Food for Peace Table of Contents FOOD FOR PEACE (P.L. 480, Titles II and III) [FORMERLY USAID HANDBOOK 9] TABLE OF CONTENTS LIST OF ACRONYMS DEFINITIONS PART I - AUTHORITY, RESPONSIBILITY, POLICY AND STRUCTURE Chapter 1 - Authority 1A. Statutory Authority l. Title I - Trade and Development Assistance 2. Title II - Emergency and Private Assistance 3. Title III - Food for Development 4. Section 416(b) 5. Food for Progress 1B. Executive Order No. 12752 1C. USAID Regulation 11 1D. Delegations of Authority Nos. 401 and 902 Chapter 2 - Allocation and Coordination of Responsibility 2A. Coordination 1. Food Assistance Policy Council 2. Food Aid Consultative Group 2B. Responsibilities 1. General 2. The President 3. Office of Management and Budget 4. Department of Agriculture 5. Agency for International Development 6. Cooperating Sponsors Chapter 3 - Policy 3A. Statutory Policy 3B. USAID Policy Determinations 3C. Title I - Trade and Development Assistance 3D. Title II - Emergency and Private Assistance 3E. Title III - Food for Development 3F. Local Currency 3G. Title V - Farmer-to-Farmer Program Chapter 4 - Structure and Objectives 4A. Introduction 4B. Title I - Trade and Development Assistance l. Objectives 2. Structure 3. Operational Responsibility 4. Procedures 4C. Title II - Emergency and Private Assistance 1. Objectives 2. Structure 3. When to Choose Title II 4. Procedures for Requesting Title II 5. Reference Materials 4D. Title III - Food for Development 1. Objectives 2. Structure 3. When to Choose Title III 4. Procedures for Requesting Title III 5. Reference Materials 4E. Section 416(b) 1. Objectives 2. Structure 3. Section 416(b) Operational Responsibilities 4F. Food for Progress 1. Objectives 2. Structure PART II - TITLE II - EMERGENCY AND PRIVATE ASSISTANCE PROGRAMS Chapter 5 - Title II Program Components and Sponsors 5A. Objectives 5B. Types of Title II Programs 1. Emergency Food Assistance 2. Regular Title II Programs 5C. Cooperating Sponsors 1. Types of Cooperating Sponsors 2. Cooperating Sponsor Eligibility 3. Cooperating Sponsor Agreements 4. Documents of Transfer Chapter 6 - Title II Regular Program Development 6A. Preparation and Submission of Program Proposals 1. Operational Plans or Multi-Year Operational Plans 2. Multi-Year Operational Plan Updates 3. Monetization Requests 4. Section 202(e) Proposals 5. Annual Estimate of Requirements 6B. Roles and Responsibilities 6C. Submission Timelines 6D. Review and Approval Process Chapter 7 - Emergency Programs 7A. Authority 7B. Introduction 7C. Early Warning and Food Needs Assessment 7D. General Definition of Emergency 7E. Early Warning and Food Needs Assessments 7F. Types of Emergency Programs 1. Short-Term 2. Long-Term or Complex 7G. Guidelines 1. Program Support 2. Options for Overcoming Time Constraint 7H. Preparation and Submission of Requests 1. Initiation of Emergency Programs 2. Program Approval Procedure 3. PVO and Cooperative Requests 4. Government and International Organization Requests 7H. Project Implementation Guidelines 1. Monitoring 2. Liaison with Cooperating Sponsor 3. End-Use Examinations 4. Reporting Chapter 8 - Title II Program Support 8A. Introduction 8B. Monetization Projects 1. Definition 2. Authority 3. Program Guidelines 4. Project Proposal Submission 5. Mission Certification 6. Reporting Requirements 7. Reference Materials 8C. Section 202(e) Grants 1. Authority 2. Priorities and Restrictions in the Use of 202(e) Funds 3. Grant Proposal Submission 8D. Institutional Support Grants 1. Introduction 2. Objectives 3. Eligibility Criteria 4. Grant Proposal Submission 8E. Other Resources Available 1. Grants Reserved for Registered PVOs 2. Grants Not Reserved for Registered PVOs Chapter 9 - Title II Program Implementation 9A. Introduction 9B. Responsibilitie 9C. Title II Commodities 1. Commodity Selection 2. Call-Forwards (Commodity Ordering) 3. Commodity Shipment 4. Commodities Borrowed, Transferred, Exchanged or Diverted 5. Commodity Packaging 6. Publicity 9D. Title II Management and Reporting 1. Management Procedures 2. Title II Reporting and Documentation 9E. Suspension, Termination and Expiration of Program 1. Termination or Suspension by A.I.D. 2. Termination or Suspension by Cooperating Sponsors 3. Expiration of Program Chapter 10 - Commodity Losses, Damage and Claims 10A. Introduction 10B. Prior to Loading on Ocean Vessel 1. Fault of Cooperating Sponsor 2. Fault of Others 10C. Marine (Ocean Carrier) Claims 1. Responsibilities 2. Survey and Outturn Reports 3. Claims Against Ocean Carriers 10D. Inland Claims 1. Surveys on Shipments to Landlocked Countries 2. Reporting Losses to USAID or Diplomatic Posts 3. Claims 10E. Disposition of Unfit Commodities 1. Prior to Delivery 2. After Delivery Chapter 11 - The World Food Program 11A. Structure 11B. Objectives 11C. Resources 11D. Types of World Food Program Assistance 11E. Guidelines 11F. Request and Approval Procedures 11G. U.S. Government Responsibilities and Coordination 1. Appraisal of Requests for World Food Program Assistance 2. Mission Liaison with World Food Program Representatives 3. Implementation of U.S. Commodity Shipments PART III - FOOD FOR DEVELOPMENT (P.L. 480, TITLE III) Chapter 12 - Title III Program Development 12A. Objectives 12B. Eligibility Criteria 1. Poverty Criteria 2. Food Deficit Criteria 3. A.I.D. Priority Determinations 12C. Employment of Title III Resources 1. Considerations in Program Formulation 2. Direct Feeding 3. Emergency Food Reserves 4. Sale of Commodities 5. Support of Indigenous Non-Governmental Organizations 6. Endowment Programs 12D. Title III Program Planning 1. Mission Responsibilities 2. Financial Planning 3. Cooperating Country Performance Requirements and Restrictions 4. Amendments 5. Single-Year Agreements 12E. Title II Program Proposal Components 1. Executive Summary 2. Program Description 3. Program Justification 4. Program Implementation 5. Monitoring and Evaluation Arrangements 6. Audit Plan 7. Illustrative Annexes 8. AID/W Review and Approval Process 9. Submission Timing of Title III Proposals Chapter 13 - Title III Program Implementation 13A. General Management Responsibilities 13B. USAID Management Considerations 1. Signing of Agreement 2. Procurement and Shipping Schedules 3. Payment of Freight Costs 4. Sales Transactions 5. Use of Private Sector in Sales Program 6. Determining Sales Price 7. Local Currency Deposits and Expenditures 8. Indigenous NGOs and Endowments 9. Monitoring of Local Currency Use 10. Balance of Payments Support 11. Direct Feeding 12. Emergency Food Reserves 13. Performance Indicators and Reports 13C. Cooperating Country 1. Prior to Arrival 2. Taking Delivery 3. Damage, Loss or Excess Stocks 4. Exemption from Duties and Taxes 5. Separate Account for Sales Proceeds 6. Monitoring and Use of Local Currencies 7. Balance of Payments Support 8. Direct Feeding 9. Emergency Food Reserves 10. Records and Reporting 11. Audits 12. Statutory Restrictions PART IV - AUDITS AND EVALUATIONS Chapter 14 - Audits 14A. Introduction 14B. Title II - Emergency and Private Assistance 1. Audit Requirements 2. Audit Purposes 3. Planning 4. Implementation and Monitoring 5. Evaluation and Audit 6. Suspension, Termination and Expiration 7. A.I.D. Inspector General Audits of Cooperating Sponsors 14C. Title III - Food for Developmen 1. Audit Requirements 2. Audit Purposes 3. Planning 4. Implementation and Monitoring 5. Evaluation and Audit 6. Suspension, Termination and Expiration Chapter 15 - Monitoring and Evaluation 15A. Legislation and Policy 15B. Monitoring 15C. Evaluations 15D. Data Requirements for Evaluation 15E. Title II Programs 1. Monitoring 2. Evaluations 15F. Title III Programs 1. Monitoring 2. Evaluations PART V - APPENDICES, EXHIBITS AND REFERENCES Appendix A Agricultural Trade Development and Assistance Act of 1954, as amended (P.L. 480) [RESERVED] Appendix B Regulation 11 [RESERVED] Appendix C World Food Program Supplement (as amended) to Transfer Authorization Appendix D Executive Order 12752 [RESERVED] Appendix E Delegations of Authority [RESERVED] Appendix F Instructions to Voluntary Agencies and Intergovernmental Organizations Concerning the Filing, Pursuit, Adjudication and Collection of Ocean Transportation Claims Arising from Shipment of Title II and Title III, Public Law 480 Commodities, Food for Progress Program Commodities, and Section 416 Program Commodities Appendix G Instructions to All Voluntary Agencies and Intergovernmental Organizations Concerning the Documentation Requirements of Section 416(b) Regulation, AID Regulation 11, and Applicable Program Agreements as they Apply to the Discharge of Title II and III, Public Law 480 Commodities, Section 416 Program Commodities and Food for Progress Program Commodities Appendix H Title III Model Agreement Format [RESERVED] Exhibits: Exhibit A Title II Transfer Authorization Exhibit B Food for Peace Program Agreement Exhibit C Annual Estimate of Requirements and Instructions for Completion Exhibit D Commodity Status Report Exhibit E Recipient Status Report Exhibit F Sample Report of Loss, Damage or misuse of Commodities Exhibit G Bill of Lading References Available from USAID/W - PPC/CDIE/DI/DISC (Document Locator Number) Reference 1 Food for Peace, PL 480, Title II Reference 2 Monetization Field Manual (PN ABB 486) Reference 3 A Manual for Food Needs Assessment (PN ABB 175) Reference 4 Food Aid Management Plan for USAID Missions (PN ABK 424) ______________________________________________________ Food for Peace Definitions DEFINITIONS Lists of definitions of terms, phrases, and abbreviations as used in the Title II handbook. Terms and Phrases Activity An arrangement for the utilization of Title II commodities under an approved project, in which each party to such arrangement (cooperating sponsor, host country government, local entity, food recipients) provides his/her agreed input and exercises his/her rights. Agreements The Food for Peace agreement between the cooperating sponsor and the U.S. Government. In most instances, the cooperating sponsor is a U.S. voluntary agency or an intergovernmental organization; e.g., UNICEF. AID The Agency for International Development or any successor agency. Bill(s) of Lading (B/L) A receipt for cargo signed by the vessel's master and used as a document of title to the goods by the shipper. Child Feeding The category of feeding programs and projects designed to reach women of child bearing age, infants, and children up to the age of 6. Child Feeding Programs include Maternal/Child Health and other child feeding programs and projects including, Preschool Child Feeding, institutionalized and noninstitutionalized programs. Commodities Food, transferred or available for transfer to cooperating sponsors under the P.L. 480 legislation. CCC The Commodity Credit Corporation, a corporate agency and instrumentality of the United States within the U.S. Department of Agriculture. Cooperating Sponsor Refers to the foreign government, the U.S. registered voluntary agency, or the intergovernmental organization which enters into an agreement with U.S. Government for the use of P.L. 480, Title II, agricultural commodities and/or funds (including local currencies). Coordinating Council A voluntary organization made up of representatives from the U.S. voluntary agencies in a foreign country. Consular Invoice An invoice prepared on a special form obtained from a foreign government and signed by its official to secure the importation of goods into that country. Container(s) The bag, box, can or other receptacle in which Title II commodities are packaged in the United States or repackaged elsewhere. It does not refer to receptacle(s) provided by carriers to accommodate logistics or special handling; e.g., containerization. Counterpart An entity, indigenous to the country in which a Title II program is conducted, which is associated with and is sometimes sponsored by the cooperating sponsor in the implementation of an approved Title II feeding program. Country Team The Country Team is headed by the Chief of Diplomatic Mission. Its membership for Title II activity includes the principal officer or his/her designee of each affected U.S. Government agency within the country. Delivery Survey Report The same as a Discharge Survey Report except that it covers the cargo when cleared through customs and/or port authorities or other jurisdictions, when applicable, to the point where custody is taken by the cooperating sponsor. (See AID Regulation 11, Sections 211.9(e)(1), 211.9(c)(1)(i), 211.9(c)(1)(v). Diplomatic Posts Office of the Department of State located in foreign countries, and may include Embassies, Legations, and Consular offices. Disaster Relief Organizations which are authorized by AID/W, a Organizations Mission, or by a Diplomatic Post to assist disaster victims. Disaster Victims Persons who, because of natural or manmade disaster, or extraordinary relief requirements, are in need of assistance. Discharge Survey A report prepared by an independent commercial firm based on a thorough examination of the cargo when it is discharged from the vessel at the destination port. Contains an accounting of the quantity discharged in sound and in damaged condition with details relating to the nature and extent of the damaged, as well as the probable cause of damage. Displaced Persons Persons in need because they fled from their homes as a result of civil strife and are living in a part of their country of nationality or residence other than that in which they normally earned a livelihood. Distributing Agencies Welfare agencies, disaster relief organizations, and public or private agencies which are sponsored by, and responsible to, the cooperating sponsor for handling commodities within the cooperating sponsor's distribution system. Distribution Centers The place for which commodities are issued to eligible recipients for consumption elsewhere (usually the recipient's home). End of Ship's Tackle This term indicates the point at which responsibilities for cargo may change to or from the carrying vessel. It generally refers to that point in operations where the cargo is picked up or placed at the vessel's side. Feeding Center The place where food is prepared and served to and consumed by a group of eligible recipients. Food for Peace The term used to describe the program authorized by the Agricultural Trade Development and Assistance Act of 1954 (P.L. 480), as amended. Food For Peace Officer Advises and assists Mission and counterpart personnel (FFPO) on P.L. 480 matters, and is responsible for Title II projects and activities. An FFPO may be assigned Regional responsibilities. Friendly Country A Country which is not "...dominated or controlled by a foreign government or organization controlling a world communist movement." General Average An ocean shipping term for the principle that both the vessel and its cargo share the risk of the voyage and that damage beyond the control of the vessel is shared by the owners of the surviving cargo. (See Handbook 15, Chapter 8E.) Home Office Principal office of the U.S. voluntary agency or intergovernmental organization. Institutions Nonpenal, public, or nonprofit private establishments that are operated for charitable purposes. Intergovernmental Agencies sponsored and supported by the United Organizations Nations Organization (except the World Food Program) which is referred to as an intergovernmental activity) or by two or more nations, one of which is the United States of America. Maternal/Child Health MCH programs are those designed to provide one or more health related (MCH) service(s) to women of childbearing age and children under the age of 6. Such programs may integrate several services to include, inter alia, medical care, feeding, nutritional education, family planning, etc. Maternal Child Health Food distribution projects, prefer- ably a segment of a definite (MCH) Feeding Program MCH program, in which women of childbearing age and infants up to one year old are the principal clients. Mission U.S. Government office in a foreign country which is responsible for AID's administration of Title II projects in the recipient country. It refers to an AID Mission or other AID country organization (see HB 17, Ch. 4). Mission Director The Director of a Mission or, in the absence of a Mission, an AID Representative, or the principal officer of the Diplomatic Post. Nonprofit Means that the residue of income over operating expenses accruing in any activity, project, or program is used solely for the operation of such activity, project, or program. OMB Office of Management and Budget Other Child Feeding A feeding program designed to reach needy children in institutions Programs or other child feeding facilities with the child as the only client. Regulation In this Handbook "The Regulation" refers to AID Regulation 11, as amended, which is included as Appendix C. School Feeding Programs Programs conducted for the benefit of children under the age of 14 years enrolled in schools receiving formal education through the equivalent of the U.S. primary school. Sponsor Refers to the entity with which the U.S. Government enters into an agreement involving the use of Section 204, P.L. 480, funds. A sponsor may or may not be a cooperating sponsor. Staff Those persons who serve on a paid or volunteer basis as supervisors, managers, teachers, auditors, accountants, nutritionists or dietitians, cooks, dishwashers, janitors, or other persons who serve in some capacity in the management or operations of a central facility engaged in Title II food distribution. Third Party An entity or individual other than the U.S. Government or the cooperating sponsor who has assigned or contractual responsibilities for some aspect of an approved Title II feeding program, project or activity. Transfer The Food for Peace agreement between a specified Authorization (TA) cooperating sponsor(s) and the U.S. Government. Generally, Transfer Authorizations constitute government-to-government agreements. USDA The U.S. Department of Agriculture. Voluntary Agency Refers to any voluntary nonprofit agency registered with, and approved by, the Agency for International Development. CFA The Committee on Food AID Policies and Programs is the governing body that provides general guidance on the policy, administration, and operation of the WFP. It, also, helps evolve and coordinate short-term and longer term food-aid policies recommended by the World Food Conference. World Food Program An intergovernmental activity sponsored by the United Nations and the Food and Agriculture Organization and supported through contributions of commodities, services, and funds by donor countries. World Food Program The agreement between the World Food Program and Transfer Authorization the U.S. Government, as amended, which authorizes the transfer of Title II commodities to the World Food Program. _________________________________________________________________ _______ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 1: Authority 1A: Statuatory Authority Title I - Trade and Development Assistance CHAPTER 1 AUTHORITY 1A. Statutory Authority The Agricultural Trade Development and Assistance Act of 1954, as amended, or Public Law 480 (P.L. 480), is the primary statutory basis for the Food for Peace Program. In enacting the legislation, Congress declared it to be the policy of the U.S. to use its abundant agricultural productivity to promote the foreign policy of the U.S. by enhancing the food security of the developing world through the use of agricultural commodities and local currencies accruing under this Act to combat world hunger and malnutrition and their causes; promote broad-based, equitable and sustainable development; expand international trade; develop and expand export markets; and foster and encourage the development of private enterprise and democratic participation in developing countries. 1. Title I - Trade and Development Assistance Title I provides for the sale of agricultural commodities to developing countries for dollars on credit terms, or local currencies. This program is implemented by the Secretary of Agriculture, who is granted the authority to negotiate and execute agreements with developing countries to finance the sale and exportation of agricultural commodities to such countries. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 1: Authority 1A: Statuatory Authority Title II - Emergency and Private Assistance 2. Title II - Emergency and Private Assistance Title II establishes a program to provide agricultural commodities to foreign countries to (a) address famine or other urgent or extraordinary relief requirements; (b) combat malnutrition, especially in children and mothers; (c) carry out activities that attempt to alleviate the causes of hunger, mortality and morbidity; (d) promote economic and community development; (e) promote sound environmental practices; and (f) carry out feeding programs. The Administrator of the U.S. Agency for International Development (USAID) administers the program. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 1: Authority 1A: Statuatory Authority Title III - Food for Development 3. Title III - Food for Development Title III establishes a program under which agricultural commodities are to be donated to least developed countries. The revenue generated by the sale of such commodities in the recipient country may be utilized for economic development activities. The Administrator of USAID is authorized to negotiate and execute Title III agreements with least developed countries which will provide commodities to such countries on a grant basis. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 1: Authority 1A: Statuatory Authority Section 416 (b) 4. Section 416(b) Section 416(b) of the Agricultural Act of 1949, as amended, authorizes the Secretary of Agriculture to make overseas donations of agricultural commodities acquired through Commodity Credit Corporation's price support to developing and friendly countries. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 1: Authority 1A: Statuatory Authority Food for Progress 5. Food for Progress The Food for Progress Act (Section 1110 of the Food Security Act of 1985, as amended) authorizes the use of Title I and Section 416 resources to assist emerging democracies and developing countries that are committed to introducing or expanding free enterprise elements in their agricultural economies. The Secretary of Agriculture implements the program. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 1: Authority 1B: Executive Order No. 12752 1B. Executive Order No. 12752 Executive Order 12752 was signed by President George Bush on February 25, l991 to implement P.L. 480 and the Food for Progress Act. The Executive Order established programs under Title I, Title II and Title III, and delegated authority for implementation of Title I to the Secretary of Agriculture and Titles II and III to the Administrator of USAID. To ensure policy coordination of assistance provided under P.L. 480 and the Food for Progress Act, a Food Assistance Policy Council comprised of senior representatives of the Department of Agriculture, USAID, the Department of State and the Office of Management and Budget was established. The consultation about commodities available under Section 401(a) of P.L. 480 is undertaken through this Council, and the Council prepares the annual report required under Section 407(g). Responsibility for determination of human rights violations is delegated to the Secretary of State. Responsibility for submission of an annual World Food Day report assessing progress toward food security in each country receiving U.S. food assistance is delegated to the USAID Administrator. The authority to waive payments of principal and interest due under Title I dollar sales agreements is delegated to the Secretary of Agriculture, in consultation with the Council and the Department of the Treasury. The authority to transfer up to 15 percent of funds available in any fiscal year from one title of the Act to any other title is delegated to the Director of the Office of Management and Budget, in consultation with the Council. The authority to administer Title V - Farmer-to-Farmer Program (FTF) - is delegated to the Administrator of USAID. Authority for the Food for Progress Act is delegated to the Secretary of Agriculture. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 1: Authority 1C: AID Regulation 11 1C. A.I.D. Regulation 11 USAID regulation entitled "Transfer of Food Commodities for Use in Disaster Relief and Economic Development and Other Assistance" (Regulation 11) (22 C.F.R. part 211) prescribe the terms and conditions governing the transfer of agricultural commodities to foreign governments, voluntary agencies, and intergovernmental organizations (except the World Food Program) under P.L. 480, Title II, as amended. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 1: Authority 1D: Delegations of Authority Nos. 401 and 902 1D. Delegations of Authority Nos. 401 and 902 Delegation No. 401 assigns to USAID/W-AA/Bureau for Management (M) the contract functions related to procurement of ocean transportation services and the authority to sign grants and cooperative agreements to implement the P.L. 480, Farmer to Farmer (FTF) program. Delegation No. 902 assigns all other food aid responsibilities to the following: For P.L. 480, Title II programs - the USAID/W-Bureau for Humanitarian Response (BHR) has the responsibility for these activities; and the USAID/W-Regional Bureaus, with BHR clearance, has responsibilities for P.L. 480, Title III activities. These are (a) authorization of the donation of agricultural commodities; (b) negotiation, execution and implementation of donation agreements in accordance with the terms of the authorization; (c) amendment of any authorization and of any donation agreement; and (d) findings, determinations and actions required under Title IV of P.L. 480 that relate to donations and agreements for specific countries and the terms and conditions thereof. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 2: Allocation and Coordination of Responsibility 2A: Coordination Food Assistance Policy Council CHAPTER 2 ALLOCATION AND COORDINATION OF RESPONSIBILITY 2A. Coordination 1. Food Assistance Policy Council Under Executive Order No. 12752 of February 25, 1991 the President established the Food Assistance Policy Council to ensure effective interdepartmental policy coordination in food assistance programs among the Department of Agriculture (USDA), USAID, the Department of State, and the Office of Management and Budget (OMB). The Council is to advise the President on appropriate policies under the Agricultural Trade Development Act of 1954 (P.L. 480), as amended, the Food for Progress Act of 1985, and Section 416(b) of the Agricultural Act of 1949, as amended. (Although not mentioned in the Executive Order, Section 416(b) itself states that assistance will be coordinated through P.L. 480 mechanisms). The Council is made up of senior representatives of USDA, OMB, the Department of State and USAID. The Deputy Administrator represents USAID. Meetings of the Council shall be called by the Secretary of Agriculture or can be requested by any of the senior representatives. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 2: Allocation and Coordination of Responsibility 2A: Coordination Food Aid Consultative Group 2. Food Aid Consultative Group Under Section 205 of P.L. 480, the Food Aid Consultative Group was established to regularly review the effectiveness of regulations and procedures governing emergency and private food assistance programs being implemented under Title II. It can also address other issues under Title II which involve private voluntary organizations (PVOs), cooperatives or indigenous non-governmental organizations (NGOs). The USAID Administrator (A/USAID) or his representative chairs the Group which is to include the USDA Under Secretary for International Affairs and Commodity Programs; the Inspector General of USAID; a representative of each PVO or cooperative participating in programs or receiving funds from USAID to establish programs under Title II; and representatives from African, Asian and Latin American indigenous NGOs determined appropriate by the A/USAID. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 2: Allocation and Coordination of Responsibility 2B. Responsibilities General 2B. Responsibilities 1. General The Agricultural Act of 1949, P.L. 480, the Food Security Reserve Act of 1980, and the Food for Progress Act of 1985 delineated policy and operational responsibilities among all departments and agencies concerned with food assistance programs during the past three decades. These responsibilities were redefined by the 1990 amendments to P.L. 480. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 2: Allocation and Coordination of Responsibility 2B. Responsibilities The President 2. The President The Food Security Reserve Act of 1980 (Public Law 96-494, Sections 301 and 302, as amended): the President establishes a wheat reserve that can be used under P.L. 480 to provide emergency food assistance to developing countries. The function for maintaining the reserve has been delegated to the Secretary of Agriculture, but the President has retained authority to make the findings necessary to release stocks for humanitarian purposes. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 2: Allocation and Coordination of Responsibility 2B. Responsibilities Office of Management and Budget 3. Office of Management and Budget Executive Order No. 12752: The Director of OMB or his designeeparticipates in the policy coordination efforts of P.L. 480 programs undertaken by the Food Assistance Policy Council. OMB sets the budget planning target for P.L. 480, makes recommendations to the President for the budget level of P.L. 480, and issues the OMB þmarkþ which, is the starting point for developing the President's budget to the Congress and USAID's Congressional Presentation. The OMB also determines the amount of foreign currencies generated under P.L. 480 Title I programs to be used under Section 104(c)(8) of P.L. 480 to make payment of U.S. obligations abroad. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 2: Allocation and Coordination of Responsibility 2B. Responsibilities Department of Agriculture 4. Department of Agriculture Title I of P.L. 480: Effective January 1, 1991, Congress provided USDA all authority for the concessional sales of agricultural commodities to developing countries. Sales may be for dollars on long-term credit or for payment in local currency which is owned by the U.S. Government (USG) and programmed by USDA. The Secretary of Agriculture has the responsibility to negotiate and execute agreements under Title I. Section 416(b) of the Agricultural Act of 1949: The Secretary of Agriculture is authorized to donate surplus agricultural commodities for programs in developing countries and friendly countries. Food for Progress Act: Section 1110 of the Food Security Act of 1985, as amended, authorizes the use of Title I and Section 416 resources to assist emerging democracies and developing countries that are committed to expanding free enterprise undertakings in the agricultural sectors of their economies. Executive Order 12752, Section 4(g) delegates to the Secretary of Agriculture all of the President's functions under the Food for Progress Act. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 2: Allocation and Coordination of Responsibility 2B. Responsibilities U.S. Agency for International Development 5. U. S. Agency for International Development Food aid responsibilities within USAID are established by Delegations of authority (Nos. 401 and 902) from the Administrator, and by the Functional Statements of the Bureau for Policy and Program Coordination (PPC), and the Bureau for Management (M). Food aid responsibilities are as follows: a. Bureau for Policy and Program Coordination (PPC) The Bureau for Policy and Program Coordination (PPC) performs the same functions regarding food aid programs as it does with respect to other Agency programs. PPC must take the lead and collaborate with the - the Bureau for Humanitarian Response (BHR) and the Regional Bureaus - in preparing food aid policies and maintaining policy liaison with other agencies of the USG, international organizations and other donors. PPC will determine, based on the standards in Section 302 of P.L. 480, the countries that are þleast developedþ and therefore eligible to participate in the Title III program. b. Bureau for Management (M) The Bureau for Management (M), in consultation with PPC: ~ Performs the same budget functions with respect to food aid as it does for other assistance resources available to USAID, including, - preparation of guidance on the budget process; - management of budget-year request for the Agency; - preparation and monitoring of the Operational Year Budget (OYB); and - representation of USAID on budget issues. ~ Exercises all functions relating to procurement of ocean transportation for agricultural commodities - (OP/TRANS). ~ Signs grants and cooperative agreements for the Farmer-to-Farmer Program (FTF) authorized under Title V of P.L. 480. ~ Provides guidance and support to BHR/Food for Peace (FFP) in the administration of grants and cooperative agreements signed by BHR/FFP providing assistance to PVOs and cooperatives under section 202(e) of P.L. 480. c. Bureau for Humanitarian Response (BHR) Within USAID/W, BHR, in consultation with M, PPC, and Regional Bureaus performs all other food aid functions. BHR has operational responsibility and monitors food aid, except Title III of P.L. 480. The following are BHR's principal responsibilities to: ~ Represent USAID on the Food Aid Consultative Group required under Section 205 of P.L. 480. ~ Provide support to the Administrator and Deputy Administrator who are the Agency's representatives on the Food Assistance Policy Council established under Executive Order 12752. ~ Coordinate regular and emergency operational food aid matters with USDA, State, and other federal agencies as well as with private and public international organizations, including the World Food Program (WFP). ~ Prepare and issue (with clearance from the Regional Bureaus, M and PPC) regulations, handbook materials and other operational guidance required for food aid programs, including Title III of P.L. 480, designed to accomplish statutory and policy objectives of these programs and establish Agency procedures and requirements with respect to accountability for food aid activities. ~ Advise Bureau for Management (M) regarding food aid budgets based on field submissions for Title II and Regional Bureau recommendations for Title III of P.L. 480, and monitor implementation of food aid budgets. BHR advice and recommendations for adjustments during a fiscal year will be based on total food aid budget availabilities, the need to accommodate emergencies, changes in commodity and transport availability and costs, liaison with USDA and the private sector regarding their agricultural activities, and compliance with food aid legislation. ~ Perform all functions and exercise all authorities under or relating to Title II of P.L. 480 and any other food aid program, except Title III of P.L. 480. The BHR memorandum approving regular and emergency Title II or other food aid activities should include a description of the Field Post's plan for implementing or monitoring thebe cleared by the appropriate Regional Bureau, activity, and identify the resources it will use for this purpose. If there is no Field Post in the country, the memorandum should include a description of how the program will be monitored, which is prepared by BHR in collaboration with and cleared by the appropriate Regional Bureau. ~ Sign and administer grants and cooperative agreements under section 202(e), "Support for Private Voluntary Organizations and Cooperatives," of P.L. 480. ~ In consultation with the appropriate Regional Bureau, resolve audit findings and recommendations regarding Title II and other food aid activities and collaborate, as appropriate, with Regional Bureaus in the resolution of audit findings and recommendations regarding Title III donations. ~ Coordinate with USDA and Bureau for Management (M) in the procurement of agricultural commodities and ocean transportation for all food aid programs. ~ Implement the Farmer-to-Farmer (FTF) program authorized under Title V of P.L. 480. ~ As required under applicable legislation or Executive Order, prepare annual reports to Congress on food assistance. The following procedures are used by BHR in processing P.L. 480 Title II and Title III budget requests: Title II Title II - Budget Request: Based on the Annual Budget Submission (ABS) received from each USAID Mission or Field Post and other sources of information, BHR prepares the Title II budget, including an unallocated reserve, with clearance by the Regional Bureaus. Clearance of the Title II budget by a Regional Bureau means that the Bureau will commit the resources to implement or monitor Title II activities effectively in countries included in the budget for which the Bureau is responsible. BHR/FFP and each Regional Bureau will negotiate differences that might arise in the preparation of the budget. BHR will submit the total Title II request and country levels to M/FA/B for approval. Title II - Congressional Presentation: M/FA/B provides BHR with the final budget pass-back level. BHR will coordinate with the Regional Bureaus the review of country allocations within the pass-back level. Title II - Operational Year Budget: M/FA/B will establish a preliminary OYB for Title II programs with concurrence by BHR and the Regional Bureaus. Allocations during the fiscal year that are different from amounts in the OYB, and allocations from the Title II reserve, will be proposed by BHR to M/FA/B with clearance by the Regional Bureaus. When necessary, BHR will recommend releases from the emergency wheat reserve established under sections 301 and 302 of the Food Security Reserve Act of 1980. Title III Title III - Budget Request: After a Regional Bureau approves the ABS from a USAID Mission and submits it to M/FA/B, the Title III component will be forwarded to BHR for review and advice in the preparation of a proposed Title III budget. BHR review takes into account applicable legislation, commodity and shipping availability and liaison with the private sector to ensure that programs complement normal commercial trade, and the relationship between Title III and Title II allocations as well as activities conducted by USDA, including Title I sales, Section 416 donations and export credit and enhancement programs. BHR and each Regional Bureau will negotiate differences that might arise in this review, and Bureau for Management (M) will resolve any outstanding issues. Title III - Congressional Presentation: M/FA/B provides BHR and the Regional Bureaus with the final budget pass-back level, including preliminary country allocations. BHR and the Regional Bureaus review the allocations and will submit the proposed final levels to M/FA/B for approval. Title III - Operational Year Budget: M/FA/B will establish an OYB for Title III programs with concurrence by BHR and the Regional Bureaus. BHR will convene a committee consisting of a representative (the Food Aid Coordinator) from each Regional Bureau and a representative from M/FA/Budget to monitor implementation of the Title III budget. This committee will advise M/FA/B regarding proposed reallocations during a fiscal year. d. USAID Regional Bureaus AFR/ANE/ENI/LAC Each Regional Bureau has authority and responsibility to: ~ Issue, if needed, supplementary guidance for Title III programs within the region, provided that it is consistent with the Title III operational guidance issued by BHR and that the supplementary guidance is cleared by BHR. ~ Participate in the food aid budget process. ~ Approve and implement Title III donations to eligible countries in their respective geographic areas, with clearance by BHR based on compliance with applicable legislation, commodity availability, and liaison with the private sector to ensure that programs complement normal commercial trade. The Regional Bureau will decide how the Title III donation should be integrated into the country's development plan and USAID's strategy for it, and any other development issues related to the donation. ~ Make the findings and determinations and provide the reports required under Title IV of P.L. 480 with respect to donations under Title III, subject to clearance by BHR. ~ Furnish BHR with the information needed to prepare annual reports required under applicable legislation and the Executive Order. ~ Review and clear all Title II and other food aid activities within the geographic area except those conducted by WFP and agencies of the UN. ~ Ensure that each USAID Mission has the resources necessary to implement and/or monitor food aid activities effectively in the country where the post is located. This should be established, in consultation with BHR when the Regional Bureau reviews the ABS from the USAID Mission and periodically thereafter as necessary when the food aid activity is approved and while it is being implemented. ~ Resolve, in consultation with BHR, audit findings and recommendations regarding Title III donations; collaborate as appropriate with BHR in the resolution of audit findings and recommendations regarding other food aid activities within the regional geographic area; and ensure that USAID Missions implement effectively the actions agreed upon to resolve and close audit recommendations. e. USAID, USAID MISSIONS AND/OR FIELD POSTS Except for donations through WFP or other UN agencies, no food aid activity may be conducted in a country without the clearance of the principal USAID Mission or Embassy Officer in the country and the appropriate Regional Bureau. USAID Missions or Field Posts are responsible for preparing requests for P.L. 480 Title III and clearing requests for Title II programs. All food aid programs must include monitoring plans, and arrangements for audit that are acceptable to the USAID Inspector General (IG). Title II The ABS from each USAID Mission or Field Post will contain estimates of requirements for regular Title II programs anticipated in the country. The ABS also will include a description of the resources required by the USAID Mission or Field Post to implement and monitor Title II activities. Title II - Government-to-Government Emergency Programs: ~ Assist host government to develop program proposals for emergency assistance that can be submitted with the principal USAID or Embassy Officer's recommendation to USAID/W for approval. ~ Monitor host government performance under approved programs, particularly activities involving the generation and use of local currencies. ~ Ensure that agricultural commodities made available are used effectively and in the areas of greatest need. ~ Assure that recipient country reports on generation and use of local currencies are current. ~ Report to USAID/W as required on overall progress of the program. Title II - Regular Programs ~ Determine whether a Cooperating Sponsor's (i.e., PVO or cooperative) program proposal is adequately planned and financed and logistically sound, and whether technical and administrative skills are available to accomplish program objectives. ~ Guide and assist the Cooperating Sponsor as necessary in the preparation of workable Title II program proposals. ~ Clear Cooperating Sponsor proposals and comment on the sponsor's operational plan's relationship and consistency with the USAID Mission's development strategy prior to their being submitted to USAID/W-BHR/FFP. Along with this clearance the USAID Mission or Field Post sends to USAID/W-BHR/FFP a plan with a description of the resources it will use for monitoring the activity and accepts responsibility for doing so, including providing management and administrative support if required. ~ Report to USAID/W-BHR/FFP on the progress of the program and assure that Cooperating Sponsor reporting requirements are met. Title II - World Food Program/Other UN Agencies (See Chapter 10) ~ The USG makes voluntary pledges of Title II resources to global WFP activities biannually. USAID Mission or Field Posts are responsible for providing comments to BHR/FFP about proposed food aid programs that utilize U.S. donated commodities and are conducted by WFP or other UN agencies. ~ All USAID Missions or Field Posts are to notify USAID/W-BHR/FFP when the principal USAID or Embassy Officer perceives that WFP or other UN food aid programs are not being properly planned, implemented or monitored, or impinge upon USG bilateral food aid activities. ~ More specific guidance on monitoring and reporting upon WFP and UN agency food aid programs will be given to those USAID Missions or Field Posts where such programs constitute critical components in the food requirements of a given populace. Title III USAID Missions or Field Posts should: ~ First establish that the intended recipient country is an eligible least developed country as determined by USAID/W-PPC and that there are no policy considerations that would prohibit assistance under Title III. ~ In accordance with guidance issued by BHR and the Regional Bureau, document intended use of Title III resources in the Mission's Strategic Plan (Title III is viewed as a long-term development instrument, up to five years and renewable) and prepare the Title III proposals. ~ Include proposed Title III estimates of requirements in their ABS to Regional Bureaus. ~ Once Title III proposed programs are approved, adapt the Title III Agreement format developed by the General Counsel (GC) for sales of Title III commodities to generate and use local currency proceeds, or if the commodities are put to other uses, consult with the Regional Legal Advisor (RLA) or GC/BHR to revise the Title III Agreement accordingly. ~ Each year assess the recipient country's performance in meeting program and policy performance indicators and achieving the Title III program's outputs, purposes and objectives. These Annual Progress Reports must be submitted to USAID/W before each subsequent year's funding can be approved. Audits USAID Missions or Field Posts are to implement the actions approved to resolve and close audit recommendations with respect to food aid activities in the country, whether the action is approved by the USAID Mission or Field Post itself or referred to USAID/W and approved by the appropriate Regional Bureau with respect to Title III donations, or by BHR for Title II and other food aid activities. f. USAID Inspector General (IG) The Inspector General (IG) is the principal advisor to the A/USAID regarding audit policy. Food aid programs must include arrangements for audit that are acceptable to the IG. The Administrator will decide any issues related to audit that cannot be resolved. 6. Cooperating Sponsors Once the underlying Non-Governmental Organization (NGO) program agreement, host country agreement, and any recipient agency agreements are signed, responsibilities for getting Title II programs underway are: ~ A Non-Governmental Cooperating Sponsor such as a PVO, cooperative or intergovernmental organization has the responsibility of preparing and submitting two documents covering regular or emergency Title II programs for USAID Mission or Field Post approval and USAID/W review: the Operational Plan (OP), and the Annual Estimate of Requirements (AER). ~ A Governmental Cooperating Sponsor is only eligible to receive Title II commodities in an emergency situation. A governmental Cooperating Sponsor prepares and submits a program plan akin to an NGO Operational Plan (OP). Based upon the information in this plan, as approved, the USAID Mission or Field Post or BHR/FFP will then prepare a Transfer Authorization (TA) describing the food assistance to be utilized for the Cooperating Government's signature. Once the program is approved and is underway, the Cooperating Sponsor is responsible for the implementation of the terms of their approved plans and agreements, which include proper use and accountability of all Title II commodities or funds made available to meet the agreed requirements of eligible recipients, and a system of timely and thorough reporting on program implementation which lends itself to external audit. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 3: Policy 3A. Statutory Policy CHAPTER 3 POLICY 3A. Statutory Policy The U.S. food aid program is primarily administered under P.L. 480. This act has had several amendments, the most recent being in the Agricultural Development and Trade Act of 1990. The three major titles dealing with food aid underwent major revision and changes in policy direction and are now entitled: Title I - Trade and Development Assistance Title II - Emergency and Private Assistance Programs Title III - Food for Development Program P.L. 480 cites enhancement of food security in the developing world as U.S. policy, as follows: It is the policy of the United States to use its abundant agricultural productivity to promote the foreign policy of the United States by enhancing the food security of the developing world through the use of agricultural commodities and local currencies accruing under the Act to: combat world hunger and malnutrition and their causes; promote broad-based, equitable, and sustainable development, including agricultural development; expand international trade; develop and expand export markets for United States agricultural commodities; and foster and encourage the development of private enterprise and democratic participation in developing countries. The 1990 legislation for the first time defines food security as: Access by all people at all times to sufficient food and nutrition for a healthy and productive life. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 3: Policy 3B. USAID Policy Determinations 3B. USAID Policy Determinations While the foregoing statutory definition of food security is used for P.L. 480 Title II and Title III programs, USAID's Policy Determination No. 19 (PD-19) of April 13, 1992 incorporated the fundamental concepts of this and the International Bank for Reconstruction and Development (IBRD) and Food Agricultural Organization (FAO) definitions to set forth USAID's basic definition of food security as follows: "When all people at all times have both physical and economic access to sufficient food to meet their dietary needs for a productive and healthy life." Within the context of this definition of food security, three distinct variables are recognized by USAID as central to achievement of the policy of enhancing food security in the developing world: availability, access and utilization. PD-19 explains how complementary programming of monetary resources under Development Assistance (DA), the Development Fund for Africa (DFA), and the Economic Support Fund (ESF) and P.L. 480 resources, as part of country program strategies, may overcome constraints to these variables in attaining food security policy objectives. Thus, both P.L. 480 and other USAID programs may improve the food security in countries where assistance is contemplated by addressing constraints such as those below which would impede progress toward this objective. Availability of Food: Inappropriate agricultural practices and technologies; inappropriate economic policies (e.g., pricing, tariffs, taxes); inadequate agricultural inputs; dysfunctional transportation and distribution systems; ineffective private sector marketing systems; inability to predict, assess and cope with emergency situations; natural disasters and climatic constraints; and population growth rates that offset increased production and/or imports. Access to Food: Insufficient economic growth leading to a lack of job opportunities and economic incentives; inadequate training or job skills; lack of credit or other means to improve asset and income status; inappropriate national economic policies; and food losses associated with ineffective harvesting and storage. Utilization of Food: Nutrient losses due to food preparation; inadequate knowledge and practice of health techniques, including child care and sanitation; and cultural practices that limit consumption by certain groups or family members. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 3: Policy 3C. Title I - Trade and Development Assistance 3C. Title I - Trade and Development Assistance Title I provides for the sale of agricultural commodities on concessional terms to developing countries either in dollars or for local currencies. To qualify, a country must have a shortage of foreign exchange and be unable to meet all of its food needs through commercial channels. Under Section 104(c) proceeds from local currency payments can be used to support agricultural development; trade development and promotion; loans for agribusiness; loans for agricultural facilities including cooperatives; private sector agricultural trade development; and agricultural research; and to make payments for U.S. Government (USG) obligations. A.I.D. no longer has any operational responsibility for either P.L. 480, Title I, or Section 416(b) of the Agricultural Act of 1949 under which U.S. agricultural surpluses can be donated to assist developing countries and friendly countries. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 3: Policy 3D. Title II - Emergency and Private Assistance Programs 3D. Title II - Emergency and Private Assistance Programs Legislative and USAID operational policies governing the planning, implementation and monitoring of Title II undertakings are set forth in USAID Regulation 11. It is USAID's position that it probably will be necessary to deviate from very few requirements of Regulation 11 itself to accommodate any other than the most unusual situations. It is USAID policy that the services of private voluntary organizations (PVOs) and cooperatives are to be used as Cooperating Sponsors to the maximum extent practicable to carry out Title II regular or emergency programs. While PVOs and cooperatives no longer need be registered with USAID to be eligible for Title II programs, a nongovernmental organization is eligible to implement regular Title II programs only after it has entered into a Food for Peace Agreement with USAID that incorporates the terms and conditions of Regulation 11; foreign PVOs and cooperatives are also eligible to be Cooperating Sponsors. However, in approving proposals, preference may be given to registered PVOs and cooperatives over those that are not. Governments are to be used as Cooperating Sponsors only in emergency programs. As stated in Regulation 11, the USAID Mission or Field Post has to assure proper management and exercise oversight of Title II programs in-country as well as provide assurance of linkages between Title II activities and the USAID Mission's strategic objectives. USAID/W-BHR encourages a continuing dialogue between USAID Missions or Field Posts, voluntary agencies and responsible personnel in the recipient country to assure that Title II resources are integrated with other development resources in solving priority problems in malnutrition and development. USAID/W-BHR/FFP cables Title II program guidance updating for each fiscal year is sent to USAID Missions or Field Posts for required review, comment and certification on each Cooperating Sponsor's Title II Program submission. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 3: Policy 3E. Title III - Food for Development 3E. Title III - Food for Development Legislative policy underlying the restructuring of Title III in 1990 concentrates this newly designed grant component of P.L. 480 on least developed countries (LDCs) meeting IBRD poverty criteria or having chronic food deficits. Those LDCs accorded priority consideration under Title III must have the greatest need for food; the capacity to use food aid effectively; a commitment to policies to promote food security; and a long-term plan for broad-based, equitable and sustainable development. As stated in the legislation, a country is eligible to receive grant food aid under Title III if it meets the poverty criterion established by the IBRD for Civil Works Preference (per capita annual income of $610 or less). A country not meeting the poverty criterion is still eligible if it meets the following food deficit criteria: daily per capita calorie consumption of less than 2300; child mortality rate under age five greater than 100 per 1000 live births; and inability to meet its food security requirements from domestic production or from imports due to a shortage of foreign exchange earnings. Meeting the statutory country eligibility criteria is a first requirement for a Title III program. Once this is met, a Title III proposal must meet the criteria that USAID program policy sets for use of other types of assistance. These include program prioritization, the meeting of concentration and focus requirements, program integration, and proposal review and approval by the same mechanisms undergone by Development Assistance (DA), Development Fund for Africa (DFA), and Economic Support Fund (ESF) funded project proposals. Title III legislation encourages a comprehensive approach to improving food security citing a wide range of eligible development activities for which Title III donations may be used, including balance of payments support; promotion of specific policy reforms; establishment of security food stocks to meet emergencies; improvement of rural infrastructure; support of nutrition intervention and other child survival activities; privatization; support of Peace Corps activities that relate to agricultural production; support of non-governmental organizations (NGOs), PVOs, and cooperatives; and other appropriate food security measures. The legislation requires that at least ten percent of local currency generated under a Title III program be used to support indigenous NGOs and cooperatives active in rural development, agricultural education, production and other activities to assist poor people. The nature of the activities for which Title III support can be used are long range and therefore Title III proposals must be for multi-year programs - up to five years. P.L. 480 legislation emphasizes the integration of Title III projects into the development strategy, objectives and programs of the USG and the Cooperating Country. Accordingly, proposals should include total program needs over the life of the project and be incorporated into the Country Program Strategic Plan. Title III resources can be combined with DA, DFA, ESF and other food aid to maximize the developmental impact. USAID Missions or Field Posts have overall responsibility for designing, developing, implementing and reporting on Title III programs. It is USAID policy that an Annual Progress Report (APR) which assesses recipient country accomplishments in meeting agreed Title III project and policy performance indicators and achieving the project's outputs, purpose and objectives, be submitted by the USAID Mission or Field Post and reviewed by USAID/W (appropriate Regional Bureau, BHR, PPC) before new funding can be approved for a subsequent year. In view of the degree of involvement of USAID Missions or Field Posts in Title III programs from concept through development and implementation to final evaluation and audit, it has been Agency policy to limit Title III programs to countries with USAID Missions. Cabled Title III program guidance updating for each fiscal year is sent to USAID Missions or Field Posts. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 3: Policy 3F. Local Currency 3F. Local Currency P.L. 480 and the Agriculture Act of 1949, Section 416(b) permit the generation of local currency as a statutory end in itself, and not just a by-product of the sale of food aid. Guidelines for generation, use and accountability of local currency are set forth in USAID policy determination No. 19 and State 204855. The statutory objectives of monetized P.L. 480 Title III programs, as well as P.L. 480 Title II and Section 416(b) assistance, would not be satisfied unless the local currency proceeds were used for their intended purposes. These intended purposes are defined in the legislation: P.L. 480 Title III, Section 306(b), identifies 13 specific economic development purposes for which local currency proceeds may be used; P.L. 480 Title II regular programs require that local currencies generated be used for the purposes specified in Section 203(d) of P.L. 480. P.L. 480 Title II emergency food aid programs require that the food (if not distributed to needy people) may be sold, as long as the local currency is then used for emergency purposes; Section 416(b) stipulates that sales proceeds may be used either for costs incidental to moving the Section 416(b) commodities or for activities that are consistent with providing food assistance to needy people. USAID may share responsibility in the joint programming of P.L. 480 generated local currencies, but retains the responsibility for the accountability (ensuring the use for agreed-upon purposes) of P.L. 480 Title III generated funds. P.L. 480 local currency generations should not be commingled with other local currencies associated with U.S. assistance. P.L. 480-generated local currencies should be deposited in a special account; at a minimum, the program agreement must require that reports on a special account be submitted to the USAID Mission on a quarterly basis. Key distinguishing characteristics of policy regarding local currency generated from the sale of P.L. 480 and Section 416(b) commodities are listed as follows: P.L. 480 prohibits the use of local currency derived from the sale of food commodities to finance the production for export of agricultural commodities that would compete in the world market with similar items produced in the U.S. if such competition would cause "substantial injury" to U.S. producers. P.L. 480 requires 10 percent of the local currency generated under Title III to be used to support indigenous NGOs, but only if the Title III local currency is deposited into a separate account [Section 306(b)]. P.L. 480 requires separate accounts for Title III programs to the extent determined appropriate by the Administrator. If local currency is generated in a food aid program, it must be deposited into a separate, interest-bearing account. If the requirement for a separate account is waived, USAID must still be able to verify that an equivalent amount of local currency was used for specific economic development purposes [Section 304(a)]. P.L. 480 requires consultations with the International Monetary Fund (IMF), World Bank and other donors to ensure that the use of P.L. 480 local currency for development purposes will not have a disruptive impact on the farmers or the local economy of the recipient country [Section 403(b)]. Programming local currency is permissible to support (a) developmentally sound projects under Title III; (b) non- emergency Title II programs; (c) projects and programs that pertain to emergencies; and (d) projects that pertain to food assistance to needy people under Section 416(b) agreements. Programming local currency to support particular sectors of the government's budget is permissible under Title III agreements; and to support the agriculture sector only under Section 416(b) agreements. The agreement between the Cooperating Country and USAID Mission concerning use of local currency for specific sector support should specify the format and frequency of reports. Programming local currency to reduce the government's debt may be permissible under Title III if this use can be justified under one of the specific economic development purposes described in Section 306(a) of P.L. 480; this use is not permissible under Title II or Section 416(b). Programming local currency to establish an endowment is permissible under Title II and Title III, but only if established by an NGO (and not by a host country); this use is not permissible under Section 416(b). Programming local currency to help fund USAID Mission operating expenses is not permitted under P.L. 480 or Section 416(b). _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 3: Policy 3G. Title V - Farmer-to-Farmer Program 3G. Title V - Farmer-to-Farmer Program P.L. 480 created the Farmer-to-Farmer Program (FTF). The 1990 amendment restates the policy objectives of this program and expands objectives and target groups, as well as the financing to be made available under P.L. 480. The legislative intent is to assist developing countries, middle income countries and emerging democracies to increase farm production and the incomes of farmers. The program envisages U.S. farmers, agriculturists, agribusinesses, universities and non-profit farm organizations volunteering to work with individual farmers and farm organizations in Cooperating Countries to improve the operations of food systems from production through distribution on a people-to-people basis. P.L. 480 requires that not less than 0.2 percent of the amounts made available each fiscal year from 1991 to 1995 shall be used to carry out FTF, with not less than 0.1 percent to be used for this program in developing countries. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4A: Introduction CHAPTER 4 STRUCTURE AND OBJECTIVES 4A. Introduction USAID and the U.S. Department of Agriculture (USDA) share the responsibility for administering five U.S. food assistance programs: (1) concessional loans in support of trade and development assistance (Title I); (2) donated agricultural commodities in support of emergency and non-emergency food aid programs (Title II); (3) grant food to the least developed countries (Title III); (4) donated surplus agricultural commodities to relieve temporary commodity shortfalls [Section 416(b)]; and (5) supported progress toward democracy and open market systems (the Food for Progress program). The following sections briefly discuss major elements of each program. Parts II through IV of Handbook 9 address in detail those programs for which USAID has responsibility. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4B. Title I - Trade and Development Assistance Objectives 4B. Title I - Trade and Development Assistance 1. Objectives Title I of P.L. 480 focuses on the market development aspects of the U.S. food aid program. By investing in agriculture, trade promotion, and public infrastructure, and by assisting countries with temporary foreign exchange constraints in participating in international markets, USDA uses Title I programs to help countries meet their long-term food security requirements. Priority is given to countries that (a) demonstrate the greatest need for food; (b) undertake economic reforms to promote food security, alleviate poverty, and promote development; and (c) have the demonstrated potential to become commercial markets for competitively priced U.S. commodities in the future. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4B. Title I - Trade and Development Assistance Structure 2. Structure USDA has assumed full management of the Title I concessional loan program, under which countries pay for commodities in U.S. dollars at concessional interest rates with a maximum 30-year loan term and a maximum 7-year grace period. On an exceptional basis, the Secretary of Agriculture may choose to accept repayments of loans in local currencies, which may, in turn, be used in the recipient country to support activities that promote agricultural development and trade and/or to pay for USG obligations. Sales are made by private business firms usually on a bid basis in response to tenders issued in the U.S. by the importing country. The annual funding level is set by law. It is usually required that ocean freight be paid by the importing country except for the difference in shipping costs for the quantity of commodity shipped on U.S. versus foreign flag vessels. This freight differential is paid by the Commodity Credit Corporation (CCC). In contrast to previous Title I programs, the new legislation does not require that local currency generations be programmed. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4B. Title I - Trade and Development Assistance Operational Responsibility 3. Operational Responsibility Congress has provided USDA with all authority for the concessional sale of agricultural commodities to developing countries. USAID no longer has any operational responsibility for Title I, either in Washington, DC or in the field. The Agency preference is that USAID not manage USDA programs. Any exception to this policy would call for extraordinary circumstances and the following criteria would apply. It must be understood, moreover, that meeting these criteria is a necessary but not sufficient condition for approval, and USAID concurrence should not be assumed. Criteria (a) The Missions's proposal or endorsement of a USDA request that USAID manage a Title I program, detailing the length of involvement and the specific responsibilities to be maintained, must conform with the "monitoring" section of USAID Delegation of Authority 902 (Appendix E). (b) It must be determined that the Title I activity is vital for achieving the USAID Missions or Field Post's objectives in the country or USAID or USG interest there or in the region. (c) The Title I program and/or uses of local currency generations must fit within the Mission's strategic objectives and be in conformity with the focus and concentration mandate of the Agency. (d) USDA must have no or inadequate capability to manage the program on its own without USAID involvement. (e) The USAID Mission must fully explore and/or negotiate reimbursement by USDA to USAID for the costs of implementing or monitoring the USDA program. (f) The USAID Mission or Field Post must have a food aid management plan in place approved by USAID/W and have available the human and financial resources needed for effective management of the Title I program. (g) The impact of the proposed Title I activity on the Mission's operating expenses and/or staffing is not expected to result in a need for increased staff or funding. (h) The USAID Mission or Field Post must identify the program benefits related to USAID and USAID Mission objectives, expected program impact, detailed and measurable benchmarks and evaluation plans. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4B. Title I - Trade and Development Assistance Procedures 4. Procedures If a USAID Mission is requesting exception to USAID's policy of non-involvement in USDA programs, the following procedure should be followed: A USAID Mission or Field Post will direct to the appropriate Regional Bureau its request to begin or continue managing a Title I program or indicate its concurrence in a USDA or State request for the USAID to do so. The USAID Mission or Field Post will describe briefly the proposed program including USAID's projected life of program involvement, its importance to the Mission's assistance strategy, USAID's management capacity in place, USDA's capability, and USAID resources needed to implement or monitor the activity effectively. This request should indicate, particularly for new activities, the proposed costs USDA may pay, if any, for the USAID Mission or Field Post's management. If the request is endorsed by the Regional Bureau, the Bureau will prepare an action memorandum signed by the Assistant Administrator that sets forth the information provided to it and its reason(s) for supporting the request. The signed action memorandum will be directed to the Assistant Administrator for Management (M), the Assistant Administrator for Policy and Program Coordination (PPC), and the Bureau for Humanitarian Response (BHR) for concurrence. BHR will negotiate with USDA about the arrangements for USAID participation. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4C. Title II - Emergency and Private Assistance Objectives 4C. Title II - Emergency and Private Assistance 1. Objectives The objectives of agricultural commodities provided under this title to foreign countries on behalf of the people of the U.S. are to (a) address famine or other urgent or extraordinary relief requirements; (b) combat malnutrition, especially in children and mothers; (c) carry out activities that attempt to alleviate the causes of hunger, mortality and morbidity; (d) promote economic and community development; (e) promote sound environmental practices; and (f) carry out feeding programs. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4C. Title II - Emergency and Private Assistance Structure 2. Structure Under Title II, which is managed by USAID, the U.S. Government (USG) donates agricultural commodities to support emergency and development programs. In many cases, food is distributed to individuals through direct relief, emergency feeding and disaster assistance programs. In other cases, food is combined with other program elements and targeted to certain beneficiary groups, such as in maternal-child health (MCH), school feeding (SF) and food for work (FFW) programs. In still other programs, P.L. 480 commodities are imported and sold on the local market (monetized) providing an additional supply of food locally and generating local currencies which are then used to support local development efforts, community projects, and feeding programs. Emergency assistance is provided through governments and public or private agencies, including intergovernmental organizations such as the World Food Program (WFP) and other multilateral organizations. Non-emergency assistance is provided through private voluntary organizations (PVOs) or cooperatives that are, to the extent practicable, registered with USAID or through intergovernmental organizations, such as WFP. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4C. Title II - Emergency and Private Assistance When to Choose Title II 3. When to Choose Title II The United States (U.S.) P.L. 480, Title II food assistance is often an essential response to extraordinary emergency events affecting developing countries. Important elements that can contribute to the U.S.'s ability to respond rapidly and responsibly to emergencies when they do arise are contact, cooperation and coordination with other donors in the host country, and on-going food needs and/or early warning systems. The first improves the coordination of emergency requests and responses and the second helps to identify, define and quantify the emergency food need. While some forms of emergency assistance can only be called forward when an emergency has officially been declared by the host country government, U.S. emergency food aid assistance can be activated without such an official declaration. The USAID Mission or Embassy can start the process by submission of an emergency request to USAID/W- BHR/FFP outlining in detail the cause, extent and magnitude of the emergency need as well as the appropriate U.S. response. Objectives (b) through (f) of the legislation (see 4C.1., above) can often only or most efficiently be met through regular planned development feeding programs implemented by PVOs and cooperatives operating in developing countries. In recent years the legislation has expanded the authority for sale or barter and for the use of the proceeds for economic and community development, thus broadening the ways in which food can contribute to meeting nutrition, relief and economic development needs. Grant resources are also available to support the programs and to increase their efficiency and impact. If eligible PVOs or cooperatives are available and/or have requested USAID support of feeding or food supported programs to meet objectives of the legislation and of USAID and the USAID Mission's development strategy, Title II resource support should be considered and requested. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4C. Title II - Emergency and Private Assistance Procedures for requesting Title II 4. Procedures for Requesting Title II The Administration may make a decision to offer emergency assistance and inform the USAID Missions of such decision. Cooperating Sponsors may also make a determination that emergency assistance is needed. Requests for U.S. food support should in these instances be directed to USAID Missions for transmittal to USAID/W-BHR/FFP. As stated above, USAID Missions may also initiate the emergency response process by transmitting an emergency food request to USAID/W-BHR/FFP. These procedures are detailed in Chapter 7 of this Handbook. Procedures for initiating a regular Title II program are presented in detail in Chapters 5 and 6 of this Handbook. Regular Title II programs should be an integral part of the USAID Mission and host country development strategies, and, as such, planning should begin with the Country Development Strategic Statement (CDSS) and programs should be included in the Annual Budget Submission (ABS) and Congressional Presentation (CP). Cooperating Sponsors, on the other hand, are required to submit Operational Plans (OPs) either on a yearly or multi-year basis which detail the proposed program goals, implementation and management. (Again, see Chapters 5 through 11 of this Handbook for details on Title II program development, proposal submission, implementation, management and reporting requirements.) _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4C. Title II - Emergency and Private Assistance Reference Materials 5. Reference Materials Chapters 5 through 11 of Handbook 9 Regulation 11 (Appendix B) Food Aid Management Plan for USAID Missions Commodities Reference Guide Monetization Field Manual _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4D. Title III - Food for Development Objectives 4D. Title III - Food for Development 1. Objectives The new Title III Food for Development Program, established by Congress in the 1990 Amendment to P.L. 480, focuses on the use of Title III commodities as a prominent, integral part of the USAID Mission's Country Assistance Strategy and the recipient country's Development Plan. The fundamental objective of Title III is food security. The program is grant funded; encourages multi-year commitments; allows USAID Missions or Field Posts to approve the Cooperating Country's negotiation of sale of the Title III commodities through governmental or non-governmental entities; and offers flexibility in the choice of programming options to achieve development objectives. Title III stresses three such objectives: a) the enhancement of food security; b) the privatization of food and agricultural distribution systems; and c) support of nutrition improvement and child survival initiatives. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4D. Title III - Food for Development Structure 2. Structure A country is eligible to receive grant food aid under Title III if it meets the poverty criteria established by the International Bank for Reconstruction and Development (IBRD) for Civil Works Preference. A country not meeting the poverty criterion is still eligible if it meets all of the following food deficit criteria: a) daily per capita calorie consumption is less than 2300; b) child mortality rate under age 5 is greater than 100 per 1000 live births; and c) inability to meet its food security requirements from domestic production or from imports due to a shortage of foreign exchange earnings. Meeting the statutory country eligibility criteria is only the first requirement for a Title III program. Section 202(c) of the legislation further states that USAID should give priority to those countries that (1) demonstrate the greatest need for food; (2) demonstrate a capacity to use food assistance effectively; (3) have demonstrated a commitment to policies to reduce measurably hunger and malnutrition; and (4) have a long-term plan for broad-based, equitable and sustainable development. In addition, USAID applies programming criteria similar to those for requesting other USAID resources. Along with the proposed use of Title III commodities being documented in the Mission's Strategic Plan, these criteria include program prioritization, the meeting of concentration and focus requirements, program integration, and proposal review and approval. Unlike Title II, where the USAID Mission's role is basically one of management and oversight, USAID Missions are directly involved in Title III programs from concept through development and implementation to final evaluation and audit. Because of management, monitoring and reporting requirements, implementation of Title III programs has been limited to countries with USAID Missions. Title III program implementation requirements are detailed in Chapters 12 and 13 of this Handbook. Under Title III, the United States Government (USG) will donate agricultural commodities without charge and will arrange for and pay the costs of purchasing, processing, handling and transporting the commodities to the port of discharge in the recipient country, or point of entry in a landlocked country. The recipient country shall arrange for and pay the cost of handling, transporting and distributing Title III commodities within its borders. Local currency generated by sale of Title III commodities can be used to pay these costs. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4D. Title III - Food for Development When to Choose Title III 3. When to Choose Title III Congress purposely provided considerable flexibility to USAID in using Title III resources. Missions may use Title III agreements as an important tool for advancing policy dialogue; program the commodities as balance of payments assistance to support policy reform; sell the commodities to governmental or non-governmental entities and jointly program the sales proceeds for specific development activities, for sector support, or to support policy reform; distribute the commodities in direct feeding programs; use the commodities to establish emergency food reserves; or design the program for any combination of these options. USAID Missions can also combine, in one project, Title III resources with Development Assistance (DA), Development Fund for Africa (DFA), Economic Support Fund (ESF) and other food aid to maximize the developmental impact of U.S. assistance. In using Title III to pursue policy reform, priority should be given to policy changes in the areas of food security, private sector, and nutrition - including child survival - initiatives. Policy reform programs should be structured in a manner commensurate with host country and USAID Mission implementation capabilities. Policy initiatives should be targeted to specific reforms, and the country's progress in implementing the reforms as well as the impacts of the reforms themselves should be measurable. The use of Title III resources to advance policy dialogue and reforms may, but need not be, linked to local currency programming. If commodities are sold (under Title III most are), the sale may be through the private or public sector; the sales proceeds may be owned by the host country and the sales proceeds may be used for a variety of economic development program and policy initiatives of which a listing of illustrative examples are cited in Section 306(a) of the Title III legislation. Title III can also be considered as Balance of Payments assistance to support policy reform initiatives, preferably in combination with some of the other suggested uses set forth in Section 306(a). P.L. 480 requires that, to the extent practicable, 10 percent of local sales proceeds be used to support indigenous non-governmental organizations (NGOs) and cooperatives whose activities benefit poor people in the recipient country. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4D. Title III - Food for Development Procedures for Requesting Title III 4. Procedures for Requesting Title III USAID has sole authority and responsibility for implementing Title III, and the USAID Administrator (A/USAID) has delegated responsibility for approvals of Title III programs to the Regional Bureau Assistant Administrators, with clearance by the Assistant Administrator of BHR. Development of a Title III proposal for submission to the Regional Bureau is detailed in Chapter 12 of this Handbook. This should begin with a joint USAID Mission/recipient country review of the present and long-run food import needs and food security potential of the recipient country; the policies and programs aimed at meeting its food needs; the ways in which a Title III program could provide assistance in enhancing food security and the country's capacity to use food assistance effectively; and the manner in which Title III could fit into the broader development strategies of the USAID Mission and the recipient country. Title III proposals should flow from an analysis of the country's food security situation, including the roles that food aid and the private sector can play in enhancing food security. The USAID "Manual for Food Needs Assessment" (FNA) and its accompanying software has proven to be very useful in this analysis (available USAID/W-PPC/CDIE Locator Number PN ABB 175). On the basis of this analysis, the USAID Mission should identify the primary host country organizations involved in the program and the specific undertakings to be supported by Title III. The program proposal should be about 25 single-spaced pages (exclusive of annexes) and should cross-reference existing policy and strategy statements and program documents as much as possible. The current CDSS and Action Plan could be incorporated by reference in the Title III proposal, as could project documentation for approved projects to be supported by Title III resources. Program objectives should be clearly defined, and performance indicators should be plausible, independent, objectively verifiable, targeted, accessible, comprehensive and compatible. Title III programs also require: (a) commodity needs analysis; (b) the usual marketing requirements (UMR) analysis; and (c) storage and disincentive analysis. When a Title III project involves the sale of commodities, the project description should explain the organization designated to manage the sale, how the sale will be conducted, how the sales price is determined, and the acceptable terms of sale. Local currency proceeds will be placed in a separate interest-bearing account. These proceeds are to be jointly programmed by the recipient country and USAID Mission for project or sector support. A Title III Model Agreement has been devised for the majority of Title III programs which involve sales of the donated commodities and use of local currency proceeds for agreed upon program purposes (Appendix H). If a Title III program includes the donation of any or all of the commodities for direct feeding programs, the development of emergency food reserves, or solely as balance of payments assistance in support of policy reform measures, the model format must be further revised by the General Counsel of BHR (GC/BHR) prior to USAID Mission negotiation and signing. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4D. Title III - Food for Development Reference Materials 5. Reference Materials Chapters 12 and 13 of Handbook 9 Food Aid Management Plan for USAID Missions USAID Manual for Food Needs Assessment (FNA) Monetization Field Manual Commodities Reference Guide _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4E. Section 416(b) 4E. Section 416(b) 1. Objectives The intent of Section 416 of the Agricultural Act of 1949 is twofold: one, to prevent the waste of commodities, whether private stocks or acquired through price-support operations by CCC, before they can be disposed of in normal domestic channels without impairment to the price-support program or sold abroad at competitive world prices; and, two, in so doing, to use such commodities to feed needy persons, whether domestically or under Title II and the Food for Progress Act activities. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4D. Title III - Food for Development Structure 2. Structure Section 416(b) authorizes the use of commodities in developing countries in Title II and Food for Progress programs, and for such other purposes as approved by the Secretary of Agriculture. USDA is responsible for the management and programming of the 416(b) commodities. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4D. Title III - Food for Development Section 416(b) Operational Responsibilities 3. Section 416(b) Operational Responsibilities All Section 416(b) program responsibilities belong to USDA and their country or regional agricultural attaches, as appropriate. As in the case of Title I, any exceptional cases that entail any use of Section 416(b) commodities which are to be managed by USAID Missions will be decided on a case-by-case basis. The same criteria as in 4B.3., above, are necessary, but not in themselves sufficient for approval of such programs by USAID/W: (a) a USAID Mission proposal or endorsement of a USDA request that USAID Mission manage a 416(b) program must detail the length of involvement and specific responsibilities to be maintained; (b) the proposal must show how the activity is vital for the field, USAID or USG interests in the country or region; (c) the activity must fit within the USAID Mission's strategic objectives; (d) USDA must have no on-the-ground capability to manage the program on its own without USAID Mission involvement; (e) reimbursement of costs of implementing or monitoring the program by USAID must be explored and/or negotiated; (f) a USAID Mission food aid management plan must be in place; (g) increased staff must not be required to manage the activity and (h) the USAID Mission must identify program benefits that will result from USAID management of the Section 416(b) food program. A USAID Mission or Field Post must direct to the appropriate Regional Bureau its request to begin managing a 416(b) program or indicate its concurrence with a USDA or Department of State request for USAID to do so. The USAID Mission or Field Post must describe the proposed program, including USAID Mission's projected life of program involvement, its importance to the USAID Mission's assistance strategy, USAID Mission's management capacity in place, USDA's capability and the USAID Mission's resources needed to implement or monitor the activity effectively. This request should indicate the proposed costs USDA will pay for USAID management of the program. If the request is endorsed by the Regional Bureau, the Bureau will prepare an action memorandum for signature by the Assistant Administrator which will be directed to M, PPC and BHR for concurrence and BHR will negotiate with USDA on the arrangements for USAID participation in a 416(b) activity. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4F. Food for Progress Objectives 4F. Food for Progress 1. Objectives Section 1110 of the Food Security Act of 1985 covers the Food for Progress legislation, which authorizes the President to enter into agreements to provide food to countries that make commitments to promote the implementation of private, free-enterprise agricultural policies for agricultural development. The Food for Progress program provides commodity assistance in recognition of developing countries' progress toward democracy and open market systems, as well as assistance for emerging democracies. _____________________________________________________________ Food for Peace Part I: Authority, Responsibility, Policy and Structure Chapter 4: Structure and Objectives 4F. Food for Progress Structure 2. Structure The Food for Progress program is managed by USDA and the commodities provided are from those budgeted for Title I and Section 416(b). Criteria for selection are political commitment to reform and implement policy decisions on free market principles and private sector involvement; in-country capacity to carry out agricultural reform; evidence of policies conducive to improvements in agriculture; potential for economic growth, and potential or existence of other donor support. The Food for Progress food assistance option is essentially targeted by USDA for programs in countries that can be classified as developing or evolving democracies. _____________________________________________________________ Food for Peace Part II: Title II - Emergency and Private Assistance Chapter 5: Title III Food For Development Program 5A: Introduction and Purpose CHAPTER 5 TITLE III FOOD FOR DEVELOPMENT PROGRAM 5A. Introduction and Purpose This Chapter outlines the U.S. Government procedures for approving and administering the Public Law 480, Title III, Food for Development (FFD) program. It provides guidance on those phases of the program in which AID plays an important role. _____________________________________________________________ Food for Peace Part II: Title II - Emergency and Private Assistance Chapter 5: Title III Food For Development Program 5B: Legislative History and Program Structure 5B. Legislative History and Program Structure 1. Congress enacted the Title III "Food for Development" program (Secs. 301-307 of P.L. 480) in 1977 to increase the developmental impact of P.L. 480 food aid. It did so to provide incentives to developing countries to use P.L. 480 food aid as a development resource. The key incentive for the recipient country under Title III is that, in return for carrying out agreed developmental activities, the United States Government will offset all or part of the recipient government's Title I repayment obligations. 2. Provisions of Title III of the Act, as amended, authorize: a. Commodities made available under Title III programs to be financed by CCC under the authority of Title I. b. Multi-year Food for Development Programs with eligible countries that meet specified criteria. These countries would purchase specific annual values of agricultural commodities that would be delivered over a period of one to five years. Title III permits local currency proceeds utilized for development purposes specified in the Act to be credited against the dollar repayment obligation incurred by certain Title I sales agreements. Thus, Title I sales agreements that include a Title III food for development program are referred to as Title I/III sales agreements. In return for these multi-year commitment and loan forgiveness provisions, the recipient country must undertake development effort(s) which complement, but do not replace, other development assistance provided by AID, other donors, or by the foreign government's own development programs. This means that the effort(s) must be additional to what is currently under way, already committed by donors, and specifically included in the recipient country's own development budget. c. Title III programs must support activities designed to increase (1) the access of the poor to a growing and improving food supply, and (2) the well-being of the poor in the rural sector of the society. These activities may include agricultural and rural development, nutrition programs, health services (including immunization of children), voluntary family planning programs and the Farmer-to-Farmer program. Particular emphasis should be placed on policies and associated programs which effectively assist small farmers, tenants, sharecroppers and landless agricultural laborers. Its aim is to expand their access to the rural economy through services and institutions at the local level, and provide opportunities for the poor, who are dependent upon agriculture and agricultural-related activities to better their lives through their own efforts. _____________________________________________________________ Food for Peace Part II: Title II - Emergency and Private Assistance Chapter 5: Title III Food For Development Program 5C: Title III Eligibility Requirements 5C. Title III Eligibility Requirements Recipient countries with which Title I/III sales agreements are entered into must satisfy all of the terms and conditions applicable to Title I agreements (Chapter 4), plus the following additional eligibility requirements. Each recipient country must: 1. Have a need for external resources to improve its food production, marketing, distribution, and storage systems; 2. Meet the per capita income criterion (in Fiscal Year 1988 this was a maximum of $835) necessary to qualify for development loans from the International Development Association of the International Bank for Reconstruction and Development (the World Bank); 3. Be able to use effectively the resources made available by the resale of the food commodities; 4. Indicate a willingness to take steps to improve its food production, marketing, distribution, and storage systems. _____________________________________________________________ Food for Peace Part II: Title II - Emergency and Private Assistance Chapter 5: Title III Food For Development Program 5D: Development 5D. Development 1. The Title III proposal should be brief and clearly written, and it should include as its centerpiece [1] the proposed self help measures, and [2] a plan which describes how the recipient is to earn offset [i.e. through the use of commodities or through the use of local currency]. Section 303[a] of the Act sets out the features which should be common to all Title III proposals. They are: An annual quantity and value of commodities to be financed under the Title I agreement; A plan for the uses of the commodities or the proceeds generated from their sale [which will be formalized in Annex B]; A description of the nature and magnitude of the problems to be affected by the effort undertaken through the agreement; A list of targets to be achieved; and A description of the relationships among the various projects, activities, or programs to be supported. In addition, the legislation mandates that a multiyear utilization program must include a statement of how the proposed program will be integrated into and complement the country's overall development plan and other forms of bilateral and multilateral assistance. 2. Timing a. Country teams may submit Title III Food for Development (FFD) proposals including draft Annex B at any time during the fiscal year. Ideally they should be submitted prior to the beginning of the fiscal year and no later than the end of the first quarter of the fiscal year in which it is to be signed. Because of the PL-480 requirement to load commodities at U. S. ports not later than the end of the supply period [almost always the fiscal year] and because of the complexity of Title III agreement negotiations, Missions should expect that proposals received in Washington after October 31 will be considered for signing and implementation in the following fiscal year, [i.e., FY 90 for proposals received after October 31, l988]. b. Country teams should submit draft Negotiating Instruction (See Attachment B, Chapter 4) for DCC approval not later than 60 days prior to expected date of authority to negotiate. Where the intention is to negotiate the agreement within 60 days of the submission of the proposal, draft language for the self-help measures of the Title I portion of the agreement and a draft Negotiating Instruction must be included as part of that proposal. Country teams are reminded that each agreement's specific language must be approved in Washington before formal negotiations can be authorized. Attachment B typically defines policy commitments the recipient government is undertaking and briefly describes the projects, programs or activities to be funded by L/C generations, indicating by project, program or activity both annual budget levels and annual benchmark targets. c. Waiver For those countries that meet the criteria to qualify as "relatively least developed countries," the President of the United States may waive, under Section 304 (c) of P.L. 480, the requirements with respect to project additionality, as well as the documentation requirements (i.e., the multi-year planning proposal, and the annual progress report). Such waivers are permissible if the President determines that such requirements cannot be met by a given recipient country, and yet Title III assistance is needed to meet important humanitarian or development objectives. Any such waivers, along with justifications, must be reported annually by the President to the Congress. For these countries, also, the CCC may pay the freight charges for t