Public Law 480 Title I:

Economic and Market Development Objectives Not Met

T-GGD-94-191: Published: Aug 3, 1994. Publicly Released: Aug 3, 1994.

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GAO discussed the Public Law 480 title I food aid program, focusing on the impact of title I assistance on: (1) promoting broad-based, sustainable economic development in recipient countries; and (2) developing and expanding markets for U.S. agricultural commodities. GAO noted that: (1) title I aid has minimal impact on broad-based, sustainable economic development because the value of the foreign exchange a country might save through purchasing title I commodities on concessional terms is small relative to the country's development needs; (2) the program provides the Department of Agriculture little leverage to influence development activities or initiate policy reforms in recipient countries; (3) title I contribution to long-term, foreign market development for U.S. agricultural commodities has not been demonstrated; (4) since title I commodities tend to be price sensitive, it is difficult to transform the concessional market share established through the title I program into commercial market share, unless the United States can offer competitive prices and financing; (5) several program requirements impose constraints on recipients that undermine market development efforts; and (6) despite amendments to the title I program, multiple and sometimes competing objectives, as well as contradictory program requirements, continue to encumber the title I program, making it difficult to create and implement an effective program strategy.

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