[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
HEARING TO REVIEW EFFORTS TO DELIVER INTERNATIONAL FOOD AID AND PROVIDE
FOREIGN AGRICULTURAL DEVELOPMENT ASSISTANCE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON SPECIALTY CROPS, RURAL
DEVELOPMENT AND FOREIGN AGRICULTURE
OF THE
COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
JULY 16, 2008
__________
Serial No. 110-41
Printed for the use of the Committee on Agriculture
agriculture.house.gov
----------
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COMMITTEE ON AGRICULTURE
COLLIN C. PETERSON, Minnesota, Chairman
TIM HOLDEN, Pennsylvania, BOB GOODLATTE, Virginia, Ranking
Vice Chairman Minority Member
MIKE McINTYRE, North Carolina TERRY EVERETT, Alabama
BOB ETHERIDGE, North Carolina FRANK D. LUCAS, Oklahoma
LEONARD L. BOSWELL, Iowa JERRY MORAN, Kansas
JOE BACA, California ROBIN HAYES, North Carolina
DENNIS A. CARDOZA, California TIMOTHY V. JOHNSON, Illinois
DAVID SCOTT, Georgia SAM GRAVES, Missouri
JIM MARSHALL, Georgia MIKE ROGERS, Alabama
STEPHANIE HERSETH SANDLIN, South STEVE KING, Iowa
Dakota MARILYN N. MUSGRAVE, Colorado
HENRY CUELLAR, Texas RANDY NEUGEBAUER, Texas
JIM COSTA, California CHARLES W. BOUSTANY, Jr.,
JOHN T. SALAZAR, Colorado Louisiana
BRAD ELLSWORTH, Indiana JOHN R. ``RANDY'' KUHL, Jr., New
NANCY E. BOYDA, Kansas York
ZACHARY T. SPACE, Ohio VIRGINIA FOXX, North Carolina
TIMOTHY J. WALZ, Minnesota K. MICHAEL CONAWAY, Texas
KIRSTEN E. GILLIBRAND, New York JEFF FORTENBERRY, Nebraska
STEVE KAGEN, Wisconsin JEAN SCHMIDT, Ohio
EARL POMEROY, North Dakota ADRIAN SMITH, Nebraska
LINCOLN DAVIS, Tennessee TIM WALBERG, Michigan
JOHN BARROW, Georgia BOB LATTA, Ohio
NICK LAMPSON, Texas
JOE DONNELLY, Indiana
TIM MAHONEY, Florida
TRAVIS W. CHILDERS, Mississippi
______
Professional Staff
Robert L. Larew, Chief of Staff
Andrew W. Baker, Chief Counsel
April Slayton, Communications Director
William E. O'Conner, Jr., Minority Staff Director
______
Subcommittee on Specialty Crops, Rural Development and Foreign
Agriculture
MIKE McINTYRE, North Carolina, Chairman
JIM MARSHALL, Georgia MARILYN N. MUSGRAVE, Colorado,
HENRY CUELLAR, Texas Ranking Minority Member
JOHN T. SALAZAR, Colorado TERRY EVERETT, Alabama
JOHN BARROW, Georgia ADRIAN SMITH, Nebraska
EARL POMEROY, North Dakota JEFF FORTENBERRY, Nebraska
ROBIN HAYES, North Carolina
Aleta Botts, Subcommittee Staff Director
(ii)
C O N T E N T S
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Page
Goodlatte, Hon. Bob, a Representative in Congress from Virginia,
prepared statement............................................. 6
McIntyre, Hon. Mike, a Representative in Congress from North
Carolina, opening statement.................................... 1
Prepared statement........................................... 3
Musgrave, Hon. Marilyn N., a Representative in Congress from
Colorado, opening statement.................................... 4
Peterson, Hon. Collin C., a Representative in Congress from
Minnesota, prepared statement.................................. 5
Smith, Hon. Adrian, a Representative in Congress from Nebraska,
prepared statement............................................. 6
Witnesses
Yost, Michael W., Administrator, Foreign Agricultural Service,
U.S. Department of Agriculture, Washington, D.C................ 7
Prepared statement........................................... 9
Kunder, James R., Acting Deputy Administrator, U.S. Agency for
International Development, Washington, D.C..................... 13
Prepared statement........................................... 14
Callahan, Sean, Executive Vice President, Overseas Operations,
Catholic Relief Services, Baltimore, MD........................ 29
Prepared statement........................................... 31
Supplemental submitted material.............................. 72
Barnes, Ph.D., Andrew, Director of Food Security, Food for the
Hungry, Washington, D.C.; on behalf of Alliance for Food Aid... 34
Prepared statement........................................... 36
Supplemental submitted material.............................. 78
Guroff, Avram ``Buzz,'' Senior Vice President, Food Security and
Specialty Crops Portfolio, ACDI/VOCA (Agricultural Cooperative
Development International/Volunteers in Overseas Cooperative
Assistance), Washington, D.C................................... 40
Prepared statement........................................... 41
Response to submitted question............................... 81
Minot, Ph.D., Nicholas W., Senior Research Fellow, Markets,
Trade, and Institutions Division, International Food Policy
Research Institute, Washington, D.C............................ 44
Prepared statement........................................... 46
Supplemental submitted material.............................. 79
Dillaha III, Ph.D., P.E., Theo A., Professor of Biological
Systems Engineering and Program Director, Sustainable
Agriculture and Natural Resource Management (SANREM)
Collaborative Research Support Program (CRSP), Office of
International Research, Education, and Development, Virginia
Polytechnic Institute and State University, Blacksburg,
Blacksburg, VA................................................. 54
Prepared statement........................................... 56
Response to submitted question............................... 80
Submitted Material
Fowler, Dr. Cary, Executive Director, Global Crop Diversity
Trust, submitted statement..................................... 69
Paarlberg, Ph.D., Robert, B.F. Johnson Professor of Political
Science, Wellesley College, submitted statement................ 67
HEARING TO REVIEW EFFORTS TO DELIVER INTERNATIONAL FOOD AID AND PROVIDE
FOREIGN AGRICULTURAL DEVELOPMENT ASSISTANCE
----------
WEDNESDAY, JULY 16, 2008
House of Representatives,
Subcommittee on Specialty Crops, Rural Development,
and Foreign Agriculture,
Committee on Agriculture,
Washington, D.C.
The Subcommittee met, pursuant to call, at 10:02 a.m., in
Room 1300 of the Longworth House Office Building, Hon. Mike
McIntyre [Chairman of the Subcommittee] presiding.
Members present: Representatives McIntyre, Salazar, Barrow,
Pomeroy, Musgrave, Smith, Fortenberry, and Moran.
Staff present: Aleta Botts, Alejandra Gonzalez-Arias, John
Riley, April Slayton, Mike Dunlap, and Jamie Weyer.
OPENING STATEMENT OF HON. MIKE McINTYRE, A REPRESENTATIVE IN
CONGRESS FROM NORTH CAROLINA
The Chairman. This hearing of the Subcommittee on Specialty
Crops, Rural Development and Foreign Agriculture will come to
order. I am Congressman Mike McIntyre from southeastern North
Carolina. Welcome to all of you for coming today and as shown
by the presence of the number of people here, this obviously is
a hearing that I believe will iterate--will be generating great
interest. I would like to welcome everyone here to the
Subcommittee's efforts to deliver international food aid and
provide foreign agricultural development assistance in the form
of a hearing to discuss these issues. I am pleased to welcome
Mr. Michael Yost, the Administrator of the Foreign Agricultural
Service, and Mr. James Kunder, acting Deputy Administrator of
the U.S. Agency for International Development. Welcome,
gentlemen.
The world is facing an unprecedented challenge to its food
and agricultural systems. Just last week, the U.S. Department
of Agriculture released a food security assessment that
projects that the food security situation in 70 developing
countries will deteriorate over the next decade, and the number
of hungry people will increase by 16 percent in the next year
alone.
This hearing will consider two key pieces of the continuum
of options to address this crisis: immediate food aid and
longer term agricultural development assistance. So we want to
look at both the short term, the immediate crisis, as well as
the longer view so that we can plan for the future.
First, with regard to food aid, the United States is by far
the largest contributor of food aid worldwide, giving over half
of the annual total worldwide. I am grateful that the good Lord
has blessed our land with plenty that we can do this and I
think we should count our blessings and share that cornucopia
with others. Worldwide, the act of breaking bread with another
person symbolizes a fellowship, a kinship with another human
being and not only nourishes the body but nourishes the soul.
Our food aid accomplishes this on a huge scale, something that
we all, in this room, know the United States needs to do in
this time of international crisis. The United States has
stepped up to respond to the crisis through additional
resources, as well. The recently enacted supplemental
appropriations bill provides over $1.2 billion in additional
funds for 2008 and 2009 with the P.L. 480 Food for Peace
program taking our contribution for food aid to an even higher
level.
We all are interested in learning the status of current
food aid efforts, what is expected in the next year with regard
to regions at risk of famine, including Ethiopia, a place that
I have been to twice in the last 10 months and Somalia. And how
the resources recently provided by the Congress and the
supplemental appropriations bill will be used.
Now, with regard to agricultural development, the United
States, we realize, must continue to provide food aid to
address crisis situations. However, we cannot be short-sighted.
We have to consider how funds to provide the agricultural
development can be used to enhance the ability of the
developing nations themselves to produce food. After all, food
provided directly today does not necessarily always lead to a
full stomach for tomorrow. As Members of the Agriculture
Committee, we are uniquely aware of the plentiful bounty that
we do have in this country, with which we have been blessed in
the forms of its fields and our resources. But, beyond that, we
also understand the importance that supply chains have that
deliver inputs and transport harvests; the markets that
facilitate interactions between buyer and seller; and the well
developed system of land-grant institutions, which I know many
of us are proud of in our states, that conduct research and
extension programs--extension assistance to our farmers and our
ranchers and to farm families. Underlying all of this, our
legal, judicial and regulatory systems help protect private
property rights and other rights that we know are enshrined in
our Constitution and by law. All of these elements are critical
to our highly developed agricultural economy. Rarely are all of
them present in the economies of developing countries that are
experiencing food shortages, which is why we have to look at
the broader picture.
Agricultural development assistance competes with numerous
other foreign aid priorities and has, too often, lost in the
battle to these other priorities. The proportion of U.S.
development assistance for agriculture has declined from 25
percent of total development assistance in 1980 to less than
one percent last year. The World Bank has decreased its lending
to the agricultural sector from 30 percent in 1978 to eight
percent in 2006. We need to evaluate that level of commitment
from our own country and the developed world to measure the
increase that we need to have in agricultural production.
I hope the witnesses gathered today will provide answers to
the questions that have arisen about the state of our
agricultural development efforts with examples and statistics
like I have just shared. How can limited agricultural
development resources best be used with regard to particular
sectors, and for countries that are devoting their own
resources to the effort and have created a desirable regulatory
environment for agricultural development. What do we know about
the successes and the failures of existing programs and how can
we use those lessons to educate and enhance future development
efforts. Also, I want you to be thinking about how the United
States can do a better job of reducing the impact of the food
crisis on vulnerable populations through greater attention with
regard to agricultural development.
I would encourage the witnesses to use the 5 minutes that
they are provided for their statements to highlight the most
important points. Please do not read your statement, unless you
can read it all within 5 minutes. Otherwise, please select the
highlights and summarize those within the 5 minute time period,
given our time constraints today. Pursuant to Committee rules,
testimony by witnesses, along with questions and answers by
Members of the witnesses, will be stopped at 5 minutes. But
don't worry, your complete written testimony will be submitted,
in its entirety, in the record and we welcome that complete
statement.
[The prepared statement of Mr. McIntyre follows:]
Prepared Statement of Hon. Mike McIntyre, a Representative in Congress
From North Carolina
Good morning, and welcome to the Subcommittee's hearing on efforts
to deliver international food aid and provide foreign agricultural
development assistance. I am pleased to welcome Mr. Michael Yost, the
Administrator of the Foreign Agricultural Service, and Mr. James
Kunder, Acting Deputy Administrator of the U.S. Agency for
International Development.
The world is facing an unprecedented challenge to its food and
agricultural systems. Just last week, the U.S. Department of
Agriculture released a Food Security Assessment that projects that the
food security situation in 70 developing countries will deteriorate
over the next decade and the number of hungry people will increase by
16 percent in the next year alone.
This hearing will consider two key pieces of the continuum of
options to address this crisis: immediate food aid and longer-term
agricultural development assistance.
Food Aid
The United States is by far the largest contributor of food aid
worldwide, giving over half of the annual total. I am grateful that the
good Lord has blessed our country with plenty so we are in a position
to do this. Worldwide, the act of breaking bread with another person
symbolizes a fellowship, a kinship with another human being. Our food
aid accomplishes this simply on a larger scale.
The United States has stepped up to respond to the crisis through
additional resources. The recently enacted supplemental appropriations
bill provides over $1.2 billion in additional funds for 2008 and 2009
within the P.L. 480 Food for Peace program, taking our contribution to
food aid even higher.
I am interested in learning the status of current food aid efforts,
what is expected in the next year with regard to regions at risk of
famine, including Ethiopia and Somalia, and how the resources recently
provided by the Congress in the supplemental appropriations bill will
be used.
Agricultural Development
The United States must continue to provide food aid to address
crisis situations. However, we cannot be short-sighted. We have to
consider how funds we provide for agricultural development can be used
to enhance the ability of developing nations to produce food. After
all, food provided directly today does not necessarily lead to a full
stomach tomorrow.
As Members of the Agriculture Committee, we are uniquely aware of
the plentiful bounty we have in this country in the forms of its fields
and its resources. Beyond that, however, we also understand the
importance of the supply chains that deliver inputs and transport
harvests, the markets that facilitate interactions between buyer and
seller, and the well-developed system of land-grant institutions that
conduct research and extension assistance to our farmers and ranchers.
Underlying all of this, our legal, judicial, and regulatory systems
help protect private property and other rights enshrined in our
Constitution and other laws.
All of these elements are critical to our highly developed
agricultural economy. Rarely are all of them present in the economies
of developing countries experiencing food shortages.
Agricultural development assistance competes with numerous other
foreign aid priorities and has lost too often to these other
priorities. The proportion of U.S. development assistance for
agriculture has declined from 25 percent of total development
assistance in 1980 to less than one percent last year. The World Bank
has decreased its lending to the agricultural sector from 30 percent in
1978 to eight percent in 2006. We need to evaluate the level of
commitment of the United States and the developed world to measures to
increase agricultural production.
I hope the witnesses gathered today will provide answers to
questions that have arisen about the state of our agricultural
development efforts.
How can limited agricultural development resources be best used
with regard to particular sectors and for countries that are devoting
their own resources to the effort and have created a desirable
regulatory environment for agricultural development?
What do we know about the successes and failures of existing
programs and how can those lessons educate future development efforts?
How can the United States do a better job of reducing the impact of
the food crisis on vulnerable populations through greater attention on
agricultural development?
Conclusion
I would encourage witnesses to use the 5 minutes provided for their
statements to highlight the most important points in their testimony.
Pursuant to Committee rules, testimony by witnesses along with
questions and answers by Members of the witnesses will be stopped after
5 minutes. Your complete written testimony will be submitted in its
entirety in the record.
At this time, I would like to recognize the Ranking Member of the
Subcommittee, Representative Marilyn Musgrave, for any opening comments
that she may have.
The Chairman. I would now like to recognize the Ranking
Member, Mrs. Musgrave for an opening statement, and as a point
of personal privilege, let me just say what an honor it is to
work with her and I greatly respect her, her character and her
work here in Congress. Mrs. Musgrave.
OPENING STATEMENT OF HON. MARILYN N. MUSGRAVE, A REPRESENTATIVE
IN CONGRESS FROM COLORADO
Mrs. Musgrave. Thank you, so much, Mr. Chairman. I
appreciate you calling this hearing today to review the
international food aid and agricultural development programs.
As a Member of the House Hunger Caucus, these issues today are
of particular importance to me. A little over a year ago this
Subcommittee held a hearing to review food aid programs
operated by USAID and USDA as a precursor to the Committee's
work on the farm bill. That legislation was a catalyst to
streamline our international food aid programs and more
effectively meet the needs of millions of people throughout the
world who do not enjoy the freedom and prosperity that we
Americans, sometimes, take for granted.
For many years, the United States has been the leading
contributor of all kinds of foreign aid. As you said, Mr.
Chairman, especially food and development aid. Emergency food
aid is a big part of what we are able to provide to help people
survive in the face of acute hunger resulting from drought,
conflict or poor government, sometimes corrupt government. This
continued trend in rising commodity prices has a double edge
and we on the Agriculture Committee know that very well. While
producers can benefit from higher prices, the U.N.'s food
world--the U.N.'s World Food Programme estimates that higher
commodity prices will drive an added 130 million people towards
hunger, in addition to the 850 million people already suffering
from chronic malnutrition.
Congress recently stepped up efforts to help counter a near
doubling in the cost of food aid commodities with an additional
$1.2 billion to supplement current efforts to combat hunger
around the world. Today I look forward to hearing about how
those efforts are succeeding. Though emergency assistance is an
important component of U.S. aid around the world, agricultural
development is believed, by many, to be the very foundation of
sound economic progress. We are very proud of our ability to
provide resources to help feed the world, but I think that
everyone here would applaud the moment that those developing
countries are able to have a sustainable economy.
The United States has always been a leader in contributing
to a vast array of development and capacity building
initiatives. With the advent of significant, private investment
in development programs it is imperative that a consensus on
the direction of agricultural development be reached among all
contributing partners, here and abroad, to prevent duplication
of projects. Agricultural development, certainly, cannot happen
in a vacuum and I believe that the United States must also play
an active role in building the institutions of law, property
rights, which are critical to the long term success of
development efforts. We want to foster peace and stability in
these developing nations and that will diminish the need for
acute aid and allow leaders to turn their attention to building
the global economy.
As food and energy prices rise, the World Bank and the
World Food Programme have stated that much of the progress made
in the last decade has been eroded. Poor governments, weak
institutions, adverse weather and multiple approaches to aid
programs present tremendous challenges for those Congress has
entrusted with taxpayers hard earned money to help developing
countries.
I look forward to hearing from the witnesses today, and I
want to hear how they are overcoming these challenges. Thank
you very much, Mr. Chairman.
The Chairman. Thank you very much, Mrs. Musgrave. The Chair
will now request that other Members submit their opening
statements for the record so the witnesses may go ahead and
begin their testimony and we ensure that there is ample time
for questions by the Members.
[The prepared statements of Messers. Peterson, Goodlatte,
and Smith follow:]
Prepared Statement of Hon. Collin C. Peterson, a Representative in
Congress From Minnesota
Thank you, Chairman McIntyre for recognizing me to speak and for
holding this hearing. I also want to welcome the witnesses who have
joined us today and thank them for their testimony.
The need for food aid has grown and changed in significant ways
even just in the past few months. Administrator Yost from USDA and
Acting Deputy Administrator Kunder from USAID, we are interested to
hear how your agencies are responding to the increasing need for food
aid and what can be done to help you respond to immediate and long term
food assistance needs internationally.
The international aid organizations on today's second panel play an
integral role in delivering food aid and supporting long term
agricultural development in the countries where hunger and poverty are
most acute. Today, I hope they can share with us their experiences on
the ground where development programs have succeeded, where they have
failed and why.
While the food crisis is a major challenge facing people living in
poverty and organizations dedicated to helping them, this is also an
opportunity to invest in the long term ability of poor regions to
expand agricultural production to feed their people and create
successful businesses in their rural and agrarian communities. The
market is providing a clear signal to encourage production, but
unfortunately, due to a lack of roads, access to credit and other
factors, producers in many developing countries are not able to respond
sufficiently to the market. While meeting the immediate needs for food
continues to be a priority, I hope that our witnesses can offer insight
into the long term development that is going on and that needs to be
done in order to improve the ability of developing countries to meet
some of their own food needs.
Chairman McIntyre, thank you again for holding this hearing, and I
look forward to the testimony from our witnesses.
______
Prepared Statement of Hon. Bob Goodlatte, a Representative in Congress
From Virginia
I thank the Chairman for convening the hearing today, and for the
time our witnesses have taken to be here. Today's hearing is addressing
two very important issues: food aid and agricultural development
programs. Both of these programs have the potential to have a positive
impact on the lives of many people throughout the world through
emergency and long-term programs.
The U.S. provides more food aid than any other country in the
world. The recently passed farm bill reauthorized U.S. food aid and
development programs and expands tools needed for quick humanitarian
response, such as prepositioning commodities overseas. Our farmers and
ranchers produce the safest, most abundant, most affordable food supply
in the world and are proud of the role they play in helping those in
need.
Today, there are more people in need of urgent food aid than ever
before. Sudan continues to struggle with conflict which is affecting
over four million people in and around the country. Ethiopia is facing
a chronic crisis with over ten million people requiring emergency
assistance. And Zimbabwe has over five million people who are relying
on food assistance. These are just a few of the many countries in need.
While disruptions to crops, higher commodity prices, and growing
populations add to the strain on their own food systems, the
contributing factor of poor governance cannot be ignored. Today we will
hear testimony discussing how USAID is coordinating agricultural
development efforts through USDA and other partners.
Agricultural development can provide a firm foundation on which
countries can build their economy. It is important to pay attention to
the details of how those programs are designed and implemented, so I
look forward to hearing from the agencies and private organizations
involved in carrying out these projects. I am particularly interested
in hearing how the strategic approach USAID is using will overcome the
significant challenges facing our experts in the field.
Thank you, Mr. Chairman.
______
Prepared Statement of Hon. Adrian Smith, a Representative in Congress
From Nebraska
Good afternoon and thank you, Mr. Chairman.
The price of food and fuel has arrested the attention of
Nebraskans, the United States, and indeed the world. As all of us here
are aware, these increased costs have created great challenges for
lower income Americans, but have had an even greater impact on the poor
of developing countries. The budgets of both government and food aid
organizations have been stretched as they try to provide more
assistance with fewer resources. We are here today to consider tools to
meet these challenges.
Our food aid and agricultural development assistance dollars should
be spent to help developing nations become capable of sustained
economic growth. We can accomplish this objective through education,
research into production systems best suited to different regions, free
trade, and application of agricultural technologies.
I personally find science-based solutions and new technologies
exciting. They are the future of agriculture. Biotechnology has
revolutionized agriculture in the United States, and genetically
modified crops may lead to the second green revolution in the
developing world. These technologies could help us to overcome the
challenges of feeding an increasing number of people, dealing with
extreme weather conditions, combating new and old diseases, and
increasing efficiency with fewer inputs.
I want to thank our witness for testifying, and the Committee and
the Chairman for holding this hearing. I look forward to working with
you in the future.
The Chairman. So with that, we will begin with our first
panel, and Michael Yost, Administrator of the USDA Foreign
Agricultural Service, James Kunder, acting Deputy Administrator
of the Agency for International Development. Gentlemen, as I
said a moment ago, we welcome you here today. Mr. Yost, if you
would please begin.
STATEMENT OF MICHAEL W. YOST, ADMINISTRATOR,
FOREIGN AGRICULTURAL SERVICE, U.S. DEPARTMENT OF AGRICULTURE,
WASHINGTON, D.C.
Mr. Yost. Mr. Chairman, Members of the Subcommittee, I am
pleased to appear before you today. The U.S. Department of
Agriculture, the U.S. Agency for International Development and
all of our partner agencies and organizations are proud of the
role we play in helping countries overcome hunger and
malnutrition. USDA's Foreign Agriculture Service administrates
two non-emergency food assistance programs that are making a
difference in the lives of poor and hungry people: the Food for
Progress (FFP) program and the McGovern-Dole International Food
for Education and Child Nutrition (McGovern-Dole) program.
The FFP is targeted to countries that are making strides
toward democracy and private enterprise. The program emphasizes
private sector agricultural and economic development to enhance
food security. The McGovern-Dole program supports education,
child development and food security in low-income, food-deficit
countries that are committed to universal education. The
program provides U.S. agricultural products, as well as
financial and technical assistance, to our partners, who combat
hunger and strengthen the quality and the access to education.
FAS works closely on food assistance and agricultural
development projects with USDA's Farm Service Agency, USAID,
and other partners, including private voluntary organizations
and inter-governmental organizations. We base our priority
countries on factors such as per capita income levels,
prevalence of under-nourishment, moving toward freedom, adult
literacy rates, government commitment to education and degree,
if any, of civil conflict.
Food aid is just one component in our global assistance
efforts. Trade-capacity building allows USDA to lend its
expertise in agriculture, food and trade to support market-
based agricultural development and help countries create
regulatory systems that enable them to produce safe products
for domestic consumption and for trade with other markets.
The Cochran Fellowship Program helps middle-income
countries and emerging democracies develop the capacity to
trade through short-term, market-orientated, agricultural
training in the United States. The Norman E. Borlaug
International Agricultural Science and Technology Fellows
Program provides collaborative research training at U.S.
universities, USDA or other government agencies and non-
governmental organizations that foster the scientific and
technological advances in agriculture.
USDA also has a critical role in the economic, political
and security environment in Afghanistan and Iraq. In
Afghanistan, 80 percent of the population is involved in
farming and herding. In Iraq, the agriculture there is the
second largest contributor to the country's gross domestic
product and employs 25 percent of the labor force, making it
the largest employer in Iraq. USDA provides expertise in
agricultural policy and development in these two countries. We
coordinate our efforts through an interagency process that
includes, among others, the U.S. Department of State, the U.S.
Department of Defense, and USAID.
Our most notable role has been through USDA employees who
have volunteered as advisors on Provincial Reconstruction Teams
(PRT), which typically consist of military units of 50 to 100
personnel with two to three U.S. Government civilian advisors.
PRT activities include soil and water conservation, irrigation
and water management, grain and seed storage, post-harvest loss
reduction, market system development, livestock health,
nutrition, and breeding. Since 2003 and 2006, respectively,
USDA has deployed 48 volunteers in Afghanistan and 20 to Iraq
from nine different USDA agencies.
The Administration's Fiscal Year 2009 budget requests $12.5
million for the Office of the Secretary, which is crucial for
USDA to have the resources to support agriculture
reconstruction and development in both of these countries.
High commodity costs, combined with increased
transportation costs, have tightened the amount of food aid
that can be provided under the limited program budgets. We have
taken innovative and bold steps to ensure critical needs are
met. A year ago, USDA initiated the Stocks-for-Food program,
exchanging government owned commodities, acquired through
forfeitures of marketing assistance loans for processed
products to be distributed through USDA domestic and
international food assistance food programs. Stocks-for-Food is
providing approximately $120 million in funds, with $100
million going to the emergency food assistance program, and
more than $20 million to benefit over 650,000 children and
mothers in the McGovern-Dole Program.
Last month, Agriculture Secretary Schafer laid out the
United States' integrated three-pronged strategy to combat
rising global food prices. First, the United States will target
countries made vulnerable by rising food prices. To that end,
President Bush directed USDA to draw down the Bill Emerson
Humanitarian Trust, which made $200 million worth of total
assistance immediately available through P.L. 480 Title II
Program. We also greatly appreciate the supplemental
appropriations provided by Congress for P.L. 480 Title II
Program food aid in Fiscal Year 2008 and the additional bridge
funding provided for Fiscal Year 2009. Second, we will provide
developmental assistance to countries capable of rapidly
increasing stable food production, such as through the trade-
capacity building programs that I previously talked about. And
third, we will support trade liberalization, increasing the use
of advanced agricultural technology.
The United States is encouraging other governments to lift
restrictions on agricultural exports, adapt science-based
regulations that promote research and adoption of innovative
technologies, such as biotechnology and conclude an ambitious
agreement to the Doha Development Agenda of the World Trade
Organization this year. While we will continue to deal with a
variety of food assistance challenges in the years ahead,
together we will remain focused on our primary goal to ensure
that the food needs of the poor and hungry are met.
This concludes my statement. I look forward to answering
any questions.
[The prepared statement of Mr. Yost follows:]
Prepared Statement of Michael W. Yost, Administrator, Foreign
Agricultural Service, U.S. Department of Agriculture, Washington, D.C.
Mr. Chairman, Members of the Subcommittee, I am pleased to appear
before you today with James Kunder, Acting Deputy Administrator of the
U.S. Agency for International Development (USAID). The U.S. Department
of Agriculture, USAID, and all of our partner agencies and
organizations are proud of the role we play in helping countries
overcome hunger and malnutrition. I will review USDA's efforts to
deliver international food and agricultural development assistance.
Food Assistance Programs
The two food assistance programs administered by USDA's Foreign
Agricultural Service (FAS) are making a difference in the lives of poor
and hungry people: the Food for Progress (FFP) Program and the
McGovern-Dole International Food for Education and Child Nutrition
(McGovern-Dole) Program. These programs provide international
assistance and support development activities that alleviate hunger and
improve nutrition, education, and agriculture in some of the world's
poorest countries.
FFP is targeted to countries that are making strides toward
democracy and private enterprise. The program emphasizes private sector
agricultural and economic development and enhanced food security in
recipient countries. In Fiscal Year 2007, USDA implemented 21 Food for
Progress agreements in 15 countries with a total program value of
nearly $120 million. Ongoing activities are reaching well over one
million beneficiaries, including farmers and their families, community
members, cooperatives, producer groups, and small agribusinesses.
Activities have included improving agricultural techniques and
marketing systems, providing education to farmers, helping to develop
cooperatives, teaching irrigation and land conservation techniques,
supporting agribusinesses and microcredit enterprises, and other
activities that build the capacity to trade.
The McGovern-Dole Program supports education, child development,
and food security in low-income, food-deficit countries that are
committed to universal education. The program provides donated U.S.
agricultural products, as well as financial and technical assistance,
to our partners, who creatively combat hunger and strengthen the
quality of and access to education. In addition to providing food for
direct distribution, USDA has provided cash resources for school-
related infrastructure improvements, teacher and parent-teacher
association training, and school gardens. Since 2000, the McGovern-Dole
Program has provided meals to feed more than 22 million children in 41
countries and boosted school attendance.
For both the FFP and McGovern-Dole Programs, FAS works closely on
food assistance and agriculture development projects with USDA's Farm
Service Agency, USAID, and our partners, including private voluntary
organizations (PVOs), cooperatives, intergovernmental organizations,
foreign governments, and the United Nations World Food Programme. Each
fiscal year it is necessary to:
Determine priority countries based on the objectives of each
program and factors such as per capita income levels,
prevalence of undernourishment, movement toward freedom, adult
literacy rates, government commitment to education, and degree,
if any, of civil conflict; and
Evaluate and select proposals based on specific criteria.
These criteria are program-specific and may include assurances
that commercial markets will not be disrupted; tangible
benefits exist 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.
Trade-Capacity Building
Food aid is just one component in our global assistance efforts.
Trade-capacity building (TCB) allows USDA to lend its expertise in
agriculture, food, and trade to support market-based agricultural
development and help countries create regulatory systems that enable
them to produce safe products for domestic consumption and for trade
with other markets, leading to economic development and growth.
Because of limited FAS resources, TCB is a shining example of how
we coordinate with other agencies within USDA, and other parts of the
U.S. Government, as well as with universities, PVOs, and the private
sector. For example, we rely on the technical expertise of USDA's Food
Safety and Inspection Service (FSIS) to conduct food safety seminars,
USDA's Animal and Plant Health Inspection Service (APHIS) to explain
U.S. import requirements, and USDA's Cooperative State Research,
Education, and Extension Service (CSREES) to connect us with experts at
land-grant and historically-black colleges and universities. We all
have a common goal to provide the means for people to lift themselves
and their countries out of poverty and into sustainable and ultimately
viable economies that can trade in the world market.
Our TCB activities with developing and transitional countries
facilitate trade, promote food security, and increase the ability of
developing nations to participate in global agricultural markets.
For example, our Cochran Fellowship Program helps middle-income
countries and emerging democracies develop the capacity to trade
through short-term, market-oriented agricultural training in the United
States targeted at senior and mid-level specialists and administrators
from the public and private sectors. The program helps eligible
countries develop agricultural systems that meet the food needs of
their citizens and strengthens and enhances trade linkages between
eligible countries and agricultural interests in the United States.
Since its inception in 1984, the Cochran Program has provided
training for more than 13,000 international participants from 103
countries worldwide, including the President of Albania, the Prime
Minister of Moldova, and Madagascar's Minister of Land Reform, Fields,
and Urban Planning.
The Norman E. Borlaug International Agricultural Science and
Technology Fellows Program provides collaborative research training for
entry-level international agricultural research scientists and
policymakers from developing and middle-income countries. Training
takes place at U.S. universities, USDA or other government agencies,
private companies, not-for-profit institutions or international
agricultural research centers through exchanges that foster the
transfer of scientific and technological advances in agriculture, and
that address obstacles to the adoption of technology, such as
ineffectual policies and regulations.
Since 2004, the Borlaug Program has grown from training 33 Fellows
from five countries to 310 Fellows from 40 countries in 2008. Notable
graduates from the Borlaug Program include the Director of Animal
Industry and Fisheries in Uganda's Ministry of Agriculture, the
Assistant Director for Nigeria's National Institute of Agronomic
Research, and the Director of the Quality Mark and Certifications
Department in Oman's Ministry of Agriculture.
FAS' Trade and Investment Missions (TIMs) target emerging markets
and free trade agreement (FTA) countries to promote two-way trade and
investment. The missions form partnerships between local agribusinesses
and U.S. financiers and agribusinesses. The missions provide U.S.
participants with focused one-on-one meetings with host country
business representatives. In addition to furthering business
opportunities, these discussions also identify and address trade
barriers. Financial support to U.S. and host country businesses is
facilitated through the Export-Import Bank and other investment
brokers.
TIMs have been conducted in many countries and regions. Since 2005,
missions to East Africa, the Republic of Georgia, Kazakhstan, North
Africa, Southern Africa, and West and Central Africa have generated an
estimated $45.8 million in two-way trade.
How These Programs Work Together
Let me give you an example of how FAS weaves all these programs
together in one region of the world to provide an integrated approach
to developing stable, secure economies that can become reliable trade
partners and markets for U.S. agricultural products now and in the
future. The Dominican Republic-Central America Free Trade Agreement
(CAFTA-DR) is notable for being the first U.S. trade agreement that
includes trade capacity building in its structure. We are using all of
our tools--food and technical assistance, trade-capacity building and
training programs--to help our partners in this region realize the
benefits of free trade.
For example, in Honduras, USDA is working with Catholic Relief
Services (CRS) to implement a McGovern-Dole Program agreement to
improve access to quality education in 15 Honduran municipalities where
malnutrition exceeds 60 percent. In 2006, CRS used 4,400 metric tons of
U.S.-donated food valued at $3.4 million to provide daily meals to more
than 32,700 students in 658 elementary schools. Take-home rations were
delivered to more than 13,000 children under the age of 5. The free
school breakfasts and dry rations have allowed parents to use their
resources for other purposes. The project also included the delivery of
take-home rations to nearly 7,000 pregnant women and new mothers.
Several complementary activities are being supported by this
project, which will improve sustainability, education, and hygiene.
More than 120 gardens or fish ponds have been built, teaching parents
and schoolchildren new ways to produce food and providing food and
income for the schools. Elementary and pre-school teachers from the
schools continue to receive training through organized workshops in
mathematics and Spanish. The program has improved sanitation systems
and infrastructure for 77 of the neediest 100 schools. Work is
continuing at the remaining 23 schools. Employment opportunities have
been created through handling and distribution of the food and the
construction of the new infrastructure.
In Guatemala, FINCA International, a PVO, implemented an FFP
agreement in 2006 that used 8,000 tons of U.S. soybean meal and 2,000
tons of U.S. tallow to generate $3.2 million in proceeds to support a
micro-credit program. The proceeds were used to develop a village
banking program tailored to the specific needs of Guatemala's rural
entrepreneurs. The program brings neighbors together, giving them the
collective power to disburse, invest, and collect loan capital. Clients
report improved earnings and family nutrition, high loan repayment
rates, and increased empowerment. Last August, former Agriculture
Secretary Mike Johanns met with Guatemalan women who had used these
loans to develop small businesses, all of which were generating income
to support their families.
Also during this trip, former Secretary Johanns announced that USDA
would lead an agribusiness trade and investment mission to the CAFTA-DR
region in the near future. This mission will provide an excellent
opportunity for U.S. and Central American agribusinesses to develop
commercial ties, expand two-way trade, and promote foreign direct
investment.
In Nicaragua, Cochran Fellowship Program alumni made valuable
contributions to improving their country's national trade policies and
regulatory frameworks, resulting in increased market access for U.S.
agricultural products. The four alumni received Cochran training in
agricultural biotechnology. Upon their return home, they provided
expert consultations to the Health Commission of the Nicaraguan
National Assembly, which enabled the Commission to send a positive
report on a comprehensive Biosafety Bill to the President of the
National Assembly.
Under the Borlaug Program, USDA has formed a partnership with the
World Cocoa Foundation to provide a specialized program to help the
cocoa industry in CAFTA-DR countries, Africa, and South East Asia
combat cocoa pests and diseases, build trade and scientific capacity,
and improve regional cocoa production and market access. USDA is
seeking a total of 14 fellows from these cocoa-producing countries--
four from CAFTA-DR, seven from Africa, and three from South East Asia--
for this new initiative.
Reconstruction and Stabilization in Afghanistan and Iraq
Finally, I would like to discuss USDA's role in rehabilitating the
agricultural sectors in Afghanistan and Iraq. Our assistance in these
efforts is a critical component to the economic, political, and
security environment in both countries. In Afghanistan, 80 percent of
the population is involved in farming and herding. In Iraq, agriculture
is the second largest contributor to the country's gross domestic
product and employs 25 percent of the labor force, making it the
largest employer in Iraq.
USDA provides expertise in agricultural policy and development in
these two countries. We coordinate our efforts with and through an
interagency process that includes, among others, the U.S. Department of
State, the U.S. Department of Defense (DOD), and USAID. Again, we draw
from a full range of resources both here in the United States and as
much as possible in-country to facilitate technical assistance,
exchanges, and university extension programs to demonstrate sound
agricultural and regulatory practices.
Our most notable role has been through USDA employees, who have
volunteered as advisors on Provincial Reconstruction Teams (PRT), which
typically consist of military units of 50-100 personnel with two to
three civilian U.S. Government advisors. PRT activities include soil
and water conservation, irrigation and water management, grain and seed
storage, post-harvest loss reduction, market system development, and
livestock health, nutrition, and breeding. Since 2003 and 2006,
respectively, USDA has deployed 48 volunteers to Afghanistan and 20 to
Iraq from nine different USDA agencies, including the Agricultural
Marketing Service; Animal and Plant Health Inspection Service;
Cooperative State Research, Education, and Extension Service; Farm
Service Agency; FSIS; FAS; Forest Service; Natural Resources
Conservation Service (NRCS); and Rural Development. Of these agencies,
NRCS has provided the most employees.
The Administration's Fiscal Year 2009 budget request includes $12.5
million in the Office of the Secretary to help support the costs of
participating in these activities in both Iraq and Afghanistan.
Agricultural reconstruction and development are crucial for
establishing stability in both of these countries, and USDA needs
dedicated funding to have the resources needed for its staff to play an
effective role in achieving that goal.
High Food Prices
High commodity costs, combined with increased transportation costs,
have tightened the amount of food aid that can be provided under
limited program budgets, but we have taken innovative and bold steps to
ensure critical needs are met.
About a year ago, we announced that USDA would exchange government-
owned commodities for further processed products to be distributed
through USDA domestic and international food assistance programs. We
call this new initiative ``Stocks-for-Food.'' The government-owned
commodities were acquired through forfeitures of marketing assistance
loans to farmers, and include wheat, corn, soybeans, cotton, peanuts,
and rice.
Stocks-for-Food is providing approximately $120 million in funds,
with $100 million going toward The Emergency Food Assistance Program--
one of our domestic food aid programs--and more than $20 million to
benefit over 650,000 children and mothers in several low-income
countries through the McGovern-Dole Program.
The issue of high food prices has received the attention of the
world food aid community as well as world leaders. In response,
President Bush directed USDA to draw down the Bill Emerson Humanitarian
Trust, which made $200 million of total assistance immediately
available through the P.L. 480 Title II Program to address the impact
of rising commodity prices on U.S. emergency food aid programs, using
the funds to meet unanticipated food aid needs in Africa and elsewhere.
We greatly appreciate the work between the Administration and
Congress to provide $850 million in supplemental appropriations for
P.L. 480 Title II Program food aid in Fiscal Year 2008 and $395 million
in additional funds to support the Title II program in Fiscal Year 2009
to address the most immediate needs and alleviate systemic problems.
At the High-Level Conference on World Food Security in Rome last
month, Agriculture Secretary Schafer laid out the United States'
integrated, three-pronged strategy to combat rising food prices. First,
the United States will target countries made vulnerable by rising food
prices. Second, we will provide development assistance to countries
capable of rapidly increasing staple food production. And third, we
will support trade liberalization and increasing the use of advanced
agricultural technologies.
The United States encourages other governments to conclude an
ambitious agreement in the Doha Development Agenda of the World Trade
Organization this year that increases market access for agricultural
products and reduces trade-distorting subsidies; lifts restrictions on
agricultural exports; and expands research, promotes science-based
regulations, and encourages the adoption of innovative technologies,
including biotechnology.
Conclusion
While we will continue to deal with a variety of food assistance
challenges in the years ahead, together we will remain focused on our
primary goal--to ensure that the food needs of the poor and the hungry
are met.
This concludes my statement. I look forward to answering any
questions you may have. Thank you.
The Chairman. Thank you, sir. Thank you very much. Mr.
Kunder.
STATEMENT OF JAMES R. KUNDER, ACTING DEPUTY
ADMINISTRATOR, U.S. AGENCY FOR INTERNATIONAL
DEVELOPMENT, WASHINGTON, D.C.
Mr. Kunder. Thank you, Mr. Chairman. We very much
appreciate your holding this hearing today. I think this is one
of the most critical foreign policy issues facing our country,
not only because of the human suffering that you mentioned, but
because of the potential for instability in a number of
critical countries around the world. What I tried to do in my
testimony is talk about the nature of the current crisis we are
facing. There are a lot of short term factors that are playing
into this crisis, such as the drought that you mentioned in the
Horn of Africa affecting Ethiopia and Somalia, increased
petroleum prices, which obviously affect the utilization of
fertilizer, and so forth, but essentially what I argue in my
testimony is that we are facing a significant structural change
in global supply and demand.
During the 1970s and 1980s, global food production
increases were averaging in the three to four percent rate.
Those have now declined to one percent a year, and given the
fact that we are talking about a global population increase of
about 1.15 percent a year, and in the developing countries,
more like 1\1/2\ percent a year. We are facing a structural
supply and demand situation that will require long term
sustained efforts on the part of the U.S. Government and other
donors around the world.
I cite in my testimony that this is not a change without
some mixed benefits. Obviously, there are opportunities not
only for American farmers; there are opportunities for poor
farmers in the developing world. Zambia, which had,
historically, a grain surplus, is now selling its grain. That
means African farmers are benefiting from increased sales. But
overall, we have a structural imbalance that we are going to
have to address. I summarize in my statement the three basic
approaches that the U.S. Government is taking.
One is emergency food aid for the vulnerable, that the
Ranking Minority Member cited, who simply don't have access to
food. And not only is that a question of providing food, but
certainly USAID's experience in 50 years of dealing with these
problems around the developing world, it is primarily a
purchasing power problem. There may be food available on the
markets; the very poor, the bottom billion that we talk about
around the world, simply can't afford it. So what we are trying
to address is not only availability of food, but availability
of credit and incomes, micro-lending programs that will give
the poorest of the poor an opportunity to buy their own food.
The second is we are looking at productivity increases
where we think we can get an immediate bang for the buck in
increased production in the developing world. To answer the
part of your question, Mr. Chairman, as soon as we got that
additional supplemental funding from the Congress, we have been
identifying those countries in Africa and elsewhere where we
believe an immediate infusion of additional foreign aid
assistance could dramatically increase production of staple
crops in the short term.
And the third part of this equation is long-term trade
facilitation, and again I would agree with what the Ranking
Minority Member said. This is not just a question of increased
trade, but it is also a question of macro-economic policy
creating an environment where free markets will thrive around
the world and we can see increased production.
One last aspect that I touch on in my testimony is we have
to make sure we have good data, and are targeting the aid that
the American taxpayers are making available to us. USAID
traditionally funds the so-called FEWS NET program, the Famine
Early Warning System. This is a combination of satellite
tracking and local monitoring of food prices. We have now
extended the FEWS NET system into urban areas around the world,
which face the greatest potential for instability in this
environment. The overall trend, I report in my testimony,
within the U.S. Government, in terms of investing in all of
these agriculture research, agriculture development issues, has
in fact been downward. And that trend, over the last 20 years,
is paralleled by the European foreign aid donors and all the
other major donors around the country. And I think your
diagnosis is correct, Mr. Chairman, what has happened is not a
lack of attention or lack of interest in this, but simply our
desire as a government to address other critical priorities
like the global AIDS pandemic, and so forth, have crowded out
agricultural funding. And certainly, in our 2009 request we are
increasing those levels and I would posit that we have to get
that investment back up, both with our agricultural
universities and in partnership with the U.S. private sector.
We very much appreciate the assistance of the Congress in
raising the appropriation levels that we asked for in Fiscal
Year 2008 and 2009. I would just add one additional item to
that. USAID is in the business of trying to rebuild our
staffing levels. We once had a premier cadre of agricultural--
American agricultural--specialists that we could have around
the world assisting local farmers. That staffing level has
dramatically eroded over the years, so from our perspective, we
need to build up both our dollar amounts and also our technical
staffing. We work very closely with the United States
Department of Agriculture to make sure that we have technical
experts around the world, but we simply don't have enough
technical officers out there working with the exchange programs
and the other critical interventions.
So that summarizes my statement, Mr. Chairman. I am glad to
answer any questions you have. Thank you.
[The prepared statement of Mr. Kunder follows:]
Prepared Statement of James R. Kunder, Acting Deputy Administrator,
U.S. Agency for International Development, Washington, D.C.
Thank you Chairman McIntyre and distinguished Members of the
Committee. I appreciate the opportunity to be here today to address
this important topic.
We are in the midst of a global food crisis unlike other food
crises we have faced in the past half century, one not caused by
natural disasters, conflict or any single event such as drought. It is
not localized--instead it is pervasive and widespread, affecting poor
people in developing countries severely. It is one that has
demonstrated how worldwide markets transmit price rises rapidly,
underscoring the need for global solutions.
The Members of this Committee are familiar with the new reality we
face; Last year, the international food price index rose by 27.1%,
compared with just 14.4% in 2006. So far from April 2007 to April 2008,
the index is up more than 45%, and the prices of some major staples
have increased even more. Dwindling global stocks of grain make prices
even more sensitive to shocks, whether from a drought in Australia or
floods in our Midwest. When countries react to high prices or tight
supplies by hindering trade, the global food system functions less
efficiently, further exacerbating price volatility.
While sharply higher prices have been welcome news for many
farmers, for the world's poor subsisting on $1/day or less they can
mean deprivation and real hunger. The World Bank estimates that ranks
of the chronically food insecure have grown, due to the impact of high
prices, by over 100 million in the past year--to nearly 982 million. In
addition to current estimates of 75 to 100 million people whose needs
require immediate response, over two billion people, more than \1/3\ of
humanity, are being seriously affected.
The rapidly increasing cost of food is also weakening the ability
of governments of both poor and middle-income countries to sustain
growth, protect the vulnerable, or even to maintain order. The fear of
food riots, even in some middle-income countries, presents a new
dynamic that puts pressure on sound decision-making for long term
growth and stability. The same high prices also limit our own ability
to respond to critical emergency hunger needs around the world through
our food aid programs.
In response to the challenge posed by rising food prices, President
Bush has called for a three-pronged strategy to the crisis resulting
from high global food prices. The first and most pressing component
involves expanding humanitarian assistance, the second increasing
agricultural productivity in at-risk regions, and the third, a vigorous
policy effort to promote agricultural trade and investment.
Our food assistance programs have to be more efficient and targeted
than ever. In Fiscal Year 2007, USAID provided more than two million
metric tons of P.L. 480 Title II commodities, worth $1.87 billion, that
reached an estimated 41 million beneficiaries in 56 countries around
the world. In Sudan alone, more than 350,000 metric tons of food
commodities, valued at $356 million, were provided to an estimated 6.4
million beneficiaries.
These amounts include approximately $1 billion annually to the U.N.
World Food Programme (WFP), or approximately 40 percent of all
contributions to the organization. We also contribute significant
international food aid through private voluntary organizations (PVOs),
and are committed to working with other donors, from both the
commercial and nonprofit sectors.
To assist in meeting these immediate needs, the United States has
taken various steps:
On April 14, President George W. Bush directed the Secretary of
Agriculture to draw down on the Bill Emerson Humanitarian Trust to meet
emergency food aid needs. The Emerson Trust is a food reserve of up to
four million metric tons of wheat, corn, sorghum, and rice administered
under the authority of the U.S. Secretary of Agriculture. The Secretary
of Agriculture may authorize the release of commodities from the
reserve to meet unanticipated emergency needs that cannot otherwise be
met under Title II of P.L. 480. This release was estimated to provide
$200 million in emergency food aid through USAID. This additional food
aid is being provided for emergency needs in Afghanistan, Ethiopia,
Kenya and Zimbabwe.
In addition, President Bush on May 1 requested $770 million in
additional allocations, including $395 million intended to preserve
price parity in existing food aid programs. These funds will allow
USAID's emergency food aid program partners to meet their ongoing
humanitarian obligations.
We thank Congress for passing the emergency supplemental spending
last month, with $850 million in P.L. 480 resources for Fiscal Year
2008. Working closely with USDA, within days of the President's
signature of the emergency supplemental, USAID initiated expedited
commodity procurement procedures to ensure rapid arrival of lifesaving
assistance.
Food for Peace has already provided significant assistance to the
drought emergency affecting the Horn of Africa, particularly Ethiopia
and Somalia. In Fiscal Year 2008 to date, more than 780,000 metric tons
of Title II food aid, valued at nearly $650 million, has been provided
to assist the region. With the new funding made available through the
supplemental appropriation, much more food will soon be in the
pipeline.
In summary, USAID's Food for Peace funding committed to address
food insecurity and price increases totaled $1.87 billion in Fiscal
Year 2007, with more than $1.53 billion to date in Fiscal Year 2008.
Additionally, the emergency supplemental appropriation makes available
in Fiscal Year 2009 $395 million for additional emergency food
assistance.
To aid in addressing the new challenges we face, I'd like to share
with you two new tools that will assist us in identifying populations
impacted by rising food prices. The urban poor are particularly
vulnerable to price increases because such a large portion of their
income goes to purchasing food. These new early warning tools,
developed by USAID's Famine Early Warning Systems Network (FEWS NET),
will allow us to monitor more closely emerging food security threats in
urban settings.
The first tool is an urban food market price watch, which tracks
price changes for staple foods in 20 countries. This price information
will provide advance warning to better target our food aid resources to
the most vulnerable. The second tool, which emerged from a workshop
with private voluntary organizations and World Food Programme experts,
is an urban food aid programming manual that will allow us to better
target and deliver food aid to those most impacted by rising food
prices.
As I have stressed, food and emergency assistance are short-term
measures; they are critical tools but food aid alone will not solve the
food crisis. Our approach links those emergency tools to growth in
agricultural production, access to markets and advancement of global
policy solutions that foster trade and investment in agriculture.
In its invitation, the Committee also asked for information about
our agricultural development efforts--essentially the second thrust of
our three-part effort in humanitarian assistance, growth in
agricultural productivity, and sound global policies.
Agricultural productivity in developing countries grew at between
three and four percent per year during the 1970s and 1980s. These gains
fueled broad economic growth and marked reductions in hunger and
poverty; food became both more available and more affordable for
literally billions of the world's people. Now, annual agricultural
productivity growth rates in the developing world are less than 1%--a
rate that will not keep up with rising demands from ever-larger
populations.
A coordinated global effort will be required to reverse the
downward trend in productivity growth, and engagement by the United
States as a leader will be essential. We have the world's largest and
most diversified agricultural research capability, in our partnerships
with USDA, the land-grant universities and in the private sector. Our
seed, fertilizer and food industries represent tremendous resources in
strengthening markets, reducing losses and generating economic gains
through value addition.
Many of the threats faced by agriculture are global--for example
the new stem rust disease of wheat spreading in Africa and Asia that
Norman Borlaug has warned of. By working with the International
Agricultural Research Centers and partners in Africa and India and here
at home, USAID and USDA have combined forces to reduce the impact of an
epidemic overseas and at the same time help protect American farmers
and consumers from this devastating disease which could potentially
cause billions of dollars in losses. Sources of resistance have been
identified through research partnerships and resistant varieties are
being developed and multiplied.
Similarly, our work to stop the spread of Avian Influenza is
helping to protect both the health and livelihoods of millions of
people in Africa and Asia. Valuable information is gained and lessons
are learned that we can apply in similarly protecting our own nation's
health as well as its poultry industry and wildlife.
Agricultural growth and resilience not only lead to reduced needs
for food aid and emergency assistance, they open up new markets
opportunities for American farmers and business to reach new markets.
Traditionally, as developing countries invest more in crops, livestock
and irrigation, demand for feed grains, other commodities and
technology increases.
USAID has a proven track-record of promoting agricultural growth in
many countries--we are seeing remarkably positive trends in countries
that invest in technology and infrastructure, and build markets and
trade that helps farms access the inputs they need and market the
output they produce. Through the President's Initiative to End Hunger
in Africa (IEHA), we have focused squarely on productivity, markets and
trade--in other words, growth, but growth with special attention to the
most vulnerable. This vision has now been widely acknowledged as the
only sustainable means of reducing hunger.
Unfortunately, in recent years funding for agricultural development
investments have declined as we face budgetary constraints. Let me
stress that there has not been opposition to agricultural investment by
USAID. In fact, current and past leadership of USAID have called for
the need to do more in this vital sector. And within our budgetary
constraints, we have done what we can. However, support to some of our
most effective and strategic investments--for example in agricultural
biotechnology and the Consultative Group on International Agricultural
Research centers--had to be reduced.
Now that a renewed understanding of agriculture's vital importance
to combating hunger, poverty and even civil unrest has emerged, the
outlook for agricultural investment for FY 2009 has improved. USAID is
gearing up to provide renewed leadership to the global development
community. The emergency supplemental just passed by the Congress will
provide an additional $200 million in FY 2009 development assistance to
help us begin to mount an effective response to the crisis. Of that
amount, $50 million will support regional market development and local
procurement of major food crops, $130 million will target production
increases and markets in countries that have the potential to mount a
rapid production response, and $20 million will support science and
technology aimed at increasing productivity of food staples.
Our strategy focuses on increasing the availability and
affordability of food staples on which low-income people depend in the
most at-risk regions. We will do this by helping the agricultural
sector in those countries modernize, providing new opportunities for
millions of farm families, especially smallholders, to respond to the
market. We can achieve this vision by building a coalition that aligns
the resources of the U.S. Government with the commitment of the target
countries themselves, other donors and the private sector--both for-
profit and nonprofit.
Our investments will focus on restoring the growth in agricultural
productivity in the developing world, especially of key staple foods,
to levels that can meet rising demands. We will work to achieve rapid
growth in agricultural trade--making markets more efficient for both
low-income consumers and producers. The gains we make will actually
reduce the need for emergency food assistance, as communities and
nations make gains in ensuring their own food security. As we work
toward these vital objectives, we will continue to meet the needs of
those most vulnerable through both food assistance and emergency
resources, all the while helping them to rebuild their livelihoods and
resilience.
The Development Leadership Initiative recently endorsed by the
Congress will help us build the institutional capacity necessary to
lead in the global development community. Our partnership with the U.S.
University community through Collaborative Research Support Programs
(CRSPs), Higher Education for Development and other partnerships
remains strong, and are helping to build a new generation of scientists
and decision-makers from our partner countries ready to apply
technology, policy and marketing know-how to solving the problems
facing developing countries.
We are aligning our humanitarian and development assistance efforts
in new ways. We are coordinating our efforts to address the near-term
humanitarian crisis with the design of new programs that will build the
foundation--information, technology, institutions, policies, safety
nets--for the modernization of agriculture, transforming more small
producers into commercial enterprises. To be successful we must focus
our effort in agriculture while scaling them up to the level of the
challenge.
Following are the key elements of our vision:
First, we must halt the slide into hunger and absolute poverty.
Maintaining our global commitment to emergency food and nutrition
assistance, and expanding local purchase and IDA funding to quickly
reinforce productive safety nets (e.g. cash or food for work) and
livelihoods, we will stabilize the situation, beginning this year in
East and West Africa, and expanding to encompass other at-risk
countries.
Second, we must expand development and use of modern technology for
staple foods. We know that we can double yields of staple foods by
ensuring that small-holder producers access the tools of modern
agriculture--improved seeds, fertilizer, irrigation, dairy management.
This is an area for U.S. leadership. Through our universities and
industry, we are global leaders in the area of science and technology.
U.S. farmers are in the forefront of adoption of modern technologies
and practices. We see this very clearly in the area of biotech crops,
for example. We must dramatically expand the use of existing technology
and practices by small farmers, while also investing in longer-term
challenges to agricultural productivity--climate change, the high price
of fertilizer linked to high fuel prices, natural resource degradation,
competition for water resources, and emerging diseases such as avian
influenza or wheat stem rust.
To do this, we are expanding funding for research and development,
harnessing traditional breeding, biotechnology, geospatial technology
to guide resources management, as well as consider the role of advances
in nanotechnology and energy efficiency. We will expand our
partnerships with the biotechnology industry and the seed sector, U.S.
universities, the Consultative Group on International Agricultural
Research, and national research systems to leverage advance scientific
research while training a new generation of agricultural researchers.
Third, we must empower the private sector to deliver inputs and
information. More than ever before, agribusiness will take the lead in
getting up-to-date production and marketing information to smallholder
farmers. We must support small and medium enterprises as the key means
of delivering seeds and fertilizer to rural communities. That will mean
expanding support for business services, strengthening linkages between
public research and commercialization of technology, access to credit,
and policy reform to reduce the barriers to private sector investment.
Fourth, we need to expand market access and efficiency. We will
connect small-holder producers to the market by expanding rural roads
and information technology to provide access to market and price
information. To stimulate market-led growth, we will strengthen the
ability of producers to meet market standards--the quality, product
diversity, and safety standards that will generate opportunity for
commercial growth. Export restrictions, taxes and other hindrances to
market signals and producer responsiveness will be reduced or
eliminated. We will work to foster science-based regulatory policies
that will foster trade, particularly in food staples, as well as
investment by both the public and private sectors.
Fifth, we must work with the partner countries and the private
sector to expand access to financing. We must expand and strengthen
mechanisms to stimulate private investment in agriculture--from small
producers to the value chain industries that take the product to the
market. We must go beyond producers, however, and develop new
mechanisms to fund the larger agribusiness engaged in the value chain--
commodity importers, millers, processors, and distributors. Developing
country policies must foster renewed confidence on the part of the
financial sector that farming and other agro-enterprises are emerging
as principal drivers of economic growth.
Sixth, the United States must lead a global effort to promote
policies that support growth. This is, in effect, the third, longer
term dimension of the President's response to the food crisis. As we
engage our own government as well as other donors and the target
countries themselves, we will support further analysis and discussion
on policy dimensions and especially the successful conclusion of the
Doha agreement.
Seventh, we must reduce risks to food security for the poor. We
will align our humanitarian efforts with this growth strategy to
maximize the synergies between meeting basic needs and enhancing
productivity investments. This means linking our agricultural
investments to humanitarian interventions (e.g. diversifying diets,
delivering nutritional outreach alongside agricultural extension and
health services) making sure that as we deliver humanitarian aid, we
protect household productive assets and move families, communities, and
the agricultural sector towards a growth strategy. We will also ensure
that our productivity, market and finance activities build resilience
for small producers. We are engaging the PVO and NGO community more
comprehensively in ways that align with this growth strategy.
And finally, eighth, we need to develop a new coalition based on
commitment to a common agenda. The United States is a crucial part of a
global response to a global problem. To be effective, we must work as a
partner and engage leaders at the highest levels in the target
countries, regional economic organizations, the international
development community (UN, World Bank, regional banks, private
foundations) and the private sector (agrifood, seed, fertilizer
industry, and finance institutions).
In sum, our vision calls for an unprecedented humanitarian and
development assistance effort by the United States, distinguished by:
b Significant attention to staple foods;
b Action at scale with the problem;
b Real integration of targeted safety nets with wealth creation;
b Building the capacity in the target countries to carry the growth
process beyond our assistance;
b Partnership with the target countries to ensure the commitment to
policy and good governance needed to reach success. Our partner
countries must demonstrate political will to invest and set a
positive policy environment;
b Clear targets and metrics to gauge progress towards longer term
goals;
b A ``whole of government'' approach, uniting the resources of
multiple agencies;
b A coordinated effort with other donors; and
b A major role for the private sector in implementing this agenda.
We know we can increase food security in the world's poorest
countries--in both its supply and demand dimensions--through strategic
investments in agricultural development, markets and trade. The task of
reducing hunger is huge, but the moral imperative is compelling. And in
the long run, the cost of action will be less than the cost of
inaction.
The FY 2009 bridge funding just approved by the Congress is an
important step in the right direction. I urge the Members of this
Committee to help make United States' leadership in combating global
hunger all that it should be. No one is better positioned to lead--in
food assistance, in science and technology, and in fostering markets
and trade.
We are confident that, with U.S. leadership and investment, we can
stem and reverse the supply-demand imbalance that exists today in food
staples. Some of it will occur here at home, but some of it must occur
in countries where poor, food insecure populations generally make their
living in agriculture. We know how to do it--we know what works and
what does not; we know that we must rely much more on the private
sector and on broad alliances than was the case in the first Green
Revolution. We have new tools, and we need to use them: markets, trade
and science will transform our approach.
Political leadership can help solve this crisis. Over the past
months we have seen major commitments from the President and the
Congress, and from leaders around the world. Ban Ki-moon, Bob Zoellick
and Josette Sheeran have put the full force of their respective
organizations behind this effort. But U.S. leadership remains vital to
success and to the pursuit of a sustainable growth agenda for
agriculture.
Failure is not an option. Though I have concentrated on the problem
and its solution, we must never lose sight of the terrible human cost
of hunger. Even short term hunger can unalterably affect a child by
exposing him or her to disease, threatening normal cognitive
development and lifelong productivity, or, tragically, even early
death. Yet the problem posed by high food prices is one we know how to
solve--and in doing so we can also recommit to ending the scourge of
chronic hunger once and for all. Thank you.
The Chairman. Thank you. Excellent job. We appreciate that.
Let me go ahead and ask you, since you were summarizing some of
your points. You have the eight elements that you identify as
part of the vision of USAID to address the food crisis. Many of
these currently appear, in some form or fashion, in an existing
development where, I noticed that you mentioned that it looked
like, primarily, the concern was money and staffing. Are there
other elements that can or should be enhanced in these eight
items under the vision you have?
Mr. Kunder. Beyond the funding level, sir?
The Chairman. Right.
Mr. Kunder. Yes, certainly the staffing levels. We had a
U.S. foreign aid program, at one point during the Vietnam War,
we had 12,000 Americans we were sending around the world to
assist with health programs, education programs, agricultural
extension. I think it is common knowledge that when the Cold
War ended, we made a number of decisions, as a government, the
Administration and Congress, to eliminate tools of foreign
policy like the U.S. Information Agency. We made a decision
that we really didn't need to engage in the global struggle for
hearts and minds. In my view, sir, that was a mistake. The U.S.
Agency for International Development went from 12,000 American
officers, we are down to now about 1,200 officers. And I don't
want to paint all gloom and doom. We worked very closely with
the U.S. Department of Agriculture, with the Army Corps of
Engineers, with other parts of the U.S. Government, but we have
eroded the staffing to what I believe is a harmful level, in
terms of America's ability to respond to these kind of crises
when they arise. The second thing is we need to rebuild as many
of our partnerships with the land-grant universities. As the
staffing has gone down within USAID, we once had a much more
robust partnership with the land-grant universities. They are
an enormous benefit and tool that America has to contribute to
these kinds of crises, and one of the things that Administrator
Fore has committed to is rebuilding that partnership with the
land-grant universities.
The Chairman. Thank you, sir. And, Mr. Yost, can you tell
us has there been any particular analysis done on the Food for
Progress program to point out areas where the program has,
particularly, achieved success that we can build on or,
particularly, and conversely had a problem that we need to make
sure is not repeated or that is removed.
Mr. Yost. We have a number of success stories with the Food
for Progress program. Kenya comes to mind where we have done
something with Land O'Lakes where we have developed a founder
market system, including coaching for dairy--for the dairy
industry, budding dairy industry in that country. As we look to
the future, it is incumbent upon us to leverage our resources,
perhaps, more than we have in the past. To put these programs
that we administrate at USDA in more of a holistic approach to
development, and we are trying to accomplish that, trying to
blend the Food for Progress program along with the Cochran
program, the Borlaug Program, our trade investment missions, so
that we can build an infrastructure in these countries that can
participate in world trade, bring their agricultural economies
into the 21st century. And also, we are exploring some
partnerships in some private sector trade associations and
companies.
The Chairman. Can you give us an example of some of those
private sector ones?
Mr. Yost. I would go back to the trade investment missions
that we have hosted. We have hosted them in different parts of
the world, we have a couple more that we are proposing to take
place this year, where we take U.S. companies, small, medium
and large to different countries. We have been to Kenya, we
have been to Ghana, we have been to Kazakhstan, and they
interact with their peers over there and they talk about
opportunities, what needs to be done to create opportunities,
what the government needs to do, what the private sector needs
to do, and I think these are very beneficial. With today's
technology, with wireless communication, with the group of
young entrepreneurs coming up around the world, I think this
can create the foundation for something quite dynamic as we
move to the future.
The Chairman. Thank you, sir. Mrs. Musgrave.
Mrs. Musgrave. Thank you, Mr. Chairman. Mr. Kunder, you and
Mr. Yost, both, have talked about the three-pronged approach to
combating the world food crisis and agricultural development
seems to be the very centerpiece of that. I just would like to
ask you why USAID previously diverted funding from the most
effective and strategic investments, such as research that was
mentioned in your statement, and where did you send this money?
Mr. Kunder. Yes, ma'am. I probably would quibble with the
term ``diverted'' because we have a Federal budgetary process
and along the way we make a number of competing decisions. Our
staff work in the developing world, and are passionately
committed to food issues; and perhaps we have requested levels
that perhaps weren't approved. But I particularly mention the
term ``crowding out.'' I honestly believe that what we have had
happen in the 150 account, the foreign assistance and foreign
diplomacy account has had a cap established by the budget
process. As we have made decisions to take on issues like
PEPFAR and malaria and illiteracy and reconstruction in
Afghanistan, the amount of money left over for some of the core
things that we have traditionally done in foreign aid, jobs
creation, creating private enterprise system, the kind of
things you were talking about land titling, and certainly
agriculture simply got crowded out within that 150 account. And
I am not making excuses. We could have fought harder. Maybe we
could have fought smarter, but that is the effect of what
happened is we bumped up against those ceilings and I have
enormous respect for the Congress. I am not here complaining,
but our budget is currently earmarked. The U.S. Foreign Aid
Budget is currently earmarked at about 104 percent. That is to
say that we have enormous guidance from the Congress, in terms
of how much we have to spend on malaria, how much we have to
spend on child survival, and these are all worthy causes. But,
what I find that is the core economic and agricultural
functions which have the least passionate constituency and
which end up at the end of the line, and that is the honest
truth, ma'am.
Mrs. Musgrave. Well, I certainly agree with the last part
of your statement that you just made, the passion for each of
these causes. Tell me about the role of private volunteer
organizations and do they get to make many decisions about
where programs should be and how it should be operated?
Mr. Kunder. We rely enormously at USAID on the private
sector, both not for-profit and for-profit. In terms of the
NGOs, the way USAID operates around the world, the American
non-governmental organizations and local NGOs are among our
primary partners. They are actually out there on the front
lines, working with the villagers, disseminating new seeds,
disseminating new techniques, working with marketing systems.
On the private sector side, the for-profit side, I have to say
that this is one of the most productive areas for future work.
We launched a couple of years ago what we call the Global
Development Alliance, an explicit attempt to partner with for-
profit private sector American firms. I got our team to print
out, before I came up here today, a list of our current
agricultural partnerships, and it is quite dramatic. We are
partnering with Shell Oil in Nigeria to improve cassava
production. We are partnering with American business in Angola
to increase food production there. This is an exciting area
where we can devote more of America's desire to invest in these
poor countries and to the cause of human progress. So, in
short, both the NGOs and the American for-profit, private
sector are critically important partners to us.
Mrs. Musgrave. Very quickly, when we think about wise use
of these taxpayers' dollars, what do you do to avoid
duplication? That is probably one of our biggest concerns.
Mr. Kunder. Yes, ma'am, it is a very fair question and I
would not claim perfection, but what our Food for Peace office
does and our agricultural office, they do a country by country
analysis and they try to look at what the country is investing,
what other donors are investing, the World Bank, the British,
the Japanese, what the NGOs are able to raise on their own.
They do a country by country analysis to make sure that we are
filling in the critical gaps and trying not to duplicate what
others are doing.
Mrs. Musgrave. Thank you very much. Thank you, Mr.
Chairman.
The Chairman. Yes, ma'am, thank you. Mr. Pomeroy.
Mr. Pomeroy. Mr. Chairman, and Ranking Member Musgrave, I
want to commend each of you for your thoughtful opening
statements and also for leadership of the Subcommittee in this
way. You know, it disturbed me greatly, that as we were
building the new farm bill, we found ourselves frequently at
policy odds with the global hunger community, or at least the
U.S. representatives of international food aid. We even heard
suggestions, not new--that have made--been around for a few
years, that the structure of the farm bill as constructed in
this Committee has actually been a contributing factor to
global hunger. That somehow U.S. agriculture was a contributing
factor to the misery people are experiencing around the world
and can't get enough to eat. I have just flat out rejected the
premise of those advocates. I mean, the U.S. farmer has been
extremely proud of the role they have played in providing food
for the world. U.S. ag infrastructure has been very proud of
the role they have played in the technological innovations that
have greened the world. And so far from being a--viewing
ourselves as somehow making the situation worse, we have always
viewed ourselves as being a substantial contributing factor to
the fight against global hunger.
Now, if we have some things wrong, we need to have a very
robust dialogue about straightening out this difference. I view
this hearing, and I hope other hearings to follow, as a formal
way by which this Subcommittee really grabs this issue. I think
it is a big one and one that in the end will potentially
threaten our ability to pass another farm bill, if we don't get
these points of difference straight. So it is in our near term
self interest, but far beyond that. It is also consistent with
the best instincts of this Committee, historically, we want to
do our part to making sure people across the world have enough
to eat, and so I--you know, this isn't, maybe, kind of run of
the mill Agriculture Committee stuff that we are doing. Some
might think, well this is--almost feels like the Foreign
Affairs Committee. It is right in the heart of what we ought to
be doing and I really commend the leadership of each of you in
getting into this area. To our panel, I would say, if I close
my eyes Mr. Kunder and Mr. Yost, I think, gosh, I don't--this
is USAID or the Secretary of Defense at the table. I am going
to quote the Secretary of Defense. I think what he has done is
extraordinary and spot on. Today's Washington Post, Secretary
Gates, ``we cannot kill or capture our way to victory,'' he
says, ``in the long term campaign against terrorism.'' Now, the
military action should be subordinate to political and economic
efforts to undermine extremism. ``American's civilian
institutions of diplomacy and development have been chronically
undermanned and under-funded for far too long, relative to what
we traditionally spend on military, and more importantly,
relative to the responsibilities and challenges our nation has
around the world.'' How about that from the Secretary of
Defense? I really think that the painful errors that have been
made in military and foreign policy ought to shock us back into
rebuilding the capacity, much in the ways that each of you have
spoken of, so we have many things to talk about and not a lot
of time.
Let me start with the little issues to make sure I get to
cover it all in with the bigger issue. Land-grant--I was in
Mali, what is it 2 years ago, and I was just appalled. It said
17 percent of the population has proximate access to potable
water. I came back here to North Dakota State University with
3,000 engineering students and just magnificent engineering
capacity. Nothing would be better for the--some of those
engineering students to be parlayed into meaningful assistance
in a partnership way as part of their learning experience.
Maybe some of them would find careers in international
development, but if nothing else, it would still be an
extraordinary experience as part of an undergraduate
curriculum. Yes, absolutely consistent with hard core
engineering training, I mean, are these the kinds of things,
Mr. Kunder, that you believe we could build upon?
Mr. Kunder. Yes, sir, we do have a cooperative research
support program with the land-grant universities. We have been
in discussions, Administrator Fore has directed us to talk with
the National Association of State Universities and Land-Grant
Colleges here in town, which happens to be headed by our former
USAID Administrator, Dr. Peter McPherson, formerly of Michigan
State, and that is exactly the kind of thing we want to
explore. There is an enormous capacity within our land-grant
system to contribute to the problems we have been discussing
here today, but, again, as the funding has gone down, as the
number of ag officers that we have had to talk to our
colleagues in the land-grant universities has eroded for all
the reasons I think you, rightly, summarized earlier, this
discussion has waned.
Mr. Pomeroy. I had spoken, at some length, to the President
of North Dakota State University about this and if there was a,
specifically, an idea you have about how we might engage, in
North Dakota, in this way please let me know.
Mr. Kunder. Thank you.
Mr. Pomeroy. I would like to do a little matchmaking there.
We are ready to go.
Mr. Kunder. Thank you, sir. If I could just add one thing,
sir. You mentioned this perception that somehow American
agriculture is contributing to some of these problems, I know
there is a huge policy debate out there, but the Congress, in
its wisdom, has given us the Bellmon Amendment and we are
required to do, by law, a Bellmon Analysis of making sure that
whatever agricultural bounty we deliver from the American
farmer does not, in fact, disrupt local markets. Now I am not
going to claim 100 percent perfection. We sometimes make
mistakes, it is a tough business, but this is a standard part
of our doing business. Before we deliver any U.S. food aid
assistance, we do a serious analysis to ensure that it does not
disrupt local farmers markets.
Mr. Pomeroy. I just have one.
The Chairman. Thank you, Mr.----
Mr. Pomeroy. Mr. Chairman, I have one more question. I know
I am over time, but----
The Chairman. We will come back to you because what we have
is----
Mr. Pomeroy. Fine, another panelist.
The Chairman. Yes, if we have enough time, we can come
back, I believe. Mr. Fortenberry.
Mr. Fortenberry. Thank you, Mr. Chairman and Ranking Member
for holding this hearing and thank you, gentlemen, for coming
before us. I think at the outset it is important to point out
that the United States leads the world in terms of generosity
and outreach, both in terms of agricultural and humanitarian
assistance. I think that is important to point out because it
is important to examine how effective our programs are, but
also the underlying premise there is, in spite of the needs
that exist in the world and the fact that people are continuing
to turn to us to lead in this regard, this is very good because
it points to two things. One, our capacity to help other
peoples and two the generosity of the American people and
willingness to do that, and with that said, and I appreciate
Mr. Pomeroy's pointing out some of the creative and interesting
thinking that is going on, in terms of issues of international
security. How they are interrelated with: building capacity for
people in need, not only in civil structures, but in market
structures so that we can prevent boom and bust cycles; the
need for immediate humanitarian assistance in grave
circumstances so that these problems are mitigated and
stability comes to people throughout the world, not only in
terms of food production, but also in terms of building a
variety of civil capacity so that people can, truly, have lives
filled with opportunity and hope and build just and good
societies. I mean, that is going to continue to be an evolving
part of our entire foreign policy and defense policy
considerations in Congress. With that said, you have both of
those jobs, to meet the immediacy of need in terms of
humanitarian crises that exist in the world, but also to try to
prevent those crises by building the capacity for people to
stabilize institutions of--whether that leads to agricultural
production or other institutions such as markets that can allow
for the free flow of goods and help people. In that regard, and
the second point in regards to capacity building, I would like
you to point to some best practices that have evolved and are
working extraordinarily well that have prevented boom and bust
cycles in terms of food production throughout the world. These
have led to, again, an increase in capacity and stability for
people who are in the most dire and difficult circumstances.
Mr. Yost. Congressman Fortenberry, as far as trade capacity
building you were referring to?
Mr. Fortenberry. No. I am referring to building
sustainablility in country infrastructure that will lead to,
again, stabilized food production. Basically, since that is the
primary focus of our hearing today, and other capacities that
will, again, prevent or help build long term capacity to
prevent the types of humanitarian difficulties that seem to
arise in various places in the world and then necessitate
emergency responses.
Mr. Yost. Well, it is a tall order, as you are well aware
and other Members of the Committee have commented on. We have a
number of things that we are trying to do and with varying
amounts of success, as we try to establish sustainability,
particularly in tenuous parts of the world. We have worked with
countries on developing some good governmental practices. You
have to have policies in place that reward production. You
don't have economic policies in place that provide a
disincentive to produce, you don't control food prices at an
artificially low level, as far as what you pay to producers.
You also have to have in place financing--especially small
ordered land holders, need financing desperately. That is one
of the common threads we see throughout the world. We are
working on different programs, trying to bring that--raise that
issue to a higher level.
Mr. Fortenberry. Such as micro-finance.
Mr. Yost. Micro-financing, exactly. Then it gets into the
acceptance of new technology. There is a resistance to
biotechnology in developing countries that is unfounded. It is
one of the reasons we are so productive in this country. We
need to accentuate the positive of biotechnology. It is not the
only new technology that we need to accentuate, but that
clearly is one of the critical ones. People have to realize
that if there are millions of farmers around the world, 12
million farmers, now using biotechnology, then it is good for
all sizes of farmers. Things like: drip irrigation, water is
getting to be a more and more precious resource; livestock
genetics, we can quickly improve productivity by enhancing
livestock genetics; food safety issues, post harvest handling,
how to control losses. Many countries have up to 40 percent
losses of post harvest handling to insects, rodents, because
they don't have proper storage, don't have cold chains. These
are all things that we are trying to work on, we are trying to
elevate as necessities for sustainabilities.
The Chairman. Thank you, very much, Mr. Fortenberry. We
would like to welcome the gentleman from Kansas, Mr. Moran.
Although he is not a Member of the Subcommittee, he is a Member
of the full Committee and we are always happy to have his
presence with us. I have consulted with the Ranking Member, we
are pleased to welcome you to join us in the questioning of the
witnesses. It is my understanding, you were waiting until the
second panel for questions, is that correct?
Mr. Moran. Mr. Chairman, I thank you for your and Mrs.
Musgrave's courtesy in allowing me to join the panel here
today, and the opportunity to listen to the testimony and hear
the witnesses. I am one of the House co-chair hunger--I am one
of the Co-Chairman of the House Hunger Caucus and this is an
issue of significant importance to all of us and I am delighted
that you are having this hearing. I thank you again for your
allowing me to participate today.
The Chairman. Thank you, Mr. Moran. Mr. Salazar, I
understand you do not have a question at this time, but we
welcome you with us. I will open the entire panel for anyone
who may have a second question, and Mr. Pomeroy I believe you
did, so I will be happy to call on you first.
Mr. Pomeroy. Thank you, Mr. Chairman. It is probably an
issue that, maybe, Mr. Moran will want to jump in on, as well.
We discussed in the course of the farm bill construction, the
structure of food aid response and we advanced the proposition
and maybe we ought to wall off some of this aid to make sure
that it goes into capacity building. Then, inevitably, there is
an emergency, inevitably there is a complete spend out in the
emergency response, so we are always fighting the fire and we
never get around to fire prevention. In the end, that fell out
of the bill and in light of the global food crisis, that
wouldn't have probably had to, but Mr. Yost can you speak to
this issue of--or either one of you, the issue of trying to
build capacity, while on the other hand continually losing the
resources because we have to deal with the emergency and not
ever making much structural progress. Mr. Moran, have I
captured your thoughts on that? Okay.
Mr. Kunder. Sir, this was, as you know, a very hard-fought
policy issue. We took the position that while we understand the
basic principle that unless we invest in long term agricultural
development in these poor countries, we are never going to get
ahead of this thing, and we know we need to do that. But our
argument was that the worst possible thing you could do would
be to put rigid quantitative numbers into that bill. I am one
of those people who have to, ultimately, sign the documents and
make the decision to cut off emergency food to some place where
people are starving because we would bump up against a ceiling
and it has got to go into agricultural research. Now,
obviously, the right answer in a resource unconstrained
environment is we need both and that is why we are arguing for
more money for long term agricultural research. That is why we
appreciate the generosity of the Congress in giving us more
money for that, but that is really the issue, is how to carve
out enough money from the overall Federal budget to invest in
long term agricultural research. But in the short term we would
vigorously--respectfully, but vigorously--resist the notion of
trying to figure this out ahead of time and allow us to make
some of these very difficult decisions late in the fiscal year
when people are starving somewhere.
Mr. Pomeroy. Mr. Yost, are you seeing an evolution of
receptivity to biotech foods in Africa? It was our take, a
couple years ago, it seemed to be heavily influenced by
European thinking on this. Basically, it was stifling some of
the innovation that could be created to respond to unique
circumstances of the extraordinarily difficult production
circumstances in Africa. We could give them varieties that are
going to do better down there, but the innovations used in
developing those varieties was constrained, the ultimate result
was food shortages.
Mr. Yost. Congressman Pomeroy, you are exactly right. The
Europeans do have a significant amount of influence over Africa
when it comes to biotechnology. I think gradually, maybe more
than gradually, now, with the food security, the food price
issue being at the forefront in everyone's mind, that people
are starting to look at this technology in a different view.
There is no question about it, it started in Asia, quietly the
Koreans and Japanese have let products of biotechnology enter
the food supply now. They haven't shown the resistance they
have in the past. And visiting with groups that work in Africa,
visiting with representatives from African countries, I see
more interest than in the past. The key will be to develop
crops that are grown in Africa, that are grown for domestic
needs, not for exports that have bio-traits, particularly
drought resistance traits, some other pest resistant traits. If
we can get those developed, in place, on the ground, I think a
critical mass will be there to see its acceptance.
Mr. Pomeroy. Thank you. Thank you, Mr. Chairman.
The Chairman. Thank you Mr. Pomeroy. Anyone else have a
second question? Yes, sir, Mr. Fortenberry.
Mr. Fortenberry. Mr. Kunder, I would like to allow you a
chance to respond to the question that I asked, as well. In
terms of looking at that second critical component of your
work, emergency assistance. But, also, the balance that you are
trying to achieve in terms of building sustainable capacity in
the most difficult areas of the world so that we can prevent
the emergencies that so often happen, and basically occupy,
obviously, most of your effort. Best practices, in that regard,
that you think have actually helped mitigate what could have
been substantial crises that we can learn from and potentially
duplicate.
Mr. Kunder. Thank you, sir. I would agree with Mike that
the range is pretty broad. The way we design our U.S. foreign
aid program, we don't sit here in Washington, as the military
likes to say, and apply the 6,000 mile screwdriver. We send an
American team to a place like Malawi or Sri Lanka and then
those folks tell us what is most needed. Is it improvement of
the agricultural exchange service in that country, is it
improved seed varieties, is it a strengthened agriculture
training university? And then we try to build the program from
the bottom up. But to answer your question directly, the two
things that I think are unqualified successes around the world
have to do with linking information technology with the effort
to increase production. Number one, in places that don't have
much infrastructure, where it is very hard to get farmers
together because they don't have cars, pickup trucks, to
disseminate new information about cropping techniques. Distance
learning, we really perfected the technique of having an
agricultural expert in the capital city and then having farmers
gather around a radio somewhere and create an interactive
extension service that is low cost, but effective, and then,
increasingly try to disseminate to farmers the ability to tap
into the Internet on market prices. One of the great
impediments to these farmers is they are smart people and they
know markets, but they simply don't have market data, and
through simple dissemination of radios or other systems, we are
able to allow them to tap into market data just like an
American farmer and they will make the right decisions based on
that. Those are the ones I would cite as real cost effective
investments on the part of the American taxpayer.
Mr. Fortenberry. Thank you.
The Chairman. Thank you, sir. Mr. Moran, did you want to
ask a question yet?
Mr. Moran. Mr. Chairman, thank you, and I appreciate the
gentleman from North Dakota and his line of inquiry. We
struggled in a way that you, Mr. Kunder, indicated that you
would expect people to struggle and try to figure out what the
right answer is. Each of us recognizing the importance of--
emergency aid doesn't ever eliminate the need for emergency
aid, and so there is a great desire, on our part, to make
certain that developmental aid occurs. I think our balance--I
don't know who won this battle, but I hope that the people who
are hungry were the ultimate winners. As you probably know, the
outcome of the farm bill debate, the provisions in that bill
are for a $450 billion box, in which you cannot tap that for
emergency aid without first utilizing the Emerson Trust, and
you can't use that money for foreseen--for difficulties,
disasters that are known to occur. They have to be unexpected,
and you do have to notify Congress, although we no longer--we
did not leave in that bill the provision that we have allow you
the opportunity. So I hope we found that right mix, because the
consequences of those decisions are about life and death for
people around the world.
I just wanted to ask a broader question about the
Department of Agriculture's viewpoint on the opportunities that
agricultural research has to alleviate hunger by producing
greater yields and larger quantities of crops. Is there
evidence that we are on the verge of scientific research
breakthroughs that will dramatically increase the ability to
feed the world?
Mr. Yost. Congressman Moran, you are a little bit out of my
area of expertise. I think that there are a lot of things I am
told on the horizon, both in the public and private sector that
can dramatically increase yields. There is no question about
it, I touched on biotechnology, I touched on drip irrigation,
there are a number of things, minimum tillage. There are a lot
of things that can be done. Now with the economic incentive
there, I think we are going to see a more amplified response in
both the public and private sector. Agriculture has been in the
back water, really, when you talk about the economy and the
world concerns for a period of time. Mr. Kunder has talked
about the diminishing roles played in their programs. Clearly
in our economy, now, with it on the front page every other day
of every major newspaper, I see a big change both in government
and in the private sector on where resources are going to go,
and where initiatives are going to begin. We have taken a
renewed interest in pulling together the various agencies
within the Department on this food security strategy. Our
agency is trying to play point on that. We think we have an
awful lot to offer and we are working with USAID and others
inter-governmentally on this. It takes awhile to get it
together, but to answer your question, yes I think that there
are several things on the horizon that will dramatically allow
increased food production, but we also have to have countries
in the world that will allow that to happen. They have to have
the rule of law and good governance of people who will go there
and invest and allow things to happen.
Mr. Moran. Administrator, if you would tell your colleagues
at the Department of Agriculture of my interest in this
question, I would be glad to hear from others as well. And I do
think that it is an area that we, on the Agriculture Committee,
ought to be spending more time on, on those who are concerned
about hunger. I think there is significant potential and we
often think about how do we divide up the resources that we
have? How do we divide the loaf, as compared to how do we
produce more loaves, and I think there are some significant
opportunities with technology and research that advance
agriculture in a hungry world. I thank you, Mr. Chairman, for
the opportunity.
The Chairman. Thank you so much, Mr. Moran. That concludes
this panel. We thank both gentlemen. I would like you to answer
in the affirmative, if you would be willing to answer Members
written questions within the next 2 weeks should they be
submitted to you. Would you?
Mr. Kunder. Yes, sir.
The Chairman. Would you, Mr. Yost?
Mr. Yost. Yes.
The Chairman. Okay, thank you. So, I encourage Members to
please submit any further questions you may have in writing.
The gentlemen have agreed to answer you within 2 weeks of the
submission of those questions. This does complete our first
panel. We thank the gentlemen very much.
We would like to invite our second panel to come quickly to
the table. Mr. Sean Callahan, Executive Vice President for
Overseas Operations of Catholic Relief Services, Baltimore
Maryland; Dr. Andrew Barnes, Director of Food Security, Food
for the Hungry Incorporated here in Washington; Mr. ``Buzz''
Guroff, Senior Vice President, Food Security and Specialty
Crops Portfolio of ACDI/VOCA in Washington; Dr. Nicholas Minot,
Senior Research Fellow at International Food Policy Research
Institute here in Washington; and Dr. Theo Dillaha, Program
Director, Office of International Research for Education and
Development, Virginia Tech University. If these folks would
please come to the table, we want to stay on time and we will
begin our questions. Thank you very much. Mr. Callahan, you may
begin with your testimony.
STATEMENT OF SEAN CALLAHAN, EXECUTIVE VICE
PRESIDENT, OVERSEAS OPERATIONS, CATHOLIC RELIEF SERVICES,
BALTIMORE, MD
Mr. Callahan. Good morning Chairman McIntyre, Ranking
Member Musgrave, Members of the Committee. My name is Sean
Callahan. I am the Executive Vice President of Catholic Relief
Services. We serve in over 100 countries throughout the world
and are supported by over 68 million Catholics in our effort,
and have been a long time partner of USAID and Food for Peace
in trying to eradicate hunger globally. This hearing here today
is very timely, and we very much appreciate the efforts that
you have made to date. We would like to thank your leadership,
not only in holding this meeting, but also in providing the
leadership in food aid internationally and the recent approval
of the farm bill.
We think that that is a mechanism that will help us into
the future, in responding to this grave crisis. As a U.S.
taxpayer and a representative who goes oversees, the leadership
that the U.S. has provided in this area is very, very helpful
in us having a more influential voice to those overseas in
trying to eradicate hunger. People are suffering in this global
food crisis and we see that not only in our own country, and
our colleague agency Catholic Charities, as increased numbers
of participants in their local programs. Where in the United
States only ten percent of the income is used for food
purchases, whereas overseas it is over 75 percent, so we
understand the grave need that people are facing. People are
indeed stretched and Catholic Relief Services sees that on the
ground. We see that people are eating less, and in some cases
making very difficult decisions on who in the family should
actually eat.
Last month I was in Ethiopia and I happened to make a trip
down to an area where one of our partners said people were
suffering and in distress. And I went down to a site that was
being serviced by the Ethiopian church, The Missionaries of
Charity, and Doctors without Border were providing medical
assistance. In this area, although people were claiming there
wasn't a hunger crisis in the area, 23 children had died at the
site that we had served once they had been admitted to the
site, and over 40 children in the area community were said to
have died. Now one of the parents brought one of the children
in as we were there and told us that the situation was so bad
that they brought their healthy child to the center because
their unhealthy child probably wouldn't make it. Another
grandfather was feeding a child with a syringe because the
child didn't have the ability to even drink the high protein
solution that was being provided at the time. So although some
countries may not admit right away that there is a crisis,
certainly we are seeing it on the ground.
Unfortunately, this food crisis has deep roots, and the
deep roots are complex and just can't be answered by providing
additional food assistance. It is an increased demand for food,
generally, an increased demand for animal protein, we are
seeing higher fuel prices that are leading to this, a diversion
of grain and oilseed crops that go into biofuel production, as
well as commodity speculation and global climate change. We are
trying to work in all of these different areas and in global
climate change to try to reduce the affects that disasters have
on people. It has affected not only the urban areas, but as I
have just attested to in Ethiopia, also some of the rural areas
where people produce.
We see at Catholic Relief Services a couple areas that we
can focus on. I think there are two of them that are structural
and that is developing a mechanism to better enhance and
strengthen our ability to coordinate our hunger efforts in the
United States. The U.S. is a leader in this area, but I am not
sure that we are coordinating our efforts as we have, possibly,
in the HIV/AIDS with PEPFAR and so I ask you as a Committee to
look at that to see if we need to focus a greater need and a
coherence in our hunger efforts. In addition to that I would
say greater partnerships overseas, as we do at the civil
society, and community level because this isn't something that
we can solve from the outside. We need to build the local
capacity and strengthen the local communities so that they are
more resilient and better able to respond to shocks in their
systems.
We look at four different areas for developmental
assistance. One, certainly, is the global safety net which is
not only saving but transforming lives as I saw personally in
Ethiopia. We also need alternatives, and Mr. Fortenberry
mentioned some infrastructural issues. Alternative to rain fed
agriculture: One of the big problems that we see is the rain
fed agriculture and so irrigation systems are crucial. A
greater focus on agro-enterprise at the local level linking
small farmers to markets is a crucial area. We found voucher
programs that others are enticing small business people into
the community so that we can actually develop a market and also
the issue of infrastructure as far as roads go and
transportation so that the communications are there so people
can actually market their crops. Again, I would also say,
alternative sources of energy are also very much needed at the
local community level. Thank you.
[The prepared statement of Mr. Callahan follows:]
Prepared Statement of Sean Callahan, Executive Vice President, Overseas
Operations, Catholic Relief Services, Baltimore, MD
Good afternoon Chairman McIntyre, Ranking Member Musgrave, and
Members of the Subcommittee.
Thank you for calling this very timely hearing on delivering
international food aid and providing foreign agricultural development
assistance. I would like to express my gratitude for providing Catholic
Relief Services the opportunity to share our insights--based on our
long experience of programming food aid for emergencies and long-term
development, including our support of agricultural development with
poor farmers around the world.
My name is Sean Callahan, Executive Vice President of Overseas
Operations for Catholic Relief Services (CRS). Operating in more than
100 countries around the world, CRS is the international development
and relief agency of the U.S. Conference of Catholic Bishops, drawing
support from among the 68 million members of the U.S. Catholic
community. And for more than half a century, we have been in a
partnership with Food for Peace that has tangibly expressed the
goodwill and compassion of the American people.
In my testimony, I will spotlight what I call the ``Global Food
Crisis'' by citing the actual experiences of hungry people, including
my personal observations. I will then focus on the deep roots of this
crisis. Last, I will make five recommendations on food security to
guide Congress in its response to the emergency: $2.1 billion for Title
II, $300 million for the McGovern-Dole program, $230 million to
replenish the Emerson Trust, more cash for local purchases and
vouchers, and stronger partnerships with recipient nations.
Hungry People Suffer in the Global Food Crisis
As you all know, high commodity prices are affecting people in
every country of the world, including our own. The average American
family spends less than ten percent of its income on food, while low-
income Americans spend a larger proportion of their limited resources
on food. An impoverished family overseas that typically spends about
half its income on food is now spending up to 75 percent or more
because of the Global Food Crisis. These price increases have made food
truly unaffordable to the very poor--and sometimes the not-so-poor.
This desperation is fueling the urban demonstrations and riots that
have been springing up around the world over the past several months.
The problem for CRS relief efforts is not the availability of food, but
the soaring prices that make food less and less affordable for the poor
in both urban and rural settings
CRS staff around the world has heard stories of families who are
stretched to the limit by the high price of food. Some are having to
make do with eating less at each meal. Some are already skipping meals,
or even not eating on a particular day. Few can afford to buy meat or
chicken for any of their meals. The most desperate will sell off
precious resources, such as a water jug, a hoe or even the tin roof of
their home in order to buy food. Tragically, they may even have to
decide which child or children may have the best chance of survival and
which, already ill and weak, will be allowed to die. These are the
agonizing choices the global food crisis is forcing the poor to make.
Frequent reports from our CRS field offices document that this
awful scenario is being repeated in many countries in the developing
world. In some regions of Niger, families have started eating only one
meal a day. In dire circumstances, some families have resorted to
eating anza, a wild plant with bitter leaves, to supplement their diet.
In northern Ghana, students have been taking CRS-provided lunches home
to share with hungry family members. For some children, this means
sharing their only meal of the day.
In southern and eastern Ethiopia, two consecutive seasons of poor
rains have led to total crop failure. Many people in these areas now
have nothing--literally nothing--to eat. And with food prices soaring
worldwide, they cannot afford to buy the dwindling and increasingly
expensive supplies in the market. As a result, we are beginning to see
cases of severe malnutrition, especially in children.
I was in eastern Ethiopia last month, and I saw how the people
there are already suffering. I visited a feeding site run by the
Ethiopian Catholic Church and the Missionaries of Charity in a largely
Muslim area where, over the previous 5 weeks, 28 children had died of
malnutrition. The conditions there are already dire. They are going
through a ``green drought,'' where there was just enough rain to allow
stocks to sprout 3 to 5 inches, but there is no yield.
I saw one Ethiopian parent bring a very sickly, lethargic child to
the center for emergency treatment. The parent told the sisters, ``I
brought this child because I thought he could make it. My weakest child
is at home.'' Nearby, a grandfather fed his grandson sips of milk every
30 seconds from a plastic syringe.
This Food Crisis Has Deep Roots
My first reaction on seeing all this was simply to bite my lip, to
contain my emotion. My second reaction was anger. How could we let this
happen? But the more I observed, I realized that this was a place of
hope. I saw kids being fed and stabilized, getting better. Parents were
thanking the workers for saving the lives of their children. This is an
area that has had good production over the past 5 years, and they just
need some immediate food assistance so that they can make it until the
next harvest. And much of that help is coming in the form of food aid
from the American people. They also asked for help to increase their
planting for the next season. But if the next rainy season is poor and
the next harvest fails, these people will be even worse off.
What really concerns me about his food crisis is that it is not a
blip on the screen. This food crisis is structural. Its causes are
complex and are based on fundamental changes in the global marketplace.
The Economist magazine has called these changes ``The end of cheap
food,'' in recognition of a consensus that prices will not return to
pre-food crisis levels.
This food crisis will be long-lasting. And it is just beginning.
Its effects are being seen first in urban areas where people cannot
produce their own food and cannot absorb the steep price increases.
There is widespread drought in East Africa, and there may be other crop
failures this year, beginning with the massive destruction of rice in
Myanmar. Farmers who are struggling to feed their families will not be
able to invest in fertilizer that has doubled in price and continues to
rise, so their yields will be lower. By next February, this crisis will
be deeper and broader as more segments of society are pushed into
poverty by the combination of higher food prices and reduced
availability worldwide.
Over the long term, there are several factors that could exacerbate
the food crisis, including an increased demand for food generally, an
increased demand for animal protein, higher fuel prices and the
diversion of grain and oilseed crops for biofuel production. In
addition, there is an emerging scientific consensus that there is
evidence of global climate change, and that this phenomenon is having a
significant impact on global agriculture. Earlier this month, the head
of the UN's Framework Convention on Climate Change said the Global Food
Crisis will only worsen because of climate change, as he urged the
leaders of the G8 to set goals to reduce carbon emissions within the
next dozen years. It is a fact that droughts and severe storms and
other natural disasters are occurring more frequently and are adversely
affecting food production. And it is inevitably those least responsible
for the factors leading to climate change, the poor, who will bear the
brunt of its effects. In terms of the response to this Global Food
Crisis, we are looking at short-term measures as well as longer term
initiatives.
In the short term, CRS believes we need to get cash and food into
the hands of the urban and rural poor, so people can eat. Our plan is
to provide cash vouchers to help both urban and rural families afford
sufficient food during the crisis, where food is available. Eligible
families would receive a set amount of food vouchers to supplement
their food supplies when rising prices limit their purchasing power.
This approach was successfully applied by CRS in 2006 as part of a
drought response in Kenya with 2,500 expectant and nursing mothers and
3,500 families with malnourished children receiving food vouchers to
supplement their food resources. Where there isn't sufficient food
available, we are working with Food for Peace and the World Food
Programme to ensure delivery of imported food.
We are also providing an opportunity for people to receive cash for
working on projects that better prepare communities to weather
disasters like hurricanes or cyclones. For example, in Haiti, cash for
work projects have helped to clear drainage canals that will help
prevent flooding when a storm hits. We are also seeking to help farmers
in the developing world by investing in seeds, fertilizer and other
materials that will help them in the next planting season. For example,
we have used a voucher approach to enable rice farmers in Burkina Faso
to acquire both improved seed and fertilizer in order to boost
production of this urban staple that is in such short supply. In Ghana,
Senegal, Mali and Nigeria we are hoping to expand this approach, and we
have a proposal waiting for funding to expand production in 16
countries across Africa, and to move from rice to pulses and eventually
to roots and tubers such as cassava.
Unfortunately, within the current food aid framework, there are not
enough cash resources available from Food for Peace to fund these types
of programs, especially at the scale that is needed. In addition to
using valuable food aid resources, CRS will also be devoting private
resources to fund some of these short-term measures. This Global Food
Crisis is bigger than food aid alone. The U.S. Government should
provide much more cash in the International Disaster Assistance and
Development Assistance accounts to complement current food aid efforts.
In the longer term, CRS agrees with the general consensus among
international PVOs that there must be a much more robust investment in
agricultural productivity and market infrastructure in the developing
world to reverse the decade-long decline in aid for agriculture.
Ironically, the food crisis presents us with an opportunity to make a
major impact in the fight against extreme poverty, particularly in
Africa. Timely initiatives that increase agricultural productivity and
expand small farmers' access to markets could go a long way toward
easing the suffering caused by hunger. As Pope Benedict XVI said in his
message to last month's FAO summit on food security:
Hunger and malnutrition are unacceptable in a world which has,
in fact, levels of production, resources and knowledge
sufficient to put an end to such dramas and their consequences.
The great challenge of today is to `globalize,' not just
economic and commercial interests, but also the call for
solidarity, while respecting and taking advantage of the
contribution of all components of society.
Congress Can Help To Reverse the Global Food Crisis
The response by Congress to the Global Food Crisis has already been
substantial, and I must commend you for this. The 2008 Farm Bill will
greatly help us in this fight against global hunger. I would in
particular like to commend Chairman Peterson and Ranking Member
Goodlatte for their bipartisan leadership in crafting the 2008 Farm
Bill. A number of initiatives that strengthen food aid and food
security were included in the Trade Title that was enacted into law.
Perhaps the most important of these is the $450 million safebox for
developmental food aid. CRS views this provision as an important first
step in reshaping United States international food and agriculture
assistance policy and increasing global food security. United States
international food and agriculture policy must integrate Title II,
McGovern-Dole, and regular bilateral and international agricultural
programs, while continuing to provide adequate and practical resources
for emergencies.
I must point out, however, that the structural changes in commodity
prices will likely erode any increases to developmental food aid in the
safebox. The volume of commodities that can be procured and shipped
will continue to decline as prices of food, fuel, and transportation
skyrocket. Even with the recent supplemental appropriation, Food for
Peace is not in a position to provide more food aid than it did in
2007, which had the lowest volume (at 2.6 million metric tons) in many
years. So, in fact, we are right back to where we started unless we
take other urgent steps. We must remember that Food for Peace operates
programs fighting long-term hunger in only 18 or so countries. The
World Food Programme has identified more than 30 countries that are now
affected by the current Global Food Crisis.
Moreover, as part of a broad Catholic coalition working on the farm
bill, CRS had sought real price support payment reform, especially to
level the playing field for poor small farmers in our partner nations
so they can compete fairly and help their countries respond to the
global food crisis. A major opportunity for real reform was lost and
what functions as a subsidy system continues to help those who need it
least instead of those who need help the most, both in the United
States and abroad.
At the same time, we would like to thank the Congress and the
Administration for acting to pass the FY 2008/2009 Supplemental
Appropriations Act. It will provide vitally needed resources to begin
an emergency response, as well as to continue developmental food aid
programs that build long-term food security.
Looking ahead, we would like to ask you to work with your
colleagues on the Appropriations Committee to help enact the following
five initiatives build food security:
First, in addition to the $395 million included in the
supplemental, we recommend that Congress fund the FY 2009
regular appropriation for Title II at $2.1 billion. This
appropriation will bring the total appropriation for FY 2009 to
$2.5 billion, the maximum level authorized in the farm bill. A
level of $2.5 billion also ensures that we can provide enough
food aid to match closely the average tonnage level of the last
5 years of 2.77 MMT (assuming a cost of $700 per metric ton).
Only robust funding will fill the safebox and maintain the U.S.
contribution to global food aid, while ensuring that we can
respond to additional needs and ever-rising prices.
We also recommend that Congress provide complementary
funding of $300 million for the McGovern-Dole Nutrition and
Education program. This level would equal the amount that would
be authorized by the Global Food for Education Pilot Program.
It would ensure that the McGovern-Dole program could also keep
pace with rising food aid costs while also responding more
completely to the rising demand for integrated education and
nutrition programs.
Third, the Bill Emerson Humanitarian Trust complements
regular Title II emergency aid as an important reserve for
responding to acute hunger. We urge Congress to replenish $230
million, the amount withdrawn in April and May of this year to
address the current food-price crisis. We need an incremental
replenishment now or the next withdrawal likely will deplete
the Trust, the most timely and flexible resource for handling
unanticipated food emergencies.
Fourth, the Administration and Congress must also recognize
the need for cash resources as a necessary complement to
commodities. In addition to new cash resources included in the
2008 Farm Bill, we urge you to work with your colleagues on the
Appropriations Committee to ensure that cash resources are
provided in the International Disaster Assistance and
Development Assistance accounts. We direly need cash to buy
food locally or to support voucher and food-for-work programs,
as may be appropriate.
Finally, we need to build stronger partnerships with the
hungry and poor overseas. Money alone will not solve the
problem of food security. We need real commitments from
beneficiary nations to energize their own resources in the
fight against acute and chronic hunger. We also need to rely on
private voluntary organizations like CRS because we have
durable and effective partnerships with the poor overseas. We
further need to ensure that we integrate all food security
programs in close cooperation with recipients and host
governments. Such integration includes using cash wisely and
making effective investments in agricultural development.
In conclusion, I want to once again thank you, Chairman McIntyre,
and all the Members of the Subcommittee for your leadership on food
security in the 2008 Farm Bill and for holding this hearing on
responding to the needs of the hungry around the world. At Catholic
Relief Services, we believe that the current food crisis will add
another 100 million people to the 850 million people already suffering
from hunger. This troubling reality requires the continued and
augmented leadership of the U.S. Government in providing for both
chronic and acute hunger needs.
I would be pleased to respond to any questions that the Committee
may have.
The Chairman. Dr. Barnes.
STATEMENT OF ANDREW BARNES, Ph.D., DIRECTOR OF FOOD SECURITY,
FOOD FOR THE HUNGRY, WASHINGTON, D.C.; ON BEHALF OF ALLIANCE
FOR FOOD AID
Dr. Barnes. Mr. Chairman, thank you for the opportunity to
testify on food aid during this period of global food crisis. I
am the Director of Food Security for Food for the Hungry and I
am testifying today, on behalf of the Alliance for Food Aid, an
alliance of 14 PVOs. We are most grateful to Congress for
providing $850 million of emergency supplemental funding for
2008 and $395 million of advanced funding for 2009. It is
further proof that the United States is a long standing global
leader in providing food assurance--food assistance.
However, we feel that in light of the global food crisis,
even greater funding will be needed for developmental food aid.
Due to the crisis, an additional 100 million people are facing
food shortages. We hear 130 million today. Many of these people
are in Ethiopia where I served as Food for the Hungry's Country
Director for the past 4 years. I returned to the United States
last month. Therefore, I will focus my discussion on food aid
in the developing crisis on my experience in Ethiopia, which I
feel is very relevant across Africa.
Ethiopia's farmers, like many in Africa, survive on small,
highly eroded farms while facing frequent droughts. Food crises
occur annually. To survive during these periods, families many
times, need to sell assets, including agricultural tools and
this results in long term reductions in productivity. The
innovative Title II funded Productive Safety Net began in 2005,
and was designed to alleviate the consequences of these annual
food shortages. This program helps the poor before they must
use destructive strategies to survive.
American PVOs, Food for the Hungry included, have used
Title II resources to work with communities to prevent annual
food shortages and to build productive community assets. These
food for work generated assets are being linked to other
agricultural programs and have resulted in increased
agricultural productivity and the lives of many have been
greatly improved. In spite of the success of this safety net,
the global food crisis has hit Ethiopia very hard and this year
an estimated 10.4 million people, approximately 12 percent of
the population, are in need of assistance. Three factors have
combined to make this crisis worse than any crisis in recent
years.
First, very low crop yields have resulted from extremely
poor rains in 2007 and 2008. Second, the cost of wheat and
other staples has more than doubled and local market prices,
surprisingly, are now higher than global market prices. Third,
the supply of food in Ethiopia's emergency food reserve is very
low. Much of this food, which is set aside to help in cases of
emergency, has been sold in an attempt to stabilize the rising
commodity prices. This action has greatly reduced the reserves
of food stocks and very little emergency food is currently
available in the country. Without this safety net, the current
situation would be much worse than it is. It has greatly
improved the lives of millions, but the current food crisis has
the potential to undermine this progress.
Consequently, PVOs have proposed an emergency program to
USAID and resources are being mobilized. Rapid mobilization is
critical to save lives. The question is, where do we go from
here? Across the globe, long term solutions are needed.
Innovative food-based development programs need to be expanded
to other countries. Kenya, for example, would greatly benefit
from a safety net type program. Unfortunately, important Title
II programs in Kenya are ending this year because of limited
funding.
Food aid must be linked to long term strategies to improve
nutrition, agricultural productivity and to build self-
sufficiency. Food for development is critical for this and we
thank this Committee and Congress for setting minimum levels of
Title II funding. However, we encourage that $500 million of
Title II funds be made available, annually, for non-emergency
developmental programs, in order to reduce the suffering during
this global crisis.
In conclusion, Mr. Chairman, because of the current global
food crisis, developmental food aid funded by the United States
of America, is needed now, more than ever. I thank you and I
will be pleased to answer any questions.
[The prepared statement of Dr. Barnes follows:]
Prepared Statement of Andrew Barnes, Ph.D., Director of Food Security,
Food for the Hungry, Washington, D.C.; on Behalf of Alliance for Food
Aid
Food Crisis in the Horn of Africa
The United Nations reported on July 11th that approximately 14
million people in the Horn of Africa (Ethiopia, Somalia, Eritrea,
Djibouti, Uganda and Kenya) are facing an unprecedented food crisis.
These countries are suffering from both rapidly rising food costs and
an extensive drought. The 14 million includes 1.2 million pastoralists
in northern Kenya, 700,000 Ugandans, and approximately 2.6 million
people in Somalia. However the vast majority are in Ethiopia, which has
10.4 million individuals facing an acute lack of food.
The situation in Kenya is typical for the region. In Kenya drought,
high fuel prices and political instability have contributed to the food
crisis. The impacts of the food crisis are being felt in both urban and
rural areas but the urban areas are facing the greatest difficulties.
The country is being hit with increased inflation, increased costs of
production, and lower crop production in 2008. Food prices for staples
have risen rapidly; the price of corn flour has risen by more then 40%.
These price increases are particularly hard on the poor who already
spend a large portion of their income on food. To survive in this
situation many are pulling children out of school and families skipping
meals. Increased prices for fertilizers and fuel have resulted in a 50%
increase in land preparation costs making land preparation less
affordable and the results will be lower agricultural production. The
reduced production will obviously extend and increase the intensity of
the crisis.
I served as Food for the Hungry's Country Director in Ethiopia from
June 2004 until June 2008 when I took the position of Director of Food
Security with Food for the Hungry in Washington. The majority of my
comments will focus on Ethiopia because of my experience in that
country.
Ethiopia's Productive Safety Net Program
Ethiopia's economy and its people remain largely dependent on
subsistence farming. This dependency has proven to be very problematic
because of a number of factors including high variability of rainfall
from year to year. However frequent droughts are not the only factors
contributing to Ethiopia's food security problems. The average farmer
works to feed his or her family on less than 2 acres of land and this
land is often over cultivated and subjected to intense soil erosion.
Ethiopia's population growth remains very high with an annual rate of
approximately 2.4%, causing further reductions in farm size. As farm
size decreases the intensity of agriculture increases contributing to
further land degradation and soil erosion. These perennial problems
make Ethiopia one of the world's poorest countries. Ethiopia's children
bear the brunt of this poverty; approximately 50% of children under the
age of 5 are moderately to severely stunted.
Donors (including USAID), the Government of Ethiopia and PVOs have
worked together to limit the adverse affects of this situation. The
drought of 2002-2003 resulted in 21% of Ethiopia's population needing
relief aid. The U.S. responded generously and many lives were saved.
While saving lives is obviously necessary, those interested in
Ethiopia's future realize that more must be done to break the vicious
cycle of drought and poverty.
Approximately 8.5 million people, ten percent of Ethiopia's
population are chronically food insecure (face annual food deficits).
These people are very vulnerable to the negative consequences of any
variability in rainfall or other negative events. During an emergency
situation their ability to survive depends on the ``mining'' of their
already limited capital and assets including, physical assets (tools
and oxen), natural assets (land and water) and human capital (education
and labor). The mining of assets occurs when families take last resort
actions such as taking children out of school, or selling productive
assets and household goods in order to survive. These survival
strategies result in long-term negative impacts. After the drought has
passed, these families must rebuild their capital to become productive
again; consequently, the economic impacts of a crop failure are long-
term and result in lifelong reductions in earnings. With each shock,
families and communities become less able to cope and fall farther into
food insecurity.
Before the introduction of the Productive Safety Net in 2005 a
large portion of food aid was programmed ``on the fly''. Food aid
appeals were made based on annual crop assessments. The timing of these
assessments and appeals made it difficult to receive the food aid on
time and many people had to sell assets to survive until the food
arrived. Also the food for work activities associated with these annual
appeals were hastily planned and the quality of the activities was in
many cases less than desired. Truly, a new approach to programming food
aid was needed for the lives of these food insecure households and
communities to improve.
Ethiopia's recent history makes it clear that weather related
problems and annual food shortages will continue to occur regularly in
the future. Consequently, the Productive Safety Net Program (PSNP) was
designed with the expectation of these annual food shortages. In the
Productive Safety Net food aid is program based on long term historical
needs and in a typical year no emergency appeal is need beyond the
programmed PSNP resources. In this program the food aid is planned in
advance and made available during the annual hunger period; therefore
the safety net helps the chronically food insecure communities before
the onset of the food shortage season and before they must use negative
coping strategies. By eliminating the need to sell scarce assets to
survive the food shortage season, the hard hit communities are able to
retain and build upon their asset base. Through this innovative program
American PVOs using Title II resources are working together with local
communities to prevent annual food shortages, build community assets
that will contribute to long term productivity and reduce the need for
poor families to sell assets to survive until next year.
The following figure represents a generalization of food
availability throughout the year for a high-land community in Ethiopia.
Food availability begins to increase in October when the harvest
begins. It peaks in December but then begins to decline from March to
June or July when it reaches the low point. It remains low through
September and then climbs again at the start of the new harvest.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The lives of the safety net participants have been greatly
improved. Families in the program no longer need to ``mine'' personal
assets to survive the normal annual food deficient period. Community
assets are being constructed through food for work activities and many
of the assets are being synergistically linked to and utilized by other
agricultural and food security programs to improve productivity and
income.
Graduation from the program is the ultimate goal of the PSNP and
will result in the reduction of the number of households requiring
external food aid and assistance. As community assets are built and are
linked to other agricultural and income generating programs family
assets are protected and can actually increase. After a family's assets
grow to an appropriate level graduation from the Productive Safety Net
program will occur.
This program has been operating in Ethiopia since 2005. USAID is
funding six PVOs (CARE, Catholic Relief Services, Food for the Hungry,
REST (an indigenous Ethiopian organization), Save the Children and
World Vision) to implement the Productive Safety Net in over 40
districts. The program is supported by wheat, peas and vegetable oil
produced by American farmers and is partially funded by monetization of
vegetable oil. Without monetization this program would lack adequate
funding and be greatly reduced in scale.
The Productive Safety Net and the Current Situation in Ethiopia.
The Productive Safety Net has stabilized and greatly improved the
lives of millions of people in Ethiopia. As intended community assets
are being built, livelihoods are being protected and improved and the
normal annual food gap is been filled.
The Productive Safety Net was designed to fill the food gap during
an average year. In general the food gap is about 6 months long and
USAID and its partner PVOs have based their programs on a 6 month
hunger period, understanding that abnormal years will occur and that
actions outside the Productive Safety Net will be necessary in such a
year. Unfortunately 2008 has developed into an extremely difficult year
and the needs are well beyond the capacity of planned Productive Safety
Net resources.
Three factors have combined to make this food crisis much worse
than any seen in Ethiopia in recent history. Some have used the analogy
``Perfect Storm'' to describe the situation. I disagree with the term
``storm'' because storm implies a short term, passing event,
unfortunately the developing crisis will likely continue for the long
term. The three major contributors to the current situation in Ethiopia
are: (1) low crop yields due to inadequate rain, (2) the soaring cost
of food and (3) very low food supplies in Ethiopia's Emergency Food
Security Reserve. Past emergencies were primarily the result of the low
availability of food; however this year rising food prices and low food
reserves are exacerbating the problem.
Current Drought--Low Yields and Poor Harvest
In April 2008, the government and its partners released a joint
document that set out the humanitarian requirements for 2008. This
analysis was based on an assessment conducted in November/December
2007. As a result, the government-led multi-agency needs assessment
estimated approximately 2.2 million people would require emergency food
assistance in 2008. The situation however deteriorated greatly after
the April report.
The performance of the seasonal rains in the highlands including
the Belg, (rains from March to May) were very poor and the area of
farmland planted declined significantly as a result of the lack of
rain. Pastoral and agro-pastoral areas also experienced very limited
rains resulting in greatly reduced availability of pasture, reduced
animal productivity, increased disease and many livestock deaths. Poor
rains have also affected root crop production in southern Ethiopia
where they make a significant contribution to the food security of many
communities.
Rising Food Costs
The Central Statistical Agency of Ethiopia reports that general
inflation is running at over 20% annually and food prices have risen by
over 40% in the past year. However, the prices of some staples such as
wheat and corn have more than doubled and the price of cooking oil has
increased by about \1/3\. Local cereal prices have now become higher
than global market prices. According to the World Food Programme,
imported wheat is currently cheaper than the local price of maize and
sorghum. The current local price of wheat is U.S. $660/MT compared to
import parity of U.S. $425/MT.\1\ In Food for the Hungry program areas
corn has increased from $250 per ton a year ago to $650 and barley has
increased from $150 per ton to $450 per ton.
---------------------------------------------------------------------------
\1\ World Food Programme.
---------------------------------------------------------------------------
These rising food costs are causing great hardships around the
country but especially for the urban poor. In an attempt to reduce the
impact of the rapidly rising food costs the Ethiopian Government has
been selling staples such as corn at subsidized prices to the urban
poor.
The Government of Ethiopia has also restricted export of cereals
and local purchases by aid agencies, in an attempt to control inflation
of prices. It is believe that the government is planning to import
cereals to be sold in major cities with the intention of stabilizing
the market situation in Ethiopia.
Unfortunately this situation is likely to get worse as the hunger
season (April to September) progresses. The belg harvest is expected to
be very poor which contributes to the expectation that price will
remain very high until the next major harvest in October.
Low Stocks in the Emergency Food Security Reserve
The Emergency Food Security Reserve Agency (EFSRA) was set up in
Ethiopia as a source of food to be stored and released when emergencies
like the current food crisis occur. The EFSRA has been every effective
and has allowed rapid responses to previous food shortages. Government
agencies, PVOs, and others borrow from the food reserve while waiting
for food shipments to arrive from abroad or for food to be purchased
locally if it is available.
The EFSRA has been a very important component of the emergency
response system in Ethiopia, however this year its stocks are very low.
The Government of Ethiopia's attempt to stabilize food prices is one of
the major reasons for the low stock levels. As stated above the
government has been selling staples such as corn at subsidized prices
to the urban poor. These commodities have been sold from the EFSRA and
this attempt to stabilize prices has resulted in a depletion of
inventory. Consequently, there have been ``pipeline'' breaks in food
supplies for both the emergency response and the Productive Safety Net.
Early in 2008 Food for the Hungry tried to borrow 8,000 tons from the
reserve but was only able to obtain 5,000 because of limited stocks.
The situation is critical. The need for emergency food has
increased to over 400,000 tons and the food reserve is well below its
minimum desired level of 100,000 tons and most agencies are being told
food is unavailable for borrowing.
According to the recent assessments by the government of Ethiopia
the total number of individuals that will require emergency food
assistance is 10.4 million people. Of this total 4.6 million will be
individuals who are not involved in the Productive Safety Net and will
require 5 or 6 months of assistance. The remaining 5.8 million people
are in the PSNP and will need an extra 3 months of assistance because
of the failed belg rains (rains from March to May). These numbers are
expected to increase after the completion of the Ethiopian government
led multi-agency assessment of the belg rains.
Solutions
Short Term Needs and Solutions
The Productive Safety Net has been successful and greatly improved
the lives of millions of people since its startup in 2005. Because of
the USAID Title II funded safety net communities and families have been
able to build assets, avoid using destructive coping strategies and
have moved toward self sufficiency. Unfortunately the current food
crisis has the potential to undermine the progress that has been made
over the past 4 years. The PSNP districts that rely on the belg rains
are facing an additional 3 months of limited food and will need
assistance so that the progress made over the past 4 years will not be
lost.
With this need in mind the PVO's implementing the PSNP with USAID
resources have prepared a Joint Emergency Operation Program with
Catholic Relief Services acting as the lead agency. The proposal is
base on the Government of Ethiopia's recent appeal and has been
submitted to USAID and is under review. Because of the above mentioned
factors rapid mobilization of resources will be very important. The
next few months are critical.
Long Term Needs and Solutions
Unfortunately the developing food crisis in Ethiopia and other
countries in the Horn of Africa will not be quickly resolved. Long term
solutions are needed. One possible solution is the increased use of
monetization of food commodities in the Horn. The prices of staples
such as wheat, corn and vegetable oil are soaring. Increased
monetization of these commodities in the Horn may help to stabilize
prices over the long run.
Innovative, long-term food aid programs such as the USAID funded
Productive Safety Net Program in Ethiopia are needed in other
countries. Kenya and Uganda would both greatly benefit from a long-term
safety net type program. Unfortunately Kenya was recently removed from
the priority country list and Title II programs in Kenya are currently
shutting down. Long term food based programs would help address the
food crisis and lead to development.
There also needs to be a renewed focus on increasing yields of
small scale agriculture and food security in rural areas of the Horn.
High food prices will provide farmers the opportunity to increase
household income. To accomplish this traditional agriculture and
livestock farming will need to be improved through effective
agricultural extension and marketing. Example programs would be the
promotion of small scale irrigation for production of high value crops,
protecting and improving the capacity of the land and improving access
to credit in rural areas.
In conclusion, the developing food crisis in the Horn of Africa is
tragic and U.S. food aid programs are needed now more than ever. Short-
term, timely emergency assistance is urgently needed to mitigate the
affects of the soaring food costs and the current drought. Timely
assistance will save thousands of lives. Long-term food based
developmental assistance is also needed. Increased monetization of
commodities in these countries may help to stabilize prices over the
long run and the expansion of Title II food aid programs into other
countries will help address the food crisis and lead to development.
The Chairman. Thank you very much. Mr. Guroff.
STATEMENT OF AVRAM ``BUZZ'' GUROFF, SENIOR VICE
PRESIDENT, FOOD SECURITY AND SPECIALTY CROPS
PORTFOLIO, ACDI/VOCA (AGRICULTURAL COOPERATIVE
DEVELOPMENT INTERNATIONAL/VOLUNTEERS IN
OVERSEAS COOPERATIVE ASSISTANCE), WASHINGTON, D.C.
Mr. Guroff. Thank you, Mr. Chairman, for inviting me to
testify. The present world food situation is unarguably in dire
crisis. Today's high food prices will add about 100 million
people to the 850 million already food insecure. I presently
serve as Senior Vice President at ACDI/VOCA where this month we
are observing our 45th anniversary working on worldwide
agricultural development and food security.
Twelve years ago I had the honor of serving as National
Food Security Coordinator and participating as a member of the
U.S. delegation to the World Food Summit in Rome. At that time,
the U.S. Government joined the international community in
committing to the reduction by half of the 850 million hungry
people in the world by 2015. Regrettably, scant progress has
been made on that commitment so far. I hope that the current
crisis doesn't prove to be yet another opportunity for lofty
rhetoric but little political will to address this
unconscionable condition.
The Summit did a good job of reaching consensus that the
achievement of food security will require addressing multiple
factors simultaneously. There is, of course, the need to
provide emergency assistance, but that must be balanced by,
among other things, a significant investment in food production
and rural income generation. What is often overlooked in the
rhetoric of the crisis is that many of the world's farmers see,
in today's rising food prices, unprecedented opportunity if
they are able to develop their capacity and capture markets. I
would like to use this opportunity to say a few words about our
approach to non-emergency food aid, specifically P.L. 480 Title
II and Food for Progress programs, which are important parts of
our portfolio. When possible, we use the process known as
monetization, the selling of the donated U.S. commodities, as a
means of promoting entrepreneurship and fair competition. We
then use the proceeds to fund a wide range of developmental
programs that are designed to assist families to become self-
sufficient and over time reduce the need for emergency food
aid. Our programs in places like Uganda and Cape Verde are
replete with examples of this.
We need to avoid being too reliant on direct distribution
of food aid as a response to the current crisis. We support
local purchase of food aid as a tool in the tool box, but urge
that it be employed carefully with all the same disciplines
that are applied to other food aid programs.
It has now been widely acknowledged that the diminution of
development aid devoted to agriculture over recent decades was
a terrible mistake. Almost no country has managed a rapid rise
from poverty without increasing agricultural productivity. The
2009 U.S. budget proposes that only two percent of foreign aid
expenditures be directed to agricultural development, the
lowest level of spending in more than a decade. As part of the
Coalition for Agricultural Development, we are encouraging
Congressional appropriators to allocate a minimum $600 million
for ag development in 2009.
Let me just mention a couple of examples of how the extra
money should be spent. In Kenya, besides organizing producer
groups and improving cultivation techniques, we develop market
linkages and promote inter-firm cooperation. We have helped
quadruple yields among beneficiary farmers while reducing costs
40 percent. This has generated approximately $133 million in
earnings for our 250,000 beneficiary farmers.
A legacy of our work in Malawi is the National Association
of Smallholder Farmers of Malawi, NASFAM, a member owned and
run organization of over 100,000 farm families. It encourages
smallholders to form village based clubs to increase farming
revenues and stimulate economic development.
Mr. Chairman, in summary, food shortages, lack of
empowerment of people to become self-sufficient, high prices
and inefficiency in the world food economy have been ACDI/
VOCA's 45 year preoccupation. We know that where livelihoods
are agriculture based, food production is the economy of the
economy and fundamental to progress and peace.
To conclude, I reiterate my concern that the global food
crisis not be just another opportunity for hand-wringing and
lofty rhetoric on the part of the international community. I
hope we will do our part by providing robust funding mechanisms
to make long-term sustainable agricultural development a
priority again. I thank you.
[The prepared statement of Mr. Guroff follows:]
Prepared Statement of Avram ``Buzz'' Guroff, Senior Vice President,
Food Security and Specialty Crops Portfolio, ACDI/VOCA (Agricultural
Cooperative Development International/Volunteers in Overseas
Cooperative Assistance), Washington, D.C.
Mr. Chairman, thank you for inviting me to testify. You are to be
commended for focusing attention on the present world food situation,
which is unarguably in dire crisis. Most experts are telling us that we
face a profound, pervasive and persistent problem--and a growing one.
Today's high food prices will add about 100 million people to the 850
million already food-insecure, and climate change may put another 50
million at risk by 2020.
I presently serve as Senior Vice President at ACDI/VOCA responsible
for that organization's food security and specialty crop programs. This
month ACDI/VOCA observes its 45th anniversary working on worldwide
agricultural development and food security. We were founded in 1963 by
U.S. farmer cooperatives in response to Congress's desire to have co-
ops play a role in U.S. foreign assistance, and since then we have
operated in 145 countries on behalf of USAID, USDA and other donors.
Andrew Natsios, former USAID Administrator, called ACDI/VOCA the
``premier agricultural development NGO in the world.''
I welcome the opportunity to speak the language of agricultural
development to you. Permit me to say that, unfortunately, it has almost
been a ``lost'' language in the foreign assistance arena. This defies
logic, since the main beneficiaries are the billion people who subsist
on less than a dollar a day, of whom three-quarters live in rural areas
and depend on agriculture for a living. These rural poor now have to
spend about half their income on food. And productivity growth in
developing country agriculture has fallen from three percent per year
in the 1970s and 1980s to less than one percent today, even in the face
of burgeoning populations. This is a sorry situation--all the more so
because it was largely preventable.
Twelve years ago I had the honor of serving as the National Food
Security Coordinator and participating as a member of the U.S.
delegation to the World Food Summit in Rome. At that time the U.S.
Government joined the international community in committing to the
reduction by half of the 850 million hunger people in the world by
2015. Regrettably scant progress has been made on that commitment so
far. I hope that the current crisis doesn't prove to be yet another
opportunity for lofty rhetoric but little political will to address
this unconscionable condition.
The World Food Summit did do a good job of reaching consensus that
the achievement of food security will require addressing multiple
factors simultaneously. There is, of course, the need to provide
emergency assistance; but that must be accompanied by, among other
things, a significant investment in food production and rural income
generation. Technological advances cannot be overlooked; they were
instrumental during the Green Revolution and are just as possible and
necessary today. Trade policy, as well, is of critical importance;
farmers obviously need to be able to market their production at a fair
price.
The strategy needs to be a balance between doing what we can--what
we must--in the short-term to avoid starvation, distress and
instability, but by all means redoubling our efforts toward sustainable
solutions. And, as this Subcommittee surely understands, but as is so
often overlooked in the rhetoric about the crisis, many of the world's
farmers see in today's rising food prices unprecedented opportunity if
they are able to develop their capacity and capture markets.
Global food production must grow by 50 percent by 2030 to meet
increasing demand, as United Nations Secretary General Ban Ki-moon told
world leaders at a recent conference in Rome. ``Nothing is more
degrading than hunger, especially when it is man-made,'' he said. ``It
breeds anger, social disintegration, ill-health and economic decline.''
But will the world's 450 million smallholder farmers, those on 2
hectares or less, be part of the solution? We say they must for the
sake of widespread food security. Besides, leaving them out would
result in greater hunger and poverty, and attendant disposal of
productive farm assets, poor education, infant mortality, disease and
massive out-migration from rural areas that would add to spiraling
problems in overcrowded cities.
Many of the world's worst-off need direct emergency food aid. For
ACDI/VOCA's part, we are not generally involved in emergency
assistance. However, we selectively do food distribution in contexts
where it makes sense, e.g., supplemental feeding for HIV/AIDS-affected
households, and mother and child health.
Others will likely cover food aid distribution more fully. I would
like to use this opportunity to say a few words about ACDI/VOCA's
approach to non-emergency food aid, specifically P.L. 480 Title II and
Food for Progress programs, which are an important part of our
portfolio. When possible, ACDI/VOCA uses the process known as
monetization, the selling of the donated U.S. commodities, as a means
of stimulating trade within a country. Where appropriate, we design the
process so that small traders have access to markets. By breaking up
the commodities into small lots and working directly with local
marketers in an auction or another sales process, we stimulate the
local market, promote entrepreneurship and fair competition, and
provide a more efficient and wider distribution of needed foodstuffs.
ACDI/VOCA has considerable experience with P.L. 480 Title II programs
in Africa and more recently in Haiti. We have monetized on behalf of
NGOs such as Catholic Relief Services, World Vision and CARE. We have
managed over a million metric tons of commodities.
The second prong of ACDI/VOCA's food aid approach is the use of the
monetization proceeds to improve food security, promote agricultural
development, improve natural resource management, establish and promote
rural micro- and small-business credit institutions, and open up
commercial markets for small producers as well as programs for people
living with HIV/AIDS and their families. In short we and other NGOs
involved in food aid undertake developmental programs that are designed
to assist families to become self-sufficient and, over time, reduce the
need for emergency food aid programs. Our programs in places like
Uganda and Cape Verde are replete with examples of this.
We need to avoid becoming too reliant on direct distribution of
food aid as a response to the current crisis. We support local purchase
of food aid as a tool in the tool box, but urge that it be employed
carefully with all the same disciplines that are applied to other food
aid programs.
Agricultural Development
It has now been widely acknowledged that the diminution of
development aid devoted to agriculture over recent decades was a
terrible mistake. Since ACDI/VOCA's roots are in the Green Revolution,
we couldn't agree more. Investment in agriculture in recent decades
should have been a powerful tool for improving food security and
reducing poverty. The World Bank calculates that for the world's
poorest, GDP growth generated by agriculture is up to four times more
effective in reducing poverty than growth in other sectors. Yet the
proportion of official development assistance to agriculture has fallen
to less than three percent from 18 percent of all aid in 1979.
The World Bank's 2007 World Development Report posits that almost
no country has managed a rapid rise from poverty without increasing
agricultural productivity. Vietnam, a graphic example, has risen from
being a food-deficit country to the world's second-largest rice
exporter, largely as a result of the development of its smallholder
farming sector. The proportion of people living in absolute poverty
there has declined from 58 percent to 14 percent.
The FY09 U.S. budget proposes that only two percent of foreign aid
expenditures be directed to agriculture. The U.S. commitment to
agricultural development has declined from $489 million in 2005 to the
current level of $283 million in 2008, the lowest level of U.S.
agricultural development spending in more than a decade, even before
adjusting for inflation. ACDI/VOCA is pleased to be playing a
leadership role in a new broad-based Coalition for Agricultural
Development (CFAD) which is encouraging Congressional appropriators to
allocate a minimum of $600 million for agricultural development in
FY09. This is the first time in history that a coalition of U.S. based
private sector companies, NGOs, religious groups and others have come
together to advocate for reversing the decline in U.S. spending for
agricultural development.
Examples
Let me address how the extra money should be spent. ACDI/VOCA takes
a comprehensive value chain approach to agricultural development and
examines whether, for example, farmers are organized to understand and
capitalize on markets, build their internal capacities and take
advantage of economies of scale. Do they need access to microfinance to
pay for fertilizer, seeds and equipment, or can they even obtain those
essentials? Do they need upgraded technology, land reform, an enabling
business environment, infrastructure? We identify constraints and
opportunities up and down the respective agricultural value chains and,
within our donors' project objectives, act accordingly to develop a
sustainable local food system.
In Kenya, the poorest quarter of the population was spending 28
percent of its income and probably more now on maize. Our project there
considers the crop's entire value chain in an effort to improve the lot
of smallholder farmers who grow it and to provide more food. Besides
organizing Kenyan producer groups and improving cultivation techniques,
ACDI/VOCA develops market linkages and promotes inter-firm cooperation.
We have built relations with a diverse consortium of partners and
established a market information network. This year's maize business
fair in Eldoret, where our new 176 page Kenya Maize Handbook was a hot
item, drew 15,000 people, including many key private sector players.
ACDI/VOCA has helped quadruple yields among beneficiary farmers while
reducing costs 40 percent. This has generated approximately $133
million in earnings for our 250,000 beneficiary farmers.
Good business principles help make producer groups sustainable. A
legacy of our work in Malawi, which ended in 2003, is the National
Association of Smallholder Farmers of Malawi, known as NASFAM, still
going strong today. NASFAM is a member-owned and run organization that
encourages smallholders to form village-based clubs and associations to
increase farming revenues and stimulate economic development. The
Association has developed farming skills, purchased inputs in bulk,
built its own warehouses and linked to markets in Africa and Europe for
sales of its high-value peanuts and bird's eye chilis. Today NASFAM
represents over 100,000 farm families and has established a commodity
exchange and subsidiaries that provide business services.
Organizing for sustainability has been a hallmark of our success in
Ethiopia where ACDI/VOCA helped revitalize cooperatives and founded
second-tier coffee cooperative unions. These unions gained permission
from the government to bypass the central coffee auction and began
exporting on behalf of their members. Increased market share and
traceability led to further quality improvements. Again, because the
project addressed the whole value chain, it arranged finance, tractor
rentals, transportation deals, representation at world coffee fora,
etc. Today Sidama and Yirgacheffe coffee from these smallholders is
recognized by gourmands around the world. Ethiopia's successful coffee
growers are well positioned to continue putting food on the table even
as food prices increase.
Conclusion
Mr. Chairman, in summary, food shortages, lack of empowerment of
people to become self-sufficient, high prices and inefficiency in the
world food economy have been ACDI/VOCA's 45 year preoccupations. We
know that more productive farming is fundamental to the world's
prospects for progress and peace, and to the extent it is market-based,
the private sector can and will play a welcome and significant role.
As Senator Lugar said about the food crisis, ``Our response exposes
our weaknesses, but it also points the way to needed reforms.'' Time
after time, USAID mission directors have shared with us their
frustration over allocations of development assistance that de-
emphasize agriculture. While the poor suffer from educational, health
and other maladies, I trust we have learned that their foremost need is
food, and, where livelihoods are agriculture-based, food production is
the engine of the economy.
To conclude, I reiterate my concern that the global food crisis not
be just another opportunity for hand-wringing and lofty rhetoric on the
part of the international community. I hope we will do our part by
providing robust funding mechanisms to make long-term sustainable
agricultural development a priority again. If ACDI/VOCA and its
partners have the wherewithal to carry on our work, the risk of future
food crises of this one's magnitude will be substantially reduced.
The Chairman. Thank you Mr. Guroff. Dr. Minot.
STATEMENT OF NICHOLAS W. MINOT, Ph.D., SENIOR
RESEARCH FELLOW, MARKETS, TRADE, AND INSTITUTIONS DIVISION,
INTERNATIONAL FOOD POLICY RESEARCH
INSTITUTE, WASHINGTON, D.C.
Dr. Minot. Thank you, Mr. Chairman, for the opportunity to
participate in today's hearing. Since January 2006, the prices
of corn, wheat and soybeans on the world markets have more than
doubled and the price of rice has tripled. In developing
countries, food accounts for 40 to 70 percent of family budgets
and staple grains represent a large share of food spending,
particularly for the poor. Although many farmers benefit, the
urban poor and a surprising number of rural households are net
buyers and therefore are hurt by higher prices. The net effect
in most countries has increased poverty and hunger.
These price hikes have been catalyzed by various factors
including rising cost of oil, biofuel subsidies, depreciation
of the dollar and export restrictions by some countries.
Although the topic is complex and beyond the scope of this
statement, I would like to clarify two points regarding the
contributing factors.
First, although the effect of biofuel subsidies on the
global cost of food is small, the effect on corn prices and on
the cost of food for poor people in developing countries is
substantial. The Council of Economic Advisors confirms
estimates by IFPRI, my institution, Iowa State University and
the World Bank that biofuel demand accounts for at least \1/3\
of the increase in world corn prices.
Second, the evidence that speculation in futures markets
has contributed to high food prices is weak. If speculation
were a factor we would see rising inventories, futures prices,
leading spot prices and smaller increases for commodities that
do not have futures markets. But this is not the case. What are
the implications of the food crisis for development assistance?
I believe that development assistance needs to respond in eight
ways.
The most obvious implication is that developing countries
and international organizations need to devote more attention
to and more resources to agricultural development. In real
terms, donor support for agriculture is less than half of what
it was in 1982. The U.S. Agency for International Development
needs to boost its aid to agriculture, but this task is
complicated by the large number of earmarks in the foreign
assistance budget.
Second, there is a need to expand resources available for
emergency food aid. According to the USDA, the number of hungry
people increased by 122 million, or 14 percent, in 2007 and
undoubtedly continues to grow this year. At the same time, high
prices have dramatically eroded the purchasing power of the
budget of the world food program and other food aid programs.
Furthermore, a more institutional approach for funding
emergency assistance is needed, rather than the case by case
allocations that are currently used.
Third, there is a need to make better use of existing food
aid budgets. While other industrialized countries have taken
steps to untie their emergency assistance, shifting towards
local purchases and cash transfers, U.S. food aid is still
largely, in kind, based on U.S. sourced food transported on
U.S. flagged ships. This policy raises the cost of shipping
food aid by at least $70 per ton, according to the GAO,
probably higher with the current high fuel prices, as well as
delaying the arrival of emergency assistance. More flexibility
is needed to reduce costs and streamline U.S. response to
emergency needs.
Fourth, emergency assistance should be more closely
integrated with programs to increase agricultural production
and invest in human capital. One promising approach is a
conditional cash transfer program that provide cash transfers
to poor households on the condition that children are kept in
school and that family members participate in health and/or
nutrition programs.
Fifth, the most effective long term strategy for addressing
the food crisis is to invest in agricultural research and
development, particularly in the staple food crops. Not only is
this the right response to the crisis, but it makes good
economic sense. Over 250 economic studies confirm that
investments in agricultural research in developing countries
offer very high rates of return, generally more than 30 percent
per year. Furthermore, the benefits tend to accrue
disproportionately to poor farmers and consumers.
Sixth, investments in agriculture research and development
must be coupled with efforts to reduce the cost of marketing
and storage in developing countries. Improvements in the
marketing system will help distribute surpluses, alleviate
local shortages and reduce volatility. This involves improved
marketing infrastructure, establishing a policy environment
that is conducive to the private sector, reduction in internal
and external barriers to trade and identifying better ways to
manage risk.
Seventh, completing the Doha Round of trade liberalization
would make the global agricultural system more resilient to
shocks. Additional discipline on export restrictions is needed,
either as part of the Doha Round or as a separate agreement.
Finally, it is a mistake to think that one can design, in
advance, the optimal long term agricultural development
strategy. Agricultural policy and public investments must adapt
in response to evolving conditions, and analysis provided by
local researchers is more likely to be accepted, particularly
if it concerns politically sensitive topics such as food
prices. Thus it is essential that developing countries improve
their own capacity to collect information, analyze data,
diagnose problems and identify policy solutions. This concludes
my statement. I would be pleased to answer any questions you
may have. Thank you.
[The prepared statement of Dr. Minot follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Thank you, Dr. Minot. Mr. Dillaha.STATEMENT OF THEO A. DILLAHA
III, Ph.D., P.E., PROFESSOR OF BIOLOGICAL SYSTEMS ENGINEERING
AND PROGRAM
DIRECTOR, SUSTAINABLE AGRICULTURE AND NATURAL
RESOURCE MANAGEMENT (SANREM) COLLABORATIVE
RESEARCH SUPPORT PROGRAM (CRSP), OFFICE OF
INTERNATIONAL RESEARCH, EDUCATION, AND
DEVELOPMENT, VIRGINIA POLYTECHNIC INSTITUTE AND STATE
UNIVERSITY, BLACKSBURG, BLACKSBURG, VA
Dr. Dillaha. Thank you Chairman McIntyre and----
The Chairman. Dr. Dillaha, sorry. Thank you.
Dr. Dillaha. That is fine. Thank you Chairman McIntyre,
Members of the Subcommittee. I speak today as a University
Faculty member representing Virginia Tech and its Office of
International Research Education and Development. Personally, I
have been engaged in international development for a few
decades as a Peace Corps volunteer, an ACDI/VOCA volunteer, an
Engineers without Borders volunteer, a university faculty
member and currently I serve as the Program Director of the
USAID funded Sustainable Agriculture and Natural Resource
Management Collaborative Research Support Program, one of the
CRSPs. There are eight other CRSPs. Our primary objective is to
build developing country capacity to address their own food
security needs. We do this by working in partnership with the
host country's scientists and institutions. And we also develop
new technologies to help USAID, ACDI/VOCA and others that are
engaged in addressing agricultural problems in developing
countries.
To improve U.S. food assistance, I would recommend the
following three short-term actions. Fully fund the World Food
Programme and other USAID--other U.S. programs, and improve the
effectiveness of these programs by removing earmarked and tied
aid requirements. This has been mentioned previously. I would
also request that we reconsider some U.S. policies, such as our
biofuel program and a 1986 Bumpers Amendment, which contribute
to the food security crisis. I would also recommend
facilitating the immediate provision of seeds and fertilizers
for countries that are most affected by the food crisis.
To improve U.S. agricultural development assistance, I
recommend the following, intermediate term actions to help
developing countries solve their own problems and improve food
security. First, we need to expand agricultural research and
development capacity in developing countries. We can do this by
restoring funding for USAID's Collaborative Research Support
Program, the CGIAR and other international agricultural
research centers, the USDA Foreign Agricultural Service and
other U.S. agricultural university engagement programs with
their developing country partners. In particular we need to
support long-term collaborative research programs which build
developing country agricultural research and development
institutions.
Second, we need to expand agricultural education programs
for host country nationals to increase the capacity of food-
insecure developing countries to solve their food security
needs through education of their scientists and policy makers
and we need to do this at U.S. universities. Adequate funding
is needed for programs such as the USAID Collaborative Research
Support Program, Fulbright Humphrey, Borlaug and numerous
programs that work in this area, the USDA Foreign Agricultural
Service and particularly the establishment of these long term
partnerships between U.S. agricultural universities and
developing country institutions that is being discussed.
Long-term U.S. training has decreased dramatically since
1980 from approximately 15,000 host country students to less
than 1,000 last year. This is a disaster for developing
countries and it also decreases U.S. influence abroad. We need
to support the replication of the U.S. Land-Grant University
model abroad. Combining agricultural research, teaching, and
extension missions into a university led system is largely
responsible for the success of the U.S. and, even now, the
Indian agricultural systems. This system, or something like it,
should be supported in other countries.
Most importantly, as we have heard repeatedly today, we
need to dramatically increase agricultural development
assistance. A disproportionate amount of U.S. foreign
assistance supports temporary emergency food aid. We must
increase agricultural development assistance so that developing
countries can feed themselves. We also need to restore the
agricultural development capacity of USAID. We can do this by
recognizing that, as it has been pointed out several times
today, that agricultural development is the first step in
economic growth by establishing agricultural production and
food self-sufficiency as a USAID priority. It is not now. By
doubling USAID and other U.S. foreign agricultural assistance
support, by fully staffing USAID and hiring program managers
with agricultural expertise, and it sounds like we are making
some progress in that area, and by doubling USAID central
funding for agricultural programs and by providing increased
flexibility for those funds by reducing Congressional earmarks.
Finally, we need to fully implement Title XII of the
Foreign Assistance Act, which calls for full participation of
U.S. agricultural universities and USAID efforts to improve
world food production and nutrition.
In conclusion, I thank the Committee for giving me the
opportunity to testify. There are no quick-fix silver bullets
or easy answers to the current food security crisis. Solutions
will take time, but the time to act is now. Please make sure
that U.S. food aid and foreign agricultural assistance
investments benefit both the U.S. and our developing country
host partners by ensuring that each investment reduces
developing country dependence on foreign food aid, builds
developing country capacity to solve their own problems and
strengthens positive attitudes in developing countries
regarding U.S. policies, actions and intentions. Thank you.
[The prepared statement of Dr. Dillaha follows:]
Prepared Statement of Theo A. Dillaha III, Ph.D., P.E., Professor of
Biological Systems Engineering and Program Director, Sustainable
Agriculture and Natural Resource Management (SANREM) Collaborative
Research Support Program (CRSP), Office of International Research,
Education, and Development, Virginia Polytechnic Institute and State
University, Blacksburg, Blacksburg, VA
Thank you, Chairman McIntyre and distinguished Members of the
Subcommittee, for inviting me to participate in today's hearing. I
welcome this opportunity to testify before you on the need for a new
approach to U.S. food aid and foreign agricultural assistance.
I am speaking today as a faculty member representing Virginia
Polytechnic Institute and State University and its Office of
International Research, Education, and Development (OIRED). OIRED
manages a research portfolio of over $46 million in 44 countries around
the world. Current research projects involve forestry and natural
resource management, integrated pest management, sustainable
agriculture, watershed management, and micro-enterprise development and
higher education capacity-building projects Haiti, Nepal, and Oman.
Twelve full-time faculty and nine staff members support these efforts
in partnership with over 40 U.S. university partners and a similar
number of developing country institutions. The majority of these
activities involve agricultural development and are funded by USAID.
Personally, I have been engaged with the issues of international
development for over 3 decades as a Peace Corps volunteer, a U.S.
university faculty member involved in agricultural development and
environmental protection, and currently as the Program Director of the
Sustainable Agriculture and Natural Resource Management Collaborative
Research Support Program (SANREM CRSP) managed by OIRED and sponsored
by the U.S. Agency for International Development (USAID). The SANREM
CRSP is a long-term, $2.4 million per year program that sponsors
applied research to develop new knowledge and technologies to improve
agriculture and natural resource management.
Even before the current global food crisis, there were numerous
calls for reviewing and improving the effectiveness of U.S. food aid
and foreign agricultural assistance programs. Now with the food crisis
and the potential for pushing at least 100 million people in developing
countries back into poverty due to rising food prices, the need for
program reform is even greater. I urge you and other Members to act
quickly and responsibly to address this crisis. My recommendations are
based on my personal experiences in international development and
discussions and with colleagues involved in international development
as well as developing country scientists, policymakers, and aid
recipients.
The overarching objective of the following recommendations is to
increase the capacity of developing countries to pull themselves out of
the food crisis spiral. I recommend that you consider the following
actions:
Immediate
1. Fully fund the emergency food assistance programs of the World
Food Programme and USAID's other Food for Peace activities,
improve the effectiveness of these funds by removing earmarked
and tied aid, and support World Food Programme and USAID
efforts to purchase food locally where possible. Wherever
possible, require strong linkages between emergency food
assistance and agricultural assistance programs.
2. Do not transfer foreign agricultural assistance funds to
emergency humanitarian relief efforts.
The practice of reducing foreign agricultural assistance programs
to provide emergency humanitarian relief is self-defeating and
delays and/or inhibits developing country self-sufficiency in
food production. After the successes of the Green Revolution we
assumed that the ``food'' problem was solved and funding to
increase agricultural productivity to keep pace with growing
populations and demand declined dramatically. Today, we are
faced with recurrent food crises in many developing country
populations and with current policies and aid programs, no
long-term solutions are in sight.
3. Assess and change policies contributing to the global food
security crisis whose humanitarian and economic costs outweigh
their benefits. Key policies that need to be reviewed include:
Biofuel programs competing with grains and oilseeds used
for food.
Current short-term U.S. goals for biofuel use are not
reasonable in light of their effects on food prices.
Deadlines need to be scaled back until biofuels can be
supplied without competing with food crops; subsidies
for biofuel based on food crops should be reduced or
eliminated; and non-food crop biofuel research (e.g.,
cellulosic ethanol) should be greatly expanded. While I
congratulate the Committee for recognizing the
importance of transitioning to advanced biofuel through
the introduction of a new producer credit for
cellulosic ethanol and for providing mandatory funding
for cellulosic infrastructure expansion, there is
certainly more that needs to be done. For one, a
6 cents reduction in the ethanol blenders credit does
not do justice to the immediate need to move U.S.
biofuel production away from an unsustainable corn
based system.
Repeal the 1986 Bumpers Amendment, which prohibits the
use of foreign
assistance funds in developing countries on crops that if
exported, would
compete with U.S. agricultural commodity exports.
This regulation is hampering agricultural development
and U.S. influence in some of the poorest countries.
Recognition that it is not helpful for development is
illustrated by the fact that it is slowly being
relaxed, e.g., U.S. assistance to cotton production in
West Africa.
4. Facilitate the immediate provision of seeds and fertilizer for
countries most affected by the food crisis by using `smart'
subsides friendly to market development in the upcoming
planting seasons.
Intermediate to Long Term
Increase the ability of developing countries to feed themselves and
reduce their dependence on external food aid through capacity building.
From the U.S. university perspective, the major agricultural
development problem and a fundamental cause of the current food
security crisis is the lack of effective capacity of developing country
institutions and personnel to solve local problems and to work with
U.S. and other international scientists and development specialists on
more complex problems. Local capacity building is the cornerstone of
sustainable development. Efforts to build local capacity and solve
local problems have been hampered because:
U.S. universities have had few effective and stable long-
term developing country partners with which to build capacity
and few resources to do so.
Long-term partnerships are necessary to address
sustainability problems because management strategies for
agriculture and natural resources are dynamic, constantly
presenting new challenges and opportunities that require new,
innovative and collaborative research.
U.S. universities simply cannot return again and again each
time a new challenge appears to rebuild developing country
problem solving capacity that was lost and that is continually
needed for responding to evolving needs before they become
critical.
5. Expand agricultural research: For the past forty years, the
Green Revolution and other public and private sector
agricultural research allowed food production to keep pace with
population growth and increasing demand and saved 100s of
millions of people from starvation. As a result, governments,
policymakers, and others concluded that the ``food problem''
was largely solved and that the remaining issues were rather
marginal technology transfer, distribution, and marketing
problems. Resources for new technology development and systems-
related research declined in real dollars. As a result,
agricultural production is not keeping pace with rising demand,
food prices are increasing dramatically, and the numbers of
people in poverty and at risk of malnutrition and starvation
are increasing.
Needed investments in agricultural research include:
Reversing declines and restoring funding for USAID's
Collaborative Re-
search Support Programs, the Consultative Group on
International Agri
cultural Research (CGIAR) and other international
agricultural research
centers, the USDA-Foreign Agricultural Service, and
other programs that
engage U.S. universities agricultural research and
education in devel-
oping countries.
Long-term research programs with well-defined goals
rather than short-
term projects. Long-term programs not only solve
current food production
problems, they also build human and institutional
capacity to solve
future problems.
Creation of developing country agricultural research
institutions (national
and/or regional) that can address local and regional
agricultural research
needs.
To solve the food security crisis, researchers from the U.S.,
other developed counties, and our developing country partners
must work together to provide unbiased scientific knowledge,
which policymakers and development specialists can use to
address the food security crisis. Critical issues include:
New agricultural production technologies and
methodologies;
Sustainable food production given accelerating soil,
water, and ecosystem
deterioration;
Lack of well-trained local researchers;
Extension services for technology innovation and
transfer;
Economics (poverty cycle, markets, infrastructure,
trade issues including
U.S. domestic agriculture policy);
Storage and post harvest food losses (up to 50% in
some cases);
Impacts of global warming and climate change;
Control of invasive species and plant pests;
Biotechnology;
Outmoded land tenure systems;
Gender and resource access issues;
Corruption and governance issues;
HIV/AIDS and other diseases;
Increasing population pressure;
Food aid and delivery mechanisms;
Food transport systems; and
Ecosystem services.
6. Expand agricultural education: Increase the capacity of food-
insecure developing countries to solve their food security
needs by educating developing country agricultural scientists
and policymakers at U.S. universities.
The principal investment needed in long-term agricultural
education is adequate funding for training and capacity
building programs conducted by:
the USAID Collaborative Research Support Programs,
U.S. programs such as the Fulbright and Humphrey
Fellow and Scholar
Programs,
the USDA-Foreign Agricultural Service, and
long-term partnerships between U.S. land-grant
universities and colleges
and developing country educational, research, and
extension organiza-
tions.
Prior to 1990, the U.S. was the world leader in educating
developing country scientists and policy makers; however, U.S.
efforts in this area have declined dramatically. Long-term
training in the U.S. decreased from approximately 15,000 per
year in the 1980s to approximately 1,000 last year. Long-term
degree training in the U.S. also benefits the U.S. by exposing
future developing country leaders to the U.S. system and
creating leaders who understand and are supporters of U.S.
policy and actions. The decrease in training of Africans has
been particularly devastating for agriculture in Africa, as a
significant portion of U.S. educated African scientists and
policymakers have either died of AIDS or retired. Because of
the decrease in training, there is now a dearth of qualified
people for agricultural research, development, and leadership
positions. In Africa, China has replaced the U.S. as the
premier leader in long-term higher education, and we have lost
one of our most effective means of influencing future African
leaders.
7. Support for the U.S. land-grant university model under Title
XII: Combining agricultural research, teaching, and extension
missions into a university led system has been largely
responsible for the success of U.S. agriculture. A similar
system based on the U.S. model is also largely credited with
the success of agricultural development efforts in India. This
success is due to the following factors:
The U.S. land-grant university approach to
agricultural development fa-
cilitates communication and collaboration among the
three
necessary components of agricultural development:
research, education,
and extension.
Through this integration, research and education are
grounded in real
world problems identified through agricultural
extension programs, and
extension programs in turn benefit from the cutting-
edge university re-
search and teaching methods.
In the developing world, the three missions are generally
housed in different ministries, greatly complicating
collaboration internally and externally.
U.S. land-grant universities and colleges and their world class
researchers, educators, and extension specialists are ideal
mentors for developing country universities wishing to adopt
this model. They can build human capacity (long-term degree
training and faculty development) as they advise and helped
integrate the agricultural research, education, and extension
missions in developing country institutions based on the land-
grant model.
The U.S. land-grant university model with long-term
partnerships between U.S. land-grant universities and colleges
and developing country ``land-grant'' type institutions are
natural partners for solving the immediate as well as emerging
problems in agriculture and natural resource management.
Together they can leverage many more resources to support joint
efforts and thereby magnifying the impacts of U.S. foreign
assistance.
8. Dramatically and sustainably increase agricultural development
assistance: The U.S. devotes too high a proportion of its
foreign assistance budget to temporary emergency food aid. More
resources should be devoted to developing country capacity
building to enable them to solve their own problems.
Food aid is a double edged sword; it relieves immediate hunger,
but it can create dependency and more threateningly, it can
disrupt local food markets, lower local food prices, and make
local food production unprofitable. Many developing country
officials indicate that their people would be much better off
if food aid were reduced and resources were shifted to
agricultural development assistance so they could feed
themselves. For example, Ethiopia, a chronically food insecure
U.S. aid recipient, receives approximately $12 in food aid for
each dollar of agricultural development assistance. Food aid
and development assistance are related in their consequences
but should be funded separately.
9. Restore the agricultural development capacity of USAID by:
Recognizing that agricultural development is necessary
as the first step
in economic growth and a precursor to
industrialization.
Establishing agricultural production and food self-
sufficiency as USAID's
priority in developing countries that are food
insecure.
Double USAID and other U.S. foreign agricultural
assistance support of
rural infrastructure; water and irrigation services;
developing country ag
ricultural education, research, and extension services;
and post-harvest
management in countries that have supportive
agriculture policies that
favor economic growth.
Improving the effectiveness of USAID agricultural
assistance programs
by fully staffing USAID and by hiring program managers
with
expertise in agriculture and natural resource
management.
As noted by Peter McPherson, former USAID
Administrator, and Secretary of Defense Robert
Gates, USAID human resources have declined
dramatically. Since 1980, permanent American
USAID employees have declined from 4,058 to
2,200 and permanent foreign officers from about
2,000 to 1,000. In terms of all permanent USAID
employees, USAID staff has dropped from a high
of 15,000 during Vietnam to about 3,000 in the
1990s. In addition, there has been a dramatic
loss of technical expertise. For example, USAID
now has only two engineers, 16 agriculture
experts and 17 education experts. So the
combination of reduced staff overall and the
loss of technical expertise puts the agency in
the difficult position of trying to manage
projects and programs with technical expertise
and numbers of staff that are substantially
inadequate. We need to rebuild human capacity
for our international work (Secretary of
Defense Robert Gates).
Doubling USAID central funding (USAID/EGAT/AG) for
agricultural pro-
grams, and provide increased funding flexibility by
reducing earmarks.
USAID has much less flexibility today to
respond to new problems and the needs of
countries as the countries define them because
of excessive congressional and executive
earmarks and directives (sometimes exceeding
100% of appropriated funds). There is
insufficient funding and budget flexibility to
respond to opportunities or to leverage
resources from others. Congress must provide
direction to USAID for appropriated monies, but
with greater flexibility within the context of
the appropriation process and oversight (Peter
McPherson).
USAID agricultural development assistance should be a
mix of short-
term, intermediate, and long-term agricultural
development programs
overseen by USAID staff with appropriate disciplinary
expertise.
Because of staff cuts, USAID has moved from an
implementation to a contracting agency, which
farms out large portions of the foreign aid
program. It is increasingly difficult for USAID
to provide proper technical oversight to these
contracts. I have been told that because of
staff shortages, USAID program officers are
currently managing on average four times more
funding than USAID policies call for. This
makes technical oversight difficult. As an
example, I recently conducted a training
program for USAID staff in Washington on
payments for environmental services. At one
point I apologized that my program speakers
were all economists. One of the USAID
participants quickly responded, ``Don't worry
about that; we are also almost all
economists.'' USAID needs more staff and more
appropriate disciplinary diversity.
10. Full implementation of Title XII, the Famine Prevention and
Freedom from Hunger amendment to the Foreign Assistance Act,
which identifies a leading role for U.S. universities to work
with USAID to achieve the goals of ``ensuring food security,
human health, agricultural growth, trade expansion, and the
wise and sustainable use of natural resources''--agriculture in
all its dimensions--through research, education, extension/
outreach, and policy formulation.
Over the years, the scope and level of activities carried out
by USAID through U.S. universities that have been characterized
as ``Title XII activities'' has declined dramatically. The
early members of the Board for International Food and
Agricultural Development (BIFAD) had a broad and bold vision of
their role and were supported in that view by the USAID
administration of the time. They envisioned a huge potential in
the application of university-led cutting-edge research and
technical assistance in solving food and nutrition problems
around the world (Deborah Ruben, 2008 Title XII Activity
Report).
Conclusions
In conclusion, I would like to thank the Committee for giving me
the opportunity to testify. I hope that my testimony has been useful
and will assist the Committee in playing a leadership role in the
discussion and reform of U.S. international food aid and foreign
agricultural assistance. There are no silver bullets or easy answers to
the current food security crisis. Solutions will take time, but the
time to act is now. Please make sure that U.S. food aid and foreign
agricultural assistance investments benefit both the U.S. and our
developing country partners by assuring that each investment:
reduces developing country dependence on foreign food aid,
builds developing country capacity to solve their own
problems, and
strengthens positive attitudes in developing countries
regarding U.S. policies and actions.
The Chairman. Thank you. Thank you to all of our witnesses.
Dr. Minot, you mention in your testimony the need for more
institutionalized system for funding emergency assistance. As
we have heard today and has been referred to, emergency
assistance is designed by nature to be somewhat ad hoc because
of the fact that it, indeed, is an emergency. What systems or
procedures do you suggest should be institutionalized to make
the assistance more available when it is needed in times of
emergency?
Dr. Minot. Well, I think--and first of all, I think it
needs to be internationally coordinated because this is
something that where the risks of shock occurring, there may be
several famines or several emergencies in a given year. It is
much more difficult for one country, even the United States, to
respond to multiple crises at the same time, than it is--it
would be easier for the industrialized countries, as a whole,
to respond to this crisis. So, first of all, some sort of
international cooperation would be required. Second, some sort
of--it is basically an insurance scheme. You have a situation
where countries are willing to contribute a certain amount per
year, but they want to make available a larger sum on this
occasional, sort of, crisis situation, particularly when there
are multiple crises--multiple emergencies that occur in a year.
Those are the two key elements that would be required for a
more institutionalized approach to emergency assistance.
The Chairman. I know that we are moving close to votes and
I want the many Members of the panel to have an opportunity to
ask questions so that we will be able to complete this before
the set of votes come on the House floor. So I now move to the
Ranking Member for any questions she may have.
Mrs. Musgrave. Several of you have cited the lack of
current agricultural production and reminded of the gains that
have been made through the green revolution. Zimbabwe is always
on my mind and could you just address government policies and
what effect they have had. You know, you think of Zimbabwe
being the bread basket of Africa and the enormous ability there
to grow food and now it is just--I mean, it is devastated in
every way. Could one of you, or all of you, comment on that?
Whichever or whomever would like. Yes, go ahead.
Mr. Guroff. I mentioned in my statement about the World
Food Summit and the fact that there are, by consensus, a
variety of things that have to happen all at once if a country
is going to become food secure. And one of those factors, and a
big one in the Zimbabwe case, is clearly the enabling
environment for success in that area. There is no amount of
food aid, there is no amount of technology that can overcome
bad government practices and the absence of an environment for
private investment, which is also a critical factor. So the
answer, unfortunately, is a broad political one, in that case,
that as I said--no amount of aid is going to overcome.
Dr. Minot. Let me just--I certainly agree with my
colleague's comments. I spent 2 years in Zimbabwe in the early
1990s and am very aware of, certainly, the potential of the
country, both in terms of agricultural production and as a
vibrant member of the international community. The case of
Zimbabwe highlights the fact that technical assistance and
technology and developmental assistance is not always
sufficient. It also highlights the need for assistance in the
area of democracy and governance. It may be that the situation
in Zimbabwe could not have been prevented by assistance in this
area, but it certainly highlights the importance of good
governance and transparency. Thank you.
Mr. Callahan. Representative Musgrave, I might just have
one quick point on that, as well. Having been in Zimbabwe
earlier this year, and then most recently in Sudan last month,
that certainly civil society is a crucial area, in Zimbabwe
they are now exporting some of their highest producing farmers
to Zambia and other countries due to the insecurity in the area
and the lack of continuity. It is difficult for people to plant
crops if they don't know if they are going to be owning that
land or be able to harvest them down the line. In addition to
that, even food aid has become more and more difficult in the
capturing of trucks and things that are going to certain areas
to be used for political use, but I think we should use
Zimbabwe as an example. Certainly in southern Sudan and other
countries where there isn't stability, now is the time for us
to address some of those concerns in civil societies so that we
don't have a crisis down the line in other countries as we do
in Zimbabwe.
Mrs. Musgrave. Thank you very much, Mr. Chairman, and thank
you, witnesses.
The Chairman. Thank you. Mr. Pomeroy
Mr. Pomeroy. What a terrific hearing. Mr. Callahan, I want
to commend your testimony. We can almost feel the emotional
impact of the trip you had into the feeding stations through
your testimony for us. It certainly has created, in my own
mind, a notion that we better take a trip there. I think that
if these Committee Members could, similarly, see what you have
seen, we might have a different notion about all of this. I am
absolutely convinced that there are strategies that can
profoundly improve our international food aid, that don't. On
the other hand, we are bound against the very interest we are
elected to represent, the well being of our farmers and so to
those of you that--and I have heard a couple of statements. I
think biofuels or some of the other ways we have structured our
food assistance, we just have to reverse course on these. In
other words, seek to dramatically reduce commodity prices so
that we can do more relative food aid. Well, that is a
structure that we are not going to really embrace here in the
Agriculture Committee. We are trying to improve the financial
circumstance of those we represent, but we are completely
convinced this does not mean we are trying to starve the world.
And so, trying to work through how we build capacity, how we
drive innovation, how we expand global ag extension, how we
weave in food for school attendance. These are strategies that
are win-win strategies and these, in my opinion, needs to be--
if you are going to think about it practically and
strategically and what is going to be politically, most likely,
to prevail needs to be the key points of advocacy by the hunger
community, and we are ready to partner with you on that. I am
not going to partner with you on taking down commodity prices.
The market is, ultimately, going to sort that out. As we look
at so many issues, so little time to try and get our hands
around, I am interested in what seems to be working. You know,
what are best practices that we might identify, pull and
export.
And Mr. Guroff, you allude to some of them in your
testimony. What factors are common to the success stories you
have seen that we might learn from and, maybe, do a better job
of incorporating into our policies?
Mr. Guroff. I appreciate the question. There was discussion
during the first panel about sustainability and one of the core
elements of what we do at ACDI/VOCA is work at the local level
to build cooperatives, to build associations, to build linkages
that will be there long after we have gone. And this is--if
there is anything that runs through our development efforts
consistently it is this sort of development of human
infrastructure, if you will. I referred to the hundreds of
thousands that are benefiting from that organizational linkage
and putting those groups to: linking them up in various stages
of the value chain like NASFAM in Malawi; like the
organizations that we have nurtured in Uganda; making small
grants in Rwanda or Cape Verde with the resources made
available through Title II programs. Taking what I have always
referred to as the alchemy process of taking North Dakota wheat
and turning it into road building and community organization
and agricultural development around the world is a magical
thing to me in the 10, 12 years I have been in this business.
And I see this, as I say, working, essentially, through local
organization building.
Mr. Pomeroy. Dr. Dillaha, as part of the land-grant
university, you talked earlier about the potential of trying to
expand. We don't have enough folks to help. We have had,
basically, USAID shrink to, it is a contracting agency, and in
order to deal with staffing up, we are going to have to
leverage some resources that are otherwise available. You fall
pretty quickly on the land-grants there. What do you think,
from your position, is the capacity that could be marshaled in
a useful way from land-grants?
Dr. Dillaha. I think there is a huge potential, and once
again somebody mentioned earlier that Peter McPherson, through
his role is the chair of the NASULGC is working with Members of
Congress and others on some long-term programs that would
establish partnerships between major U.S. agricultural
universities; and either universities in different developing
countries, or maybe a regional university that would represent
a group of developing countries that would build up their
capacities to educate people, to conduct research to address
their problems. But, probably, more importantly is adapting
their extension services to actually get the knowledge that we
transfer from here that is developed there collaboratively, to
get it out. One of the biggest problems that we have in many of
the developing countries is they have educational institutions,
they have agricultural research institutions, and they have
extension services and they are all separate and they do not
communicate. They do not work like the model we have. So I as
an educator or researcher, I benefit from working with
extension workers because I learn what the real problems are
out there and then we integrate that into our teaching and our
research programs. Then it also gives the opportunity for the
extension workers to learn more about our research programs and
the new knowledge that is generated so they can get that out
there. That model just does not exist in innate places. There
were attempts to establish this in the past and there wasn't
long-term support to maintain these efforts.
Mr. Pomeroy. Thank you, Mr. Chairman, for your indulgence.
The Chairman. Yes. Thank you very much. Thank you, Dr.
Dillaha. Mr. Smith.
Mr. Smith. Thank you, Mr. Chairman. I guess I apologize for
arriving late, I am trying to get a grasp of what all has been
said and try not to repeat things. I would offer some comments
first and that is that it is a relatively short period of time
that we have gone from a surplus of some grains to, many would
say, a premium. How can we explain that other than--I can't
help but think that there are causes greater than and certainly
have a greater impact than simply biofuel production. I can
offer those, but in the interest of time I would prefer to hear
from you, but the fact is when we hear about our current
situation not being sustainable I would say neither is $2
bushel corn sustainable. When you look at the bigger picture of
production and the cost inputs and otherwise--I don't need to
repeat prior information. I also think about GMOs and I think
the important role that GMOs have played in, literally, feeding
the world. Dr. Barnes, could you, perhaps, express your
association's perspective on GMOs and perhaps how useful they
are, or if you are not an advocate of GMOs, could you explain
that.
Dr. Barnes. Thank you for the question. Speaking for
myself, and my organization, I would say that I advocate GMOs.
Getting the proper GMO to the situation, say in Africa or to
Ethiopia where I worked, would take some work, but Ethiopia
needs improved productivity. It needs new options. The farmers
there need new options and as my colleague from Virginia Tech
said, extension work needs to be done. Well we need to give the
right tools to the people. Genetically modified corn or wheat
would be very helpful in Ethiopia if it fit the agricultural
and environmental situation, so I fully support the idea.
Mr. Smith. Thank you. Dr. Dillaha, could you elaborate,
perhaps, on the acceptance? I would say GMOs are, maybe,
accepted a little more today than just a couple of years ago.
Could you speak to the acceptance worldwide, or to the science
and those who may still fight GMOs, are they coming around?
Dr. Dillaha. I don't know that I would have any more
knowledge than you would. I think that the thing that we need
to remember when we think about biotechnology and GMOs is they
are not a silver bullet. It is just like the green revolution.
The green revolution only worked in some parts of the world
where there was adequate management skill, adequate water,
adequate access to fertilizer and things like that. If we just
introduce better seed, we are not, necessarily, going to get
any increases in production and things like that. We have to
have all of these other enabling factors. We have to look at
farming systems. We have to look at the markets that have been
mentioned and things like that. Certainly there is opposition
to GMOs and some types of biotechnology in different parts of
the world, but it is certainly a valuable tool that we have in
our tool box to address the problems that we are talking about.
Mr. Smith. Okay, thank you. And let me just say that last
year when I traveled to Ethiopia, I must say that I was
impressed and, actually, inspired by the interaction of USAID,
Catholic Relief Services--by not only their interaction, but
how they are bringing a better way of life to those folks that
most Americans don't identify with. The increment of improved
living is huge and I commend those agencies involved and
certainly thank you. Thank you, Mr. Chairman.
The Chairman. Thank you very much. Mr. Callahan, you had
mentioned the long term nature of the food crisis and how we
are only at the beginning. Based on what you have seen, do you
think the situation will be improved or worse a year from now?
Mr. Callahan. From what we are doing, we need to make some
significant efforts or the situation will be worse a year from
now, so we are very concerned about it. I think the publicity
that we are currently receiving; the fact that the Congress has
acted and the U.S. Government has shown great leadership; the
fact that the World Bank is getting involved; and the fact that
a lot of other foundations such as Gates and others are
participating, is very helpful to the cause. But I still see
there are a lot of gaps, there are a lot of people in isolated
areas that won't be reached by some of the quicker initiatives.
As we have mentioned at this meeting--longer term agricultural
production investments are going to be necessary or the
situation will continue to be difficult and worse than it is
today.
The Chairman. What is your answer to that, Mr. Guroff? Is
it going to be worse or better a year from now?
Mr. Guroff. I think, as I said in my testimony, it depends
on political will at this point. I think the jury is out on the
question. We have made some progress in the farm bill, in terms
of protecting non-emergency programs, which down the road will
help us to avoid similar emergencies. But it is just a step in
the right direction. It needs to go further. There has been no
answer in terms of the Emerson Trust and replenishment, and as
so many have said investment in agricultural development--if we
can't really ramp that up, we are not going to be doing our
parts, and as I said, it is the international community as a
whole. Certainly the U.S. can't do it all, but the U.S. can
certainly point the way and show that there is political will.
Otherwise, I think we will see a worse situation a year from
now.
The Chairman. Okay. Dr. Barnes, your answer to that
question? Is it going to be better or worse a year from now,
and why?
Dr. Barnes. Well I think, as we have all said, this is a
long-term problem and I believe, at best, we can hope things
will have perhaps bottomed out in a year from now. I feel that
the global economic situation that we are facing took a long
time to develop. It just didn't happen overnight and it is
going to take a while to correct itself. So for the poor in the
world and the hungry in the world I think this is going to be
lasting a few more years. I hope it bottoms out in the next
year and we can begin to make progress, but on the whole, I
feel this is here for the long run and in the next year things
will be about the same.
The Chairman. All right, thank you, sir. We are getting
ready to have votes at any moment now. Mrs. Musgrave had to
leave a few moments early, but in our discussion, the question
that I have just asked that three of you have answered, I would
like you three to put your statement in writing and perhaps to
expand upon it, if you like. I would also like Dr. Minot and
Dr. Dillaha to answer the same questions and put that in
writing. We would like, as you know, to be able to have any
expanded comments and the answer to that question within 10
business days from today. Normally it is 10 calendar days, but
I am giving you 10 business days since earlier in the panel we
asked you to be able to give any extended remarks within 10
business days, so we will make that consistent. That would be 2
weeks from today, 2 calendar weeks from today. The record will
remain open to allow any supplementary written responses,
specifically to the last question I ask. I would like all five
of you to answer. Mrs. Musgrave has an intense interest in your
answer as well, and unfortunately, had to leave a few moments
early.
Also, if there are any other questions that any Members
have that they would like to submit to you, I encourage them to
do so, immediately, within the next day or 2 so that you can
also answer those questions within the 10 business days. Thank
you all for your attendance. I thank the audience for their
patience and thanks to the staff, Kim and Aleta, particularly,
I want to say thank you and thanks to the minority staff, as
well. This hearing of the Subcommittee on Specialty Crops,
Rural Development and Foreign Agriculture is now adjourned. May
God bless you.
[Whereupon, at 11:51 a.m., the Subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Submitted Statement of Robert Paarlberg, Ph.D., B.F. Johnson Professor
of Political Science, Wellesley College
In the developing world, advocates for high-yield farming have
recently been on the defensive. The current spike in world food prices
has raised a possibility that modern farming in developed countries may
be close to exhaustion due to environmental limits. A global project
called the International Assessment of Agricultural Knowledge, Science
and Technology for Development (IAASTD), sponsored by the World Bank
and the United Nations Food and Agriculture Organization, concluded
earlier this spring that modern high-yield farming had led to land
degradation, unsustainable water use, excessive fertilizer
applications, inappropriate use of pesticides, and a loss of
biodiversity. The implied conclusion was that poor countries in the
developing world should stay away from modern high-yield farming and
place much greater emphasis on agro-ecological approaches, organic
farming, or ``traditional knowledge.''
This conclusion would take the developing world in exactly the
wrong direction. The record shows that high-yield farming in rich
countries today is actually friendlier to the rural environment (per
bushel of production) and hence more sustainable than low-yield
farming, and it is becoming more so every day as technology continues
to evolve. The popular impression that modern farming will ruin the
environment dates from Rachel Carson's 1962 book Silent Spring, a
description of the health and environmental damages done by the use of
DDT in farming. Yet this impression is now out of date. Thanks in part
to Carson's book chemical use in American farming is now more tightly
restricted (DDT has not been used for nearly 4 decades) and numerous
other regulatory and technical advances (such as conservation tillage)
have dramatically reduced environmental damage even as yields have
continued to increase.
And, there is no end in sight to this important progress. The
Organisation for Economic Co-operation and Development (OECD) has just
published an important review \1\ of the ``environmental performance of
agriculture'' in the 30 most advanced industrial countries of the
world, those with the highest yielding farming systems. The new data
show that between 1990 and 2004 total food production increased in
volume by another five percent, while adverse environmental impacts
were diminishing in every area.
---------------------------------------------------------------------------
\1\ OECD (2008). Environmental Performance of Agriculture in OECD
Countries Since 1990, Paris, France, www.oecd.org/tad/env/indicators.
The area of land taken up by agriculture declined four
---------------------------------------------------------------------------
percent.
Soil erosion from both wind and water was reduced.
Water use on irrigated lands declined by nine percent.
Energy use on the farm increased at only \1/6\ the rate of
energy use in the rest of the economy.
Gross greenhouse gas emissions from farming fell by three
percent.
Herbicide and insecticide spraying declined by five percent.
Excessive nitrogen fertilizer use declined by 17 percent.
Biodiversity improved, as increased numbers of crop
varieties and livestock breeds came in use.
The OECD countries registered this strong performance even while
continuing to carry a disproportionate production burden. They are home
to only 18 percent of the world's citizens (and a much smaller fraction
of the world's farmers) yet they produce 36 percent of the world's
annual cereal crops, 40 percent of the world's meat, and 47 percent of
the world's milk.
What has made these reduced impacts on the environment possible is
not a move away from high-yield farming, but instead a move toward
``precision farming.'' Farmers are now conserving water with drip
irrigation systems and laser-leveled fields. Farm tractors now have
satellite-linked Global Positioning System (GPS) monitors and
Geographical Information System (GIS) maps that can tell exactly where
they are in a field (within 1 square meter) and precisely how much
water or fertilizer that part of the field needs. In the United States,
genetically engineered seeds have allowed farmers to control pests and
weeds with fewer chemical sprays and less soil tillage, leading also to
less burning of diesel fuel and more sequestered carbon.
It is low-yield farming, not high-yield farming, that does
greatest harm to the environment. In America it was in the 1930s, when
wheat yields were less than half the current level, that farmers plowed
fragile dry lands on the southern plains, and then watched the soil
blow away creating an infamous ``Dust Bowl.'' In the decades that
followed, improved seeds and new fertilizers made good lands much more
productive, so fragile lands no longer had to be plowed. As a
consequence total U.S. farm output doubled after 1950, even as the land
area being farmed declined by 25 percent.
When developing countries embrace modern farming they make
comparable land conservation gains. In India in 1964, before the
introduction of modern seeds and fertilizers, farmers produced 12
million tons of wheat on 14 million hectares of land. Following an
uptake of new seeds and fertilizers, yields increased dramatically so
by 1993 India was able to quadruple its wheat production while
increasing its cropped wheat area by only 60 percent. M.S. Swaminathan,
the Indian crop scientist who led this ``green revolution'' later
commented: ``Thanks to plant breeding, a tremendous onslaught on
fragile lands and forest margins has been avoided.''
The goal of environmentalists today should be to help farmers in
Africa make a similar transition toward more productive cropping
techniques. Roughly 60 percent of all citizens in sub-Saharan Africa
are farmers, and most have no irrigation, no improved seed varieties,
no nitrogen fertilizers, and no veterinary medicine for their animals.
Their crop yields are only \1/10\ as high as in Europe and only \1/3\
as high as in the developing countries of Asia, and despite their best
efforts production has fallen behind the rate of population growth. On
a per capita basis, production in Africa today is actually 19 percent
below where it was in 1970.
Some (including those who influenced the ISTAAD assessment) like to
peddle a romantic notion that Africa should stay away from high-yield
farming and embrace pre-modern ``organic'' production methods instead.
Yet most of Africa's smallholder farmers today are de facto organic
(since they use little or no nitrogen fertilizer) and the outcome is
anything but romantic. A majority of smallholder farmers in Africa are
women who earn only about $1 a day, and \1/3\ of them are malnourished.
Nor are they succeeding as stewards of the environment. The nutrients
in their soils become exhausted from constant cropping without
fertilizers, so they must move on to clear new lands. Land clearing for
low-yield agriculture has become the cause of approximately 70 percent
of all deforestation in Africa. High-yield farming based on modern
agricultural science may not be romantic, but it remains the best
option available for increasing both the production of food and the
income of farmers, at least cost to the natural environment.
What is it that holds poor farmers in Africa back from moving
toward higher crop yields and a better-protected rural environment? In
my new book Starved for Science: How Biotechnology is Being Kept Out of
Africa (Harvard University Press) I show that farmers in Africa suffer
from low productivity because most are laboring without any of the
essentials of modern farming. No fertilizers, no hybrid seeds, no
irrigation, no electrical power, no veterinary medicine. Only four
percent of farmland in Africa is irrigated. Farmers in Africa use only
about \1/10\ the amount of fertilizer per acre as farmers in the
industrial world.
It would be easier for farmers in Africa to get access to these
essential technical supports if governments in Africa invested more in
agricultural development. In recent years governments in Africa have
dedicated only about five percent of their public spending to any kind
of agricultural development, far too little for a sector employing \2/
3\ of their citizens and in such great need. Because of inadequate
rural infrastructure investments, most farmers in Africa are
significantly isolated from the modern economy. Seventy percent of
rural dwellers live more than 2 kilometers (a 30 minute walk) from the
nearest all-weather road, so most household transport still takes place
on foot. High transport costs drive up the price of fertilizer
deliveries and drive down farm profits from commercial sales. Rural
infrastructure and agricultural research need public sector leadership,
but government spending on farm-to-market feeder roads has been
marginal and agricultural research has been particularly neglected.
At an African Union (AU) meeting in 2003 in Maputo, governments in
Africa pledged to increase their budgetary spending on agriculture to
ten percent by 2009, in support of a new Comprehensive Africa
Agriculture Development Programme (CAADP). Helping governments in
Africa to reach this goal should be the first priority of U.S.
development assistance in the region. Unfortunately, USAID support for
agriculture in Africa has been shrinking rather than growing for the
past 2 decades. As late as 1980 a full 25 percent of all U.S. official
development assistance went to agriculture, but as of 2007 only one
percent of USAID spending went for that purpose. When the aid-dependent
countries of Africa see the donors pulling money away from agricultural
modernization, they are inclined to do the same.
Weak donor support has been particularly damaging to agricultural
research investments in Africa. We know that agricultural research has
big payoffs in Africa. Colin Thirtle, Lin Lin, and Jenifer Piesse have
calculated that the weighted average rate of return to agricultural R&D
spending in Africa's farm sector has been a respectable 22 percent. In
its 2008 World Development Report the World Bank has estimated, from a
review of 188 different studies carried out in Africa (between 1953 and
1997) that the average rate of return on agricultural research
investment in Africa is above 30 percent. Yet investments in
agricultural research have been badly neglected. In one sampling of
twenty-seven countries in sub-Saharan Africa in the 1990s, public
spending on agricultural R&D had declined in half. Between 1981 and
2000, per capita spending on agricultural science in Africa overall
actually declined by 27 percent.
This abandonment of agricultural research in Africa was caused, in
significant measure, by a collapse in donor support. Between the mid-
1980s and 2004, annual USAID funding for agricultural R&D in Africa
dropped by nearly \3/4\, down to a negligible $15 million for the
entire continent. African governments were unable to make up for this
decline in external assistance so their own spending on agricultural
research was cut back.
Why was external assistance to African farming cut back so sharply?
One reason was an illusion, created by low international food prices in
the 1980s and 1990s, that the world's food production problems had all
been solved. In truth, food production problems in Africa were
worsening in the 1980s and 1990s, and between 1991 and 2002 the number
of undernourished people in the region increased from 169 million up to
206 million. Nearly \1/3\ of all men, women, and children in sub-
Saharan Africa became malnourished, even at a time when world food
prices were low. Price levels in the international marketplace have
always been a poor indicator of actual circumstances in the African
countryside.
The current run-up in international crop prices has brought renewed
attention to food and farming issues, but so far the response of the
U.S. Government has been to stress short-term food aid needs over long-
term investments in agricultural development. Roughly 85 percent of the
new funding pledged by President Bush in response to the world food
crisis this year has been for food aid. Financing food aid is
important, but what poor farmers in Africa need for the longer run is
higher farm productivity. This will require revived international
support for adequate local public investments in things like rural
roads, rural irrigation and power, rural schools, rural clinics, and
most of all local agricultural research. The bulk of Africa's food
crisis comes not from the high cost of imported food but instead from
the low productivity of Africa's own smallholder farmers. The current
interlude of high food prices has revived interest in international
food and hunger issues, which is a good thing. If the current crisis
can be leveraged to revive USAID's traditional mission in supporting
farm productivity gains in poor countries, then something even better
will have been achieved.
______
Submitted Statement of Dr. Cary Fowler, Executive Director, Global Crop
Diversity Trust
On behalf of the Global Crop Diversity Trust I would like to thank
the Committee for the opportunity to submit this testimony, and in
particular for the Committee's recognition of the importance of the
Trust's work through the authorization in the farm bill of the
appropriation of $60 million to fund the United States' contribution to
the endowment of the Trust.
Background
The recent food price crisis has thrown into sharp focus many of
the development challenges we face to ensure food security: population
growth, little new land, water shortages, uncertain energy supplies,
and climate change. These mean that soon our crops must produce more
food, on the same amount of land, with less water, with more expensive
and less secure supplies of energy and fertilizer, under climactic
conditions which farming has never experienced.
There is no possible scenario in which we can continue to grow the
food we require without crop diversity. But this diversity is at risk,
dying even in the gene banks where it has been placed for safekeeping.
Individual varieties, such as the 200,000 varieties of wheat, have
different traits for drought or heat tolerance, nutritional quality,
disease resistance and every other possible characteristic. Crop
diversity is therefore the raw material for improving and adapting
crops to meet all future challenges.
But securing crop diversity is a unique challenge because:
There is complete agreement regarding its paramount
importance--it is the biological foundation of all agriculture,
everywhere.
There is total global interdependence--no country in the
world is self-sufficient in the genetic diversity of the crops
which feed its people.
The solution is available and simple--all the political
agreements are in place, the science is understood, the
institutions exist. Only the finance is missing.
There is only one organisation working worldwide to solve
this problem--the Global Crop Diversity Trust.
Therefore, full funding of the Global Crop Diversity Trust's
endowment will guarantee that the genetic diversity of the world's main
food crops will be secured, conserved and available--forever.
Global Crop Diversity Trust
The Trust is an independent international organization, established
in 2004. Its founders were the international research centers of the
Consultative Group on International Agricultural Research (CGIAR), and
the Food and Agriculture Organisation of the United Nations, both of
which recognized the urgent need for a dedicated organisation to
undertake a task which was beyond the mandate of either organisation.
Since at least the 1980s, crop yield improvements have been the
single greatest contributor to increased production. But the rate of
increase has been dropping steadily. Not coincidentally, since 1980 the
share of overseas development assistance for agriculture has plummeted
from more than 16% to less than 4% of Official Development Assistance.
These cuts impact not only research, but the conservation of the
raw material for much research--the collections held by gene banks. The
crop research called for so frequently, in particular with regard to
fostering a second green revolution in Africa or adapting agriculture
to climate change, is based on the material found in gene banks, the
most important of which internationally are held by research
organizations. The lack of security of funding threatens these, with
implications for agriculture everywhere. The Trust will, once fully
endowed, fund the maintenance of the world's most important gene banks
so that the fluctuations of individual research budgets have no impact
on the crucial collections of crop diversity.
The Trust has already raised $143 million, from developed and
developing country donors as varied as the United Kingdom, India,
Australia and Ethiopia, as well as from philanthropic foundations and
corporations. The U.S. was one of the first countries to announce
support for the Trust, prior even to its formal establishment as an
international organization. This early vote of confidence was vital to
encouraging other donors, who have since come through very strongly. As
other countries have stepped forward top fund the Trust, the U.S. is
now one of the Trust's smallest donors. In a reversal of the earlier
situation, now the lagging contribution by the U.S. has the potential
to undermine confidence in the Trust, and consequently future
fundraising.
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``To ensure that the most critical collections of rice, wheat, corn,
potatoes and the other staple crops that feed the world continue to be
protected, the Global Crop Diversity Trust deserves continued
support.At a time when science is providing the keys to understanding
how best to use the contents of these precious food crop gene banks in
order to benefit humanity and the environment, the collections
themselves are under threat. The Global Crop Diversity Trust will help
protect these irreplaceable sources of global biodiversity, ensuring
that their promise is fully realized.'' Dr. Norman E.
Borlaug,
Nobel Peace Prize Laureate, 2007 Recipient of Congressional Gold
Medal.
------------------------------------------------------------------------
The Work of the Trust
The Global Crop Diversity Trust is the sole worldwide response to
the under-funding crisis facing gene banks, offering a clear and
achievable solution. The Trust will ensure the conservation and
availability of the vast genetic diversity of our food crops. Although
less than 4 years old, the Trust has already raised $143 million, and
has launched a comprehensive programme to:
regenerate and safely duplicate threatened, and unique,
collections (the Trust is already funding regeneration
activities in 45 collections in 32 countries);
upgrade key gene banks holding multiple globally important
collections;
safely duplicate collections at the Svalbard Global Seed
Vault (the Trust has organised and funded the shipment of over
100 million seeds to this unique back-up facility in the
Arctic);
develop information systems for better management of, and
dramatically improved access to, collections-specifically:
the Trust is funding the development of a version of
USDA's gene bank management software which can be rolled
out for free to developing countries; and
the Trust is also developing a system to enable plant
breeders to search collections globally, by trait, over the
Internet, which will massively expand the ability of
scientists to research and access useful traits;
screen collections for traits essential to meet climate
change and other challenges, for example the Trust has just
entered into partnerships with institutions in 15 countries to
support screening of collections of banana and plantain,
barley, chickpea, coconut, cowpea, grasspea, lentil, maize,
millet, rice, sweet potato, taro, wheat, and yam; and
develop improved conservation methods for difficult-to-
conserve crops of particular importance to the poor in tropical
countries, such as cassava, yam, and sweet potato.
This programme can be seen as preparing a `global system' for the
conservation and availability of crop diversity, whose permanent
maintenance the Trust will fund through its endowment. The Trust has
also already started funding vitally important collections from its
endowment--effectively providing grants which will last in perpetuity
and therefore removing all funding uncertainty from vital collections.
In 2008, long-term grants drawn from the Trust's endowment will already
total $1.95 million and will provide security to cassava, wheat,
barley, faba bean, lentil, pearl millet, banana, bean, grass pea,
sorghum, yam, forages, rice, and the management of the Svalbard Global
Seed Vault.
Long-Term Funding for a Long-Term Task
The conservation of crop diversity is by its nature a very long-
term task, requiring consistent and reliable funding. Uncertainties in
funding for gene banks place collections at risk, and even short-term
interruptions in funding can result in the loss of unique material. The
current funding approaches--a reliance on annual funding from central
treasuries and on traditional 3 to 5 year grants--are failing, despite
the importance to development of a well-funded system of gene banks
worldwide.
There is a focus from most donors on short-term impact, though
shortfalls in gene bank funding can reduce options for agriculture
forever. In the long-term nature of gene banks' work, a 3 to 5 year
grant provides very little meaningful security. Only an endowment fund
can provide the requisite guarantees of truly long-term funding, which
will insulate the vital work of gene banks from budget cuts and changes
in funding fashions, while still exposing them to the rigours of
effective project management, external review and proper
accountability.
The Congress endorsed the Trust's mission and the need to fund it
through a permanent endowment when it enacted section 3202 of the 2008
Farm Bill. Section 3202 authorized the appropriation of $60 million
over 5 years to fund the U.S. contribution to the Trust endowment.
The appropriation of funds for the Trust endowment is a concrete
contribution to one of the most important issues facing agriculture--
the conservation of its biological base. Globally, current arrangements
for conserving crop diversity are failing to provide adequate security
for this vital resource.
The international community therefore funds the conservation
of crop diversity in a patchwork of individual commitments and
arrangements, yet does not have the reassurance that the job is
being done.
The Trust, as the sole dedicated worldwide funding
organization for the conservation of crop diversity, is
uniquely placed to allow donors to view this work globally,
rather than through disparate institutions across the globe.
The Trust allows donors to apply rigorous standards to
donations whilst avoiding the competition and duplication
inherent in current funding arrangements.
The Trust allows donors to remove funding uncertainty from
the conservation of crop diversity as a whole, while
reinforcing the need for individual institutions to perform.
The Trust will promote the effective, goal-oriented,
economically efficient and sustainable global system which the
conservation of crop diversity requires.
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``Low agricultural productivity in sub-Saharan Africa is due, in
part, to the limited use of agricultural inputs, such as fertilizer and
improved seed varieties, and the lack of modern farming practices.''
``The U.S. Agency for International Development (USAID) funding to
address food insecurity in Africa has been primarily for emergency food
aid, which has been crucial in helping to alleviate food crises but has
not addressed the underlying factors that contributed to the recurrence
and severity of these crises.'' Government Accountability Office (May
2008).
------------------------------------------------------------------------
What Sets the Trust Apart?
In a world where there are many important, and apparently
overwhelming, issues demanding attention, it is important to note how
the Trust differs from other organizations competing for donations.
Its mission is achievable. It is rare that the world faces a
major problem which has highly disturbing implications but an
identifiable and achievable solution. This is precisely what
the Trust offers; a costed, measurable plan, relying on
existing institutions and simple proven technologies.
It is the only solution. Crop diversity is disappearing,
even in the gene banks built to protect it, and there is no
organization apart from the Trust tackling this problem
worldwide. The Trust offers a unique opportunity to put in
place a rational and cost-effective system for the conservation
of the resources which underpin all agriculture and the world's
future food supplies.
U.S. Funding for the Trust
Sixty million dollars has been authorized for the Trust in the 2008
Farm Bill. The Trust hopes to make significant strides towards this
target in the early period of the Bill, due to the twin imperatives of
the urgency of delivering its mission, and the importance of
establishing clear support from the U.S. in the eyes of other potential
donors.
In this regard, we urge the Congress to ensure that the precious
and irreplaceable resource of our crop diversity is preserved through
the provision of funding for the Trust from funds provided in the FY
2008 supplemental appropriations provided for agricultural development.
In addition, we urge that funding for the Trust endowment be provided
within the FY 2009 Foreign Operations appropriations at a level which
would ensure fulfillment of the $60 million Trust authorization within
the 5 year timetable approved by this Committee and enacted by
Congress.
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``Since crop gene banks around the world are so critical for
sustaining the U.S. food supply system and a major sector of the U.S.
economy, full support for the Global Crop Diversity Trust and its
conservation goals is essential.'' Safeguarding the Future of U.S.
Agriculture, University of California,
2005.
------------------------------------------------------------------------
The Global Crop Diversity Trust is extremely grateful to the
Committee for the chance to present this testimony, as the Committee
considers the complex issues surrounding agricultural development
assistance and food aid. We will of course welcome the opportunity to
respond to any questions that the Committee may have in this regard.
______
Supplemental Material Submitted By Sean Callahan, Executive Vice
President, Overseas Operations, Catholic Relief Services
CRS Expectations About the Global Food Crisis Next Year
Summary: Encouraging signs indicate that the rapid, upward trend in
food prices is abating. However, major multilateral organizations and
think tanks point out that this is a long-term crisis.
Vulnerable countries and volatile markets need to be
monitored closely, and the U.S. response needs to be expanded
geographically and even modified to better address the needs on
the ground. The real danger in this situation is the prospect
of high fuel and food prices putting extreme pressure on
societies already vulnerable to political or environmental
shocks.
Countries hardest hit will be food and fuel importing
nations with low per capita incomes. Slowing food price
increases, or even a leveling off, will not be enough to
overcome the extreme vulnerability throughout much of the
developing world.
Congress should continue leadership that it has shown in the
Trade Title of the 2008 Farm Bill and the FY 2008-2009
Supplemental Appropriations bill.
CRS has outlined additional steps in this prospective review
for consideration by the House Agriculture Committee. In
particular, CRS urges Congress to conduct both oversight
hearings and overseas fact-finding trips.
Expected Short-term Trends: The current global food crisis stems
from increased costs in the commodity, fuel, and credit markets. A
critical factor in this ongoing crisis is the ability of countries to
buffer the most negative economic effects as they arise. While OECD
countries are tightening their belts, developing economies have less
room for maneuver, and the most vulnerable countries have virtually no
flexibility to handle severe economic stress and hunger.
The course of the global food crisis over the next 6-12 months will
depend upon the political will of all nations to employ real remedies
for the causes of food insecurity. Evidence of economic resilience in
major economies, greater global political stability, downward pressure
on oil prices, and resolution of international financial turbulence
would all help maintain food price stability. Given this long list of
contributing factors, food prices do appear to be stabilizing at
significantly higher levels than in 2006. See charts below.
Although strong wheat production has led to falling prices, maize
sells at double the previous levels and rice prices remain historically
high. Poor harvests, climate change, low grain stocks, and increased
demand for animal protein and biofuels all contribute to the
continuation of high commodity prices. Record prices for energy and
fertilizer, both key inputs to global agriculture prices also
exacerbate the food price crisis. Current threats to oil production
from hurricanes, insecurity in Nigeria, and uncertainty about Iranian
policy hold prices at record levels.
Price Graphs for Key Food and Fuel Commodities 2007-2008
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Multilateral Assistance Outlook: The World Bank has launched a
special request for Ethiopia at $200 Million, but even if successful,
this approach cannot be easily be replicated for all the other
countries. In an alternative approach the World Bank is calling for a
``Global vulnerability fund'' to provide a new channel for investment
in crisis areas, but there is little new money to fund this idea.
Agencies such as World Food Programme are looking to the Middle East
for new funds and the Saudi Government has given $500 million to date.
Other UN Agencies are also undergoing planning efforts, but how these
will be manifested and at what funding levels remain unclear.
Unfortunately, many other donors are only seeking to reshuffle existing
development aid rather than adding new resources to keep pace with
rising food insecurity.
Recommendations: What we see in our field programs across the
developing world is that the current food aid structure lacks certain
provisions to maximize the already generous resources provided by the
American people. The following list of recommendations for the
Subcommittee provides steps to address both short and long-term aspects
of the crisis.
Feeding the poorest of the poor--Establish a global social
safety net program to be administered by FFP with approximately
$50 million per year of Title II resources. The multi-year
unconditional social safety net programs would target people
most vulnerable to food insecurity. In addition to the current
food aid programming objectives, these safety net resources
would be used to preserve the human dignity of the most
vulnerable and expand outreach to the most vulnerable, those
who suffer from the most severe forms of chronic hunger. These
same people are currently victims of geography, as they are
outside of the Food for Peace's regular programs.
Providing PVOs more resources to complement Title II food
aid--Establish a cash pipeline for FFP (outside of P.L. 480,
Section 202e) to use in both emergency and development programs
(this would be either through funding authorized by the Foreign
Affairs Committee, the Agriculture Committee or both). The
funds would be made available from outside current P.L. 480
legislation but would be used by Food for Peace to supplement
food aid resources. Such cash resources would tackle hunger
more broadly than the current resources allow, by employing
voucher programs and agriculture development activities, which
require more appropriated funding than allowed under Title II.
The widespread suffering in the current crisis points to a
complex of food security factors:
(1) availability of food (including food aid); and
(2) access to and affordability for vulnerable
populations (targeted food vouchers); as well as
(3) boosting agricultural production (through input
vouchers).
Such effective interventions apply across the range of
countries suffering from this crisis. Providing more commodity
food aid is clearly not enough. Food for Peace needs to build a
more flexible and comprehensive response to world hunger.
Creating a Mechanism for Government to Government Technical
Assistance on Agricultural Policy--Amend the farm bill to
provide government to government technical assistance on
agricultural policy by creating a mechanism for USDA
representatives (and U.S. Land-Grant partners when appropriate)
to provide short and long-term technical assistance to
developing country governments suffering from the food crisis.
Areas of assistance could include specific areas as follows:
--Creating or strengthening government social safety
net programs, using experts from U.S. Government WIC,
food stamp and school feeding programs.
--Land tenure structures to allow owners of farms large
and small to enjoy free-title to their land and enter
into the formal agricultural economy.
--Strengthening farm credit systems through technical
expertise from the U.S. Farm Credit Administration to
establish or strengthen legal environments for
agricultural credit as well as assistance to improve
the ability of nations to carry out agricultural credit
programs that reach farmers and agribusinesses of all
income levels.
--Research and extension technical assistance through
the USDA Agricultural Research Service, the Cooperative
State Research, Education, and Extension Service as
well as U.S. Land-Grant partners to help countries
build or strengthen national research and extension
structures.
Monitoring Title II Safe box Programs--Provide oversight to
Food for Peace as it carries out expanded development food aid
programs as a result of new provisions called for in the
current farm bill. Currently, Food for Peace operates
development food aid programs in about 18 countries, while the
World Food Programme and the World Bank estimate that countries
hit especially hard by this long-term price crisis number over
30. Both need to coordinate on how to achieve food aid
effectiveness. The Agriculture Committee can provide crucial
oversight to this process.
Supporting House efforts to increase investment in
agricultural production, agro-enterprise, market
infrastructure--In addition to the suggestions for expanded
authority and funding for Food for Peace, Members should
support expanded appropriations for USAID/EGAT to increase
funding for interventions that will expand global food
availability and decrease the vulnerability of the poorest
producers and most vulnerable urban populations.
The matrix below offers a birds-eye view of possible trends and
responses in the nest year,
------------------------------------------------------------------------
Scenarios Outcomes Interventions
------------------------------------------------------------------------
The current situation Declining Food
is one of high fuel urban poor purchasing transfers to most
and food prices, power vulnerable urban
leading to increased Food groups
vulnerability, reductions in rural Input support
especially in net areas to farmers
importing countries Reduced Link
with large low income ability of governments production to markets
populations. to support vulnerable Use local
communities procurement methods
Reduced demand to meet urban and
for fuel and oil based rural needs
products Improve
market information
systems
------------------------------------------------------------------------
Hopeful: In 6 months Stabilizing Food
time lowering fuel commodity prices transfers to most
prices and increasing Fuel costs vulnerable urban
global production will fall to below $100/ groups
led to falling fuel barrel levels Input support
and food prices. Food prices to farmers
begin to fall Monitor
markets
------------------------------------------------------------------------
Less Hopeful: In 6 Continued Food
months time with pressure on food transfers via food
continued high fuel prices, combined with vouchers for urban
and food prices, many hungry periods, and rural poor to
governments will be requires increased access food
unable to continue levels of intervention Rural farmers
subsidies to fuel and in affected countries to access inputs to
food or support to boost production
vulnerable Voucher based
populations. local procurement to
buy initial increase
in production to
avoid production
losses
------------------------------------------------------------------------
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
``Based on your experience, what do you think the food security
situation will be a year from now, either globally or in areas
with which you are especially familiar?''
The food security situation is areas of Africa that are generally
food insecure will not be greatly improved in a year's time. In the
best of times these food insecure countries struggle to meet their food
needs. In Ethiopia food needs of the chronically food insecure are
supported by hundreds of thousands of tons of imported foods annually.
Much of this food is supplied by the United States through Title II.
The cost of buying that food, transporting it to Ethiopia and trucking
it to its final destination has approximately doubled in the past year;
making food aid a very costly intervention.
The factors contributing to the rapidly rising food prices are well
know and included:
Supply and demand for food. The population of the world is
increasing at faster rate then global food production. Also the
middle class is expanding in developing countries such as China
and India and these upwardly mobile people are eating more per
capita and are enjoying different foods, both of which are
contributing to greater demand for food. This increase in
demand seems to be permanent.
Rising fuel costs. The rapidly growing middle class in China
and India are purchasing more automobiles driving up the demand
for fuel and therefore the price of fuel. This trend is not
likely to change and therefore, it appears that the high cost
of fuel is here to stay.
Loss of crop land. The planting of land with non-edible
biofuel production has reduced food production in some
countries. The increased interest in the planting of biofuels
is based largely on government policies which are not likely to
change rapidly.
All these factors contribute to the very high price of Title II
food. The American taxpayer can only bear so much. Title II programs
are being closed in a number of countries due to the raising costs of
the program. Hard choices must be and have been made. Should the U.S.
Government fund Title II programs in Kenya or Ethiopia? Someone will
lose out, and countries such as Kenya will not be receiving Title II
food aid in the future.
The poor in Kenya will not see a great improvement in their food
security situation in the next year or so. On the contrary they may be
in worse condition than they currently are. It takes a couple of years
to recover from a bad drought and the associated loss of productivity.
In the past when food aid was less expensive it was more plentiful and
could reach more people. The dwindling availability of food aid will
make the effects of current drought even more difficult to recover
from.
The above mentioned factors that contribute to the current global
crisis did not suddenly develop because a rapid change in the global
economy or a sudden change in global food policy. The current global
food supply and demand ``equation'' did not spring up over night. Long
term population trends and a long term ``disinterest'' in improving
agricultural productivity have contributed to the problem. These trends
will not change over night. Even if the governments of the world
decided to immediately double funding for research to increase
agricultural productivity it would still take a number of year to see
the results. The fuel shortage and the associated high cost of fuel are
the consequences of long term population growth, a greater demand for
fuel and stagnant oil production. The growing middle class of the
developing world will continue to want vehicles and the change to more
fuel efficient vehicles will take time. High fuel prices may be here to
stay. The large increase in the use of farmland to produce biofuels is
affecting the availability of food. Government policies promoting
biofuels will be hard to overturn in spite of the global need for food.
All these issues will make the ``food crisis'' long term in many
countries which are chronically food insecure. This is especially true
for the urban poor. Before the ``global food crisis'' large portions of
their incomes were devoted to purchasing food and these people ``lived
on the edge''. With today's prices many of them are falling off the
edge. Even if food prices over the next year or so decline somewhat
from their current highs these urban poor will still be desperate and
be among the world's chronically food insecure.
Unfortunately, the current situation appears to be long term and
will increase the length of the list of those who cannot feed
themselves adequately. The consequences of this situation may include
forcing a young girl into prostitution to support her family on the
personal level or anarchy on the national level. This is a rather
gloomy perspective but one that does occur daily in the first case and
may occur in the second case if global food prices do not come down.
Andrew Barnes, Ph.D.,
Director of Food Security,
Food for the Hungry.
______
Supplemental Material Submitted By Nicholas W. Minot, Ph.D., Senior
Research Fellow, Markets, Trade, and Institutions Division,
International Food Policy Research Institute
July 29, 2008
At the July 16 hearings of the Subcommittee on Specialty Crops,
Rural Development and Foreign Agriculture, Representative Mike McIntyre
asked the witnesses to respond to a follow-up question: ``Based on your
experience, what do you think the food security situation will be a
year from now, either globally or in areas with which you are
especially familiar?'' This note is a response to his question, with
emphasis on the impact in low-income countries.
The food security situation in July 2009 will depend on a number of
factors including the trend in commodity prices over the next 12
months, the response of governments and international organizations,
and the response of individual farmers and consumers in developing
countries.
Commodity Prices
It is very difficult to predict commodity prices, but we can draw
some clues from the expected duration of the factors that have pushed
these prices up. Wheat prices have been driven up by depreciation of
the dollar and modest supply shocks, but a major factor has been
restrictions on exports by Russia, Argentina, and other countries. It
is likely that production will increase this year and next in response
to higher prices. The USDA is predicting a record wheat crop for 2008-
2009, based on a strong U.S. harvest and a possible end to the drought
in Australia. It is quite possible that some of the major exporters
will relax their restrictions on exports. Earlier this month, the
Senate in Argentina rejected the President's plan to continue taxing
agricultural exports, which will probably mean increased supplies of
wheat and soybeans on the world market. Indeed, world wheat prices have
declined about 25% from their peak in March, though they are still far
above the 2007 average.
Rice prices have been increased by depreciation of the dollar,
strong demand, and export restrictions by India, Vietnam, Egypt, and
other countries. However, talk of creating a rice exporters cartel has
been dropped, and the 2008 harvest is forecast to be 2.3% higher than
last year, though much of it will not hit the market until the second
half of the year. In response to these factors, the price of Thai Super
A1 broken rice has also declined 28% from its peak in May, though still
much higher than in January of this year.
The price of corn, on the other hand, is supported by the strong
demand for animal products and for ethanol, the latter linked to the
high price of oil. Although the European Union is scaling back its
biodiesel subsidies because of its effect on oilseed prices, political
support for ethanol subsidies in the United States remains strong, so
it is less likely that corn prices will fall over the next 12 months
unless oil prices do.
In summary, the prices of wheat and rice have already fallen from
their peaks earlier this year, but are expected to remain significantly
above the 2007 levels over the next 12 months. The price of corn will
depend on the price of oil and U.S. ethanol policy, but is less likely
to fall over the next 12 months. A global recession would reduce
commodity prices quickly, but in this case the cure may be worse than
the disease.
Food Security
Farmers that are able to produce marketable surpluses of the wheat,
rice, and corn will benefit from the high prices, though the gains will
be partially offset by higher fuel and fertilizer prices. These farmers
represent 20-40% of the rural households in most low-income countries
in sub-Saharan Africa and Asia. The urban poor and rural agricultural
laborers spend a large share of their income on staple foods and depend
entirely on the market for their food supplies, so their losses, as a
percentage of income, are the greatest. Small-scale farmers that are
net buyers also lose, though the loss is partially offset by the fact
that they meet some of their food requirements from their own
production. Other urban households also lose, though their higher
income protects them to some degree.
Assuming that commodity prices remain high by historical standards
(even if they decline somewhat from the current levels), the effect on
food security 1 year from now will be mixed. On the one hand,
households will respond to the higher prices. Consumers will shift to
staple crops that are not internationally traded (such as cassava,
sweet potatoes, yams, sorghum, and millet) because their prices have
not increased as much. Farmers will shift to producing these basic
grains in response to the higher prices. For example, the FAO expects
rice production to grow 3.6% in sub-Saharan Africa and 7.4% in Latin
America and the Caribbean. It is also possible that the high food
prices will slow or even reverse urban migration in some countries, as
household respond to the high prices by returning to agricultural
production. These responses by consumers and producers will reduce the
negative impact of the high prices on food security.
On the other hand, many poor households will be forced to pay for
food by pulling their children out of school, postponing health care,
and reducing other non-food spending. If this is not enough, they may
be forced to sell off assets, such as animals, consumer goods, or even
land, to cover the cost of food purchases. If this is not enough, they
may be forced to eat less, with dire consequences for nutrition and
productivity. Obviously, the latter two responses cannot be sustained
over time. Households that sell their assets this year to purchase food
may have nothing left to sell next year. Furthermore, if they sell
productive assets such as oxen this year, it will reduce their income
next year. Likewise, the condition of people that start to eat less
this year will worsen over time. Because of these cumulative factors,
it is quite possible that the food security situation in 2009 may be
worse than this year, even if food prices remain at current levels.
The response of the international community may represent the ``tie
breaker'' between these two opposing factors. If food aid deliveries
can be maintained or increased in volume terms and if social protection
programs (like conditional cash transfer programs) can be expanded, it
will help households avoid liquidation of their assets and
malnutrition, reduction in school enrollment, and malnutrition. This
will provide time and energy needed to adapt to the higher food prices.
Support for agricultural development, particularly agronomic research
on staple grains, will not improve food security by 2009, but it is an
indispensable part of the long-term recovery of the balance between
food supply and demand.
The biggest danger, in my view, is that the political will in both
rich and poor countries to expand support for food and agriculture will
dwindle when grain prices are no longer rising, even if they remain
two- to three-times higher than in 2006.
______
Response to Question Submitted to Theo A. Dillaha III, Ph.D., P.E.,
Professor of Biological Systems Engineering and Program Director,
Sustainable Agriculture and Natural Resource Management (SANREM)
Collaborative Research Support Program (CRSP), Office of International
Research, Education, and Development, Virginia Polytechnic Institute
and State University, Blacksburg, Blacksburg, VA
Question. ``Based on your experience, what do you think the food
security situation will be a year from now, either globally or in areas
with which you are especially familiar?''
Answer. My best professional judgment is that is that there is a
significant risk that the food security situation will be more serious
next year. My judgment is based on the following factors:
Factors that will potentially worsen the food security situation
(in no particular order):
U.S. and European biofuel programs will require for grain to
supply increasing biofuel factories. For example, current U.S.
ethanol capacity as of July 24, 2008 is 9,407.4 million gallons
per year and an additional capacity of 4,208 million gallons
per year is under construction, a 45% increase in production.
The vast majority is reliant on corn as a feedstock. According
to the USDA, U.S. corn ethanol production currently uses 30% of
the global change in total wheat and coarse grains production
from 2002/03 to 2007/08. This has decreased wheat and coarse
grains supplies and increased prices by varying estimates, but
the estimates are generally in excess of 25%. EU diesel
programs have a similar effect.
Increasing meat consumption: Globally, meat consumption is
increasing at a rate of 2.1% per year while global grain
production is only increasing by 1.2%. Meat requires 2.6 lbs
grain/lb meat (chicken) to 7.0 lbs grain/lb meat. Consequently,
unless growth in meat consumption decreases, there will be less
grain for other uses, which will make grain scarcer and more
costly.
High energy prices: Increases costs of production by
increasing fertilizer, production, and transport costs. I have
no idea where energy costs are going.
Grain reserves: Many countries maintain grain reserves for
food security reasons. Theses have been depleted this year and
countries will be trying to rebuild reserves, which will tend
to increase prices.
Weather: Agricultural droughts are expected to continue in
many parts of the world.
Speculation: I don't know.
Factors that will potentially improve the food security situation
(in no particular order):
High commodity prices should increase production.
Theo A. Dillaha, Ph.D., P.E.,
Program Director SANREM CRSP,
Office of Int. Res., Edu., and Development,
Virginia Tech.
______
Response to Question Submitted to Avram ``Buzz'' Guroff, Senior Vice
President, Food Security and Specialty Crops Portfolio, ACDI/VOCA
(Agricultural Cooperative Development International/Volunteers in
Overseas Cooperative Assistance)
Question. Based on your experience, what do you think the food
security situation will be a year from now, either globally or in areas
with which you are especially familiar?
Answer. That will largely depend on the political will of the
international community. High food and energy prices will be with us
for some time to come. Some of the adverse effects of this are yet to
be felt--not just hunger, but malnutrition and morbidity rates will
continue to rise. Productive assets will in some cases be sold off in
lieu of farming income. Also, continued societal unrest could
exacerbate the crisis.
At the same time, rising food prices present an unprecedented
opportunity if farmers in the developing world are able to develop
their capacity and capture markets. Some of the greatest productivity
gains could come in regions that are now the least advanced. However, 1
year is a short timeframe for building the capacity of people to
produce their own food, which is the most sustainable and cheapest
method of addressing world hunger and poverty.
Still, the market will respond over time and food shortages will
abate. The extent to which the U.S. and other donors provide increased
emergency and agricultural development assistance, as well as adjust
trade and price control policies, to help avert future crises will be
critical to how much better or worse things will get over the next few
years.