Foreign Assistance: Lack of Strategic Focus and Obstacles to Agricultural Recovery Threaten Afghanistan's Stability
Released: 2003-06-30T00:00:00

Letter

Background

Afghanistan is a mountainous, arid, land-locked Central Asian country with limited natural resources. At 647,500 square kilometers, it is slightly smaller than the state of Texas. Afghanistan is bordered by Pakistan to the east and south; Tajikistan, Turkmenistan, Uzbekistan, and China to the north; and Iran to the west (see fig. 1). Its population, currently estimated at 26 million, is ethnically diverse, largely rural, and mostly uneducated. Life expectancy in Afghanistan is among the lowest in the world, with some of the highest rates of infant and child mortality.

Political conflicts have ravaged Afghanistan for years, limiting development within the country. Conflict broke out in 1978 when a communist-backed coup led to a change in government. One year later, the Soviet Union began its occupation of Afghanistan, initiating more than two decades of conflict. Over the course of the 10-year occupation, various countries, including the United States, backed Afghan resistance efforts. The protracted conflict led to the flight of a large number of refugees into Pakistan and Iran. In 1989, the Soviet forces withdrew, and in 1992, the communist regime fell to the Afghan resistance. Unrest continued, however, fueled by factions and warlords fighting for control.

The Taliban movement emerged in the mid 1990s, and by 1998 it controlled approximately 90 percent of the country. Although it provided some political stability, the Taliban regime did not make significant improvements to the country’s food security. Furthermore, the Taliban’s continuing war with the Northern Alliance and the Taliban’s destructive policies, highlighted in its treatment of women, further impeded aid and development. Coalition forces removed the regime in late 2001, responding to its protection of al Qaeda terrorists who attacked the United States. In December 2001, an international summit in Bonn, Germany, established a framework for the new Afghan government, known as the Bonn Agreement.

Agriculture is essential to Afghanistan. Despite the fact that only 11.5 percent (7.5 million hectares) of Afghanistan’s total area is cultivable, 85 percent of the population depends on agriculture for its livelihood, and 80 percent of export earnings and more than 50 percent of the gross domestic product have historically come from agriculture. However, Afghanistan’s agricultural sector continues to suffer from the effects of prolonged drought, war, and neglect. It lacks high-quality seed, draft animals, and fertilizer, as well as adequate veterinary services, modern technology, advanced farming methods, and a credit system for farmers. Further, Afghanistan’s Ministry of Agriculture and Animal Husbandry and its Ministry of Irrigation and Water Resources lack the infrastructure and resources to assist farmers.

Because Afghanistan experiences limited rainfall, its agricultural sector is highly dependent on irrigation—85 percent of its agricultural products derives from irrigated areas. Thus, the conservation and efficient use of water is the foundation of the agricultural sector. The severe drought that has gripped the country since 1998 has resulted in drastic decreases in domestic production of livestock and agricultural supplies including seed, fertilizer, and feed (see fig. 2). Several earthquakes and the worst locust infestation in 30 years exacerbated this crisis in 2002. Without adequate supplies and repairs to irrigation systems, even if the drought breaks, farmers will be unable to produce the food that the country needs to feed itself.

Since 1965, the WFP has been the major provider of food assistance to Afghanistan. Partnering with nongovernmental organizations, it delivers assistance through emergency operations that provide short-term relief to populations affected by a specific crisis such as war or drought. It also conducts protracted relief and recovery operations designed to shift assistance toward longer-term reconstruction efforts. Because of its policy to target assistance at specific populations, WFP does not attempt to provide food for all of the vulnerable people within a country or affected area. Instead, it focuses on specific vulnerable populations such as internally displaced people or widows (see fig. 3). Further, it does not try to meet all of the daily requirements of the targeted populations. WFP’s 2002 emergency operation in Afghanistan targeted internally displaced people, people affected by drought, and children, among others. The assistance programs designed to assist these populations provide between 46 and 79 percent, or 970 to 1671 kilocalories, of the recommended minimum daily requirement of 2100 kilocalories. WFP assumes that beneficiaries will obtain the remainder of their food through subsistence farming or the market.

FAO has provided much of the agricultural assistance to Afghanistan. FAO has been involved in agricultural development and natural resource management in Afghanistan for more than 50 years. FAO was founded in 1945 with a mandate to raise levels of nutrition and standards of living, to improve agricultural productivity, and to better the condition of rural populations. Today, FAO is one of the largest specialized agencies in the UN system and the lead agency for agriculture, forestry, fisheries, and rural development. An intergovernmental organization, FAO has 183 member countries plus one member organization, the European Community. FAO has traditionally carried out reconstruction efforts in relatively stable environments. Although FAO is increasingly implementing its programs in unstable postconflict situations such as Afghanistan, the agency and its staff are still adjusting to operating in such environments. FAO's regular program budget provides funding for the organization's normative work and, to a limited extent, for advice to member states on policy and planning in the agricultural sector. FAO's regular budget can also fund limited technical assistance projects through its Technical Cooperation Program. Apart from this, extrabudgetary resources, through trust funds provided by donors or other funding arrangements, fund all emergency and development assistance provided by FAO. Thus, extrabudgetary resources fund FAO’s field program, the major part of its assistance to member countries.

U.S. and International Food Assistance Had Significant Impact and Was Well Managed, but Donor Support Was Problematic

The emergency food assistance provided to Afghanistan by the United States and the international community from January 1999 through December 2002 benefited millions and was well managed, but donor support was inadequate. WFP delivered food to millions of people in each of the 4 years, helping avert widespread famine. In addition, WFP managed the distribution of U.S. and international food assistance effectively, overcoming significant obstacles and using its logistics system and a variety of monitoring mechanisms to ensure that food reached the intended beneficiaries. However, inadequate and untimely donor support in 2002 disrupted some WFP assistance efforts and could cause further disruptions in 2003. Further, WFP could have provided assistance to an additional 685,000 people and reduced its delivery times if the United States had donated cash or regionally purchased commodities instead of shipping U.S.-produced commodities. Additionally, if the United States had donated the $50.9 million that it spent on approximately 2.5 million daily rations air- dropped by the Department of Defense, WFP could have purchased enough regionally produced commodities to provide food assistance for an estimated 1.0 million people for a year.

Food Assistance Had Important Impact

The emergency food assistance that the United States and other bilateral donors provided in Afghanistan through WFP from 1999 through 2002 met a portion of the food needs of millions of vulnerable Afghans. Over the 4-year period, WFP delivered approximately 1.6 million metric tons of food that helped avert famine and stabilize the Afghan people, both in Afghanistan and in refugee camps in neighboring countries. The food assistance also furthered the country’s reconstruction through projects, among others, that exchanged food for work. WFP delivered the assistance as part of seven protracted relief–recovery and emergency operations (see table 1). The types of operations and their duration and objectives varied in response to changing conditions within Afghanistan. These objectives included, but were not limited to, providing relief to the most severely affected populations in Afghanistan and Afghan refugees in neighboring countries and preventing mass movements of populations.

WFP implemented a number of different types of food assistance projects, including free food distribution; institutional feeding programs; bakeries; food-for-work, -seed, -education, -training, and -asset-creation projects; and projects targeted at refugees, internally displaced people, and civil servants. (See app. II for a list and description of WFP’s projects.) Food-for- work and food-for-asset-creation projects provided essential food assistance to the most vulnerable members of Afghanistan’s population while enabling the beneficiaries to help rehabilitate local infrastructure and rebuild productive assets such as roads and schools. Between July and September 2002, these projects employed 1 million laborers per month, paying them in food commodities.

U.S. food assistance to Afghanistan, provided by USAID and USDA, accounted for approximately 68 percent of the cash contributions and 67 percent of the commodities delivered by WFP from 1999 through 2002 (see table 1). The U.S. provides cash to WFP to cover transportation and administrative costs associated with its in-kind contributions of commodities. USAID’s authority to donate to WFP operations derives from Title II of the Agricultural Trade Development and Assistance Act of 1954 (P.L. 480). Title II authorizes the agency to donate agricultural commodities to meet international emergency relief requirements and carry out nonemergency feeding programs overseas. USDA also provides surplus commodities to WFP under section 416(b) of the Agricultural Act of 1949. U.S. contributions consisted of in-kind donations of commodities such as white wheat and cash donations to cover the cost of transporting the commodities from the United States to Afghanistan.

Food Assistance Distribution Was Well Managed

WFP managed the distribution of U.S. and international food assistance to Afghanistan effectively despite significant obstacles, including harsh weather and a lack of infrastructure to deliver food to beneficiaries. To accomplish this, WFP appointed a special envoy to direct operations and employed a dedicated staff of local nationals. It also used various monitoring and reporting mechanisms to track the delivery of food.

WFP’s Management Overcame Many Obstacles

In distributing the food assistance, WFP faced significant obstacles related to political and security disturbances in Afghanistan as well as physical and environmental conditions. These obstacles included limited mobility due to continued fighting between the Taliban and the Northern Alliance and coalition forces; religious edicts issued by the Taliban limiting the employment of women by international organizations; difficult transport routes created by geography, climate, and lack of infrastructure (see fig. 4); and attempts by Afghan trucking cartels to dramatically increase trucking fees. To overcome these obstacles, WFP negotiated with the Taliban to allow the movement of food to areas occupied by the Northern Alliance; it also threatened to cancel certain projects unless women were allowed to continue to work for WFP. Further, WFP found ways to deliver food to remote areas, including airlifting food and hiring donkeys (see fig. 5). In addition, it purchased trucks to supplement a fleet of contracted trucks. Using these trucks as leverage against the Afghan trucking cartel, WFP forced the cartel to negotiate when the cartel attempted to dramatically increase transport fees.

WFP created the position of Special Envoy of the Executive Director for the Afghan Region to lead and direct all WFP operations in Afghanistan and neighboring countries during the winter of 2001–2002, when it was believed that the combination of winter weather and conflict would increase the need for food assistance. WFP was thus able to consolidate the control of all resources in the region, streamline its operations, and accelerate the movement of assistance. WFP points to the creation of the position as one of the main reasons it was able to move record amounts of food into Afghanistan from November 2001 through January 2002. In December 2001 alone, WFP delivered 116,000 metric tons of food, the single largest monthly food delivery within a complex emergency operation in WFP’s history.

WFP also credits its quick response to its national staff and the Afghan truck drivers it contracted. WFP employed approximately 400 full-time national staff during 1999–2002. These staff established and operated an extensive logistics system and continued operations throughout Afghanistan, including areas that international staff could not reach owing to security concerns, and during periods when international staff were evacuated from the country. The truckers who moved the food around the country continued working even during the harshest weather and in areas that were unsafe because of ongoing fighting and banditry.

WFP Monitoring Shows Effective Distribution and Negligible Losses

WFP uses a number of real-time monitoring mechanisms to track the distribution of commodities in Afghanistan, and the data we reviewed suggested that food distributions have been effective and losses minimal. (For a description of WFP’s monitoring procedures, see app. III.) During our visits to project and warehouse sites in Afghanistan, we observed orderly and efficient storage, handling, and distribution of food assistance. WFP’s internal auditor reviewed WFP Afghanistan’s monitoring operations in August of 2002 and found no material weaknesses. USAID has also conducted periodic monitoring of WFP activities without finding any major flaws in WFP’s operations. In addition, most of the implementing partners we contacted were familiar with WFP reporting requirements. However, 10 of the 14 implementing partners we contacted commented unfavorably on WFP’s project monitoring efforts, stating that monitoring visits were too infrequent. Finally, WFP’s loss reporting data indicated that only 0.4 percent of the commodities was lost owing to theft, spoilage, mishandling, or other causes.

Inadequate International Support Disrupted Food Assistance; U.S. Contributions Costly and Slow

Inadequate and untimely donor support disrupted WFP’s food assistance efforts in 2002 and could disrupt efforts in 2003; in addition, U.S. assistance to Afghanistan, both through WFP and the Department of Defense, was costly. In 2002, interruptions in support forced WFP to delay payments of food, curtail the implementation of new projects, and reduce the level of rations provided to repatriating refugees. WFP expressed concern that donor support in 2003 may be similarly affected, as a growing number of international emergencies and budgetary constraints could reduce the total funding available for food assistance to Afghanistan. In addition, WFP could have delivered more food and reduced delivery times if the United States had provided either cash or regionally purchased commodities instead of shipping U.S.-produced commodities and airdropping humanitarian daily rations.

Limited International Donor Support Disrupted Food Assistance in 2002, Could Disrupt Efforts in 2003

Obtaining donor support for the emergency food assistance operation for the April 2002 through December 2002 period was difficult owing to the donor community’s inadequate response to WFP’s appeal for contributions. WFP made its initial appeal in February 2002 for the operation and it made subsequent appeals for donor support throughout the operation. The operation was designed to benefit 9,885,000 Afghans over a 9-month period, through the provision of 543,837 metric tons of food at a cost of over $295 million. It was also intended to allow WFP to begin to shift from emergency to recovery operations with particular emphasis on education, health, and the agricultural sector. When the operation began in April 2002, WFP’s Kabul office warned that it might have to stop or slow projects if donors did not provide more support. At that time, WFP had received only $63.9 million, or 22 percent of the required resources. The United States provided most of this funding. (See app. IV for a list of donors and their contributions for the operation.) From April through June—the preharvest period when Afghan food supplies are traditionally at their lowest point— WFP was able to meet only 51 percent of the planned requirement for assistance. WFP’s actual deliveries were, on average, 33 percent below actual requirements for the 10-month period April 2002–January 2003. Figure 6 illustrates the gaps in the operation’s resources for the 10-month period.

Lack of timely donor contributions and an increase in the number of returning refugees forced WFP and its implementing partner, the UN High Commissioner for Refugees, to reduce from 150 to 50 kilograms the rations provided to help returning refugees and internally displaced persons reestablish themselves in their places of origin. The rations are intended to enable these groups to sustain themselves long enough to reestablish their lives; reducing the rations may have compromised efforts to stabilize population movements within Afghanistan. The lack of donor support also forced WFP and its implementing partners to delay for up to 10 weeks, in some cases, the compensation promised to Afghans who participated in the food-for-work and food-for-asset-creation projects, resulting in a loss of credibility in the eyes of the Afghans and nongovernmental organizations. Similarly, because of resource shortages, WFP had to delay for up to 8 weeks in-kind payments of food in its civil service support program, intended to help the new government establish itself, and it never received enough contributions to provide civil servants with the allocation of tea they were to be given as part of their support package. In addition, WFP was forced to reduce the number of new projects it initiated, thus limiting the level of reconstruction efforts it completed.

In January 2003, WFP expressed concern that the problems it encountered with donor support in 2002 could recur in 2003. Despite the expansion of agricultural production in 2002 because of increased rainfall, 6 million Afghans will require food assistance in 2003. Although the United States was the largest donor of food assistance to Afghanistan in 2002, the U.S. contribution may be smaller in 2003 than in previous years owing to reduced surpluses of commodities, higher commodity prices, and competing crises in Africa, North Korea, and Iraq. The UN forecasts Afghan cereal production for July 2002 through June 2003 at 3.59 million metric tons, a cereal import requirement of 1.38 million metric tons, and Afghan commercial food imports at 911,000 metric tons. Thus, an estimated total deficit of 469,000 metric tons remains to be covered in the 12-month period by international food assistance.

U.S. Food Assistance Contributions Were Costly and Inefficient

The U.S.-produced commodities and humanitarian daily rations provided by the United States to Afghanistan resulted in lower volumes of food than if the United States had provided regionally purchased commodities or cash donations. If it had provided WFP with cash or commodities from countries in the Central Asia region, the United States could have eliminated ocean freight costs. We estimated that the savings in freight costs would have enabled WFP to provide food assistance to approximately 685,000 additional people for 1 year. In addition, we estimated that if the United States had donated cash or regionally purchased commodities instead of air-dropping rations, WFP could have provided food assistance for another 1.0 million people for a year.

U.S.-Produced Commodities Raised Costs and Slowed Delivery Most of the food assistance that the United States donated to Afghanistan in 1999–2002 was provided through WFP as in-kind donations of U.S. agricultural products as well as cash to cover shipping and freight costs. Since the commodities were purchased in the United States, much of the cost of the assistance represented shipping and freight costs rather than the price of the commodities. Figure 7 provides a breakdown of the costs associated with U.S. food assistance to Afghanistan from 1999 through 2002. (See app. V for additional cost data.)

We estimated that if the United States had provided cash or regionally purchased commodities instead of U.S.-produced commodities in 2002, WFP could have purchased approximately 103,000 additional metric tons of commodities and saved 120 days in delivery time. WFP officials in Rome and Cairo stated that cash was greatly preferable to in-kind donations because it allows for flexibility and for local and regional purchases. Other contributors to WFP efforts in Afghanistan have provided cash, allowing WFP to make the purchases it deemed most expedient, including purchases from Central Asian countries that produced large surpluses in 2002. Ninety-three percent of the commodities WFP purchased for the emergency operation that began in April 2002 (157,128 metric tons) were from Kazakhstan and Pakistan. WFP also stated that it could have saved approximately 120 days in delivery time if it had received U.S. contributions in cash that it could have used for regional purchases.

Although the commodity costs and some of the freight costs for regional purchases are lower, the largest portion of the savings from regional purchases comes from eliminating ocean freight costs. In 2002, USDA spent $5.6 million on ocean freight, or 31 percent of the value of the aid it provided to Afghanistan. USAID spent $29.4 million on ocean freight, or 18.3 percent of the value of the aid it provided to Afghanistan. Overall, USDA and USAID spent approximately $35.0 million on ocean freight and commissions, or 19.6 percent of the total value ($178,068,786) of the food aid they provided through WFP to Afghanistan. Had this money been spent on regional purchases instead of on ocean freight, it could have paid for 103,000 additional metric tons of commodities, or enough to provide food assistance for approximately 685,000 people for 1 year. However, the laws governing the main food assistance programs under which most of the U.S. assistance was provided to Afghanistan through WFP do not provide for USAID and USDA to purchase food assistance commodities regionally or provide cash to WFP to make regional purchases. All of the assistance must be provided in the form of U.S. commodities, and 75 percent of the commodities by weight must be shipped on U.S.-flag vessels. According to USDA, this requirement referred to as “cargo preference” accounts for 9 percent of the cost of U.S. food assistance shipments worldwide. In this case, it accounted for approximately $16 million of the $35 million in ocean freight. In prior reports we reported that the most significant impact of the cargo preference requirement on U.S. food assistance programs is the additional costs incurred. Using U.S.-flag vessels reduces funds available for purchasing commodities, thus the amount of food delivered to vulnerable populations is decreased. In its 2002 annual assessment of management performance, the Office of Management and Budget concluded that U.S. food assistance programs would be more cost effective and flexible if the requirement to ship U.S. food assistance on U.S.-flag vessels was eliminated. In commenting on a draft of this report, USDA stated that consideration should be given to waiving cargo preference requirements in specific food aid situations.

In February 2003, the President announced a new humanitarian $200 million Famine Fund. Use of the fund will be subject to presidential decision and will draw upon the broad disaster assistance authorities in the Foreign Assistance Act. According to USAID, these authorities allow the U.S. government to purchase commodities overseas to meet emergency food assistance needs. However, this authority does not extend to the United States’ fiscal year 2003 $2.6 billion food assistance programs under existing food assistance legislation.

Humanitarian Daily Rations Were Expensive and Inefficient The U.S. Department of Defense’s humanitarian daily ration program was a largely ineffective and expensive component of the U.S. food assistance effort. The program was initiated to alleviate suffering and convey that the United States was waging war against the Taliban, not the Afghan people. However, the program’s public relations and military impact have not been formally evaluated. Airdrops of the humanitarian daily rations were intended to disperse the packets over a wide area, avoiding the dangers of heavy pallet drops or having concentrations of food fall into the hands of a few. On October 8, 2001, U.S. Air Force C-17s began dropping rations on various areas within Afghanistan. Drops averaged 35,000 packets per night (two planeloads) and ended on December 21, 2001. In 198 missions over 74 days, the Air Force dropped 2,489,880 rations (see fig. 8).

According to WFP, one of the major problems with the ration program was the lack of any assessment to identify the needs of the target populations or their locations. WFP representatives were part of the coordination team located at Central Command in late 2001 when the airdrops were made. These representatives provided the Defense Department with general information on drought-affected areas but were not asked to provide information on specific areas to target. According to Department of Defense officials, the drop areas were selected based on consultations with USAID staff familiar with the situation in Afghanistan.

Defense officials told us that the rations are an expensive and inefficient means of delivering food assistance and were designed to relieve temporary food shortages resulting from manmade or natural disasters— not, as in Afghanistan, to feed a large number of people affected by a long- term food shortage. Defense officials responsible for the ration program stated that the humanitarian, public relations, and military impact of the effort in Afghanistan had not been evaluated. According to these officials, anecdotal reports from Special Forces soldiers indicated that vulnerable populations did receive the food and that the rations helped to generate goodwill among the Afghan people. However, reports from nongovernmental organizations in Afghanistan indicated that often the rations went to the healthiest, since they were able to access the drop zone most quickly, and were hoarded by a few rather than distributed among the population.

The cost of the rations was $4.25 per unit, or $10,581,990 for the approximately 2.5 million dropped. The total cost of the program was $50,897,769, or $20.44 per daily ration. Delivery cost is estimated at $16.19 per unit, based on the difference in the ration cost and the department’s total expenditure. The rations accounted for only 2,835 metric tons out of the total of 365,170 metric tons, or .78 percent of the total weight of food aid delivered in fiscal year 2002. However, the cost of the rations equals 28.6 percent of the $178,068,786 that USAID and USDA spent on emergency assistance to Afghanistan from October 2001 through September 2002. If the United States had bought traditional food assistance commodities regionally instead of dropping the 2,835 metric tons of rations, it could have purchased approximately 118,000 metric tons of food, enough to provide food assistance to 1.0 million people for 1 year.

Agricultural Assistance Has Had Limited Impact and Lacks Coordination, and Major Obstacles Jeopardize Food Security and Political Stability

The U.S. and international community’s agricultural reconstruction efforts in Afghanistan have had limited impact, coordination of the assistance has been fragmented, and significant obstacles jeopardize Afghanistan’s long- term food security and political stability. Because of drought and adverse political conditions, agricultural assistance provided by the international community has not measurably improved Afghanistan’s long-term food security. In 2002, collective efforts to coordinate reconstruction assistance, especially with the Afghan government, were ineffectual and, as a result, no single operational strategy has been developed to manage and integrate international agricultural assistance projects. Finally, the inadequacy of proposed agricultural assistance, and the increase in domestic terrorism, warlords’ control of much of the country, and opium production all present obstacles to the international community’s goal of achieving food security and political stability in Afghanistan.

Impact of Agricultural Assistance Limited by Drought and Political Factors

For most of the period 1999–2002, because of war and drought, FAO, bilateral donors, and more than 50 nongovernmental organizations in Afghanistan focused resources primarily on short-term, humanitarian relief; consequently, the impact of this effort on the agricultural sector’s long-term rehabilitation was limited. The assistance was provided in an effort to increase short-term food security and decrease Afghanistan’s dependence on emergency food assistance. During most of the 4-year period, FAO provided $28 million in assistance to Afghanistan partly under the UN Development Program’s (UNDP) Poverty Eradication and Community Empowerment program and partly as donor-funded response to the drought. The poverty eradication program ended in 2002, but FAO continues its projects in Afghanistan. FAO’s short-term activities focus on efforts to enable war- and drought-affected populations to resume food production activities. These activities include providing agricultural inputs such as tools, seed, and fertilizer; controlling locusts; and making repairs to small-scale irrigation systems (see fig. 9). Its longer-term activities include, among other things, the establishment of veterinary clinics, assistance in the production of high-quality seed through 5,000 contracted Afghan farmers, and horticulture development. From 1999 to 2002, bilateral efforts focused on the distribution of agricultural inputs and the repair of irrigation systems. USAID activities currently include developing a market-based distribution system for agricultural inputs as well as distributing high- quality seed. As of March 2002, at least 50 of the approximately 400 national and international nongovernmental organizations working in Afghanistan were involved in agriculture-related assistance, including providing agricultural inputs, farmer training, microcredit, and the construction of wells.

For most of the 4-year period, the rise of the Taliban, the continuing conflict with the Northern Alliance, and the ongoing drought prevented the international community from shifting from short-term relief projects to longer-term agricultural rehabilitation projects and reversed earlier advancements in agricultural production. For example, by 1997, agriculture in some areas had returned to prewar levels, and Afghanistan as a whole had reached 70 percent self-sufficiency in the production of cereals. At the time, assistance agencies were planning to implement longer-term assistance activities but were unable to do so owing to drought and conflict. These same factors resulted in decreases in cereal production and livestock herds of 48 percent and 60 percent, respectively, from 1998 through 2001. In 2002, a number of longer-term agricultural rehabilitation efforts were started, including efforts by USAID to reestablish agricultural input and product markets. However, these efforts have not been evaluated, and it is too early to determine their sustainability after donor assistance ends or their long-term impact.

Weak Assistance Coordination in 2002 Hindered Afghan Government’s Involvement and Development of Operational Strategy

International assistance, including agricultural assistance, was not well coordinated in 2002, and, as a result, the Afghan government was not substantively integrated into the agricultural recovery effort and lacks an effective operational strategy. In December 2002, the Afghan government and the international community instituted a new mechanism, the Consultative Group, to improve coordination. However, the Consultative Group is similar in purpose and structure to a mechanism used earlier in 2002, the Implementation Group, and does not surmount the obstacles that prevented the Implementation Group’s success. Because of the lack of coordination, the Afghan government and the international community have not developed a single operational strategy to direct the agricultural rehabilitation effort; instead, all of the major assistance organizations have independent strategies. Although documents prepared by the Afghan government and others to manage assistance efforts contain some of the components of an effective operational strategy, these components have not been combined in a coherent strategy. The lack of an operational strategy hinders efforts to integrate projects, focus resources, empower Afghan government ministries, and make the international community more accountable.

Assistance Coordination Was Weak in 2002

Despite efforts to synchronize multiple donors’ initiatives in a complex and changing environment, coordination of international assistance in general, and agricultural assistance in particular, was weak in 2002. According to the UN, assistance coordination refers to a recipient government’s integration of donor assistance into national development goals and strategies. From the beginning of the assistance effort in 2002, donors were urged to defer responsibility for assistance coordination to the Afghan government as stipulated in the Bonn Agreement. According to the UN, coordination rests with the Afghan government, efforts by the aid community should reinforce national authorities, and the international community should operate, and relate to the Afghan government, in a coherent manner rather than through a series of disparate relationships.

The Security Council resolution that established the UN Assistance Mission in Afghanistan goes further; it states that reconstruction assistance should be provided through the Afghan government and urges the international community to coordinate closely with the government.

In April 2002, the Afghan government attempted to exert leadership over the highly fragmented reconstruction process. To accomplish this task, the government published its National Development Framework. The framework provides a vision for a reconstructed Afghanistan and broadly establishes national goals and policy directions. The framework is not intended to serve as a detailed operational plan with specific objectives and tasks that must be pursued to accomplish national goals. Also, in 2002, the Afghan government established a government-led coordination mechanism, the Implementation Group (see app. VI for detailed descriptions and a comparison of the coordinating mechanisms). The intent of the Implementation Group was to bring coherence to the international community’s independent efforts and broad political objectives, such as ensuring Afghanistan does not become a harbor for terrorists. The mechanism’s structure was based on the National Development Framework. Individual coordination groups, led by Afghan ministers and composed of assistance organizations, were established for each of the 12 programs contained in the framework.

The Implementation Group mechanism proved to be largely ineffective. Officials from the Afghan government, the UN, the Department of State, and USAID, as well as a number of nongovernmental bodies, expressed concern over the lack of meaningful and effective coordination of assistance in Afghanistan in 2002. For example, a high-ranking WFP official in Afghanistan said that coordination efforts since September 11, 2002, paid only “lip-service” to collaboration, integration, and consensus. In August 2002, the Ministers of Foreign Affairs, Rural Reconstruction and Development, Irrigation, and Agriculture stated that the donor community’s effort to coordinate with the government was poor to nonexistent. A USAID official characterized the coordination of reconstruction in 2002 as an “ugly evolution” and “the most complex post-conflict management system” he had ever seen.

The ineffectiveness of the Implementation Group mechanism resulted from its inability to overcome several impediments. First, each bilateral, multilateral, and nongovernmental assistance agency has its own mandate, established by implementing legislation or charter, and sources of funding, and each agency pursues development efforts in Afghanistan independently. Second, the international community asserts that the Afghan government lacks the capacity and resources to effectively assume the role of coordinator and, hence, these responsibilities cannot be delegated to the government. Third, no single entity within the international community has the authority and mandate to direct the efforts of the myriad bilateral, multilateral, and nongovernmental organizations providing agricultural assistance to Afghanistan. Finally, efforts to coordinate agricultural assistance were further complicated because the Ministries of Agriculture, Irrigation, and Rehabilitation and Rural Development share responsibility for agriculture development.

Efforts to Improve Coordination Have Been Implemented

In December 2002, the Afghan government instituted a new coordination system, the Consultative Group mechanism. The overall objective of the Consultative Group in Afghanistan is to increase the effectiveness and efficiency of assistance coordination in support of goals and objectives contained in the National Development Framework. According to the Afghan government, the program-level consultative groups established under this mechanism provide a means by which the government can engage donors, UN agencies, and nongovernmental organizations to promote specific national programs and objectives presented in the government’s National Development Framework and the projects articulated in the Afghan National Development Budget. According to advisors to the Afghan government, the Consultative Group mechanism provides a real opportunity for donors to provide focused support for policy development, project preparation, implementation, monitoring, and evaluation.

The Consultative Group mechanism in Afghanistan evolved out of the Implementation Group and is similar in its National Development Framework–based hierarchal structure, the role of the Afghan government, the membership and leadership of sector specific groups, and stated goals (see app. VI). One difference between the Implementation and Consultative Group mechanisms is that, since the establishment of the latter, the Afghan government has asked donor government and assistance organizations to categorize their assistance projects under the subprograms in the National Development Framework and to direct funding toward the projects in the Afghan National Development Budget.

Despite the effort to develop a more effective coordination mechanism, the Consultative Group mechanism has not surmounted the conditions that prevented the Implementation Group from effectively coordinating assistance. For example, in 2003, donor governments and assistance agencies have continued to develop their own strategies, as well as fund and implement projects outside the Afghan government’s national budget. In addition, agricultural assistance is divided up among several consultative groups including the groups for natural resources management and livelihoods. Further, unlike food assistance where donors primarily use one agency, WFP, for channeling resources, donors continue to use a variety of channels for their agriculture assistance. Although the Afghan government asserts that it is assuming a greater level of leadership over the coordination effort, as of May 2003, we could not determine whether the new coordination mechanism would be more successful than earlier efforts.

Lack of Coordination Prevented Development of Operational Strategy

Because of the inadequate coordination of agricultural assistance, the Afghan government and the international community have not developed an operational agricultural sector strategy. Each assistance agency has published its own development strategy that addresses agriculture and numerous other sectors. The Consultative Group mechanism and the National Development Framework, as well as other documents prepared by the Afghan government and others to manage assistance efforts, contain some of the components of an effective operational strategy, such as measurable goals and impediments to their achievement. However, these components have not been incorporated in a single strategy. Without an integrated operational strategy, jointly developed by the Afghan government and the international community, the Afghan government lacks a mechanism to manage the agricultural rehabilitation effort, focus limited resources, assert its leadership, and hold the international donor community accountable.

Assistance Agencies Have Developed Separate Strategies No donor has taken the lead in the agricultural sector; consequently, multilateral, bilateral, and nongovernmental organizations, including the UN, FAO, the Asian Development Bank, the World Bank, USAID, and others, have prepared individual strategies that address, to varying degrees, agricultural reconstruction and food security. However, these strategies lack measurable national goals for the sector and have not been developed jointly with the Afghan government. For example, in August 2002, the Minister of Agriculture stated, “The ministry does not know the priorities of the international community for the agricultural sector, how much money will be spent, and where the projects will be implemented.” FAO claimed that the Ministry of Agriculture had endorsed FAO’s agricultural rehabilitation strategy. However, no letter of agreement or memorandum of understanding between the FAO and the ministry documents the acceptance of the strategy. The Minister of Agriculture told us, in December 2002, that the ministry had not endorsed FAO’s latest strategy. Further, the Ministry of Agriculture presented a list of more than 100 prioritized rehabilitation projects to the international community. As of late December 2002, the international community had not responded regarding the ministry’s proposed projects.

Components of an Operational Strategy Have Not Been Integrated into a Single Document Although Consultative Group mechanism–related documents, the Afghan National Development Framework, and other documents prepared by the Afghan government and others to manage assistance efforts contain some of the components of an effective operational strategy, these components have not been incorporated in a single strategy. For an operational agricultural strategy to be effective, all relevant stakeholders must participate in its formulation. In this case, stakeholders include the Afghan Ministries of Agriculture and Irrigation and key nongovernmental, multilateral, and bilateral development organizations. Further, such strategies must establish measurable goals, set specific time frames, determine resource levels, and delineate responsibilities. For example, in Afghanistan, one such goal might be to increase the percentage of irrigated land by 25 percent by 2004 through the implementation of $100 million in FAO-led irrigation projects in specific provinces. In addition, an operational strategy should identify external factors that could significantly affect the achievement of goals and include a schedule for future program evaluations. Stakeholders should implement the strategy through projects that support the measurable goals of the strategy and broader policy objectives, such as those contained in the Afghan Government’s National Development Framework (see fig. 10).

The Implementation Group and its successor, the Consultative Group, as well as the National Development Framework and other documents, contain some of the essential elements of an operational strategy. These elements include the involvement of key stakeholders, the development of some measurable objectives, and the identification of external factors that could affect the achievement of goals. However, since the National Development Framework is a general national strategy and not a detailed operational strategy, it is sufficiently broad that any assistance to the agricultural sector could be considered supportive of the framework, even if the assistance were not well targeted or made no significant impact. In addition, the various elements of an effective operational strategy that are contained in the National Development Framework and other documents have not been effectively applied, nor has a single agricultural sector strategy incorporating all of these elements been developed.

The UN Assistance Mission for Afghanistan’s management plan endorses the formulation of joint strategies for reconstruction. In late December 2002, Afghanistan’s Minister of Agriculture told us that he would welcome the development of a joint Afghan–international agricultural sector strategy containing clear objectives, measurable goals, concrete funding levels, and clearly delineated responsibilities. In January 2003, FAO’s Assistant Director-General of Technical Cooperation stated that FAO would welcome the opportunity to assist the Ministry of Agriculture in preparing a strategy. The Consultative Group mechanism could serve as a vehicle to support the development of such a strategy. In March 2003, Afghan government advisors told us that consultative groups could develop strategies based on the subprograms contained in the National Development Framework and National Development Budget. Proposals for the development of strategies pertaining to natural resources management, including agriculture, have been drafted, and support for these proposals is being sought from the international community.

Lack of Operational Agricultural Sector Strategy Limits Integration and Oversight The lack of an operational agricultural sector strategy hinders efforts to integrate disparate projects, focus limited assistance resources, place Afghan government ministries in a leadership role, and make the international community more accountable to the Afghan government. In its October 2002 National Development Budget, the Afghan government cited the lack of a strategic framework for the natural resources management sector, including agriculture, as an impediment to rehabilitation. Absent an operational strategy, the Afghan government lacks a mechanism to integrate disparate projects into an effective agricultural rehabilitation manage finite resources so as to ensure the greatest return on guide the efforts of the international community and assert the Afghan government’s leadership in agricultural reconstruction.

Finally, an operational agricultural sector strategy that includes measurable goals and the means to assess progress against those goals could increase accountability. Because no comprehensive integrated strategy exists, the Afghan government lacks the means to hold the international assistance community accountable for implementing the agricultural sector reconstruction effort and achieving measurable results.

Limited Funding and Security Problems Present Obstacles to Food Security and Political Stability

Major obstacles to the goal of a food-secure and politically stable Afghan state include inadequate assistance funding, as well as a volatile security situation, long-standing power struggles among warlords, and the rapid increase in opium production. Donor support has not met Afghanistan’s recovery and reconstruction needs, and future funding levels for agricultural assistance may be inadequate to achieve the goal of food security and political stability, primarily because assistance levels are based on what the international community is willing to provide rather than on Afghanistan’s needs. Meanwhile, the continued deterioration of the security situation, exacerbated by a rising incidence of terrorism, the resurgence of warlords, and near-record levels of opium production, are impeding reconstruction and threaten to destabilize the nascent Afghan government.

International Assistance May Be Insufficient to Meet Needs

Total assistance levels, including those for agricultural reconstruction, proposed at the Tokyo donors’ conference in January 2002 do not provide Afghanistan with enough assistance to meet its estimated needs. The preliminary needs assessment prepared for the January 2002 donor’s conference in Tokyo estimated that, in addition to humanitarian assistance such as food and shelter assistance, between $11.4 and $18.1 billion over 10 years would be needed to reconstruct Afghanistan (see table 2). Others have estimated that much more is required. For example, the Afghan government estimated that it would need $15 billion for reconstruction from 2003 through 2007.

In January 2002, donors pledged $5.2 billion for the reconstruction of Afghanistan for 2002–2006, or slightly more than half of the base-case estimate for 5 years. For the period January 2002–March 2003, the donors pledged $2.1 billion (see app. VII for donor pledges and donations). As of March 2003, approximately 88 percent of the 2002 grant funding had been disbursed. However, only 27 percent, or $499 million, was spent on major reconstruction projects such as roads and bridges, which are essential for the export of Afghan agricultural commodities and the import of foreign agricultural supplies. Despite the importance that the United States and the international community attach to the Afghan reconstruction effort, Afghanistan is receiving less assistance than was provided for other recent postconflict, complex emergencies. For example, per capita assistance levels have ranged from $193 in Rwanda to $326 in Bosnia, compared with $57 for Afghanistan. Given that the livelihood of 22 million Afghans depends on agriculture, we estimated that if all of the assistance had been provided only to people engaged in agriculture, each person would have received $67 annually or about 18 cents per day for their daily subsistence and agriculture production efforts in 2002. If Afghanistan were to receive per capita aid consistent with the average amounts provided for other recent postconflict reconstruction efforts, in 2002 it would have received $6 billion in international assistance, and from 2002 to 2006 it would receive $30 billion, or nearly three times the base-case estimate.

Funding May Be Inadequate to Rehabilitate Agricultural Sector

The funding proposed by donors for food security–related issues is limited and may be insufficient to achieve the long-term goals of the Afghan government and the international community. Despite the Afghan government’s estimated annual need of $500 million for agricultural rehabilitation, agricultural assistance for Afghanistan in 2003 may total approximately $230 million. Afghanistan’s President has emphasized that the goal of food security and political stability is the Afghan government’s overarching priority, and the United States and other donor governments recognize the strong link between stability and food security. According to the U.S. Department of State, reconstruction is an integral part of the campaign against terrorism: the U.S. policy goal in Afghanistan is to create a stable Afghan society that is not a threat to itself or others and is not a base for terrorism. Because the agricultural sector forms the core of the Afghan economy, the pace of the sector’s recovery will largely determine the rate of overall economic recovery. Sustained investment in the agricultural sector, particularly the rehabilitation, upgrading, and maintenance of the nation’s irrigation infrastructure, is essential for the recovery of the Afghan economy and the country’s long-term food security. Despite improvements in agricultural production in 2002, owing primarily to increased precipitation, the fundamental weakness of Afghanistan’s agricultural infrastructure continues to threaten overall recovery efforts.

The Ministry of Agriculture estimates that it needs $5 billion over 10 years to complete 117 key projects and other efforts important for the recovery of the sector. Despite these costs, the 2003 Afghan development budget for natural resource management, including agriculture, is only $155 million. Since the budget is funded almost entirely by the donor community, the budget reflects what the government expects to receive from the international community, not the Afghan government’s actual need. Afghan government budget estimates indicate that the natural resources management budget will increase to $298 million in 2004 and $432 million in 2005. International donors have budgeted approximately $230 million for agriculture-related assistance in 2003. USAID considers adequate funding a prerequisite for the success of the assistance effort and plans to spend approximately $50 million on agriculture in 2003 and similar amounts in 2004 and 2005. USAID funding covers 32 percent of the Afghan government’s 2003 natural resources management program budget of $155 million but only 10 percent of the Afghan Ministry of Agriculture’s estimated annual needs of $500 million.

Increased Terrorism, Warlords, and Opium Production Are Major Obstacles to Food Security and Political Stability

The goal of a stable Afghan state is threatened by the rise in domestic terrorism, long-standing rivalries among warlords, and the rapid increase in opium production. In March 2002, in a report to the UN Security Council, the UN Secretary General stated that security will remain the essential requirement for the protection of the peace process in Afghanistan. One year later, in a report to the council, he stated that “security remains the most serious challenge facing the peace process in Afghanistan.” Others in the international community, including USAID, consider security as a prerequisite for the implementation of reconstruction efforts. In 2002 and early 2003, the deteriorating security situation was marked by terrorist attacks against the Afghan government, the Afghan people, and the international community. These incidents have forced the international community to periodically suspend agricultural assistance activities, disrupting the agricultural recovery effort.

Meanwhile, clashes between the warlords’ private armies continue to destabilize the country and reduce the Afghan government’s ability to fund agricultural reconstruction. The warlords foster an illegitimate economy fueled by smuggling of arms, drugs, and other goods. They also illegally withhold hundreds of millions of dollars in customs duties collected at border points in the regions they control, depriving the central government of revenues needed to fund the country’s agricultural reconstruction. The warlords control private armies of tens of thousands of armed men. Across Afghanistan, approximately 700,000 Afghan men are armed, and half of these are combat trained. USAID considers the demobilization and integration of these armed men a prerequisite for the success of the international recovery effort. Currently, the unemployment rate in Afghanistan is estimated at 50 percent. Without a revitalization of the agricultural sector—the engine of the Afghan economy and the main source of employment—it is likely that these men will remain in the employ of the warlords.

Another destabilizing force that affects agriculture is the illicit international trade in Afghan opiates. The drug trade was the primary income source of the Taliban and continues to provide income for terrorists and warlords. On January 17, 2002, the President of Afghanistan issued a decree stating that the existence of an opium-based economy was a matter of national security and should be fought by all means. During the 1990s, Afghanistan became the world’s leading opium producer accounting for approximately 70 percent of opium production worldwide. Despite being a central focus of a number of international donors engaged in Afghanistan, opium poppy eradication efforts implemented by the Afghan government and the international community in 2002 failed. In July 2002, one of Afghanistan’s vice presidents and leader of the Afghan government’s poppy eradication campaign, Haji Qadir, was assassinated. In October 2002, the UN Office for Drug Control and Crime Prevention estimated that, in 2002, Afghan farmers produced 3,400 metric tons of opium. This level of production equals or exceeds levels achieved in 9 of the last 10 years. Total 2002 revenue from opium production totaled $1.2 billion, an amount equivalent to 70 percent of total assistance to Afghanistan pledged for 2002, or nearly 220 percent more than the Afghan government’s 2003 operating budget.

The UN Drug Control Program also estimated that the average poppy farmer earned $4,000 dollars from growing poppies in 2002. Owing to continuing drought, a poor agricultural marketing structure, and widespread poverty, farmers have turned to poppy cultivation to avoid destitution. Since the fall of the Taliban, irrigated acreage dedicated to wheat production has fallen by 10 percent, supplanted by opium poppies. In addition, it is estimated that 30 to 50 percent of Afghans are involved in opium cultivation. Many of the farmers continue to grow opium poppies because they lack the seed and fertilizer needed to grow alternative crops that generate revenues comparable to those from opium.

Conclusions

The establishment of a new government in Afghanistan has provided the Afghan people, the international community, and the United States an opportunity to rebuild Afghanistan and create a stable country that is neither a threat to itself or its neighbors nor a harbor for terrorists. In 2002, U.S. and international food assistance averted famine, assisted the return of refugees, and helped to implement reconstruction efforts. However, U.S. food assistance and cargo shipping legislation limited the United States’ flexibility in responding quickly to the emergency and providing support to WFP; the legislation does not provide for purchasing commodities regionally or donating cash to the UN for procuring commodities and requires that U.S. commodities be shipped on U.S. flag vessels. Consequently, the costs of food assistance were higher and delivery times were greater, fewer commodities were purchased, and a smaller number of people received food assistance. In addition, a lack of timely and adequate overall donor support disrupted WFP’s food assistance efforts. Meanwhile, in 2003, six million people will require food assistance in Afghanistan.

Because the economy remains overwhelmingly agricultural, the pace of recovery in the agricultural sector will largely determine the rate of Afghanistan’s overall recovery. Food assistance alone cannot provide food security; Afghanistan’s agricultural sector must be rehabilitated. Environmental and political problems have limited the impact of the international community’s agricultural assistance efforts. In addition, in 2002, the assistance efforts were not coordinated with each other or with the Afghan government. A new coordination mechanism established in December 2002 is largely similar to earlier mechanisms, and it is too recent for us to determine its effectiveness. Further, whereas U.S. and UN agencies, bilateral donors, and nongovernmental organizations have drafted numerous overlapping recovery strategies, no single Afghan government–supported strategy is directed toward the effort to rehabilitate the sector. Meanwhile, funding for the agricultural assistance effort is insufficient and the nascent Afghan government is plagued with problems stemming from domestic terrorism, the resurgence of warlords, and near- record levels of opium production. These obstacles threaten the recovery of the agricultural sector and the U.S. goals of achieving food security and political stability in Afghanistan.

Matter for Congressional Consideration

To increase the United States’ ability to respond quickly to complex emergencies involving U.S. national security interests, such as that in Afghanistan, Congress may wish to consider amending the Agricultural Trade Development and Assistance Act of 1954 (P.L. 83-480), as amended, to provide the flexibility, in such emergencies, to purchase commodities outside the United States when necessary and provide cash to assistance agencies for the procurement of non-U.S.-produced commodities. In addition, Congress may wish to amend the Merchant Marine Act of 1936, as amended, to allow waiver of cargo preference requirements in emergencies involving national security. These amendments would enable the United States to reduce assistance costs and speed the delivery of assistance, thus better supporting U.S. foreign policy and national security objectives.

Recommendations for Executive Action

To increase the effectiveness of the agricultural assistance effort in Afghanistan, we recommend that the Secretary of State and the Administrator of the U.S. Agency for International Development work through the Consultative Group mechanism to develop a comprehensive international–Afghan operational strategy for the rehabilitation of the agricultural sector. The strategy should (1) contain measurable goals and specific time frames and resource levels, (2) delineate responsibilities, (3) identify external factors that could significantly affect the achievement of goals, and (4) include a schedule for program evaluations that assess progress against the strategy’s goals.

Agency Comments and Our Evaluation

We provided a draft of this report to WFP, Department of State, USDA, USAID, and Department of Defense and received written comments from each agency (see app. VIII, IX, X, XI, and XII respectively). We also received technical comments from USDA, the Departments of Defense and State, USAID, FAO, and the World Bank, and incorporated information as appropriate.

Department of State, USDA, and USAID all commented on our matter for congressional consideration related to amending food assistance legislation. WFP supported our suggestion that Congress consider amending the Agricultural Trade Development and Assistance Act of 1954 to allow the provision of non-U.S. commodities when such action supports U.S. national security. However, State, USDA, and USAID did not support the recommendation. Specifically, although State accepted our evidence that purchasing commodities from the United States is not the most cost- effective method of providing assistance, it believes that further study of potential variables, such as regional customs fees, taxes, and trucking costs, that may negate cost-benefit savings is needed before the act is amended. USAID stated that an amendment is not necessary because other authorities under the Foreign Assistance Act allow the provision of cash, and the proposed $200 million Famine Fund announced by the President in February 2003 would also increase the flexibility of U.S. assistance programs. USDA stated that the flexibility to quickly respond to humanitarian crises can be achieved through means, such as amending cargo shipping legislation, that would not adversely affect the provision of U.S. commodities. Specifically, USDA suggested adding a national security waiver to the U.S. regulations that govern how U.S. assistance is transported to eliminate the requirement to use U.S. flag vessels in certain circumstances.

We do not disagree that under broad disaster assistance legislation U.S. agencies may provide cash or purchase food aid commodities outside the United States. However, we maintain that amending the Agricultural Trade Development and Assistance Act of 1954 to allow the provision of cash or food commodities outside the United States will greatly improve U.S. flexibility in responding to crises that affect U.S. national security and foreign policy interests. The act is the principal authority for providing food assistance in emergency situations. In both 2002 and 2003 over $2 billion in food assistance, the preponderant amount of this type of assistance, was dispersed under this authority. Amending the act will provide the United States with more flexibility to respond rapidly and at lower cost to events that affect U.S. national security; this is particularly important given the number and magnitude of crises requiring food assistance and decreasing surpluses of U.S. commodities. We also agree with USDA that the cargo preference requirement adds additional cost to food assistance and should be waived in specific situations, and we have adjusted the matter for congressional consideration contained in the report on this issue.

In its comments, USDA stated that the report did not provide enough evidence about the existence of surpluses in 2002 in the Central Asia region. It also stated that if the U.S. had procured greater levels of commodities with the savings accrued by purchasing regional versus U.S. - origin commodities, the additional commodities would have over burdened WFP’s logistics system while generating only “marginal savings in time and money.”

We have added additional information on the 7.6 million metric ton 2002 grain surplus in Kazakhstan and Pakistan. We disagree with USDA’s assertions that additional regionally procured commodities would have taxed WFP’s logistics system and brought only marginal gains. In December 2002, while fighting between coalition forces, the Northern Alliance, and the Taliban was still occurring, and winter weather was complicating food deliveries, WFP delivered 116,000 metric tons of food to Afghan beneficiaries, in the single largest movement of food by WFP in a 1- month period. According to WFP, its Afghanistan logistics system was capable of routinely moving more than 50,000 metric tons of food per month. Further, we disagree with USDA’s statement that the potential savings in cost and time by purchasing commodities regionally are marginal. Savings from the elimination of ocean freight costs could have fed 685,000 people for 1 year, and commodities purchased regionally are delivered to beneficiaries within weeks of being purchased, compared with the 4 months that it can take for commodities purchased in the United States.

WFP, the Department of State, USDA, and USAID all agreed with the report’s conclusion and recommendation pertaining to assistance coordination and the need to develop a joint international-Afghan agricultural rehabilitation strategy. WFP pointed out that although the international assistance effort may have been aided by better coordination in 2002, the overall level of assistance might have been too small in 2002 to have any long-term impact on the agricultural sector. Although USAID agreed with our recommendation, it stated it did not want to lead the strategy development effort. We believe that USAID should take an active and aggressive role in the development of a joint international–Afghan government strategy, because the United States is the largest donor to Afghanistan, agriculture rehabilitation is the focus of USAID’s assistance effort in Afghanistan, and the achievement of U.S. goals in Afghanistan is tightly linked to the rehabilitation of the country’s agricultural sector. According to USAID’s assistance strategy for Afghanistan, restoring food security is USAID’s highest priority.

Finally, the Department of Defense focused its comments on the report’s discussion of the humanitarian daily ration program. Specifically, the Department of Defense stated that (1) the report incorrectly characterized the ration program as a food assistance program, (2) informal evaluations of the program indicated that the program alleviated hunger and generated goodwill from the Afghan people toward U.S. soldiers, and (3) although the funds used to purchase rations could have been used to purchase bulk food, the bulk food could not have been delivered to remote areas. The report discusses both the food assistance and nonfood assistance aspects of the rations program, and we have added information on page 30 about the goodwill generated by the rations to the report. Finally, as discussed on page 20 of the report, bulk food could have been delivered to remote areas during the period of time (October-December 2001) when the ration program was implemented. During the month of December 2001, WFP delivered 116,000 metric tons of food to Afghanistan, a level of food assistance that exceeds any 1-month total for any emergency operation in WFP’s history.

We are sending copies of this report to the Honorable Richard J. Durbin, Ranking Minority Member, Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Committee on Governmental Affairs, and to the Honorable Frank R. Wolf, Chairman, Subcommittee on Commerce, Justice, State, and the Judiciary, Committee on Appropriations, House of Representatives. We also will make copies available to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-4347. Other GAO contacts and staff acknowledgments are listed in appendix XIII.

Scope and Methodology

To examine the management, cost, and sufficiency of U.S. and international food assistance since 1999, we reviewed documents obtained from the World Food Program (WFP) and the U.S. Agency for International Development (USAID). Specifically, we reviewed program documentation for recent emergency and special operations; WFP Afghanistan Country Office quarterly and annual reports; WFP’s Emergency Field Operations Manual and Food Aid in Emergencies Redbook; country office monitoring guidelines; Afghanistan area office strategies; memorandums of understanding and letters of agreement signed by WFP and United Nations (UN) agencies, nongovernmental organizations, and the Afghan government; and monitoring reports prepared by USAID staff.

In addition, we analyzed project monitoring and loss data to determine the frequency of monitoring visits, the experience and education level of monitors, and the level of commodities lost versus those delivered. We did not verify the statistical data provided by WFP. We also reviewed donor resource contribution data for recent emergency and special operations. We contacted by e-mail, or spoke with, 14 Afghan and international nongovernmental organizations to obtain their views on the delivery of assistance, WFP monitoring and reporting, and overall assistance coordination issues. We interviewed WFP management and staff at WFP headquarters in Rome, Italy; at the Regional Bureau for the Mediterranean, Middle East, and Central Asia, in Cairo, Egypt; at the Country Office in Kabul, Afghanistan; and at the Area Office in Hirat, Afghanistan. We also interviewed USAID, U.S. Department of Agriculture (USDA) and U.S. Department of State staff in Washington, D.C., and Kabul; U.S. Department of Defense Staff in Washington; the International Security Afghanistan Force, UN Development Program (UNDP), and UN Assistance Mission in Afghanistan (UNAMA) staff in Kabul; and UN High Commissioner for Refugees staff in Kabul and Hirat. Finally, we visited WFP project sites and warehouses in Kabul and Hirat. The number of sites visited was limited because of constraints placed on our movement within Afghanistan by the U.S. Embassy because of security considerations.

We also examined cost data provided by USDA and USAID. The data included commodity costs; total ocean freight charges; inland freight; internal transport, storage, and handling charges; and administrative support costs. We used the data to calculate two additional expenses, per USDA statements about the composition of costs and additional costs that are not stated on the data sheets. First, the "freight forwarder" fees represent 2.5 percent of the total cost of ocean freight. Thus, ocean freight charges were divided between freight forwarder fees (total freight minus total freight divided by 1.025) and actual freight costs (total freight minus freight forwarder fees). This was true for both USDA and USAID assistance. In the final analysis, the freight forwarder fee was included in the ocean freight cost because it is an expense that would not have been incurred if ocean shipping had not been used. Second, with each donation to WFP, USDA provides an administrative support grant at the rate of 7.5 percent of the total value of the donated commodities. We calculated these data accordingly.

We checked all USAID and USDA data for validity, where possible to the level of individual shipment. We cross-checked USAID data with USDA data. (USAID typically provided only estimated costs for commodities for the period 1999–2002. Because USDA conducts almost all commodity purchases for USAID, USAID estimates the commodity costs at the time it places its order with USDA, based on the current market cost. However, because USDA provided actual costs for USAID purchases in 1999, 2000, and 2001, the USAID commodity costs we cited for 2002 are based on USAID's estimate.) We then compared the cost of the U.S.-purchased commodities with the cost of commodities purchased in the Central Asia region to determine whether any savings could have been realized by purchasing commodities regionally versus buying U.S. commodities. Finally, using the level of rations that WFP provides to returning refugees, 12.5 kilograms per month, we calculated the amount of food assistance that the United States could have purchased and the number of people that could have received food assistance if it had purchased commodities in the Central Asia region.

Further, we examined the costs associated with the Department of Defense’s Afghan humanitarian daily ration program, implemented from October 2001 through December 2001. Using the level of rations that WFP provides to returning refugees, 12.5 kilograms per month, we calculated the amount of food assistance that the United States could have purchased and the number of people that could have received food assistance if it had purchased commodities in the Central Asia region.

In addition, we reviewed relevant food assistance legislation including the Agricultural Trade Development and Assistance Act of 1954 (P.L. 83-480) to determine whether provisions in the law allowed the U.S. government to purchase commodities outside the United States or provide cash transfers to assistance agencies for the provision of commodities from sources other than U.S. suppliers.

To assess U.S. and international agricultural assistance, coordination, strategies, and funding intended to help Afghanistan maintain stability and achieve long-term food security, we reviewed documentation provided by FAO, UNDP, and UNAMA; the World Bank; the Asian Development Bank; USAID; and the Afghan Ministries of Agriculture and Animal Husbandry, and Irrigation and Water Resources. We reviewed information pertaining to past and current coordination mechanisms in the Afghan government’s National Development Framework and National Development Budget. We examined the structure and content of the assistance strategies published by FAO, UNDP, UNAMA, the European Commission, the World Bank, Asian Development Bank, and USAID, and we examined the proposed funding levels contained in each strategy. Using the criteria contained in the U.S. Government Performance and Results Act, we examined the strategies to determine whether each contained the basic elements of an operational strategy articulated in the act. Further, we examined the overall assistance funding requirements contained in the January 2002 UNDP, World Bank, and Asian Development Bank Comprehensive Needs Assessment, which served as a guideline for international donor contributions for Afghanistan. We interpolated the funding projection data to construct annual aid flows, so that the cumulative totals were equal to those contained in the assessment. Assuming that the first year of data referred to 2002, we applied the U.S. gross domestic product deflator to convert the assumed current dollar figures into constant 2003 dollars.

Further, we examined security reports produced by the Department of Defense and the UN, as well as the UN Office on Drugs and Crime report on opium production in Afghanistan, to determine the impact of warlords and opium production on food security and political stability. In addition, we discussed U.S. and international agricultural assistance efforts and food security issues with officials from USAID in Washington and Kabul; FAO in Rome and Kabul; UNDP and the Afghan Ministries of Communication, Foreign Affairs, Interior, Rural Rehabilitation and Development, and Irrigation and Water Resources in Kabul; and the Afghan Ministry of Agriculture in Kabul and Washington.

We conducted our review from April 2002 through May 2003 in accordance with generally accepted government auditing standards.

World Food Program Projects in Afghanistan, 2002

Free food is delivered to the most vulnerable populations.

Malnourished children, pregnant and nursing mothers, and people undergoing treatment for tuberculosis and leprosy are provided with a blended mix of either milled corn and soy or wheat and soy, in addition to sugar and oil, through feeding centers, hospitals, clinics, and orphanages.

Returning refugees, internally displaced persons, and people involved in the poppy industry, among others, reconstruct and rehabilitate irrigation canals, roads, and other infrastructure. The program provides wages in the form of food and tools.

Men and women of the community decide which families should receive food. Able- bodied households contribute their labor to construct or rehabilitate an asset, such as an irrigation canal, that benefits the entire community. Those who cannot contribute labor also receive food, and they benefit from the community asset.

Food is distributed to students in school to encourage families to send their children to school. To encourage families to support the education of females, additional food is provided to female students. Food is also provided to teachers to supplement their low salaries.

Food is provided to women who participate in informal education activities including technical skills and literacy training.

Food is exchanged for improved seed grown by contract farmers. The seed is then sold to other farmers.

Daily rations of bread are provided to more than 250,000 people. Women operate 41 of the 100 bakeries.

Approximately 270,000 civil servants were provided with pulses and oil to supplement their salaries and help the Afghan government reestablish itself.

Food assistance is provided as part of a resettlement package to help people reestablish themselves in their home areas or chosen community.

Description of WFP Food Assistance Monitoring Mechanisms

The World Food Program uses a number of mechanisms to minimize losses and ensure that its commodities are well managed. The mechanisms include real-time automated tracking, periodic monitoring visits to project sites, required periodic reports from implementing partners, and end-of- project evaluations. The program’s global automated tracking system, the Commodity Movement and Progress Analysis System, is intended to record and report all commodity movement, loss, and damage. Each WFP suboffice in Afghanistan has access to the system and employs a clerk dedicated to managing it. The system produces a number of reports, including stock, damage, and loss reports.

WFP guidelines state that monitoring and reporting are essential parts of effective project management in the field, and it is WFP’s policy not to support any project that cannot be monitored. Monitoring activities are intended to assess the status of projects by comparing the actual implementation of activities to the project’s work plan. The responsibility for monitoring projects rests with the program’s country office in Kabul and five Afghan suboffices located in other cities. Each office employs between 6 and 24 local Afghan project monitors, and WFP has 22 program staff in Afghanistan who also monitor projects, in addition to their other duties. WFP’s Afghan country office has developed monitoring guidelines for its monitors and monitoring checklists for each type of activity (e.g., food-for-work, food-for-seed, food-for-asset-creation, food-for-education).

According to WFP, monitoring visits include an examination of project inputs, current operations, outputs, and immediate effects. Specific monitoring activities include an examination of food stocks held by implementing partners. The monitors spot-check the weight of randomly selected bags in storage and compare the total stock held with WFP stock balance reports. The monitors also survey local markets to determine whether any WFP food is being resold rather than used by beneficiaries. Projects are monitored on a periodic basis. WFP tries to visit each project when it starts, during its implementation, and when it is completed. The WFP data that we examined indicated that, on average, 2.4 monitoring visits were conducted on all projects implemented between April 2002 and November 2002 in Afghanistan.

In addition to requiring the project monitoring visits, WFP requires its implementing partners to report on the status of projects on a monthly basis. WFP project proposals and the letters of agreement signed by WFP and its implementing partners stipulate that monthly and end-of-project reports must be submitted to WFP. The end-of-project reports include an assessment of the achievement of project objectives and a breakdown of budget expenditures.

Donor Contributions to World Food Program Emergency Operation 10155 as of May 12, 2003

Cost Data for U.S. Food Assistance to Afghanistan Provided to the UN World Food Program, Fiscal Years 1999–2002

International Donor Assistance Coordination Mechanisms in Afghanistan

Between 1998 and 2003, as circumstances in Afghanistan changed, the coordination processes utilized by the international community and the Afghan government evolved (see table 3 and figure 11). Beginning in 1998, the international community employed a strategy of Principled Common Programming among United Nations agency, nongovernmental, and bilateral donor programs. The international community’s aim was to establish priorities and projects based on agreed upon goals and principles that would form the UN’s annual consolidated appeal for assistance. To implement Principled Common Programming, a number of coordination mechanisms were established, including the Afghan Programming Body. The programming body consisted of the Afghan Support Group, 15 UN Representatives, and 15 nongovernmental organizations and was responsible for making policy recommendations on issues of common concern, supporting the UN’s annual consolidated appeal for donor assistance, and promoting coordination of assistance efforts. The Taliban government had no role in the programming body. The programming body was supported by a secretariat; working level operations were conducted by a standing committee and thematic groups responsible for analyzing needs, developing strategies and policies, and setting assistance priorities within their thematic areas (e.g., the provision of basic social services). The Afghan Programming Body and its standing committee were incorporated into the Implementation Group/Program Group process established in 2002. Table 3 describes the Afghan assistance coordination mechanisms in place in 2002.

In December 2002, the Afghan government instituted the Consultative Group coordination process in Afghanistan. The process evolved out of the previous Implementation/Program group processes. (Table 4 compares the two processes.) The Consultative Group process retains the same basic hierarchical structure that was established under the Implementation Group process. For example, the new process includes 12 groups, each lead by an Afghan government minister, organized around the 12 programs contained in the Afghan government’s National Development Framework. In addition to the 12 groups, 2 consultative groups covering national security programs (i.e., the national army and police); and 3 national working groups on disarmament, demobilization, and reintegration; counternarcotics; and demining were established. Further, 5 advisory groups were also established to ensure that cross-cutting issues, such as human rights, are mainstreamed effectively in the work of the 12 consultative groups and reflected in the policy framework and budget.

Each consultative group will assist in policy management, as well as monitoring the implementation of activities envisaged under the Afghan government’s national budget. The groups will assist in preparing the budget, provide a forum for general policy dialogue, monitor the implementation of the budget, report on indicators of progress for each development program, and elaborate detailed national programs. The groups, with assistance from the standing committee, will also focus on monitoring performance against benchmarks established by each group. Each lead ministry will select a focal point, or secretariat, organization from among donors and UN agencies. Each year, in March, the Afghanistan Development Forum, or national consultative group meeting, will be held to discuss the budget for the next fiscal year, review national priorities, and assess progress. At that time, the consultative groups will report to the Consultative Group Standing Committee.

Major Donors’ Pledges and Contributions as of December 31, 2002 (as reported by the U.S. Department of State)

3 years Russia did not pledge at Tokyo – Russian assistance has been primarily in-kind donations.

Comments from the World Food Program

The following are GAO’s comments on the letter from the United Nations World Food Program dated June 2, 2003.

GAO Comments

1. Although changes in the coordination mechanism utilized in Afghanistan were introduced in 2003, the Afghan government and the international community still lack a common, jointly developed strategy for rehabilitating the agricultural sector. We believe that such a strategy, including measurable goals and a means to evaluate progress toward achieving the goals, is needed to focus limited resources and hold the international community accountable for the assistance it delivers.

Comments from the Department of State

The following are GAO’s comments on the letter from the Department of State dated June 3, 2003.

GAO Comments

1. The U.S. Agency for International Development (USAID) currently purchases limited amounts of regional food commodities in an effort to respond quickly to humanitarian emergencies. Commodities purchased in the United States by U.S. agencies must travel the same logistics networks as commodities purchased regionally. For example, U.S. commodities destined for Afghanistan in 2002 were shipped from the United States to the Pakistani port at Karachi and moved to their final destination via roads in Pakistan and Afghanistan. Commodities purchased in Pakistan followed the same transit routes. Hence, the overland shipping costs, such as for trucking, were the same for U.S. origin commodities and Pakistani commodities. Further, regional cash purchases of food would be made by U.S. government officials or World Food Program (WFP) officials, the same officials that currently handle hundreds of millions of dollars in assistance funds and millions of metric tons of commodities; we are not suggesting that cash be provided to local governments. Any purchases would be subject to U.S. and UN accountability procedures, as such purchases are currently; increasing the amount of commodities purchased locally would not by itself create an opportunity for corruption.

Comments from the United States Agency for International Development

The following are GAO’s comments on the letter from the United States Agency for International Development dated June 6, 2003.

GAO Comments

strategy recognizes the importance of agriculture sector rehabilitation to the achievement of the U.S. policy goals in Afghanistan, including a politically stable state that is not a harbor for terrorists. 4. We agree that other authorities allow USAID to provide cash or purchase assistance commodities outside the United States. However, we believe that amending the Agricultural Trade Development and Assistance Act of 1954 to allow the provision of cash or food commodities outside the United States will greatly improve U.S. flexibility in responding to crises affecting U.S. national security and foreign policy interests. The act is the principal authority for providing food assistance in emergency and nonemergency situations. Amending the act will provide a permanent provision in this authority allowing the United States to respond rapidly and in a cost-effective manner to events that affect U.S. national security.

USAID cites the recently proposed $200 million Famine Fund as providing the flexibility that the United States needs to address humanitarian crises. However, the fund proposal indicates that the fund will target dire unforeseen circumstances related to famine; thus, the fund does not appear to be designed to respond to nonfamine crises involving large amounts of food aid or national security. The fund amounts to less than 10 percent of the $2.2 billion and $2.6 billion appropriated for U.S. food aid in 2002 and 2003, respectively, a period marked by an increasing number of humanitarian food crises—for example, in Afghanistan, southern Africa, and North Korea—that did not entail famine but that did, in some cases, affect U.S. national security. The Famine Fund is inadequate to respond to the increasing number and size of such crises. Meanwhile, the availability of commodities in the United States for food assistance has declined in 2003. Therefore, the need to procure commodities overseas in close proximity to affected countries has become more critical while also being more cost effective.

Comments from the Department of Agriculture

The following are GAO’s comments on the letter from the Department of Agriculture dated June 10, 2003.

GAO Comments

1. Although other legislation allows for the provision of cash or assistance commodities from non-U.S. sources, we believe that amending the Agricultural Trade Development and Assistance Act of 1954 to allow the provision of cash or food commodities outside the United States will greatly improve U.S. flexibility in responding to crises that affect U.S. national security interests. The act is the principal authority for providing food assistance in emergency and nonemergency situations. Amending the act will provide a permanent provision in this authority allowing the United States to respond rapidly and in a cost effective manner to events that affect U.S. national security.

In addition, although the proposed $200 million Famine Fund may provide some additional flexibility for responding to humanitarian crises, the fund proposal indicates that the fund will target dire unforeseen circumstances related to famine. Thus, the fund does not appear to be designed to respond to nonfamine crises involving large amounts of food aid or national security. The fund amounts to less than 10 percent of the $2.2 billion and $2.6 billion appropriated for U.S. food aid in 2002 and 2003, respectively, a period marked by an increasing number of humanitarian food crises—for example, in Afghanistan, southern Africa, and North Korea—that did not entail famine but that did, in some cases, affect U.S. national security. 2. We agree with the U.S. Department of Agriculture (USDA) that the cargo preference requirement adds additional cost to food assistance and should be waived in specific situations, and we have adjusted the matter for congressional consideration to reflect this. As stated in the report, 19.6 percent of total food assistance costs in fiscal year 2002 were for ocean freight. These costs were incurred because of the requirement that assistance commodities must be purchased in the United States, and 75 percent of the purchased commodities by weight must be shipped on U.S.-flagged carriers. In previous reports, we analyzed the costs of cargo preference requirements on food assistance and demonstrated the negative impact of these costs on U.S. food aid programs. it had used the savings realized through the purchase of regional commodities versus U.S. commodities to procure additional commodities. Further, WFP has commodity quality control standards and would not purchase commodities with donor funds that were objectionable to the donor providing the funds. Finally, much of the wheat that was purchased in the United States was shipped in bulk to ports in Pakistan where it was bagged for final distribution in bags clearly marked “USA.” Wheat purchased regionally with U.S. funds was packaged in Pakistan in the same type of bags. Thus, any regional purchases could be packaged in appropriately marked bags in the country of origin or at a bagging facility in a transit country. WFP uses this practice in other regions, such as southern Africa. 6. WFP made regional purchases during late 2001, but it also made regional purchases during 2002. As stated in the report, the amount of food available for food assistance in 2003 is less than in 2002, while the need for food aid continues to grow around the world, most notably in southern Africa. In addition, even if the U.S. grain infrastructure system is able to respond to ongoing demands for food aid, purchasing U.S. origin commodities and shipping the commodities via expensive ocean freight is not the most cost effective or quickest means either of supplying food to hungry people or of achieving U.S. national security and foreign policy objectives, such as stability in Afghanistan. 7. We agree that the donor community faced challenges in engaging the Afghan government in 2002. We believe that the mechanisms currently in place, including the Consultative Group coordination mechanism, provide an environment where the international community and the Afghan government can engage in a joint strategy development effort. 8. The report’s description of Afghanistan’s agriculture sector is based on discussions with and documents obtained from FAO, Asian Development Bank, USAID, and Afghan government officials. We have adjusted the language in the report in response to USDA’s comments.

Comments from the Department of Defense

The following are GAO’s comments on the letter from the Department of Defense dated June 10, 2003.

GAO Comments

1. The report discusses both food assistance and nonfood assistance aspects of the Humanitarian Daily Ration program. On page 30 of the report, we state that the HDR program was initiated to alleviate suffering and convey that the United States waged war against the Taliban, not the Afghan people. Also, the HDR program is included with the U.S. Agency for International Development’s humanitarian programs in U.S. government tallies of total humanitarian assistance provided to Afghanistan. 2. Department of Defense officials responsible for the administration of the HDR program stated that no formal evaluation of the HDR program in Afghanistan has been conducted. In the report, we cite the informal reporting that provided the Department of Defense with some information about how the program was received by the Afghan people. We have added information about the goodwill that the HDRs generated according to the informal reports cited by the Department of Defense in its comments on the draft report. 3. The report describes how HDRs are designed to be used—to relieve temporary food shortages resulting from manmade or natural disasters—not, as in Afghanistan, to feed a large number of people affected by a long-term food shortage. Further, as discussed in the report, the World Food Program (WFP) has worked in Afghanistan for many years, and during that period it developed an extensive logistics system for delivering food throughout the country. Even during the rule of the Taliban, WFP was able to deliver food to remote areas including those controlled by the Northern Alliance. During the month of December 2001, while Department of Defense was delivering HDRs, WFP delivered 116,000 metric tons of food to Afghanistan, a level of food assistance that exceeds any 1-month total for any emergency operation in WFP’s history. As stated in the report, WFP’s logistics system was capable of delivering commodities to remote populations both by air or by donkey if necessary.

GAO Contacts and Staff Acknowledgments

GAO Contacts

Staff Acknowledgments

In addition to the individuals named above, Jeffery T. Goebel, Paul Hodges, and Reid L. Lowe made key contributions to this report.

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