Primer on P.L. 480 -- Program History, Description, and Operations: A Brief Compilation of Explanatory Documents

Congressional Research Service The Library of Congress Washington, D.C. 20540 NORTHERN fiENTUCHY UNlVERSlTV LIBRARY PRIMZR ON P . L . 480--PROGRAM HISTORY, DESCRIPTION, AND OPERATIONS: A BRIEF COMPILATION OF EXPLANATORY DOCUMENTS Compiled b y Susan B. E p s t e i n Analyst Environment and N a t u r a l R e s o u r c e s P o l i c y D i v i s i o n November 1 3 , 1984 ABSTRACT J u l y 1 0 , 1984 marked t h e 3 0 t h A n n i v e r s a r y o f P.L. f o r Peace Program). 480 ( t h e Food Over t h e l a s t t h r e e d e c a d e s , t h e program h a s d i s - t r i b u t e d a l m o s t 6 5 3 b i l l i o n pounds o f food p r o d u c t s a t a v a l u e o f n e a r l y $40 b i l l i o n t o h u n g r y p e o p l e around t h e world. About 1 . 8 b i l l i o n p e o p l e i n more t h a n 100 c o u n t r i e s h a v e d i r e c t l y b e n e f i t t e d from P.L. t h e same t i m e , p r a c t i c a l l y e v e r y s t a t e i n t h e U.S. 480. At g a i n s from i n c r e a s e d commodity e x p o r t s r e s u l t i n g f r a n t h e food a i d program which i s f i n a n c e d i n l a r g e p a r t b y U.S. taxpayers. P r o p o n e n t s n o t e f u r t h e r t h a t U,S. foreign p o l i c y o b j e c t i v e s a r e a i d e d by t h e program and t h a t h u m a n i t a r i a n b e n e f i t s are very large. C r i t i c s o f P.L. 480 a r g u e t h a t t h e U. S. f o r e i g n food a i d program i s l a r g e l y a farm s u b s i d y a r r a n g e m e n t t h a t "dumps" s u r p l u s ccmmodi- t i e s on developing n a t i o n s with l i t t l e r e g a r d f o r t h e i r n u t r i t i o n a l n e e d s o r t h e i r a b i l i t y t o a b s o r b t h e goods. Moreover some s t u d i e r , i n d i c a t e t h a t food a i d may sometimes d i s p l a c e normal c m m e r c i a l e x p o r t s , may p r o v i d e disincencentives t o the a g r i c u l t u r a l s e c t o r i n the developing country, and may c a m o u f l a g e t h e need f o r p o l i t i c a l o r economic change i n t h e r e c i p i e n t country. T h i s c o m p i l a t i o n of d o c m e n t s p r o v i d e s t h e r e a d e r w i t h b a s i c h i s t o r i c a l , d e s c r i p t i v e , and o p e r a t i o n a l i n f o r m a t i o n on t h e l a r g e s t U.S. f o r e i g n food a i d program--P.L. 480. TABLE OF CONTENTS Page . ............. ............................... Overview o f Program O b j e c t i v e s . S t r u c t u r e and P r o c e d u r e s Program O b j e c t i v e s and Amendments ....................................... The Program P l a n n i n g P r o c e s s .................................... C o n g r e s s i o n a l A p p r o p r i a t i o n s .................................... C u r r e n t Program S t r u c t u r e ............................................. O p e r a t e ........................................ I n i t i a l Allocations How P.L. 480 Programs ........................................................ T i t l e 111 ....................................................... 480.. T i t l e 11111 Program F l o w c h a r t .............................. 480.. T i t l s I1 Program F l o w c h a r t ................................. T i t l e I1 P.L. P.L. .. U S A g r i c u l t u r a l E x p o r t s Under GovernmentF i n a n c e d Programs D e c l i n e d P.L. 480 Program E x p o r t s . T o t a l P.L. ........................................... -FY 1955-1984 ............................... 480 As A P r o p o r t i o n o f T o t a l U.S. Agriculture Exports ..... ................... Funding L e v e l s ....................................................... P.L. 480 Program L e v e l s . FY73.. FY85 ................................... C r i t i c s o f P.L. 480 .................................................. F r e e Food B a n k r u p t s F o r e i g n Farmers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E s t i m a t e d Value o f P.L. 480 E x p o r t S h a r e s b y S t a t e .................................... Fteferences ................................... Does Food f o r Peace S t u n t G r o w c h ? K o r l d Hunger: Selected Program O b j e c t i v e s and Amendments I n 1954 t h e 8 3 r d C o n g r e s s p a s s e d t h e Agr i c u l t u r a1 T r a d e Development and A s s i s t a n c e Act ( P u b l i c Law 8 3 - 4 8 0 ) , t h e r e b y e s t a b l i s h i n g t h e U . S . i n t e r n a t i o n a l f o o d a s s i s t a n c e p r o g r a n commonly r e f e r r e d t o a s t h e "P.L. 480," o r "Food f o r P e a c e , " program. Throughout i t s h i s t o r y , t h e P.L. 480 program h a s s e r v e d a v a r i e t y o f o b j e c t i v e s . Summarized i n t h e P r e a m b l e t o t h e Act , a s amended, t h o s e o b j e c t i v e s i n c l u d e : 11 . . . to - -_ expand i n t e r n a t i o n a l t r a d e ; t o d e v e l o p and expand e x p o r t m a r k e t s f o r U . S . a g r i c u l t u r a l c o m m o d i t i e s ; t o use t h e abundant a g r i c u l t u r a l p r o d u c t i v i t y o f t h e U n i t e d S t a t e s t o c w b a t h u n -g e r and m a l n u t r i t i o n . and t o e n c o u r a g e economic development i n t h e d e v e l o p i n g c o u n t r i e s , w i t h p a r t i c u l a r e m p h a s i s . on a s s i s t a n c e t o t h o s e c o u n t r i e s t h a t a r e d e t e r m i n e d t o improve t h e i r own a g r i c u l t u r a l p r o d u c t i o n ; and t o promote i n o t h e r ways t h e f o r e i g n p a l i c y o f t h e U n i t e d S t a t e s . " Since t h e program's c r e a t i o n t h e r e have been s h i f t s i n t h e emphasis p l a c e d on t h e s e d i f f e r e n t o b j e c t i v e s , i n r e s p o n s e t o c h a n g e s i n t h e d o m e s t i c and i n t e r n a t i o n a l e n v i r o n m e n t s i n h i c h t h e program must o p e r a t e , Yet a l l f o u r t y p e s o f o b j e c t i v e s - - p r o m o t i n g a g r i c u l t u r a l t r a d e , p r o v i d i n g h u m a n i t a r i a n r e l i e f , a i d i n g t h e economic advanc a n e n t o f d e v e l o p i n g c o u n t r i e s , and p r o m o t i n g U.S. f o r e i g n p o l i c y - - r e n a i n c e n t r a l t o t h e p r o g r a m ' s e x i s t e n c e and o p e r a t i o n . To u n d e r s t a n d t h e i m p o r t a n c e of t h e P.L. 480 p r o g r m ' s v a r i o u s o b j e c t i v e s i t might be h e l p f u l t o r e c a l l t h e d o m e s t i c and i n t e r n a t i o n a l c o n t e x t s i n which t h e program was c r e a t e d . Problems of supply-demand imbalance h a v e plagued U. S. a g r r i c u l t u r e r e p e a t e l y s i n c e t h e e a r l y 1 9 0 0 ' s . I n t h e e a r l y 1 9 5 0 ' s U.S. a g r i c u l t u r e was e x p e r i e n c i n g a p e r i o d of prod u c t i o n e x c e e d i n g demand t h a t d e p r e s s e d p r i c e s , and t h u s f a r m e s ' i n c o m e s . ~ u r i n gb o t h world w a r s , f o r example, t h e U n i t e d S t a t e s was t h e m a j o r s o u r c e of food and f i b e r f o r t h e n a t i o n s o f Europe. Soon a f t e r b o t h w a r s , however, f o r e i g n demand d e c r e a s e d a s E u r o p e ' s own a g r i c u l t u r a l p r o d u c t i v e c a p a c i t y was r e s t o r e d . As a consequence, the prices received by U.S. f a r m e r s f o r t h e i r c o m m o d i t i e s d e t e r i o r a t e d s h a r p l y . * F u e l l , Lawrence D . , "The P . L . 480 ( ~ o o df o r P e a c e ) Program: T i t l e s I/III Terms and C o n d i t i o n s ; P l a n n i n g and I m p l e m e n t a t i o n P r o c e d u r e s , I ' U . S . Dep a r t m e n t of X g r i c u l t u r e , F o r e i g n A g r i c u l t u r a l S e r v i c e , A p r i l 1 9 8 2 . , Beginning i n t h e 1 9 3 0 1 s , Congress p a s s e d l e g i s l a t i o n aimed . a t improving a g r i c u l t u r a l canmodity p r i c e s i n c l u d i n g l e g i s l a t i o n t h a t e s t a b l i s h e d p r i c e s u p p o r t s and r e s t r i c t e d p r o d u c t i o n t h r o u g h a c r e a g e s e t asides. But e x c e p t f o r b r i e f r e s p i t e s d u r i n g t h e Second World War, and a t t h e s t a r t o f t h e Korean War when g o v e r n m e n t s s t o c k p i l e d a g a i n s t p o s s i b l e s h o r t a g e s , s u r p l u s e s c o n t i n u e d t o a c c u m u l a t e i n U . S. Government i n v e n t o r i e s , a t c o n s i d e r a b l e taxpayer expense. Concurrent w i t h t h e s e a g r i c u t u r a l t r e n d s , t h e r e were important p o l i t i c a l and economic t r e n d s t h a t c o n t r i b u t e d t o t h e i m p e t u s f o r c r e a t i n g t h e P.L. 480 program. F i r s t , t h e r e was a growing a w a r e n e s s a f t e r t h e s e c o n d world war., w i t h i n t h e U. S. government a s w e l l a s among t h e g e n e r a l p u b l i c , t h a t A m e r i c a ' s economic p r o s p e r i t y was i n t e r d e p e n d e n t with t h a t of o t h e r n a t i o n s . A m e r i c a ' s f a r m e r s became aware t h a t t h e i r h i g h e s t income o c c u r r e d when f o r e i g n demand f o r t h e i r p r o d u c t s were h i g h . S e c o n d , a t t h e end o f t h e s e c o n d world war t h e U n i t e d S t a t e s emerged a s t h e m a j o r e c o n a n i c power i n t h e w o r l d . American l e a d e r s h i p and w i l l i n g n e s s t o assume a more a c t i v i s t r o l e i n t h e i n t e r n a t i o n a l s y s t e m were d e m o n s t r a t e d by s u c h p o l i c i e s and programs a s t h e Truman D o c t r i n e and t h e M a r s h a l l P l a n . The P . L . 480 program r e f l e c t s t h i s same k i n d o f c m r n i t ment. A t h i r d , i n t e r n a t i o n a l economic t r e n d t h a t was p a r t i c u l a r l y a c u t e a f t e r World k'ar XI was a s h o r t a g e of f o r e i g n exchange i n Europe and t h e d e v e l o p i n g c o u n t r i e s w i t h which t o buy goods from t h e U n i t e d S t a t e s . The p o t e n t i a l demand was t h e r e f o r U.S. a g r i c u l t u r a l and o t h e r c a n m o d i t i e s , b u t n o t t h e f i n a n c i a l means t o p u r c h a s e them. It was i n t h i s c o n t e x t t h a t t h e P . L . 480 program was c r e a t e d . The growing Cost o f s t o c k p i l i n g farm s u r p l u s e s , a w i l l i n g n e s s t o c o n t i n u e a i d e f f o r t s t o Europe and t h e d e v e l o p i n g c o u n t r i e s begun w i t h t h e M a r s h a l l p l a n , and t h e l a c k o f f o r e i g n exchange o n t h e p a r t o f U.S. t r a d e p a r t n e r s , were a l l c e n t r a l t o t h e e s t a b l i s h m e n t of t h e program. A t the time of t h e p r o g r a ' s e n a c t m e n t , r e c i p i e n t c o u n t r i e s p a i d f o r U. S . a g r i c u l t u r a l commodities w i t h t h e i r own n o n c o v e r t i b l e c u r r e n c i e s . These c u r r e n c i e s , owned by t h e U n i t e d S t a t e s , a l m o s t a l w a y s s t a y e d i n t h e r e c i p i e n t c o u n t r y and were s p e n t a s t h e U n i t e d S t a t e s and t h e r e c i p i e n t c o u n t r y a g r e e d . Thus, t h e u n i t e d S t a t e s saved f o r e i g n c u r r e n c y i t o t h e r w i s e would have Conversely, the r e c i p i e n t needed t o spend i n t h e recipient c o u n t r y . c o u n t r y saved f o r e i g n e x c h a n g e which i t c o u l d u s e t o buy o t h e r needed imports. AS o r i g i n a l l y w r i t t e n P . L . 480 a u t h o r i z e d t h r e e t y p e s o f commodity t r a n s f e r s : s a l e s o f c o m m o d i t i e s t o be p a i d f o r w i t h t h e l o c a l c u r r e n c y o f t h e r e c i p i e n t c o u n t r i e s ( t i t l e I ) , d o n a t i o n s o f c o m m o d i t i e s t o meet famine and o t h e r e x t r a o r d i n a r y r e l i e f r e q u i r e m e n t s ( t i t l e 11) and b a r t e r e x c h a n g e s of c o m m o d i t i e s f o r s t r a t e g i c m a t e r i a l s ( t i t l e 1 1 1 ) . The b u l k of t r a n s f e r s d u r i n g t h e f i r s t y e a r s of t h e p r o g r a m ' s o p e r a t i o n were i n t h e '£om o f s a l e s f o r l o c a l c u r r e n c i e s . D u r i n g t h e ' f i r s t , l O y e a r s o f t h e p r o g r a m ' s o p e r a t i o n e x p a n d i n g U. S . a g r i c u l t u r a l t r a d e was p r o b a b l y t h e c h i e f i m p e t u s o f t h e P.L. 4 8 0 proBy t h e l a t e gram. However, o t h e r i n ' t e r e s t s a l s o p l a y e d a n i m p o r a n t r o l e . 1 9 5 0 1 s , f o r e x a m p l e , a s t h e economies o f K e s t European c o u n t r i e s r e g a i n e d t h e i r pre-war s t r e n g t h , c o n c e r n f o r t h e U.S. b a l a n c e o f payments p o s i t i o n grew. I n 1958 a l o n e , U.S. g o l d r e s e r v e s d e c l i n e d by more t h a n $ 2 b i l l i o n . AS a r e s u l t , e f f o r t s were n a d e t o improve t h e U.S. b a l a n c e o f payments p o s i t i o n , w i t h o u t weakening P .L. 480 program o b j e c t i v e s . Through t h e y e a r s , amendments t o t h e law were p a s s e d which i n c r e a s e d t h e p o s s i b l e u s e s o f l o c a l c u r r e n c i e s g e n e r a t e d by P.L. 480 s a l e s a g r e e m e n t s . This reduced t h e need t o p u r c h a s e l o c a l c u r r e n c i e s w i t h d o l l a r s f o r c o n d u c t i n g o f f i c i a l U. S. government b u s i n e s s . I n a d d i t i o n , s t a r t i n g i n 1 9 5 9 , r e c i p i e n t count r i e s c o u l d p u r c h a s e c a n m o d i t i e s on a d o l l a r c r e d i t ( D C ) s a l e s b a s i s , w i t h long-term repayment p e r i o d s , r a t h e r t h a n making immediate payments u s i n g l o c a l c u r r e n c i e s . T h i s a u t h o r i t y was c o n t a i n e d i n a new t i t l e I V o f t h e Act. I n 1966 a n i m p o r t a n t t;rning p o i n t i n t h e h i s t o r y o f t h e P.L. 480 program was r e a c h e d . By t h i s t i m e t h e huge s u r p l u s e s t h a t had marked U.S. a g r i c u l t u r e i n t h e 1 9 5 0 ' s and e a r l y 1 9 6 0 ' s had d i m i n i s h e d . The problems of world h u n g e r and economic advanc ement i n . t h e d e v e l o p i n g c o u n t r i e s were s u b j e c t s o f i n c r e a s e d d i s c u s s i o n and d e b a t e i n s i d e a s w e l l a s o u t s i d e t h e government. I n l i g h t o f t h e s e and o t h e r t r e n d s , t h e Food f o r P e a c e Act was p a s s e d by C o n g r e s s i n 1966. None of t h e o r i g i n a l o b j e c t i v e s o f t h e program was abandoned b y t h e Food f o r P e a c e A c t , b u t t h e i n t e n t of t h e Act c o n c e r n i n g h u m a n i t a r i a n and development o b j e c t i v e s i n d e v e l o p i n g c o u n t r i e s was s t r e n g h e n e d . R e f e r e n c e s t o U.S. a g r i c u l t u r a l s u r p l u s e s were d e l e t e d from t h e l a n g u a g e of t h e A c t , a l t h o u g h c c w n o d i , t y " a v a i l a b i l i t y " remained a p r e r e q u i s i t e f o r P.L. 480 s h i p m e n t s . I n a d d i t i o n " s e l f - h e l p " p r o v i s i o n s were r e q u i r e d t o be added t o e a c h s a l e s a g r e e m e n t . These p r o v i s i o n s s p e c i f y some o f t h e ways i n which t h e g o v e r w e n t i n a r e c i p i e n t c o u n t r y w i l l u s e t h e l o c a l c u r r e n c i e s g e n e r a t e d by t h e r e s a l e f o P.L. 480 c o m m o d i t i e s . The Food f o r P e a c e Act of 1966 a l s o s o u g h t t o improve t h e impact of t h e program on t h e U.S. b a l a n c e of payments p o s i t i o n . An amendment t o t h e Act r e q u i r e d t h a t t h e P r e s i d e n t t a k e s t e p s t o a s s u r e a p r o g r e s s i v e t r a n s i t i o n from s a l e s f o r f o r e i g n c u r r e n c i e s t o d o l l a r c r e d i t (DC) s a l e s a g r e e m e n t s , o r , f o r t h o s e c o u n t i e s n o t c a p a b l e of g o i n g d i r e c t l y t o DC s a l e s , t o a new t y p e of s a l e s a g r e e m e n t s c a l l e d " c o n v e r t i b l e l o c a l c u r r e n c y c r e d i t " (CLCC) s a l e s a g r e a n e n t s . CLCC a g r e e m e n t s a r e e s s e n t i a l l y t h e same a s DC a g r e m e n t s , e x c e p t t h a t t h e y o f f e r more t i m e f o r p r i n c i p a l repayment ( 4 0 i n s t e a d o f 2 0 y e a r s ) ; a l o n g e r g r a c e p e r i o d t o b e g i n p r i n c i p a l repayment ( u p t o 1 0 y e a r s v s . a maximum o f 2 y e a r s f o r DC s a l e s a g r e e m e n t s ) ; and t h e y p e r m i t , a t t h e o p t i o n of t h e U.S. g o v e r n m e n t , payment i n c o n v e r t i b l e c u r r e n c y o f a t h i r d c o u n t r y . Both a u t h o r i t i e s - - t o e n t e r i n t o DC and C L C C s a l e s a g r e e ments--were i n c l u d e d i n an amended t i t l e I of t h e A c t . A s e c o n d t u r n i n g p o i n t i n t h e h i s t o r y Bf t h e P.L. 480 program o c c u r r e d during 'the e a r l y 1970's. I n 1972 t h e r e was a worldwide r e d u c t i o n i n g r a i n p r o d u c t i o n due t o i n c l e m e n t w e a t h e r and o t h e r p r o d u c t i o n c o n d i t i o n s . A t t h e same t i m e new and u n e x p e c t e d c o m m e r c i a l e x p o r t demands were made o n U. S. a g r i c u l t u r a l s u p p l i e s , i n c l u d i n g l a r g e p u r c h a s e s o f wheat and f e e d g r a i n s by t h e U.S.S.R. I n s t e a d o f t h e l a r g e s u r p l u s e s and low p r i c e s t h a t p l a g u e d U.S. a g r i c u l t u r e two d e c a d e s e a r l i e r , t h e s i t u a t i o n i n 1972-1973 was o n e of d r a s t i c a l l y r e d u c e d r e s e r v e s and s h a r p l y r i s i n g p r i c e s . The u p s h o t of t h e s e new a g r i c u l t u r a l c o n d i t i o n s f o r t h e P.L. 480 program was r e d u c e d l e v e l s o f c o m m o d i t i e s a v a i l a b l e f o r e x p o r t t h r o u g h t h e program. Some d e v e l o p i n g c o u n t r i e s found i t n e c e s s a r y t o e n t e r r e g u l a r commercial m a r k e t s f o r food c m o d i t i e s , a t a t i m e when commodity p r i c e s w e r e a t a l l t i m e h i g h s due t o l i m i t e d s u p p l i e s . The volume o f a g r i c u l t u r a l p r o d u c t s e x p o r t e d under t h e P.L. 4 8 0 program f e l l t o i t s l o w e s t l e v e l e v e r i n f i s c a l y e a r s 1973 and 1974 due t o t h e a v a i l a b i l i t y r e q u i r e m e n t s o f t h e p r o g r am. Added t o t h e economic p r e s s u r e s c r e a t e d by a t i g h t food s i t u a t i o n , i n 1973 t h e O r g a n i z a t i o n o f P e t r o l e u m E x p o r t i n g C o u n t r i e s ( O P E C ) q u a d r u p l e d i t s p r i c e s f o r petroleum. Because o i l and food a r e m a j o r i m p o r t s o f m o s t d e v e l o p i n g c o u n t r i e s , t h e economic s i t u a t i o n o f many o f t h e s e c o u n t r i e s worsened . I n t h i s c o n t e x t of h e i g h t e n e d n a t i o n a l and i n t e r n a t i o n a l c o n c e r n o v e r t h e m r l d food s i t u a t i o n ( t h e f i r s t K o r l d Food C o n f e r e n c e was convened i n Rome i n 19741, f u r t h e r r e v i s i o n s were made i n t h e E L . 480 program l e g i s l a t i o n t h a t were d e s i g n e d t o s t r e n g t h e n t h e h u m a n i t a r i a n and d e v e l o p ment a s s i s t a n c e emphases o f t h e program. The p r i n c i p a l c h a n g e s s i n c e 1975 including the following: --An amendment was added t o t h e Act by t h e I n t e r n a t i o n a l Development and Food A s s i s t a n c e Act o f 1 9 7 3 , and f u r t h e r amended by t h e I n t e r n a t i o n a l Development and Food A s s i s t a n c e Act o f 1977, which r e q u i r e d t h a t a t l e a s t 7 3 % of t i t l e I a s s i s t a n c e p r o v i d e d e a c h f i s c a l y e a r s h o u l d be a l l o c a t e d t o t h o s e n a t i o n s which meet t h e p o v e r t y c r i t e r i a o f t h e ~ n t e r n a t i o n a lDevelopment A s s o c i a t i o n of the I n t e r n a t i o n a l Bank f o r R e c o n s t r u c t i o n and Development ( i . e . , p e r c a p i t a n a t i o n a l income). --A r e q u i r e m e n t t h a t a minimum of 1 . 3 m i l l i o n m e t r i c t o n s o f a g r i c u l t u r a l c k o d i t i e s b e d i s t r i b u t e d t h r o u g h T i t l e I1 d o n a t i o n s , w i t n one m i l l i o n m e t r i c tons of t h a t mininun t o be d i s t r i b u t e d t h r o u g h p r i v a t e v o l u n t a r y o r g a n i z a i t o n s ( P v O 1 s ) and t h e World Food Program (KFP) o f t h e U n i t e d N a t i o n s , was added by t h e I n t e r n a t i o n a l Devel oprnent and Food . ; l s s i s t a n c e Act of 1973. The 1977 I n t e r n a t i o n a l Development and ?ood A s s i s t a n c e Act i n c r e a s e d t h e s e l e v e l s t o 1 . 6 m i l l i o n m e t r i c t o n s of T i t l e I1 d o n a t i o n s , ~ 5 t ha 1 . 3 m i l l i o n m e t r i c t o n s subminimum by 1980. I n 1981 t h e minimal a l l o c a t i o n o f r e s o u r c e s t o b e d i s t r i b u t e d t h r o u g h PYQ's and t h e CFP was changed t o 1 . 2 m i l l i o n m e t r i c t o n s , and i n c l u d e s o n l y t h a t food u s e d i n r e g u l a r non-emergency f e e d i n g progr a m . --A Food f o r Development P r o g r a n was added t o t i t l e 111 o f t h e Act by t h e I n t e r n a t i o n a l Development and Food A s s i s t a n c e Act of 1977. T h e s e p r o v i s i o n s p e r m i t t e d s a l e s a g r e e m e n t s under t h e a u t h o r i t y o f t i t l e I t h a t would i n c l u d e ( 1 ) m u l t i - y e a r c a n m i t m e n t s of U.S. food a i d t o a c o u n t r y , ( 2 ) l o a n repayment f o r g i v e n e s s , and ( 3 ) a g r e a t e r development a s s i s t a n c e emphasis, e s p e c i a l l y i n t h e a r e a s of a g r i c u l t u r a l development. --The S e c r e t a r y o f A g r i c u l t u r e was g i v e n t h e a u t h o r i t y , by t h e Food and A g r i c u l t u r e Act o f 1 9 7 7 , t o d e t e r n i n e t h a t some p a r t o f t h e d o m e s t i c s u p p l y o f c u n m o d i t i e s be a v a i l a b l e u n d e r P . L . 480 i n t i m e s of u r g e n t n e e d , even i f U.S. s u p p l i e s w u l d n o t o t h e r w i s e be a v a i l a b l e . These and o t h e r r e v i s i o n s h a v e s t r e n g t h e n e d t h e r o l e of t h e P.L. 4 8 0 program f o r s a t i s f y i n g h u m a n i t a r i a n food n e e d s , and e n c o u r a g i n g longt e r m economic d e v e l o p m e n t i n c o u n t r i e s r e c e i v i n g P.L. 480 c a m n o d i t i e s . The program c o n t i n u e s t o b e a v a l u a b l e t o o l f o r a g r i c u l t u r a l commodity s u p p l y management, a s w e l l a s f o r b u i l d i n g and m a i n t a i n i n g o v e r s e a s m a r k e t s f o r U.S. a g r i c u l t u r a l commodities. S i m i l a r l y , t h e program c o n t i n u e s t o be a v a l u a b l e t o o l f o r promoting t h e f o r e i g n p o l i c y i n t e r e s t s of t h e U n i t e d States. C u r r e n t Program S t r u c t u r e The P.L. 480 p r o g r a l , a s c u r r e n t l y o p e r a t e d , p r o v i d e s two t y p e s o f commodity t r a n s f e r s : c o n c e s s i o n a l s a l e s ( T i t l e I ) , and d o n a t i o n s o r g r a n t s T i t l e 111 o f t h e A c t , a s amended, c o n t a i n s p r o v i s i o n s o f t h e ( T i t l e 11). r e c e n t l y e s t a b l i s h e d Food f o r Development program, w h i c h , i n c o n j u n c t i o n w i t h T i t l e I s a l e s a g r e e m e n t s , a r e d e s i g n e d t o s t r e n g t h e n t h e impact of U.S. food a i d on t h e " b a s i c n e e d s " of t h e r u r a l p o r i n c o u n t r i e s ~ e c iev i n g such a i d . T i t l e IV c o n t a i n s s e v e r a l g e n e r a l p r o v i s i o n s . In t e r m s o f t h e v a l u e o f c a n m o d i t i e s e x p o r t e d , t i t l e I s a l e s a g r e e m e n t s a r e t h e most i m p o r t a n t of t h e two t y p e s of a g r i c u l t u r a l t r a n s f e r s made t h r o u g h t h e P . L . 4 8 0 program. Xore t h a n 7 0 p e r c e n t of t h e v a l u e of a l l T . L . 480 t r a n s f ~ r smade s i n c e t h e prsgrarn began and t h r o u g h f i s c a l y e a r 1980 h a v e b e e n i n t h e form o f T i t l e I s a l e s a g r e e m e n t s . T h e s e s a l e s a g r e e m e n t s a r e a l l c o n c e s s i o n a l o n e s - - t h a t i s , s a l e s made o n t e r m s more f a v o r a b l e t o t h e r e c i p i e n t c o u n t r y t h a n t h e t e r m s o f n o r m a l camnercial s a l e s . I n p r a c t i c e t h i s means long-term r e p a y m e n t s and low interest rates. P r i o r t o 1972 most s a l e s a g r e e m e n t s were l o c a l c u r r e n c y (LC) s a l e s a g r e e m e n t s , p a y a b l e i m m e d i a t e l y upon r e c e i p t o f t h e c o m m o d i t i e s , but payable i n t h e l o c a l c u r r e n c y of t h e r e c i p i e n t c o u n t r y . Currently, a l l s t a t e s a g r m e n t s a r e e i t h e r d o l l a r c r e d i t (DC) o r c o n v e r t i b l e l o c a l c u r r e n c y c r e d i t (CLCC) s a l e s a g r e e m e n t s . Repayment i s d e f e r r e d , b u t i n d o l l a r s , o r , a t t h e o p t i o n o f t h e U.S. g o v e r w e n t , i n c o n v e r t i b l e currencies of a t h i r d country. The v a r i o u s t e r m s and c o n d i t i o n s , a s w e l l a s t h e s t e p s i n t h e implementation o f T i t l e I s a l e s agreements, w i l l be d i s c u s s e d i n d e t a i l i n t h e n e x t two p a r t s o f t h i s p u b l i c a t i o n . B r i e f l y , t h e United S t a t e s Department o f A g r i c u l t u r e , t h r o u g h t h e Commodity C r e d i t C o r p o r a t i o n (cCC), f i n a n c e s t h e s a l e and e x p o r t o f a g r i c u l t u r a l commodities u n d e r T i t l e I s a l e s a g r e e m e n t s . The a c t u a l s a l e s a r e made by p r i v a t e U. S. s u p p l i e r s t o f o r e i g n i m p o r t e r s o r t o a f o r e i g n g o v e r w e n t p u r c h a s i n g a g e n c y . The conrmodities a r e t h e n r e s o l d i n t h e r e c i p i e n t c o u n t r i e s , and t h e l o c a l c u r r e n c y p r o c e e d s a r e used by t h e g o v e r w e n t o f t h e r e c i p i e n t c o u n t r y f o r p u r p o s e s s p e c i f i e d i n t h e s a l e s a g r e e m e n t ( e . g . , t o implement t h e '!self-helpu p r o v i s i o n s of t h e s a l e s agreement). ' T i t l e I1 t r a n s f e r s a r e g r a n t s o r d o n a t i o n s o f a g r i c u l t u r a l comm o d i t i e s u n d e r t h e P.L. 480 p r o g r m . T i t l e I1 g r a n t s may b e made on a government-to-government b a s i s . Host T i t l e II g r a n t s , h o w e v e r , a r e made t o , and d i s t r i b u t e d by, p r i v a t e v o l u n t a r y o r g a n i z a t i o n s ( P V O ' S ) s u c h a s CARE ( C o o p e r a t i v e f o r American R e l i e f ~ v e r y w h e r e )and CRS ( ~ a t h oi lc R e l i e f s e r v i c e s ) , o r i n t e r n a t i o n a l o r g a n i z a t i o n s such a s t h e UN's K o r l d Food Program. I t i s s t i p u l a t e d i n t h e program l e g i s l a t i o n t h a t t h e P r e s i d e n t u t i l i z e o n l y t h o s e PVO's r e g i s t e r e d w i t h and a p p r o v e d by t h e A d v i s o r y Committee o n V o l u n t a r y F o r e i g n Aid i n d i s t r i b u t i n g c a n m o d i t i e s u n d e r t h i s title. T i t l e I1 food g r a n t s s u p p o r t r e g u l a r ongoing programs s u c h a s s c h o o l f e e d i n g , m a t e r n a l l c h i l d h e a l t h p r o g r a m s , and food-for-work ccmrnunity d e v e l o p m e n t p r o j e c t s , a s w e l l a s emergency d i s a s t e r r e l i i e f a c t i v i t i e s . A l l commodities f u r n i s h e d u n d e r T i t l e 11 must b e c l e a r l y i d e n t i f i e d a s f u r n i s h e d by t h e p e o p l e of t h e U n i t e d S t a t e s . T i t l e 111 a u t h o r i z e s m u l t i y e a r food f o r d e v e l o p m e n t programs f o r t h e p u r c h a s e o f a s p e c i f i c a n n u a l v a l u e of a g r i c u l t u r a l c o m m o d i t i e s , by t h e r e c i p i e n t - c o u n t r y , t o b e d e l i v e r e d o v e r a p e r i o d of one t o f i v e years. Commodities made a v a i l a b l e u n d e r T i t l e 111 programs a r e f i n a n c e d by C C C under t h e a u t h o r i t y of t i t l e I. However, t i t l e 111 p e r m i t s l o c a l c u r r e n c y p r o c e e d s u t i l i z e d f o r development p u r p o s e s s p e c i f i e d i n t h e Act t o b e c r e d i t e d a g a i n s t t h e d o l l a r repayment o b l i g a t i o n i n c u r r e d by t h e t i t l e I a l e s a g r e e m e n t s . Thus t i t l e I s a l e s a g r e e m e n t s t h a t i n c l u d e a t i t l e 111 f o o d f o r d e v e l o p m e n t program annex a r e . r e f e r r e d t o a s t i t l e 11111 s a l e s q r e e m e n t s . I n r e t u r n f o r t h e s e m u l t i y e a r commitment and l o a n f o r g i v e n e s s p r o v i s i o n s , t h e r e c i p i e n t c o u n t r y must undertake development e f f o r t ( s ) which complement, b u t do n o t r e p l a c e , o t h e r d e v e l o p m e n t a s s i s t a n c e p r o v i d e d by A I D , o t h e r d o n o r s , o r by t h e f o r e i g n g o v e r n m e n t ' s own development programs. That i s , t h e e f f o r t ( s ) must be a d d i t i o n a l t o what i s c u r r e n t l y u n d e r way, a l r e a d y committed by d o n o r s , and s p e c i f i c a l l y i n c l u d e d i n t h e r e c i p i e n t c o u n t r y ' s own d e v e l o p m e n t b u d g e t . T i t l e 111 programs m u s t s u p p o r t a c t i v i t i e s d e s i g n e d t o i n c r e a s e t h e a c c e s s o f t h e poor t o a growing and i m p r o v i n g food s u p p l y , and t o i n c r e a s e t h e w e l l - b e i n g of t h e poor i n t h e r u r a l s e c t o r of t h e s o c i e t y . These a c t i v i t i e s may i n c l u d e a g r i c u l t u r a l and r u r a l d e v e l o p m e n t , n u t r i t i o n programs, and o t h e r h e a l t h s e r v i c e s and p o p u l a t i o n p l a n n i n g p r o j e c t s . P a r t i c u l a r emphasis s h o u l d b e p l a c e d on p o l i c i e s and a s s o c i a t e d programs which e f f e c t i v e l y a s s i s t s m a l l f a r m e r s and l a n d l e s s a g r i c u l t u r a l l a b o r e r s , by e x p a n d i n g t h e i r a c c e s s t o t h e r u r a l economy t h r o u g h s e r v i c e s and i n s t i t u t i o n s a t t h e l o c a l l e v e l , and by p r o v i d i n g o p p o r t u n i t i e s . f o r t h e p o o r , who a r e d e p e n d e n t upon a g r i c u l t u r e and a g r i c u l t u r a l - r e l a t e d a c t i v i t i e s , t o b e t t e r t h e i r l i v e s t h r o u g h t h e i r own e f f o r t s . T i t l e I V of t h e Act c o v e r s t h e g e n e r a l p r o v i s i o n s o f t h e program. Among t h o s e p r o v i s i o n s i s t h e r e q u i r e m e n t t h a t t h e s e c r e t a r y o f A g r i c u l t u r e s h a l l d e t e r m i n e c a n m o d i t y a v a i l a b i l i t y f o r s h i p m e n t under t h e P .L. 480 program, t a k i n g i n t o a c c o u n t p r o d u c t i v e c a p a c i t y , d o m e s t i c r e q u i r e m e n t s , farm and consumer p r i c e l e v e l s , c m m e r c i a l e x p o r t s , and a d e q u a t e c a r r y over requirements. A s m e n t i o n e d a l r e a d y a b o v e , i n 1977, . a n amendment w a s added t o t h e l a w p e r m i t t i n g t h e S e c r e t a r y o f A g r i c u l t u r e t o waive t h i s a v a i l a b i l i t y r e q u i r e m e n t , i f t h a t o f f i c i a l d e t e r m i n e s t h a t some p a r t o f t h e U.S. s u p p l y s h o u l d b e used t o c a r r y o u t u r g e n t h u m a n i t a r i a n p u r p o s e s o f t h e Act. ~ e s i d e st h e a u t h o r i t y d i s c u s s e d a b o v e , u n d e r which t h e program c u r r e n t l y o p e r a t e s , t h e r e a r e a l s o t h r e e o t h e r p r o v i s i o n s a u t h o r i z e d by t h e ~ c t b, u t which a r e n o t b e i n g used a t p r e s e n t . One of t h e s e i s t h e a u t h o r i t y f o r USDA t o e n t e r i n t o s a l e s a g r e e m e n t s w i t h a p r i v a t e t r a d e e n t i t y ( P T E ) , r a t h e r than a g o v e r w e n t agency, i n t h e r e c i p i e n t country. P r i v a t e t r a d e a g r e e m e n t s s p e c i f y p r e c i s e l y t h e u s e t o which t h e c a n m o d i t y s a l e s p r o c e e d s w i l l be p u t , such a s t h e c o n s t r u c t i o n of g r a i n t e r m i n a l s o r p o r t f a c i l i t i e s . A second a u t h o r i z e d b u t unused p r o v i s i o n o f t h e program i s t h e b a r t e r According t o a u t h o r i t y g r a n t e d t o C C C c o n t a i n e d i n T i t l e I11 o f t h e Act. t h a t p r o v i s i o n , C C C i s a u t h o r i z e d t o exchange CCC-owned c m o d i t i e s f o r s t r a t e g i c m a t e r i a l s o r o f f - s h o r e c o n s t r u c t i o n programs. F i n a l l y , i n c l u d e d i n T i t l e IV a r e p r o v i s i o n s f o r a f a r m e r - t o - f a r m e r a s s i s t a n c e program. These p r o v i s i o n s a1 low f o r c o n t r a c t s w i t h l a n d - g r a n t c o l l e g e s t o r e c r u i t people t o t r a i n f a r n e r s o f developing c o u n t r i e s , abroad o r i n t h e United S t a t e s , and t o c o n d u c t r e s e a r c h i n t r o p i c a l and s u b t r o p i c a l a g r i c u l t u r e . Funds were a u t h o r i z e d b u t n e v e r a p p r o p r i a t e d by C o n g r e s s f o r t h i s program. C o n s e q u e n t l y , i t h a s n e v e r b e e n implemented. The ~ r o e r & p l a n n i n e p r o c e s s . The P.L. 480 program b u d g e t o p e r a t e s by f i s c a l y e a r s ( F Y ) which b e g i n o n O c t o b e r I , and end o n September 3 0 (FY 1 9 8 2 , f o r e x a m p l e , b e g a n o n O c t o b e r 1 , 1981, and ended on S e p t e m b e r 3 0 , 1 9 8 2 ) . The p r o c e s s o f p l a n n i n g t h e P.L. 480 program budget f o r a g i v e n f i s c a l y e a r b e g i n s some e i g h t e e n m o n t h s i n a d v a n c e o f t h e s t a r t of t h a t f i s c a l y e a r . R e s p o n s i b i l i t y for p l a n n i n g and i m p l e m e n t i n g t h e F.L. 4 8 0 program i s s h a r e d by s e v e r a l a g e n c i e s of t h e U.S. g o v e r w e n t . The p r i n c i p a l a g e n c i e s i n v o l v e d i n t h e P.L. 480 program p l a n n i n g p r o c e s s a r e t h e Department o f A g r i c u l t u r e (USDA) , t h e I n t e r n a t i o n a l Development C o o p e r a t i o n Agency and Agency f o r I n t e r n a t i o n a l ~ e v e l o p m e n tT ' ~ A / A I D ) ,t h e Department o f S t a t e , t h e Off i c e o f Management and Budget (OMB) , and t h e Department of t h e T r e a s u r y . O t h e r a g e n c i e s which may p l a y a r o l e d e p e n d i n g on t h e i s s u e under d i s c u s s i o n , p a r t i c u l a r l y d u r i n g t h e f o r m u l a t i o n of s a l e s a g r e e m e n t s w i t h s p e c i f i c r e c i p i e n t c o u n t r i e s , i n c l u d e t h e N a t i o n a l S e c u r i t y C o u n c i l ( N S C ) , and t h e D e p a r t m e n t of Commerce. Congressional Appropriations I n February t h e P r e s i d e n t is r e q u i r e d t o submit t o Congress t h e proposed f e d e r a l b u d g e t f o r t h e f i s c a l y e a r t h a t b e g i n s o n O c t o b e r 1 o f t h a t same y e a r . T h a t p a r t o f t h e b u d g e t c o n c e r n i n g t h e P.L. 480 program i s s e n t t o t h e a g r i c u l t u r a l a p p r o p r i a t i o n subcommittees i n b o t h t h e S e n a t e and t h e House o f R e p r e s e n t a t i v e s . Funds f o r t h e program a r e a p p r o p r i a t e d each year. Program a u t h o r i z a t i o n , however, h a s r e c e n t l y b e e n e x t e n d e d on a f o u r y e a r b a s i s . The m o s t r e c e n t r e - a u t h o r i z a t i o n of t h e P.L. 480 program i s c o n t a i n e d i n t h e . A g r i c u l t u r e and Food Act o f 1981 ( P u b l i c Law 97-98). Program a u t h o r i z a t i o n e x p i r e s December 3 0 , 1985. Besides t h e a p p r o p r i a t i o n s c a n m i t t e e s o f Congress, t h r e e o t h e r c o m m i t t e e s have P.L. 480 o v e r s i g h t r e s p o n s i b i l i t i e s . These a r e t h e A g r i c u l t u r e , N u t r i t i o n and F o r e s t r y C a n n i t t e e i n t h e S e n a t ? ; and t h e ~ g r i c utlu r e Committee and t h e F o r e i g n A f f a i r s Commi t r e e i n t h e House o f Representatives. The i n t e r e s t shown i n t h e program by two s u b s t a n t i v e l y d i f f e r e n t c o m m i t t e e s i n t h e House r e f l ~ c t st h e m u l t i p l e p u r p o s e s of t h e program, s e r v i n g b o t h d o m e s t i c a g r i c u l t u r e and i n t e r n a t i o n a l d e v e l o p m e n t and f o r e i g n p o l i c y i n t e r e s t s . I n i t i a l Allocations ~t t h e s t a r t o f e a c h f i s c a l y e a r USDA i s r e q u i r e d t o s u b m i t t o C a n g r e s s a l i s t o f r e c i p i e n t c o u n t r i e s t o which P.L. 480 t i t l e 11111 r e s o u r c e s a r z e x p e c t e d t o be a l l o c a t e d i n t h a t f i s c a l y e a r . The document s e n t t o C o n g r e s s i s referred to a s the "initial allocation table." The i n f o r m a t i o n c o n t a i n e d i n t h a t t a b l e , i n c l u d i n g t h e t y p e s and volume o f c m o d i t i e s t r a n s f e r r e d , i s updated q u a r t e r l y f o r t h e Congress. Preparing the i n i t i a l a l l o c a t i s n s C RS- 9 t a b l e p r o v i d e s t h e o p p o r t u n i t y t o * m a k e f u r t h e r amendments o r c o n f i r m t h e In the intervening period, a t e n t a t i v e d e c i s i o n s made a y e a r e a r l i e r . much c l e a r e r p i c t u r e o f a g r i c u l t u r a l s u p p l y c o n d i t i o n s w i l l hav; become available. I n a d d i t i o n , o t h e r c h a n g e s o f a p o l i t i c a l o r g e n e r a l economic n a t u r e i n t h e i n t e r n a t i o n a l s y s t en might h a v e oc c u r e d t h a t r e q u i r e p r o g r an a d j u s t m e n t s . L a s t , b u t c e r t a i n l y n o t l e a s t , C o n g r e s s may h a v e L e g i s l a t e d p o l i c y changes d u r i n g i t s renewal of t h e program's a u t h o r i z a t i o n a n d / o r appropriation t h a t require adjustments. H a P .L. 4 8 0 PROGRAMS OPEUTE* TITLE 1 T i t l e I o f P.L. 480 p r o v i d e s f o r c o n c e s s i o n a l s a l e s o f a g r i c u l t u r a l c m o d i t i e s t o f r i e n d l y c o u n t r i e s . U n t i l t h e end o f 1 9 7 1 , t h e l a w p e r m i t t e d s a l e s a g r e e m e n t s which p r o v i d e d f o r payment i n l o c a l c u r r e n c i s s on d e l i v e r y . Since 1972, s a l e s agreements have been n e g o t i a t e d o n l y f o r Long-term c r e d i t r e p a y a b l e i n d o l l a r s o r i n c u r r e n c i e s c o n v e r t i b l e t o dollars. C o n v e r t i b l e l o c a l c u r r e n c y agreements u s u a l l y a l l o w a l o n g e r p e r i o d f o r repayment t h a n d o l l a r c r e d i t a g r e e m e n t s and a r e used when a c o m p l e t e t r a n s i t i o n from l o c a l c u r r e n c y s a l e s t o d o l l a r c r e d i t i s n o t feasible. D o l l a r c r e d i t a g r e e n e n t s may p r o v i d e f o r a s p e c i f i c down payment i n d o l l a r s , f o r e i g n c u r r e n c y o r b o t h , upon d e l i v e r y o f t h e c u n m o d i t i e s . The b a l a n c e o f t h e a g r e e m e n t i s r e p a i d i n d o l l a r s i n a p p r o x i m a t e l y e q u a l a n n u a l i n s t a l l m e n t s o v e r a p e r i o d o f up t o 20 y e a r s . Such a g r e e m e n t s may a l s o i n c l u d e a g r a c e p e r i o d of up t o 2 y e a r s , d u r i n g which p r i n c i p a l payments a r e n o t r e q u i r e d . Repayment u n d e r c o n v e r t i b l e l o c a l c u r r e n c y a g r e e m e n t s i s i n d o l l a r s o r , a t t h e o p t i o n of t h e United S t a t e s , i n c o n v e r t i b l e f o r e i g n c u r r e n c y . The maximum t e r m a v a i l a b l e u n d e r t h i s t y p e o f f i n a n c i n g i s 4 0 y e a r s , i n A down payment, i n d o l l a r s , f o r e i g n c l u d i n g a g r a c e p e r i o d up t o 1 0 y e a r s . c u r r e n c y , o r b o t h , a l s o may b e r e q u i r e d i n t h i s k i n d o f a g r e e m e n t . Int e r e s c r a t e s u n d e r b o t h t y p e s o f f i n a n c i n g a r e s e t b y l a w a t minimums o f 2 p e r c e n t d u r i n g a g r a c e p e r i o d and 3 p e r c e n t t h e r e a f t e r . The minimum r a t e s have been used i n t h e m a j o r i t y o f t i t l e I s a l e s agreements. A 1 though t h e Commodi t y C r e d i t C o r p o r a t i o n f i n a n c e s t h e s a l e and e x p o r t o f c m o d i t i e s u n d e r t i t l e I , a c t u a l . s a l e s a r e made by p r i v a t e U.S. s u p p l i e r s t o f o r e i g n i m p o r t e r s , g o v e r w e n t a g e n c i e s , o r p r i v a t e trade e n t i t i e s . S e c t i o n 401 o f t h e Act p r o v i d e s t h a t t h e S e c r e t 3 r y o f A g r i c u l t u r e must d e t e r m i n e t h e a v a i l a b i l i t y f o r c o n c e s s i o n a l e x p o r t o f c o m m o d i t i e s included i n s a l e s agreements. In determining t h i s a v a i l a b i l i t y , t h e S e c r e t a r y must c o n s i d e r U. S. p r o d u c t i v e c a p a c i t y , d o m e s t i c r e q u i r e m e n t s farm and c o n s m e r p r i c e l e v e l s , a d e q u a c y o f c a r r y o v e r s t o c k s , and a n t i c i p a t e d e x p o r t s f o r do1 l a r s . , Each s a l e s agreement u n d e r t i t l e I b e g i n s w i t h a r e q u e s t , from a f o r e i g n government o r p r i v a t e t r a d e e n t i t y f o r c o m m o d i t i e s . The r e q u e s t , *U.S. C o n g r e s s . Senate. Committee on A g r i c u l t u r e , and F o r e s t r y . .American F o r e i g n Food A s s i s t a n c e , P u b l i c Law 480 and R e l a t e d M a t e r i a l s . W a s h i n g t o n , U.S. Govt. P r i n t . O f f . , 1976, pp. 1-4. i s g e n e r a l l y s u b m i t t e d t o t h e American Embassy i n t h e h o s t c o u n t r y , and . i s t h e n t r . a n s m i t t e d d i r e c t l y t o W a s h i n g t o n a c c m p a n i e d by r e c a n m e n d a t i o n s o f t h e Embassy and s u p p o r t i n g e v i d e n c e o f need f o r c o m m o d i t i e s i n e x c e s s o f l i k e l y d o m e s t i c p r o d u c t i o n and normal commercial i m p o r t s . Such f a c t o r s a s p r o d u c t i o n and c o n s u m p t i o n p a t t e r n s , e x p o r t o f s i m i l a r c o m m o d i t i e s and t h e s u p p l y p o s i t i o n of t h e p a r t i c i p a t i n g c o u n t r y a r e c o n s i d e r e d . I n Washington t h e r e q u e s t i s forwarded t o t h e Department o f A g r i c u l t u r e , w h e r e t h e s u b m i s s i o n i s a n a l y z e d . From t h a t a n a l y s i s , USDA d e v e l o p s a program which p r o v i d e s f o r s u i t a b l e c a n m o d i t y q u a n t i t i e s , e s t a b l i s h e s l e v e l s o f r e q u i r e d commercial i m p o r t s f r a n t h e U n i t e d S t a t e s and f r i e n d l y c o u n t r i e s ( u s u a l m a r k e t i n g r e q u i r e m e n t s ) , and i n c l u d e s s e l f - h e l p m e a s u r e s s u i t a b l e t o t h e needs of t h e r e q u e s t i n g c o u n t r y . The program p r o p o s a l a l s o d e a l s wish t h e u s e o f s a l e s p r o c e e d s t o b e g e n e r a t e d under t h e proposed a g r e e m e n t , o n t h e b a s i s o f recommendations of A I D , and i n c o r p o r a t e s a l l o t h e r n e c e s s a r y details. The Department of A g r i c u l t u r e s u b m i t s i t s proposed program t o t h e P.L. 480 I n t e r a g e n c y S t a f f Committee ( I S C ) . T h i s c o m m i t t e e i s c h a i r e d b y t h e Department o f A g r i c u l t u r e and i n c l u d e s T r e a s u r y , S t a t e / ~ I ~ D e, f e n s e , C w m e r c e , and O f f i c e o f Yanagement and Budget r e p r e s e n t a t i v e s . The comm i t t e e c o n s i d e r s f a c t o r b e a r i n g on t h e program, s u c h a s : The c o u n t r y ' s need f o r t h e commodity, f o r e i g n e x c h a n g e p o s i t i o n , and o v e r a l l economic s t a t u s ; The p o s s ' i b l e impact o f a t i t l e I program o n U.S. d o l l a r s a l e s and o t h e r e x p o r t programs, a s well a s U.S. n e e d s f o r l o c a l currency; The e f f e c t . of s u c h a p r o g r m on e x p o r t m a r k e t s o f f r i e n d l y s u p p l y c o u n t r i e s ; and The r e l a t i o n s h i p o f t h e proposed progam t o t h e f o r e i g n a i d program and t h e f o r e i g n p o l i c y of t h e U n i t e d S t a t e s . Once c m m i t t e e a p p r o v a l i s o b t a i n e d , t h e proposed c r e d i t t e r n s a r e s u b m i t t e d t o t h e N a t i o n a l A d v i s o r y C o u n c i l on I n t e r n a t i o n a l Monetary and ~ i n a n c i a lP o l i c i e s and c o n s u l t a t i o n s w i t h f r i e n d l y t h i r d c o u n t r i e s a r e undertaken. C o n g r e s s i o n a l a g r i c u l t u r a l ccxnmittees a r e informed of t h e proposed program a t t h i s t i m e . Negotiating i n s t r u c t i o n s a r e prepared i n Washington and forwarded t o t h e c o n c e r n e d U.S. Embassy. N e g o t i a t i o n s a r e c a r r i e d on by t h e Ambassador o r h i s d e s i g n e e s w i t h o f f i c i a l s o f t h e h o s t government. P r i v a t e t r a d e e n t i t y a g r e e m e n t s f o l l o w t h e same p r o c e d u r e b u t a r e g e n e r a l l y n e g o t i a t e d i n W a s h i n g t o n by o f f i c i a l s o f USDA and t h e requesting organizations. Once a t i t l e I s a l e s a g r e e m e n t i s n e g o t i a t e d and s i g n e d , p u r c h a s e a u t h o r i z a t i o n s a r e i s s u e d by t h e Department o f A g r i c u l t u r e . The p u r c h a s e a u t h o r i z a t i o n s p r o v i d e f o r f i n a n c i n g o f s p e c i f i c commodity s a l e s and s p e c i f y c o n d i t i o n s u n d e r which f i n a n c i n g w i l l b e made a v a i l a b l e . Where t h e a p p l i c a b l e s a l e s a g r e m e n t p r o v i d e s f o r a r e l a t i v e l y s m a l l amount o f a commodity, a p u r c h a s e a u t h o r i z a t i o n may be i s s u e d f o r t h e f u l l amount i n t h e a g r e e m e n t . K h e r e a g r e e m e n t amounts a r e l a r g e , a u t h o r i z a t i o n s a r e g e n e r a l l y s p a c e d o v e r t h e s u p p l y p e r i o d , which i s u s u a l l y e i t h e r a c a l e n d a r y e a r o r a U.S. Government f i s c a l y e a r . F o r p r i v a t e t r a d e e n t i t y a g r e e m e n t s , p u r c h a s e a u t h o r i z a t i o n s a r e timed t o c o i n c i d e with the project requirements of the p r i v a t e trade e n t i t y . , Concurrently with the issuance of a purchase a u t h o r i z a t i o n , t h e importing country o r p r i v a t e trade e n t i t y g e n e r a l l y a p p l i e s t o the Commodity C r e d i t C o r p o r a t i o n f o r a " l e t t e r o f c a n m i t m e n t . " The l e t t e r o f c w m i t m e n t i s a document i s s u e d by t h e C C C t o t h e i m p o r t i n g c o u n t r y ' s d e s i g n a t e d American b a n k , p r o m i s i n g t o r e i m b u r s e t h e b a n k f o r a n y payments made t o American s u p p l i e r s f o r approved s a i e s made under t h e p u r c h a s e a u t h o r i z a t i o n . When a n agreement r e q u i r e s a n i n i t i a l payment, t h e l e t t e r of c w m i t m e n t p r o v i d e s f i n a n c i n g o n l y f o r t h e b a l a n c e of a purchase a u t h o r i z a t i o n ' s v a l u e . For example, when t i t l e I s a l e s a g r e e m e n t s p r o v i d e f o r a n i n i t i a l payment of 5 p e r c e n t , a l l 7 u r c h a s e a u t h o r i z a t i o n s i s s u e d under t h a t agreement w i l l i n d i c a t e C C C f i n a n c i n g o f 9 5 p e r c e n t of t h e v a l u e of t h e a u t h o r i z a t i o n , The r a n a i n d e r must be p a i d by t h e i m p o r t i n g c o u n t r y , u s u a l l y t h r o u g h l e t t e r s of c r e d i t . Seven d a y s a f t e r i s s u a n c e o f t h e p u r c h a s e a u t h o r i z a t i o n , c o n t r a c t s All may b e s i g n e d b e t w e e n a n i m p o r t e r and U.S. commodity s u p p l i e r s . s a l e s c o n t r a c t s a r e s u b j e c t t o r e v i e w and a p p r o v a l by USDA t o i n s u r e t h a t t h e y meet t h e r e q u i r e m e n t s o f p u r c h a s e a u t h o r i z a t i o n s and f a l l w i t h i n a p r e v a i l i n g range of market p r i c e s . Suppliers then d e l i v e r the coarmodities t o v e s s e l s s p e c i f i e d by t h e i m p o r t i n g c o u n t r y , and o b t a i n documents s u c h a s on-board b i l l s o f l a d i n g , i n s p e c t i o n , and weigh c e r t i f i c a t e s , USDA N o t i c e o f V e s s e l A p p r o v a l , e t c . , which must b e p r e s e n t e d t o t h e i m p o r t i n g c o u n t r y ' s d e s i g n a t e d American bank f o r payment. The bank pays f o r s u p p l i e r and f o r w a r d s t h e r e q u i r e d d o c u m e n t s i n c l u d i n g commodity t i t l e d o c u m e n t s , t o t h e "approved a p p l i c a n t , " u s u a l l y a b a n k . C C C n o t i f i e s t h e American b b a s s y i n t h e i m p o r t i n g c o u n t r y o f t h e d i sbur sanent . TITLE 11 Food d o n a t i o n s a r e p r o v i d e d u n d e r t i t l e 11 t o s u p p o r t n o t h e r and c h i l d f e e d i n g a c t i v i t i e s , s c h o o l f e e d i n g p r a j e c t s , f o o d - f o r - w o r k , and emergency e f f o r t s t o a l l e v i a t e t h e s u f f e r i h g s o f v i c t i m s o f n a t u r a l and man-made d i s a s t e r s . ' T i t l e 11 p r o g r m s a r e c a r r i e d o u t u n d e r a v a r i e t y o f a r r a n g e m e n t s . Each p r o g r a n must have a " c o o p e r a t i n g s p o n s o r . " The s p o n s o r may b e t h e government of a r e c i p i e n t c o u n t r y , a Y.S. n o n p r o f i t v o l u n t a r y a g e n c y 3 r a combination of such a g e n c i e s , o r i n t e r g o v e r n m e n t a l o r g a n i z a t i o n s s u c h a s t h e K o r l d Food Program o f t h e U n i t e d N a t i o n s . The a g m i n i s t r a t i o n o f t h e t i t l e I1 program i s s h a r e d j o i n t l y b y t h e Agency f o r I n t e r n a t i o n a l Development (AID) and t h e U. S. D e p a r t m e n t o f A g r i c u l t u r e (uSDA). A I D i s g e n e r a l l y r e s p o n s i b l e f o r program o p e r a t i o n s w h i l e USDA d e t e r m i n e s c m m o d i t y a v a i l a b i l i t i e s t o g e t h e r w i t h t h e i r volumes and v a l u e s . A I D and USDA p a r t i c i p a t e j o i n t l y i n t h e programming p r o c e s s t h r o u g h t h e I n t e r a g e n c y S t a f f Committee. W i t h t h e e x c e p t i o n o f t h o s e c o m m o d i t i e s made a v a i l a b l e t o v o l u n t a r y a g e n c i e s , USDA a r r a n g e s o c e a n t r a n s p o r t a t i o n f o r a l l t i t l e I1 c a n m o d i t i e s . Program p r o p o s a l s o r i g i n a t e from t h e o v e r s e a s s t a f f s o f U.S. nonp r o f i t v o l u n t a r y a g e n c i e s o r frcm A I D o v e r s e a s m i s s i o n s , g e n e r a l l y a f t e r a s p e c i f i c r e q u e s t by t h e r e c i p i e n t c o u n t r y . Frogram p r o p o s a l s s u b m i t t e d by v o l u n t a r y a g e n c i e s a r e c o o r d i n a t e d a t o v e r s e a s p o s t s w i t h AID, Food f o r Peace o f f i c e r s o r o t h e r U.S. s t a f f members d e s i g n a t e d f o r s u c h r e s ponsibil ity. Such a s s i g n e d o r d e s i g n a t e d U. S . f o r e i g n s e r v i c e s t a f f members a d v i s e and a s s i s t v o l u n t a r y a g e n c i e s i n p r o g r a n development and implementation. They a l s o r e c e i v e , a n a l y z e , and comment on p r o p o s a l s f o r b i l a t e r a l food g r a n t a s s i s t a n c e . U.S. o v e r s e a s n i s s i o n s a l s o c o o r d i n a t * and c o o p e r a t e w i t h t h e r e p r e s e n t a t i v e s of t h e U n i t e d N a t i o n s a g e n c i e s s u c h a s UNICEF, o r t h e World Food Program r e g a r d i n g p r o p o s a l s f o r food g r a n t a s s i s t a n c e under a u l t i l a t e r a l arragements. I n a d d i t i o n , U . S. o v e r s e a s m i s s i o n s a n a l y z e and c w m e n t on a l l food g r a n t p r o p o s a l s a s they r e l a t e t o t h e .host c o u n t r y ' s d e v e l o p e n t o b j e c t i v e s . F i n a l l y , t h e missions a r e r e s p o n s i b l e f o r monitoring a l l v o l u n t a r y agency and government-to-government programs. Based on t h e s e above r e s p o n s i b i l i t i e s and a r r a n g e m e n t s , A I D i n ~ a s h i n g t o nc o o r d i n a t e s t h e a p p r o v a l of p r o g r a n s t h r o u g h t h e I n t e r a g e n c y S t a f f Ccmmittee, a u t h o r i z e s t h e i m p l e m e n t a t i o n of a p p r o v e d p r o g r a m s , and i n i t i a t e s t h e p r o c e d u r e s v h i c h r e s u l t i n t i t l e 11 c o m m o d i t i e s becoming a v a i l a b l e t o c o o p e r a t i n g s p o n s o r s and recipients. 'The p r o g r a c c l o r d i n a t i o n p r o c e s s i n K a s h i n g t o n i n c l u d e s t h e D e p a r t n e n t o f C r e a s u r y and Commerce and t h e Of f i c e of Yanaqement and Budget. T i t l e 111 ~ e c i p i e n tc o u n t r i e s w i t h which t i t l e 1/111 s a l e s a g r e e m e n t s a r e e n t e r e d i n t o must s a t i s f y a l l o f t h e t e r m s and c o n d i t i o n s a p p l i c a b l e t o T i t l e I agreements, plus the following a d d i t i o n a l e l i g i b i l i t y requirements. Each r e c i p i e n t c o u n t r y must : 1. h a v e a need f o r e x t e r n a l r e s o u r c e s t o improve i t s food p r o d u c t i o n , m a r k e t i n g , d i s t r i b u t i o n , and s t o r a g e systems; 2. m e e t t h e p e r c a p i t a income c r i t e r i o n ( i n 1982 t h i s was maximum o f $ 7 3 0 ) n e c e s s a r y t o q u a l i f y f o r d e v e l o p m e n t l o a n s from t h e I n t e r n a t i o n a l Development A s s o c i a t i o n o f t h e I n t e r n a t i o n a l Bank f o r R e c o n s t r u c t i o n and Development ( t h e World Bank) ; 3. b e a b l e t o u s e e f f e c t i v e l y t h e r e s o u r c e s made a v a i l a b l e by t h e r e s a l e o f t h e food c o m m o d i t i e s ; 4. i n d i c a t e a w i l l i n g n e s s t o t a k e s t e p s t o improve i t s food p r o d u c t i o n , m a r k e t i n g , d i s t r i b u t i o n , and s t o r a g e systems. A n o t h e r i m p o r t a n t t i t l e 1/111 e l i g i b i l i t y r e q u i r e m e n t , some t i m e s r e f e r r e d t o a s t h e " a d d i t i o n a l i t y requirement,'' i s t h a t t i t l e I/II1 a s s i s t a n c e must complement, b u t n o t r e p l a c e , o t h e r d e v e l o p n e n t r e s o u r c e s a l r e a d y planned by AID, o t h e r d o n o r s , o r t h e f o r e i g n government i t s e l f . The i m p l e m e n t a t i o n o f t i t l e I s a l e s a g r e e m e n t s t h a t i n c l u d e a t i t l e 111 food f o r development program f o l l o w t h e same p r o c e d u r e a s d e s c r i b e d a b o v e . I n a d d i t i o n , t i t l e 11111 s a l e s a g r e e m e n t s a r e s u b j e c t t o c e r t a i n p r o v i s i o n s c o n c e r n i n g t h e r e c i p i e n t c o u n t r y ' s c o m p l i a n c e w i t h t h e development c m m i t m e n t s of t h e a g r e e m e n t , and i t s e l i g i b i l i t y f o r t h e f o r g i v e n e s s c f ' l o a n repayment . The g o v e r m e n t o f t h e i m p o r t i n g c o u n t r y m u s t r e p o r t q u a r t e r l y o n d e p o s i t s and d i s b u r s e m e n t s o f l o c a l c u r r e n c y i n c o n n e c t i o n w i t h t h e food f o r development program. The U.S. Embassy m u s t d e t e r m i n e t h a t t h e l o c a l c u r r e n c y e q u i v a l e n t o f t h e d o l l a r s d i s b u r s e d by C C C h a s b e e n d e p o s i t e d i n a special account, review the disbursements of those local c u r r e n c i e s from t h e s p e c i a l a c c o u n t by t h e i m p o r t i n g c o u n t r y , and c e r t i f y t h a t t h o s e d i s b u r s e m e n t s meet t h e c o n d i t i o n s q u a l i f y i n g them f o r a p p l i c a t i o n a g a i n s t l o a n repayments. The embassy must r e p o r t q u a r t e r l y on t h i s d i s b u r s e m e n t t o CCC. The c o m p l e t e t i t l e I d e b t w i l l be deaned t o be o f f s e t o n l y when t h e r e i s f u l l d i s b u r s e m e n t , f o r a u t h o r i z e d p u r p o s e s , of t h e l o c a l c u r r e n c i e s which were d e p o s i t e d by t h e f o r e i g n government i n t o a s p e c i a l a c c o u r i t , i n a n amount e q u a l t o t h e d o l l a r v a l u e o f t h e C C C c r e d i t ( r e g a r d l e s s o f f l u c t u a t i o n s i n t h e e x c h a n g e r a t e t h a t may h a v e o c c u r r e d d u r i n g t h e l i f e of t h e program). F u l l f o r g i v e n e s s does not a p p l y i n t h e c a s e of " r e l a t i v e l y l e a s t d e v e l o p e d c o u n t r i e s ' ' (RLDc"~) which c h o o s e t o u t i l i z e d i s b u r s e m e n t s from t h e s p e c i a l a c c o u n t t o o f f s e t o t h e r t i t l e 1 d e b t coming due frcm p r e v i o u s a g r e e m e n t s . The U . S. Embassy must c e r t i f y t o C C C t h a t a l l t h e l o c a l c u r r e n c i e s g e n e r a t e d have b e e n d i s b u r s e d , b e f o r e f u l l f o r g i v e n e s s o f l o a n repayment c a n o c c u r . 1 CRS- 16 F o r t h e second c o n s e c u t i v e y e a r , U. S. a g r i c u l t u r a l e x p o r t s u n d e r c o n c e s s i o n a l Government-financed programs d e c l i n e d . The t o t a l v a l u e f o r c a l e n d a r y e a r 1983 f e l l 10 p e r c e n t t o $ 1 . 1 4 b i l l i o n and a volume of 5 . 6 m i l l i o n m e t r i c t o n s . E x p o r t s o f P u b l i c Law ( P . L . 4 8 0 T i t l e I1 donations declined. E g y p t , P a k i s t a n I n d i a , B a n g l a d e s h , and Sudan w e r e t h e leading r e c i p i e n t s f o r c o n c e s s i o n a l shipments. Major c a n m o d i t i e s e x p o r t e d w e r e wheat ( $ 4 7 8 m i l l i o n ) , r i c e ( $ 1 4 7 m i l l i o n ) , s o y b e a n o i l ($128 m i l l i o n ) , wheat f l o u r ($126 m i l l i o n ) , and c o r n ( $ 1 0 3 m i l l i o n ) . Government programs a c c o u n t e d f o r 4 p e r c e n t o f a l l U.S. a g r i c u l t u r a l s h i p e n t s. P . L . 480 t i t l e I l o n g - t e r m c r e d i t s a l e s r o s e s l i g h t l y i n v a l u e t o $756 m i l l i o n i n 1 9 8 3 , b u t volume d r o p p e d 6 p e r c e n t below t h o s e i n 1982. T i t l e I s a l e s a c c o u n t e d f o r 66 p e r c e n t o f c o n c e s s i o n a l G o v e r w e n t f i n a n c e d programs i n 1983. C h e a t a c c o u n t e d f o r h a l f o f t h e T i t l e I s a l e s i n 1983 and went t o 19 c o u n t r i e s , i n c l u d i n g E g y p t , Sudan, Y o r o c c o , B o l i v i a , S r i Lanka, and E l S a l v a d o r . R i c e , t h e second l e a d i n g commodity u n d e r T i t l e I s a l e s , r o s e 39 p e r c e n t t o $132 m i l l i o n . E x p o r t volume o f 3 8 2 , 0 0 0 m e t r i c t o n s r e p r e s e n t e d a 2 2 - p e r c e n t i n c r e a s e o v e r 1982 due m a i n l y t o d e l a y s i n s h i p m e n t s u n d e r P.L. 480. R i c e s h i p m e n t s u n d e r T i t l e I went p r i m a r i y t o I n d o n e s i a , S o m a l i a , P e r u , L i b e r i a , and B a n g l a d e s h . Shipments u n d e r T i t l e I1 d o n a t i o n s t o t a l e d $286 m i l l i o n and 1 . 4 m i l l i o n m e t r i c t o n s i n c a l e n d a r y e a r 1 9 8 3 , down 25 p e r c e n t £ r a n t h e previous year. H a l f o f T i t l e I1 d o n a t i o n s were d i s t r i b u t e d t h r o u g h v o l u n t a r y r e l i e f a g e n c i e s , o n e t h i r d t h r o u g h t h e World Food P r o g r a m , and t h e r e m a i n d e r under government-t o-government a r r a n g e m e n t s . I n d i a , P o l a n d , and P e r u r e c e i v e d o v e r h a l f t h e v o l u n t a r y r e l i e f d o n a t i o n s . Wheat and wheat p r o d u c t s , soybean o i l , and n o n f a t d r y m i l k were m a j o r commodities d i s t r i b u t e d t o t h e s e c o u n t r i e s u n d e r r e l i e f donations. P a k i s t a n and I n d i a r e c e i v e d 5 0 p e r c e n t of t h e World Food P r o g r a n d o n a t i o n s . Bangladesh, t h e l a r g e s t r e c i p i e n t of g o v e r r m e n t - t o - g o v e r w s n t wheat s h i p m e n t s , r e c e i v e d o v e r h a l f o f t h e t o t a l v a l u e . Agency f o r I n t e r n a t i o n a l Development (AID) d i s b u r s e m e n t s t o t a l e d $98 m i l l i o n , 10 p e r c e n t o f c o n c e s s i o n a l s a l e s . About 89 p e r c e n t o f A I D d i s b u r s e m e n t s went t o E g y p t , w i t h c o r n t h e m a j o r commodity. (Fannye L o c k l e y , World A n a l y s i s Branch) * F o r e i g n A g r i c u l t l u r a l T r a d e of t h e IJnited S t a t e s , U.S. Department o f A g r i c u l t u r e , ~ a r c h / A p r i l 1 9 8 4 , p. 1 1 0 . 2000 - AMOUNT 20000 - TYPE $100 THOUSAND - -- . METRIC TONS I '--- U . S . DEPARTMENT O F AGRICULTURE. FOREIGN AGRICULTURE SEAVICE TESTIMONY BY DEPUTY SECRETARY OF AGRICULTURE: RICHARD E . LYNG BEFORE THE HOUSE SELECT COMMITTEE ON HUNGER. JUNE 2 6 . 1 9 8 4 TABLE PREPARED BY CRS LEGEND: YEAR \J (METRIC TON GRAIN EQUIVALENT B A S I S ) P.L. 480 PROGRAM EXPORTS, FY 1955- 1984 TOTAL mr e . C X P ~ T S 8OURCC: UOOA F O R E I O N A O R I C U L T U R A L T R A O t M. U . S . ~OVE!HLICR/DCCCMOCR. IBLIQ. U . U. EXPORTS. UBOA. MAV T E S T I M O N Y B V A ~ C H !A t ~LYNo.\K)NC PO. 1 9 0 4 . LCOCNO: M I L L I O N S OF DOLLAR8 17. 1 9 0 4 . ~ ~ 4 EXPORTS 8 0 (Y R L r E R U T O T H C P E R C E N T T H A T T O T A L P L 4 0 O C X P O R T S RCPAC6tNTU O f THC TOTAL ABRICUCTlJRt CXPORTS FOR E A C H YCAA B H O C M . ) ' 430 8s. ~ n 2 .i a i 80. 061 *7. 4 4 3 400 sa. AMOUNT SUM TOTAL PL480 AS A PROPORTION OF TOTAL U.S. AGRICULTURE EXPORTS: Estimated Value of P.L 480 Export Shares by State1 ( $ aillions) 'metqures o r o v ~ d wIn rnls faarc are der~vcdan8 ao not ' c t l u ~acwat $moments Tho relerenca Exoon Shares is u3.d cecause as iornmoaitles orocatd :nrouqn ?no oroaucxmn C Y C I ~fnev may rran$it tnrouqn a numoer of sntes rnoreov Taring 1 1 31tf1cdlrt o assiqn a gOm1 O t m q i n 'or rne rtmi oroauc: FUNDING LEVELS* The P.L. 480 a n n u a l a p p r o p r i a t i o n i s d e p o s i t e d w i t h t h e Commodity C r e d i t C o r p o r a t i o n ( c C C ) which f i n a n c e s Food f o r P e a c e s a l e s a g r e e m e n t s and d o n a t i o n s . I f amounts a p p r o p r i a t e d a r e g r e a t e r t h a n a c t u a l n e e d s i n a n y o n e y e a r , t h e e x c e s s i s used t o r e d u c e f u t u r e a p p r o p r i a t i o n r e q u e s t s . I f t h e a p p r o p r i a t i o n s a r e l e s s t h a n a c t u a l needs o t h e r CCC f u n d s may b e used t e m p o r a r i l y t o f i n a n c e t h e b a l a n c e of t h e c o s t s . P.L. 480 b u d g e t a r y c o s t s and program l e v e l s f o r any o n e y e a r may n o t b e i d e n t i c a l . For e x a m p l e , d u r i n g FY1983 P.L. 480 programs had a program l e v e l of $ 1 , 5 0 9 . 5 m i l l i o n . The a p p r o p r i a t i o n f o r t h a t y e a r was $ 1 . 0 2 8 million. T i t l e I ' s a l e s a r e made o n c r e d i t and r e p a y m e n t s r e d u c e P.L. 4 8 0 b u d g e t c o s t s by p a r t i a l l y f i n a n c i n g t h e program l e v e l of s u b s e q u e n t y e a r s . Commodities s h i p p e d u n d e r T i t l e 11 may h a v e b e e n a c q u i r e d u n d e r t h e d o m e s t i c p r i c e s u p p o r t program. The P.L. 480 program p a y s C C C t h e e x p o r t market p r i c e f o r t h e s e commodities. Funds a v a i l a b l e f o r P.L. below i n T a b l e 1 . 480 i n FYI973 t h r o u g h FYI984 a r e i n d i c a t e d The amounts o f c o m m o d i t i e s s h i p p e d u n d e r P.L. 480 depend n o t o n l y on a c t u a l f u n d i n g l e v e l s , b u t a l s o on d o m e s t i c c a m n o d i t y p r i c e s . If P.L. 480 program l e v e l s r e m a i n c o n s t a n t and d o m e s t i c commodity p r i c e s r i s e , the q u a n t i t y of canmodities shipped w i l l d e c l i n e (unless a supplem e n t a l a p p r o p r i a t i o n i s m a d e ) . Thus, i n t h e e a r l y and mid-1970s when a g r i c u l t u r a l s t o c k s were 1 i m i t e d , c a u s i n g p r i c e i n c r e a s e s , q u ' a n t i t i e s s h i p p e d u n d e r t h e food a i d program d e c l i n e d . Over t h e p a s t t e n y e a r s , program l e v e l s h a v e v a r i e d from a low o f $963 m i l l i o n i n 1974 t o a h i g h o f $ 1 . 6 9 b i l l i o n i n 1981. Over t h e same p e r i o d , t h e q u a n t i t i e s s h i p p e d under t h e program h a v e v a r i e d from under f o u r m i l l i o n m e t r i c t o n s i n 1974 t o more t h a n 6 m i l l i o n m e t r i c t o n s i n t h e 1 9 8 0 s . I t s h o u l d be n o t e d however, t h a t i n t h e p r e v i o u s d e c a d e o f t h e 1 9 6 0 s , t h e q u a n t i t y s h i p p e d was c o n s i s t e n t l y i n t h e r a n g e o f 15-18 m i l l i o n m e t r i c t o n s . " E p s t e i n , S u s a n B . , "U.S. B i l a t e r a l and Y u l t i l a t e r a l Food A s s i s t a n c e Programs," Environment and N a t u r a l R e s o u r c e s P o l i c y ~ i v i s i o n , C o n g r e s s i o n a l R e s e a r c h S e r v i c e , L i b r a r y o f C o n g r e s s , J u l y 9 , 1984. 3 6 p. I P.L. 4 8 0 (FUW FOR I't.ACE) I'ROGIIAII LEVELS FY13-83 t 11th AND FIBS ESTIIIATE ( t l l llI o n s o f D o l l u r g ) ACTU,\I, ) 5 983.0 . 872.0 S 1 5 131.7 8J2.I $ 798.6 HLh.4 S 132.6 S 5 b43.0 S 9Ofl.fl 5 7b7.2 S flI7.I S 578.1 Program Level S 144.5 r l t l e s I/IlI a / bb9.0 176.9 102.0 680.5 42H.> 56.0 1')). I 449.5 bil.3 4L5.2 206.2 139.1 319.6 J71.6 , \ p p r u ( r r 1.11 I o n (ti.!) 2 ----H9.2 .---- 72.5 b/ 6.5 -2H9.8 Carryover F u n d s Receipts ::.0 209.1 431.9 R47.J T l t l e 1 1 P r o c r a m I,evel .(I I.u?H.o ----- -92 . - JI,.'r u -Iu.f~ II6.U ----- 1,119.~ -14.8 -85.8 198.5 5Vh.5 39.7 Carryover funds I . 15.1 3fl4.1 547.1 -21.6 I.2IH.Y $ y .I -13.5 SU7.P L50.8 80.8 H4b.l 14.y 1Ib.O 67.1 459.3 -187.1 9 1HI.I LlU.0 281.1 155.8 -29.9 Y22.9 170.0 LOR. 2 291.7 127.6 b5.6 1.169.1 -114.6 . I -- 4,)Y. 2 -- blM.0 - LllI.0 12b.U 6h0.h -313.0 I4b.2 -119.0 p: R r f l e c t m t r a n s f e r o f $ 1 5 m l l l l o n f r o m T l t l e 11 t u T l t l e u IllII. f.1y.q 4JY.V 386.6 lRb.8 107.1 1,089.9 214.9 411.9 -- 650.0 196.1 70.3 778.5 -398.8 19N.3 650.U -121.5 551.6 155.4 186.3 557.1 8yS.u 85.4 101.9 315.1 A p ( r r u p r l a t l o 1 1 (011) -161.U 67.4 ----- C a r r y o v e r Fund. 281.3 - --- -:d.S 1 r? N bf - 293.7 rn 324.0 Uecrlpts -- 386.6 U F u n d s t o r T l t l c Ill ( F o o d f o r ~ e v e l o p m e n t ) v e r r f l r s t s p e n t I n ~ ~ 7 8 . -- -- -el - R e i l r c t o t r a n s f e r of $ b l m l l l l o n from T l t l e 1 1 t o T l t l e n I l I 1 1 . -b l f r d r s I n u h l c l t c a r r y o v e r f o n d ~ r n o r r ~ ~n tr es p o s l t l v e r c f l r c t t h e u s c o f t h e p r c v l o u s y p a r ' s I v n d s t o f l n a u c r t l l c c u r r e n t y e a r ' n proj;r;am l e v e l ; year. I n w l i l c l t t h e s e a m o u n t s a r e n e g a t l v e l n d l c a t c t h a t c u r r e n t y e a r f u n d 9 w e r e u s c d t o l l n s n c e t i l e noccet.dlng y e a r ' s program l e v e l . cf - K v t e l c t n tratlsfer of m l l l l o n f r o m T l t l e 11 t o T l t l e n I/IlI. dl - E x e c u t l v r u f f l c e o f t h e President, The U t ~ d ~ or ft t h e U n l t e d S t a t e s C o v e r n m r u t - A p p c n d l x f o r f l n c a l y c a r r l Y 7 5 - 7 8 ; U.s. U r p a r t m e n t o f A g r l c u l t u r e , - U u d y r t E x p l a ~ l a t o r y k o t e w ' f o r f l s c a l year. 1978-85. TI?v P.L. hHO P r u g r a u I¶ f l n a n c t * d hy a y p r o y r l n t l o l l n , r v c e l p t . 3 f r o m p r l n c l p a l r e p a y m e n t s and l o a n Numhero d o n o t a l v a y s t o t a l d v e t o rounding. l n t r r e n t u n d e r T l t l e I,a n d c n r r y u v e r f u n d c . $50.5 r tII1IE: Source: CRITICS OF P . L . 480 C r i t i c s o f t h e program r a i s e a number o f s e r i o u s q u e s t i o n s . Some h a v e s u g g e s t e d t h a t food a i d i s more h i g h l y c o r r e l a t e d w i t h U.S. commodity s u r p l u s e s t h a t w i t h world h u n g e r n e e d s , s a y i n g t h a t t h e n e c e s s a r y q u a n t i t i e s and n u t r i e n t s a r e o f t e n n o t t h e prime c o n c e r n o f t h e U n i t e d S t a t e s . They s e e t h e program a s l a r g e l y a n o t h e r U.S. farm s u b s i d y f i n a n c e d by t h e t a x p a y e r , and o n e which sometimes d i s p l a c e s normal c a n m e r c i a l e x p o r t s . Some c r i t i c s c o n t e n d U.S. food a i d c r e a t e s d i s i n c e n t i v e e f f e c t s i n t h e r e c i p i e n t c o u n t r i e s which r e p o r t e d l y e n c o u r a g e r e d u c t i o n i n a g r i c u t u r a l p r o d u c t i o n and a l l o w t h e r e c i p i e n t g o v e r n m e n t s t o b e somewhat l a x i n t a k i n g n e c e s s a r y p o l i t i c a l and economic s t e p s t o improve t h e i r d o m e s t i c food s i t u a t i o n . C r i t i c s have a l s o q u e s t i o n e d t h e a p p r o p r i a t e n e s s o f d o n a t i n g t r a d i t i o n a l American food i t e m s ( s u c h a s c h e e s e , w h i t e f l o u r , and b l e n d e d p r o d u c t s ) t o o t h e r c u l t u r e s . These p e o p l e p o i n t o u t t h a t t h e r e a r e d r a w b a c k s t o i n t r o d u c i n g f o o d s which may b e m i s u s e d ( i . e . i n f a n t f o r m u l a ) , a s w e l l a s i n t r o d u c i n g new foods t o p r e s c h o o l and s c h o o l - a g e c h i l d r e n who may s u b s e q u e n t l y a c q u i r e new ~ a s t e s and p r e f e r e n c e s f o r food t h a t t h e y l i k e l y w i l l be u n a b l e t o o b t a i n i n t h e future. f h i l e some e x p e r t s c o n t e n d t h a t food a i d c a n n e g a t i v e l y a f f e c t a r e c i p i m t c o u n t r y , o t h e r s f e e l t h a t t h e p o s i t i v e e f f e c t s o f t e n outweigh t h e n e g a t i v e e f f e c t s o f food a i d . These p r o p o n e n t s o f a i d b e l i e v e t h e p o s i t i v e and n e g a t i v e e f f e c t s s h o u l d b e weighed on a n i n d i v i d u a l c o u n t r y - b y country basis. The i n h e r e n t problems o f food a i d a r e b e t t e r u n d e r s t o o d by d o n o r s and r e c i p i e n t s now t h a n i n 1954. T h i s a w a r e n e s s i n i t s e l f r e p o r t e d l y helps t o reduce the negative e f f e c t s . WALL STBEET JOURNAL Reproduced v i c h t h e p e r n l s s i o n o f t h e Dov J o n e s & Company, Inc 01984 '8 = . JUL 2 1984 P. THE WALL STREET J O U R N A L YONDAY. JULY Cf- 2. 1984 Free Food Bankrupts Foreign Farmers and adrmrtlstration omciads tn.sst that the program no longer puts fannen m mlptent counmed out of busness. but the evidence dcu not tlatter thew contention. PL180bstllloften nmwthLhegoalof gmng away the most !ood m the shonen m e . The Kama City Tlmes remKed that In 1 s the Peruvlan agriculture mvuster pleaded wth USDA not to send his country any more nce. feanng that ~t would giut the local marker and dnve down pnces for snuggling farmers. But the U.S. nce lobby turned up rhe heat on USDA. and the Perunan government was aid Lhat it cculd elLeer have the m e or no bed at all. The same type of p o k y fiascos occur m subSahara AMca vhtch melved !4% of food but only on condmon that cmmes to mpmve the~rdevelopment p o l W a V e r y fev m u l e s have applled tor n t l e III cadrional ad. ;u they know Lhey W get free or cheap I d regardless of ahat @des they follow. Roughly a quarter of Tltle I1 donations go for the Food for Wort IFFW) program. FFW reclptents reUiw fccd food rererum for wo&q on labor m v e projects. These projects are supposad to oe dengned to mc r e v e a g r i c u l t d pmducuwty 3ut m d e n oftel labor to trnprwe the pnvate ompeny of povcrnment officda or landowner& An .UD analysls of of ! ~ q e .W In Sanglade& a c h has 3 e are maiung an effort - .Mmy pogrmns b e fed the same peopb for mer 4 decade, thereby decreasmg tk demons /or locally produced food d creozang rl pemuinent weltore ckazs. ~ PI. 180 donatfons ur ~ -~ Afncan guv- number 3f FFW pmle~ts.conciudcd Lhat emmena force farmen a sell their c r o p .FFW "results in inacas?d quty'' md to the pvcrnment at a LMrd to a hall of "drengLhens 'ne aploltive 5e.m-teudal their market value. Per-caplta food pml- system wnlch now COnUols maR aspeeu of since the d a g e life. . . ." Worken were undeructlon food M c a has decreased %2 l9fd.arid PL isO donauons 3ave helped p d . and the pvernment of Banqfaksh U.S. MwaI for other -p and governmeno prpetuate the denrucuve - 1 status quo. The e w e r :t 1s for govern- paid iabvm mth p a r quailty. m e d ments to get ,weifare, the !w mcennve 'aheatA lY7S FOod aod Agncuiture Orpanthey have to reiorrn their own pollcia. uatlon report concluded that FFN pmjecrs deletenau efHam s anocher counuy wauxkd S m ma -have d U.S. .M6 dcrcioprnent rrsmhnnr ,kn m tk psn* m u m l a a Loid &t Hane Sukomrmrtra oa Fadg cu?eqrcsterosmdthcrmrmudmuOperaions a few yean ago, "Farina m aui x m c e rela&xu$lp d '& -on& :-ti are b m n to pol wen bmg tb.12 pk?amy." ~n m y artar rehri residenu m e e t c m p to &a ;be weef h i [ST, J.S fccdl Is dismbulpd m e t h y an w&& ?Mnm lanns rir collect genemus amxmu of !bai h r &ng UNe or m work to getafairpnce W e ~ e t q a d U S fwd a~ k m g sold." Wbuc 3me b r on yovernment.suprdaed pmlecn. FFW sharp foodcrease !n rhe supply ot !cut. prim ?as. !ike !ccd s m p r tE Ibe US.. conmb mil tnentaoly !ail and :ma1 : m e n mJl m+o :o a snortage of agncuitum iamr at harres m e . ke hi. Much of the donated fccd is W t e d for ?L (80 also u often ineffeczve !n Internanonal aisasren when a speedy response school fJod ar henIth proqrams !or is menual. People nave srarreY wWe w- nothen and :ne!r ~Mdren. .UD claims -eaucrars ,Sag@& and decrepit mats put- %at ?+is.?revents disp~acement of local pmlucuon and Mutes malnutnnon. 9ut !?red a c m n 3 e ,rean. Ln !976 an eanhquaxe h t Guatemala m A D a h t of tarpeM asnslance !n inproqrm. :onkllling 21.m) p p i e & ieanng over a da. wmcn ?,as d e !man S o m e s . Bur JM ?nor m the ciuded. "The maternau chid heuth p r o 'disaster. the country had ham& one of ,.run a&s nor impmved nutnnon and 'he has had no impact the l a m P-bcz cmpr on recmd. and school !eedinq 7i d pienoful. Pet 'he US. dumped on mcreasmg whmi enrollment or due' .Another .AD Z.m) m m c :om of d e a r on the counrry. n g 'ne a n p o u t xte. 3 e US. "$t" kncnocxed the mnom out of u d l t concluded *at ''7mgn.m merhodoiw , food Kenya 'and ekwnere 'n .Vr,cai a e !mat m r k e u and made it c!arr. harder for n i l a q s to m v e r . The Guace- creares an unilmt& demand for !ccd. . yvpuns In 'he In the 19YB arid 198b. mardve U.S. malan government Fhally had to !omld the m e long-tern i-q same areas ior 10 yean gr more have wheat dumpmg m Mia &rum the imponadon of m y more Oaslc gram. ?L 180 ud :s Olvlded u d e r three a. p a t p e n u a ! :or !ccd Dmducnon and I country's agncultiual market and U . rupted t h m d s of Lndlan fannen. :les. T d e : sells :md :o ccuntnes at con- farmly s l m l n g Ilsmcefluves. , ' ' ln ?nces. ro@y 555 :ower 9an ot'ler counmes. such ;s E m . the !ccaI M r g t Duniop. a e f of natr $1 the Senate csonu ' hqncuit!! C3mmtttec. swculatfd &at marxer :me. :tie :I :onals fwd 3 ;e 'J3 cif.cr nas aever ?sen arremp:ed :o deI on m : p rccu a d x a y +ave teen .mpmibie :or ised !3r .wal feve!oprneflt pm]ects and ! e r n e the mpac! of ?L #fox mlllioM of Naris m g . Mr. m o p for mainounUld ,mm. ntie 11: donates ,ents ?utnConai sums. , 1 I , 1983. M05t If fie L'SDA really belleves tlat g i x g fwd :o che poor ?,as no effect nn .ccd h r m e n . then presumably .Agncuiture k. retary J o h Block wmld not oblect if the Europeaa Econormc Cornmumy sent over a b~ilionpounds of surplus cheese :o !em all the hungry h e n c a n s they hear about. 2eaplent povernrnents often seg PL +SO food and use the ?meeds !or ranous doubtful pupxes. such as ouylng a m . Haunuus ;misled on recelnng m y 3 e highest quailty me-and then used 3 e .?* nard food for IS hore! :rase. In ocher cases. food a d is jquandered Secause gf government pnce controls. .Accondng :a one former .a officiu. oread :s so cneap :?at .Amencan PL M aneat s m 3~ b a e d :nm !wves and irf :o donrteys. When food a d does aor lndercut .ocv farmers. :I often replaces fwd Lbt L'e r+ uplem axrnW wouid have piu-3an terna at lo nu marbco m y . me analfound that limost 90% of ?L i%rl donations :o Ehazll miply replaced gram 3 a t nanon would have purc.ased fnrn the US. and other gmn exporters. The Gen. eiaI Accoununq Office reports that 3any counmes have decreased thew commerciai purchases .?om the US. ,while c m a n w g to receive PTr isO hanaouu. Dppositlon Is Widespread Not only does PL 180 h i m l%m Wor!d farmen. 11also helps perpetua:e Qoundern g U.S. agncuitural pollcles. L S D A pnce siipports have !ed to the pvernment x c u . muladng a nuge wheat sraxpde ind kidIons of ;iounds of slowiy n m n q aa!y pmducts. PL (80 g v m tonqressmefl a re specrable!wkmg ,iduc!e [or .iispmmq ~t 3 e evldence 01 cur 5a-m ~ h c fy u i m . Ooposnon 'a bxi atd ti w d e q r e a i unong even iiberal a c u w t s - a e m e .mum cbac often iavor nandouu sn smc!. ple. 7.e Zmadlan Coacii :or inrema:lonaI Coopi-xion recornmenas 3 a t ' 5 7 . cept In c y e s of cmei-gencm. [ar,a d x atollshed. ' Lurence R. Simon oi Oxiamkrnenca. a ;item self-help .eve!opment agency, concludes: 'We lave:: t seen emnncLqg evlaence !hat im a d can x afiecuv?!y employed 3s a 3eveioomeflt resource." Tony Jackson. author of " A g a m J tne Cram ' and a former .ADconsultant. !elleves that food a d a m o n never 'Ices more good than h a m . axcept dunnq clsas. :er 2!1ef. PL 420's m a n benericlanes are . m e ? can farmers and Ltle L ' S . .mrchant manne. PL 4.33 has bammpred pmr f a n ; e n , encouraged t'le welfare eL'llc s? =:CI. m t zounmes and jquanaereQ W i m of !ax dollars. :f ' h ~ sISour ?,wnanltananurn. rd he!p me Pdrd Wmld I! we ever ctec:ae :o :?t rough W.L? 3e.m. :? -4 .Hr Zo~.'ara9 : ' ~ e ? - ' m c ez r m Wmhmqfa Reproduced w l c h ctte ? e m r s s i o n o f t n e 3ov J o n e s b Comodny, Inc. i Letters to the Editor Does Food for Peace Stunt Growth? 1 JamesBovard Free F a d Bankrupts Fore~gnFarmers iedltonal page. July 21 ontuns mlsconcepuons regardlllg the bhc Law 180 Food for Peace Pmgram. PL 180 does not, as Mr Bovard asserts. .undercut poor farmen and d~sruptlocal was cultural ~nluared markers. ~n 19%. reclpieno When the pincluded m t Germany. France. Italy. Poland. Yuqoslana. Greece. Spun and Noway The Pro gram dld not destmy thelr agnculturai economies and che wll to grow fad. in fact, several of these countnes now contnbute food through the EEC for Sunliar programs. dso. a study by Dr H.W Singer of the L'nlverslty of Sussex found that in [ncha-long the largest reaplent of fwd a d - thmreucal analysis gves no proof that food a d . i f oroperiy handled. has senous dmxennve effects on food prcductlon. hdia illustrates the effecuvenw of food for work programs. In 1976 CARE Introduced FFW projects there These mostly involved sod consewanon. flood pmtectlon. imgauon and school consUucoon. Inlually 235.000 reclplencs m hundreds of projects consumed 71.000 tons of PL 4 8 l wheat. Thls program conunued througfl year 1977 had 1.180.1979 and n ~ t pealc s 000 recipients In food for work ZUvltles that resulted m the dmnbuuon of 297.000 tons of wheat CARE was able to end its pamclpatlon when Wo very successful crop years made I[ posnble for the Gov. rmment ot M a to talre over the program wch its own reuxlrces. CARE'S food for work p r o g n m have now been made a regular part of the SIX* Five-Year Plan. It ISexpected to generace 300 mllllon to 400 million mandays of work m u a l l y Mr. Bovard w d that L9e U S. Agency for Incernanonal Development in Hun 'has never attempted to determfflethe impact sf PL 484 fcod on reclplents nutnaonal status. 4ctually such 3 study is being conducred by Joel Cotton for 41D and [he !Int phase has Seen completed. Contrary to Mr Bovard s aS2RlOn. a study by Prof. Fredencb Bates of the Lrnlvenlty of Ceorgla showed that there was. indeed. a food shonage associated wth the earthquake In Guatemala in 1976 Also, nstead ot gram pnces dropping at the ume. as Mr. Bovard c!umed. pnces mcreased. The Bates nudy was far more comprehensive and rigorous than the impresslonlnlc Jackson piece cmd later in the anlcle by Mr Bovard. U s . far from havlng food dumped an it. Indla today ?urchases food when needed In the lnrernauonal commercial marker and is increasingly supplymg ~ t s maternal chlld health p m p m and m ~ d day meal prngnm from its own resources The government IS scheduled to take over t h ~ sprogram completely wthin 10 j e a n PYILIPJOHYSIDN Executive Director CARE Public Law 481I embodies humanltanan. ~eveiopment..ixpon p m o u o n . md for. elgn p l ~ c yobjecrives. These objecuves have been and are betng met. Under Title I. contram to Mr. Bovard's 1 2 0 4 years1 credlt at :oncesslonal inter esr rates lZmc to i % I to facilitate purcnases of U S. agncuitural output at market i pnces by fnendly developmg countnes I The food IS sold locally, wth che ?meeds used to fund economlc development Smce Tltle I generates local ioften non.conven lble, cumncles. it is &incult to see how. wthout ta)ung the nouon of hinglbillty to absurd 1engUI.s. .Mr Bovard imaqvles these monies being used by governments ro buy am. .As to food prcducuon dumcenuves. the law reqtures the k r e r a r y of Agnculnire ' to detemune that dlstnbunon WInot II re I sult m a nrbstanu.al d m c e n u v e ro or aterference wth domesnc p d u c d o n or markemg. ' RUe I -menu conwn a sen= ot "seIf4elp measures. ' :alored to the sltuanon of the reclplent coun:ry, which sped out speclnc acuons :o w W e n to foster economic developmenr These measures are not always easy or punleu: [hey often encourage pnce decontrol, market reliance. added atrentlon and resources to the pnvate agriculture sector, and elunlnation of consumer suosl dles. I Title I is highly pnzed by 'ood-debut developing countnes that lack :he forelgn exchange to meet food needs through nor mal commerclal impons. The food deficlt mlght be chronic and self.rellance might I be a generation away, even wth the 1 proper help. In other cases. a normally sell.reilant country may need short term I help to deal wth a natural or man-made I dwter I Title 11 donates 'ood to the world's 1 needlest. Even here. L9ouqfl. every effort IS made to maxunlre rhe contnbut~onto development of rh~s humamtanan pro , j , , m. Title 111 is slmllar to Title I. except mat it calls for sdded pllcy reform x otner developmental proqess in exchanqe for a multl.year food aid commltmenc and tor gveness of the food.3id debt. Since the en. acment of Tltle LII. however. Tltie L's ~ o nomic development :onaltlons were rouyn. ened. and tne difference Setween :he Aeveiopmenral mpact of :he two Titles has lessened markedly. Mr. Bovard suggests that US. !m a d has hampered agricultural pmducrlon overseas, and char somehow, wthout a ~ d .countnes would Se motivated to pro duce more domesrlcally. The fact ISLQat 3 real hunger pmbiem exisis in the wor!d today. whlch even .Mr. Bovard camot wsn away. Food aid has not prevenred :2e dra. rnarlc Increase in food ?rcducuon in the 3eveloplng world over !he past few dec. ~ d e s . Popuiauon. mionunate!y. has Increased even faster Deve!oplnq countres Impon needs commercial purchases oiuj food aid1 total lbout 35 million :ons ?er year. The U S. sells 3bour ia mllllon ion. to the deveioplng world. u d pmndes someunat over flve m~lllontons In fccd am. :; 1s hard to a r w rhar r5e five m~lllontons 1s a sign~f~cant dislncenrive :o domesnc ?rod. wtlon. ~ W I SLAMB Deputy .-stan[ jccr-rj Trade and Commercial . a f f a ~ State Department Washinglon - September 5 , 1984 World Hunger: S e l e c t e d Ref e r e n c a s T h e m p u b l i c a t i o n 8 may be a v a i l a b l e from a n e a r b y p u b l i c o r r e s e a r c h l i b r a r y . 1. B r o m , b s t e r R. P u t t i n g food on t h e w o r l d ' s t a b l e . E n v i r o n m e n t , v. 26, 'May 1984: 15-20, 38-44. S i n c e 1973, a n n u a l g r o w t h o f f o o d o u t p u t h a s b e e n l e s s t h a n 2 p e r c e n t , and "more c o u n t r i e s t h a n e v e r f a c e t h e ' p o s s i b i l i t y of f a a f n e i n e a r l y 1984." D i s c u s a c s t h e food c r i s i s o f t h e 1 9 8 0 ' s a s a r e s o u r c e d e p l e t i o n , p o p u l a t i o n , and s o c i o e c o n o m i c problem 2. The C a u s e s o f m r l d h u n g e r . E d i t e d by W i l l i a m Byron. ?lev York, P a u l i a t P r e s s , 1982. 256 p. T o p i c s i n c l u d e food r e s e r v e s , U.S. f o o d a i d , and possib1.e s o l u t i o n e . 3. C h r i a t e n a e n , C h e r y l , A r t h u r Dommen, and P e t e r R i l e y . A s s e s s i n g A f r i c a ' s food policies. A f r i c a r e p o r t , v . 29, July-Aug. 1984: 57-61. ~ i s c u a s e show d o m e s t i c p r i c i n g p o l i c i e s and f i s c a l p o l i c i e s may c o n t r i b u t e t o m a l n u t r i t i o n and h u n g e r . 4. Cohen, Marc J. US f o o d a i d t o S o u t h e a s t Asia, 1975-83. Food p o l i c y , v . 9 , May 1984: 139-155A u t h o r f i n d s t h a t " a p o l i t i c a l b i a s h a s c h a r a c t e r i z e d food a i d t o H u m a n i t a r i a n and South-east A s i a , c u t t i n g a c r o s s a d m i n i s t r a t i o n s . d e v e l o p m e n t a l g o a l s p l a y e d t h e weakest r o l e i n s h a p i n g programmes. &en c o n f l i c t o c c u r r e d , f o r e i g n p o l i c y a i m s o v e r r o d e b u d g e t a r y and commodity objectives." ... 5. F a l c o n , V a l t e r P. Recent food p o l i c y l e s s o n s from d e v e l o p i n g c o u n t r i e s [ v i t h d i s c u s s i o n by R o b e r t W. B e r d t ] American j o u r n a l of a g r i c u l t u r a l economics, V . 66, May 1984: 180-187. F a l c o n o b s e r v e s t h a t hunger i s n o t a food p r o d u c t i o n problem, n o r w i l l u n d e r n u t r i t i o n be s o l v e d by n u t r i t i o n e d u c a t i o n o r food f o r t i f i c a t i o n . Hunger " i a a food p o l i c y i a a u e set s q u a r e l y i n t h e c o n t e x t of m a r k e t s , e c o a o d c g r o w t h , and p o v e r t y a l l e v i a t i o n . " Herdt r e s p o n d s t h a t world food p r o b l e n e a r e c a u s e d by d i f f e r i n g p e r s p e c t i v e s of d e v e l o p i n g and d e v e l o p e d c o u n t r i e s , and by s h o r t s i g h t e d n e s s . 6 . F a u r i o l , Georges. The Food and A g r i c u l t u r e Organization: a f l a w e d s t r a t e g y l a t h e war a g a i n s t h u n g e r . ~ a s h i n ~ t o nH,e r i t a g e F o u n d a t i o n , L984. 4 5 p . Contents.--The U.S. and FA0.--The FAO: i t s h i s t o r y and s t r u c t u r e . - FA0 program a c t i v i t i e s . - - F A O : i m p a c t on t h e w r l d food s i t u a t i o n . - - F A 0 p o l i c y and p h i l o s o p h y : r o a d b l o c k t o development.--The c h o i c e b e f o r e u s : confrontation o r cooperation. 7. and nutrition bulletin. v. l+ 1978+ Tokyo, United Nations University. quarterly. Publishes policy analyses, state-of-the-art summaries, and original sciedtific articles reflecting a multidisciplinary approach to world hunger and malnutrition. Many of the articles are fairly technical discussions of nutrition needs, technologies, standards, and behavior. 8. Food policy. v. 1+ 1976+ Guildford, Surrey, England, Butterworth Scientific. quarterly* This international journal presents articles and opinion on the economics, planning, and politics of food, agriculture, and nutrition. Hunger, food aid, and food security are recurring topics. Population, climate and future food supply. Ambio, v. 13, 9. Harrison, Paul. no. 3, 1984: 161-167. Analyzes the vorld's projected food resources in the next century. Although food supplies are expected to keep up with population grovth, developing countries face food deficits unless they increase the level of investsent in agriculture. Also discusses impacts of climatic change o n food production. 10. U n e s , Colin, and aarbara 3inham. Can agribusiness feed Africa? Ecologist, v. 14, no. 2, 1984: 61-46. "Numerous African countries have chosen and been encouraged to choose capital intensive, large-scale food production schemes as a way out of their food problems. But this has contributed to food scarcity." Concludes that a need for increasing foreign exchange will contribute to a continued emphasis on exportable cash crops instead of basic food crops. 11. Huddleston, Barbara. Estimating food aid needs: how much and to whom? Development digest, v. 21, July 1983: 122-134. "If food security needs are quantified by estimates of per capita calorie needs sinus the sum of current production plus planned imporcs, world food aid needs are about triple the volume of actual shipments. But food aid should not be provided unless disincentives to f a m e r s are avoided and new demand for food by the salnourished is treated." 12. Isenman, Paul J., and Y. W. Singer. Food aid: disincentive effects and their policy implicatioss. Economic development and cuFtural change, v 25, Jan. 1977: 205-237. Critiques arguments that food aid hurts developing countries. . 13. Johnson, D. Gale. The world food situation: developments during the 1979s and prospects for the 1980s. In U.S.-Japanese agricultural trade relations. Edited by Emery Y. Castle and Kenzo Benmi, with Salla A. Skillings. Washington, Resources for the Future, 1982. p . 15-57. Illustrating how the events of the last decade have borne out the conclusions of his 1975 book, World Food Problems and ?respects, the author analyzes food supply, demand, prices, and nainutri:ion in tne 1970s. Discussing factors which will rnfluence nunger i n the 1380s, johnson is cautiously optimistic; however, he warns against councerproductive policies. 14. Levis, C l i f f o r d W. Global food s e c u r i t y - - a manageable c h a l l e n g e . Development d i g e s t , v . 21, J u l y 1983: 106-121. "Over t h e l a s t d e c a d e , t r a d e i n g e n e r a l and d e v e l o p i n g c o u n t r y f m p o r t e of g r a i n i n p a r t i c u l a r h a v e r i s e n v e r y much f a s t e r t h a n i n any previous period." 15. Matzke, O t t o . Food aid--pros and c o n s . A u s s e n p o l i t i k , v . 35, n o . 1, 1984: 87-98. A n a l y z e s t h e d a n g e r s o f food a i d , i n c l u d i n g encouragement of r e c i p i e n t c o u n t r y governments i n p o s t p o n i n g d o m e s t i c m e a s u r e s , d i s p l a c e m e n t of f a m e r s i n r e c i p i e n t c o u n t r i e s , and changed e a t i n g h a b i t s . i % r e o v e r , " t h e use of farm s u r p l u s e s i n t h e form of food a i d must n o t h a v e i t s prime j u s t i f i c a t i o n a s a measure t o p r o v i d e r e l i e f f o r s u r p l u s s a r k e t s . " Eaphasizes the need f o r p o l i c y d i a l o g u e w i t h d e v e l o p i n g c o u n t r i e s . 16. H e l l o r , J o h n 'rim, and R i c h a r d H. .Adam, J r . Feeding the u n d e r d e v e l o p e d w o r l d . Chemical & e n g i n e e r i n g news, v . 6 2 , Apt. 2 3 , 1984: 32-39. D e s c r i b e s t h e need f o r t e c h n i c a l and c h e m i c a l improvements i n d e v e l o p i n g c o u n t r i e s ' a g r i c u l t u r e , where p o p u l a t i o n growth r a t e s c u r r e n t l y s u r p a s s a g r i c u l t u r a l ? r o d u c t i v i t y growth r a t e s . F e r t i l i z e r s , i r r i g a t i o n , and p e s t i cides a r e discussed. 1 7 . Murphy, E l a i n e H. Food and p o p u l a t i o n : a g l o b a l c o n c e r n . Washington, Popuiat i o n R e f e r e n c e Bureau, 1984. 1 3 , 4 p. A s p e c i a l i n s e r t f o r S o c i a l E d u c a t i o n , v . 4 8 , Yay 1984. D i s c u s s e s t r e n d s and p r e s e n t s s t a t i s t i c s o n world p o p u l a t i o n g r o w t h , food o u t p u t , a g r i c u l t u r a l Labor and p r o d u c t i v i t y , c a l o r i e c o n s u m p t i o n , and l a n d r e s o u r c e s . I n c l u d e s b i b l i o g r a p h y and a c e a c h i n g g u i d e . 18. P.L. 480: food f o r p e a c e program a a r k s i t s t h i r t i e t h a n n i v e r s a r y . F o r e i g n a g r i c u l t u r e , V. 22, J u l y 1984: 14-17. P r e s e n t s b a s i c f a c t s on ?.L. 480: i t s e v o ? u t F o n , program d e s c r i p t i o n s of t h e t i t l e s , v a l u e of e x p o r t s h a r e s by S t a t e s , and s a l e s p r o c e d u r e s . i n c l u d e s s t a t i s t i c s f o r 1983 and 1984. 19. The Role of s a r k e t s i n t h e world food econoay. E d i t e d b y 3. Gale Johnson and G. Edward Schuh. 3 o u l d e r , C o l o . , Westview P r e s s , 1983. 326 p . P a r t i a l contents.--World h u n g e r : e x t e n t , c a u s e s , and c u r e s , by L. Poleman.--Hunger: d e f i n i n g i c , estimating its z l o b a l i n c i d e n c e , and a l l e v i a t i n g i t , by T. S r i n i v a s a n . -L1 20. S c a n d i z z o , P. L., and I. Tsakok. Food p r i c i n g p o l i c r ? s i 2 d e v e l o p i n g countries. Development d i g e s t , v . 2 1 , J u l y 1983: 22-32. "Several important Asian c o u n t r i e s o p e r a t e r 2 l a t i v e L y l a r g e sca12 e f f o r t s t o s u p p l y c h e a p food t o the poor--in n o s t c a s e s u r b a n . The : 2 s t s and b e n e f i t s and s p e c i a l ? r o b l e a s t h i s e n t a i l s a r ? a n a l y z e d . " 21. U-S. C o n g r e s s . House. Committee on A g r i c u l t u r e . Review t h e v o r l d hunger problem ( S e c r e t a r y J o h n R. a l a c k ) . H e a r i n g , 9 8 t h C o n g r e s s , !st i e s s i ~ z . Oct. 25, 1983. ' d a s h i n g t o n , G.P.O., 1981. 2 5 5 2. " S e r i a l no. 98-38" U.S. C o n g r e s s . House. Committee o n F o r e i g n A f f a i r s . , The w o r l d f o o d situation. H e a r i n g s , 9 8 t h C o n g r e s s , 1st s e s s i o n . J u l y 26 and 2 7 , 1983. Washi n g t o n , G.P.O., 1983. 318 p . U.S. Congress. S e n a t e . Committee o n F o r e i g n R e l a t i o n s . Subcommittee o n African Affairs. Hunger i n A f r i c a . H e a r i n g , 9 8 t h C o n g r e s s , 2nd s e s s i o n . 1984. 113 p. (Yearing, Senate, 98th Mar. 1, 1984. W a s h i n g t o n , G.P.O., C o n g r e s s , 2nd s e s s i o n , S. Hrg. 98-735) S c i e n c e , v . 224, .?fay 4 , Walsh, J o h n . S a h e l w i l l s u f f e r e v e n i f r a i n s come. 1984: 467-471. "With p o t e n t i a l p o p u l a t i o n e x p l o s i o n , no G r e e n R e v o l u t i o n , d r o u g h t i s o n l y p a r t o f t h e problem c o n f r o n t i n g t h e r e g i o n . " Discusses the f a i l u r e of development o r g a n i z a t i o n s t o t r u l y a i d t h e e i g h t S a h e l i a n c o u n t r i e s . Sidebar a r t i c l e reviews d e s e r t i f i c a t i o n i n the region. Williams, ?faurice J. Toward a food s t r a t e g y f o r A f r i c a . Africa report, v. 28, S e p t . - k t . L983: 22-26. P e r c a p i t a food p r o d u c t i o n i n A f r i c a h a s d r o p p e d s h a r p l y i n r e c e n t y e a r s , and A f r i c a i s now t h e w o r l d ' s p r i n c i p a l r e c i p i e n t o f food a i d . A r t i c l e a n a l y z e s food p o l i c i e s i n Mali, Zambia, and o t h e r n a t i o n s . Wilson, Adam. Bow s t a r v a t i o n i s f u e l l e d i n t h e c o r r i d o r s o f power. A f r i c a n b u s i n e s s , no. 68, Apr. 1984: 9-13. E x p l o r e s p o l i t i c a l a s p e c t s o f h u n g e r i n Zimbabwe, E t h i o p i a , and FAO. World food a i d n e e d s and a v a i l a b i l i t i e s , 1984. Washington, U . S . Dept. o f A g r i c u l t u r e , Economic R e s e a r c h S e r v i c e , 1984. 178 p . T h i s n i n t h a n n u a l r e p o r t a s s e s s e s 1984/85 and 1 9 8 5 / 8 6 food i m p o r t and food a i d r e q u i r e m e n t s f o r 6 7 f o o d a i d r e c i p i e n t c o u n t r i e s . Two food a i d a s s e s s m e n t s a r e made: a s t a t u s quo e s t i m a t e which a p p r o x i m a t e s a c t u a l r e c e n t i m p o r t s and a n u t r i t i o n - b a s e d a s s e s s m e n t v h i c h a d d r e s s e s t h e problem o f u n d e r n u t r i t i o n i n t h e d e v e l o p i n g c o u n t r i e s . The World food situation and p r o s p e c t s t o 1985. W a s h i 3 g t o n , U.S. D e p t . o f A g r i c u l t u r e , Economic R e s e a r c h S e r v i c e , 1974. 90 p. (Foreign agricult u r a l economic r e p o r t no. 9 8 ) "The s t u d y i s d e s i g n e d t o p r o v i d e a c o m p r e h e n s i v e a n a l y s i s o f t h e f a c t o r s which i n f l u e n c e d food p r o d u c t i o n , c o n s u m p t i o n , and t r a d e i n t h e two d e c a d e s p r i o r t o 1972, t h e c a u s e s f o r t h e t u r b u l e n t d e v e l o p m e n t s o f 1972-74, and t h e main f a c t o r s v h i c h w i l l s h a p e d e v e l o p m e n t s i n t h e n e x t d e c a d e . " R e p o r t s b r i e f l y o n t h e 1974 i l o r l d Food C o n f e r e n c e and summarizes its resolutions. Yeaney, T i a o t h y . E x p o r t i n g s u r p l u s e s : a t h r e a t t o food s e c u r i t y ? X a s h i 2 q t o n , Bread f o r t h e World, 1984. 4 p. (Background p a p e r no. 74) Argues t h a t " a g r i c u l t u r a l p o l i c i e s b a s e d on a g g r e s s i v e p r o m o t i o n and s u b s i d i e s f o r e x p o r t s a g g r a v a t e r a t h e r t h a n a l l e v i a t e problems f a c i n g hungry p e o p l e and U.S. a g r i c u l t u r e . " Rebecca X a z u r , B i b l i o g r a p h e r Environment and N a t u r a l R e s o u r c e s ~ : 3 r a r y S e r v ~ c e sJ i v ~ s i a n