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Improving the Efficiency and Effectiveness of Food Aid' which was 
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Before the Committee on Agriculture, Nutrition, and Forestry: 

U.S. Senate: 

United States Government Accountability Office: 


For Release on Delivery Expected at 9:30 a.m. EDT: 

Wednesday, March 21, 2007: 

Foreign Assistance: 

U.S. Agencies Face Challenges to Improving the Efficiency and 
Effectiveness of Food Aid: 

Statement of Thomas Melito, Director: 
International Affairs and Trade: 


GAO Highlights: 

Highlights of GAO-07-616T, a testimony before the Chairman and Ranking 
Minority Member, Senate Committee on Agriculture, Nutrition, and 

Why GAO Did This Study: 

The United States is the largest provider of food aid in the world, 
accounting for over half of all global food aid supplies intended to 
alleviate hunger. Since the 2002 reauthorization of the Farm Bill, 
Congress has appropriated an average of $2 billion per year for U.S. 
food aid programs, which delivered an average of 4 million metric tons 
of agricultural commodities per year. Despite growing demand for food 
aid, rising business and transportation costs have contributed to a 43-
percent decline in average tonnages delivered over the last 5 years. 
For the largest U.S. food aid program, these costs represent 
approximately 65 percent of total food aid expenditures, highlighting 
the need to maximize the efficiency and effectiveness of food aid. To 
inform Congress as it reauthorizes the 2007 Farm Bill, GAO examined 
some key challenges to the (1) efficiency of delivery and (2) effective 
monitoring of U.S. food aid. 

What GAO Found: 

Multiple challenges combine to hinder the efficiency of delivery of 
U.S. food aid by reducing the amount, quality, and timeliness of food 
provided. These challenges include (1) funding and planning processes 
that increase delivery costs and lengthen time frames; (2) 
transportation contracting practices that create high levels of risk 
for ocean carriers, resulting in increased rates; (3) legal 
requirements that can result in the awarding of food aid contracts to 
more expensive service providers; and (4) inadequate coordination 
between U.S. agencies and food aid stakeholders in systematically 
addressing food delivery problems, such as spoilage. U.S. agencies have 
taken some steps to address timeliness concerns. USAID has been 
stocking or prepositioning food commodities domestically and abroad and 
USDA has implemented a new transportation bid process, but the long-
term cost effectiveness of these initiatives has not yet been measured. 

Figure: Selected Trends in U.S. Food Aid, Fiscal Years 2002 to 2006: 

[See PDF for Image] 

Source: GAO analysis of USAID and USDA budget data. 

Note: Emergency funding reflects USAID only. 

[End of figure] 

Given limited food aid resources and increasing emergencies, ensuring 
that food reaches the most vulnerable populations—such as poor women 
who are pregnant or children who are malnourished—is critical to 
enhancing its effectiveness. However, USAID and USDA do not 
sufficiently monitor the effectiveness of food aid programs, 
particularly in recipient countries, due to limited staff, competing 
priorities, and restrictions in the use of food aid resources. For 
example, although USAID has some non-Title II-funded staff assigned to 
monitoring, it had only 23 Title II-funded staff assigned to missions 
and regional offices in just 10 countries to monitor programs costing 
about $1.7 billion in 55 countries in fiscal year 2006. As a result of 
such limitations, U.S. agencies may not be sufficiently accomplishing 
their goals of getting the right food to the right people at the right 

What GAO Recommends: 

In a draft report that is under review by U.S. agencies, GAO recommends 
that the Administrator of USAID and the Secretaries of Agriculture and 
Transportation work together to enhance the efficiency and 
effectiveness of U.S. food aid, by instituting measures to improve 
logistical planning, transportation contracting, and monitoring of food 
aid programs, among other actions. 


To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Thomas Melito (202) 512-
9601 ( 

[End of section] 

Chairman Harkin, Ranking Member Chambliss, and Members of the 

I am pleased to be here today to discuss ways to improve the efficiency 
and effectiveness of U.S. food aid. The United States is the largest 
provider of food aid in the world, accounting for over half of all 
global food aid supplies intended to alleviate hunger and support 
development in low-income countries. Since its last reauthorization of 
the Farm Bill in 2002, Congress has appropriated an average of $2 
billion per year in annual and supplemental funding for U.S. 
international food aid programs, which delivered an average of 4 
million metric tons of agricultural commodities per year. In 2006, U.S. 
food aid benefited over 70 million people through emergency and 
development-focused programs. However, about 850 million people in the 
world are undernourished in 2007--a number that has remained relatively 
unchanged since the early 1990s, according to United Nations (UN) Food 
and Agriculture Organization (FAO) estimates.[Footnote 1] Furthermore, 
the number of food and humanitarian emergencies has doubled from an 
average of about 15 per year in the 1980s to more than 30 per year 
since 2000, due in large part to increasing conflicts and natural 
disasters around the world. Despite growing demand for food aid, rising 
transportation and business costs have contributed to a 43 percent 
decline in average tonnages delivered over the last 5 years.[Footnote 
2] For the largest U.S. food aid program, Title II of the Food for 
Peace program, these costs now account for approximately 65 percent of 
expenditures, highlighting the need to maximize the efficiency and 
effectiveness of U.S. food aid. 

My testimony is based on a report that we expect to issue in April 
2007. Today, I will primarily focus on the need to improve the 
efficiency of delivery of U.S. food aid. I will also focus on the 
importance of efforts to monitor U.S. food aid programs in order to 
enhance their effectiveness. In addition to these issues, our April 
report will address monetization, assessments, targeting, and commodity 
quality and nutritional standards. 

We conducted the work for the forthcoming report and this testimony 
between April 2006 and March 2007 in accordance with generally accepted 
U.S. government auditing standards. 


Multiple challenges combine to hinder the efficiency of delivery of 
U.S. food aid by reducing the amount, timeliness, and quality of food 
provided. These challenges include: 

* funding and planning processes that increase delivery costs and 
lengthen time frames. These processes make it difficult to time food 
procurement and transportation to avoid commercial peaks in demand, 
often resulting in higher prices than if such purchases were more 
evenly distributed throughout the year. 

* transportation and contracting practices that differ from commercial 
practices and create high levels of risk for ocean carriers, increasing 
food aid costs. For example, food aid transportation contracts often 
hold ocean carriers responsible for costly delays that may result when 
food aid cargo is not ready for loading onto an ocean vessel, or when a 
destination port is not ready to receive cargo. Ocean carriers factor 
these costs into their freight rates, driving up the cost of food aid. 

* legal requirements that result in the awarding of food aid contracts 
to more expensive providers and contribute to delivery delays. For 
example, cargo preference laws require 75 percent of food aid to be 
shipped on U.S.-flag carriers, which are generally more costly than 
foreign-flag carriers. The Department of Transportation (DOT) 
reimburses certain transportation costs, but the sufficiency of these 
reimbursements varies. 

* inadequate coordination between U.S. agencies and stakeholders in 
tracking and responding to food delivery problems. For example, while 
food spoilage has been a long-standing concern, the U.S. Agency for 
International Development (USAID) and the U.S. Department of 
Agriculture (USDA) lack a shared, coordinated system to track and 
respond to food quality complaints systematically. 

However, to enhance the efficiency of delivery of food aid, U.S. 
agencies have taken measures to improve their ability to provide food 
aid on a more timely basis. Specifically, USAID has been stocking food 
commodities, or prepositioning them, in Lake Charles (Louisiana) and 
Dubai (United Arab Emirates) for the past several years and is in the 
process of expanding this practice. Additionally, in February 2007, 
USAID and USDA implemented a new transportation bid process in an 
attempt to increase competition and reduce procurement time frames. 
Although both efforts may result in food aid reaching vulnerable 
populations more quickly in an emergency, their long-term cost 
effectiveness has not yet been measured. 

Despite the importance of ensuring the effective use of food aid to 
alleviate hunger, U.S. agencies' efforts to monitor food aid programs 
in recipient countries are insufficient. Given limited food aid 
resources and increasing emergencies, ensuring that food reaches the 
most vulnerable populations, such as poor women who are pregnant or 
children who are malnourished, is critical to enhancing its 
effectiveness and avoiding negative market impact. However, USAID and 
USDA do not sufficiently monitor food aid programs, particularly in 
recipient countries, due to limited staff, competing priorities, and 
restrictions in the use of food aid resources. For example, although 
USAID has some non-Title II staff assigned to monitoring, it had only 
23 Title II-funded staff assigned to missions and regional offices in 
just 10 countries to monitor programs costing about $1.7 billion in 55 
countries in fiscal year 2006. USDA has even less of a field presence 
for monitoring than USAID. As a result, U.S. agencies may not be 
sufficiently accomplishing their goals of getting the right food to the 
right people at the right time. 

In our draft report, which is under review by U.S. agencies, we 
recommend that the Administrator of USAID, the Secretary of 
Agriculture, and the Secretary of Transportation take actions to 
improve the efficiency and effectiveness of U.S. food aid. These 
actions include (1) improving food aid logistical planning; (2) 
modernizing transportation contracting practices; (3) minimizing the 
cost impact of cargo preference regulations on food aid transportation 
expenditures; (4) tracking and resolving food quality complaints 
systematically; and (5) improving the monitoring of food aid programs. 

USAID, USDA, and DOT reviewed a draft of this testimony statement and 
provided us with oral comments, including technical comments that we 
have incorporated as appropriate. We also provided DOD, State, FAO, and 
WFP an opportunity to provide technical comments, which we have 
incorporated as appropriate. 


Food aid comprises all food-supported interventions by foreign donors 
to individuals or institutions within a country. It has helped to save 
millions of lives and improve the nutritional status of the most 
vulnerable groups, including women and children, in developing 
countries. Food aid is one element of a broader global strategy to 
enhance food security[Footnote 3] by reducing poverty and improving 
availability, access to, and use of food in low-income, less-developed 
countries. Donors provide food aid as both a humanitarian response to 
address acute hunger in emergencies and as a development-focused 
response to address chronic hunger. Large-scale conflicts, poverty, 
weather calamities, and severe health-related problems are among the 
underlying causes of both acute and chronic hunger. 

Countries Provide Food Aid through In-Kind or Cash Donations, with the 
United States as the Largest Donor: 

Countries provide food aid through either in-kind donations or cash 
donations for local procurement. In-kind food aid is food procured and 
delivered to vulnerable populations,[Footnote 4] while cash donations 
are given to implementing organizations for the purchase of food in 
local markets. U.S. food aid programs are all in-kind, and no cash 
donations are allowed under current legislation. However, the 
Administration has proposed legislation to allow up to 25 percent of 
appropriated food aid funds for purchase of commodities in locations 
closer to where they are needed. Other food aid donors have also 
recently moved from providing less in-kind to more or all cash 
donations for local, regional, or donor-market procurement. While there 
are ongoing debates as to which form of assistance is more effective 
and efficient, the largest international food aid organization, the 
World Food Program (WFP), continues to accept both.[Footnote 5] The 
United States is both the largest overall and in-kind provider of food 
aid, supplying over one-half of all global food aid. 

Most U.S. Food Aid Goes to Africa: 

In fiscal year 2006, the United States delivered food aid to over 50 
countries, with about 78 percent of its funding allocations for in-kind 
food donations going to Africa, 12 percent to Asia and the Near East, 9 
percent to Latin America, and 1 percent to Eurasia. Of the 78 percent 
of the food aid funding going to Africa, 30 percent went to Sudan, 27 
percent to the Horn of Africa, 17 percent to Southern Africa, 14 
percent to West Africa, and 12 percent to Central Africa. 

Emergencies Represent an Increasing Share of U.S. Food Aid: 

Food aid is used for both emergency[Footnote 6] and non-emergency 
purposes. Over the last several years, the majority of U.S. food aid 
has shifted from a non-emergency to an emergency focus. In fiscal year 
2005, the United States directed approximately 80 percent or $1.6 
billion of its $2.1 billion expenditure for international food aid 
programs to emergencies. In contrast, in fiscal year 2002, the United 
States directed approximately 40 percent or $678 million of its $1.7 
billion food aid expenditure to emergency programs (see fig. 1). 

Figure 1: Emergencies Represent an Increasing Share of U.S. Food Aid 
Funding from Fiscal Year 2002 to Fiscal Year 2005: 

[See PDF for image] 

Source: GAO analysis of USAID data. 

[A] These data represent all food aid programs administered by USAID 
and USDA. 

[End of figure] 

U.S. Food Aid Is Delivered Through Multiple Programs with Multiple 

U.S. food aid is funded under four program authorities and delivered 
through six programs administered by USAID and USDA,[Footnote 7] which 
serve a range of objectives including humanitarian goals, economic 
assistance, foreign policy, market development and international trade 
(see app. I).[Footnote 8] The largest program, Public Law (P.L.) 480 
Title II, is managed by USAID and averaged approximately 74 percent of 
total in-kind food aid allocations over the past 4 years, most of which 
funded emergency programs (see fig. 2). In addition, P.L. 480, as 
amended, authorizes USAID to preposition food aid both domestically and 
abroad with a cap on storage expenses of $2 million per fiscal year. 

Figure 2: Average Shares of Total Funding for U.S. International Food 
Aid by Program Authority from Fiscal Year 2002 to Fiscal Year 2006 
(Dollars in millions): 

[See PDF for image] 

Source: GAO analysis of USAID data. 

[A] This includes the Bill Emerson Humanitarian Trust. 

[End of figure] 

U.S. food aid programs also have multiple legislative and regulatory 
mandates that affect their operations. One mandate that governs U.S. 
food aid transportation is cargo preference, which is designed to 
support a U.S.-flag commercial fleet for national defense purposes. 
Cargo preference requires that 75 percent of the gross tonnage of all 
government-generated cargo be transported on U.S.-flag vessels. A 
second transportation mandate, known as the "Great Lakes Set Aside," 
requires that up to 25 percent of Title II bagged food aid tonnage be 
allocated to Great Lakes ports each month.[Footnote 9] Other mandates 
require that a minimum of 2.5 million metric tons of food aid be 
provided through Title II programs, and that of this amount, a "sub- 
minimum" of 1.825 million metric tons be provided for non-emergency 
programs.[Footnote 10] (For a summary of congressional mandates for 
P.L. 480, see app. I.) 

Multiple U.S. Government Agencies and Stakeholders Participate in U.S. 
Food Aid Programs: 

U.S. food aid programs involve multiple U.S. government agencies and 
stakeholders. For example, USAID and USDA administer the programs, 
USDA's Kansas City Commodity Office (KCCO) manages the purchase of all 
commodities, and the U.S. Maritime Administration (MARAD) of DOT is 
involved in supporting their ocean transport on U.S. vessels. These and 
other government agencies coordinate food aid programs through the Food 
Assistance Policy Council, which oversees the Bill Emerson Humanitarian 
Trust, an emergency food reserve.[Footnote 11] Other stakeholders 
include donors, implementing organizations such as WFP and NGOs, 
agricultural commodity groups, and the maritime industry. Some of these 
stakeholders are members of the Food Aid Consultative Group, which is 
led by USAID's Office of Food for Peace and addresses issues concerning 
the effectiveness of the regulations and procedures that govern food 
assistance programs. 

Multiple Challenges Hinder the Efficiency of Delivery of U.S. Food Aid: 

Multiple challenges reduce the efficiency of U.S. food aid, including 
logistical constraints that impede food aid delivery and reduce the 
amount, timeliness, and quality of food provided. While agencies have 
tried to expedite food aid delivery in some cases, the majority of food 
aid program expenditures is on logistics, and the delivery of food from 
vendor to village is generally too time-consuming to be responsive in 
emergencies. Factors that increase logistical inefficiencies include 
uncertain funding and inadequate planning; transportation contracting 
practices that disproportionately increase risks for ocean carriers 
(who then factor those risks into freight rates); legal requirements; 
and inadequate coordination to systematically track and respond to 
logistical problems, such as food spoilage or contamination. While U.S. 
agencies are pursuing initiatives to improve food aid logistics, such 
as prepositioning food commodities, their long-term cost effectiveness 
has not yet been measured. 

Food Aid Procurement and Transportation are Costly and Time-Consuming: 

Transportation costs represent a significant share of food aid 
expenditures. For the largest U.S. food aid program (Title II), 
approximately 65 percent of expenditures are on inland transportation 
(to the U.S. port for export), ocean transportation, in-country 
delivery, associated cargo handling costs, and administration. 
According to USAID, these non-commodity expenditures have been rising 
in part due to the increasing number of emergencies and the expensive 
nature of logistics in such situations. To examine procurement costs 
(expenditures on commodities and ocean transportation)[Footnote 12] for 
all U.S. food aid programs, we obtained KCCO procurement data for 
fiscal years 2002 through 2006. KCCO data also suggest that ocean 
transportation has been accounting for a larger share of procurement 
costs with average freight rates rising from $123 per metric ton in 
fiscal year 2002 to $171 per metric ton in fiscal year 2006 (see fig. 
3).[Footnote 13] Further, U.S. food aid ocean transportation costs are 
relatively expensive compared with those of some other donors. WFP 
transports both U.S. and non-U.S. food aid worldwide at reported ocean 
freight costs averaging around $100 per metric ton--representing less 
than 20 percent of its total procurement costs.[Footnote 14] At current 
U.S. food aid budget levels, every $10 per metric ton reduction in 
freight rates could feed about 1.2 million more people during a typical 
hungry season.[Footnote 15] 

Figure 3: U.S. Food Aid Ocean Transportation Costs: 

[See PDF for image] 

Source: GAO analysis of Kansas City Commodity Office data; GAO 

Note: Total procurement costs include commodity and ocean 
transportation costs. Costs incurred to transport the cargo to the U.S. 
port for export are included in the commodity and ocean transportation 
costs, dependent on contract terms. 

[End of figure] 

Delivering U.S. food aid from vendor to village is also a relatively 
time-consuming task, requiring on average 4 to 6 months. Food aid 
purchasing processes and example time frames are illustrated in figure 
4. While KCCO purchases food aid on a monthly basis, it allows 
implementing partners' orders to accumulate for 1 month prior to 
purchase in order to buy in scale. KCCO then purchases the commodities, 
receives transportation offers, and awards transportation contracts 
over the following month. Commodity vendors bag the food and ship it to 
a U.S. port for export during the next 1 to 2 months.[Footnote 16] 
After an additional 40 to 50 days for ocean transportation to 
Africa,[Footnote 17] for example, the food arrives at an overseas port, 
where it is trucked or railroaded to the final distribution location 
over the next few weeks. While agencies have tried to expedite food aid 
delivery in some cases, the entire logistics process often lacks the 
timeliness required to meet humanitarian needs in emergencies and may 
at times result in food spoilage. Additionally, the largest tonnages of 
U.S. food aid are purchased during the months of August and September. 
Average tonnages purchased during the fourth quarter of the last 5 
fiscal years have exceeded those purchased during the second and third 
quarters by more than 40 percent. Given a 6-month delivery window, 
these tonnages do not arrive in country until the end of the peak 
hungry season (from October through January in southern Africa, for 
example) in most cases.[Footnote 18] 

Figure 4: An Example of a U.S. Food Aid Purchase and Its Delivery from 
Vendor to Village: 

[See PDF for image] 

Sources: GAO analysis of USAID and USDA information; photos (GAO). 

[End of figure] 

Various Factors Cause Inefficiencies in Food Aid Logistics: 

Food aid logistics are costly and time-consuming for a variety of 
reasons. First, uncertain funding processes for emergencies can result 
in bunching of food aid purchases, which increases food and 
transportation costs and lengthens delivery time frames. Many experts, 
officials, and stakeholders emphasized the need for improved logistical 
planning. Second, transportation contracting practices--such as freight 
and payment terms, claims processes and time penalties--further 
increase ocean freight rates and contribute to delivery delays. A large 
percentage of the carriers we interviewed strongly recommended taking 
actions to address these contracting issues. Third, legal requirements 
such as cargo preference can increase delivery costs. Although food aid 
agencies are reimbursed by DOT for certain transportation expenditures, 
the sufficiency of reimbursement levels varies. Fourth, when food 
delivery problems arise, such as food spoilage or contamination, U.S. 
agencies and stakeholders lack adequately coordinated mechanisms to 
systematically track and respond to complaints. 

Funding and Planning Processes Increase Costs and Lengthen Time Frames: 

Uncertain funding processes, combined with reactive and insufficiently 
planned procurement, increase food aid delivery costs and time frames. 
Food emergencies are increasingly common and now account for 80 percent 
of USAID program expenditures. To respond to sudden emergencies--such 
as Afghanistan in 2002, Iraq in 2003, Sudan, Eritrea, and Ethiopia in 
2005, and Sudan and the Horn of Africa in 2006--U.S. agencies largely 
rely on supplemental appropriations and the Bill Emerson Humanitarian 
Trust (BEHT) to augment annual appropriations by up to a quarter of 
their budget. Figure 5, for example, illustrates that USAID 
supplemental appropriations have ranged from $270 million in fiscal 
year 2002 and $350 million in fiscal year 2006 to over $600 million in 
fiscal years 2003 and 2005. Agency officials and implementing partners 
told us that the uncertainty of whether, when, and at what levels 
supplemental appropriations would be forthcoming hampers their ability 
to plan both emergency and non-emergency food aid programs on a 
consistent, long-term basis and to purchase food at the best price. 
Although USAID and USDA instituted multi-year planning approaches in 
recent years, according to agency officials, uncertain supplemental 
funding has caused them to adjust or redirect funds from prior 

Figure 5: Funding for U.S. Food Aid Programs, Annual and Supplemental 
Appropriations, Fiscal Year 2002 to Fiscal Year 2006 (Dollars in 

[See PDF for image] 

Source: GAO analysis based on USAID budget data. 

[End of figure] 

Agencies and implementing organizations also face uncertainty about the 
availability of Bill Emerson Humanitarian Trust funds. As of January 
2007, the Emerson Trust held about $107.2 million in cash and about 
915,350 metric tons of wheat valued at $133.9 million--a grain balance 
that could support about two major emergencies based on an existing 
authority to release up to 500,000 metric tons per fiscal year and 
another 500,000 of commodities that could have been, but were not, 
released from previous fiscal years. Although the Secretary of 
Agriculture and the USAID Administrator have agreed that the $341 
million combined value of commodity and cash currently held in the 
trust is more than adequate to cover expected usage over the period of 
the current authorization, the authorization is scheduled to expire on 
September 30, 2007. Resources have been drawn from the Emerson Trust on 
12 occasions since 1984. For example, in fiscal year 2005, $377 million 
from the trust was used to procure 700,000 metric tons of commodities 
for Ethiopia, Eritrea, and Sudan. However, experts and stakeholders 
with whom we met noted that the trust lacks an effective replenishment 
mechanism--withdrawals from the trust must be reimbursed by the 
procuring agency or by direct appropriations for reimbursement, and 
legislation establishing the Emerson Trust capped the annual 
replenishment at $20 million.[Footnote 19] 

Inadequately planned food and transportation procurement reflects the 
uncertainty of food aid funding. As previously discussed, KCCO 
purchases the largest share of food aid tonnage during the last quarter 
of each fiscal year. This "bunching" of procurement occurs in part 
because USDA requires 6 months to approve programs and/or because funds 
for both USDA and USAID programs may not be received until mid-fiscal 
year (after OMB has approved budget apportionments for the agencies) or 
through a supplemental appropriation. USAID officials stated that they 
have reduced procurement bunching through improved cash flow 
management.[Footnote 20] Although USAID has had more stable monthly 
purchases in fiscal years 2004 and 2005, food aid procurement in total 
has not been consistent enough to avoid the higher prices associated 
with bunching. Higher food and transportation prices result from 
procurement bunching as suppliers try to smooth earnings by charging 
higher prices during their peak seasons and as food aid contracts must 
compete with commercial demand that is seasonally high. According to 
KCCO data for fiscal years 2002 through 2006, average commodity and 
transportation prices were each $12 to $14 per metric ton higher in the 
fourth quarter than in the first quarter of each year.[Footnote 21] 
Procurement bunching also stresses KCCO operations and can result in 
costly and time-consuming congestion for ports, railways, and trucking 

While agencies face challenges to improving procurement planning given 
the uncertain nature of supplemental funding in particular, 
stakeholders and experts emphasized the importance of such efforts. For 
example, 11 of the 14 ocean carriers we interviewed reported that 
reduced procurement bunching could greatly reduce transportation costs. 
When asked about bunching, agency officials, stakeholders and experts 
suggested the following potential improvements: 

* Improved communication and coordination. KCCO and WFP representatives 
suggested that USAID and USDA improve coordination of purchases to 
reduce bunching. KCCO has also established a web-based system for 
agencies and implementing organizations to enter up to several years' 
worth of commodity requests. However, implementing organizations are 
currently only entering purchases for the next month. Additionally, 
since the Food Aid Consultative Group (FACG) does not include 
transportation stakeholders, DOT officials and ocean carriers strongly 
recommended establishing a formal mechanism for improving coordination 
and transportation planning. 

* Increased flexibility in procurement schedules. USAID expressed 
interest in an additional time slot each month for food aid purchases. 
Several ocean carriers expressed interest in shipping food according to 
cargo availability rather than through pre-set shipping windows that 
begin 4 weeks and 6 weeks after each monthly purchase. Although KCCO 
has established shipping windows to avoid port congestion, DOT 
representatives believe that carriers should be able to manage their 
own schedules within required delivery time frames. 

* Increased use of historical analysis. DOT representatives, experts, 
and stakeholders emphasized that USAID and USDA should increase their 
use of historical analysis and forecasting to improve procurement. 
USAID has examined historical trends to devise budget proposals 
prepared 2 years in advance, and it is now beginning to use this 
analysis to improve timing of procurement. However, neither USAID nor 
USDA has used historical analysis to establish more efficient 
transportation practices, such as long-term agreements commonly used by 
DOD.[Footnote 22] Furthermore, WFP is now using forecasting to improve 
purchasing patterns through advanced financing but is unable to use 
this financing for U.S. food aid programs due to legal and 
administrative constraints. 

Transportation Contracting Practices Increase Delivery Costs and 
Contribute to Delays: 

Transportation contracting practices are a second factor contributing 
to higher food aid costs. DOT officials, experts, and ocean carriers 
emphasized that commercial transportation contracts include shared risk 
between buyers, sellers, and ocean carriers. In food aid transportation 
contracts, risks are disproportionately placed on ocean carriers, 
discouraging participation and resulting in expensive freight 
rates.[Footnote 23] Examples of costly contracting practices include: 

* Non-commercial and non-standardized freight terms. Food aid contracts 
define freight terms differently than commercial contracts and place 
increased liability on ocean carriers.[Footnote 24] For example, food 
aid contracts hold ocean carriers responsible for logistical problems 
such as improperly filled containers that may occur at the load port 
before they arrive. Food aid contracts also hold ocean carriers 
responsible for logistical problems such as truck delays or improper 
port documentation that may occur at the discharge port after they 
arrive. Further, several carriers reported that food aid contracts are 
not sufficiently standardized. Although USAID and USDA created a 
standard contract for non-bulk shipments, contracts for bulk shipments 
(which currently account for 63 percent of food aid tonnage delivered) 
have not yet been standardized. To account for risks that are unknown 
or outside their control, carriers told us that they charge higher 
freight rates. 

* Impractical time requirements. Food aid contracts may include 
impractical time requirements, although agencies disagree on how 
frequently this occurs. Although USAID officials review contract time 
requirements and described them as reasonable, they also indicated that 
transportation delays are a common result of poor carrier performance 
and the diminishing number of ocean carriers participating in food aid 
programs.[Footnote 25] Several implementing organizations also 
complained about inadequate carrier performance. WFP representatives, 
for example, provided several examples of ocean shipments in 2005 and 
2006 that were more than 20 days late. While acknowledging that 
transportation delays occur, DOT officials indicated that some 
contracts include time requirements that are impossible for carriers to 
meet. For example, one carrier complained about a contract that 
required the same delivery date for four different ports. When carriers 
do not meet time requirements, they must pay costly penalties. Carriers 
reported that they review contracts in advance and, where time 
requirements are deemed implausible, factor the anticipated penalty 
into the freight rate.[Footnote 26] While agencies do not 
systematically collect data on time requirements and penalties 
associated with food aid contracts, DOT officials examined a subset of 
contracts from December 2005 to September 2006 and estimated that 13 
percent of them included impractical time requirements. Assuming that 
the anticipated penalties specified in the contracts analyzed were 
included in freight rates, food aid costs may have increased by almost 
$2 million (monies that could have been used to provide food to an 
additional 66,000 beneficiaries). 

* Lengthy claims processes. Lengthy processes for resolving 
transportation disputes discourage both carriers and implementing 
organizations from filing claims. According to KCCO officials, 
obtaining needed documentation for a claim can require several years 
and disputed claims must be resolved by the Department of Justice. 
USAID's Inspector General reported that inadequate and irregular review 
of claims by USAID and USDA has also contributed to delayed 
resolution.[Footnote 27] Currently, KCCO has over $6 million in open 
claims, some of which were filed prior to fiscal year 2001. For ocean 
carriers, the process is burdensome and encourages them to factor 
potential losses into freight rates rather than pursue claims. 
Incentives for most implementing organizations are even weaker given 
that monies recovered from claims reimburse the overall food aid budget 
rather than the organization that experienced the loss.[Footnote 28] 
According to KCCO and WFP officials, transportation claims are filed 
for less than 2 percent of cargo. However, several experts and 
implementing organizations suggested that actual losses are likely 
higher. In 2003, KCCO proposed a new administrative appeals process for 
ocean freight claims that would establish a hearing officer within USDA 
and a 285-day timeframe. While DOT and some carriers agreed that a 
faster process was needed, DOT officials suggested that the process for 
claims review should include hearing officers outside of USDA to ensure 
independent findings. To date, KCCO's proposed process has not been 

* Lengthy payment time frames and burdensome administration. Payment of 
food aid contracts is slow and paperwork is insufficiently streamlined. 
When carriers are not paid for several months, they incur large 
interest costs that are factored into freight rates. While USDA now 
provides freight payments within a few weeks, several ocean carriers 
complained that USAID often requires 2 to 4 months to provide payment. 
USDA freight payments are timelier due to a new electronic payment 
system, [Footnote 29] but USAID officials said this system is too 
expensive, so they are considering other payment options. In addition, 
a few carriers suggested that paperwork in general needs streamlining 
and modernization. The 2002 Farm Bill required both USDA and USAID to 
pursue streamlining initiatives that the agencies are in the process of 
implementing. KCCO officials indicated that they are updating food aid 
information technology systems (to be in place in fiscal year 2009). 

Through structured interviews, ocean carriers confirmed the cost impact 
of food aid transportation contracting practices. For example, 9 (60 
percent) and 14 (100 percent) of the carriers reported that 
"inefficient claims processes" and "liabilities outside the carriers' 
control" increase costs, respectively. To quantify the impact, two 
carriers estimated that non-standardized freight terms increase costs 
by 5 percent (about $8 per metric ton) while another carrier suggested 
that slow payment increases costs by 10 percent (about $15 per metric 
ton). Over 70 percent of the carriers strongly recommended actions to 
address contracting practices. 

Legal Requirements Can Increase Delivery Costs and Time Frames: 

Legal requirements governing food aid procurement are a third factor 
that can increase delivery costs and time frames, with program impacts 
dependent on the sufficiency of associated reimbursements. In awarding 
contracts, KCCO must meet various procurement requirements such as 
cargo preference and the Great Lakes Set Aside. Each requirement may 
result in higher commodity and freight costs. Cargo preference laws, 
for example, require 75 percent of food aid to be shipped on U.S.-flag 
carriers, which are generally more expensive than foreign-flag carriers 
by an amount that is known as the ocean freight differential (OFD). The 
total annual value of this cost differential between U.S.-and foreign- 
flag carriers averaged $134 million from fiscal years 2001 to 2005. 
Additionally, since only a relatively small percentage of cargo can be 
shipped on foreign-flag vessels, agency and port officials believe that 
cargo preference regulations discourage foreign-flag participation in 
the program and result in delays when a U.S.-flag carrier is not 
available. DOT officials emphasize that USAID and USDA receive 
reimbursements for most if not all of the total OFD cost--DOT 
reimbursements varied from $126 million in fiscal year 2002 to $153 
million in fiscal year 2005. [Footnote 30] However, USAID officials 
expressed concern that the OFD calculations do not fully account for 
the costs of cargo preference or the uncertainties regarding its 
application. For example, OFD reimbursements do not account for the 
additional costs of shipping on U.S.-flag vessels that are older than 
24 years (approximately half of these vessels) or shipments for which a 
foreign-flag vessel has not submitted a bid.[Footnote 31] USAID 
officials estimate that the actual cost of cargo preference in fiscal 
year 2003 exceeded the total OFD cost by about $50 million due to these 
factors. Finally, USAID and DOT officials have not yet agreed on 
whether cargo preference applies to shipments from prepositioning 

Inadequate Coordination Limits Agencies' and Stakeholders' Response to 
Food Delivery Problems: 

U.S. agencies and stakeholders do not coordinate adequately to respond 
to food and delivery problems when they arise. USAID and USDA lack a 
shared, coordinated system to systematically track and respond to food 
quality complaints, and food aid working groups and forums are not 
inclusive of all stakeholders.[Footnote 32] Food quality concerns have 
been long-standing issues provoking the concern of both food aid 
agencies and the U.S. Congress.[Footnote 33] In 2003, for example, 
USAID's Inspector General reported some Ethiopian warehouses in poor 
condition, with rodent droppings near torn bags of corn soy blend 
(CSB), rainwater seepage, pigeons flying into one warehouse, and holes 
in the roof of another. Implementing organizations we spoke with also 
frequently complained about receiving heavily infested and contaminated 
cargo. For example, in Durban, South Africa we saw 1,925 metric tons of 
heavily infested cornmeal that arrived late in port because it had been 
erroneously shipped to the wrong countries first. This food could have 
fed over 37,000 people. When food arrives heavily infested, NGOs hire a 
surveyor to determine how much is salvageable for human consumption or 
for use as animal feed, and destroy what is deemed unfit. 

When such food delivery problems arise, U.S. agencies and food aid 
stakeholders face a variety of coordination challenges in addressing 
them. For example: 

* KCCO, USDA and USAID have disparate quality complaint tracking 
mechanisms that monitor different levels of information. As a result, 
they are unable to determine the total quantity of and trends in food 
quality problems. In addition, because implementing organizations track 
food quality concerns differently, if at all, they cannot coordinate to 
share concerns with each other and with U.S. government agencies. For 
example, since WFP--which accounts for 60 percent of U.S. food aid 
shipments--independently handles its own claims, KCCO officials are 
unable to track the quality of food aid delivery program-wide. Agencies 
and stakeholders have suggested that food quality tracking and 
coordination could be improved if USAID and USDA shared the same 
database and created an integrated food quality complaint reporting 

* Agency country offices are often unclear about their roles in 
tracking food quality, creating gaps in monitoring and reporting. For 
example, USAID has found that some missions lack clarity on their 
responsibilities in independently verifying claims stemming from food 
spoilage, often relying on the implementing organization to research 
the circumstances surrounding losses. One USAID country office also 
noted that rather than tracking all food quality problems reported, it 
only recorded and tracked commodity losses for which an official claim 
had been filed. Further, in 2004, the Inspector General for USAID found 
that USAID country offices were not always adequately following up on 
commodity loss claims to ensure that they were reviewed and resolved in 
a timely manner. To improve food quality monitoring, agencies and 
stakeholders have suggested updating regulations to include separate 
guidance for complaints, as well as developing a secure website for all 
agencies and their country offices to use to track both complaints and 

* When food quality issues arise, there is no clear and coordinated 
process for seeking assistance, creating costly delays in response. For 
example, when WFP received 4,200 metric tons of maize in Angola in 2003 
and found a large quantity to be wet and moldy, it did not receive a 
timely response from USAID officials on how to handle the problem. WFP 
incurred $176,000 in costs in determining the safety of the remaining 
cargo, but was later instructed by USAID to destroy the whole shipment. 
WFP claims it lost over $640,000 in this case, including destruction 
costs and the value of the commodity. Although KCCO established a 
hotline to provide assistance on food quality complaints, KCCO 
officials stated that it was discontinued because USDA and USAID 
officials wanted to receive complaints directly, rather than from KCCO. 
Nevertheless, agencies and stakeholders have suggested that providing a 
standard questionnaire to implementing organizations would ensure more 
consistent reporting on food quality issues. 

While Agencies Have Taken Steps to Improve Efficiency, Their Costs and 
Benefits Have Not Yet Been Measured: 

To improve timeliness in food aid delivery, USAID has been 
prepositioning commodities in two locations and KCCO is implementing a 
new transportation bid process. Prepositioning enabled USAID to respond 
more rapidly to the 2005 Asian tsunami emergency than would have been 
otherwise possible. KCCO's bid process is also expected to reduce 
delivery time frames and ocean freight rates. However, the long-term 
cost effectiveness of both initiatives has not yet been measured. 

Prepositioning and Transportation Procurement Could Improve Timeliness: 

USAID has prepositioned food aid on a limited basis to improve 
timeliness in delivery.[Footnote 34] 

USAID has used warehouses in Lake Charles (Louisiana) since 2002 and 
Dubai (United Arab Emirates) since 2004 to stock commodities in 
preparation for food aid emergencies and it is now adding a third site 
in Djibouti, East Africa. USAID has used prepositioned food to respond 
to recent emergencies in Lebanon, Somalia, and Southeast Asia, among 
other areas. Prepositioning is beneficial because it allows USAID to 
bypass lengthy procurement processes and to reduce transportation 
timeframes. USAID officials told us that diverting food aid cargo to 
the site of an emergency before it reaches a prepositioning warehouse 
further reduces response time and eliminates storage costs.[Footnote 
35] When the 2005 Asian tsunami struck, for example, USAID quickly 
provided 7,000 metric tons of food to victims by diverting the carrier 
at sea, before it reached the Dubai warehouse. According to USAID 
officials, prepositioning warehouses also offer the opportunity to 
improve logistics when USAID is able to begin the procurement process 
before an emergency occurs, or if it is able to implement long-term 
agreements with ocean carriers for tonnage levels that are more 
certain.[Footnote 36] 

Despite its potential for improved timeliness, prepositioning has not 
yet been studied in terms of its long-term cost effectiveness. Table 1 
shows that over fiscal years 2005 and 2006, USAID purchased about 
200,000 metric tons of processed food for prepositioning (about 3 
percent of total food aid tonnage), diverted about 36,000 metric tons 
en route, and incurred contract costs of about $1.5 million for food 
that reached the warehouse (averaging around $10 per metric ton). In 
addition to contract costs, ocean carriers generally charge higher 
freight rates for prepositioned cargo to account for additional cargo 
loading or unloading, additional days at port, and additional risk of 
damage associated with cargo that has undergone extra handling. USAID 
officials have suggested that average freight rates for prepositioned 
cargo could be $20 per metric ton higher. 

Table 1: USAID Tonnage and Costs for Prepositioning, Fiscal Year 2005 
to Fiscal Year 2006: 

Tonnage purchased for prepositioning sites; 
Lake Charles: 99,630 MT; 
Dubai: 100,520 MT. 

* Tonnage shipped to prepositioning site; 
Lake Charles: 99,630 MT; 
Dubai: 64,606 MT. 

* Tonnage diverted before reaching prepositioning site; 
Lake Charles: 0 MT; 
Dubai: 35,644 MT. 

Contract costs for storage and cargo handling services; 
Lake Charles: $839,380; 
Dubai: $715,668. 

Source: USAID. 

[End of table] 

In addition to costs of prepositioning, agencies face several 
challenges to their effective management of this program, including the 

* Food aid experts and stakeholders expressed mixed views on the 
appropriateness of current prepositioning locations.[Footnote 37] Only 
5 of the 14 ocean carriers we interviewed rated existing sites 
positively and most indicated interest in alternative sites. KCCO 
officials and experts also expressed concern with the quality of the 
Lake Charles warehouse and the lack of ocean carriers providing service 
to that location. For example, many carriers must move cargo by truck 
from Lake Charles to Houston before shipping it, which adds as much as 
an extra 21 days for delivery. 

* Inadequate inventory management increases risk of cargo infestation. 
KCCO and port officials suggested that USAID had not consistently 
shipped older cargo out of the warehouses first. USAID officials 
emphasized that inventory management has been improving but that 
limited monitoring and evaluation funds constrain their oversight 
capacity.[Footnote 38] For example, the current USAID official 
responsible for overseeing the Lake Charles prepositioning stock was 
able to visit the site only once in fiscal year 2006--at his own 

* Agencies have had difficulties ensuring phytosanitary certification 
for prepositioned food because they do not know the country of final 
destination when they request phytosanitary certification from 
APHIS.[Footnote 39] According to USDA, since prepositioned food is not 
imported directly from a U.S. port, it requires either a U.S.-reissued 
phytosanitary certificate or a foreign-issued phytosanitary certificate 
for re-export. USDA officials told us they do not think that it is 
appropriate to reissue these certificates, as once a food aid shipment 
leaves the United States, they cannot make any statements about the 
phytosanitary status of the commodities, which may not meet the entry 
requirements of the country of destination. USDA officials are 
concerned that USAID will store commodities for a considerable period 
of time during which their status may change, thus making the 
certificate invalid. Although USDA and USAID officials are willing to 
let foreign government officials issue these certificates, U.S. 
inspection officials remain concerned that the foreign officials might 
not have the resources or be willing to recertify these commodities. 
Without phytosanitary certificates, food aid shipments could be 
rejected, turned away, or destroyed by recipient country governments. 

* Certain regulations applicable to food aid create challenges for 
improving supply logistics. For example, food aid bags must include 
various markings reflecting contract information, when the commodity 
should be consumed, and whether the commodity is for sale or direct 
distribution. Marking requirements vary by country (some require 
markings in local language), making it difficult for USAID to divert 
cargo. Also, due to the small quantity of total food aid tonnage (about 
3 percent) allocated for the prepositioning program, USAID is unable to 
use the program to consistently purchase large quantities of food aid 
earlier in the fiscal year. 

New Transportation Bid Process Could Reduce Procurement Time Frames: 

In addition to prepositioning, KCCO is implementing a new 
transportation bid process to reduce procurement time frames and 
increase competition between ocean carriers. In the prior two-step 
system, during a first procurement round, commodity vendors bid on 
contracts and ocean carriers indicated potential freight rates. 
Carriers provided actual rate bids during a second procurement round, 
once the location of the commodity vendor had been determined. In the 
new 1-step system, ocean carriers will bid at the same time as 
commodity vendors. KCCO expects the new system to cut 2 weeks from the 
procurement process and potentially provide average annual savings of 
$25 million in reduced transportation costs. KCCO also expects this new 
bid process will reduce cargo handling costs as cargo loading becomes 
more consolidated. When asked about the new system, many carriers 
reported uncertainty as to what its future impact would be, while 
several expressed concern that USDA's testing of the system had not 
been sufficiently transparent. 

Various Challenges Prevent Effective Monitoring of Food Aid: 

Despite the importance of ensuring the effective use of food aid to 
alleviate hunger, U.S. agencies' efforts to monitor food aid programs 
are insufficient. Limited food aid resources make it important for 
donors and implementers to ensure that food aid reaches the most 
vulnerable populations, thereby enhancing its effectiveness. However, 
USAID and USDA do not sufficiently monitor food aid programs, 
particularly in recipient countries, due to limited staff, competing 
priorities, and legal restrictions in use of food aid resources. 

U.S. Agencies Do Not Sufficiently Monitor Food Aid Programs: 

Although USAID and USDA require implementing organizations to regularly 
monitor and report on the use of food aid, these agencies have 
undertaken limited field-level monitoring of food aid programs. Agency 
inspectors general have reported that monitoring has not been regular 
and systematic, and that in some cases intended recipients have not 
received food aid or the number of recipients could not be verified. 
Our audit work also indicates that monitoring has been insufficient due 
to various factors including limited staff, competing priorities, and 
restrictions in use of food aid resources. 

USAID and USDA require NGOs and WFP to conduct regular monitoring of 
food aid programs. USAID Title II guidance for multi-year programs 
requires implementing organizations to provide a monitoring plan, which 
includes information such as the percentage of the target population 
reached, as well as mid-term and final evaluations of program impact. 
USDA requires implementing organizations to report semi-annually on 
commodity logistics and the use of food. According to WFP's agreement 
with the U.S. government, WFP field staff should undertake periodic 
monitoring at food distribution sites to ensure that commodities are 
distributed according to an agreed-upon plan. Additionally, WFP is to 
provide annual reports for each of its U.S.-funded programs. 

In addition to monitoring by implementing organizations, agency 
monitoring is important to ensure targeting of food aid is adjusted to 
changes in conditions as they occur, and to modify programs to improve 
their effectiveness, according to USAID officials. However, various 
USAID and USDA Inspectors General reports have cited problems with 
agencies' monitoring of programs. For example, according to various 
USAID Inspector General reports on non-emergency programs in 2003, 
while food aid was generally delivered to intended recipients, USAID 
officials did not conduct regular and systematic monitoring.[Footnote 
40] One such assessment of direct distribution programs in Madagascar, 
for example, noted that as a result of insufficient and ad hoc site 
visits, USAID officials were unable to detect an NGO reallocation of 
significant quantities of food aid to a different district that, 
combined with late arrival of U.S. food aid, resulted in severe 
shortages of food aid for recipients in a USAID-approved district. The 
Inspector General's assessment of food aid programs in Ghana stated 
that the USAID mission's annual report included data, such as number of 
recipients, that were directly reported by implementing organizations 
without any procedures to review the completeness and accuracy of this 
information over a 3-year period. As a result, the Inspector General 
concluded, the mission had no assurance as to the quality and accuracy 
of this data. 

Limited Staff Constrain Monitoring of Food Aid Programs in Recipient 

Limited staff and other demands in USAID missions and regional offices 
have constrained their field-level monitoring of food aid 
programs.[Footnote 41] In fiscal year 2006, although USAID has some non-
Title II staff assigned to monitoring, it had only 23 Title II- funded 
staff assigned to missions and regional offices in just 10 countries to 
monitor programs costing about $1.7 billion in 55 countries.[Footnote 
42] For example, USAID's Zambia mission had only one Title-II funded 
foreign-national and one U.S.-national staff to oversee $4.6 million in 
U.S. food aid funding in fiscal year 2006. Moreover, the U.S.-national 
staff only spent about one-third of his time on food aid activities and 
two-thirds on the President's Emergency Plan for AIDS Relief program. 

USAID regional offices' monitoring of food aid programs has also been 
limited. These offices oversee programs in multiple countries, 
especially where USAID missions lack human-resource capacity. For 
example, USAID's East Africa regional office, which is located in 
Kenya, is responsible for oversight in 13 countries in East and Central 
Africa, of which 6 had limited or no capacity to monitor food aid 
activities, according to USAID officials.[Footnote 43] This regional 
office, rather than USAID's Kenya mission, provided monitoring staff to 
oversee about $100 million in U.S. food aid to Kenya in fiscal year 
2006.[Footnote 44] While officials from the regional office reported 
that their program officers monitor food aid programs, according to an 
implementing organization official we interviewed, USAID officials 
visited the project site only 3 times in 1 year. USAID officials told 
us that they may have multiple project sites in a country and may 
monitor selected sites based on factors such as severity of need and 
level of funding. In another case, monitoring food aid programs in the 
Democratic Republic of Congo (DRC) from the USAID regional office had 
been difficult due to poor transportation and communication 
infrastructure, according to USAID officials. Therefore, USAID decided 
to station one full-time employee in the capital of the DRC to monitor 
U.S. food aid programs that cost about $51 million in fiscal year 2006. 

Limited Resources and Restrictions in Their Use Further Constrain 
Monitoring Efforts: 

Field-level monitoring is also constrained by limited resources and 
restrictions in their use. Title II resources provide only part of the 
funding for USAID's food aid monitoring activities and there are legal 
restrictions on the use of these funds for non-emergency programs. 
Other funds, such as from the agency's overall operations expense and 
development assistance accounts, are also to be used for food aid 
activities such as monitoring. However, these additional resources are 
limited due to competing priorities and their use is based on agency- 
wide allocation decisions, according to USAID officials. As a result, 
resources available to hire food aid monitors are limited. For example, 
about 5 U.S.-national and 5 foreign-national staff are responsible for 
monitoring all food aid programs in 7 countries in the Southern Africa 
region, according to a USAID food aid regional coordinator. Moreover, 
because its operations expense budget is limited and Title II funding 
only allows food monitors for emergency programs, USAID relies 
significantly on Personal Services Contractors (PSCs) --both U.S.- 
national and foreign-national hires--to monitor and manage food aid 
programs in the field.[Footnote 45] For example, while PSCs can use 
food aid project funds for travel, USAID's General Schedule staff 
cannot. Restrictions in the use of Title II resources for monitoring 
non-emergency programs further reduce USAID's monitoring of these 

USDA administers a smaller proportion of food aid programs than USAID, 
and its field-level monitoring of food aid programs is more limited 
than for USAID-funded programs. In March 2006, USDA's Inspector General 
reported that USDA's Foreign Agricultural Service (FAS) had not 
implemented a number of recommendations made in a March 1999 report on 
NGO monitoring. Furthermore, several NGOs informed GAO that the quality 
of USDA oversight from Washington, D.C. is generally limited in 
comparison to oversight by USAID. USDA has fewer overseas staff who are 
usually focused on monitoring agricultural trade issues and foreign 
market development. For example, the agency assigns a field attaché-- 
with multiple responsibilities in addition to food aid monitoring--to 
U.S. missions in some countries. However, FAS officials informed us 
that in response to past USDA Inspector General and GAO 
recommendations, a new monitoring and evaluation unit has been 
established recently with an increased staffing level to monitor the 
semiannual reports, conduct site visits, and evaluate programs. 

Without adequate monitoring from U.S. agencies, food aid programs are 
vulnerable to not effectively directing limited food aid resources to 
those populations most in need. As a result, agencies may not be 
sufficiently accomplishing their goals of getting the right food to the 
right people at the right time. 

Objectives, Scope, and Methodology: 

To address these objectives, we analyzed food aid procurement and 
transportation data provided by USDA's KCCO and food aid budget data 
provided by USDA, USAID and WFP. We determined that the food aid data 
obtained was sufficiently reliable for our purposes. We reviewed 
economic literature on the implications of food aid on local markets 
and recent reports, studies, and papers issued on U.S. and 
international food aid programs. We conducted a structured interview of 
the 14 U.S.-and foreign-flag ocean carriers that transport over 80 
percent of U.S. food aid tonnages. We supplemented our structured 
interview evidence with information from other ocean carriers and 
shipping experts. In Washington, D.C., we interviewed officials from 
USAID, USDA, the Departments of State (State), DOD, DOT, and the Office 
of Management and Budget (OMB). We also met with a number of officials 
representing NGOs that serve as implementing partners to USAID and USDA 
in carrying out U.S. food aid programs overseas; freight forwarding 
companies; and agricultural commodity groups. In Rome, we met with 
officials from the U.S. Mission to the UN Agencies for Food and 
Agriculture, the UN World Food Program headquarters, and FAO. We also 
conducted field work in three countries that are recipients of food 
aid--Ethiopia, Kenya, and Zambia--and met with officials from U.S. 
missions, implementing organizations, and relevant host government 
agencies in these countries and South Africa. We visited a port in 
Texas from which food is shipped; two food destination ports in South 
Africa and Kenya; and two sites in Louisiana and Dubai where U.S. food 
may be stocked prior to shipment to destination ports. For the 
countries we visited, we also reviewed numerous documents on U.S. food 
aid, including all the proposals that USDA approved from 2002 to 2006 
for the food aid programs it administers, and approximately half of the 
proposals that USAID approved from 2002 to 2006 for the food aid 
programs it administers.[Footnote 46] Finally, in January 2007, we 
convened a roundtable of 15 experts and practitioners including 
representatives from academia, think tanks, implementing organizations, 
the maritime industry, and agricultural commodity groups to further 
delineate, based on GAO's initial work, some key challenges to the 
efficient delivery and effective use of U.S. food aid and to explore 
options for improvement. We took the roundtable participants' views 
into account as we finalized our analysis of these challenges and 
options. We conducted our work between April 2006 and March 2007 in 
accordance with generally accepted U.S. government auditing standards. 


U.S. international food aid programs have helped hundreds of millions 
of people around the world survive and recover from crises since the 
Agricultural Trade Development and Assistance Act (P.L. 480) was signed 
into law in 1954. Nevertheless, in an environment of increasing 
emergencies, tight budget constraints, and rising transportation and 
business costs, U.S. agencies must explore ways to optimize the 
delivery and use of food aid. U.S. agencies have taken some measures to 
enhance their ability to respond to emergencies and streamline the 
myriad processes involved in delivering food aid. However, 
opportunities for further improvement in such areas as logistical 
planning and transportation contracting remain. Moreover, inadequate 
coordination among food aid stakeholders has hampered ongoing efforts 
to address some of these logistical challenges. Finally, U.S. agencies' 
lack of monitoring leaves U.S. food aid programs vulnerable to wasting 
increasingly limited resources, not putting them to their most 
effective use, or not reaching the most vulnerable populations on a 
timely basis. 

In a draft report that is under review by U.S. agencies, we recommend 
that to improve the efficiency of U.S. food aid--in terms of amount, 
timeliness, and quality--USDA, USAID, and DOT work together and with 
stakeholders to: 

* improve food aid logistical planning through cost-benefit analysis of 
supply-management options, such as long-term transportation agreements 
and prepositioning--including consideration of alternative methods, 
such as those used by WFP; 

* modernize transportation contracting procedures to include, to the 
extent possible, commercial principles of shared risks, streamlined 
administration, and expedited payment and claims resolution; 

* seek to minimize the cost impact of cargo preference regulations on 
food aid transportation expenditures by updating implementation and 
reimbursement methodologies to account for new supply practices, such 
as prepositioning, and potential costs associated with older vessels or 
limited foreign-flag participation; and: 

* establish a coordinated system for tracking and resolving food 
quality complaints. 

To optimize the effectiveness of food aid, we recommend that USAID and 
USDA improve monitoring of food aid programs to ensure proper 
management and implementation. 

Agency Comments and Our Evaluation: 

USAID, USDA, and DOT provided oral comments on a draft of this 
statement and we incorporated them as appropriate. We also provided 
DOD, State, FAO, and WFP an opportunity to offer technical comments 
that we have incorporated as appropriate. 

Mr. Chairman and Members of the Committee, this concludes my prepared 
statement. I would be pleased to answer any questions that you may 

GAO Contact and Staff Acknowledgments: 

Should you have any questions about this testimony, please contact 
Thomas Melito, Director, at (202) 512-9601 or Other 
major contributors to this testimony were Phillip Thomas (Assistant 
Director), Carol Bray, Ming Chen, Debbie Chung, Martin De Alteriis, 
Leah DeWolf, Mark Dowling, Etana Finkler, Kristy Kennedy, Joy Labez, 
Kendall Schaefer, and Mona Sehgal. 

[End of section] 

Appendix I: Program Authorities and Congressional Mandates: 

The United States has principally employed six programs to deliver food 
aid: P.L. 480 Titles I, II, and III; Food for Progress; McGovern-Dole 
Food for Education and Child Nutrition; and Section 416(b). Table 2 
provides a summary of these food aid programs by program authority. 

Table 2: U.S. Food Aid by Program Authority: 

Program: Total funding allocation[A]; 
P.L. 480: Title I: $20 million; 
P.L. 480: Title II: $1,668 million; 
P.L. 480: Title III: 0[B]; 
Food for Progress: $195.1 million; 
McGovern-Dole Food for Education and Child Nutrition: $89.5 million; 
Section 416(b): $76.3 million[C]. 

Program: Managing agency; 
P.L. 480: Title I: USDA; 
P.L. 480: Title II: USAID; 
P.L. 480: Title III: USAID; 
Food for Progress: USDA; 
McGovern-Dole Food for Education and Child Nutrition: USDA[D]; 
Section 416(b): USDA. 

Program: Year established; 
P.L. 480: Title I: 1954;
P.L. 480: Title II: 1954; 
P.L. 480: Title III: 1954; 
Food for Progress: 1985; McGovern-Dole Food for Education and Child 
Nutrition: 2003; 
Section 416(b): 1949. 

Program: Description of assistance; 
P.L. 480: Title I: Concessional sales of agricultural commodities; 
P.L. 480: Title II: Donation of commodities to meet emergency and non-
emergency needs; commodities may be sold in-country for development 
P.L. 480: Title III: Donation of commodities to governments of least 
developed countries; 
Food for Progress: Donation or credit sale of commodities to developing 
countries and/or emerging democracies; 
McGovern-Dole Food for Education and Child Nutrition: Donation of 
commodities and provision of financial and technical assistance in 
foreign countries; 
Section 416(b): Donations of surplus commodities to carry out purposes 
of P.L. 480 (Title II and Title III) and Food for Progress programs. 

Program: Type of assistance; 
P.L. 480: Title I: Non-emergency; 
P.L. 480: Title II: Emergency and non-emergency; 
P.L. 480: Title III: Non-emergency; 
Food for Progress: Emergency and non-emergency; 
McGovern-Dole Food for Education and Child Nutrition: Non-emergency; 
Section 416(b): Emergency and non-emergency. 

Program: Implementing partners; 
P.L. 480: Title I: Governments and private entities; 
P.L. 480: Title II: World Food Program and NGOs; 
P.L. 480: Title III: Governments; 
Food for Progress: Governments, agricultural trade organizations, 
intergovernmental organizations, NGOs, and cooperatives; 
McGovern-Dole Food for Education and Child Nutrition: Governments, 
private entities, and intergovernmental organizations; 
Section 416(b): See implementing partners for Title II, Title III, and 
Food for Progress programs. 

Source: GAO analysis based on USAID and USDA data. 

[A] Funding data are for fiscal year 2005. USDA data represents 
programmed funding, while USAID data represents appropriated funds. 

[B] This program has not been funded in recent years. 

[C] This program is currently inactive due to the unavailability of 
government-owned commodities. Because it is permanently authorized, it 
does not require reauthorization under the Farm Bill. 

[D] USDA administers this program as stipulated by law, which states 
that the President shall designate one or more federal agencies. 

[End of table] 

In addition to these programs, resources for U.S. food aid can be 
provided through other sources, which include the following: 

* International Disaster and Famine Assistance funds, designated for 
famine prevention and relief, as well as mitigation of the effects of 
famine by addressing its root causes. Over the past 3 years, USAID has 
programmed $73.8 million in famine prevention funds. Most of these 
funds have been programmed in the Horn of Africa, where USAID officials 
told us that famine is now persistent. According to USAID officials, 
experience thus far demonstrates that one of the advantages of these 
funds is that they enable USAID to combine emergency responses with 
development approaches to address the threat of famine. Approaches 
should be innovative and catalytic, while providing flexibility in 
assisting famine-prone countries or regions. Famine prevention 
assistance funds should generally be programmed for no more than 1 year 
and seek to achieve significant and measurable results during that time 
period. Funding decisions are made jointly by USAID's regional bureaus 
and the Bureau for Democracy, Conflict and Humanitarian assistance, and 
are subject to OMB concurrence and congressional consultations. In 
fiscal year 2006, USAID programmed $19.8 million to address the chronic 
failure of the pastoralist livelihood system in the Mandera Triangle-- 
a large, arid region encompassing parts of Ethiopia, Somalia, and Kenya 
that was the epicenter of that year's hunger crisis in the Horn of 
Africa. In fiscal year 2005, USAID received $34.2 million in famine 
prevention funds for activities in Ethiopia and six Great Lakes 
countries. The activities in Ethiopia enabled USAID to intervene early 
enough in the 2005 drought cycle to protect the livelihoods--as well as 
the lives--of pastoralist populations in the Somali Region, which were 
not yet protected by Ethiopia's Productive Safety Net program. In 
fiscal year 2004, the USAID mission in Ethiopia received $19.8 million 
in famine prevention funds to enhance and diversify the livelihoods of 
the chronically food insecure. 

* State's Bureau of Population, Refugees, and Migration (PRM), which 
provides limited amounts of cash to WFP to purchase food locally and 
globally in order to remedy shortages in refugee feeding pipeline 
breaks. In these situations, PRM generally provides about 1 month's 
worth of refugee feeding needs--PRM will not usually provide funds 
unless USAID's resources have been exhausted. Funding from year to year 
varies. In fiscal year 2006, PRM's cash assistance to WFP to fund 
operations in 14 countries totaled about $15 million, including $1.45 
million for humanitarian air service. In addition, PRM also funds food 
aid and food security programs for Burmese refugees in Thailand. In 
fiscal year 2006, PRM provided $7 million in emergency supplemental 
funding to the Thailand-Burma Border Consortium, most of which 
supported food-related programs. PRM officials told us that they 
coordinate efforts with USAID as needed. 

Table 3 lists congressional mandates for the P.L. 480 food aid programs 
and the target for fiscal year 2006. 

Table 3: Congressional Mandates for P.L. 480: 

Mandate: Minimum; 
Description: Total approved metric tons programmed under Title II; 
FY 2006 target: 2.5 million MT. 

Mandate: Subminimum; 
Description: Metric tons for approved non- emergency programs; 
FY 2006 target: 1.875 million MT. 

Mandate: Monetization; 
Description: Percentage of approved non- emergency Title II programs 
that are monetization programs; 
FY 2006 target: 15%. 

Mandate: Value-added; 
Description: Percentage of approved non- emergency program commodities 
that are processed, fortified, or bagged; 
FY 2006 target: 75%. 

Mandate: Bagged in the United States; 
Description: Percentage of approved non-emergency whole grain 
commodities that are bagged in the United States; 
FY 2006 target: 50%. 

Source: GAO analysis, based on USAID data. 

[End of table] 

[End of section] 

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[1] According to FAO's 2006 The State of Food and Agriculture report, 
conditions in Asia have improved while those in Africa have worsened. 

[2] While we acknowledge that commodity prices also affect tonnages, 
there has been no clear trend in total average commodity prices for 
food aid programs from fiscal year 2002 to fiscal year 2006. 

[3] Food security exists when all people at all times have both 
physical and economic access to sufficient food to meet their dietary 
needs for a productive and healthy life. 

[4] In-kind food aid usually comes in two forms: non-processed foods 
and value-added foods. Non-processed foods consist of whole grains such 
as wheat, corn, peas, beans, and lentils. Value-added foods consist of 
processed foods that are manufactured and fortified to particular 
specifications, and include milled grains such as cornmeal and bulgur, 
and fortified milled products such as corn soy blend (CSB) and wheat 
soy blend (WSB). 

[5] WFP relies entirely on voluntary contributions to finance its 
humanitarian and development projects, and national governments are its 
principal source of funding. More than 60 governments fund the 
humanitarian and development projects of WFP. 

[6] WFP defines emergencies as "urgent situations in which there is 
clear evidence that an event or series of events has occurred which 
causes human suffering or imminently threatens human lives or 
livelihoods and which the government concerned has not the means to 
remedy; and it is a demonstrably abnormal event or series of events 
which produces dislocation in the life of a community on an exceptional 

[7] The authority for these U.S. international food aid programs is 
provided through P.L. 480 (the Agricultural Trade Development and 
Assistance Act of 1954, as amended, 7 USC § 1701 et seq.); the Food for 
Progress Act of 1985, as amended, 7 USC § 1736o; section 416(b) of the 
Agricultural Act of 1949, as amended, 7 USC § 1431; and the Farm 
Security and Rural Investment Act of 2002 (P.L. 107-171). Funding 
sources for U.S. international food assistance other than these six 
USAID-and USDA-administered food aid programs include (1) International 
Disaster and Famine Assistance funds and (2) State's Bureau of 
Population, Refugees, and Migration. (See app. I for a description of 
these sources of funding.) 

[8] See GAO, Food Aid: Experience of U.S. Programs Suggests 
Opportunities for Improvement, GAO-02-801T (Washington, D.C.: June 4, 

[9] P.L. 104-239, 110 Stat. 3138. See GAO, Maritime Security Fleet: 
Many Factors Determine Impact of Potential Limits on Food Aid 
Shipments, GAO-04-1065 (Washington, D.C.: Sept. 13, 2004). 

[10] Due to increasing emergency food aid needs, USAID has not met this 
sub-minimum requirement since 1995 and has regularly requested and 
received a waiver from Congress. 

[11] The Bill Emerson Humanitarian Trust, a reserve of up to 4 million 
metric tons of grain, can be used to help fulfill P.L. 480 food aid 
commitments to meet unanticipated emergency needs in developing 
countries or when U.S. domestic supplies are short. The Secretary of 
Agriculture authorizes the use of the Trust in consultation with the 
Food Assistance Policy Council, which includes senior USAID 
representatives. The Trust, as presently constituted, was enacted in 
the 1998 Africa Seeds of Hope Act (P.L. 105-385) and replaced the Food 
Security Wheat Reserve of 1980. 

[12] Inland transportation costs are included in commodity and ocean 
transportation contracts. 

[13] In addition to rising fuel prices and greater global demand for 
shipping, one factor contributing to the rise in freight rates is the 
rising share of U.S. tonnage sent to Africa, which had a slightly 
higher average cost of $180 per metric ton in 2006. 

[14] World Food Program, WFP in Statistics, July, 2006 and Review of 
Indirect Support Costs Rate, Report WFP/DB/A.2006/6-C1 (Rome, Italy: 
May 2006). 

[15] In this testimony, we use USAID's estimate that 1 metric ton can 
feed approximately 1,740 people per day. Given that the current average 
U.S. program cost for 1 metric ton of food aid is $585, if that average 
cost had been reduced by $10 per metric ton through a reduction in 
ocean transportation freight rates, the fiscal year 2006 food-aid 
budget could have funded an additional 62,500 metric tons--enough to 
feed approximately 1.2 million people for a typical peak hungry season 
lasting 3 months. 

[16] KCCO data suggest that there is some variation in the time 
required from the contract award date until the commodity reaches a 
U.S. port for export. For example, for fiscal years 2002 through 2006, 
this time period varied from less than 30 days for several shipments to 
more than 90 days for several others. 

[17] Ocean transportation time frames may include loading and unloading 
of vessels. 

[18] GAO has previously reported on the poor timing of food aid 
delivery. See Famine in Africa: Improving U.S. Response Time for 
Emergency Relief, GAO/NSIAD-86-56 (Washington, D.C.: Apr. 3, 1986). 

[19] Additionally, Congress can appropriate funds to augment the Trust. 
The Emergency Wartime Supplemental Appropriations Act, 2003 (Pub. L. 
108-11) appropriated $69 million for that purpose. 

[20] USAID has taken steps to improve its management of (1) committed 
and anticipated cash outflows for development and emergency programs, 
prepositioning, and other accounts; and (2) anticipated cash inflows 
from annual and supplemental budgets, DOT reimbursements, and other 
carryover accounts. However, according to a KCCO study, though both 
USDA and USAID experience an upsurge in purchasing at the end of the 
year (particularly in September), USDA's is more pronounced. 

[21] These figures exclude prices for non-fat dry milk and vegetable 

[22] Several years ago, USAID asked DOD to calculate the cost for a 
sample set of food aid shipments using long-term transportation 
agreements managed by DOD. This analysis indicated a lack of potential 
savings. However, DOD and DOT officials subsequently found that the 
analysis contained flaws and they recommend that a new analysis be 
conducted. DOD officials suggested that USAID conduct a pilot program 
using DOD's Universal Service Contract. DOT officials indicated that 
cost savings could be realized if USAID were to manage its own 
contracts, and that they had offered to assist USAID in doing so. DOT 
also provided examples of contracts that would not discourage cargo 
consolidation or reduce competition. 

[23] Various factors distinguish food aid shipments from commercial 
shipments, making freight rates between these activities not directly 
comparable. Nonetheless, KCCO data suggest that average food aid 
freight rates from the Gulf of Mexico to Djibouti, East Africa were 
over $150 per ton in 2006. Average commercial freight rates for grain 
shipments from these ports were about one-third the price at $55 per 

[24] International commercial terms (InCo terms) are internationally 
accepted terms defining responsibilities of exporters and importers in 
shipments. InCo terms define free alongside ship ("FAS"), for example, 
as a contract where cargo is placed at the load port under the seller's 
responsibility and any vessel loading charges, freight, and other costs 
incurred including "detention and demurrage" (costs for detaining 
vessel or equipment at a discharge port longer than specified in the 
contract) are the buyer's responsibility. For food aid programs, FAS 
contracts specify that cargo is loaded and discharged at the carrier's 
time, risk, and expense. 

[25] We reported in 2004 that, between fiscal years 1999 and 2003, 
there was an annual average of 108 U.S.-flag vessels participating in 
U.S. food aid programs (see GAO-04-1065). According to DOT estimates, 
fewer than 90 U.S.-flag vessels participated in food aid programs in 
fiscal year 2006. Due to fleet changes, USAID officials estimate that 
there are now even fewer U.S.-flag vessels available to carry U.S. food 

[26] Various stakeholders questioned whether penalties are effective. 
USAID officials emphasized that penalties are their most practical tool 
to compel ocean carrier performance because FAR regulations make it 
very difficult to suspend carriers from participating in food aid 
programs due to poor performance. 

[27] See USAID, Office of Inspector General Report No. 4-663-04-002-P 
(Washington, D.C.: Nov. 21, 2003). 

[28] WFP handles food aid claims independently through an insurance 

[29] This system is entitled "PowerTrack" and is also currently used by 
DOD. According to DOD, PowerTrack has provided the government with 
visibility of payment history, reduced administrative and handling 
costs and expedited vendor payments. However, ocean carriers are 
responsible for paying transaction fees and USAID officials believe 
these fees - which are a percentage of the contract value -may be too 
expensive for large contracts. They are researching whether they can 
find a similar service with a fixed transaction fee. 

[30] The Food Security Act of 1985 requires DOT to reimburse food aid 
agencies for the portion of the OFD cost and for ocean transportation 
costs that exceed 20 percent of total program costs. Reimbursement 
methodologies are governed by a 1987 interagency memorandum of 
understanding. According to DOT officials, the OFD cost was relatively 
low in fiscal year 2005 due to high global demand for freight services 
and relatively high foreign-flag freight rates. These factors raised 
ocean transport costs as a percentage of program costs, however, such 
that DOT's total reimbursement was higher as well. 

[31] USAID and USDA are required to apply cargo preference regulations 
for vessels of any age. However, total OFD costs are based on an 
average OFD for vessels that are 24 years or younger. USAID officials 
argue that the cost difference between U.S.-flag and foreign-flag rates 
is larger for older vessels. Further, since opportunities for foreign- 
flag participation are limited, USAID argues that they are not 
reimbursed for the higher cost of shipping on a U.S.-flag vessel when 
foreign-flag bids are not received. Using KCCO data, we found that 14 
percent of food aid commodity requests in fiscal year 2005 received no 
foreign-flag bid. 

[32] Food quality pertains to the degree of food spoilage, infestation, 
contamination and/or damage that can result from factors such as 
inadequate fumigation, poor warehouse conditions, and transportation 

[33] In a report accompanying H.R. 5522, the 2007 Department of State, 
Foreign Operations, and Related Programs Appropriations Act, the Senate 
Foreign Relations Committee stated its concern for reports that food 
aid distribution overseas had been disrupted, suspended and in some 
instances rejected due to quality concerns, and supported efforts by 
USAID and other agencies to investigate these concerns. S. Rept. 109- 
277, p. 61. GAO has also reported on food quality issues. See Foreign 
Assistance: U.S. Food Aid Program to Russia Had Weak Internal Controls, 
GAO/NSIAD/AIMD-00-329. (Washington, D.C.: Sept. 29, 2000). 

[34] P.L. 480 authorizes USAID to preposition food aid both 
domestically and abroad with a cap on storage expenses of $2 million 
per fiscal year. 

[35] Purchases for the Lake Charles prepositioning site must reach the 
warehouse and may not be diverted in advance. 

[36] USAID representatives suggested they might consider pursuing a 
long-term transportation agreement for prepositioned tonnage to 
Djibouti. KCCO officials suggested that, as part of such a program, 
earlier purchases of food could also reduce commodity prices. 

[37] USAID chooses prepositioning locations based on three factors: (1) 
storage and warehouse costs; (2) technical criteria such as the port's 
plan of operations and personnel capacity, and the frequency of service 
provided by ocean carriers; and (3) past performance. 

[38] USAID is considering building inventory management into warehouse 
contracts and establishing standard operating procedures. 

[39] A phytosanitary certificate is a document required by many states 
and foreign countries for the import of non-processed, plant products. 
As specified by the importing country or state, exported products must 
meet various plant health requirements pertaining to pests, plant 
diseases, chemical treatments and weeds. 

[40] USAID Inspector General, Audit of USAID/Madagascar's Distribution 
of PL 480 Title II Non-Emergency Assistance in Support of its Direct 
Food Aid Distribution Program, 2003. See also Audit of USAID/Ghana's 
Distribution of P.L. 480 Title II Non-Emergency Assistance in Support 
of Its Direct Food Aid Distribution Program, 2003; and Audit of USAID/ 
Ethiopia's Distribution of P.L. 480 Title II Non-Emergency Assistance 
in Support of Its Direct Food Aid Distribution Program, 2003. 

[41] As part of the 2002 Farm Bill, the Congress directed USAID to 
streamline program management as well as procedures and guidelines, 
including "information collection and reporting systems by identifying 
critical information that needs to be monitored and reported on by 
eligible organizations." In its report to the Congress in 2003, USAID 
identified actions to help achieve legislative directives, which 
included a re-examination of its staffing and human resources 
requirements to ensure timeliness and efficiency, especially due to the 
workload imposed by a $1.4 billion Title II program. However, USAID did 
not conduct a systematic assessment of its workload and staffing 
requirements for the Office of Food for Peace to determine appropriate 
levels to monitor its operations in over 50 countries. 

[42] In addition to Title II-funded positions, USAID missions and 
regional offices have positions that are funded through other sources 
such as development assistance or operating budgets for these offices. 
Although these staff in this positions may monitor food aid programs, 
they would also be responsible for monitoring other programs. 

[43] In 2005, USAID's East Africa regional office had oversight 
responsibilities for $1.3 billion in food aid distributed in the 
region, including about $377 million from the Bill Emerson Humanitarian 
Trust to meet emergency needs in Ethiopia, Eritrea, and Sudan. 

[44] In contrast, while USAID's mission in Ethiopia also comes under 
the purview of USAID's East Africa regional office, it has its own 
staff to monitor its food aid programs. Specifically, 2 U.S.-national 
and 4 foreign-national staff manage and monitor U.S. food aid programs 
in Ethiopia, funded at $143 million in 2006. 

[45] USAID hires U.S. and foreign nationals under personal service 
contracts to complement its workforce of U.S. foreign service and civil 
service personnel. These personal service contractors, or PSCs, serve 
in USAID's overseas offices or missions and are generally considered to 
be more cost-effective by the agency. 

[46] USDA administers Public Law (P.L.) 480 Title I, Food for Progress, 
Section 416(b), and the McGovern-Dole International Food for Education 
and Child Nutrition programs. USAID administers P.L. 480 Title II. 

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