United States Government Accountability Office

GAO Committee on Foreign Affairs, 

Subcommittee on Africa and Global 

Health, House of Representatives 

FOREIGN ASSISTANCE

Various Challenges Limit 

the Efficiency and 

Effectiveness of U.S. Food 

Aid 

Statement of Thomas Melito, Director

International Affairs and Trade 

For Release on Delivery

Expected at 2:30 p.m. EDT

Thursday, May 24, 2007

 

GAO-07-905T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

May 24, 2007

FOREIGN ASSISTANCE

Various Challenges Limit the Efficiency 

Highlights of GAO-07-905T, a testimony and Effectiveness of U.S. Food Aid 

before the Chairman, House Committee 

on Foreign Affairs, Subcommittee on 

Africa and Global Health 

www.gao.gov/cgi-bin/getrpt?GAO-07-905T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Thomas Melito 

(202) 512-9601 (MelitoT@gao.gov). 

The United States is the largest 

global food aid donor, accounting 

for over half of all food aid supplies

to alleviate hunger and support 

development. Since 2002, Congress 

has appropriated an average of $2

billion per year for U.S. food aid 

programs, which delivered an 

average of 4 million metric tons of 

food commodities per year. 

Despite growing demand for food 

aid, rising business and

transportation costs have

contributed to a 52 percent decline 

in average tonnage delivered 

between 2001 and 2006. These

costs represent 65 percent of total 

emergency food aid, highlighting

the need to maximize its efficiency

and effectiveness. This testimony is 

based on a recent GAO report that 

examined some key challenges to 

the (1) efficiency of U.S. food aid 

programs and (2) effective use of

U.S. food aid. 

What GAO Recommends

GAO recommended that the 

Administrator of the U.S. Agency 

for International Development 

(USAID) and the Secretaries of the 

U.S. Department of Agriculture

(USDA) and the Department of 

Transportation (DOT) enhance the 

efficiency and effectiveness of U.S. 

food aid by improving logistical

planning, transportation 

contracting, and monitoring, among 

other actions. DOT supports the 

transportation initiatives GAO

highlighted. While recognizing that 

improvements can be made, USAID 

and USDA did not directly respond

to GAO’s recommendations but 

disagreed with some of GAO’s 

analysis. 

Multiple challenges hinder the efficiency of U.S. food aid programs by 

reducing the amount, timeliness, and quality of food provided. Factors that 

cause inefficiencies include (1) insufficiently planned food and 

transportation procurement, reflecting uncertain funding processes, that 

increases delivery costs and time frames; (2) ocean transportation and 

contracting practices that create high levels of risk for ocean carriers,

resulting in increased rates; (3) legal requirements that result in awarding of 

food aid contracts to more expensive service providers; and (4) inadequate 

coordination between U.S. agencies and food aid stakeholders in tracking 

and responding to food and delivery problems. U.S. agencies have taken 

some steps to address timeliness concerns. USAID has been stocking or 

prepositioning food domestically and abroad, and USDA has implemented a 

new transportation bid process, but the long-term cost effectiveness of these

initiatives has not yet been measured. The current practice of using food aid

to generate cash for development projects—monetization—is also inherently 

inefficient. Furthermore, since U.S. agencies do not collect monetization 

revenue data electronically, they are unable to adequately monitor the 

degree to which revenues cover costs. 

Selected Trends in U.S. Food Aid, Fiscal Years 2002 through 2006 

0

500

1,000

1,500

2,000

2,500

3,000

3,000

4,000

5,000

6,000

U.S. dollars spent on program funding

(U.S. dollars in millions)

Metric tons of food aid delivered

(in thousands)

2002 2003 2004 2005 2006

Major emergencies

Afghanistan and

southern Africa

Iraq Sudan, 

Ethiopia,

and Eritrea

Sudan and 

Horn of Africa

Tonnage 

Funding 

Source: GAO analysis of USAID and USDA data.

Numerous challenges limit the effective use of U.S. food aid. Factors 

contributing to limitations in targeting the most vulnerable populations 

include (1) challenging operating environments in recipient countries; 

(2) insufficient coordination among key stakeholders, resulting in disparate 

estimates of food needs; (3) difficulties in identifying vulnerable groups and 

causes of their food insecurity; and (4) resource constraints that adversely 

affect the timing and quality of assessments, as well as the quantity of 

food and other assistance. Further, some impediments to improving the 

nutritional quality of U.S. food aid may reduce its benefits to recipients. 

Finally, U.S. agencies do not adequately monitor food aid programs due to 

limited staff, competing priorities, and restrictions on the use of food aid 

resources. As a result, these programs are vulnerable to not getting the right 

food to the right people at the right time. 
Food Aid

Mr. Chairman and Members of the Subcommittee: 

I am pleased to appear today to discuss ways to improve the efficiency and 

effectiveness of U.S. food aid. The United States is the largest provider of 

food aid in the world, accounting for over half of all global food aid 

supplies intended to alleviate hunger and support development in lowincome countries. Since its last reauthorization of the Farm Bill in 2002, 

Congress has appropriated an average of $2 billion per year in annual and 

supplemental funding for U.S. international food aid programs, which 

delivered an average of 4 million metric tons of agricultural commodities 

per year. In 2006, the largest U.S. food aid program, Title II of Public Law 

480, benefited over 70 million people through emergency and 

development-focused projects. However, about 850 million people in the 

world are currently undernourished—a number that has remained 

relatively unchanged since the early 1990s, according to United Nations 

(UN) Food and Agriculture Organization (FAO) estimates.1

 Furthermore, 

the number of food and humanitarian emergencies has doubled from an 

average of about 15 per year in the 1980s to more than 30 per year since 

2000, due in large part to increasing conflicts, poverty, and natural 

disasters around the world. Despite the growing demand for food aid, 

rising transportation and business costs have contributed to a 52 percent 

decline in average tonnage delivered from 2001 to 2006.2

 For the largest 

U.S. food aid program, these noncommodity costs now account for 

approximately 65 percent of program expenditures, highlighting the need 

to maximize the efficiency and effectiveness of U.S. food aid. 

My testimony is based on a report that we issued on April 13, 2007.

3

 Today,

I will focus on the need to (1) increase the efficiency of U.S. food aid 

programs in terms of the amount, timeliness, and quality of food provided;

and (2) ensure the effectiveness of U.S. food aid so that it reaches the most 

vulnerable populations and does not cause negative market impact. We 

define efficiency as the extent to which a program is acquiring, protecting, 

and using its resources in the most productive manner. We define 

 1

According to FAO’s 2006 The State of Food and Agriculture report, conditions in Asia 

have improved while those in Africa have worsened. 

2

While we acknowledge that commodity prices also affect tonnage, there has been no clear 

trend in total average commodity prices for food aid programs from fiscal years 2002 

through 2006. 

3

GAO, Foreign Assistance: Various Challenges Impede the Efficiency and Effectiveness of 

U.S. Food Aid, GAO-07-560 (Washington, D.C.: Apr. 13, 2007).

Page 1 GAO-07-905T
Food Aid

effectiveness as the extent to which U.S. food aid programs are being used 

to achieve their goals and objectives.

In preparing this testimony, we relied on our completed review of the 

efficiency and effectiveness of U.S. food aid. To address our objectives, we 

analyzed food aid procurement and transportation data provided by the 

U.S. Department of Agriculture’s (USDA) Kansas City Commodity Office 

(KCCO); reviewed food aid proposals and funding data provided by USDA

and the U.S. Agency for International Development (USAID); conducted 

interviews with U.S. agencies, U.S.- and foreign-flag ocean carriers, 

nongovernmental organizations (NGO), freight forwarders, and 

agricultural commodity groups; conducted fieldwork in Rome, Ethiopia, 

Kenya, and Zambia; and visited ports in Texas, South Africa and Kenya, as 

well as prepositioning sites in Louisiana and Dubai. We also discussed our 

preliminary findings with a roundtable of 15 food aid experts and 

practitioners. We conducted the work for our report and this testimony 

between May 2006 and March 2007 in accordance with generally accepted 

government auditing standards. 

Multiple challenges in logistics combine to hinder the efficiency of U.S. 

food aid programs by reducing the amount, timeliness, and quality of food

provided. Specific factors that cause inefficiencies in food aid delivery 

include the following: 

Summary 

• Insufficiently planned food and transportation procurement, reflecting 

uncertain funding processes, that increases food aid delivery costs and

time frames. Difficulty in timing food procurement and transportation to 

avoid commercial peaks in demand often results in higher prices than if 

such purchases were more evenly distributed throughout the year. 

• Ocean transportation contracting practices that differ from commercial 

practices and create high levels of risk for ocean carriers, increasing 

food aid costs. For example, food aid transportation contracts often hold 

ocean carriers responsible for logistical problems occurring at the load 

port or costly delays at destination when the port or implementing 

organization is not ready to receive the cargo. Ocean carriers factor these 

costs into their freight rates, driving up the cost of food aid. 

• Legal requirements that result in the awarding of food aid contracts to 

more expensive providers and contribute to delivery delays. For 

example, cargo preference laws require 75 percent of food aid to be 

shipped on U.S.-flag carriers, which are generally more costly than foreignPage 2 GAO-07-905T
Food Aid

flag carriers. The U.S. Department of Transportation (DOT) reimburses 

certain transportation costs, but the sufficiency of these reimbursements 

varies. 

• Inadequate coordination between U.S. agencies and stakeholders in 

tracking and responding to food and delivery problems. For example, 

while food spoilage has been a long-standing concern, USAID and USDA 

lack a shared, coordinated system to systematically track and respond to 

food quality complaints. 

To enhance the efficiency of food aid delivery, U.S. agencies have taken 

measures to improve their ability to provide food aid on a more timely 

basis. For example, USAID has been stocking food commodities, or 

prepositioning them, in Lake Charles (Louisiana) and Dubai (United Arab 

Emirates) for the past several years and is continuing this practice. 

Additionally, in February 2007, USAID and USDA implemented a new 

transportation bid process in an attempt to increase competition and 

reduce procurement time frames. Although both efforts may result in food 

aid reaching vulnerable populations faster in an emergency, their longterm cost-effectiveness has not yet been measured. Despite such initiatives 

to improve the process of delivering food aid, the current practice of using 

food aid as a means to generate cash for development projects—

monetization—is an inherently inefficient use of resources. Monetization 

entails not only the costs of procuring, transporting, and handling food, 

but also the costs of marketing and selling it to generate cash for funding 

development projects. Furthermore, NGOs must maintain the expertise 

necessary to sell and market food aid abroad, which diverts resources 

from their core missions. In addition, U.S. agencies do not collect or 

maintain data electronically on the revenues generated from monetization. 

The absence of such electronic data impedes the agencies’ ability to 

adequately monitor the degree to which monetization revenues can cover 

the costs. 

Various challenges limit the effective use of food aid to alleviate hunger. 

Given limited food aid resources and increasing emergencies, ensuring 

that food aid reaches the most vulnerable populations—such as poor 

women who are pregnant or children who are malnourished—is critical to 

enhancing its effectiveness and avoiding negative market impact in 

recipient countries. Specific factors that impede the effective use of food 

aid include the following: 

• Challenging operating environments characterized by poor 

infrastructure and lack of physical safety and security, which restrict 

Page 3 GAO-07-905T
Food Aid

access to populations in need and cause delays. For example, we recently 

reported that frequent violence has hampered the ability of implementing 

organizations to access parts of the Darfur region of Sudan to provide food

and other assistance to vulnerable populations. 

• Insufficient coordination among key stakeholders, resulting in 

disparate estimates of food needs. For example, separate assessments by

host governments, WFP, and NGOs have resulted in significantly different 

estimates of food needs and numbers of intended recipients, resulting in 

delays in donor assistance until the various stakeholders reach agreement 

on these estimates. 

• Difficulties in identifying the most vulnerable groups and 

understanding the causes of their vulnerability. For example, it has been

challenging for implementing organizations to determine the causes of 

chronic food insecurity—such as poor health and water quality, in addition 

to lack of food—and provide appropriate assistance. 

• Resource constraints that adversely affect the timing and quality of 

assessments, as well as the quantity of food and other assistance. U.S. 

food aid funding available to conduct assessments in advance of program 

implementation is limited. Furthermore, in cases where recipients do not 

receive sufficient complementary assistance, they may be forced to sell 

part of their food rations to buy other basic necessities and, therefore, may 

not get the full health benefits of food aid. 

Impediments to improving the nutritional quality of U.S. food aid, 

including a lack of an interagency mechanism to update food aid products 

and specifications, may result in recipients not receiving the most 

nutritious or appropriate food. For example, although U.S. agencies have 

undertaken some measures to improve the nutritional quality of food aid, 

such as updating food aid product specifications with fortification 

enhancements, they have not fully addressed some key concerns. Finally, 

USAID and USDA do not sufficiently monitor food aid programs, 

particularly in recipient countries, due to limited staff, competing 

priorities, and restrictions on the use of food aid resources. For example, 

although USAID had some non-Title II-funded staff assigned to monitoring, 

it had only 23 Title II-funded staff assigned to missions and regional offices 

in 10 countries to monitor programs costing about $1.7 billion in 55 

countries in fiscal year 2006. USDA has even less of a field presence for 

monitoring than USAID. As a result, U.S. agencies may not be

accomplishing their goals of getting the right food to the right people at 

the right time. 

Page 4 GAO-07-905T
Food Aid

Our report made recommendations to the Administrator of USAID, the 

Secretary of Agriculture, and the Secretary of Transportation to work to 

improve the efficiency of U.S. food aid delivery, including instituting 

measures to (1) improve food aid logistical planning, (2) modernize 

transportation contracting practices, (3) update reimbursement 

methodologies to minimize the cost impact of cargo preference 

regulations on food aid transportation expenditures, (4) track and resolve 

food quality complaints systematically, and (5) develop an information 

collection system to track monetization revenues and costs. Further, to 

improve the effective use of food aid, we recommended that the 

Administrator of USAID and the Secretary of Agriculture also work to 

(1) enhance the reliability and use of needs assessments; (2) determine 

ways to provide adequate nonfood resources, when appropriate; 

(3) develop a coordinated interagency mechanism to update food aid 

specifications and products; and (4) improve monitoring of food aid 

programs. 

In commenting on the draft of our report, DOT stated that it supports the 

transportation initiatives we highlighted. While recognizing that 

improvements can be made, USAID and USDA did not directly respond to

our recommendations but disagreed with some of our analysis. 

Countries provide food aid through either in-kind donations or cash 

donations. In-kind food aid is food procured and delivered to vulnerable 

populations,4

 while cash donations are given to implementing 

organizations to purchase food in local, regional, or global markets. U.S. 

food aid programs are all in-kind, and no cash donations are allowed under 

current legislation. However, the administration has recently proposed 

legislation to allow up to 25 percent of appropriated food aid funds to 

purchase commodities in locations closer to where they are needed. 

Background 

Countries Provide Food 

Aid through In-kind or 

Cash Donations, with the 

United States the Largest 

Donor 

 4

In-kind food aid usually comes in two forms: nonprocessed foods and value-added foods.

Nonprocessed foods consist of whole grains like wheat, corn, peas, beans, and lentils. 

Value-added foods consist of processed foods that are manufactured and fortified to 

particular specifications and include milled grains, such as cornmeal and bulgur, and 

fortified milled products, such as corn soy blend (CSB) and wheat soy blend (WSB). 

Page 5 GAO-07-905T
Food Aid

Other food aid donors have also recently moved from providing primarily 

in-kind aid to more or all cash donations for local procurement. Despite 

ongoing debates as to which form of assistance are more effective and 

efficient, the largest international food aid organization, the United 

Nations (UN) World Food Program (WFP), continues to accept both.5

 The 

United States is both the largest overall and in-kind provider of food aid to

WFP, supplying about 43 percent of WFP’s total contributions in 2006 and 

70 percent of WFP’s in-kind contributions in 2005. Other major donors of 

in-kind food aid in 2005 included China, the Republic of Korea, Japan, and 

Canada. 

In fiscal year 2006, the United States delivered food aid through its largest

program to over 50 countries, with about 80 percent of its funding 

allocations for in-kind food donations going to Africa, 12 percent to Asia 

and the Near East, 7 percent to Latin America, and 1 percent to Eurasia. Of 

the 80 percent of the food aid funding going to Africa, 30 percent went to 

Sudan, 27 percent to the Horn of Africa, 18 percent to southern Africa, 14 

percent to West Africa, and 11 percent to Central Africa. 

Over the last several years, funding for nonemergency U.S. food aid 

programs has declined. For example, in fiscal year 2001, the United States 

directed approximately $1.2 billion of funding for international food aid 

programs to nonemergencies. In contrast, in fiscal year 2006, the United 

States directed approximately $698 million for international food aid 

programs to nonemergencies. 

Most U.S. Food Aid Goes 

to Africa, with 

Nonemergency Funding 

Declining 

 5

WFP relies entirely on voluntary contributions to finance its humanitarian and 

development projects, and national governments are its principal source of funding. More 

than 80 countries fund the humanitarian and development projects of WFP. 

Page 6 GAO-07-905T
U.S. food aid is funded under four program authorities and delivered 

through six programs administered by USAID and USDA;6

 these programs 

serve a range of objectives, including humanitarian goals, economic 

assistance, foreign policy, market development, and international trade.7

 

(For a summary of the six programs, see app. I.) The largest program, P.L. 

480 Title II, is managed by USAID and represents approximately 74

percent of total in-kind food aid allocations over the past 4 years, mostly 

to fund emergency programs. The Bill Emerson Humanitarian Trust, a 

reserve of up to 4 million metric tons of grain, can be used to fulfill P.L. 

480 food aid commitments to meet unanticipated emergency needs in 

developing countries or when U.S. domestic supplies are short.8

 U.S. food

aid programs also have multiple legislative and regulatory mandates that

affect their operations. One mandate that governs U.S. food aid 

transportation is cargo preference, which is designed to support a U.S.-flag 

commercial fleet for national defense purposes. Cargo preference requires

that 75 percent of the gross tonnage of all government-generated cargo be

transported on U.S.-flag vessels. A second transportation mandate, known 

as the Great Lakes Set-Aside, requires that up to 25 percent of Title II 

bagged food aid tonnage be allocated to Great Lakes ports each month.9

U.S. Food Aid Is Delivered 

through Multiple Programs 

with Multiple Mandates 

 6

The authority for these U.S. international food aid programs is provided through P.L. 480

(the Agricultural Trade Development and Assistance Act of 1954, as amended, 7 USC § 1701

et seq.); the Food for Progress Act of 1985, as amended, 7 USC § 1736o; section 416(b) of

the Agricultural Act of 1949, as amended, 7 USC § 1431; and the Farm Security and Rural 

Investment Act of 2002 (P.L. 107-171). 

7

See GAO, Food Aid: Experience of U.S. Programs Suggests Opportunities for 

Improvement, GAO-02-801T (Washington, D.C.: June 4, 2002). 

8

As of January 2007, the Bill Emerson Humanitarian Trust held about $107.2 million in cash 

and about 915,350 metric tons of wheat valued at $133.9 million. The Food Assistance 

Policy Council—including representatives from USDA, USAID, and other key government 

agencies—oversees the trust. The Secretary of Agriculture authorizes the use of the trust 

in consultation with the Food Assistance Policy Council. 

9

P.L. 104-239, 110 Stat. 3138. See GAO, Maritime Security Fleet: Many Factors Determine 

Impact of Potential Limits on Food Aid Shipments, GAO-04-1065 (Washington, D.C.: Sept. 

13, 2004). 

Page 7 GAO-07-905T Food Aid
Multiple challenges in logistics hinder the efficiency of U.S. food aid 

programs by reducing the amount, timeliness, and quality of food 

provided. While in some cases agencies have tried to expedite food aid 

delivery, most food aid program expenditures are for logistics, and the 

delivery of food from vendor to village is generally too time-consuming to 

be responsive in emergencies. Factors that increase logistical costs and 

lengthen time frames include uncertain funding processes and inadequate

planning, ocean transportation contracting practices, legal requirements, 

and inadequate coordination in tracking and responding to food delivery 

problems. While U.S. agencies are pursuing initiatives to improve food aid

logistics, such as prepositioning food commodities and using a new 

transportation bid process, their long-term cost-effectiveness has not yet

been measured. In addition, the current practice of selling commodities to

generate cash resources for development projects—monetization—is an 

inherently inefficient yet expanding use of food aid. 

Inadequately planned food and transportation procurement increases food

aid delivery costs and time frames. U.S. agencies bunch their procurement, 

purchasing the largest share of food aid tonnage during the last quarter of 

each fiscal year, in part because USDA requires 6 months to approve 

programs and because USDA and USAID may not receive funding until the 

middle of a fiscal year (after the Office of Management and Budget has 

approved budget apportionments for the agencies or through a 

supplemental appropriation). Higher food and transportation prices result 

from procurement bunching as suppliers try to smooth earnings by 

charging higher prices during their peak seasons and as food aid contracts 

must compete with seasonally high commercial demand. According to 

KCCO data for fiscal years 2002 through 2006, average commodity and 

transportation prices were each $12 to $14 per metric ton higher in the 

fourth quarter than in the first quarter of each year.10 Although USAID has 

improved its cash flow management to achieve more stable monthly 

purchases in fiscal years 2004 and 2005, total food aid procurement has 

not been consistent enough to avoid the higher prices associated with 

bunching. 

Ocean transportation contracting practices—such as freight and payment 

terms, claims processes, and time penalties—further increase ocean 

freight rates and contribute to delivery delays. DOT officials, experts, and

ocean carriers emphasized that commercial transportation contracts 

include shared risk between buyers, sellers, and ocean carriers. In food aid 

Multiple Challenges 

Hinder the Efficiency 

of U.S. Food Aid 

Programs 

Various Logistical Factors 

Increase Delivery Costs and 

Lengthen Time Frames 

 10These figures exclude prices for nonfat dry milk and vegetable oil. 

Page 8 GAO-07-905T Food Aid
Food Aid

transportation contracts, risks are disproportionately placed on ocean

carriers, discouraging participation and resulting in expensive freight 

rates. For example, food aid transportation contracts often hold ocean 

carriers responsible for logistical problems occurring at the load port or 

costly delays at destination when the port or implementing organization is

not ready to receive the cargo. Ocean carriers factor these costs into their 

freight rates, driving up the cost of food aid. 

Legal requirements governing food aid procurement can also increase 

delivery costs and time frames, with program impacts dependent on the 

sufficiency of associated reimbursements. In awarding contracts, KCCO 

must meet various legal requirements, such as cargo preference and the 

Great Lakes Set-Aside. Each requirement may result in higher commodity 

and freight costs. Cargo preference laws, for example, require 75 percent

of food aid to be shipped on U.S.-flag carriers, which are generally more 

expensive than foreign-flag carriers by an amount known as the ocean 

freight differential (OFD).11 The total annual value of this cost differential 

between U.S.- and foreign-flag carriers averaged $134 million from fiscal 

years 2001 to 2005. DOT reimbursements have varied from $126 million in

fiscal year 2002 to $153 million in fiscal year 2005.12 However, USAID 

officials expressed concern that the OFD calculations do not fully account 

for the additional costs of shipping on older U.S. vessels or for contracts 

that did not receive a bid from a foreign carrier. Finally, USAID and DOT 

officials have not yet agreed on whether cargo preference applies to 

shipments from prepositioning sites. 

U.S. agencies and stakeholders do not coordinate adequately to respond to 

food and delivery problems when they arise. For example, while food 

spoilage has been a long-standing concern, USAID and USDA lack a

shared, coordinated system to track and respond to food quality 

complaints.13 Having disparate quality complaint tracking mechanisms that 

 11U.S.-flag rates are subject to DOT’s Fair and Reasonable Rate guidelines, which take into 

account operating and capital costs, cargo handling costs, and depreciation. See 46 C.F.R.

382.3. 

12The Food Security Act of 1985 requires DOT to reimburse food aid agencies for a portion 

of the OFD cost and for ocean transportation costs that exceed 20 percent of total program

costs. Reimbursement methodologies are governed by a 1987 interagency memorandum of 

understanding. 

13GAO uses the term food quality to refer to the degree of food spoilage, infestation, 

contamination and/or damage that can result from factors such as inadequate fumigation, 

poor warehouse conditions, and transportation delays. 

Page 9 GAO-07-905T
Food Aid

monitor different levels of information, KCCO, USDA and USAID are 

unable to determine the extent of and trends in food quality problems. In 

addition, because implementing organizations track food quality concerns 

differently, if at all, it is difficult for them to coordinate to share concerns 

with each other and with U.S. government agencies. For example, since 

WFP—which accounts for approximately 60 percent of all U.S. food aid 

shipments—independently handles its own claims, KCCO officials are 

unable to track the quality of food aid delivery programwide. Although 

KCCO established a hotline to provide assistance on food quality 

complaints, KCCO officials stated that it was discontinued because USDA

and USAID officials wanted to receive complaints directly, rather than 

from KCCO.

To improve timeliness in food aid delivery, USAID has prepositioned food 

aid on a limited basis,14 and KCCO is implementing a new transportation 

bid process.15 USAID has used warehouses in Lake Charles (Louisiana) 

since 2002 and Dubai (United Arab Emirates) since 2004 to stock 

commodities in preparation for food aid emergencies, and it is now adding 

a site in Djibouti, East Africa. Prepositioning is beneficial because it allows 

USAID to bypass lengthy procurement processes and to reduce 

transportation time frames. USAID officials told us that diverting food aid 

cargo to the site of an emergency before it reaches a prepositioning 

warehouse further reduces response time and eliminates storage costs. 

However, agencies face several challenges to their effective management 

of this program. For example, inadequate inventory management increases

the risk of cargo infestation, and limited monitoring and evaluation funds 

constrain USAID’s oversight capacity. Regarding KCCO’s transportation 

bid process, KCCO expects this new system to cut 2 weeks from 

procurement time frames and to reduce cargo handling costs as cargo 

loading becomes more consolidated. However, the long-term costeffectiveness of both prepositioning and the new bid process have not yet

been measured. 

Prepositioning and New 

Transportation Bid Process 

Could Improve Efficiency, but 

Their Related Long-term Costs 

and Benefits Have Not Yet 

Been Measured 

 14P.L. 480 authorizes USAID to preposition food aid both domestically and abroad with a 

cap on storage expenses of $2 million per fiscal year. 

15In the prior two–step system, during a first procurement round, commodity vendors bid

on contracts and ocean carriers indicated potential freight rates. Carriers provided actual 

rate bids during a second procurement round once the location of the commodity vendor 

had been determined. In the new one-step system, ocean carriers will bid at the same time

as commodity vendors. 

Page 10 GAO-07-905T
The current practice of selling commodities as a means to generate 

resources for development projects—monetization—is an inherently 

inefficient yet expanding use of food aid. Monetization entails not only the 

costs of procuring, shipping, and handling food, but also the costs of 

marketing and selling it in recipient countries. Furthermore, the time and 

expertise needed to market and sell food abroad requires NGOs to divert 

resources from their core missions. However, the permissible use of 

revenues generated from this practice and the minimum level of 

monetization allowed by the law have expanded. The monetization rate for 

Title II nonemergency food aid has far exceeded the minimum requirement 

of 15 percent,16 reaching close to 70 percent in 2001 but declining to about 

50 percent in 2005. 

Despite these inefficiencies, U.S. agencies do not collect or maintain data

electronically on monetization revenues, and the lack of such data 

impedes the agencies’ ability to fully monitor the degree to which revenues 

can cover the costs related to monetization. USAID used to require that 

monetization revenues cover at least 80 percent of costs associated with 

delivering food to recipient countries, but this requirement no longer 

exists. Neither USDA nor USAID was able to provide us with data on the 

revenues generated through monetization. These agencies told us that the

information should be in the results reports, which are in individual hard 

copies and not available in any electronic database. 

Various challenges to implementation, improving nutritional quality, and 

monitoring reduce the effectiveness of food aid programs in alleviating 

hunger. Since U.S. food aid assists only about 11 percent of the estimated

hungry population worldwide, it is critical that donors and implementers 

use it effectively by ensuring that it reaches the most vulnerable 

populations and does not cause negative market impact. However, 

challenging operating environments and resource constraints limit 

implementation efforts in terms of developing reliable estimates of food 

needs and responding to crises in a timely manner with sufficient food and

complementary assistance. Furthermore, some impediments to improving 

the nutritional quality of U.S. food aid, including lack of interagency 

coordination in updating food aid products and specifications, may 

Monetization Is an 

Inefficient, Expanding 

Practice and Agencies’ 

Lack of Electronic Data 

Impedes Their Monitoring 

Ability 

Various Challenges 

Reduce the Effective 

Use of Food Aid 

 16In 1990, Congress increased the minimum monetization rate to 10 percent and the 

permissible use of monetized revenues was expanded to include broad development 

purposes, including agricultural development. In 1996, the minimum monetization level was 

further increased to 15 percent for non-emergency Title II. 

Page 11 GAO-07-905T Food Aid
Food Aid

prevent the most nutritious or appropriate food from reaching intended

recipients. Despite these concerns, USAID and USDA do not sufficiently 

monitor food aid programs, particularly in recipient countries, as they 

have limited staff and competing priorities and face legal restrictions on 

the use of food aid resources. 

Difficult operating environments characterized by poor infrastructure and 

concerns about physical safety and security have impeded access to the 

most vulnerable populations and caused delays in providing food aid, 

especially in conflict zones. We recently reported that ongoing violence 

and an increase in attacks on humanitarian staff in the Darfur region of 

Sudan limited the ability of implementing organizations to access parts of 

the region and provide food and other assistance to vulnerable 

populations including internally displaced persons. As a result, 

approximately 460,000 people in northern Darfur were cut off from 

emergency food aid in July 2006, and 355,000 people were still not 

receiving food aid in August 2006, according to UN sources.17

Insufficient coordination among key stakeholders and use of 

noncomparable methods has resulted in disparate assessments of food 

needs and numbers of recipients. For example, according to an NGO 

official in Zambia, the Zambian government and NGOs conducted two 

parallel but separate assessments in 2005 that resulted in significantly 

different estimates. This discrepancy led to a 6-month delay in declaring an 

emergency while the difference in assessment results was resolved. 

Accurately identifying vulnerable populations and the causes of their 

vulnerability has been difficult due to the complexity of factors—such as 

poverty, environmental degradation, and disease—that contribute to food

insecurity.18 For example, donors and implementers misdiagnosed the 

cause of the 2005 food crisis in Niger as a lack of food availability, when in

fact it was caused by other factors such as health, water, and sanitation 

problems, according to WFP and USAID assessments. As a result, although 

the crisis reached emergency proportions in February 2005, donors did not 

Challenging Operating 

Environments Have Hindered 

Implementation of Food Aid 

Programs in Recipient 

Countries 

 17GAO, Darfur Crisis: Progress in Aid and Peace Monitoring Threatened by Ongoing 

Violence and Operational Challenges, GAO-07-9 (Washington, D.C.: Nov. 9, 2006). 

18According to WFP officials in southern Africa, identifying people with HIV/AIDS who 

need food aid has been very difficult because the social stigma associated with the disease 

may discourage intended recipients from getting tested for it. It is also difficult to assess

whether deterioration in health is due to hunger or the disease itself. 

Page 12 GAO-07-905T
Food Aid

respond until May 2005 and recipients did not receive food until August 

2005. The request for aid was revised 7 times in the interim because 

insufficient understanding of the causes of the crisis initially led to a 

disagreement between the recipient government and WFP on how to 

respond to the situation.

Limitations on the amount and use of cash resources have adversely 

affected the quality and timing of assessments, particularly for Title IIfunded programs. U.S. agencies provide very limited or no resources to 

conduct assessments prior to the implementing organizations’ submission

of proposals requesting food aid.19 This is because requests for cash for 

materials or activities related to U.S. food aid funding, such as 

assessments, must accompany requests for food commodities. Since cash 

is in effect tied to requests for commodities, the U.S. government cannot

provide assistance for activities such as needs assessments that may 

enhance the use of food aid but may not require commodities at the same 

time. 

Resource constraints have also limited the quantity of food and other 

complementary assistance that is provided to intended recipients.20 In 

2003, we reported that due to the lack of adequate donor funding in 

Afghanistan, food rations to refugees and internally displaced persons 

were reduced to a third of the original planned amount, and program 

implementation was delayed by up to 10 weeks in some cases.21 During our 

field work, we found instances where insufficient complementary 

assistance to meet basic needs in addition to food has also limited the 

benefits of food aid to recipients. For example, people with HIV/AIDS 

receiving food aid in Wukuru, Ethiopia, informed us that they sold part of 

their food rations to pay for other basic necessities because they lack 

other assistance or income. 

 19USAID provides NGOs limited funding through institutional capacity-building grants that 

are not directly linked to proposals requesting food for projects. Additionally, in some 

cases, USAID has provided resources other than Title II to undertake assessments and data

collection efforts. 

20To ensure that limited food aid resources are targeted to areas where they are most 

needed, USAID identified 15 priority countries in 2006 for nonemergency or development

programs. According to USAID officials, focusing resources on the most vulnerable 

countries will help to build their resilience and ensure that food aid will be less necessary 

in the future. 

21GAO, Foreign Assistance: Lack of Strategic Focus and Obstacles to Agricultural

Recovery Threaten Afghanistan’s Stability, GAO-03-607 (Washington, D.C.: June 2003). 

Page 13 GAO-07-905T
Food Aid

Impediments to Improving 

Nutritional Quality Reduce 

the Benefits of Food Aid 

Some impediments to improving nutritional quality further reduce the 

effectiveness of food aid. Although U.S. agencies have made efforts to 

improve the nutritional quality of food aid, the appropriate nutritional 

value of the food and the readiness of U.S. agencies to address nutritionrelated quality issues remain uncertain. Further, existing interagency food 

aid working groups have not resolved coordination problems on nutrition 

issues. Moreover, USAID and USDA do not have a central interagency

mechanism to update food aid products and their specifications.22 As a 

result, vulnerable populations may not be receiving the most nutritious or 

appropriate food from the agencies, and disputes may occur when either 

agency attempts to update the products. 

Although USAID and USDA require implementing organizations to 

regularly monitor and report on the use of food aid, these agencies have 

undertaken limited field-level monitoring of food aid programs. Agency 

inspectors general have reported that monitoring has not been regular and 

systematic, that in some cases intended recipients have not received food

aid, or that the number of recipients could not be verified. Our audit work 

also indicates that monitoring has been insufficient due to various factors 

including limited staff, competing priorities, and legal restrictions on the 

use of food aid resources. In fiscal year 2006, although USAID had some 

non-Title II-funded staff assigned to monitoring, it had only 23 Title IIfunded USAID staff assigned to missions and regional offices in 10 

countries to monitor programs costing about $1.7 billion in 55 countries.23

USDA administers a smaller proportion of food aid programs than USAID 

and its field-level monitoring of food aid programs is more limited. 

Without adequate monitoring from U.S. agencies, food aid programs may 

not effectively direct limited food aid resources to those populations most 

in need. As a result, agencies may not be accomplishing their goal of 

getting the right food to the right people at the right time. 

U.S. Agencies Do Not 

Sufficiently Monitor Food 

Aid Programs 

 22Food aid commodity specifications include specific requirements that the commodity 

vendor must follow to meet USDA’s contracts for producing and delivering the 

commodities. The specifications contain standards relating to the quality, appearance, and 

delivery of the product; conditions under which it is to be grown or produced; explicit 

descriptions regarding its nutrient content; and details of the inspection process.

23In addition to Title II-funded positions, USAID missions and regional offices have 

positions that are funded through other sources, such as development assistance or 

operating budgets for these offices. Although staff in these positions may participate in 

monitoring food aid programs, they also administer other development assistance 

programs. 

Page 14 GAO-07-905T
Food Aid

U.S. international food aid programs have helped hundreds of millions of 

people around the world survive and recover from crises since the 

Agricultural Trade Development and Assistance Act (P.L. 480) was signed 

into law in 1954. Nevertheless, in an environment of increasing 

emergencies, tight budget constraints, and rising transportation and 

business costs, U.S. agencies must explore ways to optimize the delivery 

and use of food aid. U.S. agencies have taken some measures to enhance 

their ability to respond to emergencies and streamline the myriad 

processes involved in delivering food aid. However, opportunities for 

further improvement remain to ensure that limited resources for U.S. food 

aid are not vulnerable to waste, are put to their most effective use, and 

reach the most vulnerable populations on a timely basis. 

To improve the efficiency of U.S. food aid—in terms of its amount, 

timeliness, and quality—we recommended in our previous report that the 

Administrator of USAID and the Secretaries of Agriculture and 

Transportation (1) improve food aid logistical planning through costbenefit analysis of supply-management options; (2) work together and 

with stakeholders to modernize ocean transportation and contracting 

practices; (3) seek to minimize the cost impact of cargo preference 

regulations on food aid transportation expenditures by updating 

implementation and reimbursement methodologies to account for new 

supply practices; (4) establish a coordinated system for tracking and 

resolving food quality complaints; and (5) develop an information 

collection system to track monetization transactions. 

To improve the effective use of food aid, we recommended that the 

Administrator of USAID and the Secretary of Agriculture (1) enhance the 

reliability and use of needs assessments for new and existing food aid 

programs through better coordination among implementing organizations, 

make assessments a priority in informing funding decisions, and more 

effectively build on lessons from past targeting experiences; (2) determine 

ways to provide adequate nonfood resources in situations where there is 

sufficient evidence that such assistance will enhance the effectiveness of 

food aid; (3) develop a coordinated interagency mechanism to update food

aid specifications and products to improve food quality and nutritional 

standards; and (4) improve monitoring of food aid programs to ensure 

proper management and implementation. 

DOT, USAID, and USDA—the three U.S. agencies to whom we direct our 

recommendations—provided comments on a draft of our report. These 

agencies—along with the Departments of Defense and State, FAO, and 

Conclusions 

Page 15 GAO-07-905T
Food Aid

WFP—also provided technical comments and updated information, which 

we have incorporated throughout the report as appropriate. DOT stated 

that it strongly supports the transportation initiatives highlighted in our 

report, which it agrees could reduce ocean transportation costs. USAID 

stated that we did not adequately recognize its recent efforts to 

strategically focus resources to reduce food insecurity in highly vulnerable

countries. Although food security was not a research objective of this 

study, we recognize the important linkages between emergencies and 

development programs and used the new USAID Food Security Strategic 

Plan for 2006-2010 to provide context, particularly in our discussion on the 

effective use of food aid. USDA took issue with a number of our findings 

and conclusions because it believes that hard analysis was lacking to 

support many of the weaknesses that we identified. We disagree. Each of 

our report findings and recommendations was based on a rigorous and 

systematic review of multiple sources of evidence, including procurement 

and budget data, site visits, previous audits, agency studies, economic 

literature, and testimonial evidence collected in both structured and 

unstructured formats. 

Mr. Chairman and Members of the Subcommittee, this concludes my 

prepared statement. I would be pleased to answer any questions that you

may have. 

Should you have any questions about this testimony, please contact 

Thomas Melito, Director, at (202) 512-9601 or MelitoT@gao.gov. Other 

major contributors to this testimony were Phillip Thomas (Assistant 

Director), Carol Bray, Ming Chen, Debbie Chung, Martin De Alteriis, Leah 

DeWolf, Mark Dowling, Etana Finkler, Kristy Kennedy, Joy Labez, Kendall

Schaefer, and Mona Sehgal. 

GAO Contact and 

Staff 

Acknowledgments 

Page 16 GAO-07-905T
Appendix I: Program Authorities 

The United States has principally employed six programs to deliver food 

aid: Public Law (P.L.) 480 Titles I, II, and III; Food for Progress; the 

McGovern-Dole Food for Education and Child Nutrition; and Section 

416(b). Table 1 provides a summary of these food aid programs. 

Table 1: U.S. Food Aid by Program Authority

P.L. 480 

Program Title I Title II Title III 

Food for

Progress 

McGovern-Dole 

Food for

Education and 

Child Nutrition 

Section

416(b)

Total budgeta$30 million $1,706.9 million 0b$207.8 million $97 million $20.8 millionc

Managing 

agency 

USDA USAID USAID USDA USDAd USDA 

Year 

established 

1954 1954 1954 1985 2003 1949

Description 

of assistance 

Concessional

sales of 

agricultural 

commodities 

Donation of 

commodities to meet 

emergency and 

nonemergency needs; 

commodities may be 

sold in-country for 

development 

purposes 

Donation of 

commodities to

governments 

of least 

developed 

countries 

Donation or credit 

sale of 

commodities to

developing 

countries and 

emerging 

democracies 

Donation of 

commodities and 

provision of 

financial and 

technical 

assistance in 

foreign countries 

Donations of 

surplus 

commodities 

to carry out 

purposes of 

P.L. 480 (Title 

II and Title III) 

and Food for 

Progress 

programs 

Type of 

assistance 

Nonemergency Emergency and

nonemergency

Nonemergency Emergency and

nonemergency

Nonemergency Emergency

and 

nonemergency

Implementing 

partners 

Governments and

private entities

World Food Program 

and NGOs

Governments Governments,

agricultural trade 

organizations, 

intergovernmental 

organizations, 

NGOs, and 

cooperatives 

Governments, 

private entities,

intergovernmental 

organizations 

See 

implementing 

partners for 

Title II, Title III,

and Food for 

Progress 

programs 

Source: GAO analysis based on USAID and USDA data. 

a

Budget data are for fiscal 2006. USDA data represent programmed funding, while USAID data 

represent appropriated funds as of August 2006. 

b

This program has not been funded in recent years.

c

This program is currently inactive due to the unavailability of government-owned commodities. 

Because it is permanently authorized, it does not require reauthorization under the Farm Bill. 

d

USDA administers this program as stipulated by law, which states that the President shall designate 

one or more federal agencies. 

(320510) 
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
GAO’s Mission The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To

have GAO e-mail you a list of newly posted products every afternoon, go 

to www.gao.gov and select “Subscribe to Updates.” 

The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Mail or Phone 

To Report Fraud,

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

PRINTED ON RECYCLED PAPER