Summary
The United States is the largest global food aid donor, accounting for over half of all food aid supplies to alleviate hunger and support development. Since 2002, 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 food commodities per year. Despite growing demand for food aid, rising business and transportation costs have contributed to a 52 percent decline in average tonnage delivered over the last 5 years. These costs represent 65 percent of total emergency food aid, highlighting the need to maximize its efficiency and effectiveness. Based on analysis of agency documents, interviews with experts and practitioners, and fieldwork, this report examines some key challenges to the (1) efficiency of U.S. food aid programs and (2) effective use of U.S. food aid.
Multiple challenges hinder the efficiency of U.S. food aid programs by reducing the amount, timeliness, and quality of food provided. Specific factors that cause inefficiencies include (1) funding and planning processes that increase delivery costs and lengthen time frames; (2) ocean transportation and contracting practices that create high levels of risk for ocean carriers, resulting in increased rates; (3) legal requirements that result in awarding of food aid contracts to more expensive service providers; and (4) inadequate coordination between U.S. agencies and food aid stakeholders to track and respond to food and delivery problems. U.S. agencies have taken some steps to address timeliness concerns. The U.S. Agency for International Development (USAID) has been stocking or prepositioning food commodities domestically and abroad, and the U.S. Department of Agriculture (USDA) has implemented a new transportation bid process, but the long-term cost effectiveness of these initiatives has not yet been measured. In addition, the current practice of using food aid to generate cash for development projects--monetization--is an inherently inefficient use of resources. Furthermore, since U.S. agencies do not collect monetization revenue data electronically, they are unable to adequately monitor the degree to which revenues cover costs. Numerous challenges limit the effective use of U.S. food aid. Factors contributing to limitations in targeting the most vulnerable populations include (1) challenging operating environments in recipient countries; (2) insufficient coordination among key stakeholders, resulting in disparate estimates of food needs; (3) difficulty in identifying vulnerable groups and causes of their food insecurity; and (4) resource constraints on conducting reliable assessments and providing food and other assistance. Further, some impediments to improving the nutritional quality of U.S. food aid may reduce the benefits of food aid to recipients. Finally, U.S. agencies do not adequately monitor food aid programs due to limited staff, competing priorities, and restrictions on the use of food aid resources. As a result, these programs are vulnerable to not getting the right food to the right people at the right time.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
Director:
Team:
Phone:
Thomas Melito
Government Accountability Office: International Affairs and Trade
(202) 512-9601
Recommendations for Executive Action
Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should improve food aid logistical planning through cost-benefit analysis of (1) supply-management options, such as long-term transportation agreements, and (2) prepositioning, including consideration of alternative methods, such as those used by the World Food Program.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: Department of Transportation
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: Implemented
Comments: In response to our recommendation, agencies have taken several actions. USDA now actively pursues long-term purchasing agreements with private voluntary organizations, allows transportation bookings to carry over from the fiscal year to the end of the calendar year to reduce third quarter bunching, and has disallowed certain inland transportation contracts that are difficult to monitor. USAID and DOT established pricing guidelines for long-term transportation agreements to be pursued when price conditions become less volatile. Additionally, in January 2008, USAID completed a cost-benefit analysis of prepositioning food aid. As a result, USAID officials report that they have begun to implement a new approach to prepositioning?modeled after the "K-Mart approach" where cargo is procured for the prepositioning site in advance, and when an emergency occurs, cargo from the prepositioning site is sent first (rather than last). Congress has also taken steps to facilitate the ability of U.S. agencies to implement our recommendation. In the Farm, Nutrition, and Bioenergy Act of 2007 Report, Congress encouraged USDA and USAID to continue efforts aimed at improving logistical planning of food aid to address, among other issues, the problem of bunching. In enacting the 2008 Farm Bill, Congress required USDA and USAID to undertake efforts to improve procurement planning by stipulating that the agencies shall develop procedures that ensure expedited processing of commodity requests in order to provide commodities overseas in a timely manner and to the extent feasible, according to planned delivery schedules. Congress authorized an increase in annual funding for stockpiling and rapid delivery of prepackaged foods from $ 3 million to $8 million. Congress also authorized $10 million to allow USAID to conduct feasibility assessments of no less than two sites for prepositioning food aid and to establish, based on the results, additional sites in foreign countries. Improved supply-management practices, such as avoiding both procurement bunching and shipping food out of prepositioning sites first could reduce delivery costs and food spoilage, enabling U.S. food aid programs to serve additional beneficiaries. With an improved prepositioning program, U.S. agencies will also be able to respond more rapidly to food emergencies, preventing increased food insecurity in developing nations resulting from delays in food aid delivery.
Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should work together and with stakeholders to modernize ocean transportation and contracting practices to include, to the extent possible, commercial principles of shared risks, streamlined administration, and expedited payment and claims resolution.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: Department of Transportation
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: In process
Comments: In response to our recommendation, agencies have taken several actions. Although some progress has been made, agencies still need to establish principles of shared risk and expedited claims resolution. USAID sought information on web-based payments, but has not yet made a decision. The following actions have been taken: First, USAID, USDA, and DOT established a transportation working group as part of the Food Aid Consultative Group and DOT officials accompanied USAID to several delivery sites to identify options for making contracts more uniform. USAID has also introduced changed contracting procedures to ensure clear custody transfers from the commodity vendor to the transportation carrier. USDA is using a Commodity Concern Feedback Guide to improve information sharing on transportation issues and has established a point person within the agency responsible for this task. On April 18, 2007, the Agriculture Secretary also stated that, in light of GAO recommendations, USDA is proposing changes to make their programs more market-oriented. Congress has also taken steps to support U.S. agency efforts in responding to our recommendation. In enacting the 2008 Farm Bill, Congress required the Food Aid Consultative Group to include representatives from the maritime transportation sector. Congress also required the Administrator, in consultation with the Secretary, to establish systems and activities to identify and implement best practices for food aid programs to improve the efficiency of assistance provided. With more modern transportation contracting practices, U.S. food aid programs will be able to reduce transportation costs and delivery timeframes. As a result, U.S. food aid programs will be able to serve additional beneficiaries and prevent increased food insecurity in developing nations during food crisis.
Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should 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.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: Department of Transportation
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: In process
Comments: No progress to date. OMB rule may be needed.
Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should establish a coordinated system for tracking and resolving food quality complaints.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: Department of Transportation
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: In process
Comments: In response to this recommendation, agencies have begun to take some action, but plans seem in the development stage. USDA is in the process of developing a computerized Food Aid Information System (FAIS) that will record and track all food aid transactions ? including food quality problems. USDA is waiting for funds to proceed with the ?build? stage of this system. To coordinate food aid quality tracking, the joint commodity working group has also circulated draft versions of a response feedback tracking system that is currently in interagency clearance. The Agriculture Secretary stated on April 18, 2007 that, in light of GAO recommendations, USDA is proposing to develop an information system (FAIS) to improve monitoring and evaluating of food aid. USDA?s Transportation and Logistics Branch has also added a ?feedback loop function? to obtain and share up-to-date information on food aid related issues and has committed staff to evaluate food quality concerns related to shipments. Congress has also taken steps to facilitate the ability of U.S. agencies to implement our recommendation. In the Farm, Nutrition, and Bioenergy Act of 2007 Report, Congress encouraged USDA and USAID to synchronize systems within the agencies for tracking food aid programs. In enacting the 2008 Farm Bill, Congress authorized $22 million annually in Title II funds for the Administrator to carry out, among other things, monitoring of emergency food aid. Of this amount, $2.5 million is available in 2009 for the purposes of upgraded information technology systems. No later than 90 days after enactment of the bill, Congress also required that USAID and USDA shall submit a report on efforts taken to improve monitoring, as well as an assessment of the impact of each monitoring and evaluation system on the efficiency of assistance provided. With enhanced information sharing on food quality, U.S. food aid programs will be able to systematically track, resolve, and potentially prevent issues such as food spoilage. As a result, U.S. food aid programs will be able to serve additional beneficiaries with each dollar of funding and prevent the delays that occur when shipments arrive with food quality problems.
Recommendation: To improve the efficiency of U.S. food aid--in terms of its amount, timeliness, and quality, the Administrator of USAID and the Secretaries of Agriculture and Transportation should develop an information collection system to track monetization transactions.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: Department of Transportation
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: In process
Comments: In response to our recommendation, USAID has taken action. USDA is in the process of developing a comprehensive computerized Food Aid Information System (FAIS) that will record and track monetization transactions. USDA is waiting for funds to proceed. USAID has updated its processes for capturing and recording monetization transactions and now enters this data into its Quarterly Web Interfaced Commodity Reporting System. According to USAID, it is also working with USDA to ensure that information collected is shared. Congress has also taken steps to facilitate USAID?s ability to implement our recommendation. In enacting the 2008 Farm Bill, Congress authorized $22 million annually in Title II funds for the Administrator to carry out, among other things, monitoring of emergency food aid and evaluation of monetization programs. Of this amount, $2.5 million is available in 2009 for the purposes of upgraded information technology systems. No later than 90 days after enactment of the bill, Congress also required that USAID and USDA shall submit a report on efforts taken to improve monitoring, as well as an assessment of the impact of each monitoring and evaluation system on the efficiency of assistance provided. With systematic collection of information on monetization transactions, USAID will be able to monitor the relative efficiency of this program and the share of each food aid dollar that is allocated towards commodities, delivery, and monetizing the commodities in foreign markets. As a result, USAID will be better able to make decisions on when and where to monetize food aid in order to maximize the efficiency of the program and reach the largest number of beneficiaries.
Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should enhance the reliability and use of needs assessments for new and existing food aid programs through better coordination among implementing organizations, make assessments a priority in informing funding decisions, and more effectively build on lessons from past targeting experiences.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: Implemented
Comments: According to USAID officials, as of May 2008, USAID had indexed the assessment tools that its cooperating sponsors developed under Institutional Capacity Building grants. The index was circulated to make the assessment tools more widely available. In addition, at an Executive Board meeting of the World Food Program (WFP), the U.S. government, working with other donors, requested that WFP ensure adequate resources (not less than 1 percent of programming costs) be available for diagnosing emergency needs. USDA officials reported that, for 2009-2010, USDA had refined its methods for identifying priority countries for food aid. Specifically, for the Food for Progress and McGovern-Dole Food for Education programs, USDA determines priority countries based on the objectives of each program and factors such as per capita income levels, prevalence of undernourishment, movement towards freedom, adult literacy rates, government commitment to education and degree, if any, of civil conflict. As a result, USDA has been able to reduce the number of priority countries eligible for food aid in an effort to better target its resources. For example, the number of Food for Progress priority countries went from 28 in fiscal year 2007 to 11 is fiscal year 2009. Moreover, USDA evaluates and selects proposals based on specific criteria that may include assurances that commercial markets will not be disrupted; tangible benefits for the country's agricultural sector; the recipient country is committed to improving its quality of education and nutrition; and the program is sustainable after USDA funding ends. In enacting the 2008 Farm Bill on June 18, 2008, Congress authorized up to $22 million annually of Title II funds for monitoring and assessment activities for nonemergency programs. As a result of the additional resources that Congress has authorized and actions that USAID has under way, USAID's ability to ensure that food aid resources are directed to those populations most in need will be improved.
Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should determine ways to provide adequate nonfood resources in situations where there is sufficient evidence that such assistance will enhance the effectiveness of food aid.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: Implemented
Comments: In its 60-day response to GAO's recommendations, USAID stated that under the new U.S. Foreign Assistance Framework, it would seek to better integrate food aid with other development programs. In May 2008, USAID stated that new Title II programs in Mozambique and Congo will be linked with complementary Development Assistance (DA) funding while new programs in Ethiopia, Haiti, and Uganda will be linked with complementary President's Emergency Plan for AIDS Relief (PEPFAR) resources. USDA noted that it already provides for the use of nonfood resources through direct cash funding in Food for Education and its liberal interpretations for the use of monetized proceed for Food for Progress. In Report 110-256 dated July 23, 2007, the House Committee on Agriculture specifically cited our April 2007 report in making provisions for the food assistance and development programs in the Farm Bill. The Committee took action to raise the amount that USAID can pay participating organizations for project, administrative, and other costs and added a provision to allow these organizations to use the funds for monitoring and project oversight. In enacting the 2008 Farm Bill on June 18, 2008, Congress authorized increasing the amount of section 202 (e) funding from not less than 7.5 percent but no more than 13 percent (previously 5 to 10 percent). It allows using these funds for improving and implementing methodologies for food aid programs including needs assessments (upon the request of the Administrator), monitoring, and evaluation. As a result of the additional resources for that Congress has authorized and actions that USAID has under way, USAID?s ability to ensure that food aid resources are directed to those population most in need will be improved.
Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should develop a coordinated interagency mechanism to update food aid specifications and products to improve food quality and nutritional standards.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: Implemented
Comments: Both USAID and USDA are already undertaking a comprehensive review of food aid specifications and products, as noted in comments to the GAO report. The review is beginning with a thorough evaluation of contracting procedures, focusing on the expeditious enforcement of contract standards to improve contract compliance. As of May 2008, according to USDA, a Request for Proposal was announced in July 2007, and SUSTAIN was awarded the contract, which is aimed to standardize and make consistent the existing food aid specifications. The second stage of the review will evaluate USDA product specifications, focusing on improving post-production commodity sampling and laboratory testing procedures. USDA has indicated that the Foreign Agricultural Service and the Farm Service Agency are responsible for this work, which has been provided a $500,000 apportionment by OMB from Commodity Credit Corporation funds. The third stage will review options on nutritional quality and cost effectiveness of commodities currently provided USAID and USDA food aid to ensure that the food is of the highest caliber to meet the nutritional requirements necessary to address today's beneficiaries. It will study the present mix and uses of food aid commodities and recommendations for future use, including possible new formulations USAID is conducting and funding this effort from P.L. 480, Title II, funds. In July 2008, USAID officials reported posting the Request for Information and Presolicitation Notice on grants.gov and a formal Request for Proposals was to follow. A presolicitation RFP for a study and recommendations of food aid formulations has been posted and closes August 27, 2008. According to a USAID official, the review will examine the role of fortified and/or enriched commodities in the context of total available dietary resources, including a scientific review of current enrichment and fortification technologies, methods for delivery of micronutrients a consultative process that includes industry, academic and operational experts and ultimately, recommendations as to how to most cost-effectively meet the nutritional needs of P.L. 480 Title II beneficiary populations with food aid commodities. The micronutrient profiles and needs of each group shall be described and the role of food aid commodities to respond to those needs shall be analyzed through a series of technical briefing papers. As a result of new funding that Congress authorized and agencies' actions to improve food aid specifications and products, the nutritional quality of food aid will be enhanced, thus increasing the likelihood that vulnerable populations receive food that is nutritious and appropriate.
Recommendation: To improve the effective use of food aid, the Administrator USAID and the Secretary of Agriculture should improve monitoring of food aid programs to ensure proper management and implementation.
Agency Affected: Department of Agriculture
Status: In process
Comments: No action reported.
Agency Affected: United States Agency for International Development
Status: Implemented
Comments: Citing our April 2007 report, in enacting the 2008 Farm Bill on June 18, 2008, Congress authorized up to $22 million annually for USAID to establish a system of monitoring and assessment of nonemergency programs, including hiring additional food aid monitors in-country. Congress required USAID to report on its efforts to conduct oversight of nonemergency programs within 6 months of the enactment of the act and directed GAO to review the agency's efforts and report to Congress 9 months later. Congress' authorization of these measures, which are in line with our recommendations, will help to further advance U.S. agencies' efforts that are now under way to implement our recommendations. The House Committee on Agriculture, in Report 110-256, dated July 23, 2007, specifically cited our April 2007 report as the justification for the Committee's action requiring USAID to develop systems to improve, monitor, and evaluate the effectiveness and efficiency of assistance provided under P.L. 480. According to USAID officials, as of May 2008, USAID had collected data on current monitoring staff (all funding sources). The agency had begun the hiring process for new staff in two of its largest emergency programs (Sudan and Zimbabwe). In addition, USAID held monitoring and evaluation workshops for all Title II partners. They continued work with missions to implement Layers as well as the Lot Quality Assurance Sampling (LQAS) method. For USDA, as of May 2008, the Foreign Agricultural Service (FAS) had established a staff entirely devoted to monitoring of food aid programs. FAS has moved to reduce its backlog of open agreements (more than 60 had been closed since the reorganization of FAS). FAS also initiated a thorough review of program reporting. Finally, according to USDA, post coverage was added as criteria for determining country priority status - - support from FAS attaches would be used to better monitor program activities and help PVOs when issues arise in the field. As a result of the additional resources for field level monitoring that Congress has authorized and actions that USAID has under way, USAID?s ability to ensure that food aid resources are directed to those population most in need will be improved.
