Fact SheetInternational Food Aid Reform

October 2013

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2006 2007 2008 2009 2010 2011 2012� Base � Supplemental

Food for Peace AppropriationsFY06 – FY12

The United States has long been a global leader in responding to humanitarian emergencies and is the largest provider of lifesaving food aid. Since Food for Peace—the largest food aid program–began in the 1950s, approximately 3 billion people in 150 countries have benefitted from American generosity and compassion.1 There is an opportunity to reform this valuable program so that appropriated funds are used more efficiently to reach the maximum number of hungry people overseas, especially malnourished women and children.

Food aid has been an integral part of the U.S. government’s efforts to end global hunger, but its shortcomings in meeting nutritional requirements of recipients has been noted in the Tufts University Food Aid Quality Review2 and reported by the U.S. Government Accountability Office (GAO).3 Nutrition is especially important in the 1,000 day-window of opportunity between the beginning of a woman’s pregnancy and her child’s second birthday. Should malnutrition set in during this period, its effects are lifelong and often irreversible with health, education, social, and economic consequences.4 In fact, malnutrition can negatively affect a country’s gross domestic product (GDP) by as much as 10 percent.5

Food aid is authorized through the Food for Peace Act,6 and is provided as both disaster response and developmental assistance. In a humanitarian response, improved nutrition in food aid products–provided from the United States or sourced locally–can save additional lives. The U.S. Agency for International Development USAID and its program-implementing partners need additional flexibility to target the best possible food aid products to recipients.

Despite the continued importance of Food for Peace, particularly among vulnerable women and children, funding has decreased over the past several years. At the same time, more people are in need of assistance than ever; especially as the lasting effects of drought are felt in places such as East Africa. In today’s budgetary climate, the U.S. government needs to be as flexible as it can, while being a wise steward of appropriated funds. Food aid interventions that address malnutrition are considered by experts to be among the best investments in developmental assistance.7

425 3rd Street SW, Suite 1200, Washington, DC 20024 • 1-800-822-7323 • www.bread.org

USA

ID

Bread for the World • 425 3rd Street SW, Suite 1200, Washington, DC 20024 • 1-800-822-7323 • www.bread.org

Why Reform is Needed We have a unique opportunity to make reforms and use appropriated funds more efficiently to feed more hungry people.

Americans support effective development The average American believes the United States should spend about 10 percent of the federal budget on foreign assistance.8 Yet the reality is that foreign assistance accounts for only about 1 percent of the federal budget and poverty-focused developmental assistance that funds all food aid accounts for only 0.6 percent of the total.9 According to recent polling, almost 90 percent of Americans believe that improving health for people in developing countries should be one of the top priorities of U.S. foreign assistance; nearly two-thirds of those individuals specifically prioritize reducing hunger and malnutrition.10 According to a recent study commissioned by Bread for the World, American citizens feel strongly that our country has a moral and financial responsibility to help end hunger and poverty. (Read the study in its entirety at www.bread.org/media/pdf/weber-shandwick-hunger-poll-sm.pdf).

Nutritional quality of food aid is essential An increasing number of food aid recipients are women and children, and the effects of malnutrition in the 1,000-day window of opportunity can have devastating and lifelong effects. The types of food aid provided by the United States and other donors in general distribution do address hunger by providing needed calories, but can come up short in addressing micronutrient needs.11 Ensuring good nutrition to vulnerable populations has not been a high priority—at least partly because emergency programs are seen to address short-term food emergencies. Improved nutrition in food aid can build resilience that is needed to withstand and overcome future food security challenges.

Flexibility Saves Dollars and Lives Funding to support com-plementary food security activities alongside direct distribu-tion of food aid must be used as efficiently as possible. Procuring more food locally and regionally is, on average, 30 percent cheaper than traditional food aid and can be provided more quickly.12 For women and children in the 1,000-day window, timely arrival of food aid can mean the difference between a life of health and opportunity and one of stunted growth and human potential. The 2008 farm bill authorized a pilot program to implement and study local and regional procurement (LRP) activities in both emergency and non-emergency settings. Results showed savings in both money (50 percent) and time (62 percent faster delivery). Efficient programming can also be achieved by using cash and vouchers where appropriate. Increasing program options will allow for specialized food aid products and fortificants (vitamins and minerals) to be adjusted and targeted to most vulnerable populations to improve nutritional outcomes.

Reforms promote self-sufficiency of smallholder farmers Bagged food aid commodities are usually shipped from the United States or a pre-position site, which can add to food aid cost and delivery time. The practice of monetization–shipping food commodities purchased in the United States and reselling them to support food aid development projects–can mean losses of as much as 30 cents on the dollar, compared to the use of vouchers or cash, and can in some cases be a disincentive for local markets and farmers. In fiscal year 2012, $31.7 million was lost due to inefficiencies related to the practice of monetization.13 More than 800,000 additional people could have been fed through direct funding. According to GAO, monetization is “inherently inefficient”14 and can undercut efforts to develop agricultural systems (which is a primary goal of Feed the Future).

A Call to ActionAs specific food aid reform proposals in the 2013 farm bill are considered, final legislation must include the following

provisions:

• AuthorizationofLocalandRegionalProcurement:Support making permanent the authority for LRP projects at the U.S. Department of Agriculture (USDA) at an annual authorized level of $60 million. This provision adds an important and versatile tool that can be used to reach more food insecure people with better, more nutritious food.

Source: Hoddinott et. al,”The economic rationale for investing in stunting reduction,” Maternal and Child Nutrition, Sept. 2013.

Every invested

in nutrition generates

as much as $48in better health and

increased productivity

$1

• Improve Food Aid Quality andMeasure Nutrition Outcomes: Support extending 2008 farm bill authority to allow USDA and USAID to adjust food aid products and formulations, accelerate the use of specialized products that have proven to be superior in improving nutritional outcomes, and continue to test new food aid products. Senate farm bill language maintains authorized annual funding levels at $4.5 million that will allow this vital research to continue and move toward becoming operational.

• Increased Flexibility on Resource Allocation: Consistent with existing authority, Congress should allow cash funds within the Title II and Food for Progress programs to be used to pay the cost of up to 20 percent of activities. This would increase program implementing partners’ flexibility in selecting between cash-based resources and in-kind resources and reduce reliance on monetization.

• Increased202(e)Funding: Support raising the level of project food aid program resources available as cash from 13 percent to 15 percent to help provide funding for important programmatic tools that had been previously procured from monetization proceeds.

• Monetization Transparency and Reporting: The need to monetize should eventually be replaced by other program options, recognizing the importance of a responsible phase-out period to ensure program continuity.

• DonaldM.PayneAnti-HungerGrants: Congress should authorize the use of focused programming in the 1,000 day-window between the beginning of a woman’s pregnancy and her child’s second birthday in order to build individual and household resilience and self-reliance.

Endnotes 1 USAID, Food for Peace: Bringing Hope to the Hungry, Available at: http://pdf.usaid.gov/pdf_docs/PDABZ818.pdf 2 Webb, et al. (April 2011), Delivering Improved Nutrition: Recommendations for Changes to U.S. Food Aid Products and Programs, Food Aid Quality Review Report to the U.S. Agency for International Development, Tufts University3 U.S. Government Accountability Office (May 2011), International Food Assistance: Better Nutrition and Quality Control Can Further Improve US Food Aid, Report to Congressional Requesters (GAO-11-491). Available from: http://www.gao.gov/assets/320/318210.pdf 4 Webb et al., op. cit.5 Available at http://www.ifpri.org/sites/default/files/publications/infographic_2013_lancet.pdf 6 As Amended Through P.L. 110–246, Effective May 22, 20087 The Copenhagen Consensus Center, Consensus Results 2008, http://www.copenhagenconsensus.com 8 CNN Opinion Poll, http://i2.cdn.turner.com/cnn/2011/images/03/31/rel4m.pdf; ‘American Public Opinion on Foreign Aid’, World Public Opinion.9 Office of Management and Budget, http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/12msr.pdf 10 Kaiser Family Foundation, 2012 Survey of American’s on the U.S. Role in Global Health, http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8304.pdf 11 Webb et al., op. cit.12 GAO, International Food Assistance: Local and Regional Procurement Can Enhance the Efficiency of U.S. Food Aid, but Challenges May Constrain Its Implementation, GAO-09-570 (Washington, 2009), www.gao.gov/products/GAO-09-570 13 Available at http://www.usaid.gov/sites/default/files/documents/1869/USAIDFoodAidReform_FactSheet.pdf 14 U.S. Government Accountability Office, op. cit.

“It’s not just the waste that should bother us, but the harmful impact of dumping such commodities, which can destroy local farming, and in turn increase the dependency on aid we’d like to see end.”

– Rep. Ed Royce (R-Calif.), chairman, House Foreign Affairs Committee, on current food

aid system

n

“It is time we apply some innovation, ingenuity and flexibility to our nation’s food aid program in a way that does not disrupt agricultural markets and better achieves our goal of a food secure world.”

–Cargill statement, May 22, 2013

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“Land O’Lakes sees the value that such LRP efforts can bring to countries like Bangladesh, and supports steps that will help meet development objectives through food aid reforms and ultimately make populations more resilient in the face of future shocks.”

–Jon Halverson, vice president ofLand O’Lakes International Development

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“At a time of such urgent human need and budget constraint, reforms that enable us to reach more hungry people while saving taxpayer dollars, and continue to engage the talent and generosity of American agriculture, are the right choice.”

–Roger Johnson, president,National Farmers Union

425 3rd Street SW, Suite 1200Washington, DC 20024

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