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Thomas Melito: Statement to US Senate
United States Government Accountability Office
21 March 2007
Thomas Melito
Director of International Affairs and Trade, US Government

Acknowledgements: FANRPAN acknowledges DEC as the source of this document: http://dec.usaid.gov/index.cfm?p=search.getCitation&rec_no=144965


Summary

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. agenciesí 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.

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