THIRD WORLD HUNGER STUDY- PART 2 (NON-EMERGENCY, CHRONIC FOOD DEFICIT PROBLEMS)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90B01013R000400030002-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 35
• Document Creation Date: December 27, 2016
• Document Release Date: January 30, 2013
• Sequence Number: 2
• Publication Date: December 20, 1984
• Content Type: REPORT

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Third World Hunger Study
Part II
(Non-Emergency, Chronic Food Deficit Problems)
Chairman: Ambassador Robert B. Keating
Date: December 20, 1984
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?
Third World Hunger Study, Part II
A. Actual Food Aid Decision-Making Process
1. Actual Decision-Making Process for PL 480
Title I .Programs
2. Areas of Inter-Agency Conflict
3. Actual Allocation Criteria for Inter-Agency
Decision-Making Process
4. Multi-Attribute Utility Theory
5. Inter-Agency Food Aid Decision-Making
B. A New Food Aid Initiative
1. US Food Export Policy Dilemma
2. The Changing Economic Circumstances of Third
World Countries
3. "Food for Progress" to Back Up Agricultural
Policy Reform in Key Third World Countries
4. Reasons for "Food for Progress" Initiative
5. Size and Cost of "Food for Progress" Initiative
6. "Food for Progress" to Back Up Agricultural
Policy Reform
7. USG-Owned Grain Stocks
8. Sub-Saharan Africa Food Import Needs
9. Sub-Saharan Africa Long-Term Decline in Per
Capita Grist A
ast.i Su...101.01
10. "Food for Progress" Decision Analysis for Selection
of Recipiant Countries (Illustrative)
11. The Leveraging of Agricultural Policy Reform
12. Selection of "Food for Progress" Policy Targets
13. Implementation of "Food for Progress" Overtime
14. USG Bi-Lateral Assistance Programs
15. An Integrated Food Aid Program for Sub-Saharan Africa
16. Why Should We Use USG-Owned Food Stocks?
17. Why Would Reprogramming of Existing PL 480
Instrumentalities Fail to Accomplish the "Food for
Progress" Objective?Agricultural Policy Reform?
18. Program Characteristics Needed to Promote Agricultural
Policy Reform in Sub-Saharan Africa
19. Why Would the "Food for Progress" Initiative Based
on the Use of Surplus Commodities Owned by the
Commodity Credit Authority (CCC?Section 416)
Succeed Better Than Existing Food Aid Programs
in Achieving Agricultural Policy Reform?
20. US Domestic Political Acceptability of the "Food for
Progress" Initiative
1-25 1-85
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Actual Allocation Criteria for Inter-Agency
Decision Making Process
USDA
? Develops markets for US commercial exports of food.
? Disposes of surplus agricultural produce.
State
? Avoids trade frictions.
? Protects strategic balance and political objectives worldwide.
Treasury
? Maintains stability of international financial system.
OMB
? Limits USG spending.
AID
? Promotes effective economic development using local
currency proceeds.
? Responds to real food shortfalls.
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KEAT01.022 STAFF 2/0 ? ? ?
Actual Decision-Making Process for PL 480 Title I Programs
AID Desks
AID
Regional
Bureaus
Lines indicate degree of interaction between USG agencies during decision-making process.
Primary Secondary Occasional
AID/ FFP
Decision
State/ OFP
4:1
AF
EAP
1
1_
NEA
ARA
State Desks
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Country Team Recommendation
Treasury (Veto Power)
OMB (Veto Power)
USDA/ EC
Asia/ Near East LA AF/ EUR
(EC) (EC) (EC)
110
Commodity Interests
Agricultural Attaches
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Areas of Inter-Agency Conflict
? Diagram three key agencies and six recurring areas of
substantive conflict.
? Red line indicates inter-agency areas of conflict.
? Yellow line highlights crucially important role of third agency
in reconciling conflicts between other two agencies.
? OMB and Treasury can exercise veto power, but are not generally
involved in formulating specific aspects of PL 480 programs.
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KEAT01.028 STAFF 2/0 n
Areas of Inter-Agency Conflict
AID/FFP
Politically II
Costly /.
Self-Help
Measures p
0
UMR
Level
STATE/EB
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Self-Help Measures
Designed to Supplant
Agricultural Imports
CpmpositiOn
'411406.?.
UMR
(Tied to U.S. Market)
USDA/EC
Balance of Payments
Support (Food Aid
Reduces Need for
Commercial Imports)
Agency at origin of arrow takes role
of disinterested intermediary in
resolving dispute
Indicates fundamental conflict of
interest between two agencies
UMR - Usual Marketing Requirement (Commercial import levels)
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Actual Allocation Criteria for
Inter-Agency Decision-Making Process
USDA?Promote U.S. Agricultural Exports and Support Domestic Farm Income
STATE?Support Allies and Avoid Trade Friction
AID?Promote Economic Development in Recipient Countries
TREASURY ?Protect Stability of International Financial System and Evaluate Credit
Worthiness of Sovereign Borrowers
OMB ? Limit Size of Budget and Restrict Ongoing Programs
Dispose of Surplus
Commodities
4
Strategic Importance of
Recipient Country
7
No Disincentive
to Local Agriculture
10
Willingness to Repay
Previous PL 480 Loans
Protect Commerical
Food Exports
5
Willingness to Undertake
Market-Oriented
Policies
8
Willingness to Accept
UMRs
11
Willingness to Undertake
Economic Adjustment
Measures
3
Increase Future Food
Exports
6
Balance of Payments
Support
9
Humanitarian Need to
Cover Food Shortfall
12
Potential for Absorbing
More and More PL 480
Overtime
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Multi-Attribute Utility Theory
for Inter-Agency Food Aid Decision-Making
Purposes:
1.) Assessing the achievement of the overall objectives of PL 480
legislation: market development, foreign policy support,
economic development, and minimum cost to USG.
2.) Evaluating the allocation criteria actually used in the inter-agency
decision-making process (the attached matrix assigns a number
from -10 to +10 as a means of measuring each criterion's
importance in achieving a specific food aid objective.)
3.) Ranking allocation criteria as a function of relative weighting
of food aid objectives.
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Inter-Agency Food Aid Decision Making
PL480 Objectives
Actual
Allocation
Criteria
1 II III IV
Market Minimum Foreign Economic
Development Cost Policy Development
to U.S.G Leverage
Outcome
(Depends on Relative Weights)
Even
56
H
1=70%
25.4
11=70%
19.4
111=70%
5.6
1V=70%
5.6
1 Willingness to Accept
Abundant Commodities
-USDA
,
Rank
%
Rank
%
Rank
%
Rank
%
9
33
7
23
0
0
0
0
2 Non-Displacement of
U.S. Food Export
-USDA
10
37
1
3
0
0
0
0
40
26.2
5.8
4.0
4.0
3 Potential Commercial
Market
-USDA
10
37
2
6
0
0
0
0
43
26.5
H
7.9
3.7
4.3
4 Strategic Importance
-STATE
0
o
o
o
10
20
0
0
20
2
2
14
2
5 Pro-Private Sector
Economic Policies
-AID
6
18
0
0
5
10
10
22
50
15.8
5
11
18.2
H
6 Balance of Payments
Support
-STATE
0
0
0
0
9
18
8
17
35
3.5
3.5
14.3
13.7
7 No Disincentive
to Local Agriculture
-AID
-8
-29
_
0
0
6
12
10
22
5
-16.9
L
.5
L
7.7
13.7
8 Willingness to Accept
U.M.R.S.
-STATE
5
18
0
0
10
20
.
0
0
38
14.6
3.8
15.8
H
3.8
9 Unanticipated Food Shortfall
-AID
0
0
0
0
5
10
6
13
23
2.3
2.3
8.3
10.1
10 Willingness to Repay
PL480 Loans
-TREASURY
3
11
9
30
0
0
3
6
47
11.3
22.7
H
4.7
8.3
11 Economic Adjustment
Measures
-TREASURY
3
11
1
3
3
6
8
17
37
10.3
5.5
7.3
13.9
12 Low Potential to Absorb
Additional Resources
-OMB
-10
-37
10
33
0
0
0
0
-4
L
-15.9
19.4
-.4
-.4
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US Food Export Policy Dilemma
Many Third World countries with potential growth prospects are unable
to pay cash for US food.
Apply additional resources to help
develop and expand the markets
of key Third World countries, and
over time have them become
credit-worthy commercial clients.
A
Intensify efforts to take
away commercial markets from
other food exporting countries.
PL 480
1-1-7
GIV1 "Food for Progress"
Titles I II III
102
5
301
(Dollar amount only
(3 year credit
(3 year direct
(3-10 year
slightly above 1972 level)
guarantee)
credit)
intermediate
($5 billion)
($150 million)
direct credit - $0)
Many recipient countries cannot repay
credits in three years.
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Key Question: Would not changes in our agricultural export credit
programs help expand the economies of key Third World countries and
bring a return to the US economy?
Key Considerations:
1.) The pros and cons of providing intermediate credit (say 7-10 years)
to help key Third World countries with their food needs during
a period of debt crisis.
2.) The pros and cons of new legislation permitting a GSM intermediate
guarantee program.
3.) The pros and cons of providing funding for the currently authorized
direct intermediate GSM 301 credit program (or should it be
scrapped?).
4.) The pros and cons of providing easier terms for PL 480
Titles I and Ill (including local currency repayment, less
complicated regulations and requirements).
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Key Question: Would not changes in our agricultural export credit
programs help expand the economies of key Third World countries and
bring a return to the US economy?
Key Considerations: (Continued)
5.) The pros and cons of turning Title I into a multi-year program and
scrapping Title Ill.
6.) The pros and cons of providing a higher level of overall PL 480
food aid.
7.) The pros and cons of the present level of Title ll non-emergency
regular programming (1.2 million mt/yr -- too high, too low,
just right?).
8.) What is the appropriate mix of present and proposed programs
in our "food for progress" strategy?
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The Changing Economic Circumstances
of Third World Countries
Geo-Political Context (National Security Implications)
? Socialist economic model failing to generate growth for
Third World countries.
? Third World countries beginning to experiment with more
market-oriented approaches.
? US should target assistance to underwrite economic reform
efforts during transition period austerity.
? Soviets unable to offer much in the way of economic assistance.
? Demonstrated success of economic reform measures can shift
US-Soviet balance of influence in the Third World.
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"Food for Progress" to back up agricultural policy reform
in key Third World countries
Goal: To use American food resources more effectively in
support of Third World countries which have made commitments
to policy changes in four critical areas:
? Agricultural price policy
? Marketing reform and liberalization
? Input supply and distribution policy
? Private sector involvement
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"Food for Progress" to back up agricultural policy reform
in key Third World countries
? The sole objective of the "Food for Progress" initiative would be
to support the IMPLEMENTATION of policy changes over a medium-
term transition period in Third World countries of strategic value
and trade potential, initially in Sub-Saharan Africa.
? Unlike present food aid programs with comprehensive and
multiple objectives, this initiative would:
-- Connect food aid with strategies to achieve structural reforms
in food pricing and marketing;
-- Involve co-financing with the World Bank and other
financing institutions;
-- Make use of government-owned food stocks (accounting
model -- President Reagan's Section 416 of the
Agricultural Adjustment Act).
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Reasons for "Food for Progress" Initiative
? In Sub-Saharan Africa, food import needs are increasing by
at least 700,000 mt per year.
? Use of 500,000 mt/yr of USG-owned food surpluses (17.5 million mt)
would increase non-emergency US food aid by 50 percent
to 1.5 million mt/yr.
? Today's emergency food crises highlight the need to tackle
the underlying structural problems of agricultural stagnation.
? US food abundance can reduce the political risks to leaders of
key Third World countries undertaking agricultural reform
measures during a transition period of economic hardship.
? The intention of this initiative is to provide incentives for
improved food production policies.
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Size and Cost of "Food for Progress" Initiative
Duration: 4 years.
Size: 500,000 mt/year of wheat, corn and rice in addition to regular
PL 480 commodities.
Value: $90 million/year (sunk investment -- already paid for by CCC).
Accounting: The use of surplus commodities owned by the Commodity
Credit Authority (CCC) through the authority of Section 416.
Since the new initiative would use food resources already
paid for by the USG, the net cost would be transport
(est. $40 million), minus savings in storage (est. $6 million).
Recipient
Countries: Initially, 6-8 Sub-Saharan African countries.
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"Food for Progress" to Back-Up Agricultural
Policy Reform
1.) Price policy reform to provide incentives to farmers to produce
food on a regular basis for the market.
-- Adequate price levels for agricultural commodities.
-- Timely payment to farmers for their commodities.
2.) Other policy reform to help create an efficient internal market
for increased agricultural productivity.
-- Greater farmer access to private, competitive markets.
-- Market-determined exchange rate.
-- Adequate foreign exchange for imported inputs along with their
efficient and timely delivery (fertilizer, pesticide, credit).
-- Adequate rural infrastructure (farm-to-market roads,
collection stations, storage).
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USG-Owned Grain Stocks
(Source: USDA)
Total: 17.5 MILLION MI ($2.6 Billion)
Wheat 8.8 Million MT (Including the International
Emergency Food Reserve of 4.0 Million MD
Corn 5.1 million MT
Rice 0.9 million MT
Sorghum 2.3 million MT
Other Grains .4 million MT
Sub-Sahara African Food Import Needs
A) USDA projects a food shortfall of at least 3.7 million MT
in FY 1985
B) PL 480 Titles I & II will provide 1.2 million in FY 1985
C) The "Food for Progress" initiative would provide an
additional 500,000 MT/YR for four years
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PL 480 Title I
780,000 MT
PL 480 Title ll
435,000 MT
"Food for Progress"
500,000 MT
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Sub-Saharan Africa
Long-Term Decline in Per Capita Grain Production
and Consumption
For the Last Two Decades, 50
Sub-Saharan Countries have Faced: 45
40
? Declining Per Capita Production (20%) 35
? Declining Per Capita Consumption (7%) 30
25
? Increasing Reliance on International 20
Food Aid Programs 15
? Falling Export Earnings 10
? High Population Growth 5
0
-5
-10
-15
-20
KEATO 1.029 STAFF 2/0
Real Population Growth
Production
(Per Capita)
Consumption
(Per Capita)
-25 ?
1970
1983
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Potential
Recipients
Angola
Benin
Burkina-Fasso
Chad
Ethiopia
Ghana
Kenya
Lesotho
Liberia
Madagascar
Mali
Mauritania
Mozambique
Niger
Senegal
Sierra Leone
Somalia
Sudan
Tanzania
Zaire
Zambia
"Food for Progress"
Decision Analysis for Selection of
Recipient Countries (Illustrative)
Strategic
(FY86 ESF)
Co-Financing
Impact
(Existing W.B.
Agr. Programs)
Food Aid Needs
(USDA
Projection)
Trade Potential
(Population)
Country Ranking
Weights
.40
.20
.20
.20
Index
%
MAUT
Value
Index
%
MAUT
Value
Index
%
MAUT
Value
Index
%
MAUT
Value
MAUT
Value Total
0
0
0
0
0
0
3
3
0.6
7
7
1.4
2.0
Resource
ResponseIndex
(Proposed)
I
0
0
0
3
5
1.0
3
3
0.6
2
2
0.4
2.0
0
0
0
0
0
0
3
3
0.6
5
5
1.0
3.6
4
6
2.4
0
0
0
2
2
0.4
2
4
0.8
3.6
0
0
0
8
13
2.6
10
9
1.8
10
10
2.0
6.4
0
0
0
7
11
2.2
8
7
1.4
7
7
1.4
5.0
8
12
4.8
0
0
0
8
7
1.4
8
8
1.6
7.8
0
0
0
0
0
0
5
4
0.8
0
0
0
0.8
8
12
4.8
4
6
1.2
1
1
0.2
1
1
0.2
6.4
3
5
2.0
6
10
2.0
8
7
1.4
6
6
1.2
6.6
0
0
0
0
0
0
5
4
1.0
5
5
1.0
2.0
0
0
0
0
0
0
5
4
1.0
0
0
0
1.0
5
8
3.2
0
0
0
8
7
1.4
7
7
1.4
6.0
4
6
2.4
0
0
0
5
4
1.0
3
3
0.6
4.0
5
8
3.2
5
8
1.6
8
7
1.4
5
5
1.0
7.2
0
0
0
7
11
2.2
2
2
0.4
1
1
0.2
2.8
7
11
4.4
5
8
1.6
8
7
1.4
2
2
0.4
7.8
10
15
6.0
10
16
3.2
8
7
1.4
8
8
1.6
12.2
0
0
0
0
0
0
9
8
1.6
8
8
1.6
3.2
5
8
3.2
0
0
0
4
3
0.6
10
10
2.0
5.8
6
9
3.6
7
11
2.2
2
2
0.4
5
5
1.0
7.2
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The Leveraging of Agricultural Policy Reform Through
"FOOD FOR PROGRESS"
The amount of "leverage" will be influenced by:
1.) The ratio of: "Food for Progress" additional food assurance
A country's total food needs
2.) The potential recipient country's performance in implementing
? agreed-upon policy reforms (World Bank/IMF conditionality).
3.) The potential recipient country's agreement to:
-- More fully implement needed policy measures if provided
with multi-year additional food assurance, or
-- To change a disfunctional economic policy.
The analytical task is to:
1.) Back-up or select those policies within a country which would
yield the largest economic return for the additional food
assurance of the "Food for Progress" program, and
2.) Then determine which countries would yield the largest potential
economic return through participation in the "Food for Progress"
program. KEATO1 015 STAFF 2/0
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KEAT01 027 STAEEM
ELLolsumption El Production
Selection of "Food for Progress" Policy Targets
Food
Production
Response
/ Select Policy "B"
/ as Leverage
Target
------rocy A
Amount of Policy Change
Through "Food for Progress" ????????11w-
KEAT01.027 STAFF 2/0
PI_ 480
Title I
Policies for Leverage
o Farmer Prices
0 Exchange Rates
o Food Subsidy Levels to Consumers
o Involvement of Private Enterprise
in Marketing System
0 Fertilizer Import Regulations
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KEAT01.025 STAFF 2/0
?
Recipient Country Production and Consumption of Staple Food Items
Implementation of "Food for Progress" Over Time
Level of
Food
Production
and
Consumption
ED Consumption
Production
PL 480 r--7 Other Donors'
Title I 1_1 Food Aid
Minimally Adequate Per Capita Food Consumption
"Food for Progress" as an
Inducement to Agricultural
Policy Reform
"Food for Progress" as an
Assurance During
Transition Period Austerity
Commercial Food Imports
Ultimate Goal
Current Situation Year 1
Year 2
Year 3
Year 4
Subsequent Years
(Food for (Policy (Policy (Program Goals (A Country Becomes
Progress Begins) Implementation Enhancement Met) Commercially Viable
Phase) Phase) Food Importer)
Time -OP- KEAT01.025 STAFF 2/0
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USG Bi-Lateral Assistance Programs
PL 480 Title I: Food aid sold on highly concessional terms on a one-year
basis to support foreign policy, economic development, and market
development objectives.
PL 480 Title II: Food aid given away on a one-year basis to the
neediest people in a country regardless of their government's policies.
PL 480 Title Ill: Multi-year food aid in support of multi-sectoral
economic development objectives.
GSM 102 & GSM 5: CCC guarantees and loans to develop markets for
US agricultural commodities (repayment on a three-year basis).
KEAT01.011 STAFF 2/0
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USG Bi-Lateral Assistance Programs (Continued)
Economic Support Fund: Grants for multi-purpose budget and balance
of payments support commensurate with foreign policy objectives
(one-year allocation).
Development Assistance: Grants and concessional loans in support of
multi-sectoral economic development projects (one-year basis allocation).
Economic Policy Initiative: Cash grants in support of multi-sectoral
economic reform in Africa (one-year allocation).
"Food for Progress": The use of USG-owned food on a multi-year basis
in support of agricultural policy reform in key Third World countries.
KEAT01.012 STAFF 2/0
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S?Strong
M?Moderate
P?Partial
N?Negligible
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USG Bi-Lateral Assistance Programs
Programs
Program
Value
(Millions)
Structure
Terms
Duration
Program Objectives
Market
Development
Foreign
Policy
Humanitarian
Assistance
to Neediest
Multi-
Sector
Economic
Development
Reform
Agricultural
Pricing
Program
Domestic
Political
Support
Results
Effectiveness
in Meeting
Program
Objective
PL 480 Title I
$730.0
Concessional
Credit (15-40yrs)
1 Year
S
M
P
M
P
S
S
PL 480 Title II
(Section 206)
$800.0
$20.0
Grant
Grant
1 Year
3 Years
N
N
N
N
S
on
N
M
N
P
S
P
M
P
PL 480 Title Ill
$106.0
Conditional
Grant
3 Years
N
P
P
S
M
P
N
GSM-102
$5,000.0
Commercial
Interest (3 yrs)
1 Year
S
N
N
N
N
S
s
GSM-5
$120.0
No interest
(3 yrs)
1 Year
S
N
N
N
N
M
P
GSM-301
0
1 Year
S
N
N
N
N
P
N
Economic
Support
Fund
$3,438.1
Grant
1 Year
N
S
N
N
N
P
S
Economic
Policy
Initiative
$75.0
Grant
1 Year
N
M
N
S
M
P
Not Yet
Attempted
Development
Assistance
$2,266.1
Concessional
Credit and Grant
1 Year
N
M
P
S
P
P
M
Food for
Progress
$90.0
Conditional
Grant
4 Years
M
M
N
P
S
s
Not Yet
Attempted
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An Integrated Food Aid Program
for Sub-Saharan Africa
? "Food for Progress" and the Economic Policy Inititiative (EPI)
both provide additional resources for Sub-Saharan African
countries. "Food for Progress" should not displace PL 480
Titles I, II, Ill, or other donors' food aid.
? Decision analysis (MAUT) can help determine the proper mix
of "Food for Progress", EPI, PL 480, and other food aid
instrumentalities for a recipient country.
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An Integrated Food-Aid Program
for Sub-Saharan Africa (Illustrative)
Recipient
Countries
(by FY 85 ESF)
Other Donors
30 %
Index % MAUT
Title I
20%
Index % MAUT
Title II
5%
Index % MAUT
Food Self-
Sufficiency
45%
Index % MAUT
Country
Ranking
Appropriate
Program
Sudan
10
17
5.1
10
23
4.6
5
13
0.7
5
10
4.5
14.9
E.P.I.
Kenya
7
12
3.6
5
12
2.4
8
21
1.1
2
4
1.8
8.9
Food for Progress
Liberia
2
3
0.9
6
14
2.8
0
0
0
5
10
4.5
8.2
Food for Progress
Somalia
10
17
5.1
7
16
3.2
0
0
0
6
12
5.4
13.7
E.P.I
Zambia
6
10
3.0
5
12
2.4
0
0
0
4
8
3.6
9.0
E.P.I.
Zaire
2
3
0.9
6
14
2.8
5
13
0.7
1
2
0.9
5.3
Food for Progress
Zimbabwe
0
0
0
0
0
0
0
0
0
10
20
9.0
9.0
E.P.I
Sengal
10
17
5.1
4
9
1.8
10
26
1.3
6
12
5.4
13.6
E.P.I
Chad
5
9
2.7
0
0
0
5
13
0.7
3
6
2.7
6.1
Food for Progress
Botswana
3
5
1.5
0
0
0
0
0
0
9
18
8.1
9.6
E.P.I
Niger
1
2
0.6
0
0
0
0
0
0
4
8
3.0
4.2
Food for Progress
Djibouti
2
3
0.9
0
0
0
5
13
0.7
1
2
0.9
2.5
Food for Progress
Total Sub-Saharan
African
58
43
38
50
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Why Should We Use USG-Owned Food Stocks?
? Provides needed additional food resources without raising
appropriations.
? Reduces large USG-owned food stocks overhanging depressed
agricultural markets.
? Will not disrupt food aid levels of other PL 480 programs.
? Permits greater year-to-year scheduling flexibility without
the pressures of annual appropriations and commodity interests,
thereby increasing the "Food for Progress" program's effectiveness
for recipient countries and US leverage for policy reform
in the agricultural sector.
? For the same reasons, the use of USG-owned food stocks for
the "Food for Progress" initiative would lend itself to
co-financing arrangements with the World Bank and other
financing institutions.
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Why would reprogramming of existing PL 480 instrumentalities fail to
accomplish the "Food for Progress" objective -- agricultural policy reform?
? Planned PL 480 resources only cover essential State/Aid/USDA requirements
to meet A.) Title I/III multiple objectives, B.) Title ll non-emergency
statutory minimum food aid, and C.) the Title ll reserve for emergencies.
? Reprogramming PL 480 instrumentalities for "Food for Progress" would subject
the new initiative to unpredictability of funds and pressures from State/
Aid/USDA to add their multiple goals to the new initiative's single objective
of agricultural policy reform, and thus seriously undermine its single
objective.
? Reprogramming PL 480 instrumentalities for "Food for Progress" would
appear unimaginative and unimportant to the Hill.
? Reprogramming PL 480 instrumentalities for "Food for Progress" would
make it unattractive as a legislative proposal because of the
resulting loss of many of the unique characteristics of the new
Presidential initiative, plus the lack of clearly identified funding.
KEAT01.020 STAFF 2/0
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Programs
PL 480 Title I
PL 480 Title ll
PL 480 Title III
E.P.I. (E.S.F.)
Section 416
"Food for
Progress"
(Section 416
Expanded to
Target Reform
in Agriculture)
Declassified and Approved For Release 2013/01/30: CIA-RDP90B01013R000400030002-9
Program Characteristics Needed to Promote
Agricultural Policy Reform in Sub-Saharan Africa
VALUE
(Millions)
TERMS
Economic
Reform
Conditionality
Multi-year
Commitment
Uses USG
Owned
Food
Free from
Annual Use
or Lose" Ap-
propriation
Free from
Domestic
Commodity
Interest
Pressure
Free from
Competing
Agency Interests,
("BARNACLES")
Discretionary
Control Over
Delivery
(Lends Itself
to Co-Financing)
U.S.
Domestic
Political
Support
$730.0
Concessional
Credit
P
N
N
N
N
N
N
P
$800.0
Grant
N
N
N
N
N
P
N
S
$106.0
Conditional
Grant
P
S
N
N
N
N
N
N
$75.0
Grant
S
P
N
N
S
P
P
N
Sunk
Investment
(U.S.G.-Owned
Commodities)
Grant
N
N
S
S
S
S
N
P
Sunk
Investment
U.S.G.-Owned
Commodities
Valued at $90.0
million per year
Conditional
Grant
S
S
S
S
S
S
S
S
S?Strong
P?Partial
N?Negligible
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Declassified and Approved For Release 2013/01/30: CIA-RDP90B01013R000400030002-9
Why would the "Food for Progress" initiative, based on the use of
surplus commodities owned by the Commodity Credit Corporation
(CCC - Section 416), succeed better than existing food aid programs
in achieving agricultural policy reform?
? The "Food for Progress" initiative would be the only US food aid instrument
employing additional food resources specifically for the purpose of
leveraging price and policy reform in key Third World countries.
The major distinguishing characteristics of the new initiative
may be summarized as follows:
-- It would make clear President Reagan's intent to match temporary
USG-owned food stocks with the food needs of key Third World
countries during their transition periods to more market-oriented
agricultural systems (not a 30-year food aid program).
-- It would use food resources already paid for by the USG where
the net additional cost would be transport, minus savings in
storage.
KEAT01.018 STAFF 2/0
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Why would the "Food for Progress" initiative, based on the use of
surplus commodities owned by the Commodity Credit Corporation
(CCC - Section 416), succeed better than existing food aid programs
in achieving agricultural policy reform? (Continued)
It would permit multi-year food aid programming free from "use or lose"
appropriations, and the associated pressures from commodity
interest groups.
It would increase our discretionary ability to vary annual food deliveries
in accordance with the changing needs and performance of
recipient countries.
It would be an efficient, carefully targetted food aid instrument
free of the "barnacles" built into PL 480 by law and agency practices,
and characterized by conflicting interests and institutional perspectives.
It would enjoy broad congressional support as a new initiative
with greater promise of achieving agricultural policy reform in
key Third World countries than the usual food programs under PL 480.
KEAT01.019 STAFF 2/0
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Interested
parties
Farm BLOC
Private
Voluntary
Organizations
Congress
Executive
Branch
US Domestic Political Acceptability
of the "Food for Progress" Initiative
Essential Features
PL 480
Continues
Food Stockpile
Not Rebuilt
No Displacement
of Commercial
Food Exports
No Adverse
Budgetary
Impact
End Goal is Getting
KeyThird World Countries
Off Dole and Back into
International Commercial
Food Market
+
+
+
0
+
+
?
0
0
+
+
+
+
+
0
+
0
+
+
+
+ Support ? Oppose 0 Neutral/Divided
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