Hearing Examines Local and Regional Food Aid Purchases

June 5, 2009 Bookmark and Share

The House Committee on Foreign Affairs’ Subcommittee on Africa and Global Health held a hearing this week focusing on the merits of local and regional procurement (LRP) versus traditional in-kind food aid.

At the hearing, USDA Deputy Under Secretary for Farm and Foreign Agricultural Services Bud Philbrook told Members that local and regional purchase of food aid has the potential to provide another tool in the food aid toolbox, and that USDA will issue guidelines for an LRP pilot program outlined in the 2008 Farm bill by mid-July.

Another witness, Jon Brause, a deputy assistant administrator at the U.S. Agency for International Development (USAID), said the Agency fully recognizes that, despite its advantages in some situations, LRP is not a viable choice in every food aid situation.

“In-kind food aid and other tools at our disposal – including pre-positioning commodities near the countries where they are most likely to be needed, and early warning systems – continue to be the most important elements in USAID’s emergency response capabilities,” Brause stated in prepared testimony.

This week’s hearing coincided with the public issuance of a Government Accountability Office (GAO) report on LRP.

The GAO report concluded that while LRP offers donors a tool to reduce food aid costs and delivery time, multiple challenges to ensuring cost-savings and timely delivery exist.

GAO found that local procurement in sub-Saharan Africa cost about 34 percent less than similar in-kind food aid purchased and shipped from the United States to the same countries between 2001 and 2008, though LRP in Latin America is comparable in cost to U.S. in-kind food aid. The report also found that food aid procured locally in 10 sub-Saharan African counties from 2004 to 2008 took significantly less time to arrive than in-kind aid.

However, the seeming advantages of LRP in the report were coupled with significant caveats. GAO noted that logistics can delay LRP contributions, donors can run into funding restrictions, and weak legal systems in countries that need food aid can often limit the ability to enforce contracts. There is also little evidence on LRP’s adherence to quality standards and product specifications, and a lack of market evidence makes it difficult to determine how much LRP can be used before creating market effects in recipient countries.

NAWG and U.S. Wheat Associates support in-kind food aid and believe that any use of local and regional procurement should not detract from our ability to respond to emergency needs with in-kind food aid.

For more on the GAO study, please visit http://www.gao.gov/products/GAO-09-570