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View Title 3 of the Farm Bill

TITLE III. Agricultural Trade And Aid

B. Food Aid Program

The Farm Security and Rural Investment Act of 2002 (FSRIA) makes several changes and additions to food aid programs.

Public Law 83-480. Reauthorized through 2007, P.L. 83-480 (P.L 480) is one of the oldest U.S. food aid programs. It includes three export titles. Each title has different objectives and provides agricultural assistance to countries at different levels of economic development. Title I of the P.L. 480 program is administered by USDA, and Titles II and III (now dormant) are administered by the U.S. Agency for International Development (USAID).

Title I provides for U.S. government financing of sales of U.S. agricultural commodities to developing countries and private entities on concessional credit terms—extended credit periods and low rates of interest charged for the financing. The FSRIA makes only minor changes in Title I.

Title II, the Food for Peace Program, which provides grant humanitarian food aid and includes the following changes made by the FSRIA:

· Minimum annual tonnage is increased to 2.5 million tons from 2.025 million tons.

· In recipient countries, sales in dollars instead of foreign currencies will be allowed in some cases.

· Sales of commodities must be at reasonable in-country market prices.

· USAID is tasked to streamline program management and application processes.

Food for Progress Program. Using either Commodity Credit Corporation (CCC) funding, or P.L. 480 Title I appropriations, the Food for Progress Program provides commodities to needy countries. Recipient countries are emerging democracies that have made commitments to introduce free enterprise elements in their agricultural economies. This program, authorized by the Food for Progress Act of 1985 (the 1985 Act) allows for the use of proceeds from the monetization of commodities for humanitarian and developmental purposes.

· The program has been authorized through 2007.

· The annual CCC funding cap for administrative costs has been increased to $15 million, and the annual CCC funding cap for other non-commodity costs has been increased to $40 million. The legislation sets an annual minimum level of commodities to be provided at 400,000 metric tons, subject to the $40 million cap.

· Not later than 270 days after enactment of the FSRIA, the President shall review and make changes in the regulations to streamline the program.

· Each December 1, the President is to submit to Congress a list of programs approved to date for that fiscal year.

Section 416(b). This program is authorized by Section 416 of the Agricultural Act of 1949 and provides for the donation to needy countries of eligible commodities held by the CCC.

· Streamlined program management and application processes are to be in effect within 270 days of enactment.

· Cooperating sponsors will have flexibility to sell commodities in dollars instead of foreign currencies.

· The Secretary of Agriculture must publish a Federal Register notice with estimates of the commodities and quantities that will be available for Section 416(b) agreements by October 31 of each year.

McGovern-Dole International Food for Education and Child Nutrition Program. Based on the USDA pilot Global Food for Education initiative, which is implemented under Section 416(b), the new McGovern-Dole International Food for Education and Child Nutrition Program is a separate program authorized by the FSRIA that will encourage education and deliver food to improve nutrition for preschoolers, school children, mothers, and infants in impoverished regions. This program may be carried out by private voluntary organizations, cooperatives, intergovernmental organizations, governments of developing countries and their agencies, and other organizations.

· The program has been authorized through 2007.

· Funding of $100 million for 2003 shall come from CCC.

· Appropriations are authorized thereafter.

The John Ogonowski Farmer-to-Farmer Program. This USAID-administered program, operated under Title V of P.L 480, strives to improve global food production and marketing by transferring technical skills of the U.S. agricultural community to farmers in participating countries. This Program was renamed to honor one of the pilots killed on September 11, 2001, who was a participant in this program.

· Minimum funding for the Farmer-to-Farmer Program through 2007 was increased from 0.4 percent to 0.5 percent of the spending appropriated for P.L. 480.

· The FSRIA emphasizes Caribbean Basin and Sub-Saharan African programs by adding, within Farmer-to-Farmer, two bilateral exchange programs--the Caribbean Basin and Farmers from Africa Programs.

Bill Emerson Humanitarian Trust. Reauthorized through 2007, this Trust was established under the Bill Emerson Humanitarian Trust Act of 1998 to meet emergency humanitarian food needs in developing countries. Up to 4-million metric tons can be held in the Trust and can be any combination of wheat, rice, corn, or sorghum.

Analysis of the Farm Bill 2002 food aid provisions by USDA's Economic Research Service.

FASonline, the Foreign Agricultural Service's Web site.