Afghanistan is one of the world’s poorest countries and ranks near the bottom of virtually every development indicator category, including life expectancy; literacy; nutrition; and infant, child, and maternal mortality. According to the most recent National Risk and Vulnerability Assessment conducted by the government of Afghanistan between 2007 and 2008, the Afghan poverty rate was 36 percent. The highest rates of poverty were among nomads and rural farmers and varied across regions and provinces. (For additional information on regional poverty in Afghanistan see GAO-10- 756SP.) The survey also found that agricultural activities provided the Afghan population’s primary livelihood; 55 percent of households were engaged in farming and 68 percent had livestock. According to the World Bank, the agricultural sector accounts for 30 percent of Afghanistan’s gross domestic product. The National Risk and Vulnerability Assessment states that agricultural productivity is hampered by water shortage, lack of credit, insufficient outreach of agricultural and veterinary extension services, and poor access to markets. Afghanistan suffers from limited means to capture water resources, soil degradation, overgrazing, deforestation, and desertification. As shown in figure 1, Afghanistan is mountainous and much of its land is not arable. According to the National Risk and Vulnerability Assessment, household access to arable land increased between 2005 and 2007/2008, largely due to increasing access to irrigated land across urban, rural, and nomadic households. Additionally, in 2007/2008, 40 percent of households nationwide had access to irrigated land and 17 percent had access to rain- fed land. Farms in Afghanistan averaged 1.4 hectares for irrigated land and 2.8 hectares for rain-fed land. The survey also found that wheat was the most frequently cited crop produced on irrigated and rain-fed land during the summer planting season, followed by opium and potatoes on irrigated land and cotton and barley on rain-fed land; corn, sorghum, and rice were grown on irrigated land during the winter planting season. Some households also grew fruit and nut trees and grapes. (For additional information on major crops grown in Afghanistan see GAO-10-756SP.) As figure 2 shows, between fiscal years 2002 and March 31, 2010, USAID awarded about $1.4 billion to 41 agricultural-assistance programs in Afghanistan, with almost two-thirds of the amount (about $900 million) disbursed. As table 1 shows, disbursements of U.S. funds for agricultural programs represented 14 percent of all USAID assistance programs in Afghanistan from fiscal years 2002-March 31, 2010. Moreover, the percentage of USAID’s total assistance to Afghanistan disbursed to agricultural programs has increased from 6 percent in fiscal years 2002-2004 to 17 percent in fiscal years 2008 and 2009. Appendix II has more funding information on USAID’s agricultural programs, including the eight agricultural programs in our review. The administration requested $827 million dollars in fiscal year 2010 for USAID agricultural-assistance programs. In fiscal years 2002–2003, to help address the complex humanitarian crisis in Afghanistan, the U.S. government provided emergency assistance that helped avert a famine, significantly reduced the suffering of the most vulnerable Afghans, and assisted the return of refugees. USAID provided Afghanistan with 355,270 metric tons of wheat and other emergency food assistance (valued at $206.4 million), and the U.S. Department of Agriculture provided 79,600 metric tons of surplus wheat (valued at $38.7 million). Over the 2-year period, the United States provided over 60 percent of all international food assistance received by Afghanistan. According to the World Food Program, the food assistance provided by the United States and the international community helped avert famine in Afghanistan. As we previously reported, from 2002 through 2004, increased opium poppy cultivation spread and drug trafficking grew as a threat to Afghanistan’s security and stability. During that time, the United States supported Afghan- and United Kingdom-led counternarcotics efforts. These efforts reportedly had little effect on the illicit narcotics industry because of limited security and stability across Afghanistan. In response, the U.S. government made counternarcotics a top U.S. priority and developed a strategy in 2004 to reduce poppy cultivation, drug production, and trafficking, shifting the emphasis of the United States’ agricultural assistance programs in Afghanistan from food security programs to counternarcotics-related ADP. This part of the U.S. counternarcotics strategy was intended to offer incentives to stop opium poppy production by helping farmers and farm laborers obtain other ways to earn a living. The strategy also called for strong disincentives such as forced eradication, interdiction, and law enforcement, while at the same time spreading the Afghan government’s antinarcotics message. The United States’ efforts also were expected to build the Afghan government’s capacity to conduct counternarcotics efforts on its own. As part of its counternarcotics efforts, beginning in 2005, USAID awarded most of its new agricultural funds to alternative-development programs (ADP)—to (1) increase agricultural productivity, (2) accelerate economic growth, and (3) eliminate illicit drug cultivation. As figure 3 shows, between 2005 and 2008, $494 million, or 71 percent of new awards were for ADP. During this time period, USAID funded ADP, as well as other large agricultural programs. Figure 4 provides a brief description of the goals and objectives of the eight programs included in this review including, beginning in 2005, ADP-Northeast, ADP-South, and ADP-East; beginning in 2006, the Accelerating Sustainable Agriculture Program; beginning in 2008, ADP-Southwest, the Afghanistan Water, Agriculture, and Technology Transfer program, and the Afghanistan Vouchers for Increased Production in Agriculture program; and beginning in 2009, the Incentives Driving Economic Alternatives-North, East and West, as a follow-on program to ADP-East. USAID identified six of the eight programs as ADP, excluding the Accelerating Sustainable Agriculture Program and the Afghanistan Vouchers for Increased Production in Agriculture. Appendix III specifies the provinces where the eight agricultural programs included in our review operated and gives examples of the range of projects that these programs implemented. In 2009, under the direction of the President and the Special Representative for Afghanistan and Pakistan, the United States shifted the focus of its agricultural strategy in Afghanistan from counternarcotics to counterinsurgency efforts. This shift de-emphasized eradication. According to the Special Representative for Afghanistan and Pakistan, eradication unduly punished and alienated farmers for making a “rational economic decision,” while ignoring the profits gleaned by traffickers and insurgents from the sale of processed opium and heroin. Further, the Administration noted that economic growth and new job creation were critical to U.S. counterinsurgency efforts in Afghanistan because they provide licit alternatives to narcotics- and insurgent-related activities and connect people to their government. As a result, the Administration integrated agricultural programs with other U.S. efforts, including military operations, and directed more resources to the agricultural sector. For example, the Afghanistan Vouchers for Increased Production in Agriculture program, which originally operated outside of the southeastern portion of Afghanistan, was expanded to Helmand and Kandahar in 2010, where according to Department of Defense officials, the United States and Afghanistan have begun military operations to break the momentum of the insurgency. Furthermore, the Administration increased the involvement of the U.S. Department of Agriculture and aligned U.S. efforts with the current agricultural priorities of the Afghan government, as laid out in the Ministry of Agriculture, Irrigation, and Livestock’s National Agriculture Development Framework. The strategy focuses on the following four areas: 1. increasing agricultural productivity by increasing farmers’ access to quality inputs, such as improved seeds and fertilizer, and effective extension services; 2. regenerating agribusiness by increasing linkages between farmers, markets, credit, and trade corridors; 3. rehabilitating watersheds and improving irrigation structure; and 4. increasing the Ministry of Agriculture, Irrigation, and Livestock’s capacity to deliver services and promote the private sector and farmer associations through direct budget and technical assistance. USAID’s Automated Directives System establishes performance management and evaluation procedures that USAID expects its staff to follow in planning, monitoring, and evaluating its agricultural assistance programs in Afghanistan. USAID operationalized these procedures through the development of a Mission Performance Management Plan (PMP). Similarly, USAID requires its implementing partners to develop monitoring and evaluation plans, which are generally included in implementing partners’ program PMPs. The collection of planning, monitoring, and evaluating efforts, when taken together, enable USAID to manage the performance of its programs. While USAID has noted that Afghanistan is an insecure environment in which to implement its programs, the agency has generally required the same performance management and evaluation procedures as it does in other countries in which it operates. In October 2008, USAID approved new guidance that outlined several alternative monitoring methods—especially when site visits are difficult or not possible—in high threat environments such as Afghanistan. This guidance, however, was not disseminated to USAID staff until December 2009, and the USAID Mission to Afghanistan agricultural staff did not become aware of the guidance until June 2010. This guidance was included in GAO’s review where applicable. Figure 5 presents a summary of USAID’s Automated Directives System’s performance management and evaluation procedures it expects its staff to follow, grouped into planning, monitoring, and evaluating categories. USAID’s Automated Directives System requires USAID officials to complete a Mission PMP for each of its high-level objectives as a tool to manage its performance management and evaluation procedures.