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HEARING TO REVIEW FOOD AID AND

AGRICULTURE TRADE PROGRAMS 

OPERATED BY THE U.S. DEPARTMENT

OF AGRICULTURE AND THE U.S. AGENCY 

FOR INTERNATIONAL DEVELOPMENT

HEARING

BEFORE THE

SUBCOMMITTEE ON 

SPECIALTY CROPS, RURAL DEVELOPMENT, 

AND FOREIGN AGRICULTURE

OF THE

COMMITTEE ON AGRICULTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MAY 10, 2007

Serial No. 110–21

(

Printed for the use of the Committee on Agriculture 

agriculture.house.gov 

COMMITTEE ON AGRICULTURE 

COLLIN C. PETERSON, Minnesota, Chairman 

TIM HOLDEN, Pennsylvania, 

Vice Chairman 

MIKE MCINTYRE, North Carolina 

BOB ETHERIDGE, North Carolina 

LEONARD L. BOSWELL, Iowa 

JOE BACA, California 

DENNIS A. CARDOZA, California 

DAVID SCOTT, Georgia 

JIM MARSHALL, Georgia 

STEPHANIE HERSETH SANDLIN, South 

Dakota 

HENRY CUELLAR, Texas 

JIM COSTA, California 

JOHN T. SALAZAR, Colorado 

BRAD ELLSWORTH, Indiana 

NANCY E. BOYDA, Kansas 

ZACHARY T. SPACE, Ohio 

TIMOTHY J. WALZ, Minnesota 

KIRSTEN E. GILLIBRAND, New York 

STEVE KAGEN, Wisconsin 

EARL POMEROY, North Dakota 

LINCOLN DAVIS, Tennessee 

JOHN BARROW, Georgia 

NICK LAMPSON, Texas 

JOE DONNELLY, Indiana 

TIM MAHONEY, Florida 

BOB GOODLATTE, Virginia, 

Ranking Minority Member 

TERRY EVERETT, Alabama 

FRANK D. LUCAS, Oklahoma 

JERRY MORAN, Kansas 

ROBIN HAYES, North Carolina 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

JO BONNER, Alabama 

MIKE ROGERS, Alabama 

STEVE KING, Iowa 

MARILYN N. MUSGRAVE, Colorado 

RANDY NEUGEBAUER, Texas 

CHARLES W. BOUSTANY, JR., Louisiana 

JOHN R. ‘‘RANDY’’ KUHL, JR., New York 

VIRGINIA FOXX, North Carolina 

K. MICHAEL CONAWAY, Texas 

JEFF FORTENBERRY, Nebraska 

JEAN SCHMIDT, Ohio 

ADRIAN SMITH, Nebraska 

KEVIN MCCARTHY, California 

TIM WALBERG, Michigan 

PROFESSIONAL STAFF

ROBERT L. LAREW, Chief of Staff 

ANDREW W. BAKER, Chief Counsel 

APRIL SLAYTON, Communications Director 

WILLIAM E. O’CONNER, JR., Minority Staff Director 

SUBCOMMITTEE ON SPECIALTY CROPS, RURAL DEVELOPMENT, AND FOREIGN

AGRICULTURE

MIKE MCINTYRE, North Carolina, Chairman 

JIM MARSHALL, Georgia 

HENRY CUELLAR, Texas 

JOHN T. SALAZAR, Colorado 

JOHN BARROW, Georgia 

EARL POMEROY, North Dakota 

MARILYN N. MUSGRAVE, Colorado, 

Ranking Minority Member 

TERRY EVERETT, Alabama 

ADRIAN SMITH, Nebraska 

JEFF FORTENBERRY, Nebraska 

ROBIN HAYES, North Carolina 

CLARK OGILVIE, Subcommittee Staff Director 

(II) 

(III)

C O N T E N T S 

Page 

Goodlatte, Bob, a Representative in Congress from Virginia, prepared statement ...................................................................................................................... 5

McIntyre, Mike, a Representative in Congress from North Carolina, opening 

statement .............................................................................................................. 1

Prepared statement .......................................................................................... 1

Musgrave, Marilyn N., a Representative in Congress from Colorado, opening 

statement .............................................................................................................. 2

Prepared statement .......................................................................................... 3

WITNESSES

McGovern, Hon. James P., a Representative in Congress from Massachusetts 5

Prepared statement .......................................................................................... 7

Emerson, Hon. Jo Ann, a Representative in Congress from Missouri ................ 17

Prepared statement .......................................................................................... 18

Yost, Michael W., Administrator, Foreign Agricultural Service, U.S. Department of Agriculture, Washington, D.C. .............................................................. 20

Prepared statement .......................................................................................... 22

Hammink, William, Director, Office of Food for Peace, U.S. Agency for International Development (USAID), Washington, D.C. .......................................... 27

Prepared statement .......................................................................................... 28

Levinson, Ellen S., Executive Director, Alliance for Food Aid (AFA); President, Levinson & Associates, Washington, D.C. ................................................ 38

Prepared statement .......................................................................................... 40

Reilly, Annemarie, Chief of Staff, Catholic Relief Services (CRS), Baltimore, 

MD ......................................................................................................................... 55

Prepared statement .......................................................................................... 57

Gillcrist, John, Chairman, Bartlett Milling Company; Director, North American Millers’ Association; on behalf of Agricultural Food Aid Coalition, 

Kansas City, MO .................................................................................................. 59

Prepared statement .......................................................................................... 61

Wickstrom, Cary L., Wheat Farmer; Member, Board of Directors, U.S. Wheat 

Associates (USW); Immediate Past President, Colorado Wheat Administrative Committee; on behalf of U.S. Wheat Associates’ Food Aid Working 

Group, Orchard, CO ............................................................................................. 65

Prepared statement .......................................................................................... 67

Binversie, Robert, Volunteer, Farmer-to-Farmer Program, Keil, WI .................. 71

Prepared statement .......................................................................................... 73

Sumner, James H., President, USA Poultry & Egg Export Council 

(USAPEEC); on behalf of Coalition to Promote U.S. Agricultural Exports, 

Stone Mountain, GA ............................................................................................ 97

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

Ford, Patrick, Director, International Marketing, Ford’s Gourmet Foods; on 

behalf of Coalition to Promote U.S. Agricultural Exports, Raleigh, NC ......... 114

Prepared statement .......................................................................................... 116

MATERIAL SUBMITTED FOR THE RECORD

Beckmann, David, President, Bread for the World, prepared statement ........... 118

Kauck, David, Senior Technical Advisor, CARE USA, prepared statement ....... 119

Maritime Food Aid Coalition, prepared statement ............................................... 127

National Corn Growers Association, prepared statement .................................... 140

(1)

HEARING TO REVIEW FOOD AID AND

AGRICULTURE TRADE PROGRAMS 

OPERATED BY THE U.S. DEPARTMENT

OF AGRICULTURE AND THE U.S. AGENCY 

FOR INTERNATIONAL DEVELOPMENT 

THURSDAY, MAY 10, 2007

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON SPECIALTY CROPS, RURAL

DEVELOPMENT, AND FOREIGN AGRICULTURE, COMMITTEE ON AGRICULTURE, Washington, D.C. 

The Subcommittee met, pursuant to call, at 1:08 p.m., in Room 

1300 of the Longworth House Office Building, Hon. Mike McIntyre 

[Chairman of the Subcommittee] presiding. 

Members present: Representatives McIntyre, Salazar, Barrow, 

Musgrave, Smith and Moran. 

Staff present: Aleta Botts, Adam Durand, Scott Kuschmider, 

Sharon Rusnak, Kristin Sosanie, Mike Dunlap, and Jamie Weyer. 

OPENING STATEMENT OF HON. MIKE MCINTYRE, A 

REPRESENTATIVE IN CONGRESS FROM NORTH CAROLINA 

Mr. MCINTYRE. This hearing of the Subcommittee on Specialty 

Crops, Rural Development, and Foreign Agriculture to review food 

aid and agriculture trade programs operated by the U.S. Department of Agriculture and the U.S. Agency for International Development will come to order. I am Mike McIntyre from the 7th District 

of North Carolina, and I am pleased to have you with us—especially our guests today here in this Subcommittee meeting. 

It is always a special privilege to hear from our witnesses, and 

we have several today. This is an opportunity for us to be able to 

hear from a special set of witnesses, and in the interest of time, 

since I was unduly delayed, I am going to forego my opening statement to put us right back on schedule and to honor the time of our 

friend and colleague, Mr. McGovern, so that he can be on schedule 

and we will honor his time as well as one of our special panelists. 

So with that, I will ask the Ranking Member if she has any comments and then we will proceed. 

[The prepared statement of Mr. McIntyre follows:]

PREPARED STATEMENT OF HON. MIKE MCINTYRE, A REPRESENTATIVE IN CONGRESS

FROM NORTH CAROLINA

Good afternoon, and welcome to the Subcommittee’s hearing on the food aid and 

foreign agriculture programs operated by the U.S. Department of Agriculture and 

2

the Agency for International Development. I am pleased to welcome Mr. Yost, the 

Administrator of the Foreign Agricultural Service, and Mr. Hammink, Director of 

the Office of Food for Peace at the U.S. Agency for International Development. 

The Trade Title of the farm bill authorizes programs that provide food aid and 

that help promote U.S. agricultural products in overseas markets. Many of these 

programs are up for reauthorization this year, and this hearing is designed to reexamine these programs as we prepare to write a new farm bill very soon. 

Importance of Food Aid 

I am proud to be able to say that the United States is by far the largest contributor of international food aid, providing over half of the annual total worldwide. I 

believe this represents the best qualities of our nation and our values as we share 

the fruits of our harvests with people in need across the globe. 

Unfortunately, despite the $70 billion provided by the United States over the last 

fifty years, millions of people around the globe face severe food shortages every year. 

As the witnesses will point out today, we are actually seeing an increase in the 

numbers of people needing food assistance. Shocks to food systems that might have 

resulted in one bad year twenty years ago now seem to set countries back multiple 

years and multiple harvests. I hope the witnesses will address how we can better 

use the food we provide to reduce the incidence of these situations. 

As we examine these programs in the farm bill, we need to determine where 

changes are relevant to ensure that our food aid programs work as designed. One 

theme that dominated a recent Government Accountability Office report was the 

need for greater interagency coordination and monitoring to ensure that every dollar 

spent on food aid is put to good use. I know the witnesses here today will address 

the concerns about food aid, and I hope they will elaborate on how we are using 

food aid now to enhance the lives—and really to save the lives—of people across the 

globe. 

Market Development Programs 

In addition to the food aid programs in the farm bill, critical foreign market development programs are up for reauthorization as well. These programs provide the 

help that our agricultural industry and small businesses need to seek out and expand in overseas markets. Many agricultural producers and value-added businesses 

want to sell overseas, but simply lack the capacity and resources to finance such 

an expansion. These programs fill that gap by ensuring that entities, like the one 

from North Carolina here today, can break down the barriers that prevent them 

from exporting high-quality, home-grown American product overseas. 

As the Inspector General of USDA pointed out in a recent report, we need greater 

efforts to address declining global market share for our agricultural producers. We 

need to examine ways to improve our strategy on behalf of these producers who are 

competing in the global marketplace. I hope both USDA and the recipients of benefits of these programs can help us find ways to do just that today. 

Conclusion 

This hearing provides us an opportunity to take a look at the title of the farm 

bill that contains these programs and look for ways to improve upon the foundation 

that has been in place for over 50 years, in the case of our international food aid 

programs. 

I would encourage witnesses to use the 5 minutes provided for their statements 

to highlight the most important points in their testimony. Pursuant to Committee 

rules, testimony by witnesses along with questions and answers by Members of the 

witnesses will be stopped after 5 minutes. Your complete written testimony will be 

submitted in its entirety in the record.

Mrs. Musgrave. 

OPENING STATEMENT OF HON. MARILYN N. MUSGRAVE, A 

REPRESENTATIVE IN CONGRESS FROM COLORADO 

Mrs. MUSGRAVE. Thank you, Mr. Chairman. I will be brief. I just 

want to thank you for calling this hearing today to review our food 

aid and agricultural trade programs that are operated by the 

United States Department of Agriculture and the U.S. Agency for 

International Development. 

3

I want to thank all of our witnesses that have come to our Committee today and especially Cary Wickstrom, a fellow Coloradoan, 

a wheat grower from my area. I am very glad to have Cary here. 

I am looking forward to hearing from USDA and USAID and 

their partners in the battle against hunger in the world. The 

United States is the largest contributor of food aid in the world—

providing humanitarian and development assistance through a variety of programs, and last year in the Sudan alone the U.S. provided over 2⁄3 of all contributions to the World Food Program. The 

prominent program, Public Law 480, known as Food for Peace, 

which shares the abundance of our United States food with those 

in need around the world, along with McGovern-Dole Food for Education, Food for Progress and related programs to secure necessary 

commodities for donation. Food for Peace provides resources for 

both emergencies and developmental programs to reduce chronic 

hunger. 

Among the issues before us today is the Administration’s proposal to use up to 25 percent of Public Law 480 Title II funds for 

local or regional purchase and distribution of emergency food aid. 

I strongly oppose the purchase of commodities in foreign markets 

with their uncertain availability as a substitute for maintaining a 

stable pipeline of commodities vital to meeting the needs for millions of people worldwide. Regional purchase of commodities has 

been attempted as a stopgap measure in dire emergencies but it 

has had really limited success. So with very little evidence to support such a bold divergence from programs with a proven track 

record, I am opposed to a move which would put less food in regions of dire need. 

I also look forward to hearing the testimony from the witnesses 

pertaining to the Market Access Program and Foreign Market Development Program. As U.S. producers and exporters face unfair 

competition abroad, these programs have lessened the damage 

from foreign export subsidies. In addition to promoting exports of 

American agricultural goods, market access and the developmental 

programs provide assistance to navigate the very complicated importation requirements of the other countries. Far from being a 

simple pay-out, the Market Access Program requires significant investment from the participating company through matching funds 

and a clear plan for success. It is also estimated that the benefits 

of these programs last from 3 to 5 years beyond the initial investment and this really leverages the impact of the programs. When 

facing significant export subsides abroad, it is important to give 

U.S. companies the tools they need to overcome these barriers. This 

hearing today will provide the background for streamlining food aid 

and agriculture trade programs needed as we approach this next 

farm bill. 

Thank you very much, Mr. Chairman. 

[The prepared statement of Mrs. Musgrave follows:]

PREPARED STATEMENT OF HON. MARILYN N. MUSGRAVE, A REPRESENTATIVE IN

CONGRESS FROM COLORADO

Thank you, Mr. Chairman, for calling this hearing today to review food aid and 

agriculture trade programs operated by the U.S. Department of Agriculture and the 

U.S. Agency for International Development. I would like to thank each of our witnesses for being here today. I also especially want to thank Cary Wickstrom, a 

4

wheat grower and fellow Coloradoan, for offering his testimony on food aid programs. 

I look forward to hearing from USDA, USAID, and their partners in the battle 

against hunger in the world. 

The United States is the largest contributor of food aid in the world, providing 

humanitarian and development assistance through a variety of programs. Last year, 

in Sudan alone, the U.S. provided over 2⁄3 of all contributions to the World Food Program. 

The prominent program is Pub. L. 480, known as Food for Peace, which shares 

the abundance of U.S. food with those in need around the world. Along with McGovern-Dole Food for Education, Food for Progress, and related programs to secure necessary commodities for donation, Food for Peace provides resources for both emergencies and development programs to reduce chronic hunger. 

Among the issues before us today is the Administration’s proposal to use up to 

25% of P.L. 480 Title II funds for the local or regional purchase and distribution 

of emergency food. I strongly oppose the purchase of commodities in foreign markets 

with uncertain availability as a substitute for maintaining a stable pipeline of commodities vital to meeting needs for millions of people worldwide. 

Regional purchase of commodities has been attempted as a stopgap measure in 

dire emergencies, but with limited success. With very little evidence to support such 

a bold divergence from programs with a proven track record, I am opposed to a 

move which would put less food in regions of need. 

I also look forward to hearing testimony from the witnesses pertaining to the 

Market Access Program and Foreign Market Development Program. As U.S. producers and exporters face unfair competition abroad, theses programs have lessened 

the damage from foreign export subsidies. 

In addition to promoting exports of American agricultural goods, market access 

and development programs provide assistance to navigate the complicated importation requirements of other countries. Far from being a simple pay-out, the market 

access program requires significant investment from the participating company 

through matching funds and a clear plan for success. 

It is also estimated that the benefits of these programs lasts from 3 to 5 years 

beyond the initial investment, further leveraging the impact of the programs. When 

facing significant export subsidies abroad, it is important to give U.S. companies the 

tools they need to overcome those barriers. 

This hearing today will provide the background for streamlining food aid and agriculture trade programs needed as we approach the next farm bill. Thank you, Mr. 

Chairman, for holding this hearing today.

Mr. MCINTYRE. Thank you, Mrs. Musgrave. 

As I said earlier, I am going to forego my opening statement and 

will submit it for the record, so let me move to the procedural aspect of this. This hearing does provide us an opportunity to take 

a look at the title of the farm bill that contains the programs that 

I mentioned briefly earlier and that Mrs. Musgrave has described 

as well, and we are very excited about the witnesses that are here 

today. We have an extremely long set of witnesses because of the 

different panels. I want to remind the witnesses that will be testifying throughout the course of the afternoon of the 5 minutes that 

are provided under the rules. Please highlight the most important 

points in your testimony, and pursuant to Committee rules, testimony by the witnesses along with questions and answers by Members will be stopped after 5 minutes. So that everybody will know, 

the complete written testimony of any of the witnesses or the Members will be submitted to the record in their entirety as requested. 

We may be joined today as well by former Chairman Goodlatte and 

Chairman Peterson, and as they come in, we will obviously recognize them. If there are any others who would like to make opening 

statements who are members of the panel, we will ask them to do 

that by entering it into the record. 

[The prepared statement of Mr. Goodlatte follows:]

5

PREPARED STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS

FROM VIRGINIA

Thank you, Mr. Chairman, for holding this hearing on food aid and agriculture 

trade programs operated by the U.S. Department of Agriculture and the U.S. Agency for International Development. I look forward to hearing comments from the 

agencies and private organizations involved in facilitation and distribution of foreign 

food aid. 

During a recent trip to Sudan I witnessed firsthand the incredible need for food 

aid among those displaced by conflict. Without a steady supply of food, many of 

these displaced people would not be able to survive. Our farmers and ranchers 

produce the safest, most abundant, and affordable food supplies in the world, and 

we proud to be able to share the bounty of our harvest with those who need it most 

in the global community. 

I am disappointed that the Administration has brought forth a proposal which 

would significantly shift food aid policy away from providing food for the hungry in 

favor of sending cash abroad. The Administration’s proposal would essentially pull 

$300 million out of taxpayers’ pockets and drop it directly into our competitor’s markets, such as the EU. We cannot guarantee the availability of commodities in foreign markets, but we can guarantee the availability, safety and reliability of American commodities. I strongly oppose replacing a consistent, reliable source of food 

with potentially unreliable sources in foreign markets. 

The U.S. is the world’s largest contributor to food aid programs, supplying roughly 

60 percent of total food aid every year. The reality is that if you want to provide 

foreign food aid, there must be Congressional support. The P.L. 480 program enjoys 

broad support because it provides hungry people worldwide with safe, nutritious 

foods while ensuring that the American people’s generosity addresses hunger directly and without a possible diversion of funds. 

Shifting such a large portion of the P.L. 480 budget to cash jeopardizes Congressional support for food aid. As I have in the past, I will continue to oppose this proposal. 

I look forward to hearing from the industry regarding the Market Access Program 

and Foreign Market Development Program. Such initiatives help small businesses 

and co-ops position their products in competitive foreign markets and I look forward 

to their comments. 

Thank you, Mr. Chairman.

As I mentioned earlier, we would like to honor the time of our 

fellow colleagues who are coming on our first panel today, Jim 

McGovern and Jo Ann Emerson, and they along with the special 

guests of our Subcommittee, Jerry Moran and I, all are from the 

same class, the class of 1996, so we have got a little mini reunion 

here. I am thrilled, Jim and Jo Ann, to have you here, so the Honorable Jim McGovern, Member of Congress from Massachusetts, 

and the Honorable Jo Ann Emerson, Member of Congress from 

Missouri, we welcome you both. 

Mr. McGovern, you may begin. 

STATEMENT OF HON. JAMES P. MCGOVERN, A 

REPRESENTATIVE IN CONGRESS FROM MASSACHUSETTS 

Mr. MCGOVERN. Thank you, Mr. Chairman, and I am delighted 

to be here, and I want to thank the Committee for giving us this 

opportunity to talk about the important contributions of the George 

McGovern-Robert Dole International Food for Education and Child 

Nutrition Program, better known as the McGovern-Dole Program, 

and I am especially pleased to be here with my colleague, Jo Ann 

Emerson, who has played such an important role in establishing 

and promoting this program. Let me begin, Mr. Chairman, by saying that I believe that the McGovern-Dole Program with its flexible 

mix of commodities, cash and technical aid is one of our most successful food aid programs. 

6

In April I had the opportunity to visit two McGovern-Dole 

projects in Kenya, both administered by the World Food Program. 

Working with the Kenyan Government, WFP carries out a school 

feeding program that reaches 1.1 million children in 3,800 schools. 

The McGovern-Dole Program provides about half of the funding, 

mainly in the form of commodities for this nationwide program and 

directly serves over 1⁄3 of these children. On average, it costs just 

9¢ a day to provide these children with a hot school lunch each 

day. I first went to the Mukuru Kayaba Primary School situated 

in the Mukuru slums in Nairobi with 1,300 students. These children live under very poor conditions in shanties with no regular 

food to eat. About 70 children are HIV/AIDS orphans and at least 

one parent is lost every 2 weeks due to the HIV/AIDS pandemic. 

When school feeding was introduced, the school population increased rapidly. It also allowed students to remain in school the 

whole day. Mrs. Faith Wachira, the School Head Teacher, reported 

that providing a hot lunch significantly reduced truancy. Despite 

their poor backgrounds, parents assist in the daily preparation of 

the food and provide firewood, salt, water, feeding utensils and 

other essentials. I joined the students for their lunch of corn and 

soy meal, maize and vegetable oil cooked into a thick porridge. One 

student I sat next to, sad to say, was hoarding some of his food, 

whether for himself to eat later or for another family member at 

home, I don’t know. 

The next day I visited the Kajiado Girls Primary School run by 

the African Inland Church. Located 2 hours outside of Nairobi, the 

school began as a rescue center for Maasai girls who were being 

forced into early marriage. Current enrollment consists of 637 girls. 

In the Maasai community, there exists a belief that girls don’t deserve an education and should remain at home doing chores. There 

is also a tradition of arranged marriages between girls as young as 

12 and much older men. At the Kajiado School, many of the girls 

actually board at the school out of fear that if they return home, 

they will be forced into marriage and over 100 remain at the school 

during holidays because they cannot safely return to their homes. 

My guide was Head Teacher, Mr. Nicholas Muniu. He told me how 

the McGovern-Dole Program, which began in 2001, significantly reduced the school’s dropout rate. Now the retention rate and daily 

attendance are very high. Since the school is a boarding school, 

both lunch and dinner are provided. McGovern-Dole also freed up 

funds in the school’s budget that were used to hire professional 

cooks, improve the kitchen facilities, purchase local produce and reduce or eliminate the modest school fees for the neediest pupils. I 

was particularly moved by a girl named Grace who refused her father’s demand that she marry an older man when she was only 13. 

In response, her father bought a sword with which to kill her and 

actually demanded that she bring him the weapon to end her life. 

She fled, and she is now at the school doing exceptionally well. She 

is safe, healthy, well fed, and with an education. She will have a 

bright future. At Kajiado, I served split yellow pea soup and a 

heaping serving of bulgur wheat for lunch—all provided through 

the bounty of America’s farmers. 

Regrettably, since 2003, funding for McGovern-Dole has never 

come close to its initial $300 million budget. Annual funding is still 

7

only 1⁄3 of what it was in the pilot phase. McGovern-Dole presently 

reaches less than half the number of children as in the first year, 

and is operating in half the original countries. I have seen firsthand how devastating these cuts have been for some of the poorest 

and most vulnerable children in places like Colombia and Ethiopia. 

Congresswoman Emerson and I have introduced legislation, H.R. 

1616, which we believe provides a blueprint on how to restore funding for the McGovern-Dole Program. Currently, the bill has 111 cosponsors. Restoring the funding would allow USDA to award 

multiyear grants of 3 to 5 years in duration, increasing local confidence in the program and strengthening the ability of projects to 

become self-sustaining. New projects could be initiated and existing 

projects expanded. Also, funding could finally be awarded to preK and early childhood education projects, which are authorized in 

the McGovern-Dole Program but lack the funds to move forward. 

Mr. Chairman, I have traveled to some of the poorest areas of 

the world, city slums and remote rural areas. Not once did anyone 

ever ask me for a bomb or a missile or a military base. Instead, 

mothers and fathers literally beg for help simply to keep their children alive, fed and in school. Mr. Chairman and Members of the 

Committee, I know that you face difficult choices given the budget 

constraints that you must work within, but McGovern-Dole has 

proven itself as a very effective way to meet these needs. 

Thank you. 

[The prepared statement of Mr. McGovern follows:]

PREPARED STATEMENT OF HON. JAMES P. MCGOVERN, A REPRESENTATIVE IN

CONGRESS FROM MASSACHUSETTS

I want to thank Chairman Mike McIntyre, Ranking Member Marilyn Musgrave 

and the Members of the Subcommittee for granting me this opportunity to testify 

on the important contributions of the George McGovern-Robert Dole International 

Food for Education and Child Nutrition Program (McGovern-Dole). I am especially 

pleased to be joined by my distinguished colleague from Missouri, Representative Jo 

Ann Emerson, who has played such an important role in helping to establish and 

promote this program. 

McGovern-Dole is among the newest of U.S. food-related development programs. 

It was launched in 2000 by President Bill Clinton as a pilot program, the Global 

Food for Education Initiative (GFEI). The purpose of the program is simple and 

straightforward: to reduce the incidence of child hunger among school-age children 

and to increase their access to education by providing at least one nutritious meal 

each day in schools. The GFEI was administered by the U.S. Department of Agriculture (USDA) and provided $300 million to 48 school feeding projects in 38 countries, reaching nearly seven million children. These projects were carried out in 

2001–2002 by U.S. non-governmental organizations (NGOs), the United Nations 

World Food Program (WFP), and one national government, the Dominican Republic. 

The pilot program proved so successful and received such high evaluations that 

it was established as a permanent program in the Farm Security and Rural Investment Act of 2002 and named in honor of former senators George McGovern of South 

Dakota and Robert Dole of Kansas for their tireless commitment to end child hunger 

here at home and around the world. The McGovern-Dole made a number of improvements over the GFEI pilot program—expanding the universe of U.S. commodities available for projects; providing financial and technical assistance for transportation, storage, and to strengthen nutritional and educational inputs; emphasizing 

the enrollment and attendance of girls and other marginalized children; requiring 

family and community engagement in the project; requiring elements of sustainability to be built into the projects from the beginning; and strengthening USDA’s 

monitoring and evaluation criteria and capacity for each project. The projects must 

target low-income and poverty areas with low school attendance, especially among 

girls, and where there is a high incidence of child hunger and food insecurity. The 

8

program continues to be administered by the office of Foreign Agricultural Services 

in the USDA. 

Over the past 5 years, the McGovern-Dole Programs have received stellar evaluations, both from USDA and from non-governmental studies. On average, enrollment 

rose by 14 percent in schools served by McGovern-Dole projects, with enrollment of 

girls increasing by 17 percent. Teachers and program administrators report a greater ability of children to concentrate after receiving school meals, a general improvement in academic performance, and improved test scores. The McGovern-Dole Program has increased local communities’ concern for and participation in their children’s education. In addition, both households and schools have benefited from 

training on food preparation, health—including HIV/AIDS education and prevention—and hygiene provided through the program. 

Rather than report a variety of statistics and results, I encourage the Members 

of the Subcommittee who have not yet had a chance to review the USDA evaluations of the GFEI and the McGovern-Dole Program to ask USDA to provide you 

with copies. There you will see the wide variety of commodities, projects, and best 

practices employed by the implementing NGOs and WFP. Each program is tailored 

to meet the needs of the local communities, region and country; each receives additional financial and in-kind support from national governments, other country and 

international donors, private sector or individual contributors, and/or the local communities themselves. Several programs have already ‘‘graduated’’ and achieved sustainability, including projects initiated in Lebanon, Moldova, Vietnam and 

Kyrgyzstan. 

Leaders on both sides of the aisle in Congress agree that the McGovern-Dole Program is one of the best programs the United States has to end poverty and hunger 

in the developing world. I have attached to my testimony copies of letters and cosponsors of legislation that verify this broad bipartisan support. Republican Senator 

Pat Roberts of Kansas has stated that the McGovern-Dole Program serves U.S. national security interests. Terrorism breeds where there is hunger and poverty, ignorance and despair. McGovern-Dole addresses all of these by providing children not 

only with food, but the hope and promise that come with education. 

Over the April recess, I traveled to Ethiopia, Kenya and eastern Chad to look at 

food aid and food security programs that address child hunger, HIV/AIDS and nutrition, and meeting emergency humanitarian crises. In Kenya, I was privileged to 

visit two McGovern-Dole projects, both administered by the World Food Program. 

WFP, in collaboration with the Kenyan Government’s goal to provide universal 

education to its children, carries out a school feeding program that reaches 1.1 million children in 3,800 schools. On average, it costs about 9¢ a day to provide these 

children with a hot lunch each school day made up of pulses, corn and vegetable 

oil. The U.S.-funded McGovern-Dole Program provides about half of the funding in 

the form of commodities for this nation-wide program, and directly serves over 1⁄3

of these children. The Kenyan Government, other international donors—like the UK 

and Japan, the private sector, individual contributions from the U.S. Friends of 

WFP, and contributions from the local beneficiary communities provide the remaining funding for the overall national program. 

The first school I visited is the Mukuru Kayaba Primary School, a public primary 

school situated in the Mukuru slums in Nairobi. The school started in 1985 as a 

non-formal school, with only one shanty room, two teachers and 10 pupils. It has 

grown to the current population of 1,300 children, including 653 girls and 647 boys, 

and became a public school in 1990. 

These children live under very poor conditions, in shanties, with no regular food 

to eat, given that the majority of their parents are without jobs. Girls are at great 

risk in the community. Sometimes they are abducted on their way home from 

school, and their security is always an issue. The school has about 70 children orphaned by HIV/AIDS who are being taken care of by their relatives or well-wishers. 

I was told that the school loses at least 1 parent every 2 weeks due to the HIV/

AIDS pandemic. But I’m pleased to inform the Committee that HIV/AIDS education 

and prevention are provided at the school to all the pupils. Finally, there are frequent fires in the slum community, which often leaves many pupils homeless. 

When school feeding was introduced, the school population increased rapidly and 

allowed for the children to remain in school the whole day. Mrs. Faith Wachira, the 

formidable woman who is the School Head Teacher, wanted me to know that there 

has been a significant reduction in truancy after the introduction of lunch, given 

that the majority of the pupils were formerly from the streets. Despite the poor 

backgrounds of the children and the community at large, the parents assist in the 

daily preparation of the food and provide firewood, salt, water, feeding utensils, and 

other essentials. Mrs. Wachira is rightfully proud of the progress of her pupils and 

her staff. 

9

I had the privilege to serve the children their lunch, and to join them during 

lunchtime. It’s a simple meal of corn and soy meal, maize and yellow split peas, and 

vegetable oil—cooked into a thick porridge. One of the children I sat next to, I’m 

sad to say, was hoarding some of his food, whether for himself to eat after school 

or for another family member at home, I don’t know. 

The second school I visited is Kajiado Girls Primary School, run by the African 

Inland Church. Located over 2 hours outside Nairobi in Maasai country, the school 

originally began as a rescue center for Maasai girls who were being forced into early 

marriage. Over the years, enrollment has increased exponentially from the initial 

20 girls to the current total of 637 girls. The McGovern-Dole Program began in 2001 

and is administered by WFP. 

In the Maasai community, there exists a belief that girls don’t deserve an education and should remain at home doing chores. There is also a tradition of arranged marriages between girls as young as age 12 and much older men. At the 

Kajiado School, many of the girls actually board at the school out of fear that if they 

return home, they will be forced into marriage. During holidays and when school 

is not in session, over 100 of the girls remain at the school because they cannot safely return to their homes and villages. 

My guide at the school was Head Teacher Mr. Nicolas Muniu, who has been with 

the school for the past 27 years. He told me that the McGovern-Dole Program has 

contributed significantly to a reduction in the school’s drop-out rate. The retention 

rate and daily attendance are both very high. Given that the school is also a boarding school to many of its students, the food provided contributes significantly to the 

daily provision of both lunch and dinner. McGovern-Dole has also freed up funds 

in the school’s budget that were used to hire professional cooks, improve the kitchen 

facilities, purchase local produce, and reduce or eliminate the modest school fees for 

the neediest pupils. 

I was particularly moved by a girl named Grace, who refused her father’s demand 

that she marry an older man when she was only 13. 

In response, her father bought a sword with which to kill her, and actually demanded she bring him the weapon to end her life. She fled—and she is now at the 

school doing exceptionally well. She is the prefect of her class—or ‘‘head girl,’’ and 

is the leading student in mathematics. She is safe, healthy, well-fed, and with an 

education, will have a bright future. When I talked with this modest, composed 

young woman, I genuinely felt like I was seeing the potential of Kenya’s future. 

The lunch I helped serve to Grace and several hundred other girls that afternoon 

consisted of a split yellow pea soup and a heaping serving of bulgur wheat. All provided through the bounty of our own farmers. I tried some myself, and I must admit 

it was both filling and very tasty. 

When I returned to Washington, I saw a report produced by the Center for Global 

Development entitled, ‘‘Inexcusable Absence: Why 60 million girls still aren’t in 

school and what to do about it.’’ One of the success stories it reviewed is the universal education program in Kenya. And one of the statistics cited said that ‘‘In 

Kenya, school feeding programs raised attendance in program schools 30 percent 

relative to schools without a free lunch; and test scores were also higher.’’ From my 

brief visits, I can certainly affirm the likelihood of these results. 

Regrettably, since 2002, funding for the program has never come close to its initial $300 million budget. The last farm bill reauthorization provided $100 million 

for FY 2003, which was to serve as a funding ‘‘bridge’’ for a smooth transition from 

the GFEI pilot program to the McGovern-Dole Program. In FY 2004 it received only 

$50 million; $91 million in FY 2005, an increase due largely to strong bipartisan 

efforts in the House and Senate to increase the funds; and it has been funded at 

$99 million in FY 2006 and FY 2007. The President’s FY 2008 budget proposal once 

again requests only $100 million for the program. 

Erratic funding levels are a serious concern. Even as the program’s budget increased from 2004, annual funding is still only a third of what it was in the pilot 

phase. McGovern-Dole presently reaches less than half the number of children as 

in the first year, and is operating in less than half the original countries. 

I have seen first-hand how devastating these cuts have been for some of the poorest and most vulnerable children in Colombia and Ethiopia. Each country received 

substantial GFEI projects in 2001 and 2002, but those programs were eliminated 

when funding was cut to $50 million in 2004 and have never returned. Luckily, in 

Colombia, USAID stepped in and picked up the former GFEI school feeding programs that were addressing the needs of internally displaced communities. I travel 

fairly frequently to Colombia, and I still hear requests from the WFP, NGOs and 

local communities for a return of McGovern-Dole funding and projects. One mother 

thanked me and the United States for the meals and schooling provided to her children. She told me that the school meals program not only allowed her to send her 

10

children to school, but kept her son from being recruited as a child soldier by the 

para-militaries and the FARC guerrillas. 

Over the April recess, I traveled to Ethiopia to review food aid and food security 

programs. Ethiopia also benefited from the GFEI pilot program, receiving $5.3 million over 3 years and reaching over 300,000 children. Ethiopia is one of the educationally least developed countries in sub-Saharan Africa. Household food insecurity 

is a national problem, with an estimated 90 percent of rural household affected either by chronic or transitory food shortages. In food insecure areas of Ethiopia, 

school children walk an average of 3 to 4 kilometers—or 1 hour—to reach school 

on an empty stomach each morning, primarily due to food shortages at home. These 

nutritional and hunger problems reduce the learning capacity of school children, 

weaken their commitment to school, and hinder their active participation in educational activities. In April, the WFP coordinator for Ethiopia told me that he keeps 

submitting proposals to USDA for McGovern-Dole Programs, but they are not accepted. The reason is simple: the McGovern-Dole Program lacks adequate funding. 

Congresswoman Emerson and I have introduced legislation, H.R. 1616, which we 

believe provides a blueprint for the Committee on how to restore funding for the 

McGovern-Dole Program back to its original $300 million level over a 5 year period. 

Currently, the bill has 111 bipartisan cosponsors. I encourage you to review its provisions as you move to take up the farm bill reauthorization in the coming weeks. 

Restoring such funding would allow for the McGovern-Dole Program to award 

multi year grants of 3 to 5 years in duration, which would greatly increase local 

confidence in the program and strengthen the ability of projects to build in self-sustaining elements. Such funding levels would also allow for existing programs to expand their reach and for new projects to be funded. And finally, it would allow for 

funding to be awarded to projects focused on pre-K and early childhood education, 

projects that are authorized under the McGovern-Dole but which the lack of funds 

has prevented from moving forward. 

I would simply like to conclude by saying that I have traveled to some of the poorest areas of the world, city slums and remote rural areas. Not once did anyone ever 

ask me for a bomb or a missile or a military base. Instead, mothers and fathers literally beg for help simply to keep their children alive, fed and in school. 

When we provide young children with the health care and nutrition they need, 

we invest in the future potential of every child. When we put a meal in the belly 

and a book in the hand of a student, new dreams, aspirations and opportunities are 

born. When we help a community sustain its own school feeding program, then they 

have often worked out ways to increase overall food production. And when educating 

girls becomes valued by a community, then they inevitably marry later, have fewer, 

healthier children, and generate greater income for their own families. 

The 9/11 Commission Report recommended significantly greater investment on 

the part of the United States in economic, social and development programs as a 

critical part of winning the war against terrorism. Our nation has not taken that 

recommendation to heart. I believe the McGovern-Dole represents America’s very 

best values, and I urge the Committee to continue its support of this program and 

to authorize increased funding during consideration of the farm bill reauthorization. 

Thank you, Mr. Chairman.

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Mr. MCINTYRE. Thank you very much, Mr. McGovern. 

Ms. Emerson. 

STATEMENT OF HON. JO ANN EMERSON, A MEMBER OF 

CONGRESS FROM MISSOURI 

Ms. EMERSON. Thank you, Mr. Chairman. Let me thank all of 

you for being here today and for allowing Jim and I to speak to you 

all. 

I first want to commend Congressman McGovern for the incredible leadership he has shown on the issue of hunger, both here in 

the Congress and even in his previous life before coming to the 

Congress, and that is very obvious from the trips that he has made 

and the things he does each and every day. I am proud to be able 

to cosponsor this bill with him and to prevail upon you all to understand that, with more than 300 million hungry children in the 

world, providing enough food aid is really a daunting challenge. 

Let me also say just briefly, I want to submit my formal remarks 

for the record because I can’t do them in 5 minutes. 

Mr. MCINTYRE. Yes, ma’am. 

Ms. EMERSON. I also want to acknowledge that we have special 

mentors in this endeavor with Senator George McGovern and Senator Bob Dole, who have been just eloquent advocates for ending 

hunger and they have provided nudges of conscience all along the 

way—reminding us in government of our moral responsibility as a 

country which is rich in natural resources and which has an abundant, safe food supply in order to help people who can’t help themselves. They really deserve so much of the credit for encouraging 

us and so many of our colleagues. 

Since Jim has really outlined everything, let me just say that I 

think that the McGovern-Dole food program takes on this whole 

issue of hunger in a very unique way—not only putting food in the 

bellies of children who need nutrition all over the world, but by virtue of bringing these children into a classroom setting we are nourishing not only their bodies but their minds, and this is so critical. 

I also want to mention that I had the opportunity to visit one of 

these programs this past summer in Nicaragua. Most of these programs, not all but most, often sustain themselves after the McGovern-Dole Program ends. It doesn’t last forever, but we try to turn 

the programs over to private voluntary organizations, NGOs and 

the like, and/or local governments even take them over and this is 

important for everybody to know. There are too many people and 

too many needs for our programs to stay forever and ever. We want 

to get the program started and then move it off into the private 

sector. 

These international programs I think, and I reiterate what Jim 

says, are so very important to us here at home because not only 

are we changing the lives of families in far-off places, we are 

changing the minds of the person on the street in countries where 

America has a less than stellar reputation in many cases, and I believe—and I know Jim does too—and I believe all of you believe 

that education and humanitarian aid are two of the very best ways 

we can uproot terrorism around the world and we shouldn’t overlook the power of a bag of food that says ‘‘gift of the people of the 

United States of America’’ to accomplish that goal. So I want to 

18

thank you all so much for allowing us to speak to you today and 

hope that you understood just like we do how important this program is to feeding or beginning to help the 300 million hungry children around the world. 

Thank you. 

[The prepared statement of Ms. Emerson follows:]

PREPARED STATEMENT OF HON. JO ANN EMERSON, A REPRESENTATIVE IN CONGRESS

FROM MISSOURI

Mr. Chairman and Members of the Committee, I want to thank you for the opportunity to appear here today and discuss the George McGovern-Robert Dole International Food for Education and Child Nutrition Program. 

I would like to stress that there is a clear need for the McGovern-Dole International Food for Education and Child Nutrition Program. There are 300 million 

school aged, children around the world who suffer from hunger. Of these children, 

an estimated 120 million do not attend school. Food for Education is just what it 

sounds like: a unique program to simultaneously improve nutrition and education 

by providing students with a nutritious meal or take home rations. The McGovernDole Program, ably administered by the U.S. Department of Agriculture, donates 

agriculture commodities and provides financial and technical assistance to governments, intergovernmental organizations, and PVOs, who do a wonderful job identifying and reaching out to those in need. 

While schools are an excellent location for reaching hungry students, they are 

more than merely a way to ensure school-age children receive nutritional assistance. 

By providing assistance through schools, the McGovern-Dole Program increases enrollment, increases the students’ ability to learn and, ultimately, increases the opportunities available to our greatest resources—children. 

Mr. Chairman, we know hunger affects learning. Hungry students often do not 

attend school, they are needed at home to help produce food or earn money to purchase it. Those hungry individuals who do make it to school often have trouble concentrating on lessons if they are hungry. Learning, conversely, has an opposite effect 

on hunger. Education allows children to acquire the skills needed to address hunger 

at their young stage of life and in the future. School attendance brings a desire to 

learn and openness to new ideas. Studies have also shown that as enrollment increases for girls, stunting in children under 5 years old decreases. Among the 

McGovern-Dole Program’s greatest successes has been increasing school enrollment 

among girls. 

If these reasons alone did not make a compelling argument for the McGovern-Dole 

Program, it is also widely recognized that such programs add to our national security. At present there are 12,000 madrassas in Pakistan. These madrassas provide 

free food and lodging to students; however, a few also get involved in militancy and, 

ultimately, terrorism. But the question Pervez Musharraf is left with is, ‘‘who else 

can provide food for these children?’’

This legislation, quite frankly, is a win-win for the American people, and it is a 

win-win for children all over the world who desperately need food assistance and 

an education. We all know, very well, that our country is currently engaged in daily 

battles with individuals who want to harm Americans. However, we are also engaged in daily battles for the hearts and minds of the ‘‘man on the street’’ in underdeveloped countries. In this battle, the McGovern-Dole International Food for Education and Child Nutrition program holds great potential. 

These are the reasons the McGovern-Dole Program is needed, however, the support for this program is not just based on need; it is also based on results. For FY 

2006 the McGovern Dole Program has exceeded USDA goals for the number of children receiving daily meals or take-home rations. The McGovern-Dole Program was 

initiated in 2000 as a $300 million pilot program, the Global Food for Education Initiative. From 2001 to 2003 the GFEI fed nearly seven million children through 48 

projects in 38 countries. During the 2002 Farm Bill reauthorization process, the 

GFEI was established as a permanent program and renamed to honor Senator 

George McGovern and Senator Robert Dole. 

The renamed program, however, immediately experienced a funding decline from 

the $300 million provided for the pilot program. H.R. 1616, legislation introduced 

by Mr. McGovern and me, which now has 109 other bipartisan cosponsors, would 

return us to the $300 million mark in FY 2012. 

I would be remiss if I failed to mention the dedication and commitment of former 

Senators McGovern and Dole. These distinguished leaders have been eloquent advoVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
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cates for ending hunger and have provided nudges of conscience reminding us in 

government of our moral responsibility as a country rich in natural resources and 

an abundant, safe food supply to help people who cannot help themselves. 

Another of the successes inherent in this program is the requirement of graduation. When USDA enters into an agreement with an eligible organization to provide 

food aid assistance in schools, the agreement must include provisions to continue 

the benefits to education and nutrition after the commodities stop flowing from 

USDA. By providing a mandatory funding source Congress could ensure a more reliable funding stream, sending a message or strong, continuing support to beneficiaries in need and to partner governments and organizations that our commitment is real. I believe this, more stable funding, would also allow USDA to increase 

the number of multi-year commitments made. 

Mr. Chairman, in closing, the McGovern-Dole International Food for Education 

and Child Nutrition Program reflects the humanitarian values Americans share. It 

reflects the value Americans place on an education—regardless of sex or race. The 

program utilizes American resources, benefits the American economy, and it makes 

us safer from the enemies of the American people who hope their message of intolerant hatred fuels a self-fulfilling response from our great nation. As this Committee 

moves forward with the important work of drafting a farm bill, I hope you will give 

every consideration to reauthorizing this important program and expanding it. 

Thank you.

Mr. MCINTYRE. Thank you, and thanks to both of you for the 

moral imperative that you have given us not only in the Subcommittee and full Committee but also as fellow Members of Congress, and thank you all for being an encouragement and also for 

your exhortation. I think both are well received that we do as just 

mentioned—look at the educational benefits and the humanitarian 

concerns and ultimately look at the ministry of a bag of food as you 

so eloquently described. 

With that, I am happy to let you all make any other comment. 

Both of you finished under 5 minutes, so if there is anything else 

you want to add? I know you have other things and we will let you 

slip on out if you need to, but is there anything else either one of 

you would like to say? 

Mr. MCGOVERN. If I could ask unanimous consent to insert my 

longer testimony into the record. 

Mr. MCINTYRE. So ordered. 

Mr. MCGOVERN. And again, I would like to associate myself with 

the remarks of my colleague, Jo Ann Emerson, especially on the 

issue, too, of the value in terms of America’s prestige around the 

world of this program. When I was in Colombia, I had a young 

mother come up to me and say, ‘‘Please thank the people of the 

United States for this program,’’ she said, ‘‘because without this 

program, my son, who is 12 years old, would probably be a member 

of one of the armed groups, either the left-wing [Revolutionary 

Armed Forces of Colombia] (FARC) or the right-wing paramilitary 

because those groups go through and they look for child soldiers.’’ 

This mother said that without this program she couldn’t provide 

her son a meal on a daily basis. With this program, she provides 

her son a meal on a daily basis in a school setting. She said on top 

of being fed, he can maybe become literate and get out of this slum. 

So, this is an incredibly powerful tool in terms of showing the best 

of the United States, and I also agree with Jo Ann that in terms 

of combating terrorism, this is the kind of program that I think we 

should be endorsing wholeheartedly. Thank you. 

Mr. MCINTYRE. Yes, ma’am. 

Ms. EMERSON. Thanks, Mr. Chairman. You know, when I was in 

Nicaragua last summer I was in the rural area. I don’t know exVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00023 Fmt 6633 Sfmt 6601 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
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actly where, about an hour and a half outside Managua, in this 

rural village, if you want to call it a village, because people’s homes 

were made out of black plastic trash bags the, kind that we use to 

take our trash out. There had been a McGovern-Dole feeding program there that we had transferred over to a private organization 

and suddenly you saw children at a school setting. The Japanese 

Government actually built the school where the kids that were—

this is how it all started with the governments. The kids were in 

school, they had uniforms that had been donated by some other organization, but they only still had that one meal every single day, 

and in this case it was maize or corn and soy kind of chopped up 

like it would be hamburger, and beans and a little tiny piece of tortilla but yet all of them came together and we had teachers. It was 

fascinating to see probably the 5th and 6th graders teaching the 

1st graders and the kindergartners and the high school kids were 

teaching the 5th and 6th graders. There were a few private teachers, but there were incentives provided for these children to actually get scholarships because you have to pay for public high school 

in Nicaragua. It was just amazing that these people’s lives had 

gone from living in trash bag houses to then having schools—all of 

which started with the McGovern-Dole food feeding program. There 

was hope in the eyes of every single person, the parents and the 

kids, and it was just remarkable. And so I just say that, and Jim 

of course, has been to Africa and Colombia and the like and just 

to see what the power of our American commodities can do, it 

speaks for itself. 

Mr. MCINTYRE. Very eloquent, very well spoken, and I believe as 

I mentioned the moral imperative that you have given us not only 

speaks to the heart and speaks to the mind but also speaks to some 

of the other issues. Also, I can tell you as a Member of the Armed 

Services Committee, I think you are exactly right about how it removes those seeds that are sown with regard to potential terrorism 

and the other things that are the end result when we don’t pay attention early on in a child’s life, so thank you all very much. You 

all have a good afternoon and God bless you. We will call our next 

panel forward. Thank you again. 

We would like to welcome our second panel to the table, Administrator Michael Yost, Foreign Agriculture Service of the USDA, 

and Mr. William Hammink, Director of the Office of Food for 

Peace, U.S. Agency for International Development, also here in 

Washington. As our witnesses take their seats, Mrs. Musgrave, 

would there be any special comment you would like to make in conclusion of the first panel or with regard to the beginning of the second panel? 

Ms. MUSGRAVE. No, I am ready to go. Thank you, Mr. Chairman. 

Mr. MCINTYRE. All right. With that then, we will begin. Mr. Yost, 

please begin. 

STATEMENT OF MICHAEL W. YOST, ADMINISTRATOR,

FOREIGN AGRICULTURAL SERVICE, U.S. DEPARTMENT OF 

AGRICULTURE, WASHINGTON, D.C. 

Mr. YOST. Mr. Chairman, Members of the Committee, I am 

pleased to testify today with my colleague from U.S. Agency for 

International Development, William Hammink. I welcome the opVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00024 Fmt 6633 Sfmt 6601 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
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portunity to discuss the trade and food aid programs administered 

by the United States Department of Agriculture. 

The trade programs administered by the Foreign Agricultural 

Service combined with access gained through free trade agreements 

have served to expand markets for U.S. agricultural products. Demand for U.S. food and agricultural products is higher than ever. 

Earlier this month USDA raised its export forecast to a record $78 

billion for Fiscal Year 2007. Free trade agreements have proven to 

be good for U.S. agriculture. Under NAFTA, agricultural exports to 

Canada and Mexico have risen from $9.5 billion to $22 billion annually. Agricultural exports to the CAFTA DR countries totaled 

$2.6 billion in 2006, an increase of 18 percent from 2005. Last 

month we concluded negotiations with South Korea on the most 

commercially significant free trade agreement in 15 years. Korea is 

projected to import over $3 billion of U.S. agricultural products 

during Fiscal Year 2007 and almost 2⁄3 of the current U.S. farm exports to Korea will become duty-free on the first day that the FTA 

is implemented. 

Today I would like to highlight two trade programs administered 

by FAS, the Market Access Program, MAP, and the Technical Assistance for Specialty Crops Program, TASC. MAP forms a partnership between USDA and nonprofit U.S. agricultural trade associations, U.S. agriculture cooperatives, nonprofit state and regional 

trade groups and small businesses. In 2006, MAP was used to find 

new products for markets for poultry products in Mexican supermarkets, to expand wheat markets in Nigeria and to re-launch U.S. 

beef sales in Japan. Our farm bill proposal recommends increasing 

MAP funding from $200 million to $225 million annually. USDA 

will allocate this additional funding to help address the imbalance 

between farm bill program crops and non-program commodities. 

The TASC program has helped U.S. exporters regain market access for millions of dollars of products by addressing sanitary, 

phytosanitary, and technical barriers. The Administration’s 2007 

Farm Bill proposals will increase mandatory funding for the TASC 

grant program at the rate of $2 million per year up to a total of 

$10 million for Fiscal Year 2011 and beyond. In recent years, TASC 

funding has been used to gain market access for California nectarines in Japan, harmonize organic standards with Canada and 

the European Union, and create a database of pesticide tolerance 

levels and standards for more than 300 specialty crops in more 

than 70 countries. 

To complement the TASC program, the Administration’s 2007 

Farm Bill proposals will include a new grant program focused on 

SPS issues and supported by $2 million in annual mandatory funding. This additional funding will allow us to better address 

phytosanitary and sanitary issues for all agriculture commodities. 

Now I would like to turn to two of our developmental food aid 

programs, the Food for Progress and the McGovern-Dole Program. 

During Fiscal Year 2006, the Food for Progress program provided 

more than 215,000 metric tons of agricultural commodities valued 

at $175 million to 19 developing countries and emerging democracies committed to introducing and expanding free enterprise in 

the agricultural sector. Again this year more than 215,000 tons of 

commodities will be provided. More than two million people in AfVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00025 Fmt 6633 Sfmt 6601 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
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ghanistan, throughout Africa and Central America will be fed by 

this program this fiscal year. The program is more than about feeding. For example, in Madagascar, proceeds from the wheat sales 

are providing micro-finance loans to farmers. 

The McGovern-Dole Program, I can’t add too much to what Congressman McGovern and Congresswoman Emerson said. The only 

thing I would like to add is that I too visited a food aid project in 

Kenya, and if I could sum up the need and the results of the program in one word, I would just say it is compelling. We appreciate 

the strong support this program has received from Members of 

Congress. 

In conclusion, as Administrator of the USDA’s Foreign Agricultural Service, I am proud of our efforts to improve the foreign market access for U.S. products, the help we do in building new markets, improving the competitive position of U.S. agriculture in the 

global marketplace, and to provide food aid and the technical assistance to foreign countries. 

This concludes my statement. 

[The prepared statement of Mr. Yost follows:]

STATEMENT OF MICHAEL W. YOST, ADMINISTRATOR, FOREIGN AGRICULTURAL

SERVICE, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, D.C. 

Mr. Chairman, Members of the Subcommittee, I am pleased to appear before you 

today. I welcome the opportunity to discuss the trade and food aid programs administered by the U.S. Department of Agriculture (USDA). 

Introduction 

Since the last farm bill was enacted in 2002, the trade programs administered by 

the Foreign Agricultural Service (FAS) have served to open new markets and maintain and expand existing markets for U.S. agricultural products. These programs 

complement our efforts to open and maintain markets through trade negotiations, 

diplomacy, and enforcement of trade agreements. To ensure that agricultural interests are well represented at the negotiating table, FAS works closely with the Office 

of the U.S. Trade Representative (USTR) and coordinates the involvement of USDA 

regulatory agencies. 

During the past year and a half, the United States successfully concluded trade 

agreements with Colombia, Panama, and Peru that provide greater market access 

for all U.S. agricultural products. Last month, we concluded negotiations with South 

Korea on the most commercially significant free trade agreement in 15 years. Korea 

is projected to already import over $3 billion of U.S. agricultural products during 

Fiscal Year 2007 and almost 2⁄3 of current U.S. farm exports to Korea will become 

duty-free on the first day of implementation of the new FTA. 

Together, our trade programs and negotiations have contributed to a strong farm 

economy and increasing foreign demand for U.S. food and agricultural products. 

Trade continues to be critically important to the long-term economic health and 

prosperity of the American food and agricultural sector. Roughly 20–25 percent of 

U.S. production is exported and, with productivity increasing faster than domestic 

demand, export markets are important, particularly markets with a burgeoning 

middle class such as China, India, Indonesia and Brazil. 

The latest USDA export forecast of $78 billion for Fiscal Year 2007 proves this 

point. This means the agricultural community is on track to increase exports by an 

estimated $9.3 billion over last year. That would be the second largest increase on 

record and the fourth consecutive year of record exports. USDA estimates that U.S. 

world market share is over 19 percent—almost 1⁄5—of world agricultural trade. This 

is particularly impressive when you consider that the size of the world agricultural 

trade pie has doubled since 1990. 

However, if we are to continue these impressive gains, we cannot rest on our accomplishments. We must continue to expand access to overseas markets, where 95 

percent of the world’s consumers live. We must continue to refine and improve our 

longstanding programs to ensure that they operate efficiently and effectively. 

The Administration’s farm bill proposals were crafted to strengthen U.S. agriculture’s competitive position, while meeting our international obligations. The farm 

bill proposals are not only good farm policy, but good trade policy. They are predictVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00026 Fmt 6633 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
23

able, equitable, and designed to withstand challenges from other countries. We appreciate Congress’ serious consideration of the proposals as Congress writes the 

2007 Farm Bill. 

Trade Programs 

Market Access Program 

The Department’s largest market development program is the Market Access Program (MAP), for which funding expires at the end of 2007. This program uses funds 

from the Commodity Credit Corporation (CCC) to create, maintain, and expand 

long-term export markets for U.S. agricultural products. 

USDA’s farm bill proposals recommend increasing MAP funding from $200 million 

to $225 million annually. USDA will apportion the additional funding to help address the imbalance between program crops and non-program commodities. MAP 

forms a partnership between USDA and nonprofit U.S. agricultural trade associations, U.S. agricultural cooperatives, nonprofit state-regional trade groups, and 

small U.S. businesses to share the costs of overseas marketing and promotional activities such as consumer promotions, market research, trade shows, and trade servicing. 

I would like to share an example of a MAP success story from my home State 

of Minnesota. Sunrich, a producer and exporter of soy food ingredients, has used the 

MAP program to sharply expand its international sales. The company has gone from 

having a single overseas market to selling in Japan, Korea, Spain, France, Germany, Indonesia, Australia, New Zealand, and Israel. Exports now generate several 

million dollars in sales for Sunrich. The Market Access Program has helped them 

do market research, produce targeted promotional materials, ship samples, and provide technical support to potential buyers overseas. 

Technical Assistance for Specialty Crops 

As our exports have grown, some of our trade partners have increasingly turned 

to sanitary, phytosanitary, and technical barriers to protect their domestic industries and deny market access to U.S. agricultural products rather than basing these 

policies on science. USDA has successfully helped U.S. exporters regain market access for millions of dollars of products from almonds to spinach. To continue to enhance efforts, the Administration’s 2007 Farm Bill proposals would expand mandatory funding for the Technical Assistance for Specialty Crops (TASC) grant program, 

which is currently funded at $2 million per year, by an additional $2 million annually up to $10 million for Fiscal Year 2011 and beyond. 

TASC projects assist U.S. food and agricultural organizations to address 

phytosanitary and technical barriers that prohibit or threaten the export of U.S. 

specialty crops. The program has proven to be very effective in providing support 

for specialty crop exports. In recent years, TASC funding has been used to gain market access for California nectarines in Japan, harmonize organic standards with 

Canada and the EU, and create a database of pesticide tolerance levels and standards for more than 300 specialty crops in more than 70 countries. In 2006, USDA 

funded 26 TASC projects. 

Grant Program To Address SPS Issues 

To complement the successes and popularity of the TASC program, the Administration’s 2007 Farm Bill proposals include a new grant program focused on sanitary 

and phytosanitary issues for other non-specialty crop commodities. This new program would provide $2 million in annual assistance through mandatory funding. 

Like the TASC program, this assistance could provide U.S. exporters with information on compounds restricted by other countries and improve other countries’ understanding of U.S. safety standards and testing methodologies. It also would enable 

us to tap targeted technical expertise on an ad-hoc basis for non-specialty crop commodities. 

Technical Assistance To Resolve Trade Disputes 

For small agricultural producers and industries, defending their products against 

inappropriate trade restricting measures such as counterfeit labeling, copyright infringement, unfair administration of tariff-rate quotas (TRQs) and other barriers to 

trade is a complex, lengthy, and time-consuming process. While U.S. industries can 

pursue unfair trade practices through U.S. trade laws or initiate a case in the World 

Trade Organization (WTO), industries must pay high legal and analytical costs for 

extended periods of time-sometimes years. This is particularly challenging for limited resource agriculture industries. Conversely, some U.S. agricultural sectors have 

themselves been challenged either in the WTO or under other countries’ domestic 

trade laws. USDA, working closely with USTR, helps industries that have been 

24

challenged. The Administration is requesting that the Secretary of Agriculture be 

granted broad discretionary authority to provide limited resource groups with enhanced monitoring, analytical support, and technical assistance if he or she deems 

it would be beneficial to U.S. agricultural exports. 

International Trade Standard Setting Activities 

USDA works closely with international standard-setting bodies, such as the Codex 

Alimentarius, the International Plant Protection Convention, and the World Animal 

Health Organization, to establish and harmonize multilateral food, plant, and animal health and safety standards. By assigning U.S. staff to work with these organizations, we have a say in their decision-making process and ensure that they design 

and implement standards for trade in agricultural products that are science-based 

and recognize U.S. health and safety standards. 

The United Nations Food and Agriculture Organization (FAO) works with member governments to place their nationals in FAO staff positions. However, the 

United States lacks sufficient funding to place adequate numbers of Americans in 

these positions. For example, out of approximately 100 positions in the FAO’s associate professional officer program, European countries fund about 83 positions for 

their nationals, while the United States currently only funds one American. 

As a result, the EU is in a better position to influence international organizations’ 

policies and programs than we are. USDA needs dedicated funding to strengthen 

U.S. representation in these organizations. In addition, we are having difficulty hiring seasoned, director-level staff to represent the United States in these organizations because we do not have the funds or the authority to pay salaries and allowances commensurate with those received by international organization employees. 

For these reasons, the Administration’s 2007 Farm Bill proposals request long-term 

mandatory funding of $15 million over 10 years to enhance our ability to assign 

USDA staff support for international trade standard-setting bodies. 

Trade Capacity Building 

Before developing countries can become reliable customers for U.S. agricultural 

products, they must first become politically, economically, and socially stable. President Bush’s National Security Strategy recognizes that a lack of economic development, particularly in fragile and strategic countries and regions, results in economic 

and political instability which can pose a national security threat to the United 

States. A productive and sustainable agricultural sector is a critical factor in creating stability. Only then can these countries and regions integrate into the global 

economy and reduce hunger and poverty. 

USDA works to develop the capacity of local governments in politically stable, but 

fragile economies to support market-based agriculture. We have provided technical 

assistance and trade capacity building in markets such as Georgia, Armenia, Kenya, 

Uganda, and Pakistan so they can harness the power of trade and create open and 

predictable policies and procedures to boost economic growth and reduce poverty. 

In recent years, USDA has worked with the Department of State, the Department 

of Defense, the U.S. Agency for International Development, and the National Security Council to assist in the reconstruction and stabilization of Afghanistan and 

Iraq. Revitalization of these two countries’ agricultural sectors is essential to their 

development and stability. USDA is conducting trade capacity building and technical assistance activities in Iraq, including a $7.8 million agricultural extension 

project in conjunction with the U.S. Department of State, and marketing education 

efforts in partnership with U.S. commodity groups. 

The Administration’s 2007 Farm Bill proposals provide $2 million annually in 

mandatory funding for agriculture trade capacity building for fragile countries and 

regions by improving food safety, supporting agricultural extension projects, agricultural knowledge initiatives, and building bilateral partnerships. 

Food Aid Programs 

In addition to this trade capacity building assistance, USDA administers three 

food aid programs that support economic development in countries needing assistance to get on their feet or needing help in a crisis or emergency—the Food for 

Progress Program, the McGovern-Dole International Food for Education and Child 

Nutrition Program, and the Public Law 480, Title I (P.L. 480, Title I) Program. 

These programs support international assistance and development activities that alleviate hunger and improve nutrition, education, and agriculture in some of the 

world’s poorest countries. Through the provision of agricultural commodities, we are 

able to feed millions. 

25

Food for Progress Program 

During the past 2 decades, the Food for Progress Program has supplied over 12 

million metric tons of commodities to developing countries and emerging democracies committed to introducing and expanding free enterprise in the agricultural 

sector. Commodity purchases totaling nearly $3 billion over this period for Food for 

Progress programming have been handled through the Commodity Credit Corporation (CCC). 

Under this program, during Fiscal Year 2006, the United States provided more 

than 215,000 metric tons of CCC-funded commodities valued at about $77 million. 

This effort supported 19 developing countries that were making commitments to introduce or expand free enterprise elements in their agricultural sectors. Again this 

year, more than 215,000 metric tons of commodities will be provided. More than two 

million people in 11 countries, including Afghanistan and countries throughout Africa and Central America will be fed by this program this fiscal year. In Fiscal Year 

2008, the President’s budget includes an estimated program level of $163 million for 

Food for Progress grant agreements carried out with CCC funds. 

McGovern-Dole Program 

Another highly successful program is the McGovern-Dole International Food for 

Education and Child Nutrition Program, which helps support education, child development, and food security in low-income, food-deficit countries that are committed 

to universal education. 

This year, we will feed nearly 2.5 million women and children in 15 developing 

countries, including Cambodia, Guatemala, and Malawi, with the $99 million appropriated funding level. We appreciate the strong support this program has received 

from Members of Congress. In Fiscal Year 2008, we are requesting $100 million for 

the McGovern-Dole Program. This amount will be supplemented by an estimated $8 

million to be received from the Maritime Administration for cargo preference reimbursements. 

In the last 5 years, the McGovern-Dole Program has helped feed more than 10 

million children in more than 40 countries. Last year, USDA awarded Counterpart 

International (CPI) a grant to provide more than 9,000 tons of commodities for use 

in Senegal. This McGovern-Dole project is using vegetable oil, textured soy-protein, 

and barley to feed nearly 18,000 primary school children and 1,800 pre-school children over a 3 year period. The proceeds from the sale of soybean oil are being used 

to improve school sanitation, repair schools, and improve the skills of teachers. The 

project includes a maternal and child health component, which provides take-home 

rations to needy mothers with young children. It also provides a growth monitoring 

and promotion program, along with a health education and assistance campaign. 

The leader of one of the villages in which the school feeding project is being conducted told the visiting U.S. Ambassador to Senegal that, ‘‘We have already seen 

immediate results from this program as students are able to stay in school longer 

and learn more each day.’’ This McGovern-Dole school feeding program provides hot 

daily meals to students, permitting them to remain in the classroom and learn for 

longer periods. 

The multi year dimension of this program is essential to addressing comprehensively the issue of chronic hunger. Moreover, providing meals both at school and 

through take-home rations provides a powerful incentive for children to remain in 

school. Government-to-government partnerships coupled with the important resources provided by the private voluntary organizations (PVOs) are vital to sustaining these programs and ensuring success. 

P.L. 480, Title I Program 

Historically, the P.L. 480, Title I program has been geared primarily toward countries with a shortage of foreign exchange and difficulty in meeting their food needs 

through commercial channels. Assistance has been provided on a government-to-government basis by selling U.S. agricultural commodities on credit terms. In recent 

years, the demand for food assistance using credit financing has fallen, mostly because worldwide commercial interest rates have been relatively low. For example, 

in 2006 we signed only three government-to-government credit agreements compared to seven in 2002. As recently as 1993, 22 Title I agreements were signed, but 

the number has steadily declined over the past 14 years. We are not requesting any 

additional funding for P.L. 480, Title I for 2008. The budget recommends that all 

P.L. 480 assistance be provided through Title II donations. 

Bill Emerson Humanitarian Trust 

USDA also manages the Bill Emerson Humanitarian Trust, which serves as a 

backstop commodity reserve for the P.L. 480 program. This reserve is available to 

26

provide emergency humanitarian food assistance to developing countries, allowing 

the United States to respond to unanticipated food crises with U.S. commodities. We 

currently have 915,000 metric tons of wheat in the Trust and $107 million in cash. 

Cash in the Trust provides the flexibility we need to purchase appropriate U.S. commodities based on availability and the specific need. With commodities in the Trust, 

we must pay storage costs. Holding the 915,000 metric tons of wheat in the Trust 

is costing more than $9 million each year or about $10 per ton. Cash in the Trust 

also allows us to respond much more quickly to a food crisis because we can easily 

purchase U.S. commodities, whereas substituting what we have in the Trust for 

what we need to provide consumes precious time. 

Upcoming Issues 

This year, several food assistance issues will come to the forefront in the domestic 

and international arenas. USDA chairs the Food Assistance Policy Council, which 

includes senior representatives from USAID, the Department of State, and the Office of Management and Budget. Over the years, this group has made significant 

progress in ensuring policy coordination of food assistance programs under the Agricultural Trade Development and Assistance Act and the Food for Progress Act. The 

Council recently identified key issues to receive attention this year: food aid quality, 

the Administration’s 2007 Farm Bill proposals, and the challenges facing food aid 

policy in the WTO. 

For more than 40 years, USDA and USAID have provided micro-nutrient fortified 

food commodities to vulnerable, food-insecure populations. We are proud of our 

record in feeding at-risk recipients of U.S. food aid around the world. However, in 

recognition that both the science of nutrition and the nature of recipient populations 

have changed over time, we are examining whether current food aid formulations 

and product manufacturing practices address the needs of at-risk recipients and reflect the best available science. 

Toward that end, our initiative includes an in-depth review of the types and quality of food products used in the administration of U.S. food aid programs. We seek 

recommendations of what changes, if any, should be made to the composition and 

mix of our commodities. The project also continues our efforts to review existing contract specifications used to obtain food aid commodities, and to improve our postproduction commodity sampling and testing regime based upon sound scientific 

standards. All three parts of the project were announced formally in April at the 

International Food Aid Conference. 

USDA and USAID agree on a division of labor for the project. We have identified 

funding. Our respective Requests for Information have been published to identify 

available, independent expertise. Our goal is to consult with many stakeholders in 

food aid, including nutritionists, scientists, commodity associations, the World Food 

Program, and the private voluntary organization (PVO) community, to make sure 

all viewpoints are heard. We want to ensure that the food aid we provide in the 

next 40 years is of the highest caliber to meet the nutritional requirements necessary to address chronic hunger. 

The Administration’s farm bill proposals include a recommendation that will provide flexibility in providing food aid when rapid response is critical to saving lives. 

The proposal would authorize use of up to 25 percent of P.L. 480, Title II, annual 

funds for the local or regional purchase of food to assist people threatened by a food 

security crisis. 

This authority would enable U.S. assistance to be more effective and more efficient. The authority would be used in those instances where the rapid use of cash 

for local or regional procurement is critical to saving lives in response to an emergency. The intention is not to change the way the United States meets most food 

aid needs, but rather to enhance the variety of tools at our disposal to address food 

emergencies. This authority will provide the ability to purchase food near the scene 

of a crisis instead of taking the additional time that it can take to load and ship 

the aid from the United States. As Secretary Johanns has said, we do not anticipate 

opting for local purchases often—only when we believe that it is essential to deliver 

aid in the timeframe that it is needed. As I mentioned, our proposal would allow 

us to use no more than 25 percent of total Title II annual funding. U.S.-grown food 

will continue to play the primary role and will be the first choice in meeting global 

needs. We simply ask for every available tool to save lives. 

As you are aware, food aid is a subject of discussion in the WTO negotiations. In 

the negotiations, the United States continues to strongly defend our ability to use 

in-kind food aid in emergency and non-emergency situations. Emergency food aid 

should not be disciplined because flexibility must be maintained to respond to people in crisis. Non-emergency food aid should only be disciplined to ensure that it 

27

does not displace commercial sales. Cash and in-kind food aid should be treated 

equally in operational disciplines and transparency provisions. 

A variety of programming options must remain available to ensure that food aid 

programs can be tailored to local needs and that sales do not disrupt local markets 

or displace commercial imports. The monetization of food aid to generate funds for 

supporting projects that result in increased economic activity and thereby directly 

confront poverty should continue. As the United States has repeatedly stated in 

these negotiations, we seek to help lift poor families out of poverty by helping governments design projects that are self-sustaining. 

Conclusion 

As Administrator of USDA’s Foreign Agricultural Service, I am proud of our efforts to improve foreign market access for U.S. products, build new markets, improve the competitive position of U.S. agriculture in the global marketplace, and 

provide food aid and technical assistance to foreign countries. 

I believe the 2007 Farm Bill Trade Title proposals will make U.S. farm policy 

more equitable, predictable, and better able to withstand challenge, while ensuring 

fairness and providing greater export opportunities to farmers, ranchers, and other 

stakeholders. 

This concludes my statement. I look forward to answering any questions you may 

have. Thank you.

Mr. MCINTYRE. Thank you very much. 

Mr. Hammink. 

STATEMENT OF WILLIAM HAMMINK, DIRECTOR, OFFICE OF 

FOOD FOR PEACE, U.S. AGENCY FOR INTERNATIONAL

DEVELOPMENT (USAID), WASHINGTON, D.C. 

Mr. HAMMINK. Mr. Chairman, Members of the Subcommittee, I 

am very pleased to be here today with you to examine the performance of U.S. Title II food aid programs that are managed by 

USAID. The Title II Food for Peace Program is a 53 year-old institution that has saved the lives of millions of people around the 

world. It is an institution that Americans across the country recognize and can be extremely proud of. The last 3 years we have averaged almost $1.8 billion including supplementals, and last year 

alone procured 2.3 million metric tons of food. It is a major indication of U.S. humanitarian assistance. 

I would like to focus my remarks on two main areas. One, the 

changing world situation is affecting the Title II food aid context 

for emergency assistance, and two, how we can improve the overall 

efficiency and effectiveness of the Title II food aid program. The 

frequency, magnitude and unpredictability of major food crises are 

increasing due to growing chronic vulnerability. Over the last decade we have seen large population groups such as pastoralists in 

East Africa, poor farmers in the Sahel, and HIV/AIDS-affected populations in southern Africa whose lives and livelihoods are at severe risk. There is evidence and understanding that food aid alone 

will not stop hunger. Today, despite the investments and the 

progress made over the past 50 years, globally an estimated 850 

million people are still food insecure. Giving food to people will 

save lives and address short-term hunger needs, but it will not by 

itself save livelihoods or end hunger. 

How can we improve our food aid programs within that context? 

Food aid programs need to be able to respond quickly and flexibly 

with the growing number of emergencies to support increasingly 

more vulnerable and desperate populations, and very importantly, 

integrated with other resources to more effectively halt the loss of 

livelihoods and address the underlying causes of food insecurity. 

28

Let me discuss a few areas where we are focusing to improve 

food aid programs. First, local procurement: The most important 

change that the Administration has been seeking in recent appropriation requests and in the Administration’s farm bill proposal is 

the authority to use up to 25 percent of the Title II funds for the 

local or regional purchase of food to assist people threatened by a 

food crisis. Let me assure you that our U.S.-grown food will continue to play the primary role and will be the first choice in meeting global needs. If provided this authority by the Congress, we 

would plan to use local and regional purchase judiciously in those 

situations where fast delivery of food assistance is critical to saving 

lives. 

Two, pre-positioning emergency food aid: To help reduce the response time needed, USAID has successfully pre-positioned processed food aid at U.S. ports and overseas. Pre-positioning is an important tool and could be expanded although there are logistical 

and other limits to pre-positioning food aid. However, pre-positioning is not in itself a substitute for local procurement authority. 

Third, the Bill Emerson Humanitarian Trust: The Emerson 

Trust is the mechanism to respond to major food aid emergencies 

and clearly complements Title II. One concern is that the releases 

from the Trust have exceeded the statutory limit on its annual replenishment. 

Fourth, prioritization: USAID is strategically focusing our nonemergency or development food aid resources in the most food insecure countries. Resources that were historically spread across 30 

countries will be concentrated in about half that many countries to 

achieve maximum impact on chronic food insecurity issues. 

Last, integration: Under the U.S. foreign assistance framework, 

USAID and the State Department are working to integrate all foreign assistance resources toward a number of objectives to set a 

given country on a sustainable path toward development. Starting 

with 2007 Title II funds, these Title II non-emergency programs 

will be integrated into country programs with other funds to 

achieve maximum impact. 

The food aid programs are complex and the problems and issues 

that U.S. food aid must address are increasingly complex. USAID 

is committed to ensuring that Title II food aid is managed in the 

most efficient and effective manner possible to decrease costs, increase impact and continue the 53 years of proud experience. We 

look forward to continued discussions. 

Thank you. 

[The prepared statement of Mr. Hammink follows:]

PREPARED STATEMENT OF WILLIAM HAMMINK, DIRECTOR, OFFICE OF FOOD FOR

PEACE, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT (USAID), WASHINGTON, 

D.C. 

Chairman McIntyre, Members of the Subcommittee, I am pleased to have the opportunity to meet with you today to examine the performance of U.S. food aid programs with particular reference to the 2007 Farm Bill discussions. As you know, 

USAID manages the P.L. 480 Title II program, which includes emergency and nonemergency food aid. The new farm bill, which will reauthorize the P.L. 480 Title 

II program, is extremely important to ensure the increased efficiency and effectiveness of U.S. Title II food aid overseas. 

James Morris, the prior Executive Director of the United Nations World Food Programme (WFP), told me shortly before he left office that the Office of Food for Peace 

29

is much more than an office in USAID. He said that after 52 years of providing U.S. 

food aid to hundreds of millions of people around the world, savings millions of lives 

and affecting the livelihoods of millions more, Food for Peace is not just an office 

but an institution, and one that Americans across the country recognize and can be 

extremely proud of. 

However, like any 52 year institution or program, we need to continue to look for 

ways to improve the efficiency and effectiveness of how we provide Title II emergency and non-emergency food aid. We appreciate this opportunity to share some 

thoughts with you on ways to do that. 

The U.S. plays a global leadership role in food security and as a humanitarian 

food aid donor. The U.S. is the largest food aid donor in the world, and the largest 

single contributor to the World Food Programme. However, procuring, shipping, 

storing, distributing, monitoring and evaluating approximately 2.5 million metric 

tons of U.S. food aid each year worth over $1 billion is highly complex, especially 

as we try to minimize costs. Our primary focus is to get food aid quickly to sudden 

emergencies to save lives, make better funding decisions, strengthen beneficiary impact of all of our food aid programs, improve predictability of non-emergency food 

aid resources, expand integration of food aid with other development programs, and 

concentrate emergency and non-emergency food aid resources in the most food-insecure countries. 

As a lead-up to the re-authorization of the farm bill, food aid reform is being analyzed and discussed by academics and think tanks, at the World Trade Organization, with UN organizations such as FAO and WFP and with a broad spectrum of 

Private Voluntary Organizations (PVOs). We are participating in these discussions 

and listening closely to all of these proposals and ideas. Because the farm bill is 

only taken up approximately every 5 years, this is an important opportunity to take 

what we have learned from experience, analyses, and research; and to link lessons 

learned to better inform changes in U.S. food aid programs. 

USAID is also undergoing changes. Under a new Strategic Framework for U.S. 

Foreign Assistance, the Department of State and USAID are developing a fully integrated process for foreign assistance policy, planning, budgeting and implementation. Under the new Framework, our goal is to ensure that Title II food aid will, 

in collaboration with all foreign assistance funds in each country context, have an 

immediate impact—saving lives and protecting livelihoods—while also contributing 

to longer term objectives, such as enhancing community and household resilience to 

shocks and reducing future emergency food aid needs. 

In reviewing the performance of Title II food aid and considering the new farm 

bill, I would like to focus this discussion on two main areas: (1) the changing world 

situation and context for the Title II food aid program; and (2) how we can improve 

overall efficiency and effectiveness of Title II food aid programs within that new context. 

The Changing World Situation and Context for Food Aid 

Food aid does not exist within a vacuum. Rather, it addresses needs within an 

international and local economic and political context, and that context has substantially shifted in recent years. The new farm bill will provide us with an opportunity 

to address these changed conditions with a response that will not just prevent hunger and food crises as they occurred years ago, but as they exist now. To do that, 

food aid must address two major trends: 

First, the frequency and magnitude and unpredictability of major food crises are 

increasing due to growing chronic vulnerability. Devastating wars, civil strife and 

natural disasters have often brought in their wake food problems. But over the last 

5 to ten years, we have seen a significant increase in the numbers of people who 

are affected by these events, who face total destitution, a loss of household assets 

and livelihoods, and a chronic exposure to even the most minor of these shocks. 

Take drought, for example. There have been droughts periodically for thousands 

of years. And while they have sometimes been deadly, the communities involved 

have generally been able to absorb that shock, restructure their livelihoods, and 

then begin to grow again. 

But now, droughts in Africa appear to be more frequent. Where they used to come 

once every ten or twenty years, they have recently begun appearing several times 

in a ten year period, and more recently still, to possibly as little as every 2 or 3 

years. With that level of frequency, a community’s full recovery from a drought is 

difficult at best. In many cases, herders’ animals die and the herder sells still more 

animals for food, further shrinking the herd. A farmer who loses his crop and food 

supply may sell his hoes and harrows for food, and then hope to find seed to begin 

again. Each successive drought may find many communities increasingly characterized by a deeper and more widespread poverty, deteriorating landscapes, drying 

30

lakes and rivers, an ever poorer agricultural base, no market to sell to or buy from, 

hampered further by poor governance and governmental policies. 

Over the last decade, we have seen large population groups—pastoralists in East 

Africa, poor farmers in the Sahel, HIV/AIDS-affected populations in southern Africa—whose lives and livelihoods are either disappearing, or are at severe risk of destruction. Continuous and overlapping crises can leave more and more people defenseless, chronically vulnerable to major food crises that may be triggered by small 

changes in rainfall, or food prices, or the rising cost of fuel. 

Often, war or civil strife occurs within these same populations, or grows out of 

the conditions they live in. Entire generations in some countries have grown up in 

an atmosphere of extreme poverty overlaid by civil unrest, if not armed conflict. Portions of these conflict-ridden societies, like in Sudan and Somalia, subsist by receiving significant amounts of food aid and other humanitarian support to sustain their 

poor economies, perpetually disrupted by poverty, insecurity and war. In Sudan 

alone, WFP is supporting the food needs of almost two million internally displaced 

people (IDPs) in Darfur and another million people living near the IDP camps in 

Darfur who are affected by the crisis. To date, the U.S. has borne a disproportionate 

share of this food aid burden, providing about 475,000 metric tons per year for 

Sudan and Eastern Chad. Last year the U.S. contributed half of the assessed food 

aid needs and over 65 percent of all the food donated to Sudan. 

Second, there is evidence and understanding that food aid alone will not stop hunger. Today, despite the investments and the progress made over the past 50 years, 

globally an estimated 850 million people are still food insecure. While providing food 

will feed people today, it will not, by itself, lead to sustainable improvements in the 

ability of people to feed themselves. Giving food to people will save lives and address 

short term hunger needs, but it will not save livelihoods or end hunger. In cases 

of widespread vulnerability, food aid must be used strategically, such as in a national safety net program, and planned along with other U.S., other donor and other 

recipient-country non-food development resources, to attack the underlying causes 

of food insecurity, such as lack of rural credit, markets, infrastructure and off-farm 

job opportunities; or environmental degradation, poor agricultural productivity, and 

poor governmental policies. The new U.S. Foreign Assistance Framework for foreign 

assistance will help. With respect to Title II non-emergency food aid programs, cooperating sponsors can monetize some of the food aid commodities that they receive 

and use the proceeds to implement activities that support the broader Title II food 

aid program. 

How Can We Improve Our Food Aid Programs Within That New Context? 

Emergency food aid needs are increasing and becoming less predictable, as conflict 

and natural disasters afflict and undermine the survival of a growing number of 

destitute and chronically food insecure people, who are often subsistence farmers, 

or herders and pastoralists. Because of this, food aid programs need to be adapted 

to these new conditions. They need to be able to respond more quickly to increasingly more vulnerable and desperate populations. They must be more effectively 

aimed at halting the loss of livelihoods that is the consequence of a series of even 

small shocks. And they must be combined with other U.S., other donor, and other 

recipient-country non-food development resources so that the multiple causes of vulnerability can be addressed together. Here are some areas where we are considering 

improvements to food aid implementation. 

Local Procurement: First, the most important change that the Administration has 

been seeking in recent appropriation requests and in the Administration’s farm bill 

proposals, is the authority to use up to 25 percent of the Title II funds for the local 

or regional purchase and distribution of food to assist people threatened by a food 

crisis. 

The long lead-time required to order and deliver U.S. food aid—normally up to 

4 months—means that we often need to make decisions well before needs are 

known. In some cases, the need is sudden, such as during a flood or an outbreak 

of fighting. In other cases, there is an unanticipated break in the flow of rations 

to beneficiaries (pipeline break), or even a short-lived cease fire allowing aid agencies to enter places previously inaccessible because of security issues where, typically, we find people that have been cut off from food for some time. 

In the case of drought we are also challenged to get food to people on time. There 

have been great advances in the ability to predict and track rainfall, undertake 

post-rain harvest assessments, and follow changing prices, resulting in better early 

warning. While we can often predict the impact of poor rains on crops, it is difficult 

to predict its impact on the ability of people to purchase enough food to eat. In the 

Sahel in 2005, for example, merely below-average rains and a marginally weak harvest, known well in advance, resulted in an unexpected major crisis because these 

31

conditions were compounded by unpredictable changes in trade flows among neighboring countries. This drew food away from regions with very poor populations, 

causing price spikes and an urgent need for food aid. 

While it is impossible to predict the location and extent of emergencies that would 

require local procurement each year, the Administration might have considered 

using this authority for the immediate response to Iraq in 2003, to the Asian tsunami in 2004, in southern Africa and Niger in 2005, in Lebanon in 2006 and in East 

Africa in 2006 and 2007. We anticipate that purchases would occur in developing 

countries (in accordance with the OECD Development Assistance Committee List of 

Official Development Assistance recipients). 

Let me assure you that our U.S-grown food will continue to play the primary role 

and will be the first choice in meeting global needs. If provided this authority by 

the Congress, we would plan to use local and regional purchases judiciously, in 

those situations where fast delivery of food assistance is critical to saving lives. 

We ask that you seriously consider our proposal and the critical role this authority could play in saving lives of the most vulnerable populations. We are willing to 

work with you to address your concerns in order to move forward to provide for urgent needs. 

Strengthening Assessments: Accurate assessments and well-targeted use of food 

aid are critical for responsible food aid. USAID is therefore giving considerable ongoing attention to working with the WFP and partner PVOs to assist them in 

strengthening emergency food needs assessment and response systems and capabilities. Specifically, USAID is actively involved with other donors in providing guidance to WFP at the Executive Board on policy and program topics related to emergencies, providing technical and advisory input to the UN ‘‘Strengthening Emergency Needs Assessment Capacity’’ (SENAC) activity, and providing resources to 

strengthen the assessment capacities of P.L. 480 Title II partner non-governmental 

organizations. USAID fully supports the GAO recommendation to enhance needs assessment methodologies and donor and host government collaboration; and can use 

and is using WFP, SENAC, the USAID Famine Early Warning System (FEWSNET) 

and other mechanisms to do so. 

Pre-positioning Emergency Food Aid: To help reduce the response time needed, for 

many years, USAID has pre-positioned processed food aid, both at U.S. ports and 

overseas. These efforts have been very successful. Pre-positioning processed food in 

warehouses not far from major emergency areas allows us to get this food to the 

beneficiaries at risk of starvation faster. Over 60% of the processed food sent to the 

pre-position sites overseas is redirected at an additional cost to meet unanticipated 

emergency needs and never makes it to the pre-position warehouses. While pre-positioning could usefully be expanded, the current farm bill has a ceiling on how much 

can be spent on pre-positioning. There are also significant logistical and other limits 

to pre-positioning food aid. For example, processed foods are the main commodities 

that can be successfully stored near emergencies. In addition, there are severe limits 

to the availability, cost, and quality of warehouse space and services near major 

emergencies, and problems certifying the condition of food withdrawn from these 

warehouses. Consistent with the GAO recommendation, we will examine the longterm costs and benefits of pre-positioning. But, while we want to expand pre-positioning, we do not expect to be able to do much more than we are currently. To be 

clear, pre-positioning is not a substitute for local procurement authority, particularly given the logistical limits to pre-positioning with respect to the amount and 

types of commodities that can be stored, as well as speed. 

Bill Emerson Humanitarian Trust: The Administration needs to ensure that it responds appropriately to major food aid emergencies. The primary means of funding 

large, unanticipated emergency food aid needs is the Bill Emerson Humanitarian 

Trust (BEHT). The BEHT is an important resource that assists the U.S. to meet 

major urgent humanitarian food aid needs. The BEHT complements Title II by providing resources to address unanticipated emergency food aid needs. However, one 

concern is that the releases from the BEHT have exceeded the statutory limit on 

its annual replenishment. As a result, the BEHT as a resource is shrinking. 

Prioritization: In 2005, USAID issued a new Food Aid Strategic Plan for 2006–

2010. This plan seeks to make the best use of Title II food aid resources by allocating resources to the most vulnerable people in order to help build resiliency and 

enable them to withstand the next drought or flood and, therefore, decrease dependency on food aid in the future. 

We are strategically focusing the food aid resources available for non-emergency 

programs on the most food insecure countries. Resources that were historically 

spread across over 30 countries will be concentrated in about half as many countries 

in order to achieve maximum impact. Through addressing the most pressing food 

security needs with focused resources (especially in the countries that continue to 

32

need emergency food aid) we will work to reduce the need for emergency food aid 

over time. 

To address the underlying causes of food insecurity in these priority countries, we 

need to increase integration of Title II and other funding sources in programming. 

For example, in Haiti USAID uses Child Survival and Health funds to train health 

care workers to monitor the growth of young children who are receiving food aid 

under the Title II program. In Mozambique, Development Assistance funds are 

used, in conjunction with Title II funds, to support road rehabilitation and help 

farmers get their products to market more quickly and for fair prices. 

Integration: Under the U.S. Foreign Assistance Framework, USAID and the State 

Department are working to integrate all foreign assistance resources toward a number of objectives designed to set a given country on a sustainable path towards development. We have wrapped funding, goals, and performance indicators into one 

system that will be able to tell you who is spending the money, what it is being 

spent on, and what we expect to get from spending it. This information will come 

together in an annual Operational Plan submitted to Washington for each country 

where foreign assistance funds are provided. For the first time, starting with FY 

2007 funds, Title II non-emergency programs will be integrated in country programs 

to achieve maximum impact. By bringing U.S. foreign assistance resources together 

in a strategic and integrated fashion, the U.S. Foreign Assistance Framework allows 

the U.S. Government to implement more-effective and multi-sectoral interventions 

that address the overlapping themes of poverty and hunger and the underlying factors that cause them, country by country. Programs are thus more comprehensive 

in scope and complementary in nature, with food aid serving as only one tool of 

many working together to address the chronic causes of poverty and hunger in the 

most food-insecure countries. 

Rationalizing Program Expenses: As we focus on the most food-insecure countries 

and integrate food aid programs with other programs focused on food insecurity objectives, we need to review our own regulations on non-food resources, such as 

202(e) authority, to ask whether it needs updating. There was a time when the distinction between two main non-freight authorities—internal transport, storage and 

handling (ITSH), on the one hand, and 202(e) administrative expenses on the 

other—made sense. After all, that latter category was viewed as overhead that 

should be limited to ensure that as much food aid went to beneficiaries as possible. 

We are considering whether consolidating these funding authorities would lead to 

a more streamlined, cost-effective operation by having needs, and not funding categories, determine expenditures. 

Another area of food aid resources that deserves a closer look is monetization. As 

the Committee knows, in recent years, monetization has generated a significant 

amount of debate both globally and in the U.S. food aid community based on differing views of the impact that monetization has on local markets and commercial 

imports. At the same time, we know that monetization can have development benefits and can be appropriate for low-income countries that depend on imports to meet 

their food needs. While the U.S. Government strongly supports monetization, many 

in the food aid community are concerned that monetization may be lost as a tool 

in the Doha World Trade Organization negotiations and continue to press for its 

use. Others are prepared to look for alternative means to address the causes of hunger and poverty. FFP agrees with the GAO recommendation to establish a database 

on monetization to record costs and proceeds, in order to inform this debate and 

seek improvements. 

Monitoring: The GAO has recommended that USAID increase the monitoring of 

Title II programs in the countries where the food is monetized and distributed. We 

support the recommendation to conduct more monitoring. USAID currently uses 

multiple sources of funding to cover current monitoring costs for Title II programs. 

Statutory restrictions in the use of Title II resources limit the current level of monitoring. 

Food Aid Quality: Both USAID and USDA are already at work in preparing a 

comprehensive evaluation of food aid specifications and products. The report will 

begin with a thorough evaluation of contracting procedures; the focus will be on the 

expeditious enforcement of contract standards in order to gain higher incidence of 

contract compliance. Next, the review will evaluate USDA product specifications 

with a focus on laboratory testing and manufacturing standards. The focus of this 

second stage will be on improving post-production commodity sampling and testing 

procedures, with emphasis on sound scientific standards. 

The third and final stage of the initiative will review options on nutritional quality and cost effectiveness of commodities currently provided as USDA and USAID 

food aid. We want to ensure that the food we provide is of the highest caliber to 

meet the nutritional requirements necessary to address today’s beneficiaries. We 

33

will have consultations with nutritionists, food technologists, commodity associations, the World Food Program, the PVO community, and all relevant businesses 

that produce, ship, or package food aid. USDA and USAID have already posted requests for information from potential contractors to support this third stage. 

Partnership: Finally, I would like to comment on our commitment to increase and 

improve our consultative partnership with our partners and to increase public-private partnerships related to food aid and reducing food insecurity. For example, the 

Food Assistance Consultative Group (FACG), mandated in the farm bill, has not 

been as participative as USAID and our partners would like to see. We plan to propose changes to the structure of the FACG in order to improve the consultative nature of discussions and to focus again on specific issues that should be solved 

through a broader consultative process. These changes do not require any legislation. 

Food aid programs are complex, and the problems and issues that U.S. food aid 

must address are increasingly complex. The Administration is committed to ensuring that Title II food aid is managed in the most efficient and effective manner possible, to decrease costs, increase impact and continue the 52 years of proud experience in using U.S. food aid to save lives and protect and improve the livelihoods 

of vulnerable populations. We look forward to continued discussions and debates 

with Congress on how the farm bill can best allow the United States to respond to 

new food aid challenges to reduce global hunger and poverty. Thank you.

Mr. MCINTYRE. Thank you very much. Thanks to both of you 

gentlemen. 

Mr. Yost, I would ask you, what is your response to the argument that shifting funds out of Public Law 480 for local or regional 

purchase would undercut U.S. support for food aid and could even 

result in less food aid being provided? 

Mr. YOST. Just a couple comments on the 25 percent proposal. 

It is up to 25 percent. It doesn’t mandate 25 percent. Second, it 

talks about sourcing the food in the local area. Just a couple examples I would use: we diverted food aid to Lebanon this past year 

and the best we could do was 17 days and we were very fortunate 

to have a ship in position that was loading at the docks in New 

Orleans. Previously, during the tsunami effort, the best we could 

do was 13 days to divert a shipment, and once again we were fortunate to have food in a position that we could shift. I think if this 

argument is presented properly, as I have presented it to stakeholders, commodity groups, when they learn this is about up to 25 

percent, not buying the food from our competitors but buying food 

locally, and it is about saving lives, the issue is better received. 

Mr. MCINTYRE. And when you say if the argument is presented 

properly, who else do you have confidence under your administration and in your service could present that argument properly? 

Who would you designate to do that if you are not available? 

Mr. YOST. I have a number of people in our agency, our Under 

Secretary. There are several that would be happy to interact. 

Mr. MCINTYRE. Could you provide us a list of those people so we 

will know who to call upon? 

Mr. YOST. Yes. 

Mr. MCINTYRE. All right. If you would do that please within the 

next 7 days, if you would submit it to the Committee staff, that 

would be great. Thank you. 

Mrs. Musgrave. 

Mrs. MUSGRAVE. Thank you, Mr. Chairman. 

Mr. Yost, could you elaborate please on the successes of the technical assistance programs that are used in resolving trade disputes? 

34

Mr. YOST. The Technical Assistance for Specialty Crops Program 

is where most of our efforts are focused. We work with co-operators 

that are on the ground working on a variety of problems in a variety of countries around the globe. We have had success with this 

program and that is one reason the Administration’s farm bill proposal looks at various ways to expand that program. 

Mrs. MUSGRAVE. Further, with budget constraints that we are 

hearing about, can you prioritize the requests of the Administration? Where should we have additional spending? Could you help 

me with that, please? 

Mr. YOST. One of the first requests we have is to expand the MAP program by $25 million per year. Also, we would like to establish a grant program to hire outside entities and experts to address sanitary and phytosanitary issues. We are requesting $2 million per year for that program. We are also requesting a small 

amount of money to position American international standard-setting bodies, and we are looking at expanding the TASC program 

over time up to $10 million per year. I think the thing we have to 

look at in all these requests is that we are talking millions of dollars, not billions and not hundreds of millions of dollars, but there 

are billions of dollars of trade at stake. We feel very strongly in our 

agency by implementing and funding these programs, we can have 

a profound effect on American agriculture. 

Mrs. MUSGRAVE. Thank you. 

Mr. Hammink, can you identify some of the problems with food 

aid transport which raise the cost, make it take a lot longer, and 

what can be done to streamline this much-needed aid, the delivery 

of this aid? 

Mr. HAMMINK. Thank you. I am sure that you are aware the 

GAO just completed a report on U.S. food aid, and a good part of 

the report focused on those kinds of efficiency questions. We met 

a few days ago with colleagues in USDA and the Maritime Administration. We will be looking at some of the GAO recommendations 

and following through. For example, to see what the cost might be 

in terms of having contracts for transport which would be longterm in nature and not just for each trip. We will also work with 

DOD to look at how that could be applicable to how Title II is 

shipped. At the same time, GAO had some recommendations on 

sharing the risks and we will be looking at that as well with our 

colleagues in the Maritime Administration and USDA as well as of 

course the industry, the carriers themselves, and other interested 

people such as the PVOs; which would probably take the risk that 

would be shifted from the carriers if we did that. We will continue 

to look at ways to decrease transport costs as well, and will continue discussions with the Maritime Administration and with the 

GAO. Thank you. 

Mrs. MUSGRAVE. I would like to thank the witnesses. 

Thank you, Mr. Chairman. 

Mr. MCINTYRE. Thank you. 

Mr. Barrow. 

Mr. BARROW. Thank you, Mr. Chairman. 

Mr. Yost, I hear you talking about how free trade agreements are 

working out fine for us. I think about what is happening in cotton 

and realize that cotton exports are booming to China, but also that 

35

we are shipping all our jobs over there for processing the raw material into fabric and then turning that fabric into finished products. 

I mean, it is sort of a mixed signal there. Are you familiar with the 

Inspector General’s report on the USDA’s efforts in expanding foreign markets? 

Mr. YOST. Yes, I am, Congressman. 

Mr. BARROW. Do you agree with his assessment that you are not 

doing as good a job as you can? 

Mr. YOST. No, we do not agree with it. 

Mr. BARROW. Why? 

Mr. YOST. Last year in 2006, worldwide exports of agricultural commodities was $350 billion. We had nearly 1⁄5. One country commanded almost 1⁄5 of those exports. We had $69 billion of agricultural exports last year. I think we are doing an outstanding job. 

Mr. BARROW. This is the Inspector General’s assessment, not 

mine. I am just wondering where does that report go off? Where 

does it disagree with your assessment that everything is fine? 

Mr. YOST. They used a different data set at different times to 

come up with their rationale. We have weighed in against it and 

argued against their methods. They still came forward with that 

assessment. They used a base period from 1984 to 2005. If you use 

1986 to 2006, our share of trade went from 21 to 19.6 percent. So 

some of it is statistics used, some of it is the data sets. In this case, 

we would argue that they didn’t use a standard set of data. 

Mr. BARROW. Didn’t use years when we were doing better? 

Mr. YOST. Pardon me? 

Mr. BARROW. They did not use years when we were doing better? 

Is that what you are saying? 

Mr. YOST. No, they started out with a different data set than 

they ended. They used different data to compile their statistics. 

Mr. BARROW. Well, I have to say I am concerned. This is one area 

where we have optimal advantages over the rest of the world and 

for us to have 1⁄5 may sound outstanding in the abstract, but where 

I am coming from folks feel like our access to foreign markets isn’t 

what it ought to be, what access we are getting as a result of bleeding in our sectors of our economy, and what I hear you saying is 

that everything is as good as it can be. 

Mr. YOST. No, I don’t want to imply it is as good as it can be. 

Mr. BARROW. All right. How can it be better? 

Mr. YOST. Well——

Mr. BARROW. And I want your assessment, not the Administration’s assessment. How do you think things can be made better? 

Mr. YOST. I really am a believer in the proposals that we are putting forward to attack sanitary and phytosanitary issues. We literally have an SPS issue of the week at our agency. These are the 

trade barriers. We need more resources to attack these barriers. 

Some of these are scientific in nature. Others are political in nature. 

Mr. BARROW. Do we need resources to attack them or do we need 

to respond in kind because we had a hearing earlier this week raising some issues about that that suggest that maybe we are not 

doing enough to protect ourselves from imports into this country 

that don’t match our standards. We are not playing on a level playing field. We hear that in other contexts about environmental 

36

standards and labor standards. It seems to me that food safety 

standards are an area where what is good for the goose is good for 

the gander. 

Mr. YOST. My response would be that, if we are going to do something, I hope we base it on scientific standards because at the end 

of the day we need to gravitate internationally to scientific standards, not——

Mr. BARROW. I appreciate that and I hear that about things 

being based on sound science and I hear folks on both sides of a 

political argument making that argument, but sound science is as 

sound science does is what I am getting at. I hope that you all will 

come up with something more effective than what we have been experiencing so far because we have a case of the ‘‘slows’’ when it 

comes to sticking up for our exports. Other folks are quick on the 

trigger to use just about every device in the world to limit our access to their markets. 

I see my time is running out, so Mr. Chairman, I yield. You may 

say whatever you want, Mr. Yost, but I have to stop. 

Mr. YOST. I tend to agree with a lot of your comments. 

Mr. MCINTYRE. Thank you very much, and thank you, Mr. Barrow for those questions, and we look forward to your responses to 

those in further detail. I would like to now acknowledge that Mr. 

Moran, who is not a Member of the Subcommittee but we had 

greeted him earlier to join us and has been here since the beginning, has stepped out. We will let Mr. Smith go ahead. 

Mr. SMITH. Thank you, Mr. Chairman. 

A question for Mr. Hammink. The GAO identified limitations of 

staff as a barrier to providing effective oversight of food aid programs. Do you feel the level of oversight provided by USAID staff 

is adequate for the extended programs and regions involved? 

Mr. HAMMINK. Thank you. I would like to discuss a few points. 

One is that monitoring is adequate, but it can always be improved 

and we do have people monitoring these programs in all the countries where we have food aid programs. The GAO report appropriately looks at how many monitors we have in those countries 

where we have non-emergency programs. The people there are 

funded from different sources and not always Title II so we would 

welcome continued discussion. We have told GAO that we plan to 

expand our monitoring capabilities—especially in those countries 

where we have ongoing multi-year, non-emergency programs. 

Mr. SMITH. Thank you. I yield back. 

Mr. MCINTYRE. Thank you, Mr. Smith. 

Mr. Salazar. 

Mr. SALAZAR. Thank you, Mr. Chairman. 

As many of you know, I am a longtime farmer. I have farmed all 

of my life and one of my biggest concerns of course is government 

intervention in many of the commodity programs. Definitely they 

understand that sometimes government means well, but sometimes 

it really messes up the farmer. For example, I am a strong believer 

in fair trade, not necessarily free trade, and many times when it 

comes to trade programs, agriculture is used as the whipping boy 

and many commodities sometimes get the short end of the stick. 

But one of the things I wanted to ask Mr. Yost is, the Secretary 

of Agriculture has proposed the authority for the export enhanceVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00040 Fmt 6633 Sfmt 6601 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
37

ment program to be terminated in the next farm bill. Could you 

elaborate on the Department’s rationale for eliminating this program? 

Mr. YOST. One of the reasons for not extending it is the fact that 

it hasn’t been used for a number of years, and would not affect U.S. 

exports. Also, in many cases, particularly now, it is hard to present 

a case where we wouldn’t have commercial displacement or trade 

that would go on normally without any help or any subsidy from 

the government. 

Mr. SALAZAR. Okay. One of the issues that we are having, and 

I tend to disagree with your rationale or your basis on saying that 

the export programs are going well. Last year, for example, we became net food importers of specialty crops. Could you address that, 

or do you agree with that? 

Mr. YOST. I don’t have the figures off the top of my head. You 

could be right. We do have year-round availability of a number of 

fruits and vegetables. Trade is a two-way street. When I go to the 

grocery store, I see that we have a wide variety and abundance of 

various fresh fruits and vegetables year round; plus there are a 

number of them that I don’t know what they are. If there wasn’t 

a sign above them, I wouldn’t know their names. We have a very 

significant immigrant community in this country now and various 

retailers are importing a number of what I would refer to as somewhat exotic fruits, vegetables and other products to sell to that 

community. 

Mr. SALAZAR. Well, especially in the specialty groups, when it 

comes to vegetables, and I agree with you that many times the 

phytosanitary issues are the ones that become really the political 

issues and I understand that for example, with the Country of 

Mexico. In Colorado, I chaired the seed export program for potatoes 

and we tried to open up that market forever and ever and it 

seemed like Canada was able to move their product, I think it was 

over 200 metric tons of seed potatoes from Canada, all the way to 

Mexico yet the American Government couldn’t, I guess rationalize 

with the Mexican Government and create a good program. So I 

would encourage you to look at specialty crops and vegetable crops 

especially because I think that the phytosanitary issue has become 

a real barrier to fair trade. 

Mr. YOST. We will do that, Congressman. The SPS issues are 

real barriers. We talked with the Mexicans this week about the potato situation, and pushed for resolution on that issue. 

Mr. SALAZAR. Thank you. I yield back, Mr. Chairman. 

Mr. MCINTYRE. Thank you, Mr. Salazar. 

We would like to thank our witnesses and look forward to your 

full statements in the record and also to your further answering 

the questions in full that you were requested to do during this 

hearing, and certainly welcome you any time to come back to our 

Subcommittee as we move further into the farm bill. 

We appreciate your kindness in being with us and call panel 

three to the table. We understand votes will be coming shortly so 

we are going to move promptly to panel three. While they are coming up here, I will go ahead, and in the interest of saving time, to 

let you know that I will be stepping out for a meeting with the 

Speaker in a few minutes and Mr. Salazar will assume the gavel. 

38

Mr. Barrow will be joining me in that meeting as well. So he and 

I will be slipping out, not because of anything that the witnesses 

say but because the Speaker has summoned us to a special meeting 

concerning this topics this Subcommittee is concerned about, namely issues involving peanuts. 

Ms. Ellen Levinson is Executive Director of the Alliance for Food 

Aid in Washington. Ms. Annemarie Reilly, Chief of Staff at Catholic Relief Services out of Baltimore. Mr. John Gillcrist is Chairman 

of Bartlett Milling Company on behalf of the Agricultural Food Aid 

Coalition out of Kansas City, Missouri. Mr. Robert Binversie is a 

Volunteer in the Farmer-to-Farmer Program out of Kiel, Wisconsin. 

I apologize if any of those names or places were mispronounced. 

Feel free to correct my pronunciation if they were not accurate. We 

have one other special guest that I will call upon the Ranking 

Member, Mrs. Musgrave, to introduce. 

Mrs. MUSGRAVE. Thank you, Mr. Chairman. I am especially 

proud today to introduce Cary Wickstrom from the beautiful area 

of the 4th district around Orchard, Colorado. He is the Immediate 

Past President of Colorado Wheat Administrative Committee, and 

Cary and his family have a farming operation there, very progressive and far-thinking. So Cary, it is especially nice to welcome you 

today so close to home. 

Thank you, Mr. Chairman. 

Mr. MCINTYRE. Thank you, Mrs. Musgrave. 

Ms. Levinson, please begin. 

STATEMENT OF ELLEN S. LEVINSON, EXECUTIVE DIRECTOR, 

ALLIANCE FOR FOOD AID (AFA); PRESIDENT, LEVINSON & 

ASSOCIATES, WASHINGTON, D.C. 

Ms. LEVINSON. Thank you, Mr. Chairman, and we are very grateful for the Committee and its longstanding support for food aid. 

My name is Ellen Levinson. I am testifying today on behalf of 15 

nonprofit organizations that are commonly called PVOs, or private 

voluntary organizations, and cooperative organizations, and the 

thing that they have in common is that they all conduct international food aid programs in addition to a variety of other humanitarian and development activities. They operate in 130 countries, 

are partners with both USDA and USAID on food aid programs, 

and they conduct both emergency and non-emergency programs. 

They are a wide range of organizations, World Vision, United 

Methodist Committee on Relief, which is very large, they are both 

very large, American Red Cross, to some smaller, lesser known 

ones like International Relief and Development and some cooperative organizations which maybe you are less familiar with. And 

they all have one thing that they do in common when they conduct 

food aid programs, and that is that they focus their efforts at the 

community level and particularly in communities that lack the 

wherewithal to meet their basic food aid needs on a regular and 

sustainable basis. 

I want to just take a minute to explain how we do that. Food aid 

is used in developing countries that have to rely on imports to meet 

their nutritional needs. So, targeting populations in need is the initial phase of a food aid program planning. As a first step, a PVO 

will use nationwide data and nationwide surveys on things such as 

39

infant mortality rates, poverty levels, prevalence of disease such as 

HIV/AIDS, and susceptibility to drought to identify the neediest 

areas within the country. Once they have identified that, they meet 

with local administrators and community groups and they determine what types of services are already being provided, which services are lacking and the types of interventions that would be most 

helpful. They use focus groups, rapid surveys and other methods to 

narrow down the target population. Then to avoid stigma when 

they develop programs, they may not necessarily just target particular households or people but maybe the whole community. So 

it is a community-wide effort. The goal is to build local partnerships, leadership and local capacities so that when the program 

ends, there is something we leave behind. Market analysis is a 

very critical part of food aid programs whether it is for distribution 

or you are going to sell some of the commodity and use the proceeds. It is required for all programs. One of the things you look 

at is what we call a disincentive analysis, and that is to make sure 

that the commodities chosen will not interfere with local production 

and marketing, and that there is adequate storage in the country 

for the commodities you are bringing in so they will be able to be 

distributed safely and kept properly in the country. 

PVOs add value to the programs by strengthening the management capabilities of local institutions, developing community leaders, providing a network of contacts and relationships, and they encourage entrepreneurship and develop programs with lasting benefits. They are audited, and I want to be clear that these programs 

are fully audited by the U.S. Government and they are responsible 

from the moment the commodity leaves ship’s tackle at U.S. port 

to the ultimate recipient. They provide detailed accounts. If it involves monetization, it is how they did the bidding, what prices 

they got and how it is compared to local market prices. If it is distribution, they have to show how they manage it, how much food 

is distributed to which populations, plus they measure impact. So 

there is a whole lot of reporting going on. I believe USAID and 

USDA have all this because it is delivered to them regularly and 

perhaps one way we could improve understanding of the programs 

is to have more of that information regularly provided to the Committee in reports. I think some confusion comes just from not having the data summarized before you. 

We have several recommendations for the farm bill, mainly to 

improve the effectiveness of programs and predictability, and also 

to make sure we do more in the area of developmental food aid and 

have emergency backup that is early and quick. First we recommend, and you can read the testimony for the details, the Bill 

Emerson Humanitarian Trust that holds commodities and funds 

for emergencies. We would like to make sure it is more reliable at 

the early stage of an emergency and immediately after the Title II 

funding. Public Law 480 Title II funding for emergencies is considered to be insufficient. A better replenishment mechanism is also 

needed, and that is rather complicated, so I won’t go into that at 

the moment. 

Second, from 2001 to 2006, U.S. developmental food aid fell by 

42 percent. We would like to turn that around. We think it is counterproductive. Non-emergency food aid programs are conducted in 

40

areas where poverty, unpredictable or unfavorable climates and remoteness have made it very difficult for people to improve their 

lives without help from the outside. Our programs are giving people a means to improve their lives—providing stability and a hope 

for a better future. I have examples in my testimony. In Kenya, for 

example, we have an area in the Tracana, a very arid area where 

not only was food aid used for distribution for food for work 

projects on agricultural development and irrigation, but also for 

targeted households for child survival; children who are malnourished under the age of 5. We were able to, within 3 years, see increases in income and they would be tripled in those households. 

These are areas that are vulnerable regularly to droughts but they 

are now not receiving emergency food aid while other areas around 

them are. So we can really overcome some of these causes. We see 

similar impacts in Bolivia and all over the world. In Bolivia, we 

can show decreased stunting by 30-some percent in children as well 

as increased household incomes. These have long-term benefits. 

How do we solve the problem of the decreasing developmental 

food aid? Well, I understand you have budget issues so the first 

thing you can do without a budget impact is to assure part of the 

Public Law 480 Title II program is definitely going to be used for 

these programs. We recommend 1.2 million metric tons and that 

cannot be waived. Second, we believe that the Food for Progress 

Program could be increased. Right now we are not even meeting 

the minimum tonnage of 400,000 metric tons. That is for countries 

that are making economic reforms, and we are using it to improve 

agricultural development, critical programs, so we would love to see 

that increase. We do realize that has a budget impact so we understand there may be issues there. 

And finally, I want to say that we believe there are ways to improve the efficiencies of this program and we are happy to discuss 

that with you, but one of the main ways is spreading out the deliveries throughout the year. Right now, program approvals, particularly under Public Law 480 Title II, lag. They aren’t approved, and 

the commodities are not called forward, early in the fiscal year. If 

we could have early approvals of programs, have the commodities 

able to be ordered and delivered throughout the year, we wouldn’t 

have what we call bunching of orders at the end of the fiscal year 

that the GAO recently reported. It could contribute to 12 to 14 percent higher prices. So I think all the way around, and it is better 

for us as implementing agencies so we can get the commodity at 

the right time for the right purpose. And so I think that is one recommendation——

[The prepared statement of Ms. Levinson follows:]

PREPARED STATEMENT OF ELLEN S. LEVINSON, EXECUTIVE DIRECTOR, ALLIANCE FOR

FOOD AID (AFA); PRESIDENT, LEVINSON & ASSOCIATES, WASHINGTON, D.C. 

Mr. Chairman, thank you for this opportunity to testify before the Subcommittee, 

today, on U.S. food aid programs. My name is Ellen Levinson and I am testifying 

today as the Executive Director of the Alliance for Food Aid (AFA or ‘‘Alliance’’). The 

Alliance is comprised of 15 private voluntary organizations and cooperatives (jointly 

called ‘‘PVOs’’) that operate humanitarian and development assistance programs in 

130 countries, are partners in USDA and USAID food aid programs, and conduct 

both emergency and non-emergency food aid programs. 

The members range from some of the largest charitable organizations in the 

United States that implement a wide variety of projects all over the world to smallVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00044 Fmt 6633 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
41

er organizations that specialize in particular regions of the world or have expertise 

in particular types of programs. What they have in common is that they focus their 

efforts on communities that lack the wherewithal to meet their basic food needs on 

a regular and sustainable basis. They use participatory methods that emphasize 

local initiative, provide technical assistance and training, and focus on building local 

capacity, institutions and leaders. Most of our members also conduct emergency programs, as well, where food aid is needed to save lives and help people regain their 

health and strength. 

Mr. Chairman, we thank the Congress for its unrelenting support of food aid over 

the years. Food aid is our nation’s principal program supporting food security in the 

developing world. It contributes to meeting the Millennium Development Goal of 

cutting hunger in half by 2015 and is critical for saving lives in the face of disaster. 

Some improvements and upgrades are needed in administrative programmatic procedures and greater efficiencies can be built into procurement and transportation 

procedures. However, most important for the 2007 Farm Bill is assuring predictable 

levels for both chronic and emergency needs in order to support good program planning and implementation and to reverse the downward trend in multi year developmental programs. 

The Alliance has three core recommendations for the 2007 Farm Bill—

• Assure adequate amounts of food aid are available from the Bill Emerson Humanitarian Trust and it is available to respond quickly in the face of food shortages, civil unrest, and other crises.

• Increase resources for multi year programs that improve the food security, 

health and welfare of populations that suffer from chronic hunger by (1) making 

available at least 1,200,000 MT of food aid each year for Title II non-emergency 

programs that promote food security and protect against the erosion of health 

and incomes, and (2) lifting the transportation cap on Food for Progress so 

500,000 MT can be provided to developing countries that are implementing reforms in the agricultural economies.

• Improve administrative procedures through early program approvals, spreading 

out procurement throughout the year, improving product quality oversight, and 

requiring the submission of annual reports from administrative agencies that 

include information about program targeting and implementation, including 

monetization and distribution results. 

Role of PVOs in Food Aid 

Identifying populations in need is part of the initial program planning process for 

PVOs. Alliance members use data from nationwide and regional surveys provided 

by recipient countries, the United Nations, and other recognized sources. Such data 

may include mortality rate of children under the age of 5, infant mortality rates, 

prevalence of malnutrition among children, percentage of people living under the 

poverty line, susceptibility to drought, and prevalence of disease, such as HIV/AIDS. 

Once areas of greatest need are pinpointed, PVOs meet with local administrators 

and community groups to determine what types of services are already being provided, which services are lacking, and the types of interventions that would be most 

helpful. They use focus groups, rapid surveys, and other methods to narrow down 

the target population to those with greatest need. To avoid stigma programs often 

target the community and not just particular households and individuals. The next 

step is working with local partners to design and implement programs. For your reference, Attachment A summarizes the program planning and approval process for 

P.L. 480 Title II non-emergency programs for FY 2007. 

PVOs are audited according to U.S. Government requirements and have well-established mechanisms for monitoring and reporting on the use of commodities from 

the point of departure from the U.S. to the ultimate recipient. In the case of monetization or if funds have been provided for program support, itemized records of the 

bidding process, funds generated and use of such funds are maintained and provided 

in regular reports to USAID and USDA. They also keep records to assess the ultimate impact of the program on the intended beneficiaries. Value is added to programs by strengthening the management capabilities of local institutions and building community capacity; providing a network of contacts and relationships linking 

people overseas with Americans; encouraging entrepreneurship and private sector 

development; and creating programs that have lasting benefits. 

Why Change Is Needed 

Food security is negatively affected by a wide range of issues, including poor agricultural productivity; high unemployment; low and unpredictable incomes; remoteness of farm communities; susceptibility to natural disasters, civil unrest and instaVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00045 Fmt 6633 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
42

bility; wide discrepancies between the well-off and the poor; chronic disease; and 

lack of basic health, education, water and sanitation services. Thus, rather than just 

distributing food to needy people, U.S. food aid has evolved into a multi-faceted program that addresses the underlying causes of hunger and poverty. This mixture of 

food and support for local development is the program’s strength and was reinforced 

in the 2002 Farm Bill. However, the Administration was given wide berth to set priorities and waive requirements, which has taken food aid down a different road 

than anticipated in 2002. 

Policy changes over the past 5 years have essentially reduced overall food aid levels (particularly by eliminating Section 416 surplus commodities and Title I appropriations), shrunk development-oriented programs to 42% their 2001 levels (according to an April 2007 GAO report) , and exposed the lack of contingency planning 

for food emergencies. While the 2002 Farm Bill called for increased levels of P.L. 

480 Title II development programs to 1,875,000 metric tons, instead these programs 

were reduced and are now about 750,000 metric tons. 

The 2002 Bill also called for upgrades and improvements in governmental management and information systems, but instead the level of programming has become 

less predictable; program priorities and proposal review processes have become more 

opaque; the ‘‘consultative’’ nature Food Aid Consultative Group process has deteriorated; Title II procedures are making it more difficult for PVOs to access funding; 

and commodity quality control systems have not been renovated to modern standards. 

Meanwhile, the world’s efforts to meet the Millennium Development Goal of cutting hunger in half by 2015 is far from reach—the number of people suffering from 

chronic hunger increased from 1996 to 2004 from under 800 million to 842 million—

and international appeals for emergency food aid are under-funded. While U.S. food 

aid alone cannot resolve this sad and complex problem, it is a critical component 

of an international food security strategy and is particularly effective in countries 

with chronic food deficits and for vulnerable, low-income populations. 

Several food aid statutes set tonnage minimums—to assure that food is provided 

in times of high prices. These requirements are important, but they need to be updated and supported by sufficient appropriations. 

Finally, Doha Round international trade negotiators, the Food Aid Convention 

and the UN Food and Agriculture Organization all have particular roles in international food aid policies and procedures. They are examining the use of food aid 

by donors and are looking critically at certain modalities and methodologies, including in-kind food aid, monetization and non-emergency programs. While U.S. programs are typically well-focused and food security oriented, this is often unclear or 

misrepresented to others. As the largest donor in the world, Americans should be 

proud of their food aid program. It is critical that government agencies collect and 

make available sufficient information to show how these programs work and their 

impact. 

With these factors and trends in mind, we offer recommendations to improve the 

quality and predictability of food aid, and to assure the United States has a plan 

and effective methods to address both chronic and emergency needs. 

P.L. 480 Title II—the Core U.S. Food Aid Program

1. Administrative Upgrades: Adequate Funding at the Start of the Fiscal Year, Predictable Tonnage Levels, Early Program Approvals, and Sufficient Reporting

Administered by the U.S. Agency for International Development (USAID), Title II 

provides food aid donations for development programs and emergency needs through 

‘‘eligible organizations,’’ which are PVOs and the UN World Food Program. The law 

sets a minimum commodity level for the program of 2,500,000 MT, of which 

1,875,000 MT is for non-emergency programs that address chronic hunger. 

From FY 1999 through FY 2002, the Section 416 surplus commodity program provided significant amounts of food aid, and much of it was for emergencies. This was 

a source of supplemental funding for the Title II program. As the attached funding 

chart shows, availability of Section 416 surplus commodities was phased out starting in FY 2002. While Title II funding increased over the same period and enough 

is provided to meet the 2,500,000 MT minimum commodity level set by law, this 

increase has been insufficient to make up fully for the loss of Section 416 commodities. Current funding levels are not maintaining adequate levels for both emergency 

and non-emergency requirements. This has resulted in cutbacks in developmental 

food aid programs, uncertainty about the levels of food aid each year and increased 

reliance on supplemental appropriations to fill gaps in emergencies. 

The Government Accountability Office (GAO) noted in a recent report that cost 

savings of 12–14 percent may be possible if commodity orders could be spread out 

43

more evenly throughout the program year, rather than ‘‘bunched’’ toward the end 

of the year. A variety of factors contribute to the ‘‘bunching’’ of commodity orders, 

including piecemeal appropriations, unreliable levels and late program approvals. 

From the perspective of implementing organizations, these practices have also created a series of other unfavorable consequences: commodity distribution and sales 

overseas cannot be well planned when dates of delivery are not reliable or when 

commodities are not made available throughout the year. This causes concern about 

the potential for disrupting commercial markets and having the food arrive at the 

wrong time in the program cycle. 

While some emergencies, such as sudden natural disasters and outbreak of civil 

war, cannot be predicted in advance and can occur any time during a fiscal year, 

other emergency needs are ongoing and can be factored into the regular budget request and appropriations process. For example, areas such as the Horn of Africa 

that are prone to drought, flooding, locusts or other natural disasters are monitored 

through a variety of early warning systems. Other emergencies, such as the ongoing 

conflict in Sudan, are expected to continue until the source of the problem is resolved. Because the Administration does not ask for adequate funding to meet these 

anticipated emergency needs, funds have been withheld from the non-emergency 

programs for several months as USAID adjusts its budget and waits to see if there 

will be supplemental funding. 

As a result, there are gaps in food aid deliveries for both emergency and nonemergency programs, PVOs must cover local costs while programs are on hold and 

some programs are, de facto, cut back. Later in the year, the Administration often 

receives supplemental appropriations for the extra emergency needs or uses commodities from the Bill Emerson Humanitarian Trust. Because the actual amounts 

needed are not requested up front as part of the regular budget cycle and the Administration only uses the Trust as a ‘‘last resort,’’ commodity orders are concentrated in the last months of the fiscal year. 

The Alliance has several recommendations for improving the reliability and timeliness of food aid programs.

• Assure that minimum tonnages are taken seriously and incorporated into 

USAID’s planning and budgeting. Our recommendation for a 1,200,000 MT 

‘‘safe box’’ for non-emergency programs, described under point 2, would help to 

achieve this goal.

• Require USAID to approve non-emergency programs and commodity levels 2 

months in advance of the beginning of the fiscal year. This would allow the first 

commodity orders to be placed in time for delivery during the first few months 

of the fiscal year. Since all agreements are subject to appropriations, early approval would not override the budget process. In addition, the Title II account 

holds extra funds at the end of each fiscal year that are typically carried over 

and these funds can be used to secure the early orders.

• While we recognize that the Committee on Agriculture may not be in the position to effect this change, on-time appropriations and sufficient appropriations 

at the beginning of the fiscal year would allow orderly program planning and 

more timely and efficient delivery of commodities throughout the year, without 

program disruptions. When adequate sums are available, more commodities can 

be pre-positioned off-shore for more timely deliveries if an emergency arises. 

The procurement can be spread out throughout the year, which will allow 

USDA to plan its procurement to get the best prices possible for commodity and 

inland transport.

• As described later in our testimony, clarify that the Trust should be used rather 

than curtailing developmental food aid programs to shift the funds to emergencies.

With these procedures, commodity ordering and delivery would be more reliable, 

which agricultural processors are seeking so they can plan their inventories, which 

PVOs are seeking so the commodity arrives when needed, and which saves money 

because commodity purchases and shipping can be spread out throughout the year 

rather than spiking during the last 3 months of the year. 

2. A Safe box for Developmental Food Aid Programs 

Establish a safe box for Title II non-emergency programs that assures 1,200,000 

metric tons will be made available each for non-emergency Title II programs each 

fiscal year. This amount would not be subject to waiver. 

Section 204(a)(2) of P.L. 480 directs USAID to make available 1,875,000 metric 

tons of commodities for Title II non-emergency programs each fiscal year. The law 

permits USAID to waive this minimum after the beginning of the fiscal year if there 

44

are insufficient requests for programs or the commodities are needed for emergencies. This implies that USAID should seek proposals for the full non-emergency 

minimum tonnage and only waive the minimum under extraordinary circumstances. 

Instead, months in advance of each fiscal year USAID acknowledges that non-emergency programs will be limited to about 750,000 MT and does not make the minimum tonnage available. 

We therefore recommend only allowing USAID to waive up to 675,000 MT of the 

non-emergency minimum tonnage level, which would assure that USAID makes 

available at least 1,200,000 MT each year for multi year food for development programs—reestablishing America’s commitment to help those suffering from chronic 

malnutrition and hunger. This is less than the minimum tonnage required under 

law for these programs (1,875,000 MT), but more than the amount USAID is actually providing (750,000 MT). 

Programs that address the underlying causes of chronic hunger include motherchild health care, agricultural and rural development, food as payment for work on 

community infrastructure projects, meals in schools and take-home rations to encourage school attendance, and programs targeting HIV/AIDS-affected communities. 

Chronic hunger leads to high infant and child mortality and morbidity, poor physical and cognitive development, low productivity, high susceptibility to disease, and 

premature death. 

Reducing these programs has been counterproductive, as developmental food aid 

helps improve people’s resilience to droughts and economic downturns. Giving people the means to improve their lives also provides hope for a better future and helps 

stabilize vulnerable areas. Valuable expertise of PVOs to help these communities 

and to respond to food crises is being lost as they must stop their food aid activities, 

leave their local partners and lose their strategic networks in these vulnerable 

areas. Giving people the means to improve their lives also provides hope for a better 

future and helps stabilize vulnerable areas. 

We also note with alarm that due to budget constraints, in 2006 USAID established a policy to limit non-emergency food aid to fewer countries in order to ‘‘focus’’ 

the remaining resources. Under this policy, non-emergency programs are being 

phased out in 17 countries and cutback in others and programs will be allowed in 

only 15–18 selected countries. Concentrating food aid resources in areas where there 

is high prevalence of food insecurity and vulnerability is appropriate and was anticipated in the USAID Food for Peace Strategic Plan, 2006–2010. However, the current 

policy eliminates too many areas where chronic hunger is prevalent and was driven 

by the decision to reduce the budget for non-emergency programs. Many poor, vulnerable populations will be excluded from receiving food aid, even though their 

needs are as compelling as those populations that will be served. The capacity of 

PVOs to serve populations in non-eligible countries will be lost, making it more difficult to respond effectively at the early signs of an emerging food crisis, which runs 

counter to the intent of the Strategic Plan. 

The two examples below are in phase out countries, Bolivia and Kenya. They 

show how food aid programs are often conducted in areas where poverty, unpredictable or unfavorable climate, and remoteness have made it very difficult for people 

to improve their lives without help from the outside. These programs leverage resources and create benefits beyond the targeted recipients, increasing the impact 

per dollar spent. 

Bolivia: Adventist Development and Relief Agency International (ADRA), Food for 

the Hungry (FH) and several other PVOs are conducting multi-faceted, 6 year programs in Bolivia using food distribution (corn-soy blend, lentils, green peas, soy-fortified bulgur, wheat-soy blend and flour) and proceeds generated from the monetization of flour to support individual, community and municipal efforts to overcome development constraints and to enhance household food security. 

In the targeted rural areas over 70% of the population live in poverty and infant 

mortality rates are 116 per 1,000 births. These communities must rely on their own 

agricultural production as they are remotely located, have poor roads and lack 

transportation. 

The current PVO programs focus on addressing their lack of access to markets, 

health care, schools and social services by increasing production and incomes and 

improving nutrition among vulnerable groups. Food aid is distributed (1) for Maternal and Child Health and Nutrition (pregnant and lactating mothers, infants and 

children under 5, the most critical stages for cognitive and physical growth); and 

(2) in conjunction with training and technical assistance for improved agricultural 

production, diversified crops to improve the diet, and marketing of agricultural products. Concurrent activities included increasing access to clean water, improving 

health and sanitation practices, natural resource management, building greenhouses, and improving marketing roads and irrigation systems. 

45

In FH’s midterm evaluation (2006, 3 years after the program began, compared to 

2002 baseline data), they found a 35% decrease in chronic malnutrition in children 

(height/weight or ‘‘stunting’’) and household incomes had increased by 270% or 

more. The direct beneficiaries of the FH program, alone, were 212,292 people and 

indirectly, 410,000 people benefited. Because of program efficiencies and FH’s ability 

to raise more matching funds after the program began, the number of beneficiaries 

was 283% greater than originally planned. 

Kenya: A World Vision Title II program in Kenya targeted 1,528 pastoralist families in the Turkana region, an arid environment that is plagued by recurring 

droughts. Before the program, these families were dependent on emergency food aid 

nearly every year. 

Some of the commodities provided were distributed as payment for participation 

in training and for working on projects that improved irrigation infrastructure, cultivation techniques and land management. Other commodities were sold through 

open tenders and the funds generated supported the food for work projects. Within 

6 years, even though there had been droughts in between, income increased from 

a baseline of $235 per year to $800 per year, families could afford to send their children to school, and the communities no longer depended on relief. In fact, the program was turned over to the participants and they have spread their knowledge to 

475 other farmer families. 

PVOs were hoping to replicate this successful model in other areas of Kenya 

where pastoralists are still dependent on emergency rations nearly every year. However, USAID is phasing out non-emergency projects in Kenya as part of a larger effort to limit the scope of developmental food aid programs. Meanwhile, Kenya remains a recipient of emergency food aid and pastoralists are particularly at risk. 

Reports accompanying appropriations bills for the past 5 years admonish the Administration to meet the Title II non-emergency minimum tonnage and to rely on 

the Bill Emerson Humanitarian Trust for urgent needs. However, this language has 

had no perceivable effect. This follows the general trend indicated in a recent GAO’s 

report—from 2001 to 2006 developmental food aid fell by 42%. 

3. Maximize Use of the Section 202(e) Support Funds 

Make 10% of the Title II program level available for Section 202(e) support funds 

and allow these funds to be used to support complementary activities associated with 

food aid programs.

Section 202(e) funds are provided by USAID to Title II eligible organizations to 

support (A) the establishment of new programs; and (B) specific administrative, 

management, personnel and internal transportation and distribution costs associated with carrying out programs in foreign countries. The law provides no less than 

5% and no more than 10% of ‘‘funds made available in each fiscal year’’ under Title 

II for these purposes. The Alliance proposes the following changes:

• Allow Section 202(e) funds to be used to cover costs for development-related activities conducted under a Title II program by an eligible organization. Monetization is often used for these purposes and Section 202(e) is not sufficient or 

intended to replace monetization. However, monetization is not appropriate in 

all target countries and in some countries the ability to monetize varies yearto year based on the market situation. Thus, flexibility is needed so Section 

202(e) funds may be used for activities that monetization funding often supports, such as materials, technical assistance and training for agricultural, materials for mother-child health care, and food-for-work infrastructure programs.

• Allow USAID to provide funds to eligible organizations to improve methodologies, such as needs assessments for identifying target populations and monitoring and reporting on the impact of monetization and other aspects of their 

programs. These are activities that will benefit program implementation overall 

and are not associated with one particular program.

• Provide not less than 10% of total Title II funding for Section 202(e) purposes. 

Currently, the law allows between 5% and 10% of Title II funds for this purpose, but when developing its 202(e) allocations, USAID does not want to overshoot the 10% maximum. USAID therefore limits 202(e) use to about 7–8% of 

the regular appropriations level; as it cannot predict how much money may be 

provided later in the year through supplemental appropriations, carry in funds, 

or maritime reimbursement. As a result, about 5–6% of the Title II program 

level is being provided for Section 202(e) (approximately $90 million) Setting a 

minimum of 10% of total funding provided from all sources will provide the additional funds needed for meeting costs associated with program implementation and improving program methodologies.

46

Before the early 1990’s, when most non-emergency food aid was provided to Latin 

America and Asia, there were other ways to obtain support funds. For example, the 

Government of India contributed to some large-scale Title II food for education and 

early childhood development programs. In some countries, such as Bolivia and Bangladesh, proceeds generated from sales of commodities under government-to-government P.L. 480 Title III programs were available. 

However, Title III programs were phased out more than a decade ago, so those 

funds are no longer available. Now, most Title II food aid is provided to sub-Saharan Africa, where the infrastructure is poorly developed. While non-emergency programs can be coordinated with recipient country developmental or food security 

plans, the governments themselves generally do not provide direct financial or 

logistical support. Instead, they look to the PVO to fill gaps in areas of poor coverage. Thus, over the past 10 years PVOs have relied, primarily, on monetization 

to generate funds to cover program costs and, secondly, on Section 202(e) funds. 

4. Update Food Quality Systems and Product Formulations 

Title II funds should be provided to bring the food aid quality enhancement project 

to completion over the next 3–4 years.

Both the quality and formulation of food aid products are crucial to delivering 

safe, wholesome products to undernourished populations, particularly vulnerable 

groups such as infants and young children, women of child-bearing age and people 

living with HIV/AIDS. Formulations for the value-added products used in Title II 

have been static for decades and food aid distribution overseas has sometimes been 

disrupted due to quality concerns. Through private funding, SUSTAIN (a nonprofit 

that provides technical assistance for food systems and was referenced in the 2002 

Farm Bill), has made progress to address these issues in a scientific, systematic and 

impartial manner. As neither USDA nor USAID has provided funding to support 

these reforms, if necessary, we support the use of Title II funds for this purpose. 

Assure Timely Use of the Bill Emerson Humanitarian Trust 

To maintain the Trust as a contingency reserve for emergencies replenish the Trust 

with $60 million per year until it is full and assure it is available to respond to emergencies in a timely manner and without interfering with the provision of Title II nonemergency programs each year.

Administered by USDA, the funds and commodities in the Bill Emerson Humanitarian Trust (BEHT or ‘‘Trust’’) are needed to supplement P.L. 480 Title II when 

there are urgent humanitarian food aid needs. The commodities are provided by the 

Trust and CCC covers the ocean freight and delivery costs. The Trust can hold up 

to 4 million metric tons or cash equivalent, but currently only holds about 915,000 

metric tons of wheat and $107,000,000 (which is available to buy commodities when 

needed). Because a diversity of commodities is needed for emergencies, it is best for 

the Trust to be replenished with funds that can be used to procure the appropriate 

commodities when needed. 

Two mechanisms need to be improved to make the Trust more readily available 

for emergencies: the ‘‘trigger’’ for releasing commodities and the level of reimbursement. We urge you to make the needed changes in the 2007 Farm Bill. 

Trigger: Section 302(c)(1)(c) of the Bill Emerson Humanitarian Trust Act states 

that a waiver of the Title II non-emergency minimum tonnage is not a prerequisite 

for the release of commodities from the Trust. Nonetheless, the Administration has 

taken the stance that it will only use the Trust commodities as a last resort after 

all other avenues, including the Title II waiver, are considered. This may partially 

be driven by the 500,000 metric ton limitation on BEHT tonnage that can be provided in any fiscal year, although if the Trust is not used 1 year the 500,000 metric 

tons for that year can be added to future year releases. Another reason may be the 

term ‘‘unanticipated’’ emergencies, which is how the BEHT Act refers to releases for 

international humanitarian crises versus ‘‘emergencies,’’ which is how the BEHT Act 

refers to releases in case of short supply of a commodity. Thus, we have several recommendations for fixing the language. 

First, create safe box for 1,200,000 metric tons (about $600 million total cost) for 

Title II non-emergency programs that cannot be waived. This takes away the confusion about whether the waiver is used before the Trust can be accessed. Second, 

eliminate the part of the Trust that refers to ‘‘short supply,’’ as it is a vestige of 

a time when food aid was considered ‘‘surplus’’ and is outdated now that the Trust 

can hold funds. Third, change the terminology and allow commodities or funds to 

be released when there are emergency food aid needs. And, forth, allow up to 

1,000,000 metric tons to be released in any fiscal year. 

Replenishment: Currently, the Trust may be replenished either through a direct 

appropriation or by capturing $20 million of funds reimbursed to CCC from P.L. 480 

47

as repayment for previous use of the Trust. The Administration has never requested 

a direct appropriation, but Congress provided $67 million for replenishment as part 

of the FY 2003 Iraq Supplemental Appropriations Act. In addition, USDA has twice 

captured $20 million from P.L. 480 reimbursements. Thus, the Trust now holds 

$107,000,000. This amount plus the 915,000 MT of wheat held in storage makes up 

the total value of the Trust, which is about 1,500,000 metric tons in wheat equivalent prices. To bring the Trust to its full 4 MMT wheat-equivalent level, we urge 

that the $20 million be raised to $60 million per year. 

Expand Food for Progress 

Increase the Food for Progress to 500,000 metric tons for programs that improve 

private sector agricultural, food and marketing systems in developing countries that 

are implementing market reforms.

The Food for Progress Act directs USDA through the Commodity Credit Corporation (CCC) to provide a minimum of 400,000 metric tons of commodities each year 

to developing countries that are introducing market reforms and supporting private 

sector development. These programs may be implemented by PVOs, the World Food 

Program and recipient country governments. The amount actually provided through 

CCC falls short of 400,000 metric tons because there is a cap on the amount of 

funds that CCC can provide for delivering the commodities and administering the 

programs overseas. 

USDA has authority to use P.L. 480 Title I funds in addition to the CCC funds 

to implement Food for Progress programs. In FY 2006, about 75 percent of Title I 

funds were used for this purpose. As no funds were appropriated for Title I in FY 

2007, and the Administration seeks no funding in FY 2008, this means a cut in 

funding in Food for Progress. 

Many poor, developing countries are undergoing economic reform and, therefore, 

the demand for Food for Progress programs is great. Forty-six different PVOs apply 

for Food for Progress programs. For FY 2007, 100 proposals were submitted by 

PVOs and 16 by governments, but only 11 new proposals were approved and three 

other programs were provided second year funding. 

We therefore recommend increasing the minimum to 500,000 metric tons and assuring that this amount is available for proposals submitted by PVOs. To accommodate the additional tonnage the amount available for transporting the commodities 

would have to be lifted or increased. 

Example: International Relief & Development (IRD), Azerbaijan 

Commodities: 10,000 MT soybean meal; Total value: 2,125,467 (1 year). 

Beneficiaries: 26,899. 

IRD targeted Ganja, Goranboy, and Khanlar in western Azerbaijan, because in 

these regions there is a high concentration of internally-displaced persons (IDPs), 

the level of unemployment is close to 70%, and the local farmers and IDPs are poor 

and are not able to support their basic needs. Soybean meal monetization was chosen because of shortages of feed grains in the country. IRD trained farmers in crop 

and livestock production and market development and distributed small grants to 

start-up local businesses. HIV/AIDS awareness was also conducted in the targeted 

communities. 

Results:

• Business development classes were provided for 1,532 farmers, in the town of 

Ganja and four local regions (Kahnlar, Geranboy, Samukh and Zakatala). As a 

result, farmers submitted business proposals to IRD, and IRD funded 106 of 

them.

• IRD published two leaflets, ‘‘Raising chickens in your backyard’’ and ‘‘Chicks’ 

diseases and their prevention’’; five handbooks on various agricultural topics: 

‘‘Recommendations for sheep keepers,’’ ‘‘Recommendations for cattle keepers,’’ 

‘‘Recommendations for beekeepers,’’ and ‘‘Recommendations for chicken keepers.’’

• The total number of people who benefited from the small grants was 26,899. 

The farmers and small entrepreneurs formed several groups that were eligible 

for receiving grants. Recipients included 16 cattle breeding groups, 22 women 

poultry groups, 38 sheep breeding groups, two women geese groups, 19 agroservice groups, two harvesting groups, and seven beekeeping groups. Within a 

year, monthly income of beneficiaries at least doubled. Each of the 19 agro-service groups received approximately $5,090 and in the first year members provided services in their communities valued at $46,421. 

48

Monetization’s Continued Contribution 

Monetization is an important component of food aid programs and we support its 

continued use where appropriate, based on market analysis.

Monetization is the sale of commodities in net food-importing, developing countries and the use of proceeds in projects that improve local food security. It can have 

multiple benefits and is appropriate for low-income countries that must depend on 

imports to meet their nutritional needs. Limited liquidity or limited access to credit 

for international purchases can make it difficult for traders in these countries to import adequate amounts of foodstuffs and monetization is particularly helpful in such 

cases. In all cases, the proceeds are used to support food security efforts or the delivery of food in the recipient country. 

Monetization can also be an effective vehicle to increase small-scale trader participation in the local market and financial systems, can be used to address structural 

market inefficiencies, and can help control urban market price spikes. The commodity can also be integrated into agricultural processing operations, helping to establish and expand feed mills, fortified foods, and other locally-important products. 

For example, International Relief & Development used bulk wheat and soy flour 

provided through Food for Progress to establish small noodle production plants in 

Cambodia and the soy-fortified products were incorporated into school feeding programs. ACDI/VOCA used soybean meal donated by USDA to help reestablish the 

feed industry in Indonesia after the economic crisis. Both of these activities expanded local enterprise, increased jobs, and had a long-lasting food security benefit. 

Market analysis is an important element of all food aid programs, but is more extensive for monetization programs. A ‘‘Bellmon Determination’’ is required for both 

monetization and distribution to make sure the commodities chosen will not interfere with local production and marketing and that there is adequate storage for the 

commodities provided. Commodities chosen for monetization are not locally produced, are produced in small amounts or are available only during certain times of 

the year. Therefore, the likelihood of creating local disincentives to production is 

small. However, some countries in a region have linked markets, so the analysis 

must also consider inter-country trade. For example, there is a Bellmon analysis 

that covers all the countries in West Africa. 

As the potential disincentive effect of food aid is oft cited, but little researched, 

one study worth noting is by Abdulai, Barrett and Hoddinott [October 2005], which 

looks at disincentive effects of food aid provided in Ethiopia, the largest food aid recipient country in Africa over the 10 year review period. It received food for distribution and monetization. The study found no disincentive effect and note on page 1701 

of the article: ‘‘In rural Ethiopia, simple test statistics. suggest that the disincentive 

effects of food aid on household behaviors are many, large in magnitude and statistically significant. However, when we take into account household characteristics. 

That can affect behaviors and on which food aid is commonly targeted—many of 

these adverse effects vanish. In fact, there is some suggestion in these data that 

food aid leads to increases in labor supply to agriculture, wage work, and own business activities.’’ 

Save the Children and World Vision prepared a review of the PVO monetization 

programs under Title II, covering six commodities in 30 countries and 48 programs 

from 2001–2005. They found that the commodity choice and quantities avoided competing with local production and marketing and therefore diminished potential disincentive effects. As the commodity levels provided were small in comparison to 

needs and required imports, the potential for commercial import disruption was also 

small. 

Example: Africare’s P.L. 480 Title II Development Program in Guinea 

Africare began implementation of a 5 year Guinea Food Security Initiative 

(GnFSI) in the Prefecture of Dinguiraye in the Upper Region of Guinea in September 2000. This program represents an expansion of a very successful first phase 

program (1995–2000). This multi-sector program is currently operating in 50 of 84 

districts of the Prefecture providing support to a population of 107,750 people. 

Africare’s program focuses on decreasing post-harvest storage losses, improving 

the nutritional status of children under the age of 5, and increasing the capacity 

of District Development Committees to understand and address the challenges to 

food availability, access and utilization. Dinguiraye is an area that prior to 

Africare’s intervention, received no outside assistance and limited support from its 

own governmental ministries. Chronic malnutrition of under five children was in excess of 50% and the amount of food available to households was adequate for less 

than 4 months per year. 

49

The program’s positive impacts due to the introduction of improved storage techniques include adding a month to post-harvest storage without damage to commodities, and doubling the months when adequate food is available in the households. 

Working with the Ministry of Health, Africare’s nutritional program reduced 

chronic malnutrition rates from 50% to 21% and the number of caretakers of under 

five children that participate in growth monitoring, food demonstrations and guided 

health discussions increased to more than 90% of the population. The prospective 

for these activities to continue under the auspices of the Ministry of Health is 

strong, because they are low cost and very popular with the beneficiaries themselves. More importantly, the target population has had an active role in improving 

the methodology by which more nutritious foods are identified and made available. 

The financial resources for the program are generated by monetization of Title II 

food commodities (approximately 4,600 MT’s of vegetable oil during FY05 for 

Africare and two other PVOs). This innovative program promotes private sector development and broadening of local markets, both for producers and consumers, independently of the food security activities funded with the sales proceeds. 

Vegetable oil was chosen for monetization because little is produced in country. 

The amount imported for monetization was small in comparison to import needs, 

which minimizes the likelihood of interfering with commercial imports. Further, 

vegetable oil availability is concentrated in the main city, not the outlying areas. 

Africare therefore arranged for the sales to reach the outlying areas through the 

sale of small lots to multiple buyers. 

Africare worked with the Guinean Government and private sector to increase the 

involvement of small-scale distributors to have access to vegetable oil, which is usually sold at the high end of the local market. A consequence has been the increased 

distribution of vegetable oil throughout the country, outside of the capital and principal urban markets to key rural areas that had never been served. Cost recovery 

was at or above local prices and averaged about 87% of the full cost of U.S. procurement and shipping. This methodology included private sector sales techniques (e.g. 

closed tender bids, bank guarantees reflecting local interest rates and payment of 

required taxes by the buyer), and generated the following benefits:

1. Higher prices received from the buyers compared to if it was just sold to regular importers, which translates into a larger amount of sales proceeds to support the development activity.

2. Increased sophistication and understanding of commercial business practices 

by the private sector, especially the small-scale operator who was often unable 

to participate in these types of transactions (or even the formal financial system).

3. Increased availability of high quality commodities throughout the national 

market. 

Example: Joint Aid Management Processing Plants in Africa, USDA Programs 

One Alliance member, Joint Aid Management, is a Christian humanitarian organization based in South Africa that focuses on nutrition programs in schools and 

for the needy, assistance to orphans and vulnerable children, water and sanitation, 

skills development and community training. It established food processing plants to 

produce corn soya blend and other blended and fortified foods for use in its nutrition 

programs, including sales to the UN World Food Program and distribution through 

their own programs. While much of the food it uses is locally procured, it also participates in USDA food aid programs, processing donated commodities that are then 

used for nutrition programs. This is one of the ways that food aid programs allow 

the creative use of monetization to support local processing while also contributing 

to targeted food security programs. 

Pilot Program for Local/Regional Purchase 

We recommend a field-based, pilot program for local purchases for famine prevention and relief.

In-kind food aid continues to be the most dependable and important source of food 

aid. Commodities committed by and sourced directly from donor countries, which 

have more than adequate production to meet their domestic needs, is required to 

assure that sufficient levels food aid are available each year. However, there are situations where purchases closer to the area of need could provide more timely response, diversity of the food basket, and benefits to local agricultural development. 

Members of the Alliance were under the impression that Title II gives broad discretion to the Administrator of USAID under section 202(a) to provide commodities 

under any terms or conditions deemed necessary for an emergency. Therefore, we 

50

assumed local purchase was already possible, albeit not meant to be used on a regular basis. However, we understand that USAID interprets this section differently. 

The Administration has proposed to provide up to 25% of Title II funds for local 

or regional purchase for emergencies. Many of the areas where food aid is delivered 

need additional commodities from imports to meet their needs and there may little 

room to expand on the local/regional purchase, considering the large amounts that 

the UN World Food Program is already procuring. Therefore, we recommend assuring adequate U.S. commodities are assured to meet the minimum tonnages under 

Title II and to add a field-based pilot program for local purchase. 

While PVOs have experience using privately-raised funds and, to a limited degree, 

USAID International Disaster and Famine Assistance account funds for local purchases, information from these programs has not been systematically collected and 

therefore is inadequate to use for developing appropriate methodologies and best 

practices for future programs. Thus, as part of the 2007 Farm Bill we recommend 

a pilot program for local purchases for famine prevention and relief—

1. Within recipient countries or nearby low-income countries,

2. In cases where the procurement is likely to expedite the provision of food aid,

3. Where the procurement will support or advance local agricultural production 

and marketing, and

4. Conducted by PVO implementing partners that have experience with food aid 

programming in the recipient countries and are fully audited according to U.S. 

Government regulations.

To assure that accepted practices for food aid programs are followed and to identify appropriate methodologies and best practices for future programs, each PVO implementing a pilot program shall:

1. Prior to implementing a local purchase program, conduct an analysis of the 

potential impact of the purchase on the agricultural production, pricing and 

marketing of the same and similar commodities in the country and localities 

where the purchase will take place and where the food will be delivered;

2. Incorporate food quality and safety assurance measures and analyze and report on the ability to provide such assurances;

3. Collect sufficient data to analyze the ability to procure, package and deliver 

the food aid in a timely manner;

4. Collect sufficient data to determine the full cost of procurement, delivery and 

administration; and

5. Monitor, analyze and report on the agricultural production, marketing and 

price impact of the local/regional purchases. 

McGovern-Dole Food for Education 

The McGovern-Dole Program provides incentives for poor families to send their 

children to school. Requiring an appropriation of no less than $100,000,000 each 

year will give certainty that funds are available for multi year programs. These 

types of programs used to be included in Title II, but with the establishment of 

McGovern-Dole in 2002, such programs under Title II are being phased out. Increased funding would allow more multi year programs, improve program impact, 

and allow broader use of the authority in the law to support both educational programs and programs for children under the age of 5, which is when malnutrition 

can have its most devastating impact on child development. 

Eliminate Objectives That Link Food Aid to Expansion of Export Markets 

Policies and programs for U.S. and other international food aid should be established and operated based on the food security needs of recipient countries and vulnerable populations rather than donor country objectives to expand its export markets. In practice, U.S. food aid programs do not include objectives to expand U.S. 

markets and their success is not measured on this basis, but there are provisions 

in current law that state market expansion as an objective. Changes are needed to 

correct this problem: (1) Eliminate the statement in the preamble to P.L. 480 that 

it is the policy of the United States to use food aid to ‘‘develop and expand export 

markets for United States agricultural commodities.’’ (2) In P.L. 480 Title I, eliminate the priority for countries that ‘‘have the demonstrated potential to become commercial markets for competitively priced United States agricultural commodities’’ 

and other references to using Title I for market development purposes. 

51

* These are commonly called ‘‘non-emergency’’ or ‘‘development’’ programs. 

Conclusion 

In conclusion, Mr. Chairman, we can see the many benefits U.S. food aid programs are now creating for poor communities, improving incomes, living conditions 

and nutrition and sowing the seeds for a promising future. 

Thank you for supporting these life-giving programs. I would be pleased to answer 

any questions you may have. 

ATTACHMENT A 

Summary of PVO/Cooperative (‘‘Cooperating Sponsor’’) Proposal Planning 

Process for P.L. 480 Title II Multi-Year Assistance Programs (MYAPs) 

for FY 2007 * 

FY 2007 Title II Proposal Time Line 

February 22, 2006—Title II Draft FY 2007 MYAP Guidelines for Cooperating 

Sponsors (CSs) were provided for submitting new program proposals. The Guidelines list eight evaluation criteria that will be used for grading proposals. 

The Guidelines state that activities must fit within the Food for Peace (FFP) Strategic Plan 2006–2010, which focuses on reducing food insecurity in vulnerable populations and is available on the USAID/FFP website. A variety of activities may fall 

under this overall objective, such as natural resource management, income security 

and social services, community development, agriculture development, employmentlabor-training, food and nutrition, disaster prevention and relief. Proposals must 

clearly describe each objective, its rationale and implementation plan, and the method for tracking and measuring impact. 

There is a section in the Guidelines called ‘‘legislative mandates for type of commodity, programming and program size,’’ but no mention is made of the 1,875,000 

metric ton minimum requirement for non-emergency programs. No information is 

provided about the amount of funding available or the tonnage level available for 

MYAPs. However, simultaneously, the USAID FFP Office issued a ‘‘priority country 

plan’’ that made clear that there would be little, if any additional commodity available overall and it the amount available for all non-emergency programs would be 

approximately 750,000 MT ($350 million). 

The priority country plan was introduced at meetings between the FFP Office and 

CSs. USAID informed CSs that for FY 2007, new programs will only be accepted 

in 15 ‘‘priority countries,’’ while for FY 2006 there were 32 countries. Multi year programs that were underway in the 17 countries not on the priority list would be 

phased out over the next 2–3 years, requiring changes in many of the already-approved program plans. 

CSs were advised to check with the USAID Missions in each country and the 

USAID/Food for Peace Office (FFPO) to find out how much commodity would be 

available. However, the amount available was not clear in any case, as USAID kept 

adjusting the levels downward over the next 6 months. 

May 1, 2006, a final set of Guidelines was published, which were similar to the 

February 22 draft, but specifically reference the ‘‘priority country plan’’ for phasing 

out 17 countries and identifying the 15 countries where programs will be allowed. 

May 15, 2006—Proposals are due. [They were originally due on March 15th, but 

this was extended to May 15th.] 

September 11, 2006—120 days after proposal submission and according to the 

law, the deadline for USAID/FFP to send approval or disapproval letters to CSs. 

Disapproval letters must include reasons and what needs to be corrected to be eligible. In the past, the CS and FFP would discuss the outstanding issues in a disapproval letter and after clarification, the proposal was often approved. An approval 

letter does not guarantee a program agreement will be signed. A Transfer Authorization (TA) must be signed before a CS can ‘‘call forward’’ (order) commodities and 

receive funds under the agreement. 

CS Program Planning (typically starts 4 months or more before submission):

1. Decision to write proposal. CS headquarters and country office staff discuss 

whether a Title II program would be appropriate for a particular country. CS 

staff meets with the FFP representative at the USAID Mission in the recipient 

country or regional office to determine the Mission’s views about Title II programs and whether the USAID Mission received notice from USAID/FFP that 

non-emergency (e.g. multi year) food aid will be made available for that country. 

A CS will also confer with other CSs operating in the country.

52

2. Proposal preparatory work. A team is developed to work on the proposal, 

which may in HQ and field staff as well as consultants. The skill sets include: 

(a) Ability to conduct a Bellmon analysis (e.g. to determine which commodities 

can be provided as food aid without having a negative impact on the local market or creating a disincentive to local production and to assure availability of 

adequate storage). Bellmons may be conducted through the USAID mission or 

in conjunction with other CSs working in the recipient country. (b) Technical 

skills in collecting baseline data, assessing nutritional and other information indicative of food security status, and knowledge of program interventions. (c) 

Country-specific knowledge and relationships.

3. Needs assessment. Identify the target population and needs broadly by available nationwide data and more specifically through a variety of techniques such 

as informant interviews, focus groups and weighing children. Collected data are 

combined with information and input from the USAID Mission, national and 

local governments, community-based groups and others to determine (a) which 

areas and populations the project will target and (b) what information to collect 

in the baseline survey (which, if the proposal is approved, is updated at the 

project start-up when the detailed implementation plan is developed.) Baseline 

survey data may include percentage of children under age 5 with stunting or 

underweight (the primarily measures of poor nutrition), adequacy of household 

food supplies, agricultural productivity and sales, and other indicators of food 

security. These indicators are also measured at intervals during the 5 year tenure of the typical program. Comparisons of baseline data to mid-term or final 

data are used to determine whether the program is making the progress intended, whether adjustments are needed in methodologies and to measure impact.

4. Develop the core elements of the proposal. Compile all data collected and begin 

to determine the following:

a. Activities that will address the constraints to food security, e.g. the situations and risks that threaten availability of food (such as the types and 

amounts of food available in local markets during different times of the year), 

access to food (such as household income levels), and utilization of food (such 

as the degree of malnutrition/under-nutrition among children and women of 

reproductive age). As 100% monetization programs are no longer allowed, 

even if these types of programs are considered well suited to the needs, they 

cannot be proposed. Typically, a mix of monetization and commodity distribution activities are selected to achieve identified objectives.

b. Commodity choice and frequency of deliveries is based on the local context 

(what are people eating that is also available from the U.S. or what is needed 

to supplement diets), market analysis (what is appropriate to provide considering local market availability and conditions—reflected by the Bellmon analysis), and what other organizations may be distributing or monetizing. In addition, a nutritional analysis (i.e. number of calories and other nutrients in 

the food basket) is conducted based on the proposed commodities for distribution versus the nutritional value of the current typical food intake of the target population.

c. Coordination of monetization with other CSs. Sometimes CSs conduct monetization jointly and each of their corresponding proposals will have the same 

description of the monetization process. The commodity for monetization is 

determined based on the usual marketing requirements (e.g. patterns of commercial imports of the same or similar commodities) determined by USDA 

and the Bellmon Determination (e.g. identification of commodities that can be 

provided that will not interfere with local production and marketing and for 

which adequate storage is available) conducted by CSs and in some cases the 

USAID Mission.

d. An Initial Environmental Estimate is prepared, which accounts for potential environmental hazards the project may encounter and conforms to 

USAID/FFP Guidelines.

e. The program implementation plan that will be used, including the evaluation and monitoring methodology and impact indicators that will be measured.

5. Prepare a rough draft and present it to the USAID Mission for feedback to 

ensure that the program continues to be in line with the USAID Mission objectives.

6. Finalize proposal. This is often done at HQ and includes:

53

a. Collect letters of support from the USAID Mission, local government, relevant non-governmental organizations and other entities that are counterparts in the project and are important for sustainability or may provide services such as supervision and/or storage for commodities.

b. Prepare the Annual Estimated Requirements (AER), which reflects the commodities and tonnage levels for each activity and schedule of delivery, is the 

basis for ‘‘call forwards’’ (commodity orders) and must be approved by the 

USAID Mission.

c. Complete and submit the proposal in accordance with USAID Guidelines, 

which are available on the USAID/Food for Peace website.

7. Approval and call forwards. The signing of the Transfer Authorization (TA) 

by USAID is the official approval of the program. Then, the CS is permitted to 

send call forwards for commodities based on the approved AER through the 

electronic Commodity Tracking System, which is monitored by FFP and USDA. 

Prior to the 4th of each month, FFP informs a CS whether its call forward is 

accepted or denied. If approved, it will be included in that month’s USDA/KCCO 

commodity purchase. Once the call forward is approved, typically the freight 

forwarder for the CS becomes engaged in monitoring USDA commodity procurement; tendering for shipping; seeking USAID/Transportation approval for the 

freight fixture and whether it is flagged U.S. or foreign (based on lowest landed 

cost of the commodity and freight combined and 75% cargo preference); and 

tracking the loading at U.S. port and the vessel’s progress until the commodities 

are delivered to the destination port. Specific regulations govern the tendering, 

awarding and contracts for ocean freight.

8. The CS’s responsibility for the commodity begins when the commodity crosses 

ship’s tackle as it is being loaded at U.S. port. The CS has a marine survey conducted at the delivery port to assess any losses or damages. The survey must 

be submitted to USDA and used as the basis for any claims against the vessel 

owner. The CS is responsible for receiving and using the commodity according 

to the terms of its agreement with USAID.

9. Monitoring progress against baseline data is required throughout the tenure 

of the program and annual reports are submitted to USAID with information 

about the levels received and used, monetization, progress to date and estimated 

requirements for the upcoming year. In addition, evaluations are conducted midterm and at the end of each program and PVOs are subject to OMB Circular 

A–133 audit requirements for non-governmental organizations.

54

Attachment B 

P.L. 480 Title II: Appropriations Compared to Actual Expenditures in U.S. Dollars and Section 416 Expenditures 

[FY 2001–2008] *

FY01 FY02 FY03 FY04 FY05 FY06 FY07 (est.) FY08 (Admin. Request) 

Title II Appropriations .......................... 835,200,000 945,000,000 a 1,809,575,000 1,185,000,000 a 1,415,000,000 a 1,632,000,000 b 1,675,000,000 1,219,000,000Title II Actual Program Level c ............ 925,900,000 1,039,100,000 1,881,000,000 1,670,100,100 1,668,000,000 1,773,000,000 1,765,000,000 N/A Sec 416(b) d ............................................. 1,103,000,000 773,000,000 213,000,000 173,000,000 147,000,000 20,000,000 0 0

* Updated: May 7, 2007. aFY03 Includes supplemental of $369 million; FY05 includes supplemental of $240 million; FY06 includes supplemental of $350 million. bFY07 Final Continuing Appropriations of $1,215,000,000 and assumes FY07 Supplemental Appropriations of $460,000,000, which was in the bill passed by Congress that was vetoed and is 

now being revised. c Actual levels include appropriations, maritime reimbursement and carry-in funds and represent the amount actually reported as expended by USAID. dSection 416(b) is funded through the Commodity Credit Corporation and is not subject to FY appropriations. It is shown because until FY03, the commodities were often used for emergencies, supplementing Title II funding. 

55

Mr. MCINTYRE. Thank you, ma’am. We have run over a good bit. 

Ms. LEVINSON. I am sorry, sir. 

Mr. MCINTYRE. That is all right. And we are happy for you to 

submit a full statement; plus I am sure there may be some questions. So feel free to supplement what you said in answering questions or in your further statement. 

Ms. Reilly. 

STATEMENT OF ANNEMARIE REILLY, CHIEF OF STAFF, 

CATHOLIC RELIEF SERVICES (CRS), BALTIMORE, MD 

Ms. REILLY. Good afternoon, Chairman McIntyre, Ranking Member Musgrave and Members of the Subcommittee. Thank you for 

calling this hearing and for providing Catholic Relief Services with 

the opportunity to share our recommendations for strengthening 

food security aid in the farm bill. We believe the reforms we propose today will improve our ability to reduce chronic hunger by 

making the current system more efficient and effective. 

My name is Annemarie Reilly. I am Chief of Staff for Catholic 

Relief Services and with your leave I will summarize my written 

statement. 

Operating in 98 countries around the world, CRS is the international development and relief agency of the U.S. Catholic community. For more than half a century we have worked in partnership with Food for Peace, expressing the goodwill of the American 

people through the food aid programs. The American people should 

be proud that the U.S. Government, through Public Law 480 Title 

II resources, is the largest food aid donor in the world. This program assists millions of people living on the edge to meet their 

daily food needs. In addition, the complementary cash support dedicated to strengthening livelihood systems improves their ability to 

feed themselves in the long term. For example, over a 5 year period 

CRS worked with a local partner to reverse severe environmental 

degradation and improve the livelihoods of 570 poor households in 

Legedini, a rural community of eastern Ethiopia. This assistance 

enabled one woman, Nuria Umere, to purchase an ox, seven goats 

and a cow, send one of her three children to school and help her 

husband to meet their household food needs. The success of this 

program is a direct result of the effective combination of food aid 

to meet immediate needs and cash for complementary livelihood 

support. 

Catholic Relief Services and other private voluntary agencies are 

very supportive of the U.S. Government response to emergencies 

but this should not be done at the expense of the chronically hungry. We are offering some proposals to improve response to food 

emergencies while at the same time protecting resources for programs that address chronic hunger and its underlying causes. I 

would like to share with you two recommendations that CRS has 

developed in collaboration with sister PVOs CARE, Mercy Corps 

and Save the Children. 

First, we believe that with some adjustments, the Bill Emerson 

Humanitarian Trust could become an invaluable backup in addressing food emergencies. The current mechanism for realizing the 

benefits of the Emerson Trust is cumbersome. We propose that, 

with Title II emergency resources when they have been exhausted 

56

in a given fiscal year, additional emergency funding would automatically come from the Emerson Trust. Of course, we would need 

to ensure that the Emerson Trust is then replenished in a timely 

fashion. CRS is currently drafting specific proposed fixes for the 

Emerson Trust to make this possible. We also propose that the resources available for emergencies be increased to 50 percent of 

Title II. 

Second, it is our position that if more cash were available 

through Title II, we would have greater efficiency and effectiveness 

in our programs to fight world hunger both chronic and emergency. 

We recommend that Section 202(e) Title II cash resources be increased to 25 percent of the overall Title II budget and that the law 

be amended to allow greater flexibility in its use for food aid program support. 

CRS has three additional recommendations we would like to 

share. First, Title II export shipments are repeatedly bunched together early in the fiscal year with resulting delays and increased 

shipping costs due to demand for vessel space, just as my colleague, 

Ms. Levinson, has talked about. We think that there are ways to 

address this. Under our proposal, the Administrator can rely on the 

availability of Commodity Credit Corporation funds to contract for 

commodities and freight to meet programming needs in the next 

fiscal year prior to the actual enactment of an appropriation. CCC 

would be reimbursed promptly from the Title II appropriation or 

continuing resolution when it comes available. Second, we ask that 

Congress appropriate a realistic annual target of $2 billion for Title 

II per year. Furthermore, we propose that a minimum of $600 million, or 50 percent of total Title II resources, whichever is greater, 

be dedicated exclusively to developmental food aid to address 

chronic hunger. In other words, a safe box. Sufficient funding up 

front with simplified programming in the field eliminates delays 

and extra storage and transportation expenses, and would ensure 

more effective and dependable links with partners. Third, CRS supports the Administration’s request for flexibility in the use of a portion of the Title II budget for local or regional purchase of food. We 

believe local purchase is an option worthy of Congressional support 

in situations where it can bolster local food security or contribute 

to faster and more appropriate response to an emergency. It can be 

more effective and efficient use of American resources in the right 

context. 

In conclusion, I want to once again thank you, Chairman McIntyre, and all the Members of the Subcommittee for holding this 

hearing to respond to the needs of the hungry throughout the 

world. Our proposed changes to U.S. food security programs will 

make a potent program even more powerful in wiping out chronic 

hunger. By adopting these recommendations, you will enable 

Catholic Relief Services and other organizations that implement 

U.S. international food assistance programs to improve food security programs, alleviate hunger and save lives. Thank you. 

[The prepared statement of Ms. Reilly follows:]

57

PREPARED STATEMENT OF ANNEMARIE REILLY, CHIEF OF STAFF, CATHOLIC RELIEF

SERVICES (CRS), BALTIMORE, MD 

Good afternoon Chairman McIntyre, Ranking Member Musgrave, and Members of 

the Subcommittee. Thank you for calling this hearing and for providing Catholic Relief Services the opportunity to share our insights based on our long experience of 

delivering and programming food aid for long-term development and emergencies. 

My name is Annemarie Reilly, Chief of Staff for Catholic Relief Services (CRS). 

Operating in 98 countries around the world, CRS is the international development 

and relief agency of the U.S. Catholic Conference of Bishops. We represent the 65 

million members of the U.S. Catholic community in a partnership with Food For 

Peace that has expressed the goodwill and compassion of the American people for 

more than half a century. The reforms we propose will improve our ability to reduce 

chronic hunger, unlocking the power of food security aid. 

According to the World Food Program, more than 850 million people on our planet 

are suffering from chronic hunger. The American people should be proud that the 

U.S. Government, through P.L. 480 Title II resources, is the largest food aid donor 

in the world. These programs assist millions of people living on the edge to meet 

their daily food needs while also strengthening their livelihood systems to help them 

to help themselves over time. 

For example, with 5 years investment of Title II food and funds, CRS worked 

through a local partner to reverse severe environmental degradation and improve 

the livelihoods of 570 poor households in Legedini, a rural community in eastern 

Ethiopia. Through support provided by USAID and CRS, this community has been 

able to use small-scale irrigation to grow marketable vegetables. They have also 

used this investment to develop small livestock herds and increase sales of milk, improve water and sanitation management, increase the engagement of women in 

microenterprise, and improve the nutritional content of family meals. Participants 

in a women’s group have begun to save and to invest their savings in business activities that diversify their assets. One woman, Nuria Umere, has been able to purchase an ox, a cow and seven goats, and she is able to send one of her three children 

to school and help her husband meet their household food needs. The success of this 

program is a direct result of the effective combination of food aid to meet immediate 

needs and cash to support complementary livelihood support activities. 

Title II resources are used to set up feeding programs in desperately poor communities around the world and are often coupled with agriculture projects, village 

banking schemes or other livelihoods enhancement efforts. Social safety net programs feed orphan-headed households and people who are too old or too sick to function in the local economy. Title II also provides food for maternal/child programs 

that combine food aid with prenatal and postnatal education and support. This is 

only a small sample of the variety of programs Title II supports to fight chronic 

hunger. Title II programs are extremely important to the families, communities and 

even nations that they serve. 

Although these are significant efforts, there remains a huge unmet need. According to Food For Peace, the U.S. Government feeds only about 50 to 70 million of 

those 850 million chronically hungry people. We don’t expect the U.S. Government 

to feed all of the world’s hungry. CRS is working on recommendations for improvements to the Food Aid Convention, due to be renegotiated, which could ensure that 

more resources will be made available worldwide to fight hunger. We also invest significant private resources and funding from other donors to support livelihood systems that address chronic food needs. But given the enormity of the hunger program, more must be done. Yet, more and more of our Title II resources are being 

diverted away from programs that address chronic hunger in order to fund an increasing number of emergencies around the world. 

Catholic Relief Services and other private voluntary agencies are very supportive 

of the U.S. Government stepping up to the plate to address emergencies, but not 

at the expense of the chronically hungry. We are offering some proposals to continue 

this vital work in responding to food emergencies, while at the same time protecting 

resources for programs that address chronic hunger and the underlying causes of 

that hunger. 

As you are well aware, current law requires that 75% of Title II food aid resources 

be devoted to development (non-emergency) programs. Over the past several years, 

however, the Administration has consistently used the emergency provision to waive 

the 75% rule. The program percentages have now been reversed as developmental 

food aid programs are diminished or eliminated in many countries so that about 

75% of commodities are used for emergencies year to year, while only about 25% 

remain for development. 

58

I. Recommendations From CRS, CARE, Save the Children, Mercy Corps 

We believe that the Bill Emerson Humanitarian Trust (BEHT) has played an important role in responding to acute hunger. Our first recommendation is that with 

some adjustments the Emerson Trust could become an invaluable tool in addressing 

food emergencies. Catholic Relief Services, along with our PVO colleagues CARE, 

Mercy Corps and Save the Children, propose that Congress change both the way 

the Bill Emerson Humanitarian Trust is used and the way it operates. When Title 

II emergency resources have been exhausted in a given fiscal year, additional emergency funding would automatically come from the Emerson Trust. We also propose 

that the resources available for emergencies be increased to 50% of Title II. Using 

the Emerson Trust first as an emergency back-up will also protect non-emergency 

developmental programs. 

Of course, to make this system work, we need to ensure that the Emerson Trust 

is replenished in a timely fashion. Catholic Relief Services is currently drafting specific proposed fixes for the Emerson Trust that would make it a more effective component in the food aid arsenal in our fight against global hunger. The current mechanism for realizing the benefits of the Emerson Trust is cumbersome, the underlying 

authority is vague, long-term availability is uncertain, and the legal and policy constraints on accessing the Trust may conflict with long-term economic development 

goals. The Emerson Trust is in need of reform and the overall goal of such reform 

should be to make it a reliable source of food resources in emergency situations and 

one that may be accessed easily to mitigate the detriment to planned non-emergency 

development funding under Title II. 

CRS is working with others to design three significant changes to the Bill Emerson Humanitarian Trust: (1) the orderly liquidation of current stocks in the Emerson Trust, so that it will hold only cash to acquire commodities as needed; (2) establishing a true Trust by allowing the cash to be invested in conservative short-term 

instruments; and (3) providing limited authority to Commodity Credit Corporation 

to replenish the Emerson Trust in a fiscal year. 

Second, it is our position that if more cash were available through Title II, we 

would have greater flexibility in carrying out our programs to fight world hunger, 

both chronic and in emergency settings. The real causes of global food insecurity 

and hunger are complex and cannot be solved over the long term by the provision 

of food assistance alone. Responding more appropriately means that additional resources in the form of cash, both within and outside of Title II, are essential to support a variety of targeted activities that can more effectively address the root causes 

of vulnerabilities and risks that afflict hungry and food insecure populations. Current Section 202(e) law permits a small percentage of Title II to be used for program 

logistics, management and related costs. However, these allowable uses do not go 

far enough to serve as an effective critical cash support mechanism. Section 202(e) 

needs to be amended to allow greater flexibility in the use of the funds to include 

administrative, management, technical and program related costs to enhance the effectiveness of Title II commodities. The percentage of funding in an expanded Section 202(e) also needs to be increased to no less than 25% of the Title II program 

levels. 

We could more flexibly use commodities and/or cash in Title II by using language 

patterned after the McGovern-Dole Food for Education and Child Nutrition Program. The McGovern-Dole Food for Education and Child Nutrition Program addresses the issue of cash resources with simple language that allows for a mix of 

commodities and cash for implementers to use to carry out the program. This has 

worked well as implementers are discouraged from monetizing commodities because 

it is much easier and more cost effective to use cash. 

II. Additional Recommendations From CRS 

The third recommendation for fighting chronic hunger is that the Congress must 

appropriate adequate funds for Title II. The consistent under-funding of Title II has 

required the annual passage of supplemental appropriations bills to cover some of 

the shortfall. These kinds of piecemeal appropriations for food through supplemental 

appropriations are disruptive to well-planned developmental programs and hamper 

emergency response. 

Repeatedly, Title II export shipments are bunched together early in a fiscal year 

with the result that delays occur and shipping costs increase due to the increased 

demand for vessel space. One of the reasons for this ‘‘bunching’’ of shipments is that 

availability of funds for a fiscal year is not often known early enough to allow for 

efficient programming commitments and planning of purchases. Under our proposal, 

the Administrator can rely on the availability of CCC funds to contract for commodities and freight to meet programming needs in the next fiscal year prior to the acVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00062 Fmt 6633 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
59

tual enactment of an appropriation. Of course, CCC would be reimbursed promptly 

from the Title II appropriation or continuing resolution when it becomes available. Fourth, we ask that Congress appropriate a realistic annual target of $2 billion per year for Title II. Furthermore, we propose that a minimum of $600 million or 

50% of total Title II resources, whichever is greater, be dedicated exclusively to developmental food aid to address chronic hunger—in a word, to put this money for 

developmental food aid in a ‘‘safe box.’’ The $2 billion figure is consistent with the 

U.S. share of annual needs for the last several years. Sufficient funding up front 

would simplify programming in the field, eliminate delays and extra storage and 

transportation expenses, and ensure more effective and dependable links with partners who look to the U.S., above all others, for life-saving aid. Designated funding 

would guarantee that we don’t lose the fight against chronic hunger by diverting 

almost all food aid to emergency uses. 

Fifth, CRS supports the Administration’s request for flexibility in the use of a portion of the Title II budget for local or regional purchase of food. CRS endorses and 

undertakes the local purchase of commodities as a cost-effective tool for some emergency and non-emergency programs, when analysis of markets indicates it is feasible. CRS also engages in the use of vouchers to promote beneficiary acquisition 

of local food. CRS believes local purchase is an option worthy of Congressional support in situations where it can bolster local food security and/or contribute to faster 

and more appropriate response to an emergency. It can be a more effective and efficient use of American resources. 

In conclusion, I want to once again thank you Chairman McIntyre and all Members of the Subcommittee for holding this hearing to respond to the needs of the 

hungry throughout the world. Our proposed changes to U.S. food aid programs are 

a sincere effort to help make a great program even greater. By adopting these recommendations CRS, and other organizations that implement U.S. international food 

assistance programs, can better promote food security, alleviate hunger, and save 

lives. 

Thank you, Mr. Chairman. I would be pleased to respond to any questions that 

the Committee may have.

Mr. MCINTYRE. Thank you very much, and thank you for your eloquent words in the time prescribed. That worked out well. 

Mr. Gillcrist. 

STATEMENT OF JOHN GILLCRIST, CHAIRMAN, BARTLETT 

MILLING COMPANY; DIRECTOR, NORTH AMERICAN

MILLERS’ ASSOCIATION; ON BEHALF OF AGRICULTURAL 

FOOD AID COALITION, KANSAS CITY, MO 

Mr. GILLCRIST. Mr. Chairman and Members of the Subcommittee, I am here today on behalf of the North American Millers’ Association and a broad coalition of groups representing American farmers and food processors called the Agricultural Food Aid 

Coalition. I am here to express my strong support for the continuation of our time-tested and effective U.S.-produced food commodity 

donation programs. We are reaching 50 to 100 million malnourished people all over the globe every year. 

I have seen these programs in action and they are remarkable. 

Our food aid clearly labeled ‘‘gift of the people of the United States’’ 

is a source of pride for Americans and is the most visible manifestation of the goodwill of the United States in the developing 

world. We also need to recognize that these programs are an essential part of our national security structure. The Agricultural Food 

Aid Coalition has drafted principles on food aid for Congress to consider when writing the farm bill. I would like to submit those for 

the record. In short, we strongly support the current structures of 

U.S. food aid programs. However, we recognize the need to constantly improve the efficiency and effectiveness of these programs 

such as pre-positioning food aid closer to recipient countries. But 

we do oppose the Administration’s proposal to authorize the use of 

60

cash for regional and local purchases of food aid commodities. The 

United States currently provides over 50 percent of the world’s food 

aid, yet there is still a huge shortfall of aid for the 850 million 

chronically malnourished people in the world. Our in-kind donation 

system is working. Humanitarian donations of U.S.-grown, processed, fortified and inspected agricultural products have ensured 

that safe and nutrient-rich foodstuffs reach a broad array of people 

in need. In fact, in 2007, the Ethiopian Government actually prohibited the local purchases of cereal grains for humanitarian programs due to the price instability those purchases created. We 

must be certain that the large purchases of scarce food supplies 

don’t actually harm the people we intend to help. We believe that 

in-kind food aid is the most dependable form of food aid, and the 

least susceptible to fraud and misuse. 

Yes, American farmers, food processors and transportation companies benefit from current programs. One billion dollars of processed Title II U.S. food generates $2.7 billion in U.S. economic activity. If that same $1 billion was donated in cash, the U.S. would 

lose $2.7 billion in economic activity, and all the benefits accrued 

to that including jobs and the tax revenues it would generate. 

I traveled to Ethiopia and saw how the food produced in American mills was making a difference in people’s lives. We visited 

land reclamation projects that are successful in stemming erosion—

growing trees and grass essential to building their homes and feeding their cattle. We also witnessed water basins villagers had hand 

dug to capture water during the rainy season to be used throughout the year. These catchments provided clean water for the village, and reduced the time and energy women and children spent 

carrying water—in some cases as much as 12 miles per day. The 

United States provided food which enabled the completion of these 

self-sustaining projects. Developmental projects like these are critical to addressing the underlying causes of poverty and chronic 

hunger which is the intended focus of Public Law 480 Title II. In 

fact, Congress requires that 75 percent of commodities procured for 

food aid must be committed to developmental programs. However, 

the Administration has waived this Congressional mandate routinely. We suggest that the Administration only be permitted to 

waive a maximum of 675,000 tons annually. 

Developmental dollars are being redirected to fund an ever-increasing number of emergencies. We know emergencies will occur. 

The Bill Emerson Humanitarian Trust, now serving as a last resort, should be used as a more predictable and viable response for 

emergencies. 

The McGovern-Dole Program fights hunger and promotes education. A school meal is often the only one these children get, and 

is the primary reason that parents send their children to these 

schools to begin with. We support full funding of this program. 

Public Law 480 Title I has operated very successfully for more than 

50 years and we support its reauthorization. 

In closing, rising world hunger and the resulting turmoil created 

begs for an expansion of U.S. food aid programs. U.S. food aid is 

the best weapon we have in our arsenal to demonstrate our true 

intentions, disarm our adversaries and establish America as the 

61

world’s undisputed superpower in the delivery of humanitarian assistance. 

Thank you for letting me speak today. 

[The prepared statement of Mr. Gillcrist follows:]

PREPARED STATEMENT OF JOHN GILLCRIST, CHAIRMAN, BARTLETT MILLING COMPANY; 

DIRECTOR, NORTH AMERICAN MILLERS’ ASSOCIATION; ON BEHALF OF

AGRICULTURAL FOOD AID COALITION, KANSAS CITY, MO 

Mr. Chairman and Members of the Subcommittee, my name is John Gillcrist. I 

am the Chairman of Bartlett Milling Company, former Chairman and a current Director of the North American Millers’ Association. Thank you for holding this hearing today on food aid and trade, two important elements of the 2007 Farm Bill. 

I am here today on behalf of both NAMA and a broad coalition of groups representing American farmers, food processors, and agribusiness called the Agricultural Food Aid Coalition. NAMA is comprised of 48 wheat, corn and oat milling companies several of whom have been involved in P.L. 480 since its inception over 50 

years ago. 

I’m here to express my strong support for the continuation of our time-tested and 

effective U.S. produced food commodity donation programs. They are reaching millions of malnourished people all over the globe every year. Our great agricultural 

bounty should continue to be used as a powerful force for the good of food insecure 

people worldwide. 

I have seen these programs in action and they are remarkable. In-kind food donations are a source of pride for American taxpayers, farmers, food processors and 

agri-businesses and express our sincere and long-term commitment to humanitarian 

assistance. Our food, clearly labeled ‘‘Gift of the People of the United States,’’ is the 

most visible manifestation of the good will of the United States in the developing 

world. We also need to recognize that these programs are an essential part of our 

national security structure. 

The Agricultural Food Aid Coalition has drafted principles on food aid for Congress to consider when writing the farm bill. I would like to submit those for the 

record, including the names of the organizations that support these principles. In 

short, we strongly support the current structures of U.S. food aid programs. 

However, the members of the Agricultural Food Aid Coalition oppose the Administration’s proposal to authorize the use of up to 25% of P.L. 480 Title II resources 

for regional and local purchases of food aid commodities. We believe that diverting 

such a significant amount of limited Title II resources for these purposes would be 

counterproductive. We must defend our in-kind donations because if the U.S. does 

not supply the food, who will? The U.S. currently provides over 50% of the world’s 

food aid, yet there is still a global shortfall of food aid for the 850 million people 

who do not have enough food to lead healthy, productive lives. EU food donations 

have dropped significantly since they converted their food donations to cash. The 

World Food Program already purchases significant quantities of local and regionally 

produced food in emergencies. We must be certain that such large purchases of 

scarce foods don’t actually harm the people we are intending to help. The law of 

unintended consequences can produce disastrous results in these largely 

unmonitored situations. 

Our in-kind donation system is working. Currently, humanitarian donations of 

U.S. grown, processed, and inspected agricultural products have insured that safe 

and uniform foodstuffs reach disaster victims, refugees, people living with HIV and 

AIDS, mothers, children and communities in need. Furthermore, the U.S. Government, private voluntary organizations and the World Food Program take great care 

when they distribute or monetize our food to avoid commercial disruptions. Purchasing food locally and regionally has the potential to be both more market distorting and less rigorously regulated than food shipped from the U.S. 

We believe that in-kind food aid is the most dependable form of food aid and the 

least susceptible to fraud or misuse. Programs such as pre-positioning of food commodities and processed products closer to recipient countries and expedited procurement and shipping procedures can increase the efficiency of in-kind food aid and cut 

down on the time and costs of responding to emergencies. 

Yes, American farmers, food processors and transportation companies benefit from 

the current programs. Indeed, the farm bill is intended to strengthen the U.S. farm 

economy; scarce agricultural budget resources should benefit U.S. farmers and secure U.S. jobs. One billion dollars of processed Title II commodities donated generates $2.7 billion in U.S. economic activity. If that same $1 billion were donated 

62

in cash, the U.S. would lose $2.7 billion in economic activity and all of the benefits 

accrued to that, including the tax revenues it would generate. 

I traveled to Ethiopia and saw with my own eyes how the food produced in American mills was making a difference in people’s lives. We visited a WFP land reclamation project near Nazeret. A group of Ethiopian villagers proudly described their 

project which consisted of terracing and planting the hills around their village in 

a successful effort to stem erosion, retain top soil, grow trees, attract wild life, and 

grow grass essential to building their roofs and feeding their cattle. 

U.S. food aid was key in providing the sustenance that allowed them to complete 

this physically challenging project over 3 years. They thanked us repeatedly for the 

food we provided. They were immensely proud of the fact that they no longer relied 

on or received food aid due to the success and sustainability of their conservation 

project. 

We also visited a water catchment project south of Addis Ababa. Villagers had 

hand dug a large water retention basin to capture water during the rainy season 

and to hold it throughout the year. This development project provided clean water 

for the village and reduced the time and energy women and children spent carrying 

water every day when they no longer needed to walk 12 miles. U.S. aid provided 

food during the construction of this catchment. 

Development programs like these are critical to the goal of reducing chronic hunger and addressing the underlying causes of hunger and poverty, which is the intended focus of P.L. 480 Title II. In fact, Congress requires that of the 2.5 million 

metric tons of commodities that must be procured for food aid, 75% or 1.875 million 

metric tons must be committed to development programs in areas such as child nutrition, agricultural development, HIV/AIDS and micro-enterprise. In recent years, 

however, the P.L. 480 Title II development programs have not had a stable and secure funding stream because the Administration is waiving this Congressional mandate routinely instead of using their waiver authority, as it was intended, on rare 

occasions. We suggest that the Administration only be permitted to waive up to 

675,000 metric tons of their development-tonnage requirements so that it can be assured that 1.2 million metric tons will be used for these critical programs. The crippling impact of HIV and AIDS in African communities makes the need for stable 

sources of funding for multi year programs that much more imperative. 

Development dollars are being redirected to fund an ever-increasing number of 

emergencies. Although we cannot predict where these natural and man-made emergencies will occur, we know that they will occur. The Bill Emerson Humanitarian 

Trust, now serving as a last-resort, should be used as a more predictable and viable 

response mechanism for emergencies. To do that a robust mechanism to replenish 

the Trust must be in place. 

In addition to P.L. 480 Title II and the Bill Emerson Humanitarian Trust, other 

U.S. food aid programs play an important role. The McGovern-Dole International 

Food for Education and Child Nutrition Program provides food to school children in 

the world’s poorest countries and has established a proven track record of fighting 

hunger and promoting education. In countries where school feeding programs are 

offered, enrollment and attendance rates increase significantly, especially for girls. 

It is widely known that school attendance by girls has long-term benefits for them, 

their future children and their communities. A school meal is often the only one 

these children get, and the primary reason that parents send their children to 

school. We applaud Congress for funding this program and hope full funding will 

be available in the future. 

P.L. 480 Title I has operated very successfully for more than 50 years. We support 

reauthorizing Title I, both in its original concessional sales role and as an additional 

funding tool for Food for Progress. Title I’s concessional sales assist eligible governments’ hungry and malnourished with humanitarian food aid resources and its Food 

for Progress program supports economic and agricultural development. Demand for 

Title I concessional sales and Food for Progress assistance continues through annual 

requests from eligible foreign countries and other applicants. Title I concessional 

sales should be reauthorized and offered to countries that can afford its terms. 

The Food for Progress program operates under a number of constraints which 

Congress could address if funding were available. Perhaps the greatest funding constraint on Food for Progress currently is the lack of funds appropriated for the Title 

I portion of P.L. 480. We urge Congress to maintain authorization for Title I so that 

it continues to be an available food aid resource in the future for governments who 

are seeking U.S. food aid commodities and so the Food for Progress program can 

be maintained as a viable funding source for organizations seeking to promote private enterprise in emerging democracies. 

The agriculture community has been and remains committed to working with the 

government to actively address issues to increase the efficiency and effectiveness of 

63

U.S. in-kind food aid. One way to achieve this goal is to improve the current systems that the U.S. Government uses to procure and transport food aid commodities 

overseas as pointed out in the Government Accountability Office’s recent report. 

It is clear to me that the United States needs to expand foreign food aid programs 

to best demonstrate our true intentions and deeply held humanitarian beliefs to the 

rest of the world. Thank you for inviting me to participate in this hearing. 

AGRICULTUE FOOD AID COALITION

FOOD AID PRINCIPLES FOR THE 2007 FARM BILL

Submitted May 10, 2007

1. Support Current Programs/Structure 

We support current structures of U.S. food aid allowing the bounty of U.S. Agriculture to be the fundamental resource for food security, development and humanitarian relief in developing countries. On that basis, we support the reauthorization 

of Public Law 480 Titles I and II, the McGovern-Dole International Food for Education and Child Nutrition Program, and Food For Progress. 

2. Continue In-Kind Food Aid & Oppose LRP (Local/Regional Purchase) 

U.S. Food Aid programs are a source of pride to American taxpayers, farmers, 

food processors and agri-businesses. We support continuation of U.S. in-kind food 

aid and oppose the diversion of funds from U.S. food aid program(s) for the purchase 

of products from other countries. Without the win-win nature of using U.S. food 

products as the base for the programs, the constituency will be lost and both appropriations in the U.S. agriculture budget and authorizations will be jeopardized.

• World Food Program (WFP) already uses significant amounts of LRP when they 

consider it justified and (based on their analysis) would not cause price inflation 

in local economies. Cash contributions from countries less able to share their 

in-kind bounty should be and are, used in emergencies or development situations when delays in arrival of in-kind food would result in humanitarian crises.

• The European Union, during their Common Agricultural Policy reform process 

converted their ‘in-kind’ food aid to cash contributions with two distinctly negative consequences. Their overall contributions to food aid went down (lack of 

constituency) and the timeliness of their cash contributions suffered. One WFP 

source was quoted as saying ‘‘it takes longer to get cash from some of the donors 

than it takes to get in-kind products in place.’’

• U.S. food products, identified as ‘‘Gift of the People of the United States’’ are one 

of the most visible manifestations of the good will of the U.S. to developing 

countries. It is not possible for such an identification to be made with hurriedly 

purchased local food.

• The procurement process for LRP, including insufficient methods to assure food 

quality and safety, will potentially give local and regional producers an opportunity to supply products under less rigorous standards than currently required 

by U.S. suppliers to food aid programs.

• We support increased efficiencies to cut down on time and costs of responding 

to emergencies, including the pre-positioning or advance purchase of U.S. commodities and processed products. 

3. Reauthorize Title I 

We support reauthorizing Title I of P.L. 480 both in its original concessional sales 

role and as an additional funding tool for Food For Progress (FFP). Demand for 

Title I concessional sales and FFP assistance continues through annual requests 

from eligible foreign countries and other applicants. Title I concessional sales should 

be reauthorized and offered to countries that can afford its terms. Without reauthorization, annual proposals from participating and interested countries could not be 

submitted, considered, or funded under Title I’s concessional sales or its FFP authority, as they are allowed to do under current law. In addition, without Title I, 

the total amount of funding available for FFP would be diminished, leaving the 

Commodity Credit Corporation (CCC) as the program’s only funding source. More 

details about Food for Progress are discussed below. 

4. Development Programs in Title II 

We support a prioritization for multi year development programs that contribute 

to long-term food security in developing countries and protection against disruptions 

of those programs due to diversion of development funds to emergencies.

64

• The original Congressional intent was that Title II be primarily used for efforts 

to combat chronic hunger and its effects. This was indicated in the requirement 

that 75% of the budget be used for such purposes denominated in minimum tonnages. This requirement is now ‘‘waived’’ annually, as 75% of the budget is now 

used for emergencies. We suggest that language be added so that USAID’s authority to waive the statutory mandate be limited to no more than 675,000 MT 

of the non-emergency minimum tonnage yearly.

• Using development program funds as the ‘first resort’ for response to emergencies causes disruptions to planned or existing projects that have already 

been approved and deemed necessary to combat chronic needs in priority countries.

• Many of the criticisms of in-kind food aid: arrival timing, market disruptions, 

inefficiencies, and product bunching can be traced to the effects of diverting 

funds from development to emergency and/or the delay in decision-making on 

funding for development programs in anticipation of possible emergency needs. 

5. McGovern-Dole International Food for Education and Child Nutrition 

Program 

We support universal school lunch and child nutrition as a fundamental goal. We 

support the expansion of the successful McGovern-Dole Program based on the very 

beneficial impact it has had and can continue to have on school attendance, competition with schools that oppose U.S. interests and the positive impacts on learning 

when children are provided adequate food and nutrition. The program was able to 

fund just 11 out of 90 proposals that were received. This program enjoys widespread 

and deep congressional support and with U.S. leadership, it can be expanded dramatically.

• USDA has demonstrated an ability to administer this program admirably and 

its authority should be made permanent.

• We support full funding for the McGovern-Dole Program. 

6. Food For Progress 

If funding were available, we would support an increase in the minimum level of 

FFP to 500,000 metric tons (up from the current 400,000) and a freight expense cap 

(currently $40 million) that is high enough to allow the minimum to be met. The 

demand for programs to support economic and agriculture reform far exceeds our 

current capacity to fund good projects; 114 proposals for FFP were submitted for FY 

2007, but only 12 were approved. The freight cap should not arbitrarily prevent approval of projects that can have dramatic positive impact. 

7. Bill Emerson Humanitarian Trust 

We support the more predictable use and full replenishment of the BEHT to make 

its use a timely, viable response to emergencies. Because the small amount of partial replenishment that is currently allowed comes from the succeeding year’s budget, the Administration is reluctant to use this tool as a first response to emergencies.

• An automatic reimbursement/replenishment up to the amount used in emergency situations should be in place, without diminishing subsequent year’s 

budgets for other needed food aid programming. 

8. Monetization 

We recognize the need for cooperating sponsors who administer and distribute 

food aid programs to have both food and cash to implement their programs. We support appropriate monetization where it is shown to not cause disruption to local and 

international markets. 

9. Reauthorize the Food Aid Consultative Group (FACG) 

We support continuing the FACG. We are concerned, however, that the FACG 

today serves more as a resource for reporting food aid information than for providing interactive input between food aid system stakeholders and the implementing 

agencies of the U.S. Government. We support clarifying language to restore and 

strengthen its role in providing interactive input among stakeholders and to clarify 

its membership to include all food aid system stakeholders. 

10. HIV/AIDS and Nutrition 

We encourage the appropriate integration of U.S. food aid programs with PEPFAR 

initiatives. 

65

11. Increased Efficiency and Effectiveness in Food Aid Programs 

As noted in the recent Government Accountability Office report on food aid, we 

encourage initiatives to reduce the lag time between needs assessments and product 

delivery in U.S. food aid emergency procurements. We also recommend the lifting 

of arbitrary limits on storage expenses for the pre-positioning of products for emergency response. The agriculture community has been and remains committed to actively addressing issues to increase U.S. food aid effectiveness.

American Soybean 

Association; 

Global Food and 

Nutrition, Inc.; 

International Food 

Additives Council; 

National Association of 

Wheat Growers; 

National Barley Growers 

Association; 

National Corn Growers 

Association; 

National Farmers Union; 

National Oilseed 

Processors Association; 

National Potato Council; 

North American Millers’ 

Association; 

USA Dry Pea and Lentil 

Council; 

USA Rice Federation; 

US Dry Bean Council; and 

US Wheat Associates. 

Mr. SALAZAR [presiding]. Thank you, Mr. Gillcrist. I also would 

like to take the opportunity to welcome Mr. Wickstrom. As many 

of you know, he was my classmate when I was in the Colorado Ag 

leadership program and we spent several weeks here in Washington. 

Mr. Wickstrom. 

STATEMENT OF CARY L. WICKSTROM, WHEAT FARMER;

MEMBER, BOARD OF DIRECTORS, U.S. WHEAT ASSOCIATES 

(USW); IMMEDIATE PAST PRESIDENT, COLORADO WHEAT

ADMINISTRATIVE COMMITTEE; ON BEHALF OF U.S. WHEAT

ASSOCIATES’ FOOD AID WORKING GROUP, ORCHARD, CO 

Mr. WICKSTROM. Thank you, Congressman Salazar, and Ranking 

Minority Member Musgrave and Members of the Committee. My 

name is Cary Wickstrom. I am a 4th-generation wheat farmer from 

northeastern Colorado. I am currently immediate past President of 

the Colorado Wheat Administrative Committee. I serve on the U.S. 

Wheat Associates’ Board of Directors. During this time I have been 

a Member of the U.S. Wheat Food Aid Working Group. That group 

includes representatives from U.S. Wheat as well as the National 

Association of Wheat Growers. 

The philosophy of the U.S. Wheat Food Aid Working Group is 

very simple: keep the food in food aid. The Food Aid Working 

Group and the foreign offices of U.S. Wheat work closely with private volunteer organizations both in the United States and around 

the world to ensure that wheat is used appropriately and efficiently. Through education, training and technical assistance, we 

try to ensure that the wheat that leaves the borders of our nation 

will be accepted by local millers and the indigenous populations of 

the countries in need. 

The United States is the most generous nation in the world when 

it comes to food aid. As noted by Agriculture Secretary Mike 

Johanns’ speech at the International Food Aid Conference in April, 

he said we give half of the world’s food aid followed by a distant 

10 percent given by the European Union, the second largest contributor. Of the food aid that the United States provides, wheat is 

by far the largest commodity supplied. It makes up to 40 to 50 percent on average of all food aid tonnage and it went to 30 countries 

last year. Sixty-two percent of the wheat in that 2005–2006 marketing year is hard red winter and hard white winter classes. 

These are the two classes of wheat that I grow on my farm. 

66

Funding: The wheat industry encourages reauthorization of Title 

I of Public Law 480 funding as an additional tool to fund Food for 

Progress. We recommend no less than 1.2 metric tons under Title 

II programs which would require roughly $600 million to provide 

commodities and support funds. Specifically for Food for Progress 

programs, the wheat industry supports a minimum level of 500,000 

metric tons and a freight expense cap, currently at $4 million, that 

would be high enough to allow this. The freight cap should not 

limit approval of Food for Progress projects. We also support the 

expansion of McGovern-Dole and full replenishment of the Bill 

Emerson Humanitarian Trust. 

Wheat donations save and improve lives. With a global presence, 

the U.S. wheat industry is intimately familiar with the impact the 

agriculture community has on improving the quality of life for so 

many people in difficult conditions worldwide. The wheat industry 

has a strong commitment to food aid and humanitarian assistance. 

In Ghana, for example, wheat donations provided funding for local 

NGOs to reduce food and livelihood insecurity in 10 vulnerable 

farm districts in Ghana with the goal of reaching some 130,000 

households in 250 farmer communities in the next 2 years. Involvement by the U.S. wheat industry through the USDA food aid programs contributed to improving the quality of life in rural communities including construction of schools and daycare centers, onsite 

school feeding for over 40,000 undernourished children and over 

60,000 girls enrolled in primary schools. Studies indicate a direct 

link between alleviation of poverty and food insecurity through formal and informal education of girls and women. Developmental 

programs like these are critical to the goal of reducing chronic hunger and addressing the underlying cause of hunger and poverty—

the focus of Public Law 480 Title II programs. 

Efficiency and logistics: The efficiency and logistical problems of 

providing food aid have recently come under fire. It is important 

to point out in this discussion that bulk grain logistics and handling are simply quite different from bagged and processed products. The U.S. system for storing and handling bulk grain is exceptionally efficient. It is not uncommon to tender for, and deliver to, 

the end destination within 45 days. This system allows the buyer 

to take advantage of current world prices, not incur storage costs 

in another country, and ensure they receive the appropriate wheat 

for the end-use need. 

Cargo preference: The Food Aid Working Group suggests it is 

time to revisit cargo preference laws. At a time when resources are 

strained, transportation costs should not exceed food costs. We understand the sensitivity of this issue, but feel it is time to evaluate 

international competition for freight and seek the opportunity to 

use as much of our U.S. dollars to feed the more than 850 million 

individuals in need of food as we can. 

Attached to my written testimony is the Food Aid Principles for 

the 2007 Farm Bill, and that is supported by the Agricultural Food 

Aid Coalition. Also attached is the Food Aid Policy Statement that 

is approved by U.S. Wheat and the National Association of Wheat 

Growers. 

Mr. Chairman, we know that U.S. growers produce the safest 

food in the world, and believe the bounty of U.S. agriculture should 

67

continue to be a fundamental resource for food security, development and humanitarian relief in developing countries. We look forward to working with you again on this important issue as you 

begin to write the 2007 Farm Bill. 

Once again, I would like to thank you for the opportunity to be 

here, and I would like to send my special thanks to Congresswoman Musgrave from Colorado. She represents 95 percent of the 

wheat production in Colorado. Colorado is fortunate to have such 

good leadership. We are well represented here today, obviously. 

Thank you. 

[The prepared statement of Mr. Wickstrom follows:]

PREPARED STATEMENT OF CARY L. WICKSTROM, WHEAT FARMER; MEMBER, BOARD OF

DIRECTORS, U.S. WHEAT ASSOCIATES (USW); IMMEDIATE PAST PRESIDENT,

COLORADO WHEAT ADMINISTRATIVE COMMITTEE; ON BEHALF OF U.S. WHEAT

ASSOCIATES’ FOOD AID WORKING GROUP, ORCHARD, CO 

Mr. Chairman and Members of the Committee, my name is Cary Wickstrom. I 

am a fourth generation wheat farmer from northeastern Colorado. I am currently 

immediate past President of the Colorado Wheat Administrative Committee and 

serve on the U.S. Wheat Associates (USW) Board of Directors. During this time I 

have been a Member of the USW Food Aid Working Group which includes representatives from USW and the National Association of Wheat Growers (NAWG). 

The philosophy of the USW Food Aid Working Group is simple: Keep the Food 

in Food Aid. The Food Aid Working Group and the foreign offices of USW work 

closely with the Private Voluntary Organizations both in the United States and 

around the world to insure that wheat is used appropriately and efficiently. 

Through education, training and technical assistance we try to insure that the 

wheat that leaves the borders of our nation will be accepted by the local millers and 

the indigenous populations of the countries in need. 

The United States is the most generous nation in the world when it comes to food 

aid. As noted by Agriculture Secretary Mike Johanns during his speech at the International Food Aid Conference in April, we give half of the world’s food aid, followed 

by ten percent given by the European Union, the second largest contributor. Of the 

food aid that the United States provides, wheat is by far the largest commodity supplied. It makes up from 40–50 percent on average of all food aid tonnage and went 

to 30 different countries last year. Sixty-two percent of that wheat in the 2005/06 

marketing year is of the hard red winter and hard white winter classes. These are 

the two classes of wheat that I produce. 

Funding 

The wheat industry encourages reauthorization of Title I of P.L. 480 funding as 

an additional tool to fund Food for Progress (FFP). We recommend no less than 

1,200,000 metric tons (MT) under Title II programs, which would require roughly 

$600 million to provide commodities and support funds. Specifically for FFP programs the wheat industry supports a minimum level of 500,000 MT and a freight 

expense cap (currently $40 million) high enough to allow this. The freight cap 

should not limit approval of FFP projects. We also support the expansion of McGovern-Dole and the full replenishment of the Bill Emerson Humanitarian Trust (emergency food aid). 

Wheat Donations Save and Improve Lives 

With a global presence, the U.S. wheat industry is intimately familiar with the 

impact that the agricultural community has on improving the quality of life for so 

many people in difficult conditions worldwide. The wheat industry has a strong commitment to food aid and humanitarian assistance. In Ghana for example, wheat donations provided funding for local NGOs to reduce food and livelihood insecurity in 

10 vulnerable farm districts in Ghana with a goal of reaching some 130,000 households in 250 farmer communities in the next 2 years. Involvement by the U.S. 

wheat industry through USDA food aid programs contributed to improving the quality of life in rural communities including construction of schools and day care centers, on-site school feeding for over 40,000 undernourished children, and over 60,000 

girls enrolled in primary schools. Studies indicate the direct link between alleviation 

of poverty and food insecurity through formal and information education of girls and 

women. Development programs like these are critical to the goal of reducing chronic 

68

hunger and addressing the underlying causes of hunger and poverty, the focus of 

P.L. 480 Title II programs. 

Efficiency and Logistics 

The inefficiency and logistical problems of providing food aid have recently come 

under fire. It is important to point out in this discussion that bulk grain logistics 

and handling are simply different from bagged and processed products. The U.S. 

system for storing and handling bulk grain is exceptionally efficient; it is not uncommon to tender for and deliver to the end destination within 45 days. This system 

allows the buyer to take advantage of current world prices, not incur storage costs 

in another country and ensures they receive the appropriate wheat for the end-use 

in need. 

Cargo Preference 

The Food Aid Working Group suggests it is time to revisit cargo preference laws. 

In a time when resources are strained, transportation costs should not exceed food 

costs. We understand the sensitivity of this issue, but feel it is time to evaluate 

international competition for freight and seek the opportunity to use as much of our 

U.S. dollars to feed the more than 850 million individuals in need of food as we can. 

Attached to my written testimony is the Food Aid Principles for the 2007 Farm 

Bill supported by the Agricultural Food Aid Coalition. Also attached is the Food Aid 

Policy Statement approved by USW and the NAWG along with supplemental material on Cargo Preference. 

Mr. Chairman, we know that U.S. growers produce the safest food in the world 

and believe the bounty of U.S. agriculture should continue to be the fundamental 

resource for food security, development and humanitarian relief in developing countries. We look forward to working with you on this important issue as you begin 

to write the 2007 Farm Bill. Thank you again for the opportunity to be here today. 

I am ready to answer any questions you may have. 

FOOD AID PRINCIPLES FOR THE 2007 FARM BILL

(Rev. Draft 5/4/07) 

1. Support Current Programs/Structure 

We support current structures of U.S. food aid allowing the bounty of U.S. Agriculture to be the fundamental resource for food security, development and humanitarian relief in developing countries. On that basis, we support the reauthorization 

of P.L. 480 Titles I and II, the McGovern-Dole International Food for Education and 

Child Nutrition Program, and Food For Progress. 

2. Continue In-Kind Food Aid & Oppose LRP (Local/Regional Purchase) 

U.S. Food Aid programs are a source of pride to American taxpayers, farmers, 

food processors and agri-businesses. We support continuation of U.S. in-kind food 

aid and oppose the diversion of funds from U.S. food aid program(s) for the purchase 

of products from other countries. Without the win-win nature of using U.S. food 

products as the base for the programs, the constituency will be lost and both appropriations in the U.S. agriculture budget and authorizations will be jeopardized.

• WFP already uses significant amounts of LRP when it is justified and (based 

on their analysis) would not cause price inflation in local economies. Cash contributions from countries less able to share their in-kind bounty should be and 

are, used in emergencies or development situations when delays in arrival of 

in-kind food would result in humanitarian crises.

• The European Union, during their Common Agricultural Policy reform process 

converted their ‘in-kind’ food aid to cash contributions with two distinctly negative consequences. Their overall contributions to food aid went down (lack of 

constituency) and the timeliness of their cash contributions suffered. One WFP 

source was quoted as saying ‘‘it takes longer to get cash from some of the donors 

than it takes to get in-kind products in place.’’

• U.S. food products, identified as ‘‘GIFT OF THE PEOPLE OF THE UNITED 

STATES’’ are one of the most visible manifestations of the good will of the U.S. 

to developing countries. It is not possible for such an identification to be made 

with hurriedly purchased local food.

• The procurement process for LRP, including insufficient methods to assure food 

quality and safety, will potentially give local and regional producers an opportunity to supply products under less rigorous standards than currently required 

by U.S. suppliers to food aid programs.

69

• We support increased efficiencies to cut down on time and costs of responding 

to emergencies, including the pre-positioning or advance purchase of U.S. commodities and processed products. 

3. Reauthorize Title I 

We support reauthorizing Title I of P.L. 480 both in its original concessional sales 

role and as an additional funding tool for Food For Progress. Demand for Title I 

concessional sales and FFP assistance continues through annual requests from eligible foreign countries and other applicants. Title I concessional sales should be reauthorized and offered to countries that can afford its terms. Without reauthorization, 

annual proposals from participating and interested countries could not be submitted, considered, or funded under Title I’s concessional sales or its FFP authority, 

as they are allowed to do under current law. In addition, without Title I, the total 

amount of funding available for FFP would be diminished, leaving the CCC as the 

program’s only funding source. More details about Food for Progress are discussed 

below. 

4. Development Programs in Title II 

We support a prioritization for multi year development programs that contribute 

to long-term food security in developing countries and protection against disruptions 

of those programs due to diversion of development funds to emergencies.

• The original Congressional intent was that Title II be primarily used for efforts 

to combat chronic hunger and its effects. This was indicated in the requirement 

that 75% of the budget be used for such purposes denominated in minimum tonnages. This requirement is now ‘‘waived’’ annually, as 75% of the budget is now 

used for emergencies. We suggest that language be added so that USAID’s authority to waive the statutory mandate be limited to no more than 675,000 MT 

of the non-emergency minimum tonnage yearly.

• Using development program funds as the ‘first resort’ for response to emergencies causes disruptions to planned or existing projects that have already 

been approved and deemed necessary to combat chronic needs in priority countries.

• Many of the criticisms of in-kind food aid: arrival timing, market disruptions, 

inefficiencies, and product bunching can be traced to the affects of diverting 

funds from development to emergency and/or the delay in decision-making on 

funding for development programs in anticipation of possible emergency needs. 

5. McGovern-Dole International Food for Education and Child Nutrition 

Program 

We support universal school lunch and child nutrition as a fundamental goal. We 

support the expansion of the successful McGovern-Dole Program based on the very 

beneficial impact it has had and can continue to have on school attendance, competition with schools that oppose U.S. interests and the positive impacts on learning 

when children are provided adequate food and nutrition. This program enjoys widespread and deep congressional support and with U.S. leadership, it can be expanded 

dramatically.

• USDA has demonstrated an ability to administer this program admirably and 

its authority should be made permanent.

• We support full funding for the McGovern-Dole Program. 

6. Food for Progress 

If funding were available, we would support an increase in the minimum level of 

FFP to 500,000 metric tons (up from the current 400,000) and a freight expense cap 

(currently $40 million) that is high enough to allow the minimum to be met. The 

demand for programs to support economic and agriculture reform far exceeds our 

current capacity to fund good projects; 122 proposals for FFP were submitted for FY 

2007, but only nine were approved. The freight cap should not arbitrarily prevent 

approval of projects that can have dramatic positive impact. 

7. Bill Emerson Humanitarian Trust 

We support the more predictable use and full replenishment of the BEHT to make 

its use a timely, viable response to emergencies. Because the small amount of partial replenishment that is currently allowed comes from the succeeding year’s budget, the Administration is reluctant to use this tool as a first response to emergencies.

70

• An automatic reimbursement/replenishment up to the amount used in emergency situations should be in place, without diminishing subsequent year’s 

budgets for other needed food aid programming. 

8. Monetization 

We recognize the need for cooperating sponsors who administer and distribute 

food aid programs to have both food and cash to implement their programs. We support appropriate monetization where it is shown to not cause disruption to local and 

international markets. 

9. Reauthorize the Food Aid Consultative Group (FACG) 

We support continuing the FACG. We are concerned, however, that the FACG 

today serves more as a resource for reporting food aid information than for providing interactive input between food aid system stakeholders to the implementing 

agencies of the U.S. Government. We support clarifying language to restore and 

strengthen its role in providing interactive input between stakeholders and to clarify 

its membership to include all food aid system stakeholders. 

10. HIV/AIDS and Nutrition 

We encourage the appropriate integration of U.S. food aid programs with PEPFAR 

initiatives. 

11. Increased Efficiency and Effectiveness in Food Aid Programs 

As noted in the GAO report on food aid, we encourage initiatives to reduce the 

lag time between needs assessments and product delivery in U.S. food aid emergency procurements. We also recommend the lifting of arbitrary limits on storage 

expenses for the pre-positioning of products for emergency response. The agriculture 

community has been and remains committed to actively addressing issues to increase U.S. food aid effectiveness.

American Soybean 

Association; 

Global Food and 

Nutrition, Inc.; 

International Food 

Additives Council; 

National Association of 

Wheat Growers 

National Barley Growers 

Association; 

National Oilseed 

Processors Association; 

North American Millers’ 

Association 

USA Dry Pea and Lentil 

Council; 

USA Rice Federation; 

US Dry Bean Council 

US Wheat Associates. 

———

POLICY: U.S. WHEAT ASSOCIATES, NATIONAL ASSOCIATION OF WHEAT GROWERS

Keep the Food in Food Aid 

• The U.S. wheat industry opposes any attempt in the World Trade Organization 

(WTO) or in any other venues to require that food aid be given as ‘‘cash only’’ 

instead of allowing donor nations to provide food directly as emergency and development assistance.

• The U.S. wheat industry supports funding food aid programs at levels no less 

than the amounts needed to provide food donation levels of at least 6 million 

metric tons annually, of which 3 million metric tons should be wheat.

• Wheat producer organizations continue to support the original intent that 

wheat held in the Bill Emerson Humanitarian Trust be used for its purpose to 

provide direct food aid and should not be sold back into the U.S. domestic market. Wheat producers urge the Administration to promptly replenish commodities released from the Bill Emerson Humanitarian Trust, in a timely manner.

• U.S. wheat producers believe that current programs administered by the U.S. 

Department of Agriculture are effective and should remain under USDA management.

• Wheat producers believe that, except in times of emergency, U.S. food aid programs should be comprised of U.S. produced food.

• Wheat producer organizations oppose withholding food aid for political purposes. 

Background 

Current international food aid oversight and requirements are sufficient and continue to work well. The WTO should only require that food aid programs not distort 

commercial markets and be consistent with guidelines of legitimate food aid organiVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00074 Fmt 6633 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
71

1 Based on USAID and USDA data, the Fiscal Year 2006 average commodity and transportation cost for 1 metric ton of food aid was $670. If that average cost had reduced by $10 per 

metric ton through a reduction in ocean transportation freight rates or any other cost factor, 

the Fiscal Year 2006 food-aid budget could have funded an additional 43,900 metric tons—

enough to feed almost 850,000 people during a peak hungry season, which typically lasts 3 

months.

zations. Food aid programs should be monitored by the food aid convention of the 

United Nations. 

The international humanitarian community needs a reliable, steady level of food 

aid. In times of crisis, and when food prices rise, a commitment of minimum tonnages would help protect the most vulnerable recipients from harm. It would also 

allow agricultural producers and processors to plan for the provision of those foodstuffs. A commitment to minimum tonnages would also combat European arguments 

that the U.S. uses food as an export subsidy. It would assure food aid availability 

at adequate levels. 

U.S. Government food aid is distributed by private voluntary organizations 

around the world. A broad spectrum of America, including farming, processing, 

transportation and distribution industries participate in the giving and handling of 

food aid. Food that America gives to the hungry is home grown and nutritious. To 

disconnect growing and handling of food from humanitarian food programs removes 

the involvement and interest of thousands of Americans and puts support for those 

programs at risk. By using American grown food in food aid, American hands and 

American infrastructure are involved throughout the entire operation, and we can 

assure and stand by the quality of the food that is delivered. 

While the need for food aid has increased, U.S. donations continue to decrease. 

Food aid programs must be funded and allowed to function in ways that meet humanitarian and development needs. 

Regarding Cargo Preference 

A GAO report released April 2007:

• Pointed out the total annual value of the cost differential between U.S.- and 

Foreign-flag carriers averaged $134 million from fiscal years 2001 to 2005.

See page 30, GAO–07–560, Foreign Assistance Various Challenges Impede the Efficiency and Effectiveness of U.S. Food Aid.

• ‘‘At current U.S. food aid budget levels, every $10 per metric ton reduction in 

freight rates could feed almost 850,000 more people during an average hungry 

season’’ 1

See page 16, GAO–07–560, Foreign Assistance Various Challenges Impede the Efficiency and Effectiveness of U.S. Food Aid.

GAO Report 

http://www.gao.gov/new.items/d07560.pdf

Transcript of Remarks By Secretary of Agriculture Mike Johanns to the USAID 

International Food Aid Conference; http://www.usda.gov/wps/portal?con

tentidonly=true&contentid=2007/04/0104.xml.

Mr. SALAZAR. Thank you, Mr. Wickstrom. 

Mr. Binversie, please, 5 minute rule. 

STATEMENT OF ROBERT BINVERSIE, VOLUNTEER, FARMERTO-FARMER PROGRAM, KEIL, WI 

Mr. BINVERSIE. Thank you, Mr. Chairman. My name is Bob 

Binversie. I am a retired dairy farmer and businessman from Kiel, 

Wisconsin. I started out as a dairy farmer taking over a 2nd-generation dairy farm, and after age 28 became allergic to cows on 

contact so I had to come up with a different occupation. Good excuse, too, for never going back. Now, my wife decided that she 

wanted to run the farm. She said this is the place to raise the kids. 

So, what we did was hire an employee to help us and I went into 

harvester sales, which gave me the background of working with 

people. In harvester sales, you being a farmer, you know it is an 

expensive piece of equipment. Not only do you have to sell the 

72

product, you had to sell a way of life and how the person was going 

to pay it back. From there, I went into another sideline. We built 

housing projects for the elderly in Waupaca County, Wisconsin—

148 units—acting as general contractor, which again gave me a lot 

of background to draw on. And I became a harvester dealer in Ohio 

for 5 years, which is some more background to draw on. My latest 

venture was starting a bank 10 years ago in my basement which 

has now grown into a half a billion dollars in loans through the 

State of Wisconsin, mainly to farmers—that was our niche—and 

small businesses, starting them out. 

My wife has Pick’s disease, which is like Alzheimer’s Disease, so 

last year after about a 7 year stint with this, she had hit the point 

that she didn’t know if I was going to be gone a day, a week, or 

a month, and we had traveled in the past. We had been to Russia, 

the eastern part of Europe and all of the western part of Europe, 

China, Japan, Brazil. So I had a real good feel for what is happening in this world. I told my children I said look—I have five 

children. They are all very successful in business. They really 

didn’t need a 72 year-old man to tell them what to do anymore. 

One of the Russians when I was in Russia asked me to come 

back and give him some advice on how they should run their 

farms, and this was just before the privatization of the farms took 

place in Russia. I was going to do it but after my wife got sick I 

dropped it. But, I took the challenge last year and contacted Norman Devorak, who had done a lot of volunteer work in the past. 

In fact, there were five volunteers that come within 20 miles of my 

home territory right now who are volunteers of Farmer-to-Farmer. 

Now, what is Farmer-to-Farmer? It is an organization that deals 

with individual people in individual countries helping to solve their 

problems, and also businesspeople in helping to solve their problems. You know, we can throw food, we can throw everything at 

them, but we still have to teach someone how to get out of their 

rut. 

If you can picture yourself—us right now tomorrow—our economy goes down the tubes, our farms are worthless, our bank accounts are worthless, everything is gone. This is exactly what happened with the privatization of the collective farm business. Seven 

years these people, that is what I felt, walked around in a trance 

not knowing where they should go and what they should do. After 

7 years, the survivors start coming up. I was lucky enough to be 

sent to one of those survivors through the Farmer-to-Farmer Program. This man was milking 13 cows last spring when I got there 

and he was getting 250 pounds of milk out of these 13 cows. The 

lady that he had hired is paid $100 a month for milking these 

cows. She arrives at 6 in the morning, and she leaves at 10:30 at 

night. This year, when I got back, I suggested to him that he improve his handling, how he harvested. He had beautiful land. They 

just have no equipment and no money. So I said what you have to 

do is harvest your crops better and store them better. I personally 

gave him a $10,000 loan. I said ‘‘Lonnie, I want you to build a new 

bunker silo.’’ He had an old contraption of a chopper that, Mr. 

Chairman, you being a farmer, you would appreciate this piece. It 

was a real relic, but he made it work. I said, ‘‘Now, get all the 

equipment and everything you need in order to get this bunker in 

73

1 U.S. Agency for International Development. 

place. I am going to send someone else after me to help you design 

this bunker.’’ He did it. This spring when I got back, his milk production from the same 13 cows was 500 pounds. The lady that is 

doing the milking, she said to me, ‘‘Can you help me out? I can’t 

hardly bend my hands anymore because to get 500 pounds of milk 

out of a cow takes twice as many squeezes as 250.’’

I am going to help him. I brought him to the United States 2 

weeks ago as a guest of mine—him and an interpreter. I showed 

him some very inexpensive milking parlors and I am going to help 

finance a milking parlor and a free stall barn for this man. We 

have bought some secondhand equipment for him, and we have 

bought milking equipment for him. 

Mr. SALAZAR. Mr. Binversie, can you conclude your remarks? 

Mr. BINVERSIE. Thank you. 

[The prepared statement of Mr. Binversie follows:]

PREPARED STATEMENT OF ROBERT BINVERSIE, VOLUNTEER, FARMER-TO-FARMER

PROGRAM, KEIL, WI 

Thank you Mr. Chairman for inviting me to testify today on an important subject 

that has great value to our nation and to many developing countries around the 

World. 

What Is Farmer-to-Farmer? 

The John Ogonowski Farmer-to-Farmer Program provides voluntary technical assistance to farmers, farm groups and agri-businesses in developing and transitional 

countries to promote sustainable improvements in production, food processing and 

marketing. The Program relies on the expertise of volunteers from U.S. farms, landgrant universities, cooperatives, private agri-businesses and NGOs to respond to the 

local needs of host-country farmers and organizations. In general, these individuals 

are not overseas development professionals but rather individuals who have domestic careers, farms and agri-businesses or are retired persons who want to participate 

in development efforts. Typically, volunteers spend approximately 3 weeks on assignment, living with host families at the level of the local population. 

The current FY04–FY08 extension of the Program will provide over 3,000 U.S. 

volunteers to 40 core countries. In the 22 years since it was first authorized by congress as part of the 1985 Farm Bill, Farmer-to-Farmer has sent more than 11,000 

ordinary Americans from all 50 states and the District of Columbia, who have donated professional time worth an estimated $80 million, to work in over 80 countries. In so doing, FtF has become one of the longest-running and most highly-regarded U.S. Government initiatives abroad. Following the terrorist attacks of September 11, 2001, the Program was renamed in honor of John Ogonowski, the pilot 

of American Airlines flight 11 that crashed into the World Trade Center.1

Funding 

The Farmer to Farmer Program is currently authorized as part of the 2002 Farm 

Bill (Farm Security and Rural Investment Act—FSRIA, P.L. 107–171). This authorization continues through FY 2007. The process is underway in the 110th Congress 

to reauthorize the farm bill which will include consideration for reauthorization of 

Title III, Agricultural Trade and Aid which includes P.L. 480 Food for Peace. 

P.L. 480, the Agricultural Trade and Development and Assistance Act of 1954, 

has three food aid titles. Title I, Trade and Development Assistance, provides for 

long-term, low interest loans to developing and transition countries and private entities for their purchase of U.S. agricultural commodities. Title II, Emergency and Private Assistance Programs, provides for the donation of U.S. agricultural commodities to met emergency and non-emergency food needs. Title III, Food for Development, provides government-to-government grants to support long-term growth in 

the least developed countries. Title I of P.L. 480 is administered by USDA; Titles 

II and III are administered by the Agency for International Development (AID). 

The FSRIA provides minimum funding for FtF at 0.5% of the funds appropriated 

for P.L. 480 programs. In actuality, under the current farm bill funds have been $10 

million per year under Title II plus a declining amount of funds from Title I. FundVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00077 Fmt 6633 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
74

ing from Title I reached a high of $702,000 in 2003 and was $381,000 in 2006. 

These funds include a percentage of Title I appropriations plus ‘‘ocean freight differential’’ for the commodities shipped under Title I. In 2006 the total budget was 

$10,381,000. 

In the 2007 Farm Bill, with Title I zeroed out and Title III dormant, the funding 

for Farmer-to-Farmer is potentially at risk of significant reduction. 

Personal Experience 

After turning my family farm over to my son in 1993, I had more free time on 

my hands. I had served in the army before buying my farm and then worked as 

an award-winning salesman for Smith Harvestore. Later, I also originated a community bank in Wisconsin, while continuing to work on the farm, so I was not accustomed to having free time on my hands. One of my colleagues from the community 

bank suggested I fill my time by volunteering with farmers from the former Soviet 

Union. That colleague had already made several trips to Moldova and hearing about 

his experiences motivated me, as well as some of our other friends and colleagues 

in Wisconsin, to want to visit the country and do what we can to help the people. 

In April, 2006, I accepted the challenge and traveled to the Republic of Moldova 

to work with the Volodeni Dairy Cooperative through the Farmer-to-Farmer Program, implemented in Moldova, Ukraine and Belarus by CNFA, Inc. I was the first 

volunteer to ever work with this group of 280 dairy farmers but, soon after arriving, 

my translator, the cooperative leader, Leonid Platon, and I became a tight knit 

group, discussing various available low cost ideas and methods to improve the coop’s 

milk sales and the health of their herds. I conducted training sessions with group 

members, visited numerous dairy farms in the community and met with the group’s 

milk buyers to determine their quality and supply demands. During our work, 

which started at 5 a.m. and lasted till 11 p.m. every day, I realized that farmers 

are basically the same all over the world. We covered all aspects of dairy cattle 

housing, sanitation, nutrition, breeding and basic veterinary care. Although I soon 

finished my 3 week assignment and headed home, a bond had been forged and I 

had also found a new business partner and friend. 

After I left, a variety of things happened. I provided Leonid with instructions and 

a $10,000 low interest loan from my own money and he set about building a modern 

silage bunker. I also worked with CNFA to craft subsequent volunteer assignments 

that would help push and develop the Volodeni Cooperative. The cooperative and 

CNFA kept in constant contact with me and the other volunteers who had worked 

with the group, to identify and solve small issues before they became large problems. 

When I came back to Moldova for my second assignment in early 2007, I was 

amazed. The advice given by Farmer-to-Farmer volunteers had led to great results: 

increased milk yields, enlarged herds, improved cattle housing conditions and higher 

prices for clean milk. The cooperative achieved a $10,000 increase in milk sales and 

a nearly 40% increase in net profit in just 1 year. In turn, the farmers had created 

new jobs and increased payrolls by 31% as well, passing on their increased prosperity to the wider community. 

While the impact on the local economy was gratifying for me and the other volunteers who worked with Volodeni, I felt we had gained even more ourselves by being 

taken into the Moldovan farmers’ homes, families and rural life and by learning 

about their culture and traditions. I was eager to return the hospitality and give 

my Moldovan friends the opportunity to meet my family and experience our farm 

life back in the U.S., so this spring I personally sponsored my friend Leonid to visit 

me and several other volunteers in the U.S.. The trip was an opportunity for Leonid 

to learn more about American agriculture and meet the families of the volunteers 

who had made such an impact on him and his community. Upon his return to 

Moldova, Leonid hopes to use what he has seen and learned in the U.S. to build 

a modern milking parlor to serve his village. 

I strongly believe in the help we have provided and the exchange between the two 

countries offered by the Farmer-to-Farmer Program. In all, the bridge between 

Moldova and Wisconsin established by that first colleague of mine has since drawn 

in a total of six Wisconsin farmers, neighbors and friends, including myself. Together, we have performed 13 volunteer assignments, contributed our own money 

to support the Moldovan farmers and raised charitable donations from our communities worth more than $30,000. As I like to say, ‘‘A candle loses nothing by lighting 

another candle’’. 

75

2 U.S. Agency for International Development. 

3Farmer-to-Farmer Mid-Term Assessment Report, by QED LLC. 

Benefits of the Farmer-to-Farmer Program 

My experience is but one example of the good work being done by Farmer-toFarmer volunteers all over the world. Given its modest cost, the FtF Program generates remarkable impact, both at home and abroad. 

Economic Development 

The Farmer-to-Farmer Program emphasizes economic impact and has been very 

successful in bringing tangible economic benefits to farmers in the developing world. 

Approximately one million farm families (representing about five million people) have 

been direct beneficiaries of the FTF Program since its inception.2

Over just the last 3 years, as part of the current FY04–FY08 program, nearly 

1,900 volunteer specialists have been fielded in support of 1,745 host institutions 

in 39 countries, including farm producers, agri-businesses, processors, retailers, exporters, input suppliers, cooperatives, associations, financial institutions, government agencies, NGOs and other agricultural sector stakeholders. Almost 80%, of 

host organizations assessed for impact of economic growth have reportedly adopted 

volunteer recommendations in some way and approximately 2.2 million direct and 

indirect beneficiaries have reported measurable improvements. With the support of 

U.S. volunteers, they have realized an increase in gross annual sales of $122.4 million and in total annual income of $17.9 million.3 The assistance the volunteers provide continues long beyond the original assignments, as well. My relationship with 

the Volodeni, Moldova dairy farmers is not unique. Eighty five percent of volunteers 

continue to have some kind of contact with the farmers and host organizations in 

the countries in which they volunteered. 

Promoting an Image of the American People 

Importantly, the program provides people all over the world the opportunity to get 

to know ordinary Americans. Each year, Farmer-to-Farmer fields approximately 650 

U.S. volunteers who provide technical assistance to agriculture and agribusiness in 

40 different countries. In addition to the technical assistance, the volunteers serve 

as citizen diplomats and carry the knowledge and culture of the American people 

directly to the public of the countries where they work. Hosts see volunteers caring 

and working hard for their development, which helps dispel many negative stereotypes about Americans that persist around the world. Moreover, they bring knowledge and understanding of those countries back with them to the U.S., conducting 

outreach and public information activities upon return to the United States and 

helping improve the American public’s understanding of the world around them and 

of the challenges facing developing countries. 

International Trade 

FtF implementing organizations go beyond simply placing volunteers on an individual basis. They focus on development of specific market chains for which overall 

impact can be evaluated. FtF volunteers build institutions and transfer technology 

and management expertise to link small farmers with markets that capitalize on 

comparative advantages in production, processing and marketing. As these developing markets expand and become more sophisticated, not only are standards of living increased for FtF hosts, but new trade and investment opportunities are created 

for U.S. agri-businesses, making the FtF Program a sensible long-term investment 

for American agriculture. Volunteers have even helped to establish subsidiaries of 

U.S. companies where they volunteered, assisted their hosts to procure productivity 

and quality-enhancing inputs and equipment from the United States and fostered 

lasting partnerships between U.S. educational institutions, agricultural organizations and private sector companies and their counterparts in developing countries 

around the world. 

Concluding Remarks 

I thank you again for allowing me to share my thoughts and experiences on the 

Farmer-to-Farmer Program with you today. I truly believe that Farmer-to-Farmer 

represents a superb value for the taxpayers’ money, achieving measurable results, 

increasing economic stability and sustainability in the developing world and empowering private enterprise as the engine of growth in agricultural production, processing and support services. 

In the greater goal of promoting awareness, understanding and friendship between ordinary Americans and people around the world, we simply cannot do 

enough in this day and age. We need more of the Farmer-to-Farmer Program and 

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other initiatives like it and I would like to encourage you to at least double the size 

of the Program in the 2007 Farm Bill and to fully fund it in the years to come. 

Now, more than ever, America needs to show the world that our people care, are 

willing to give of themselves for the benefit of others and to work hard, shoulder 

to shoulder with our friends in developing countries, to improve their standards of 

living.

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Mr. SALAZAR. Your full statement can be submitted for the 

record. 

First of all, let me just thank all of you for your commitment to 

ending world hunger. 

Ms. Levinson, the combination of commodities and cash: What do 

you think the combination of commodities and cash would be optimum for the Emerson Trust that was primarily a response to food 

emergencies around the world? 

Ms. LEVINSON. Thank you. Well, the Bill Emerson Humanitarian 

Trust currently can hold up to 4 million metric tons of commodities 

or an equivalent amount in cash, and that is toward—the cash can 

only be used for procuring the commodities. When the Trust is 

drawn down, the commodities are either released or cash can be 

used to buy on the market, and then CCC funds are used to pay 

for transportation and delivery. So in our view, the best and most 

efficient way would be to have cash in the Trust because at different times you need different commodities. Right now it holds 

about 915,000 metric tons of wheat and about $107 million and it 

is about 1⁄3 full, not at the 4 million metric ton capacity. 

Mr. SALAZAR. Would that cash be used to buy just U.S. products? 

Ms. LEVINSON. U.S. products, corn. I mean, actually in the past 

we have had a swap where we swapped wheat in 2003 for rice, and 

that was for Iraq. I think the best way to go rather than to have 

the swapping mechanism is to put the cash in there and hold it 

and have that available for emergency needs. But, it is not being 

replenished. That is one of the problems. Except the current supplemental legislation that you are voting on does have $40 million 

in it to help replenish it. 

Mr. SALAZAR. Thank you. 

Ms. Reilly, would you support a pilot project rather than the Administration’s farm bill food aid proposal for local regional purchase of food for emergencies, and why or why not? 

Ms. REILLY. Yes, we believe that local purchase or regional purchase can be extremely useful in the right context, and when this 

proposal was initially presented by the Administration we did advocate for pilot programs to really test the approach because there 

are also circumstances in which it can be a very dangerous approach. It can distort local markets, and there can be all sorts of 

other unintended negative consequences. So we do support a pilot 

approach. My particular organization has over 5 years of experience now with local purchase. We have purchased almost $7 million worth of commodities and we think there are ways in which 

it can be done. 

Mr. SALAZAR. Thank you. 

The next question is for both Mr. Gillcrist and Mr. Wickstrom. 

If the Trust were to be replenished, should replenishment be limited just to wheat as the statute permits, or should other grains 

such as corn, sorghum, and rice also be added and held in the 

Trust? 

Ms. GILLCRIST. My personal opinion would be that the greater 

flexibility in the program that you allow, the greater the efficiency 

we will see in the results of the program. 

94

Mr. WICKSTROM. I guess obviously my bias is toward wheat so 

we think that that commodity is better utilized around the world 

probably than some of the other commodities. 

Mr. SALAZAR. Thank you. 

Mr. Binversie, how do you think we can encourage more farmers 

to participate in the Farmer-to-Farmer Program? 

Mr. BINVERSIE. Actually, just what we are doing—publicizing it 

a little more. What we did back home when I had these people 

there, we had all the state’s press involved and the real thing on 

Farmer-to-Farmer is the benefit that is happening not only to 

Farmer-to-Farmer individually but as a community. These people 

when they see us and they see that we bear the same type of ideals 

and things that they are interested in, number 1, we all are interested in our families, and once they understand that America is 

also interested in families, then they have a face on it, it really 

helps. 

Mr. SALAZAR. Can you also describe what the cost is of this program to the American taxpayers? 

Mr. BINVERSIE. Well, how much would you pay me for my expertise? I am a volunteer. I do it for nothing. They just send me over, 

and pay the plane fare to take us over, and that is basically their 

cost. 

Mr. SALAZAR. Is there a certain budget? Is there a certain 

amount per year that is established for this program? 

Mr. BINVERSIE. This I can’t tell you. You would have to ask the 

people in charge. But as far as the individuals themselves or volunteers like myself, we pretty much do it out of—we feel it is our obligation to do it, and out of the goodness of our hearts. Myself, I just 

felt I had too much talent at age 72 to sit and look at the four 

walls. I had started all these other businesses; why shouldn’t I help 

people in undeveloped countries also start businesses? And, we 

start at the bottom. We don’t try to get them to shoot at the Moon. 

Mr. SALAZAR. Thank you. 

One quick final question. I remember during the tsunami aid 

package that was sent out from this House where there was a big 

bundle of money that was initially sent out and given to the victims. I have great concerns that these countries then turn around 

and buy food or other products from other countries when you provide funding instead of providing food, and I am of the same bias 

that Mr. Wickstrom is. I mean, I think we should maybe try to provide food from this country because it would help the agricultural 

market. Could you make just a quick comment, any one of you? 

Mr. BINVERSIE. Actually I am very biased in one thing. I do not 

believe in grants. Make an appropriation, but make somebody accountable on the other side. We have had an experience. Mr. 

Devorak, in the village just south of the one I had, he started a cooperative-type thing. Everybody was in charge. It failed. In my situation, I said I was going to have one person in charge and then 

have him start—in other words, let us start a business. Let us run 

it the way it is supposed to be run and charge them interest, and 

that is why I gave them that personal loan. It made him be accountable, and he thanked me for it, and so did all the other people 

that I talked to while I was over there, and I got as high as the 

Ministry of Agriculture. 

95

Mr. SALAZAR. Thank you. 

We recognize now under the 5 minute rule Mrs. Musgrave. 

Mrs. MUSGRAVE. Thank you, Mr. Chairman. Cary, I saw in your 

supplemental information, you were talking about delivery of food 

aid, and two of the things that you mentioned might assist in that 

are pre-positioning and advanced purchase that would help us be 

more efficient in the delivery. Could you elaborate on those, please? 

Mr. WICKSTROM. Well, some of the experts that are involved in 

this tell me that if we would expand our pre-positioning capabilities, we would be better able to deliver food on a timelier basis, and 

some of the logistics problems I think, in my testimony we had 

talked about cargo preference and I guess it seemed a little frustrating to me as a producer, and this might not be the only reason 

that it seems like we are spending huge amounts of money on 

transportation versus what the foods cost. 

Mrs. MUSGRAVE. I know in your verbal testimony you talked 

about how the delivery shouldn’t cost more than the food aid that 

we are sending. You talked about a very impressive delivery time 

of 45 days, and that is absolutely amazing. And then you also had 

some remarks in your supplemental materials about the E.U. 

wanting to use cash instead of commodities to feed people. You 

were saying it actually would take longer to get the monetary aid 

than the actual food aid in place. Could you speak about that a little more, please? 

Mr. WICKSTROM. Well, I think we are getting criticized by the 

European Union, and I think it is easy for them to put pressure 

on us to go to cash only when in fact they are not donating that 

much food aid. So I think we have become a target because they 

realize that it is easy to complain about the amount of giving that 

we do, or our taxpayers in the United States, when in fact they 

don’t give that much aid. So sure, they are going to be in favor of 

cash only. I mean, it would be frustrating to me as a producer to 

know that some of our tax dollars were buying wheat from, for instance, the French, to provide aid to the countries that may or may 

not have those labels on the bags that say it is a gift of the people 

of the United States. 

Mrs. MUSGRAVE. A gift from the people of the United States. 

Thank you very much. 

Thank you, Mr. Chairman. 

Mr. SALAZAR. Thank you. 

I now recognize the gentleman from Kansas, Mr. Moran, who has 

done an incredible job now serving his people back in Kansas after 

that major disaster. Thank you for your service. 

Mr. MORAN. Mr. Chairman, thank you very much. I am not a 

Member of this Subcommittee, and it requires unanimous consent 

that I am able to be seated here and asking any questions. Assuming that you will give me that, I would like to direct a couple of 

questions to our panelists today. 

Mr. SALAZAR. Without objection. 

Mr. MORAN. Thank you. I am apologetic for the portions of the 

hearing that I missed. I now am a Co-Chairman of the House Hunger Caucus, and I am very interested in these international issues 

as well as domestic food stamps and nutrition programs in the 

United States. 

96

Let me just make certain, having not heard all of the testimony 

of this panel, are there specific items that there is disagreement 

among the five of you? Was there any contention in your testimony, 

one to the other? I just want to sort that out. 

Mr. GILLCRIST. Congressman, probably with respect to cash 

versus in-kind. 

Mr. MORAN. And I assume that is the male side of the table and 

female side of the table although I think those are unrelated. 

Ms. REILLY. Well, I think there is also some difference of opinion 

between the Alliance for Food Aid and CRS and some of our fellow 

other PVOs in terms of monetization. We agree that we both would 

like to see more cash to provide support for complementary livelihood activities, but I think we have some disagreement in terms 

of the role of monetization. 

Mr. MORAN. Thank you very much. 

I paid particular attention to Mr. Gillcrist’s testimony because I 

know him well and hold him in high regard. In particular I wanted 

to give Mr. Gillcrist a moment to highlight, in his attachment, he 

talks about an appropriate integration of U.S. food aid programs in 

regard to HIV and nutrition. Mr. Gillcrist, you have visited with 

me about this in the past, and I wanted the record to indicate why 

you think this is important. 

Mr. GILLCRIST. Thank you, Congressman. If you look at the dedication this country has had to helping others, and the history we 

have had in doing that, the PEPFAR program particularly was a 

program designed to address an increasing and devastating problem of HIV/AIDS in the world, but in the course of the development 

of that program it seems that nutrition was a side issue and not 

considered in the total context of a successful program. In other 

words, retroviral drugs in the treatment of AIDS are not successful 

without substantial diets and substantial nutritional help. So, 

when we look at a program like PEPFAR, which is a proposed $15 

billion program, and compare that to a food aid program which is 

a $1.2 or $3 billion program the likelihood of success in doing the 

things that we need to do to address HIV/AIDS is limited, given 

the number of people beyond the scope of AIDS that are in dire 

need of nutritional assistance to begin with. So to integrate those 

two programs and to try to be successful in addressing both hunger 

and the HIV/AIDS program, the AIDS initiative has to have a substantial nutritional component to it. 

Mr. MORAN. Is my understanding accurate that in the programs 

that the United States Government has in attempting to meet the 

nutrition needs of people around the world, we have Public Law 

480 with Title I and Title II, the McGovern-Dole International Food 

for Education and Children Program, and the Food for Progress? 

Is that our basic array of weapons in fighting hunger? 

Ms. LEVINSON. Yes, Mr. Congressman. First of all, the Public 

Law 480 Title I program of course is a loan program primarily to 

foreign governments, but that program has been zeroed out in the 

budget. A lot of that money had been used to back up what we call 

the Food for Progress Program, which is CCC funded, and the reason I want to bring that to your attention is that that means that 

as that has been zero funded, there is less money for Food for 

Progress as well, and that targets countries that are making ecoVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00100 Fmt 6633 Sfmt 6601 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
97

nomic reforms. That is of great concern to us. We are doing agriculture programs there to improve the development of the private 

sector. So that is of great concern. The Title II program is a donation program primarily through private voluntary organizations 

like the groups I represent and Catholic Relief Service and through 

the World Food Program primarily, and it is our largest program, 

and I think all of us shared the concern. In fact, I know all of us 

agreed that the development side of that program is now anemic 

and really needs to be bolstered. The kind of programs that Mr. 

Gillcrist is referring to for nutrition for HIV/AIDS, targeting food 

security in those types of communities, those are what we call developmental food aid programs and we need more of it. And then, 

of course, McGovern-Dole Food for Education is a small program. 

It is $100 million. It is discretionary spending and it is particularly 

to encourage the attendance and enrollment of kids in school. 

Mr. MORAN. Thank you. My time is expired, but if any of you 

have suggestions about the efficient operation of those programs, I 

would be interested in hearing that. As we look at the variety of 

options that are out there, is there any effort that needs to be made 

in the structural change of how we deliver food aid, food services 

and meet nutrition needs around the world in addition to your 

point that, my guess is that all of you have made, about the need 

for additional dollars? 

Thank you, Mr. Chairman. 

Mr. SALAZAR. Thank you, Mr. Moran. 

I want to thank the panel for their enlightening testimony and 

we would invite the 4th panel to the table. We have been called for 

votes. This is a 15-minute vote, so if we can have the 4th panel join 

us at the table, I would appreciate it. 

Thank you. For panel four, we have Mr. James Sumner, President of the U.S. Poultry & Egg Export Council on behalf of the Coalition to Promote U.S. Agricultural Exports from Stone Mountain, 

Georgia. We also have Mr. Patrick Ford, of Ford’s Gourmet Foods 

from Raleigh, North Carolina. We would like you to summarize 

your testimony to a total of 3 minutes if you possibly could and 

then we would ask the Members of this Committee to submit questions for the record. Being as that we are called to vote, we do appreciate that. Thank you. 

Mr. Sumner. 

STATEMENT OF JAMES H. SUMNER, PRESIDENT, USA

POULTRY & EGG EXPORT COUNCIL (USAPEEC); ON BEHALF 

OF THE COALITION TO PROMOTE U.S. AGRICULTURAL

EXPORTS, STONE MOUNTAIN, GA 

Mr. SUMNER. Thank you, Mr. Chairman, Congresswoman 

Musgrave, it is a pleasure to be here. My name is Jim Sumner, and 

I am President of the USA Poultry & Egg Export Council, 

USAPEEC, we go by. We are a trade association that is dedicated 

to increasing the exports of U.S. poultry and egg food products. We 

have about 200 member companies that account for more than 95 

percent of all U.S. poultry and egg exports. Today I am testifying 

on behalf of the Coalition to Promote U.S. Agricultural Exports of 

which we are a member. 

98

The Coalition is an ad hoc committee of over 100 organizations 

representing farmers, ranchers, fisherman, forest product producers, cooperatives, small businesses, regional trade organizations 

and various state departments of agriculture. We believe that the 

U.S. must continue to have in place policies and programs that 

help maintain the ability of American agriculture to compete effectively in a global marketplace still characterized by highly subsidized foreign competition. Agriculture exports provide jobs for one 

million Americans, and make a positive contribution to our overall 

trade balance. U.S. agricultural exports are projected to set another 

record this year of $78 billion, up $9.3 billion over last year. However, exports could be significantly higher if it were not for a combination of factors including high levels of subsidized foreign competition and crippling trade barriers. 

Members of our Coalition strongly support and utilize the Market Access Program, MAP, and the Foreign Market Development 

Program, FMD, which are administered by USDA’s Foreign Agricultural Service. Both programs are administered on a cost-share 

basis with farmers and other participants who are required to participate with at least 50 percent of their own resources. These programs are among the few tools specifically allowed in unlimited 

amounts through the WTO rules for agriculture. By any measure, 

they have been tremendously successful and extremely cost-effective in helping maintain and expand U.S. agricultural exports to 

protect American jobs and strengthen farm income. 

A recent independent cost-benefit analysis of MAP and FMD, 

which was prepared for USDA by Global Insight Incorporated, 

which is the world’s largest economic analysis and forecasting firm, 

clearly illustrates the following benefits of increased funding for 

market development and promotion through these two programs. 

Number 1, the U.S. share of world agricultural trade since 2001 

grew by over one market share point to 19 percent, which translates into $3.8 billion in agricultural exports. A second point is that 

for every additional dollar spent on market development, $25 in additional exports resulted within 3 to 7 years. And third, farm cash 

receipts have increased $2.2 billion during the 2002 Farm Bill due 

to the additional exports from market development. This translated 

into $4 increase in farm income for every additional $1 increase in 

government spending on market development. In fact, we would 

like to offer a copy of this independent study for the record if we 

may do so at a later time. 

In contrast, to the roughly $235 million the U.S. spends annually, the E.U., the Cairns Group and other foreign competitors devoted approximately $1.2 billion annually on similar market development activities. A significant portion of that was even spent here 

in the United States. The E.U. and other foreign competitors have 

made it clear that they intend to continue to be aggressive in their 

export efforts. For this reason, we believe that the Administration 

and Congress should strengthen funding for MAP and other export 

programs as a strong trade component in the new farm bill, and 

also ensure that such programs are fully and aggressively utilized. 

Perhaps the most important thing I am going to say here is the 

fact it should be noted that MAP was originally authorized in the 

1985 Farm Bill at a level of $325 million and the Coalition strongly 

99

supports returning the program to that authorized level of funding 

from its current $200 million level. We also urge $50 million annually be provided for the FMD program for cost-share assistance to 

help boost agricultural exports. This is approximately the amount 

that would be adjusted from 1986-level funding. 

As I mentioned, I represent the poultry industry. We have done 

a number of things to utilize these funds. I wanted to give you a 

few examples. One such example, in 2005 we organized a donation 

of two containers of U.S. chicken leg quarters, which we donated——

Mr. SALAZAR. Mr. Sumner, could you submit the rest of those examples for the record? I would appreciate that, just because we are 

so limited in time and we have been called to vote and I think 

there is only 5 minutes left. 

Mr. SUMNER. I would be happy to do so. 

[The prepared statement of Mr. Sumner follows:]

PREPARED STATEMENT OF JAMES H. SUMNER, PRESIDENT, USA POULTRY & EGG

EXPORT COUNCIL (USAPEEC); ON BEHALF OF COALITION TO PROMOTE U.S.

AGRICULTURAL EXPORTS, STONE MOUNTAIN, GA 

Good morning, Mr. Chairman. My name is James H. Sumner. I am President of 

the USA Poultry & Egg Export Council (USAPEEC), which is a trade association 

that is dedicated to increasing exports of U.S. poultry and egg food products. 

USAPEEC’s 200 member companies account for more than 95% of all U.S. poultry 

and egg exports. Today, I am testifying on behalf of the Coalition to Promote U.S. 

Agricultural Exports of which we are a member. We commend you, Mr. Chairman, 

and Members of the Subcommittee, for holding this hearing to review our agricultural trade programs and wish to express our appreciation for this opportunity to 

share our views. 

The Coalition to Promote U.S. Agricultural Exports is an ad hoc coalition of over 

100 organizations, representing farmers and ranchers, fishermen and forest product 

producers, cooperatives, small businesses, regional trade organizations, and the 

State Departments of Agriculture (see attached). We believe the U.S. must continue 

to have in place policies and programs that help maintain the ability of American 

agriculture to compete effectively in a global marketplace still characterized by highly subsidized foreign competition. 

With the 2002 Farm Bill, Congress sought to bolster U.S. trade expansion efforts 

by approving an increase in funding for the Market Access Program (MAP) and the 

Foreign Market Development (FMD) Program. This commitment began to reverse 

the decline in funding for these important export programs that occurred over the 

previous decade. For MAP, funding was increased over the course of the 2002 Farm 

Bill from $90 million annually to $200 million annually, and FMD was increased 

from approximately $28 million to $34.5 million annually. 

Farm income and agriculture’s economic well-being depend heavily on exports, 

which account for over 25 percent of U.S. producers’ cash receipts, provide jobs for 

nearly one million Americans, and make a positive contribution to our nation’s overall trade balance. In FY07, U.S. agriculture exports are projected to be $78 billion, 

up $9.3 billion over last year and up $25 billion since 2002. However, exports could 

be significantly higher if it were not for a combination of factors, including continued high levels of subsidized foreign competition and competition crushing trade 

barriers. Agricultural imports are also forecast to be a record $70 billion, continuing 

a 35 year upward trend that has increased at a faster pace recently. If these projections hold, agriculture’s trade surplus is expected to be $8 billion, up $4.7 billion 

over last year but still a huge decline from the roughly $27 billion surplus of FY 

96. In FY 99, the U.S. recorded its first agricultural trade deficit with the EU of 

$1 billion. In FY07, USDA forecasts that the trade deficit with the EU will grow 

to $7.6 billion, the largest agriculture deficit the U.S. runs with any market. 

America’s agricultural industry is willing to continue doing its best to offset the 

alarming trade deficit confronting our country. However, the support provided by 

MAP and FMD (both green box programs) is essential to this effort. 

Both MAP and FMD are administered on a cost-share basis with farmers and 

other participants required to contribute up to 50 percent of their own resources. 

These programs are among the few tools specifically allowed in unlimited amounts 

100

under World Trade Organization (WTO) rules to help American agriculture and 

American workers remain competitive in a global marketplace still characterized by 

highly subsidized foreign competition. The over 70 U.S. agricultural groups that 

share in the costs of the MAP and FMD programs fully recognize the export benefits 

of market development activities. By any measure, such programs have been tremendously successful and extremely cost-effective in helping maintain and expand 

U.S. agricultural exports, protect American jobs, and strengthen farm income. 

A recent independent cost-benefit analysis of the MAP and FMD programs prepared for the Department of Agriculture by Global Insight, Inc.—the world’s largest 

economic analysis and forecasting firm—illustrates the benefit of these vital market 

development programs. MAP and FMD are public-private partnerships that use government funds to attract, not replace, industry funds. According to Global Insight, 

total partnership spending on market development has grown 150% in the past decade to over $500 million projected for FY07 ($300 million from industry and $200 

million from government). Over this period, industry contributions (up 222%) have 

grown twice as fast as government funding (up 95%) under MAP and FMD. Industry funds are now estimated to represent 59% of total annual spending, up from 

46% in 1996 and less than 30% in 1991, which strongly represents industry commitment to the effort. 

Another key finding by Global Insight is that 2⁄3 of market development funding 

through MAP and FMD is directed at technical assistance and trade servicing, not 

consumer promotions such as advertising. This category includes trade policy support, which has grown rapidly in recent years, as industry groups use program 

funds to help address rising levels of SPS barriers that U.S. products face in global 

markets. Only 20% of program funds are used in consumer promotions, largely for 

high value products supported under MAP. 

The Global Insight study clearly illustrates the following favorable benefits of increased funding for market development and promotion through MAP and FMD 

that has occurred under the 2002 Farm Bill:

Market development increases U.S. competitiveness by boosting the U.S. share 

of world agricultural trade.

• The study found that the increase in funding for MAP and FMD authorized 

in the 2002 Farm Bill—combined with the increased contributions from industry—increased the U.S. share of world trade since 2001 by over one market share point to 19%, which translates into $3.8 billion in agricultural exports.

Market development increases U.S. agricultural exports.

• As mentioned above, Global Insight found that U.S. agricultural exports are 

forecast to be $3.8 billion higher in 2008 than they would have been had market development not been increased in the 2002 Farm Bill. Furthermore, export gains will accrue well beyond 2008, reaching $5 billion once the full 

lagged impacts of market development are taken into account. For every addi- tional dollar spent on market development, $25 in additional exports result 

within 3–7 years. The study also found that 39% of the export benefits of market development accrued to U.S. agricultural products other than those that 

were being promoted. Known as the ‘‘halo’’ effect, this provides empirical evidence that the program generates substantial export benefits not only for industry partners carrying out the activity (they receive 61% of the total export 

benefit) but for other non-recipient agricultural sectors as well (that receive 

39% of the total export benefit).

Market development improves producers’ income statement and balance sheets.

• The income statement is improved by the price and output effect that higher 

exports have on cash receipts and farm net cash income. Additional cash receipts have increased $2.2 billion during the 2002 Farm Bill due to the additional exports from market development. Higher cash receipts increased annual farm net cash income by $460 million, representing a $4 increase in 

farm income for every additional $1 increase in government spending on market development.

In recent years, the EU, the Cairns group, and other foreign competitors devoted approximately $1.2 billion on various market development activities to promote 

their exports of agricultural, forestry, and fishery products. A significant portion of 

this is carried out in the United States. Market promotion is permitted under WTO 

rules, with no limit on public or producer funding, and is not expected to be subject 

to any disciplines in the Doha Round negotiations. As a result, it is increasingly 

seen as a centerpiece of a winning strategy in the future trade battleground. Many 

competitor countries have announced ambitious trade goals and are shaping export 

101

strategies to target promising growth markets and bring new companies into the export arena. European countries are expanding their promotional activities in Asia, 

Latin America, and Eastern Europe. Canada, Australia, New Zealand, and Brazil 

have also budgeted significant investments in export promotion expenditures worldwide in recent years. 

As the EU and our other foreign competitors have made clear, they intend to continue to be aggressive in their export efforts. For this reason, we believe the Administration and Congress should strengthen funding for MAP and FMD as part of a 

strong trade component in the new farm bill, and also ensure that such programs 

are fully and aggressively utilized. It should be noted that MAP was originally authorized in the 1985 Farm Bill at a level of $325 million, and the Coalition strongly 

supports returning the program to that authorized level of funding from its current 

level of $200 million per year. We also urge that no less than $50 million annually 

be provided for the Foreign Market Development (FMD) Cooperator Program for costshare assistance to help boost U.S. agriculture exports. For FMD, this proposed increase reflects approximately the 1986 level of funding, adjusted for inflation. 

We appreciate the Administration’s recognition of the merit and value of MAP in 

the 2007 Farm Bill proposals by increasing funding for the program to $225 million 

annually, although we strongly believe a higher funding level of $325 million annually is needed. Furthermore, we believe that USDA’s Foreign Agricultural Service’s 

(FAS) current system of funding based upon the competitive merit of applicants’ 

proposals works well and should not be changed. We do not believe that targeting 

funds to specific sectors is necessary. 

At this time, I will give several examples of how MAP and FMD, along with industry initiatives, have helped USAPEEC to improve exports of U.S. poultry and 

eggs. 

As an approved USDA Cooperator organization, USAPEEC is responsible for administering funds from both MAP and FMD, which are combined with industry contributions to fund various market-specific promotional activities. These activities 

can be targeted toward consumers, retail, food service, the HRI trade, or any combination of those market sectors. In fact, the availability of MAP and FMD funding 

is an added incentive for our member companies to contribute to this overall promotion effort. 

USAPEEC utilizes its annual MAP allocation largely for promotional activities. 

However, it has become an increasing necessity that the funds be used in part to 

address the numerous trade issues that hinder U.S. exports. The FMD allocation 

helps to maintain USAPEEC offices in Russia, China, Mexico and Singapore, and 

is therefore also used largely to help overcome developing new restrictions on trade. 

The staffs of these offices are the industry’s eyes and ears in those key markets. 

They work closely with key agriculture officials in the local government and with 

the U.S. Government’s embassies and Agricultural Trade Offices, as well as the import trade. They are essentially a ‘‘quick reaction force’’ for our industry, and are 

able to identify trade issues early. This helps our industry and government to work 

together to resolve trade issues involving poultry and eggs quickly and efficiently. 

As an example of cooperation between industry and government under MAP, 

USAPEEC organized a donation in 2005 of two containers of U.S. chicken leg quarters to the Vietnamese poultry industry. The Vietnamese industry then auctioned 

the donated product to raise funds for its campaign against highly pathogenic avian 

influenza that had devastated the industry. Fear of this disease had also caused a 

dramatic drop in chicken consumption in Vietnam. Auction proceeds also helped to 

calm consumers’ fears about eating chicken. 

How did this help to increase exports? As a result of this donation and auction, 

USAPEEC has gained the support of the Vietnam Poultry Association, which actually helped us promote the importation of safe poultry from the U.S. so that Vietnamese consumers would not sacrifice poultry from their normal diets. As a result, 

U.S. chicken exports to Vietnam which had dropped to just over $500,000, largely 

because of AI fears, climbed back to more than $6 million by the end of 2006. In 

the first 2 months of 2007, U.S. chicken exports to Vietnam were nearly $2.2 million. 

Exports of U.S. turkey from major producing states, such as North Carolina, have 

become increasingly important. In the Republic of Korea, USAPEEC has conducted 

restaurant and deli promotions that have helped to increase U.S. turkey meat exports to Korea from less than $1 million in 2004 to $2.8 million in 2006. 

In the Middle East, USAPEEC has coordinated activities to increase consumer 

awareness in the retail sector of the versatility of U.S. turkey parts. Exports of turkey to the Middle East have grown accordingly, from $2.3 million in 2004 to $3.1 

million in 2006. 

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Mexico has been our largest market for U.S. turkey for years. Since 2000, turkey 

exports have risen from $138 million to more than $216 million, an average of $13 

million per year. Mexico is also the fourth-largest market for U.S. chicken, valued 

at nearly $200 million in 2006. 

USAPEEC has developed a unique partnership with UNA, the Mexican Association of Poultry Processors, which has helped to keep that market thriving. Named 

the NAFTA Egg and Poultry Partnership (NEPP), the USAPEEC–UNA collaboration has organized several industry-to-industry meetings funded by MAP, as well as 

industry-government technical symposia on export issues affecting U.S. poultry. 

Under NEPP, USAPEEC and UNA worked together to establish a special safeguard arrangement that was approved by both governments to extend the NAFTA 

duty for U.S. chicken leg quarters through the end of 2007. (In the original NAFTA, 

all poultry import duties were to be eliminated in 2002). Had that not happened, 

radical elements of the Mexican poultry industry, fearing a deluge of leg quarter imports, were poised to file a dumping action against the U.S. industry, which would 

have been extremely costly. NEPP continues to coordinate industry-to-industry activities to discuss issues of mutual interest and to formalize industry recommendations to our respective governments. In fact, our organization has developed similar 

relationships in Central America and South America in support of CAFTA and the 

ANDEAN Free Trade Agreements. 

Also in Mexico, USAPEEC has promoted the use of U.S. processed egg products 

(liquid, dried, etc.) among food manufacturers, such as bakeries, confectioners and 

mayonnaise makers. Food makers in Mexico, which has the world’s highest per capita consumption of eggs, had traditionally used locally produced shell eggs to manufacture their products. Now, however, manufacturers are making the switch to highvalue U.S. processed eggs. Exports of U.S. egg products to Mexico have grown dramatically, from $7 million in 2004, to $13.1 million in 2005 to $15.8 million in 2006. 

On another front, as highly pathogenic avian influenza spread from Asia into the 

Middle East and Europe in the fall of 2005, consumption of poultry plummeted in 

many countries by as much as 20 to 50%, as fearful consumers simply stopped eating poultry. In 4 months, the price of chicken leg quarters—a market benchmark—

fell from 48¢ per pound to less than 10¢ per pound. The estimated cost to the U.S. 

industry in lost export income was estimated at $142 million per month. 

In early 2006, USAPEEC launched a worldwide initiative aimed at countering 

consumer fears. Funded by $1 million in combined MAP and industry contributions, 

the campaign carried a simple message: ‘‘Properly handled and cooked poultry is 

safe to eat.’’ The ‘‘Just Cook It!’’ campaign quickly spread around the world, and 

gained the endorsement of the World Health Organization’s chief expert on avian 

influenza, Dr. David Nabarro. USAPEEC’s international offices were instructed to 

tailor the message to suit local markets, and USAPEEC shared materials developed 

for the campaign with poultry organizations around the globe free of charge. The 

campaign helped to reassure consumers worldwide that poultry is safe to eat. Chicken leg quarter prices have since rebounded to the mid-40¢ range. 

These examples represent only a small sample of the activities in which the organization is engaged throughout the major export markets. USAPEEC also works to 

open new markets, and is actively promoting U.S. products in underutilized markets 

in Africa, such as Kenya, Tanzania, Ghana, Nigeria, Angola and others. 

In closing, I cannot overemphasize the importance of MAP and FMD to the success of U.S. poultry and egg exports. Thank you, Mr. Chairman, for this opportunity 

to share with the Subcommittee some of our successes, and I would be pleased to 

respond to any questions you may have.

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UNITED STATES POTATO BOARD

Training For PVO’s Raises Profile for Dehy Potatoes in Food Aid 

Having previously cleared the way for U.S. dehydrated potatoes to be used in U.S. 

food aid programs, the USPB is now successfully building an understanding of U.S. 

dehy benefits among organizations that use these programs. In October 2005, eleven 

members from six private voluntary organizations attended intensive training in 

U.S. dehydrated potatoes. This MAP supported activity reached Counterpart International, the World Food Programme, Africare, MARCH, ASON and World Vision. 

After learning about U.S. dehy from the high quality raw product, through the manufacturing process to end uses and benefits, each PVO was able to take key messages back to their organizations. In a highly significant development, Counterpart 

International received their first Title II shipment this year, for about 230 MT, with 

more to come. WFP with their partners in Haiti, MARCH and ASON, were able to 

start distributing dehy in a demonstration/acceptability project for the first time. 

Africare requested 70 metric tons of dehy in their Title II AER. World Vision Zambia implemented a demonstration project and is working closely with their C–SAFE 

partners to have dehy implemented in their multi year activity plans. 

Korea Continues To Purchase U.S. Potatoes Despite Phytosanitary Issues 

Korea has been a strong growth market for U.S. fresh chipping potatoes. Yet after 

steadily rising in recent years—up 2,665% from 119 MT in MY 01/02 to 3,290 MT 

in MY 04/05—U.S. exports hit a snag last year because of Columbia Root Knot Nematode (CRKN) finds. To address this, the USPB worked closely with Korean manufacturers to help them continue using U.S. chip-stockpotatoes and with the U.S. industry to resolve problems. In the U.S., the USPB worked with growers to implement a more vigorous inspection process to eliminate shipping potatoes with CRKN. 

In Korea, snack manufacturers and the USPB worked to get a processing protocol 

implemented that would enable U.S. chipping potatoes to safely enter the market 

despite CRKN issues. This safeguard system encouraged the major snack manufacturers to make commercial contracts again for the next marketing year. Korean 

manufacturers that were not able to make changes to their production facilities 

began purchasing finished chips in bulk from the U.S. as a way to supplement their 

production. Thanks to this collaboration of efforts, U.S. exports of fresh chipping potatoes fell only 39% to 1,995 MT in MY 05/06, and are poised to resume growth in 

the coming year. 

U.S. BEEF PROGRESS EVIDENT ACROSS JAPAN

February 14, 2007

It has been just a little more than 6 months since Japan removed the ban on U.S. 

beef imports. Since then, the U.S. Meat Export Federation (USMEF) has been using 

a multi-faceted campaign called ‘‘We Care’’ to help rebuild confidence in U.S. beef 

among consumers, meat buyers, retailers and restaurant owners. 

And although increases in U.S. beef exports to this region cannot come fast 

enough for the U.S. beef industry, USMEF sees encouraging progress with each 

passing month. 

Just a few weeks ago the second largest beef bowl chain in Japan, Matsuya, started featuring U.S. beef in yakiniku and karubi meals at all its 733 locations due to 

positive customer response. The ‘‘We Care’’ campaign is utilized in each restaurant 

on posters, banners and menu cards. 

Since the resumption of U.S. beef imports, Costco has been selling product with 

successful monthly results. The retailer sells approximately 35 to 40 metric tons 

(mt) per month, which is a 50 to 70 percent increase from August 2006 when the 

warehouse store restarted U.S. beef sales. 

Costco started with four U.S. beef cuts: chuck eye roll, boneless short rib, chuck 

short rib and chuck flap tail. Since U.S. beef sales were successful, Costco added 

rib eye roll, strip loin and flap meat, an underutilized cut. 

USMEF is working with Grand Hyatt Fukuoka as the hotel plans to put U.S. beef 

back on restaurant menus. An American Beef promotion will kickoff at the hotel 

March 11. 

A cooking school featuring U.S. beef recipes developed by a well-known cooking 

personality will be held Feb. 28 at the Better Home Cooking School in Shibuya. Several newspapers and magazines have advertised the event. 

In 2006, the United States exported 13,736 mt of beef and beef variety meat to 

Japan, worth $66.5 million. 

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RETAIL CHAIN SEES RESULTS FROM USMEF EFFORTS

March 14, 2007

Alsuper, a retail chain with 30 outlets in northeastern Mexico, reports that the 

U.S. Meat Export Federation (USMEF) promotions have helped the chain increase 

U.S. meat sales by 3 percent compared to 2 years ago. Approximately 80 percent 

of meat purchases made at the stores come from the United States. 

‘‘USMEF promotions and assistance with developing business relationships with 

U.S. meat companies have been very positive,’’ said Ricardo Duran, Alsuper meat 

purchasing director. Duran said meat sales currently comprise 9.4 percent of all 

sales at Alsuper. The company has set a goal to increase that number to 10 percent 

by December. 

‘‘With 5 new stores opening and continued USMEF promotions and assistance, we 

believe we can reach that goal,’’ Duran said. 

Chad Russell, USMEF regional director for Mexico and the Dominican Republic, 

noted Alsuper’s experience is an excellent example of how USMEF marketing efforts 

help build demand and loyalty for U.S. red meat in Mexico. 

NATIONAL SUNFLOWER ASSOCIATION

Mexican Baker Creates New Bread 

Using Foreign Market Development (FMD) funds, grower check-off and industry 

dollars the National Sunflower Association (NSA) has aggressively pursued improved market opportunities in Mexico. NSA has been aggressively promoting the 

use of confection sunflower kernel in bakery products in Mexico for the last 4 years. 

As a result of this promotion, the largest Mexican baker is using confection sunflower kernel in two of its breads. The breads are being distributed nationwide in 

all major supermarkets. The baker has imported 350 MT of confection sunflower 

kernel valued at $420,000 in the past 6 months of this marketing year. Sales of the 

breads are expected to double in the next year. In the past 4 years, as a result of 

these activities, the value of U.S. confection sunflower product exports has averaged 

over $5,700,000 per year. 

MAP Increases Spanish Imports of U.S. Sunflower Seeds 

Spain is currently the largest export market for U.S. confection sunflower seed. 

The primary use of sunflower seeds in Spain is for snacks. Five years ago using 

Market Access Program (MAP), grower check-off and industry dollars, and in partnership with key Spanish snack roasters, the National Sunflower Association (NSA) 

kicked off a national point-of-sale (POS) campaign to promote U.S. confection sunflower seeds. NSA developed and printed POS materials and our Spanish partners 

distributed and maintained them. The POS materials were placed at points of sale 

in supermarkets, kiosks, and nut shops throughout Spain. The display materials 

highlighted the fact that participating Spanish roasters’ products use USA confection sunflower products that are high quality and fun-to-eat at a low cost. Red, 

white, and blue colors and our ‘Pipas USA’ logo were used in all materials to show 

USA origin. Since the inception of the campaign, exports of U.S. confection sunflower seeds have grown from just over $13,000,000 to $25,350,000 and now account 

for 52 percent of the total U.S. confection sunflower seed exports. 

Exported sunflower seed and kernel are value-added products with processing facilities located in rural locations of North Dakota, South Dakota, Minnesota and 

Kansas accounting for approximately 3,100 jobs in these states. The economic impact 

of the confection sunflower seed industry was estimated at $693 million per year in 

a NSA-sponsored study. 

CALIFORNIA WALNUT COMMISSION

Asian Market Diversification 

The California Walnut Industry has actively engaged in marketing programs in 

Asia since the mid-1990’s. Utilizing MAP funds, the California Walnut Commission

(CWC) entered the Japanese and Korean markets through targeted activities in the 

trade sector to create demand for California walnuts as a bakery/pastry/confectionary ingredient while also generating consumer awareness and purchase of walnuts and walnut inclusive products. The concentrated efforts in the bakery sector 

continue to yield favorable results as over 80% of the customer base in Japan remains concentrated in this sector while in Korea it accounts for 35%. 

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Continued growth in these markets has been demonstrated through diversification within the marketplace. In Korea, high trade awareness and success with walnut inclusive products lead the CWC to develop relationships with manufacturers 

outside the baking sector. Keen interest from ice cream manufacturers, confectioneries and beverage manufacturers lead the CWC to conduct one-on-one meetings introducing possible applications customized for each company’s needs, provided technical assistance in developing new products using California walnuts, and invited 

key product development managers to California to assure quality and food safety 

of California walnuts. MAP funds were utilized to engage in these activities while 

fostering the relationships. 

As a result, an all-time best selling ice cream bar product was launched by a leading Korean ice cream manufacturer, Haitai, which brought a 30 percent market 

growth by a single item in the launching year of 2003/04. Thanks to the great success of this item, the same company launched various products with the same concept and brand name, i.e. ice cream in cup, cone, soft candy and sweet bar in the 

marketing year 2004/05. This actually made a big boom of ‘‘walnut’’ in the confectionery industry, and in the marketing year 2004/05, many other leading confectioneries and bread manufacturers like Lotte, Orion, Samlip and Crown were developing 

new California walnut items. Among them, two items- brownies and cookies using 

California walnuts—were launched by Orion in the beginning of the marketing year 

2005/06, and one steamed bun item with California walnut stuffing was launched 

by Samlip. All these new items from the end of marketing year 2003/04 and marketing year 2004/05 almost doubled the California walnut market in Korea over the 

last 2 years, growing from 3.2 million pounds in the 2002/03 crop year to 6.8 million 

pounds in 2004/05. This accounts for a value increase of 130% from $6.7 million to 

$16.1million over the over the past 2 years, making the dairy/ice cream sector now 

20 percent of the total market in Korea. 

The success of the above items has lead manufacturers to export some of the products developed in addition to sparking interest in other markets, such as Japan in 

developing walnut inclusive products, to achieve the success seen in Korea. In the 

2005 marketing year the first ice cream bar including walnuts launched in September followed by line extensions planned for later in the year. The CWC looks 

forward to the growth that mimics that of Korea, should the launches achieve the 

success intended. 

The Asian market continues to evolve despite unjustified duties in both markets—

30% in Korea and 10% in Japan. The potential for these markets to continue to 

evolve would be even greater if the duties were lifted. The CWC continues to work 

with USTR and in-country partners to remove barriers to trade. Further, MAP funding continues to be of vital importance to support the industry’s efforts to overcome 

barriers to trade, as well as develop and evolve markets. Many of the tactics utilized 

would not be possible without MAP. 

AMERICAN SOYBEAN ASSOCIATION-INTERNATIONAL MARKETING

March 2007

Technical Support to Latin America Livestock Producers 

American Soybean Association-International Marketing (ASA–IM) activities funded by USDA Foreign Agricultural Service (FAS) developed a program to provide 

technical support to Latin America livestock and poultry producers and feed mill operations. This program divided the work into three sections: farm and feed mill visits, field days and seminars, and feed formulation and the development of feeding 

programs. Poultry, swine, tilapia, dairy, beef farms, as well as feed mills, were visited in different Latin American countries under this program. The purpose of these 

visits was to teach animal producers different new nutrition and management techniques, and as a result of this servicing, animal operations will have implemented 

modern management practices and will have improved their technical skills and use 

more soybean products. Participating farms were used as an example for other producers, encouraging them to implement the new technology and thereby impact the 

consumption of soybean meal. This program was complemented with the presentation of conferences, congresses, seminars and field days showing the importance 

of using high quality soybean meal in animal diets, as well as different techniques 

to improve animal performance. Furthermore, a 24 hour on-line program was offered to animal producers for the development of feeding programs and diet formulations to improve the use of U.S. soybean meal in livestock and poultry diets, as 

well as animal performance. 

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The most important effect was the great amount of diets that were formulated. 

It was interesting to observe how each day animal producers are more interested 

to use well balanced diets, using corn and soybean meal as the main ingredients. 

Every day the concept of buying ingredients on the basis of the cost per unit of nutrient is adopted by more animal producers. In many places, the concept of buying 

by price has changed to buying by quality. Feed mills are adopting laboratory techniques to evaluate feed ingredient quality and in the case of soybean meal, analytical technique procedures for determining protein solubility values, urease activity 

and total trypsine inhibitors were discussed with the quality control staff of the 

more important feed mills in Latin America. 

In relation to animal performance improvement, the recommendations presented 

during the seminars and congresses, as well as the effect of the changes in the feeding programs, have produced good results in the livestock operations. Higher weight 

gain and feed conversions were reported for pigs, broilers and beef cattle. Increments in milk production and reproductive efficiency in dairy cattle and higher percent egg production and egg weight in layers were also reported. Most of the 

monogastric producers attributed this improvement in performance to the use of the 

‘‘Ideal Protein Concept’’, which uses as a base the digestible amino acid content of 

the different feed ingredients. Big differences between the cost of diet and the effect 

on performance were found when diets are formulated based on digestible amino 

acid content. 

U.S. HIDE, SKIN AND LEATHER ASSOCIATION

The biggest export market for U.S. bovine hides is China. Exports to China have 

grown from $640 million in 2005 to $875 million in 2006. 

There are a number of reasons for this, but one that has been singled out by some 

of the U.S. hide exporters is the Foreign Market Development (FMD) program that 

U.S. Hide, Skin & Leather Association (USHSLA) participates in. 

Through funding provided by the U.S. Department of Agriculture’ Foreign Agricultural Service (USDA/FAS) and matching dollars put up by about a dozen member 

companies of USHSLA, we have participated in two shows in China over the last 

couple of years—one in Hong Kong and the other in Shanghai. Both shows bring 

in hide buyers from all over the world but primarily from the industrializing Asian 

nations. China is the main importer of hides and remains the most dominant buying 

presence at both shows. In 2005 these two shows accounted for $46 million in onsite sales. In 2006 the two shows accounted for an increased $74.7 million in onsite sales. 

Would USHSLA’s member companies have accounted for this increase of $120.7 

million if we had not attended the shows? Probably some of this business may have 

gotten done, but in addition to an increase in sales both shows facilitate networking 

within the global industry which results in new contacts, new agents signed and additional business throughout the year. 

In fact, according to survey’s filled out by participating USHSLA companies, over 

$110.9 million in increased business in 2006 was done as a result of participation 

in those two shows. That is nearly equal to the increase in hide trade in China over 

the last 2 years. In addition to on-site sales USHSLA member companies reported 

signing 87 new agents at both shows. 

USHSLA and USHSLA members plan to attend these same two shows in 2007. 

The Hong Kong show brings traders, transportation companies, tanners and others 

from around the world and is the largest hide and leather show in the world. The 

Shanghai show is more focused on the growing hide and leather industry in solely 

China. Both shows are a vital part of the growing demand for U.S. hides and leather in Asia. USHSLA’s members will continue to attend these shows in the future 

and plan on similar successful results within China because of opportunities allotted 

to the U.S. hide and leather industry by participating in the FMD program funded 

by the USDA/FAS. 

SOUTHERN U.S. TRADE ASSOCIATION

Alabama Department of Agriculture Helps India Embrace Southern Cuisine 

In January 2006, the Southern U.S. Trade Association (SUSTA) focused on promoting value-added food products and pecans from the southern U.S. in India. 

SUSTA representatives from the Alabama Department of Agriculture participated 

in two trade events—the India International Food and Wine Show (IFOWS) 2006, 

an event for the retail industry, and HospitalityWorld 2006, an event for the hospiVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00114 Fmt 6633 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
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tality, restaurant and institution industry. These events were followed by cooking 

demonstrations and tasting events, a culinary contest with budding chefs, a press 

conference, market visits and research assessing opportunities in India’s pet food industry. 

At IFOWS 2006, in New Delhi, nearly twenty importers and industry leaders visited SUSTA’s pavilion. The show provided a platform to establish contact with local 

importers and introduce them to the southern U.S. food products. Products from 

twenty-four companies from the SUSTA region were featured in the pavilion. The 

promotion was a tremendous success. The importers and buyers, several of whom 

had one-on-one meetings with SUSTA representatives, expressed interest in the 

products and their willingness to import them. 

A cooking demonstration and tasting event was carried out by Ms. Vaishali Sood, 

SUSTA’s brand ambassador chef in India. The event was well attended with more 

than fifty people participating. Ms. Sood made pecan cake and jambalaya, which 

were an instant success with the attendees. 

A culinary contest with twenty-two budding chefs from Banarsidas Chandiwala 

Institute of Hotel Management and Catering Technology was held in New Delhi. 

These chefs used products from the southern U.S. to prepare a full course meal. The 

objective was to establish a professional platform where up-and-coming culinary professionals could display their skills and creative talent in a competitive environment. 

HospitalityWorld 2006, in Mumbai, provided a unique opportunity for strategic 

cross promotion and professional dialogue with the hotel, restaurant and institutional food sectors. The response from institutional buyers was overwhelming. A dialogue was established with Cremica Group, which showed interest in procuring condiments that could be further processed and consumed in the local market. While 

in Mumbai, SUSTA representatives had a one-on-one meeting with Reliance Industries Limited promoting southern U.S. products. The company is entering the Indian 

retail sector in an unprecedented way. 

‘‘Power Pecan—The nutritionally powerful nut’’ is the mantra used in SUSTA promotions to create awareness of pecans in India. SUSTA seeks to familiarize the Indian consumer with the uses and the versatility of the pecan, as it is not available 

in India. The press conference at Hyderabad sought to promote, create awareness 

and develop brand recognition for pecans, the power pecan. Nuts & Spices, a leading 

retail outlet in Chennai that exclusively sells dry fruits and spices, were enthusiastic to include pecans in their product offering during their meeting with SUSTA 

representatives. 

SOUTHERN U.S. TRADE ASSOCIATION

Georgia Department of Agriculture Organizes Market Access Program Generic Promotion in Dubai With Projected Sales of Over $8 Million 

Eight companies from the southern U.S. traveled to Dubai, United Arab Emirates 

in February 2007 to find success at the Gulfood trade show. The Georgia Department of Agriculture organized the Southern U.S. Trade Association (SUSTA) booth, 

along with booths for eight SUSTA region participants, as a Market Access Program 

(MAP) Generic promotion. MAP Generic promotions represent more than one product or commodity and allow suppliers to participate in trade shows, in-store promotions and other activities for a reduced cost. The U.S. companies promoted various food products at the show, including fruit juices, rice, processed meat products, 

popcorn and other snack foods. 

Importers and buyers visiting the booth were given the opportunity to meet with 

U.S. companies, find out more about southern U.S. food products, and even taste 

products prepared by a chef in the booth. Importers and buyers also expressed interest in making additional contacts with suppliers of nuts, dairy products, honey, confectionery, spices, oils, fresh vegetables, fresh fruits and sauces. 

Five companies participating in the MAP Generic promotion conducted by SUSTA 

at Gulfood reported immediate sales totaling $964,000. Others indicated that they 

expected orders within the year, projecting sales to reach approximately $8,370,000 

as a result of the show. 

SOUTHERN U.S. TRADE ASSOCIATION

The Long Green Road to Success 

In support of the notion that it takes years to tackle a foreign market, the Southern U.S. Trade Association (SUSTA), with the support of the Southern 

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Nurserymen’s Association (SNA), organized the U.S. pavilion at the Internationale 

Pflanzen Messe (IPM) in Essen, Germany for the 12th consecutive year. 

IPM, the largest horticulture trade show in the world, includes about 1,350 exhibitors from 37 countries in 19 halls totaling more than 1 million square meters 

of exhibit space. The 4-day event attracts nearly 60,000 visitors from around the 

world looking for plant material, technology, and related goods. 

Participants from eight different U.S. nursery companies, including five first-time 

exhibitors, took advantage of the institutional knowledge SUSTA has gained over 

the last 12 years. In this promotion, a first-time exhibitor has a leg up on the competition because of the groundwork laid at the past promotions. Many new exhibitors find a ‘‘built-in’’ relationship exists with many buyers because of past exhibits 

and nursery tours. European buyers return each year to the U.S. Pavilion because 

it introduces them to a wide range of new U.S. products and producers. 

In their experience, the exhibitors have found that repeated participation is one 

of the keys to success in the European market. For example, an exhibitor the first 

year may garner interest and a few small orders. The second year and third year 

exhibitor shows a buyer that the company is committed to the European market and 

the relationship is solidified. This relationship brings about larger and repeated orders. 

As in the past, most interest is in young plant material, mostly large quantities 

of ‘‘bare-root’’ stock of ornamental trees and shrubs. At the 2006 show, exhibitors 

reported $380,000 in sales and anticipated sales. There are also long term results; 

many past exhibitors have moved into growing agreements with European nurseries. In this arrangement, an EU grower either purchases the rights to grow a licensed plant variety or actually exclusively purchases young plant material to be 

grown out in-country. This partnership allows a U.S. supplier to gain a larger margin of profit than marketing the product themselves, due to many issues with trying 

to sell and ship ‘‘finished’’ nursery products to Europe. 

Exhibitors and participants also point out that gaining new customers and making sales are not the only reason they attend IPM or go on the nursery tours. Several participants use the time at the show to seek out trends that can give them 

an advantage over their competition or products that can make their business more 

efficient. As with most industries, the nursery industry is constantly changing and 

evolving. IPM gives SUSTA participants a chance to stay one step ahead in the market. 

Part of the reason this promotion has been consistently successful is its multi-layered aspect. Nurserymen are given multiple opportunities to deal with the market 

each year. For example, this year’s promotion includes: exhibition at the trade show, 

post-show nursery tours in a selected country (Italy) and then a follow-up reverse 

trade mission to the U.S. the following summer. An exhibitor has the potential to 

be introduced to a customer, visit the customer’s business and then have the customer visit his business—all in 1 year! 

Another reason of continued success is the cooperation of state, federal and private organizations. A list of this year’s cooperators reads like a who’s who: the 

Southern Nursery Association, North Carolina Association of Nurserymen, Ohio Florist’s Association, Tennessee Department of Agriculture, North Carolina Department of Agriculture, Rome FAS office, Berlin FAS office. In the past we have had 

participation from APHIS, and a multiple selection of grower organizations. 

PEANUT FARMERS REGAIN LOST MARKET SHARE

Peanuts are a vital crop for farmers in Alabama, Georgia, and North Carolina. 

Market Access Program (MAP) funds have been used successfully to increase exports of peanut butter made in Georgia and other states to Mexico. Peanut butter 

exports increased 64% from 2005 to 2006 with an increase in value from about $3.5 

to $5 million dollars in 1 year. MAP funds have also been used to promote raw peanut exports with exports increasing 14% from 2005 to 2006, regaining lost market 

share. The Market Access Program is also assisting a small peanut processing company in North Carolina to get a foothold in the export market by providing market 

information and advertising support for its products in Canada and the UK. 

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U.S. DAIRY EXPORT COUNCIL SUCCESS STORY

Arkansas, Colorado, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Nebraska, Ohio, Pennsylvania, South Carolina and 

South Dakota

New Commodity Cheese Imports to Japan 

Impacted States .... A company that benefited from this program has members in the following 

states: Arkansas, Colorado, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Minnesota, Mississippi, Nebraska, Ohio, Pennsylvania, S. Carolina and S. Dakota, among others. 

Background ........... U.S. suppliers of cheddar have had difficulty penetrating the Japanese 

market due to competitive pricing from New Zealand and Australia. 

Goal ....................... Increase awareness and market share of U.S. commodity cheese. 

Strategy ................. Educate Japanese traders and importers about the Cooperatives Working 

Together program which offers price parity with international competition and allows product trial. 

Tactics ................... Continuous trade visits. 

Results .................. During the first half of 2006, a major Japanese company imported 300 

metric ton of cheddar from a U.S. supplier through the CWT program. 

These transactions amounted to approximately $840,000. The company 

has committed to import an additional 200 metric tons of cheddar from 

the same U.S. supplier by the end of the year. 

U.S. DAIRY EXPORT COUNCIL SUCCESS STORY

Sports Nutrition Mission Spurs WPC–80 Exports to Brazil 

Background ........... A Brazilian bar manufacturer attended a USDEC-sponsored sports nutrition mission and seminar that was conducted at Cal Poly University. 

USDEC promoted the mission and seminar to U.S. dairy suppliers as an 

opportunity to learn how to incorporate whey proteins such as 

texturized whey into protein and energy bars. 

Goal ....................... Increase U.S. market share for WPC–80. 

Strategy ................. Introduce the Brazilian food supplement industry to U.S. suppliers and 

help manufacturers understand how best to incorporate whey proteins 

in sports nutrition and energy bars. Assist USDEC members with documentation issues and other regulatory information. 

Tactics ................... —Act as a liaison between the Brazilian food supplement industry and 

U.S. suppliers through trade servicing activities. 

—Support USDEC members in South America markets. 

Results .................. With knowledge obtained through the mission, the Brazilian company was 

able to re-launch a better tasting sports nutrition bar that contained 

whey proteins. The Brazilian manufacturer also will soon launch a new 

beverage using WPI from the United States. The company purchased 20 

tons of instant WPC–80, with an approximate value of $5.5/kg. It expects 

to import about 240 tons in 2006 from the United States, at an approximate value of about $1,320,000. 

USA POULTRY & EGG EXPORT COUNCIL—RUSSIA

Constraint: Russia uses veterinary requirements as technical barriers for U.S. poultry. 

Description: The Russian Veterinary Service (RVS) uses differences in U.S. and Russian standards and risk assessment as technical barriers to limit imports of U.S. poultry.

Activities: 

• Technical Regulations for Poultry Meat • U.S.-Russian Technical Consulting Center 

• Comparative Testing of Poultry Products • Database of official RVS documents

• HACCP manuals reprinting and mailing (CANCELLED, FUNDS TRANSFERRED FOR 

AI)

114

Performance measures Benchmark Goal Current 

1. Number of HACCP 

manuals distributed 

in Russia.

1,600.0 2,500.0 1,600

2. Number of new 

Russian standards 

based on the U.S. 

System.

Chicken products: 

terms and definitions.

Develop draft of technical regulations.Analysis conducted, 

RPU draft blocked. 

3. Number of translated official documents on poultry 

meat safety.

24 50 41 (1,700+ pages) 

1. USAPEEC started collecting information about development of new technical regulations 

for poultry. A draft TR initiated by the Russian Poultry Union was translated into English and 

presented for analysis to U.S. poultry industry specialist, processors, traders and importers. 

2. The U.S.-Russia Technical Consulting Center translated 41 official Russian and U.S. technical documents (total of 1,700 pages) regulating poultry production and safety control; sets of 

docs were copied on CDs, printed as books and distributed in Russia and U.S. USAPEEC helped 

organize the U.S.-Russian Meat Safety Conference ‘‘A Safe Meat Supply—From Farm to Table’’ 

in May. USAPEEC conducted comparative tests of official U.S. and Russian analytical methods 

for salmonella detection in poultry. 

3. Together with the National Association for Consumer’s Rights, USAPEEC continued comparative testing of poultry products from foreign and domestic producers. The testing proved 

adequate quality of the U.S. poultry product compared to other producers, especially Russian 

ones. 

4. A veterinary information agency was contracted to obtain new official documents from the 

VPSS. 

5. 27 articles based on HACCP manuals and U.S. professional print and on-line publications 

were placed in Russian professional veterinary periodical publications. 

WINE INSTITUTE

U.S. Wines Continue To Gain Market Share in the United Kingdom 

The United Kingdom is the largest, most competitive market for imported wine 

in the world. It is also the number one destination for U.S. wines and those from 

most producing countries. 

In 2006, U.S. wines continued to increase market share in the UK according to 

retail sales monitored by AC Nielsen. Because wines shipped to the UK trade may 

be bottled in Italy or France or shipped in-bottle from Belgium or The Netherlands, 

export shipment statistics to a particular country are a poor indication of sales 

growth in the UK. 

During 2006, U.S. wines achieved an off-premise market share of 16.0% by volume (+8.3%) and 16.2% (+8.0%) share by value. This places U.S. wines third in market share behind Australia (22.3% share) and France (16.4% share). Considering 

current growth rates, U.S. wines should overtake France for second place in the UK 

during 2007. 

In the on-premise market, U.S. wines grew 18% in value and 15% in volume, although market share is considerably less as European wines still dominate this sector.

Mr. SALAZAR. Thank you very much for your testimony. 

Mr. Ford. 

STATEMENT OF PATRICK FORD, DIRECTOR, INTERNATIONAL 

MARKETING, FORD’S GOURMET FOODS; ON BEHALF OF

COALITION TO PROMOTE U.S. AGRICULTURAL EXPORTS,

RALEIGH, NC 

Mr. FORD. Good afternoon. My name is Patrick Ford. I am the 

International Marketing Director of Ford’s Gourmet Foods. I am 

honored to have been selected among my peers to speak on behalf 

of the Market Access Program and the Foreign Market Development Program and how they increase export potential for U.S. companies. 

115

Although our company’s growth in recent years into an internationally recognized gourmet food company is testimony to the 

success of the MAP and FMD programs, it is important to understand the many ways in which these programs have been able to 

significantly increase our foreign trade in a relatively short period 

of time. I thank you for that opportunity. 

My family has been in the food business for many years. My 

great-grandfather, Andrew J. Ford, and his sons, Connie Mac, my 

grandfather, and Carl had a small farm outside of Raleigh, North 

Carolina, back in the early 1940s. With a small crop surplus to sell 

1 year, they founded Ford’s Produce Company. My parents, Len 

and Sandy Ford, took over the family business from my grandfather who retired in 1985. My mother began a new division, Ford’s 

Gourmet Foods, a specialty foods company, shortly thereafter, and 

today our company employs around 80 people. 

In 1992, we introduced Bone Suckin’ Sauce—an all-natural western North Carolina style barbecue sauce. It is my grandmother’s 

recipe. My uncle modified it. My mom named it. And it changed everything about our business. When I rejoined the family business 

after college in 1997, we shipped a few small orders to the U.K., 

Hong Kong and Canada. There was no brand awareness in the 

overseas markets, no product support and no real marketing plan 

to speak of. The international buyers that we did business with 

found us at the New York and San Francisco trade shows. We had 

no knowledge of the regulations and basically did not know how to 

get into the game. We were dependent on people in other countries 

to tell us what to do. 

I knew there must be market demand in other parts of the world 

and with the help of the Foreign Agricultural Service, the North 

Carolina Department of Agriculture, Southern U.S. Trade Association and MAP funds, we researched countries, trends, market conditions and potential customers. Our first international trade show 

was a Specialty and Fine Food Fair in London in 2003. It proved 

to be a huge success but it came with a hefty price tag. We knew 

that we would not be able to afford to attend international trade 

shows on an ongoing basis without help. We became a member of 

SUSTA shortly thereafter, and were made aware of the MAP 

funds. 

Since then we have relied heavily on MAP to help us with many 

items including correct labeling for all of our products. Foreign labeling is not just about language translation. For example, in England each port has different requirements and different ways of 

listing ingredients on each label and they do not accept the U.S. 

nutritional panel. In Canada, Montreal has different guidelines 

than the rest of the entire country. The details of the labels alone 

can take months to work out and are extremely costly for a small 

business to produce. Funding from MAP programs has also helped 

with market research, information on qualified buyers, trade show 

support, shipping costs, advertising and product support. Most 

small businesses do not have the resources, time or money to fully 

investigate all the export requirements. It simply will not get done. 

Breaking into a foreign market doesn’t happen overnight. It 

takes years of building familiarity, having a presence at trade 

shows, sending samples, advertising, in-store samplings and buildVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00119 Fmt 6633 Sfmt 6601 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
116

ing relationships with buyers to make a product successful on foreign soil. Add to this the fact that our foreign competitors are constantly increasing their investment into the market and I hope you 

can see why without significant increases in the MAP and FMD 

program funding, it will be impossible for U.S. products to keep up. 

While these same competitors are focusing export dollars on the 

U.S., jobs on U.S. soil are at stake. I know that increasing the MAP funding to $325 million means 

a major investment in the future of exports in our country. I represent the small business. We get up early, we stay late, and we 

don’t take days off. We do this to be able to seize opportunities. 

This is not only an opportunity but a partnership between the U.S. 

Government and all small businesses. The goals of this partnership 

are to benefit the small business by developing opportunities 

abroad and to benefit our country by protecting and creating jobs, 

and to begin to correct the trade deficit by protecting small businesses across the country. 

In closing, please do vote to increase the MAP program budget to $325 million. I cannot stress enough the importance of the MAP 

and FMD to the success of U.S. small business exports. Thank you. 

[The prepared statement of Mr. Ford follows:]

PREPARED STATEMENT OF PATRICK FORD, DIRECTOR, INTERNATIONAL MARKETING, FORD’S GOURMET FOODS; ON BEHALF OF COALITION TO PROMOTE U.S.

AGRICULTURAL EXPORTS, RALEIGH, NC 

Good afternoon. My name is Patrick Ford; I am the International Marketing Director of Ford’s Gourmet Foods. I am honored to have been selected among my peers 

to speak on behalf of the Market Access Program and Foreign Market Development 

Program, and how they increase export potential for U.S. companies. Although our 

company’s growth in recent years into an internationally recognized gourmet food 

company ought to be testimony enough to the success of the MAP and FMD programs, it is important to understand the many ways in which these programs have 

been able to significantly increase our foreign trade in a relatively short time. I 

thank you for that opportunity. 

I hope you will consider my testimony to be justification for a significant increase 

in funding of these programs so that other small U.S. companies may take advantage of the vast export market available, and gain assistance in conquering the 

many roadblocks that commonly interfere with or prevent altogether the possibility 

of export. 

About Ford’s Gourmet Foods 

My family has been in the food business for many years. My great-grandfather, 

Andrew J. Ford and his sons Connie Mac (my grandfather) and Carl had a small 

farm outside of Raleigh, NC back in the early 1940s. With a small crop surplus to 

sell 1 year, they founded Ford’s Produce Company. My parents, Lynn and Sandi 

Ford took over the business from my grandfather who retired in 1985. My mother 

began a new division, Ford’s Gourmet Foods, a specialty foods company. 

In 1992, we introduced Bone Suckin’ Sauce, an all-natural, Western North Carolina style barbeque sauce. It is my grandmother’s recipe that my uncle modified and 

my mom named, and it changed everything about our business. 

When I re-joined the family business after college in 1997, we shipped a few small 

orders to the United Kingdom, Hong Kong, and Canada. There was no brand awareness in the overseas markets, no product support, and no real marketing plan to 

speak of. The international buyers that we did business with found us at the San 

Francisco and New York food shows. We had no knowledge of the regulations and 

we basically did not know how to get into the game. We were dependent on the people in other countries to tell us what to do. 

I knew there must be market demand in other parts of the world. With the help 

of the Foreign Agricultural Service, North Carolina Department of Agriculture, 

Southern U.S. Trade Association and MAP Funds, we researched countries, trends, 

market conditions, and potential customers. Our first international trade show was 

the Specialty and Fine Food Fair in London in 2003. It proved to be a huge success, 

117

but it came with a hefty price tag. We knew that we would not be able to afford 

to attend international trade shows on an ongoing basis without help. 

We became a member of SUSTA and were made aware of MAP Funds shortly 

after that show. 

Since then we have relied on MAP to help us with many items including correct 

labeling for all our products. Foreign labeling is not just about language translation. 

For example in England, each port has different customs requirements, different 

ways of listing the ingredients on each label, and they do not accept the U.S. nutritional panel. In Canada, Montreal has different labeling guidelines than the rest of 

the country. The details of the labels alone can take months to work out, and be 

extremely costly for a small business to produce. Funding from MAP programs has 

also helped with market research, information on qualified buyers, trade show support, shipping costs, advertising, and product support. Most small businesses do not 

have the resources, time or money to fully investigate all the different export requirements. It simply will not get done. 

MAP branded funds level the playing field for small businesses looking to expand 

into the international market place. They have provided the advice and guidance 

to enter into the market. Since 2004 our sales in the UK have increased 300%, and 

we now have a presence in over 30 countries. 

Breaking into a foreign market doesn’t happen overnight. It takes years of building familiarity by having a presence at trade shows, sending samples, advertising, 

in-store sampling, and building relationships with buyers to make a product successful on foreign soil. Add to this the fact that our foreign competitors are constantly increasing their investment in market promotions, and I hope you can see 

why without significant increases in MAP and FMD program funding, it will be impossible for the U.S. products to keep up. And while these same competitors are focusing their export dollars on the U.S., jobs on U.S. soil are at stake. 

Conclusion 

I know that increasing MAP funding means a major investment in the future of 

exports for our country. I represent the small business. We get up early, stay late, 

and don’t take days off. We do this to be able to seize opportunities. This is not only 

an opportunity, but a partnership between the U.S. Government and all small businesses. The goals of this partnership are to benefit the small businesses by developing opportunities abroad, and to benefit our country by protecting and creating 

jobs, and to begin to correct the trade deficit by protecting small businesses across 

the country. 

In closing, please vote to increase the MAP program budget to $325 million. I cannot stress enough the importance of MAP and FMD to the success of U.S. small 

business exports. Thank you, Mr. Chairman, for this opportunity to share with you 

and the Subcommittee some of our successes, and I would be pleased to respond to 

any questions you may have.

Mr. SALAZAR. Thank you, Mr. Ford. 

We want to thank all of you who testified today for enlightening 

the Committee on these critical issues. Speaking on behalf of the 

Members of the Committee, we very much appreciate that. 

Under the rules of the Committee, the record for today’s hearing 

will remain open for 10 days to receive additional material and 

supplementary written responses from witnesses to any question 

posed by a member of this panel. This hearing of the Subcommittee 

for Specialty Crops, Rural Development, and Foreign Agriculture is 

adjourned. 

[Whereupon, at 2:58 p.m., the Subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

118

PREPARED STATEMENT OF DAVID BECKMANN, PRESIDENT, BREAD FOR THE WORLD

I appreciate the opportunity to submit written testimony on a subject very close 

to my own heart and a prime policy interest of Bread for the World. 

Founded in 1974, Bread for the World is a Christian, nonpartisan organization 

supported by 45 denominations and more than 2,500 churches that works to bring 

about public policy changes that address the root causes of hunger and poverty in 

the United States and overseas. Bread for the World’s 58,000 members lobby Congress and the Administration to this end, and mobilize a quarter of a million constituent contacts with Members of the U.S. Congress every year. Bread for the 

World helps concerned people learn about policy issues that are important to poor 

and hungry people, and then helps them turn this knowledge into positive political 

action. 

The dimensions of global hunger are well known: More than 850 million people—

half of them children—live in a state of chronic hunger and food insecurity; 25,000 

die daily due to hunger and related ailments. We are seeing the Millennium Development Goal of halving global hunger and poverty by 2015 slipping from our grasp. 

For such demeaning hunger and poverty to persist when we have the technological 

and economic means of ending it is a moral affront to American values. 

Food aid has been an important tool in combating global hunger, and has saved 

many lives, and the U.S. can rightly feel proud of its role as the world’s most generous donor of food aid. Its efforts have saved millions of lives. However, the food 

aid program has also been burdened with ancillary objectives that undermine its effectiveness and efficiency in meeting the needs of hungry people around the world. 

Bread for the World has as its fundamental mission seeking justice for hungry 

people. And while we appreciate the political argument for maintaining a broad coalition of U.S. support for food aid, we are convinced by our own polling results that 

ending global hunger is a topic that resonates with the U.S. public. Americans understand that this is fundamentally an issue of social justice, and that meeting the 

real needs of hungry and malnourished people should be the overriding objective of 

a U.S. food aid program. 

The food aid environment has changed significantly from when Food for Peace 

was initiated over 50 years ago, and changes in the food aid program are overdue. 

One need is to simplify and clarify the multiple and sometimes conflicting objectives 

and statutory requirements, which cannot all be met. Specific legislative objectives 

set for U.S. food aid include, in addition to combating world hunger and malnutrition, ‘‘promoting broad-based, equitable and sustainable development,’’ ‘‘developing 

and expanding export markets for U.S. agricultural commodities,’’ ‘‘fostering and encouraging the development of private enterprise and democratic participation,’’ and 

‘‘preventing conflict.’’ On top of these are added operational requirements, including 

minimum tonnage (generally met), sub-minimum tonnage for non-emergency programs (not met since 1995), and value added (generally not met). It is time to clarify 

the mandate of food aid, giving unambiguous priority to combating hunger and malnutrition. 

Bread for the World favors a transition to demand-driven food aid, based more 

on the needs and opportunities and less on supply and availability. Food aid is no 

longer a surplus disposal program, and the volumes involved are too small to affect 

commodity prices in any but exceptional cases. In fact, food aid tends be pro-cyclical, 

so that food aid volume tends to decrease in times of high prices—such as the 

present—when the food needs tend to be the greatest. This is exactly counter to the 

stated objective of meeting the nutritional needs of the world’s hungriest people. 

Bread for the World believes that the farm bill should ensure ongoing and consistent U.S. assistance to people in need of emergency food and nutrition support 

around the world. This means increasing the authorized funding levels for emergency food aid—especially in light of recent agricultural commodity price increases. 

We also need to recognize that commodity food aid is not always the most appropriate response to food insecurity, whether chronic or emergency. One life-affecting 

consideration is that of timeliness, ensuring the quickest response to emergencies 

or windows of opportunity. Other considerations include market impact—whether 

the commodity food aid serves as an incentive or disincentive to local or regional 

production and commerce—and commodity composition—i.e., whether the needs are 

best served by commodities or products available from the U.S. In order to facilitate 

the most effective and efficient responses to food insecurity, Bread for the World 

strongly supports providing the Office of Food for Peace with the flexibility to procure food locally or in the region. We think the Administration’s request in the farm 

bill principles for authority to use up to 25 percent of Title II appropriations for 

local or regional purchase is a step in the right direction, and urge the Committee’s 

support. Local and regional procurement is not going to be appropriate in every case 

119

and needs to be carefully applied, but there is already sufficient information and 

experience on the part of the World Food Program, the NGO community and other 

donors to clearly demonstrate the circumstances under which this instrument can 

be effectively applied. 

Along the same lines, we support loosening the restrictions that mandate the 

processing (‘‘value added’’) of food aid and U.S. flag shipping. While these reflect legitimate interests, our main focus should be on meeting needs and saving lives, and 

employing the most appropriate and efficient means to that end. Surely, other 

means can be found for ensuring the viability of the U.S. merchant marine than by 

imposing onerous and costly restrictions on the shipment of food to meet the urgent 

nutritional needs of hungry people around the world. 

The Bill Emerson Humanitarian Trust (BEHT) is another useful weapon in combating global hunger. We support changes that would render the BEHT more efficient and reliable in addressing food crises. These include making use of the BEHT 

easier and more transparent by clarifying the ‘‘trigger’’ for its utilization relative to 

Title II; increasing efficiency by directing it to hold reserves in the form of cash or 

options instead of commodities, thus reducing costs and increasing flexibility and responsiveness; and instituting provisions for regular replenishment. 

The new farm bill could also open opportunities for poor countries to become more 

food self-reliant by reducing protectionist forms of assistance to U.S. farmers. Funding within the farm bill could be shifted from trade-distorting commodity payments 

to programs that would be much more helpful for rural America, especially for farm 

and rural families of modest means, and to nutrition assistance for hungry people 

in rural and urban America. These reforms, together with reduced protectionism in 

Europe and Japan, would remove significant obstacles to agriculture and food security for many of the world’s poorest people. 

Finally, we would like to encourage Members of this Committee to consider the 

problem of world hunger from the broadest perspective, recognizing that getting beyond chronic food insecurity requires developing recipient country capacity to 

produce and trade. Emergency commodity food aid is at one end of a spectrum of 

responses, and needs to be recognized as a temporary fix at best. The U.S. Government, along with other donors, needs to put more resources into effectively addressing long-term food security. International aid for agricultural development has 

plummeted over the past 20 years, from 11 percent to just 3 percent of ODA. Increased crop yields in developing countries—something achievable with current 

technologies—would have a profound and lasting impact on global hunger. 

Growth in the developing world would also be good for U.S. agriculture. A 2006 

study, commissioned by Bread for the World Institute and conducted by the International Food Policy Research Institute, showed that a 7 percent GDP growth rate 

in the developing world would generate nearly $26 billion in additional U.S. agricultural exports between 2006 and 2020. 

We have the obligation and the opportunity to end hunger. We need to take advantage of every means for doing so. The changes to the food aid portion of the farm 

bill noted above will, I am confident, move the U.S. closer, in concert with the NGO 

community, the WFP and other donors, toward meeting this urgent objective. 

In closing, I would like to call attention to our policy paper on food aid, ‘‘Feeding 

a Hungry World,’’ issued in April 2006, a copy of which is submitted with this testimony. We would be happy to provide further information on any of the above points. 

Thank you. 

PREPARED STATEMENT OF DAVID KAUCK, SENIOR TECHNICAL ADVISOR, CARE USA 

Mr. Chairman and Members of the Subcommittee, thank you for this opportunity 

to present CARE’s perspectives on the performance of United States international 

food assistance programs. Ensuring that our nation’s food assistance programs 

achieve success at reducing hunger around the world is a critical challenge for all 

of us. CARE shares your commitment to combat hunger by providing effective and 

accountable programming wherever it is needed. CARE would like to express its 

great appreciation for all the support that both the Subcommittee and the Committee have given to programs using food aid. 

CARE has been a cooperating partner of the Food for Peace program since it was 

established in 1954. Over the past 53 years, CARE has programmed more than 18.5 

million tons of food from Food for Peace (valued at over $7.4 billion) to reach more 

than 200 million people. CARE operates food assistance programs today in twentyVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00123 Fmt 6621 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
120

1 In FY08, CARE will program Title II non-emergency resources in about 12 countries. This 

reduction is primarily due to the Office of Food for Peace’s decision to focus its non-emergency 

resources in 15 countries. CARE was consulted by the Office of Food for Peace before this decision was made. CARE supports FFP’s efforts to concentrate its non-emergency programs in 

those countries that are the most food insecure. 2 CARE–USA, ‘‘White Paper on Food Aid Policy’’, 2006. 

3Food and Agricultural Organization of the United Nations, ‘‘The State of Food Insecurity in 

the World: Eradicating World Hunger—Taking Stock Ten Years After the World Food Summit’’, 

(Rome: FAO Information Division, 2006) . 4 Christopher B. Barrett, ‘‘The United States International Food Assistance Programs: Issues 

and Options for the 2007 Farm Bill’’, February, 2007. 

two countries in Africa, Latin America, and Asia.1 In the half-century or so that 

U.S. food aid programs have existed in their current form, our work together has 

helped to save countless lives, and protect and improve the health and well-being 

of millions of people living on the edge of disaster. CARE is proud to be a part of 

this great effort. 

CARE’s approach to food assistance has evolved over the years. We began by focusing on the provision of food and other assistance to people facing the threat of 

famine. We still use food in this way, but we have learned that food resources alone, 

although valuable, are not enough to address hunger. To improve people’s lives, we 

developed multi year programs that combine food assistance with other resources. 

These programs target the neediest people, often before a humanitarian emergency 

is apparent. They are designed to address the underlying causes of hunger and to 

strengthen poor peoples’ capacity to cope with misfortune. 

When it uses food aid, CARE’s central focus is on helping poor people overcome 

hunger. Our objectives are always to save lives and protect livelihoods—while minimizing any unintended harmful consequences that might result from the use of food 

resources. CARE strives to use food only when and where it is appropriate.2 Wellmanaged food aid continues to be an important component of a global strategy to 

reduce hunger. 

While acknowledging the important contribution of U.S. food assistance programs, 

we also accept the challenges that we still face, and they are daunting. There are 

currently approximately 820 million undernourished people in the developing 

world.3 Many of these people are now so poor that they lack the means to rebuild 

their lives following natural disasters or other humanitarian emergencies. These 

problems are particularly acute in sub-Saharan Africa, where, for at least the last 

3 decades, hunger has steadily worsened, becoming more widespread and persistent 

over time. The growing numbers of highly vulnerable people who have fallen into 

extreme and intractable poverty helps to explain the increased frequency and severity of humanitarian emergencies, and the exploding demand for emergency food aid. 

In parts of the Horn of Africa, the Sahel, and southern Africa, events that would 

not have triggered major humanitarian emergencies twenty-five years ago do so 

now. 

While humanitarian crises have increased, the funding needed to adequately support food assistance demands worldwide has declined by nearly half in real terms 

since 1980.4 We recognize that these resource constraints will not be easy to resolve 

in the current budget environment. This is why everything possible must be done 

to improve the efficiency and effectiveness of food aid practices so that we can 

achieve the greatest impact possible with the resources that we have. One important way to achieve this is to improve the timeliness and targeting of food aid. Food 

aid is especially valuable when it arrives on time and reaches the people who need 

it most. If it is late or poorly targeted, essential food aid can be wasted. Worse yet, 

untimely deliveries and poorly targeted food aid can have unintended, and sometimes harmful, economic consequences. 

With these concerns in mind, CARE recommends several specific changes to current policies affecting U.S. food assistance programming. 

Local Purchase 

CARE endorses increasing procurement flexibility in the Title II program so that 

food may be routinely purchased locally or regionally in developing countries. Under 

the right circumstances, having a local purchase option can reduce delays and improve program efficiency and effectiveness, and therefore save lives. 

Although local purchase can be a useful tool under the right conditions, this approach must be undertaken carefully. If not managed properly, local purchase can 

trigger price spikes that are harmful to poor people who must purchase food in 

order to meet their basic needs. This is why we feel that a carefully monitored program would be a useful way to introduce this innovation. 

121

Better Strategies Are Needed To Provide Cash Resources for Food Security 

Programs 

In addition to direct distribution of food, there is a need for a reasonable level 

of cash assistance for complementary activities intended to reduce hunger. Experience has shown that cash-supported activities are often critical to the success of food 

programs. Although current law provides authority for limited cash assistance, 

CARE recommends that Congress increase the total amount of cash assistance provided within the Title II program and consider new strategies on how best to make 

those resources available. 

Currently, the Title II program provides three conduits for distributing in-country 

cash support: (1) Section 202(e) funds, provided primarily for administrative and 

operational costs; (2) funding for Internal Transport, Storage and Handling for logistics-related support; and (3) proceeds from the sale of monetized commodities made 

available for costs associated with enhancing the effectiveness of Title II programs. 

The practice of purchasing commodities here in the United States, shipping those 

resources overseas, and then selling them to generate funds for food security programs is far less efficient than the logical alternative—simply providing cash to 

fund food security programs. 

As a step towards improving the efficiency and effectiveness of non-emergency 

food aid programs, we recommend: (a) increasing Section 202(e) funding levels to at 

least 25% of the overall Title II appropriation; and (b) expanding Section 202(e) 

flexibility to permit the use of funds to enhance the effectiveness of program efforts. 

Not only would this substantially improve the cost-effectiveness of non-emergency 

programs, it would also eliminate a source of unnecessary controversy that hangs 

over U.S. food assistance. Economic research supports the view that open market 

sales of imported food aid may in some cases create market distortions that are 

harmful to local farmers, traders and economies. It also shows that monetized food 

tends to displace commercial imports, both from the U.S. and from other countries. 

For this reason, monetization became an especially contentious issue during recent 

WTO negotiations. 

Mr. Chairman, for the reasons just described CARE has made an internal decision 

to phase out of monetization. This transition should be completed by the end of Fiscal Year 2009. In the future, CARE will confine its use of food aid to emergency 

and safety net programs that involve targeted distribution to the chronically hungry. 

The Bill Emerson Humanitarian Trust 

The Bill Emerson Humanitarian Trust was intended to function as a reserve of 

food and food-associated assistance funding that can be drawn upon quickly to address unanticipated, rapid onset humanitarian crises. Unfortunately, at present the 

Trust is difficult to access and is usually deployed as a last resort, rather than a 

first response. Two changes would help the Trust function as it was originally intended. First, to make the Trust more accessible, the conditions for releasing food 

and funds should be clarified in law. Second, we recommend modifying current law 

to ensure replenishment of resources as part of the normal, annual appropriations 

process. CARE is eager to work with the Committee to strengthen the statutory provisions affecting the Bill Emerson Humanitarian Trust in order to make this vital 

assistance tool as effective as possible. 

Addressing the Underlying Causes of Food Insecurity and Hunger 

Chronic hunger is often the result of multiple, deeply rooted causes. In the long 

term, achieving a lasting reduction in the incidence of chronic hunger will require: 

improvements in agricultural productivity; greater access to information, capital, 

basic education, health services, and technical training for the poor; and changes in 

the status of women and girls. This ambitious list obviously goes well beyond the 

mandates set forth in the farm bill. Indeed, it is beyond the means of any single 

donor government. But this crucial, broader objective is not impossible, and it is 

fully consistent with the values of the American people to help others help themselves. 

Addressing the underlying causes of hunger will require setting common goals 

and promoting coordinated action across programs and agencies, as well as with national governments, implementing partners and other donors. Within the U.S. Government, there are several such initiatives underway. One example that CARE has 

direct experience with is Ethiopia’s Productive Safety Net Program. Under this program, multiple donors, including the United States, engage in coordinated planning 

and action. All are working toward a common goal to reduce levels of food insecurity 

in a country where conditions for its poor have not improved, in spite of extraordinary levels of food aid since the 1980s. While food aid plays an important role, 

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the program does not rely on food aid alone. Program objectives include building infrastructure, expanding markets, diversifying and expanding the assets of poor 

households, and increasing the Government of Ethiopia’s capacity to provide sustainable safety nets for chronically vulnerable citizens. We ask the Chairman and 

Committee members to consider this example as an encouraging model for coordinated action. 

In closing, we must push ourselves to make food aid a more effective tool for reducing poverty and hunger. 

CARE welcomes this opportunity to communicate our perspectives on U.S. food 

assistance policy at this important moment in the Committee’s work. The intolerable crisis of 820 million hungry people worldwide represents a moral and ethical 

challenge to us all. But with your help, Mr. Chairman, I am convinced that we have 

both the will and the means to make a difference. CARE looks forward to working 

with the Subcommittee and the Committee in the months ahead to further strengthen the U.S. response to the problem of international hunger. 

Mr. Chairman and Members of the Committee, thank you again for the opportunity to present our views. I would be pleased to answer your questions or provide 

additional information. 

WHITE PAPER ON FOOD AID POLICY—CARE–USA 

June 6, 2006

CARE International Vision: We seek a world of hope, tolerance and social justice, 

where poverty has been overcome and people live in dignity and security. CARE 

International will be a global force and a partner of choice within a worldwide movement dedicated to ending poverty. We will be know everywhere for our unshakeable 

commitment to the dignity of people. 

Introduction 

Food aid has indisputably assisted and, in many cases, saved the lives of millions 

of people in the half-century or so that it has existed in its current form. CARE has 

long been associated with food distribution programs and can be justifiably proud 

of some of the accomplishments achieved through food aid programming in assisting 

poor, vulnerable, and crisis-affected people throughout the world. CARE believes 

that, if it is well managed, food aid continues to be an important component of a 

global strategy to reduce vulnerability and food insecurity. At the same time however, it is clear that many of the practices of procurement, distribution and management of food aid—as well as the politics of allocating resources for food aid—are not 

always compatible with the CARE International Vision and Mission Statement, 

adopted by the organization in 2001. 

This paper is part of an ongoing effort to ensure that CARE–USA’s policies for 

use of food resources are aligned with the organization’s vision, mission and programming principles. In reviewing our policies, the CARE has sought to develop an 

understanding of the challenges and trends associated with food aid; to identify key 

policy options and their potential risks and implications; and to outline strategic directions that will position CARE to use food resources even more effectively. This 

paper briefly summarizes our analyses, options and directions. 

Rationale for CARE’s Food Policy Review 

Recent analysis has shown that under some circumstances food aid can harm local 

production and markets, undermining long-term food security. Studies have also 

shown that food aid is often not the most efficient use of resources for alleviating 

poverty. These findings oblige CARE to review our food aid policies and management practices in order to ensure that our strategies and practices are consistent 

with our goals and values. 

Food aid has recently become the focus of important policy debates in the U.S. 

and abroad:

• Many features of the current system of food aid management have been challenged in the current round of trade negotiations at the World Trade Organization (WTO).

• In Washington, budget constraints in a time of increased demand for emergency 

food aid have resulted in inadequate funding, particularly for non-emergency 

food aid.

• The authorizing legislation for U.S. food aid—the farm bill—is soon to be renegotiated in Washington. The legislative process will provide another arena for 

debate about food aid.

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1 CARE’s Programming Principles are: Promote empowerment; Work with partners; Ensure 

accountability and promote responsibility; Address discrimination; Promote non-violent resolution of conflicts; and Seek sustainable results.

These factors have important implications for how CARE approaches humanitarian response and other programs using food resources. They may also have important operational and budgetary consequences for some of our country offices. 

In short, the rules of the game are changing with regard to food aid. CARE’s Food 

Policy Review is part of its effort to actively engage in the food policy debate in 

order to encourage the evolution of food aid management towards being a more 

flexible and appropriate resource, while also being aware of the possible consequences of changes in food aid on our policies, programming, and budgets. 

Principles for Food Aid Management 

CARE adheres to its own six Programming Principles in all of its operations,1 but 

specifically two principles guide our use of food resources: 

1. When it uses food aid, CARE’s central focus is on helping poor and vulnerable 

people overcome food insecurity and vulnerability. Our objectives are to save 

lives, protect livelihoods, reduce vulnerability, and address underlying causes of 

poverty-while monitoring for and minimizing any potential harm from using the 

resource.

2. CARE is committed to maximizing efficiency and impact, and minimizing unintended harmful consequences. CARE will use food aid only when and where 

it is appropriate. In CARE’s view, appropriate roles for food aid include emergency response programs, safety net (asset protecting) programs, and a more 

limited role in asset building programs. CARE takes responsibility for managing 

food aid appropriately and will:

• Improve its understanding of local markets and patterns of vulnerability, so 

that it can make appropriate food aid management decisions.

• Target the right kind of assistance to the right people at the right time and 

in the right place.

• Ensure that when food is used, appropriate non-food complimentary requirements are also met.

• Ensure the flexibility to choose between food and other resources depending 

on local conditions. CARE will actively advocate for this flexibility with donors.

• Follow appropriate, internationally-accepted guidelines and codes of conduct, 

including the SPHERE Guidelines and the NGO Code of Conduct on Food Aid 

and Food Security. 

Specific Policy Decisions 

In its food aid review, CARE USA has focused on four major policy areas that 

affect the overall effectiveness of the food aid system and have potential implications for CARE programs. These are: local and regional purchases of food; monetization; U.S. Department of Agriculture (USDA) programs; and international trade, agricultural subsidies and food aid. After careful analysis, the following decisions have 

been made: 

1. Local/Regional Purchase 

CARE supports making funding available to purchase food locally or regionally in 

developing countries. The two main justifications for local and regional purchases 

of food supplies are (i) to reduce costs, delays and market distortions brought about 

by ‘‘tying’’ food aid to domestic procurement programs in the donor country and (ii) 

to increase procurement flexibility while providing economic opportunities for small 

farmers in countries where purchases are made. 

CARE recognizes that local purchase is a complex undertaking. A greater understanding of local markets and potential risks and unintended consequences is necessary before engaging in local purchase on a significant scale. CARE will support 

efforts to increase the provisions for local purchase in donors’ budgets. Some donors 

(especially the European Commission (EC) and Canada) have already moved towards more local/regional procurement. 

Our reasoning:

1. Currently, most food aid (including virtually all U.S. food aid) must be 

sourced from the donor country (i.e. in WTO language, it is ‘‘tied aid’’). This 

means that:

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2OECD (2005) ‘‘The Development Effectiveness of Food Aid: Does Tying Matter?’’ Paris: 

OECD.

• Food aid deliveries can be slow and expensive. The average time for delivery 

of Title II emergency food aid from call forward to arrival in-country is 5 

months.

• Food aid is nominally tied to the export and surplus disposal objectives of the 

exporting country.

• Imported food aid can cause commercial displacement, causing harm to traders and local farmers.

• The cost of tied food aid has been shown to be significantly higher—in many 

cases 30–50% higher—than alternative, non-tied sources of food aid.2

2. The local purchase option will increase procurement flexibility. In countries 

(or regions) where food supplies are adequate and where markets function properly, shifting from imported food aid to local purchase has the potential to significantly reduce delays and delivery costs. It can also provide important economic opportunities for small farmers in countries where food purchases are 

made. However, certain caveats need to betaken into consideration:

• Most humanitarian organizations have only recently begun to experiment 

with local purchase. Experiences to date are still being assessed, and no broad 

consensus has yet emerged about when to resort to local/regional purchase 

and how to best manage it.

• It is clear that local purchase is a complex undertaking. It brings significant 

operational challenges and risks, as does the use of imported food aid.

• The appropriateness of local purchase will depend on various factors, including highly variable local market conditions.

• If not managed properly, local purchase can cause harm. Of particular concern is the possibility that local purchase, in places where markets do not 

function effectively, will trigger price spikes for basic food stuffs. Surging 

prices can be very harmful to poor people who must purchase food in order 

to meet their basic needs. New analytical procedures are required to predict 

and monitor the impact of local and regional purchases. 

2. Monetization 

By September 30, 2009, CARE will transition out of monetization—that is, the 

sale of food aid to generate cash for humanitarian programs. The only exceptions 

will be where it can be clearly demonstrated that monetization can be used to address the underlying causes of chronic food insecurity and vulnerabilities with reasonable management costs and without causing harm to markets or local production. CARE will use monetization only when it is sure that the food which is monetized reaches vulnerable populations and has effective targeting of poor people with 

limited purchasing power. This will result in minimum or no displacement of domestic production. 

CARE’s transition away from monetization will take into consideration the project 

cycle in our country offices, replacement of lost revenue by alternative sources, and 

any other adjustments needed in our country offices and headquarters. It also 

means that all country offices submitting Multi-Year Activity Plans (MYAPs) for 

USAID/Food for Peace in the current fiscal year will need to ensure that their programs do not have a monetization component after September 30, 2009. 

CARE recognizes that the elimination of monetization will probably lead to a reduced stream of cash resources for some country offices. CARE will seek ways to 

replace some monetization proceeds, in part, by advocating for the conversion of 

monetization funds to cash accounts and for the allocation of additional resources 

to address underlying causes of food insecurity. 

CARE will advocate the adoption of a principled approach by the U.S. Government and Private Voluntary Organizations (PVOs) that addresses the potential 

harm to markets and local production as well as the high management costs associated with monetization. 

Our reasoning:

For many years, monetization has been a useful source of funding for programming to protect and enhance the livelihoods of poor people. However, there are three 

major problems with monetization:

1. Experience has shown that monetization requires intensive management and 

is fraught with risks. Procurement, shipping, commodity management, and comVerDate 0ct 09 2002 12:34 Mar 16, 2009 Jkt 041481 PO 00000 Frm 00128 Fmt 6621 Sfmt 6621 I:\DOCS\110-21\47952.TXT SOLEM PsN: REBEKA
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mercial transactions are management intensive and costly. Experience has 

shown that these transactions are also fraught with legal and financial risks.

2. Monetization is economically inefficient. Purchasing food in the U.S., shipping it overseas, and then selling it to generate funds for food security programs 

is far less cost-effective than the logical alternative—simply providing cash to 

fund food security programs.

3. When monetization involves open-market sale of commodities to generate 

cash, which is almost always the case, it inevitably causes commercial displacement. It can therefore be harmful to traders and local farmers, and can undermine the development of local markets, which is detrimental to longer-term food 

security objectives. 

3. U.S. Department of Agriculture (USDA Programs) 

Most of the food resources programmed by CARE come from the P.L. 480 Title 

II (USAID/ Office of Food for Peace). Occasionally, CARE has utilized other resources, managed by the USDA, including food resources from Title I and Section 

416b, whose stated objective is to support U.S. farmers, and Food for Progress, 

whose stated purpose is to promote free enterprise and competition in agricultural 

economies. 

CARE takes the position that food aid should not be used to enable a donor to 

establish an unfair commercial advantage and must not create disincentives to local 

production and markets. CARE believes two USDA programs, Title I (concessional 

sales) and Section 416(b) (surplus disposal) are inconsistent with its position and 

therefore will phase out of participation in these programs. Regarding a third program, Food for Progress, CARE’s stance is more complex. In many contexts, the goal 

of Food for Progress Programs is compatible with CARE’s focus on addressing the 

underlying causes of poverty. However, in recent years past, some of the food aid 

provided under Food for Progress has come from Title I or Section 416(b), and much 

of it has been monetized. CARE will not accept Food for Progress Resources that 

originate from those resources; nor will CARE monetize from this (or any other) program. 

In practice, these policies are likely to mean that CARE will receive little support 

from Food for Progress. 

Our reasoning:

1. The USDA food programs under Title I and Section 416b: Title I programs 

involve concessional (subsidized) sales of food for the stated purpose of promoting export market development for U.S. goods. Section 416(b) programs involve disposal of surplus production.

• Evidence shows that these programs actually have no measurable effect either as strategies to promote the development of export markets or as price 

support mechanisms.

• However, tying food aid to domestic agricultural priorities makes it difficult 

to maximize the cost-effectiveness and minimize the unintended harmful consequences of food aid.

2. Food for Progress: While the goal of this is broadly compatible with CARE’s 

focus on the underlying causes of poverty:

• Some of the resources programmed under Food for Progress come from Title 

I and Section 416(b).

• Much of the food aid programmed under Food for Progress is monetized. 

4. International Trade, Agricultural Subsidies and Food Aid 

Generally, CARE supports free and fair trade as far as it does not increase food 

insecurity and vulnerability of poor and marginalized populations. By focusing on 

the impact of that trade liberalization, CARE believes that it can make an important contribution in this area to the trade debate. Of particular interest is the possibility that the proposed reduction of agricultural subsidies and trade barriers may 

be linked to reform of the food aid system, a development that could lead to the 

elimination of safety nets at a time of rising commodity prices, thus causing the erosion of poor people’s purchasing power and access to food. 

CARE will enhance its capacity to understand how the poor are likely to be affected by trade liberalization. In order to do this, it will build on and improve CO 

capacity to document and analyze patterns of vulnerability and to assess the impact 

of changes in trade policy. It will also work in partnership with research organizations that have expertise in economic analysis and vulnerability assessment. Finally, it will carry out a series of case studies in a small number of countries to 

document the effects of trade liberalization on poor people. 

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Our reasoning:

Current debates about food aid are, to some degree, linked to a much larger discussion about international trade and agricultural subsidies. In the Doha Round negotiations of the WTO, European negotiators have demanded stringent restrictions 

against tied food aid, in-kind food aid, and non-emergency food aid (including monetization) in exchange for substantial reductions in European agricultural subsidies. 

In short, achieving dramatic reductions in agricultural subsidies may in the end be 

offset by dramatic changes in the way food aid is currently organized and managed. 

The potential impacts of these policy changes are complex. A significant reduction 

of agricultural subsidies in developed nations is expected to cause international agricultural commodity prices to rise. Broadly speaking, this trend will lead to uneven 

development, producing economic opportunities for some and harmful consequences 

for others. The rise of commodity prices is expected to create economic opportunities 

for households, firms and countries that produce and sell agricultural commodities. 

At the same time, households and countries that must purchase food in order to 

meet basic needs will have to cope with rising commodity prices. This can be expected to erode purchasing power and deepen patterns of poverty amongst the 

urban poor. In rural areas, the impact will be mixed. Rising commodity prices can 

be expected to provide benefits for small farmers and traders. However, many poor 

households whose food production is insufficient to meet basic needs may find that 

a higher percentage their income must go for food purchases. 

Some have argued that reforming the food aid system in exchange for the reduction of agricultural subsidies is a good deal for poor farmers. Others have pointed 

out that eliminating subsidies will cause hardship for poor people who purchase 

food, and that linking the reform of the food aid system to economic liberalization 

would have the effect of eliminating safety nets precisely at the moment when they 

are most needed.

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