are witnessing, the

lives that they are leading?

Mr. PHILLIPS. Well, I think the first thing, to put the topic in a

broader context, is that, even with the incredibly generous support

that the U.S. Government has been giving at this time and the almost unilateral nature of the food aid support for Kenyan refugees,

we are still falling far short of some of the standards and targets

that we, as an international humanitarian community, have set for

refugee assistance.

So the backdrop that we must start from is that current conditions are already, in many ways, in this particular camp, substandard. So, to start from that base and then you can extrapolate

exactly some of the issues that I described, exactly what can we see

on human terms, we can see an increase in the number of children

under five that will require supplementary feeding and therapeutic

feeding. We will see or there is the potential to develop low-birthweight babies as a result of the poor nutritional status of mothers.

I mean, the realities, the way these macro-level forces that we

are discussing here actually come together is in the case of the

human being that is on the receiving end in a place like Kakuma.

Senator DURBIN. So we are dealing with emergency feeding programs for refugees primarily from the Sudan, is that correct, in

your camp?

Mr. PHILLIPS. In my camp, yes, it is particularly Southern Sudanese.

Senator DURBIN. And the point made by Mr. Winter, I do not

think anyone will argue with, and that is that we certainly want

to keep these children and families alive, but we understand that

this is a temporary emergency nature or should be under the best

circumstances. You made the point, Mr. Winter, and I do not disagree with it, you have to be thinking ahead saying, OK, someday

we want them out of the camps back into a normal life where they

can sustain themselves, which goes to the whole question of development.

Mr. WINTER. Right.

Senator DURBIN. Maybe beyond USDA, Department of Agriculture, but certainly in your jurisdiction—— Mr. WINTER. Absolutely.

27

Senator DURBIN. I think you complement one another in the way

that you approach it.

Ms. Levinson has made the point that many of the Food for Work

programs and Food for Education programs are really trying to be

development programs that are fueled by food so that you create

the incentive that Senator McGovern and Congressman McGovern

spoke of.

Do you see a problem then, if we do not have the food to use as

incentives for development programs?

Mr. WINTER. Actually, we think there needs to be both. There

needs to be direct food assistance, most particularly in an emergency context, but direct food assistance in my opinion does not actually produce development. It is a different kind of approach that

is required, and food security requires developmental inputs. So, in

fact, we need both, and the purposes are a little bit different for

the two.

Senator DURBIN. But the money through USAID that you anticipate next year, will it be enough to sustain the programs that link

food and development? Going beyond the emergency feeding, trying

to get to the development level so that people are more self-sustaining, less dependent, do you think that your budget request for

next year is going to give you the same, more or fewer resources?

Mr. WINTER. At this point, we think we can sustain both kinds

of programs. However, as I said, this is, to some degree, a work in

progress. If we get at least our request, we believe that we can sustain both our development programs and our emergency feeding

programs, and if, for some reason, something unforeseen occurs, we

will proceed to try to draw down the Bill Emerson Trust.

But, ultimately, our first-year experiences I think will be very determinative in what the nature of our requests are past 2003. We

do think we are OK for 2003, but we are going through a learning

process in the implementation of this new framework.

Senator DURBIN. Mr. Phillips, you have seen it on the ground. I

mean, beyond subsistence from this feeding effort by the United

States, have you seen families, people graduating from this dependence into more independence, through developmental programs?

Mr. PHILLIPS. I think the camp that I am particularly discussing

right now may not be the best example to use for the success or

graduation, as you call it, from dependency in this context. There

are tremendous—I did not get into them in my oral testimony—but

in the written testimony I elaborate on many of the structural conditions which militate against strategies of self-reliance in the particular context of Kakuma, and it is unfortunate, but largely as a

result of those barriers, that the need for continuing strong support, particularly in the area of food aid remains.

In the absence of the abilities to actually move in these more

developmental directions that Mr. Winter and others have articulated, we need to continue and, in fact, in some ways, on a multilateral basis, find ways to increase the types and the quality of assistance that we are providing in these contexts.

Mr. WINTER. Mr. Chairman, can I pick up on what Mr. Phillips

said?

Senator DURBIN. Sure, of course.

28

1The information on Afghanistan Food Aid supplied by Mr. Winter appears in the Appendix

on page 117.

Mr. WINTER. We have a real problem here. What he is talking

about, that is, the absence of other donors, the increasing disinterest of other donors, is a serious problem. In Afghanistan, we covered 90 percent, basically, of the food assistance. In many of these

circumstances, we may be covering sometimes up to 70 percent.

In the case of Sudan, again, not to pick on Jason’s refugee country, we negotiated, as he pointed out, a peace arrangement that

opened up areas for humanitarian access where we could begin to

provide food for the first time in a decade or so. The Europeans and

others expressed great admiration for our accomplishment in negotiating this but did not put up much of anything to actually put

the food in the hands of the people who are now newly accessible.

So we have a donor problem, and the United States is doing the

lion’s share. We want to. We are not backing away from that.

Somehow we have to mobilize these other donors to be more productive in terms of their donations, too. This is a real problem.

Senator DURBIN. Let me follow up, since you raised Afghanistan,

it is one of the questions. In yesterday’s Christian Science Monitor—I do not know if you saw the article—entitled, ‘‘A Fight to

Feed Hungry Afghans,’’ a new report commissioned by your agency

has found that the level of food security in Afghanistan is now

down to 9 percent from nearly 60 percent 2 years ago.

Would you tell us what efforts USAID has underway in Afghanistan, for example, and whether you foresee any negative impacts

for those programs from this reduction in commitment to food aid

in the next year.

This is really going to be, is it not, in the near future a test for

the United States? This was the first battlefield in the war against

terrorism, and the way we leave Afghanistan is kind of a message

to the world; if you want to let the U.S. cops show up to take out

your terrorists what is left behind.

Is this not kind of a special-needs case that is going to perhaps

call on Congress and the administration to think about more resources?

Mr. WINTER. It is. We have, obviously, a political commitment,

as well as all kinds of other commitments when it comes to the

case of Afghanistan. I am not going to avoid your question, but I

have been out of the country. I have not seen either the article or

the report that is being cited in the article.

In the way we have been structured, we have had a special task

force dealing with the issue of Afghanistan, specifically. So I would

prefer, if you will OK it, to give you a response on the steps we

are going to take on Afghanistan in writing.1

Senator DURBIN. I wish you would. I was there in January for

just a very brief visit. It was the first daylight Codel into the country. Senator Lieberman and McCain preceded us at night, and I

say, half jokingly, that the Pentagon decided it was worth risking

four Democratic Senators for a daylight flight, and so they let us

come in there.

And I will tell you that as we went along the roadway from

Bagram to Kabul, that the children standing by the roadway,

29

pointing at our speeding vans as we were going through dangerous

territory, pointing to their mouths. It was all about food. We think

about the political stability there, but I think we had done a lot by

then. We probably are doing more now, but I think the demands

are going to be so much greater. So, if you could fill me in on that,

I would appreciate it.

Mr. Yager, the GAO has looked at our food programs year after

year after year and made recommendations of ways that you think

we can manage them better. Can you highlight some of those or

point to areas where you think we might be able to be more efficient because we bear this major responsibility?

Mr. YAGER. Certainly, Mr. Chairman. Let me just get back one

moment to the other questions you were asking about trying to

take advantage of the benefits of surpluses, while trying to minimize the downside. The more that we talked about this in preparation for this hearing, the more that we really thought about this

idea of a reserve, and the more attention that you pay—as Ms.

Levinson did—to the Bill Emerson Humanitarian Reserve. What it

does is offers the opportunity to try to hold some of the benefits of

these surpluses during the good years for the tough years.

But what you also hear, in her testimony, as well as others, is

that there needs to be a clear strategy for both the use of the reserve, as well as the replenishment of the reserve. This involves

trying to model what you might use it for and trying to anticipate

the kinds of changes that do occur over time in farm prices and in

shipments. This might allow you to make a better effort at taking

advantage of this vehicle, the Bill Emerson Reserve, which has not

been used extensively over the last decade.

Just in putting this in scale and context, the 500,000-metric tons

of grain is about one-tenth of what is shipped in a typical year during the food aid program. So it gives you some idea of the scale of

what could be done with this——

Senator DURBIN. Under Section 416?

Mr. YAGER. Well, no, we are talking about all programs in general.

Senator DURBIN. All.

Mr. YAGER. So it would not create the kinds of peaks that were

created through the Section 416(b) program, but it does offer some

ability to try to improve or try to increase the level of resources

that are provided to food aid. However, it has to be done in a very

thoughtful way, and I think it has to be managed with a strategy

both for the use, as well as for the replenishment.

Senator DURBIN. Ms. Terpstra, I live in a farm State and just

met with some farmers last week talking about the new farm bill

and their challenges. In the last 10 years, the general economy has

been very good, but not in the farm belt. We have seen, even in

strong agricultural States like Illinois and Iowa, a lot of problems

with low prices, limited income, more dependence on Federal payments.

And so if the administration walks away from using the surplus

for Section 416(b), will that create more supply on the domestic

market, pressing prices even further, calling then for more government payments to farmers because of these depressed prices?

30

Ms. TERPSTRA. Let me answer that by noting that we have two

places where we would continue to use surplus commodities. One

is the opportunity to replenish the Bill Emerson Trust. I think my

colleague from GAO is very correct. We need to be thoughtful about

how to use that more aggressively in the years ahead and how to

replenish it, and that is an issue currently under interagency discussion because we are faced with utilizing it for Southern Africa.

So we need to look at how we can replenish that trust, which currently, I think, is about 2.5 million tons out of the 4 million that

it can be held at.

The second thing is I wanted to also reiterate that we are not

seeking to end the authority of Section 416(b) and that we will continue to use any commodities in CCC inventories for food aid programs.

Senator DURBIN. You used dried milk in your testimony as an example.

Ms. TERPSTRA. For example, yes, we have those commodities

available currently.

Senator DURBIN. But if you follow my logic, and if my economics

course is going to hold up for this explanation here, if we are not

careful, we are going to run into the following circumstance:

We stop exporting the surplus; we leave it on the market here;

the domestic prices go down; and so the Federal Government then

makes greater payments to the farmers because of their depressed

prices. So we pass a supplemental appropriation bill to give farmers in Illinois more money because we are not using corn, soybeans

and wheat that they produce.

In the meantime, the recipients, at the other end, are not receiving the benefits of the additional surplus in the good years. So

there is less food aid going out, and we are really not gaining anything from it on a budget viewpoint. We are instead sending it back

to farmers because of depressed prices.

Now that is, as I look at this just from the outside, I do not know

if I am missing something here, but that strikes me as a quandary.

We are not saving money by reducing the surplus. We may be making it more dependable, in terms of what we can provide, but it

may be costly.

Ms. Levinson, since you used to work for me, I guess you have

to agree with me—— [Laughter.]

Ms. LEVINSON. One hundred percent.

Actually, this is an issue that has been raised. When you go to

CBO, the Congressional Budget Office, or OMB to make the argument that they should show some savings in farm payments because of purchases of surplus off the market should have an elevating effect on prices, from what I understand, they do not buy

it. They will not agree to that, as a budget matter. They will not

look at it and say, yes, it is an offset, and therefore increase spending on food aid.

However, as a practical matter, this offset should happen and I

think some of the commodity groups have figures that show this

and we would be happy to share that with you. PVOs worked with

the agricultural groups in an Agriculture-PVO Coalition on Food

Aid that came up with food aid recommendations, including replenishing the Trust.

31

I want to make an important comment about surpluses. In the

past few years, many of them have been used very constructively.

The CCC-funded food aid programs are Section 416 and Food for

Progress, but Food for Progress is a small program. It had a cap

of 500,000 metric tons before, and the new farm bill creates a minimum level of 400,000 metric tons. At least this requires some

CCC-funded food aid.

At USDA, they received 250 proposals for 1 year for the Food for

Progress program, 250 proposals for something that ended up being

a couple hundred thousand metric tons.

The request is for 3 million metric tons of food aid. There is demand and it’s not just to dump commodities. These are proposals

for programs; agriculture development programs, Food for Education, many different kinds. The United States paid for recovery

after hurricanes in Central America and emergencies all over the

world with Section 416, which was used as a back-up to Food for

Progress.

The demand is there for food aid, and Congress is not providing

enough through CCC funding. I am glad there is a request for

higher Title II funding, but we could be spending more money on

food aid. The demand is very high for very good programs.

Senator DURBIN. I want to thank the panel for their testimony

and for your patience as I have asked these questions. I thank you

all for what you do, for all of the agencies involved here. Particularly, Mr. Phillips, thank you for coming here to tell us the story

firsthand that you face in Kenya.

I can understand, from a management viewpoint, why this decision has been made, but I think the net impact on poor people

around the world is, at least in the next year, going to be very

painful.

If there was ever a time in history when the United States needs

to project a different image, an image of compassion and caring, I

think this is the year to do it. The McGovern-Dole program is an

example. There are others, Food for Progress, Food for Work and

others, that can start telling the story of America that can confound some of our critics around the world, and I think we are

moving in the wrong direction in food aid.

I hope we, in Congress, can look at this thoughtfully, work with

the administration and come up with an approach that does not

have that negative impact.

Thank you all for joining us today. I appreciate it.

This Subcommittee is adjourned.

[Whereupon, at 4:05 p.m., the Subcommittee was adjourned.]

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