1. United States Department of Agriculture Foreign Agricultural Service USDA Local and Regional Food Aid Procurement Pilot Project: Tools for Development Food Assistance and Findings from the Pilot Project Final Evaluation Presented by: Jamie L. Fisher, Chief, Local and Regional Procurement, FAS, USDA Tuesday May 8, 2012 1:30 pm – 3:00 pm

2. United States Department of Agriculture Foreign Agricultural Service The purpose of development food assistance is to alleviate chronic hunger and malnutrition through targeted interventions designed to address the three key components of food insecurity: –access, –availability, and –utilization. Goal of Development Food Assistance

3. United States Department of Agriculture Foreign Agricultural Service Tools Available for Development Food Assistance There are three tools that have been used by the U.S. Government (USG) to provide development food assistance: in-kind food aid, local and regional procurement (LRP), and food vouchers. The USDA Foreign Agricultural Service was the only USG Agency authorized to provide cash grants to fund LRP and food voucher schemes through development food assistance programs. Those funds were made available under the USDA Local and Regional Food Aid Procurement Pilot Project (USDA LRP Project). USDA did not permit the use of cash transfers for development assistance under the USDA LRP Project.

4. United States Department of Agriculture Foreign Agricultural Service USDA LRP Pilot Countries

5. United States Department of Agriculture Foreign Agricultural Service Development Activities Implemented Under the USDA Pilot School Feeding Food for Work Food for Training Support to Returning Refugees/IDPs Support to People Living with HIV/AIDS

6. United States Department of Agriculture Foreign Agricultural Service Benefits of Using LRP for Development Food Assistance LRP may: improve the nutritional content and diversity of school meals; improve the sustainability of activities implemented under USG in-kind food aid programs; improve food quality and safety; increase the incomes of smallholder farmers and build their capacity to effectively compete in the markets; improve local processing capacity; and strengthen food market systems.

7. United States Department of Agriculture Foreign Agricultural Service Status of the USDA Pilot Evaluation Report USDA is required to turn in an evaluation report to Congress by June 18, 2012. The report will discuss the lessons learned from the USDA LRP pilot. In June 2011, USDA hired Management Systems International (MSI) to conduct the evaluation of the pilot project and write a report on its findings. The report will address of all of the factors listed in Section 3206 (f) of the Farm Bill.

8. United States Department of Agriculture Foreign Agricultural Service Summary of Findings Timeliness: Emergency local and regional procurements took an average of 57 days from contracting to delivery vs. an average of 66 days for development procurements. The average emergency procurement was four times the size of that of the average development procurement.

9. United States Department of Agriculture Foreign Agricultural Service Summary of Findings Cont’d. Cost: When considering commodity cost alone: Bulk cereals were the least expensive commodity to procure, averaging $649/MT; Cooking oil was the most expensive, averaging $1,699/MT; Fortified blended foods averaged $1,132/MT; and Pulses averaged $1,019/MT.

10. United States Department of Agriculture Foreign Agricultural Service Summary of Findings Cont’d. Comparison of Timeliness and Cost of LRP vs. In-Kind Food Aid: Regardless of purchase size or program type, LRP was found to be significantly more timely than in-kind food aid. LRP took an average of 64 days, while in- kind shipments to the same countries in the same timeframe took an average of 154 days.

11. United States Department of Agriculture Foreign Agricultural Service Summary of Findings Cont’d. When considering total time from procurement to delivery, in-kind food aid took an average of 91 days or 13 weeks longer to arrive than locally or regionally purchased commodities. Bulk cereals and vegetable oil purchased through LRP were less expensive than those purchased and shipped under in-kind food aid programs. However, the costs of fortified blended foods and pulses were slightly higher under LRP programs than in-kind food aid programs.

12. United States Department of Agriculture Foreign Agricultural Service Summary of Findings Cont’d. Market Impact: MSI found that none of the procurements that it examined in its analysis “either positively, or probably caused market impact in procurement markets.” The small size and short duration of the programs limited the potential for market impact.

13. United States Department of Agriculture Foreign Agricultural Service Summary of Findings Cont’d. There was a high level of competition for purchases. Hard tenders made up 40% of total purchases by value, while soft tenders were 26 percent, direct purchases were 16 percent and food vouchers were 18 percent. There were relatively few defaults, but the ones that did occur generally affected development projects that were attempting to buy from smallholder farmer cooperatives.

14. United States Department of Agriculture Foreign Agricultural Service Food Quality and Safety: All grantees complied with USDA’s requirements for commodity inspection and testing. There were few defaults due to food quality issues. However, some commodities in East Africa was rejected due to the presence of aflatoxin. Summary of Findings Cont’d.

15. United States Department of Agriculture Foreign Agricultural Service Summary of Findings Cont’d. Testing commodity stocks for voucher programs poses unique challenges. Most PVOs conducted random sampling from participating vendors. In Cambodia, samples were taken on a weekly basis from participating vendors and sent to a laboratory for analysis.

16. United States Department of Agriculture Foreign Agricultural Service Summary of Findings Cont’d. Copies of the final evaluation report will be made available in June after the report has been submitted to Congress. In addition, MSI will be presenting its findings at a public information session sometime that same month. The date for the public information session will be announced by the end of May.