oversight

Foreign Assistance: Lack of Strategic Focus and Obstacles to Agricultural Recovery Threaten Afghanistan's Stability

Published by the Government Accountability Office on 2003-06-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States General Accounting Office

GAO          Report to Congressional Requesters




June 2003
             FOREIGN
             ASSISTANCE
             Lack of Strategic
             Focus and Obstacles
             to Agricultural
             Recovery Threaten
             Afghanistan’s Stability




GAO-03-607
             a
                                                June 2003


                                                FOREIGN ASSISTANCE

                                                Lack of Strategic Focus and Obstacles to
Highlights of GAO-03-607, a report to           Agricultural Recovery Threaten
congressional requesters
                                                Afghanistan's Stability



After the events of September 11,               The emergency food assistance that the United States and the international
2001 led to the defeat of the                   community provided from January 1999 through December 2002 helped avert
Taliban, the United States and the              famine by supplying millions of beneficiaries with about 1.6 million tons of food.
international community developed               However, the inadequacy of the international community’s financial and in-kind
an assistance program to support
                                                support of the World Food Program’s (WFP) appeal for assistance disrupted the
Afghanistan’s new government and
its people. Key components of this              provision of food assistance throughout 2002. Because of a lack of resources,
effort include food and agricultural            WFP reduced the amount of food rations provided to returning refugees from
assistance. GAO was asked to                    150 kilograms to 50 kilograms. Meanwhile, as a result of the statutory
assess (1) the impact, management,              requirement that U.S. agencies providing food assistance purchase U.S.-origin
and support of food assistance to               commodities and ship them on U.S.-flag vessels, assistance costs and delivery
Afghanistan and (2) the impact and              times were higher by $35 million and 120 days, respectively, than if the United
management of agricultural                      States had provided WFP with cash or regionally produced commodities. Had
assistance to Afghanistan, as well              the U.S. assistance been purchased regionally, an additional 685,000 people
as obstacles to achieving food                  could have been fed for 1 year.
security and political stability.
                                                U.S.- provided vegetable oil distributed by WFP in Hirat, Afghanistan



GAO recommends that the
Secretary of State and the
Administrator of USAID take an
active role in an international–
Afghan effort to develop an
agricultural rehabilitation strategy.

 GAO suggests that Congress
consider amending the Agriculture
Trade Development and Assistance
Act of 1954, as amended, and the
Merchant Marine Act of 1936, as
amended, to allow the purchase of
commodities overseas and waive
the U.S.-flag vessel requirement                The livelihood of 85 percent of Afghanistan’s approximately 26 million people
under certain circumstances.                    depends on agriculture. Over 50 percent of the gross domestic product and 80
                                                percent of export earnings have historically come from agriculture. Over the 4-
The agencies agree with the need to
develop a strategy, but USAID does              year period, because of continued conflict and drought, the international
not think it should lead the effort. In         community provided primarily short-term agricultural assistance such as tools
terms of providing flexibility, WFP             and seed. As a result, the assistance did not significantly contribute to the
agrees, but U.S. agencies disagree              reconstruction of the agricultural sector. In 2002, agricultural assistance was not
with the need to amend legislation.             adequately coordinated with the Afghan government; a new coordination
                                                mechanism was established in December 2002, but it is too early to determine its
                                                effectiveness. As a result of the weak coordination, the Afghan government and
                                                the international community have not developed a joint strategy to direct the
www.gao.gov/cgi-bin/getrpt?GAO-03-607.          overall agricultural rehabilitation effort. Meanwhile, inadequate assistance
                                                funding, continuing terrorist attacks, warlords’ control of much of the country,
To view the full product, including the scope   and the growth of opium production threaten the recovery of the agricultural
and methodology, click on the link above.
For more information, contact Loren Yager       sector and the U.S. goals of food security and political stability in Afghanistan.
(202) 512-4347 or yagerl@gao.gov.
Contents



Letter                                                                                                  1
                              Results in Brief                                                          2
                              Background                                                                5
                              U.S. and International Food Assistance Had Significant Impact and
                                Was Well Managed, but Donor Support Was Problematic                    13
                              Agricultural Assistance Has Had Limited Impact and Lacks
                                Coordination, and Major Obstacles Jeopardize Food Security and
                                Political Stability                                                    30
                              Conclusions                                                              46
                              Matter for Congressional Consideration                                   47
                              Recommendations for Executive Action                                     47
                              Agency Comments and Our Evaluation                                       48


Appendixes
               Appendix I:    Scope and Methodology                                                    52
               Appendix II:   World Food Program Projects in Afghanistan, 2002                         56
              Appendix III:   Description of WFP Food Assistance Monitoring
                              Mechanisms                                                               57
              Appendix IV:    Donor Contributions to World Food Program Emergency
                              Operation 10155 as of May 12, 2003                                       59
               Appendix V:    Cost Data for U.S. Food Assistance to Afghanistan Provided
                              to the UN World Food Program, Fiscal Years 1999–2002                     60
              Appendix VI:    International Donor Assistance Coordination Mechanisms in
                              Afghanistan                                                              61
             Appendix VII:    Major Donors’ Pledges and Contributions as of December 31,
                              2002 (as reported by the
                              U.S. Department of State)                                                66
             Appendix VIII:   Comments from the World Food Program                                     68
                              GAO Comments                                                             70
              Appendix IX:    Comments from the Department of State                                    71
                              GAO Comments                                                             73
               Appendix X:    Comments from the United States Agency for International
                              Development                                                              74
                              GAO Comments                                                             77
              Appendix XI:    Comments from the Department of Agriculture                              79
                              GAO Comments                                                             82



                              Page i                                         GAO-03-607 Foreign Assistance
                           Contents




          Appendix XII:    Comments from the Department of Defense                                    85
                           GAO Comments                                                               86
          Appendix XIII:   GAO Contacts and Staff Acknowledgments                                     87
                           GAO Contacts                                                               87
                           Staff Acknowledgments                                                      87


Tables                     Table 1: WFP Operations: Cash Donations, Food Donations,
                                    Number of Beneficiaries, and Percentage of U.S.
                                    Contribution, 1999–2002                                           15
                           Table 2: Projected Cumulative Funding Requirements for the
                                    Reconstruction of Afghanistan                                     42
                           Table 3: Major Assistance Coordination Mechanisms in
                                    Afghanistan in 2002                                               62
                           Table 4: Comparison of Implementation Group and Consultative
                                    Group Processes                                                   65


Figures                    Figure 1: Map of Afghanistan, Including Provinces and Major
                                      Roads                                                            7
                           Figure 2: Drought-Affected Areas in Afghanistan as of October
                                      2001                                                            10
                           Figure 3: WFP Distribution of U.S. -Provided Food in
                                      Afghanistan                                                     12
                           Figure 4: Road Conditions Faced by WFP Truckers in
                                      Afghanistan                                                     18
                           Figure 5: Use of Donkeys to Deliver Food to Remote Areas                   19
                           Figure 6: Resource Requirements vs. Actual Deliveries for WFP
                                      Emergency Food Assistance Operation in Afghanistan,
                                      April 2002–January 2003                                         22
                           Figure 7: Costs for U.S. Food Assistance to Afghanistan, Fiscal
                                      Years 1999–2002                                                 25
                           Figure 8: Humanitarian Daily Rations                                       29
                           Figure 9: FAO Irrigation Rehabilitation Project                            32
                           Figure 10: Hierarchy of Strategies for Agricultural Sector
                                      Reconstruction                                                  39
                           Figure 11: Organizations Responsible for Coordinating International
                                      Assistance in Afghanistan, 1998–2003                            63




                           Page ii                                          GAO-03-607 Foreign Assistance
Contents




Abbreviations

ACTED        Agency for Technical Cooperation and Development
FAO          Food and Agriculture Organization
HDR          humanitarian daily ration
ITSH         Internal Transport, Storage, and Handling
NDF          National Development Framework
UN           United Nations
UNAMA        UN Assistance Mission in Afghanistan
UNDP         United Nations Development Program
USAID        United States Agency for International Development
USDA         United States Department of Agriculture
WFP          World Food Program


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Page iii                                                   GAO-03-607 Foreign Assistance
A
United States General Accounting Office
Washington, D.C. 20548



                                    June 30, 2003                                                                                  Lert




                                    The Honorable Richard J. Durbin
                                    Ranking Minority Member
                                    Subcommittee on Oversight of Government Management,
                                     the Federal Workforce, and the District of Columbia
                                    Committee on Governmental Affairs
                                    United States Senate

                                    The Honorable Frank R. Wolf
                                    Chairman
                                    Subcommittee Commerce, Justice, State, and the Judiciary
                                    Committee on Appropriations
                                    House of Representatives

                                    Afghanistan is a country devastated by 23 years of war and destructive
                                    domestic policies and more than 4 years of drought. The livelihood of 85
                                    percent of Afghanistan’s approximately 26 million inhabitants depends on
                                    agriculture, yet the food and agricultural sector has been severely
                                    damaged.1 Since 1978, the country has required international food aid to
                                    help meet the shortfall between food supply and demand. Since 1999, the
                                    United States has been the largest donor of food and agricultural assistance
                                    to Afghanistan. The U.S. policy goal in Afghanistan is to create a stable
                                    Afghan society that is not a threat to itself or others and is not a base for
                                    terrorism; U.S. food and agricultural assistance to Afghanistan is intended
                                    not only to provide emergency relief but also to help achieve this long-term
                                    goal. The United States has provided short-term, emergency food
                                    assistance to feed Afghanistan’s vulnerable populations, as well as longer-
                                    term agricultural development assistance to help Afghanistan improve its
                                    food security2 and political stability. The majority of U.S. assistance has
                                    been given through the U.S. Agency for International Development
                                    (USAID) and the U.S. Department of Agriculture (USDA) to the United
                                    Nations (UN) World Food Program (WFP) and the UN Food and
                                    Agriculture Organization (FAO), as well as nongovernmental organizations.



                                    1
                                     Estimates on total population vary between 24 and 28 million.
                                    2
                                     FAO defines food security as ensuring that sufficient food is available, that supplies are
                                    relatively stable, and that those in need of food can obtain it. The World Bank defines food
                                    security as the condition whereby everyone, at all times, has access to and control over
                                    high-quality food sufficient for an active and healthy life.




                                    Page 1                                                       GAO-03-607 Foreign Assistance
                   Nongovernmental organizations and contractors distribute most of the
                   assistance provided through the UN organizations in Afghanistan.

                   Because of concerns about the United States’ and UN’s ability to deliver
                   assistance in such a complex environment, and recognizing the
                   interrelationship of short-term emergency food assistance and longer-term
                   agricultural assistance, you asked that we examine the food and
                   agricultural assistance provided to date. We assessed, for 1999–2002, (1)
                   the impact, management, and U.S. and international support of short-term,
                   emergency food assistance to Afghanistan and (2) the impact and
                   management of long-term, agricultural development assistance to
                   Afghanistan, as well as obstacles to achieving food security and political
                   stability.

                   To address these issues, we collected and analyzed information from the
                   U.S. Departments of Agriculture, Defense, and State; the U.S. Agency for
                   International Development; the UN World Food Program, Food and
                   Agriculture Organization, and Development Program; the World Bank; the
                   Asian Development Bank; and the Afghan Ministry of Agriculture and
                   Animal Husbandry and Ministry of Irrigation and Water Resources. This
                   effort included an analysis of the cost data for U.S. food assistance
                   provided through these agencies and organizations. In addition, we
                   contacted 14 nongovernmental organizations, responsible for delivering
                   WFP and FAO assistance in Afghanistan, to obtain their views on a range of
                   issues including the management of donated commodities and
                   coordination. Finally, we traveled to Afghanistan to examine the WFP’s
                   operations in country. Our presence in Afghanistan was limited due to
                   security precautions imposed by the Department of State. While in
                   Afghanistan, we spoke with officials from U.S., UN, and nongovernmental
                   organizations and the Afghan government. (For further details of the scope
                   and methodology of our study, see app. I.)



Results in Brief   The emergency food assistance provided by the United States and the
                   international community from January 1999 through December 2002
                   helped avert famine by providing approximately 1.6 million tons of food.3
                   The WFP managed the assistance efforts effectively, overcoming significant
                   obstacles and employing monitoring mechanisms such as a real-time

                   3
                    In this report, “international community” is defined as the collective grouping of bilateral,
                   multilateral, and international assistance agencies and nongovernmental organizations.




                   Page 2                                                         GAO-03-607 Foreign Assistance
automated tracking system and periodic site visits. We observed organized
and efficient food distribution operations at WFP sites, and available
program data showed that less than 1 percent of the assistance was lost.
However, the inadequacy of the international community’s financial and in-
kind support of the WFP’s appeal for assistance disrupted the provision of
food assistance throughout 2002. For example, because of lack of
resources, the WFP reduced the amount of food rations provided to
returning refugees from 150 kilograms to 50 kilograms. Meanwhile, as a
result of the statutory requirement that U.S. agencies providing food
assistance purchase U.S.-origin commodities and ship 75 percent of them
on U.S.-flagged vessels, assistance costs and delivery times were higher by
$35 million and 120 days, respectively, than if the United States had
provided cash or regionally produced commodities to international
assistance agencies.

The agricultural assistance provided by the international community had a
limited impact, from 1999 to 2002, because of continued conflict and
drought. During this period, FAO, nongovernmental organizations, and
others provided primarily short-term agricultural assistance such as
distributing tools and seed and, as a result, the assistance did not
significantly contribute to the reconstruction of Afghanistan’s agricultural
sector. In addition, in 2002, international agricultural assistance was not
adequately coordinated with the Afghan government, contrary to
established guidelines. A new coordination mechanism was established in
December 2002, but it is too early to determine its effectiveness. Because of
the lack of coordination, the Afghan government and the international
community have not developed a joint strategy to integrate the numerous
disparate assistance projects and manage the overall agricultural
rehabilitation effort. Finally, obstacles to future rehabilitation efforts
include inadequate funding to meet the U.S. and international community’s
goal of rehabilitating the agricultural sector. The international community
plans to spend approximately $230 million on agricultural assistance in
2003. However, FAO officials said that the agricultural rehabilitation effort
will cost billions of dollars and take at least a decade to complete.
Meanwhile, the unstable security situation, the control by warlords of
much of the country, and the growth of opium production create additional
obstacles to achieving food security and political stability in Afghanistan.

To increase the United States’ flexibility in responding to complex
emergencies where U.S. national security interests are involved, such as
that in Afghanistan, Congress may wish to consider amending existing food
aid legislation to allow, in the event of such emergencies, the provision of



Page 3                                             GAO-03-607 Foreign Assistance
non-U.S.-produced commodities and the provision of cash to international
assistance agencies to purchase non-U.S.-produced commodities and
amending cargo shipping legislation to allow waiver of the requirement to
ship food assistance on U.S. flag vessels. In addition, we are recommending
that the Department of State (State) and USAID take an active role in a
joint international–Afghan government effort to develop an operational
agricultural sector rehabilitation strategy that contains measurable goals,
defines resource levels, delineates responsibilities, identifies external
factors that affect the achievement of goals, and requires program
evaluations.

We presented a draft of this report to WFP, State, USDA, USAID, and the
Department of Defense. WFP agreed with our recommendation that the
Agricultural Trade Development and Assistance Act of 1954 be amended,
but State, USDA, and USAID did not. State thought that more cost-benefit
studies were needed, and USAID and USDA stated that other existing
legislation allows USAID and State the resources and flexibility necessary
to respond to humanitarian crises. USDA also observed that changes in
cargo preference regulations would help reduce overall U.S. assistance
costs while not negatively affecting the provision of U.S. commodities. In
addition, USDA asserted that if the United States had provided greater
levels of commodities as a result of purchasing regionally produced
commodities, WFP’s logistical system would have been overstrained and
savings in cost and time would have been marginal. We maintain that
amending the Agricultural Trade Development and Assistance Act of 1954
would provide greater flexibility than the provisions contained in other
existing legislation. The act is the principal authority for providing food
assistance in emergency and nonemergency situations. In both 2002 and
2003 over $2 billion in food assistance, the preponderant amount of this
type of assistance, was dispersed under this authority. Amending the act
will provide a permanent provision in the principal authority for providing
U.S. food assistance, allowing the United States to respond rapidly and in a
cost effective manner to events that affect U.S. national security. Further, in
the event that U.S. commodities are not available, amending the act will
provide the United States with the flexibility to respond in a timely and cost
effective manner. However, we agree with USDA that the cargo preference
requirement adds additional cost to food assistance and should be waived
in specific situations, and we have adjusted the matter for congressional
consideration to reflect this point. We disagree with USDA’s claim that
additional commodities would have overburdened WFP and that the
savings from purchasing regional commodities would have been
insignificant. WFP moved record-levels of commodities through its



Page 4                                              GAO-03-607 Foreign Assistance
             extensive logistics system in Afghanistan. Further, purchasing commodities
             regionally could have reduced delivery time by 120 days and increased the
             amount of commodities purchased by 103,000 metric tons.

             WFP, State, USDA, and USAID all agreed with our recommendation that a
             joint Afghan–international donor strategy for the rehabilitation of
             Afghanistan’s agriculture sector is needed. However, USAID stated that
             FAO, not USAID, should lead such an effort. We maintain that USAID
             should lead the effort because the United States is the largest donor to
             Afghanistan, agricultural rehabilitation is the cornerstone of USAID’s
             efforts in Afghanistan, and the success of U.S. policy goals in Afghanistan is
             tightly linked to the rehabilitation of the agricultural sector.

             The Department of Defense limited its comments to issues pertaining to its
             humanitarian daily ration program. The Department of Defense stated that
             (1) we incorrectly characterized the ration program as strictly a food aid
             program, (2) its informal evaluations of the program indicated that it
             alleviated hunger and generated goodwill among the Afghan people, and
             (3) although the funds used to purchase rations could have been used to
             purchase bulk food, the bulk food could not have been delivered to remote
             areas. The report discusses the food assistance and nonfood assistance
             aspects of the rations program, and we have added information about the
             goodwill generated by the rations to the report. As described in the report,
             WFP’s well established logistics system was capable of delivering food to
             all parts of Afghanistan throughout 2001, including the months of October
             through December when the rations were being delivered.



Background   Afghanistan is a mountainous, arid, land-locked Central Asian country with
             limited natural resources. At 647,500 square kilometers, it is slightly smaller
             than the state of Texas. Afghanistan is bordered by Pakistan to the east and
             south; Tajikistan, Turkmenistan, Uzbekistan, and China to the north; and
             Iran to the west (see fig. 1). Its population, currently estimated at 26




             Page 5                                              GAO-03-607 Foreign Assistance
million, is ethnically diverse, largely rural, and mostly uneducated. Life
expectancy in Afghanistan is among the lowest in the world, with some of
the highest rates of infant and child mortality.4




4
 According to the 2002 UN World Development Indicators, as of 2000 (the latest year for
which figures are available), the infant mortality rate in Afghanistan was 165 per 1,000 live
births, and the mortality rate for children younger than 5 years was 257 per 1,000 live births.
Approximately 10 percent of children younger than 5 suffer from acute malnutrition, and 50
percent suffer from chronic malnutrition. This condition renders children particularly
vulnerable to disease, especially pneumonia, tuberculosis, and diarrheal diseases. In
addition, malnutrition is believed to affect about 10 percent of Afghan women of
childbearing age.




Page 6                                                         GAO-03-607 Foreign Assistance
Figure 1: Map of Afghanistan, Including Provinces and Major Roads




                                         Political conflicts have ravaged Afghanistan for years, limiting
                                         development within the country. Conflict broke out in 1978 when a
                                         communist-backed coup led to a change in government. One year later, the
                                         Soviet Union began its occupation of Afghanistan, initiating more than two
                                         decades of conflict. Over the course of the 10-year occupation, various




                                         Page 7                                           GAO-03-607 Foreign Assistance
countries, including the United States, backed Afghan resistance efforts.
The protracted conflict led to the flight of a large number of refugees into
Pakistan and Iran. In 1989, the Soviet forces withdrew, and in 1992, the
communist regime fell to the Afghan resistance. Unrest continued,
however, fueled by factions and warlords fighting for control.

The Taliban movement emerged in the mid 1990s, and by 1998 it controlled
approximately 90 percent of the country. Although it provided some
political stability, the Taliban regime did not make significant
improvements to the country’s food security. Furthermore, the Taliban’s
continuing war with the Northern Alliance and the Taliban’s destructive
policies, highlighted in its treatment of women, further impeded aid and
development. Coalition forces removed the regime in late 2001, responding
to its protection of al Qaeda terrorists who attacked the United States. In
December 2001, an international summit in Bonn, Germany, established a
framework for the new Afghan government, known as the Bonn
Agreement.5

Agriculture is essential to Afghanistan. Despite the fact that only 11.5
percent (7.5 million hectares) of Afghanistan’s total area is cultivable,6 85
percent of the population depends on agriculture for its livelihood, and 80
percent of export earnings and more than 50 percent of the gross domestic
product have historically come from agriculture.7 However, Afghanistan’s
agricultural sector continues to suffer from the effects of prolonged
drought, war, and neglect. It lacks high-quality seed, draft animals, and
fertilizer, as well as adequate veterinary services, modern technology,
advanced farming methods, and a credit system for farmers. Further,
Afghanistan’s Ministry of Agriculture and Animal Husbandry and its




5
 The Bonn Agreement, signed by numerous stakeholders on December 5, 2001, in Bonn,
Germany, established provisional arrangements concerning the governing of Afghanistan
pending the reestablishment of permanent government institutions within the country. The
UN Security Council endorsed the Bonn Agreement on December 6, 2001, through UN
Resolution 1383.
6
One hectare is equivalent to 10,000 square meters, 2.471 acres, or 11,959.64 square yards.
7
Historical percentage based on UN data from the 1970s and early 1990s.




Page 8                                                      GAO-03-607 Foreign Assistance
Ministry of Irrigation and Water Resources lack the infrastructure and
resources to assist farmers.8

Because Afghanistan experiences limited rainfall, its agricultural sector is
highly dependent on irrigation—85 percent of its agricultural products
derives from irrigated areas. Thus, the conservation and efficient use of
water is the foundation of the agricultural sector. The severe drought that
has gripped the country since 1998 has resulted in drastic decreases in
domestic production of livestock and agricultural supplies including seed,
fertilizer, and feed (see fig. 2). Several earthquakes and the worst locust
infestation in 30 years exacerbated this crisis in 2002. Without adequate
supplies and repairs to irrigation systems, even if the drought breaks,
farmers will be unable to produce the food that the country needs to feed
itself.




8
 These ministries are referred to as the Ministries of Agriculture and Irrigation throughout
the remainder of this report.




Page 9                                                        GAO-03-607 Foreign Assistance
Figure 2: Drought-Affected Areas in Afghanistan as of October 2001




                                          Page 10                    GAO-03-607 Foreign Assistance
Since 1965, the WFP9 has been the major provider of food assistance to
Afghanistan. Partnering with nongovernmental organizations,10 it delivers
assistance through emergency operations that provide short-term relief to
populations affected by a specific crisis such as war or drought. It also
conducts protracted relief and recovery operations designed to shift
assistance toward longer-term reconstruction efforts. Because of its policy
to target assistance at specific populations, WFP does not attempt to
provide food for all of the vulnerable people within a country or affected
area. Instead, it focuses on specific vulnerable populations such as
internally displaced people or widows (see fig. 3). Further, it does not try to
meet all of the daily requirements of the targeted populations. WFP’s 2002
emergency operation in Afghanistan targeted internally displaced people,
people affected by drought, and children, among others. The assistance
programs designed to assist these populations provide between 46 and 79
percent, or 970 to 1671 kilocalories, of the recommended minimum daily
requirement of 2100 kilocalories. WFP assumes that beneficiaries will
obtain the remainder of their food through subsistence farming or the
market.




9
 WFP was established in 1963. Since its inception, it has provided food for development
projects, and it has also provided increasingly greater shares of assistance to emergency
operations around the world. WFP devoted 28 percent of its resources to development in
1997, 18 percent in 1999, 13 percent in 2000, and 10 percent in 2001. The program obtains all
of its resources through voluntary contributions from donor nations.
10
 In Afghanistan, WFP partners with UN organizations like the UN High Commissioner for
Refugees and local and international nongovernmental organizations, including CARE,
Oxfam, and World Vision.




Page 11                                                      GAO-03-607 Foreign Assistance
Figure 3: WFP Distribution of U.S. -Provided Food in Afghanistan




FAO has provided much of the agricultural assistance11 to Afghanistan.
FAO has been involved in agricultural development and natural resource
management in Afghanistan for more than 50 years. FAO was founded in
1945 with a mandate to raise levels of nutrition and standards of living, to
improve agricultural productivity, and to better the condition of rural
populations. Today, FAO is one of the largest specialized agencies in the UN
system and the lead agency for agriculture, forestry, fisheries, and rural

11
  Agricultural assistance includes distribution of inputs (seed, planting materials, fertilizer,
tools, livestock); irrigation repair; water resource management; hydrologic and climate
monitoring/watershed management; agriculture product market, supply, and distribution
systems development; rehabilitation and development of agriculture infrastructure,
including fertilizer plants, seed farms, nurseries, product production and processing
facilities, and government facilities (offices, labs); veterinary services/artificial insemination
(supplies, training); pest control and capacity building/training in related subjects
(horticulture, irrigation, animal husbandry); and development of agriculture policies,
regulations, and laws.




Page 12                                                         GAO-03-607 Foreign Assistance
                         development. An intergovernmental organization, FAO has 183 member
                         countries plus one member organization, the European Community. FAO
                         has traditionally carried out reconstruction efforts in relatively stable
                         environments. Although FAO is increasingly implementing its programs in
                         unstable postconflict situations such as Afghanistan, the agency and its
                         staff are still adjusting to operating in such environments. FAO's regular
                         program budget provides funding for the organization's normative work
                         and, to a limited extent, for advice to member states on policy and planning
                         in the agricultural sector. FAO's regular budget can also fund limited
                         technical assistance projects through its Technical Cooperation Program.
                         Apart from this, extrabudgetary resources, through trust funds provided by
                         donors or other funding arrangements, fund all emergency and
                         development assistance provided by FAO. Thus, extrabudgetary resources
                         fund FAO’s field program, the major part of its assistance to member
                         countries.



U.S. and International   The emergency food assistance provided to Afghanistan by the United
                         States and the international community from January 1999 through
Food Assistance Had      December 2002 benefited millions and was well managed, but donor
Significant Impact and   support was inadequate. WFP delivered food to millions of people in each
                         of the 4 years, helping avert widespread famine. In addition, WFP managed
Was Well Managed, but    the distribution of U.S. and international food assistance effectively,
Donor Support Was        overcoming significant obstacles and using its logistics system and a
Problematic              variety of monitoring mechanisms to ensure that food reached the intended
                         beneficiaries. However, inadequate and untimely donor support in 2002
                         disrupted some WFP assistance efforts and could cause further disruptions
                         in 2003. Further, WFP could have provided assistance to an additional
                         685,000 people and reduced its delivery times if the United States had
                         donated cash or regionally purchased commodities instead of shipping
                         U.S.-produced commodities. Additionally, if the United States had donated
                         the $50.9 million that it spent on approximately 2.5 million daily rations air-
                         dropped by the Department of Defense, WFP could have purchased enough
                         regionally produced commodities to provide food assistance for an
                         estimated 1.0 million people for a year.




                         Page 13                                             GAO-03-607 Foreign Assistance
Food Assistance Had   The emergency food assistance that the United States and other bilateral
Important Impact      donors provided in Afghanistan through WFP from 1999 through 2002 met a
                      portion of the food needs of millions of vulnerable Afghans. Over the 4-year
                      period, WFP delivered approximately 1.6 million metric tons of food that
                      helped avert famine and stabilize the Afghan people, both in Afghanistan
                      and in refugee camps in neighboring countries.12 The food assistance also
                      furthered the country’s reconstruction through projects, among others, that
                      exchanged food for work. WFP delivered the assistance as part of seven
                      protracted relief–recovery and emergency operations (see table 1).13 The
                      types of operations and their duration and objectives varied in response to
                      changing conditions within Afghanistan. These objectives included, but
                      were not limited to, providing relief to the most severely affected
                      populations in Afghanistan and Afghan refugees in neighboring countries
                      and preventing mass movements of populations.




                      12
                        During the period 1999–2001, WFP and other agencies believed that without food
                      assistance to Afghanistan, a famine could occur. In remote areas, prefamine conditions,
                      including severe malnutrition, were observed.
                      13
                       WFP has provided assistance to Afghanistan for most of the 36 years prior to 2002;
                      consequently, it had significant experience in the country, and its logistics infrastructure
                      was well established. The assistance delivered from 1999 through 2001 was not tightly
                      coordinated with the Taliban owing to the UN’s policy of not working with this particular
                      government. The assistance delivered in 2002 was coordinated with the new Afghan
                      government through memorandums of understanding.




                      Page 14                                                       GAO-03-607 Foreign Assistance
Table 1: WFP Operations: Cash Donations, Food Donations, Number of Beneficiaries, and Percentage of U.S. Contribution,
1999–2002

                              Total cash
                              donations            Percentage of                                                                       Targeted
                             (millions of       cash contributed          Food donations         Percentage of food                beneficiaries
Duration                         dollars)                by U.S.            (metric tons)        contributed by U.S.                  (millions)
1/99–12/99a                        $49.5                        87.3                111,502                       89.7                            1.2
1/00–12/01b                         54.3                        61.0                121,989                       61.5                            1.0
8/00–3/01c                          47.9                        78.4                114,694                       78.5                            1.6
4/01–10/01d                         82.2                        86.7                184,462                       82.8                            3.8
               e
11/01–10/02                         43.8                      100.0                 100,000                      100.0                            5.6
10/01–3/02f                        225.4                        61.2                500,624                       58.8                            7.5
4/02–6/03g                         242.3                       64.5h                516,394                       60.0h                           9.9
Total                             $745.4                        N/A               1,649,665                        N/A                           N/AI
Average percentage of                N/A                        68.0                     N/A                      67.0                           N/A
contributions from U.S.
                                            Legend
                                            N/A = not applicable
Source: WFP.
                                            a
                                                Protracted relief and recovery operation 6064.
                                            b
                                             Protracted relief and recovery operation 6064.01. Operation suspended, activities integrated into
                                            emergency operation 10046.0.
                                            c
                                                Emergency operation 6259.0.
                                            d
                                             Emergency operation 10046.0. Operation terminated and replaced with emergency operation
                                            10126.0.
                                            e
                                                Emergency operation 10098. Operation terminated and replaced with emergency operation 10126.0.
                                            f
                                            Emergency operation 10126.0. Covered beneficiaries in Afghanistan, Iran, Pakistan, and Tajikistan.
                                            g
                                                Emergency operation 10155.0.
                                            h
                                                As of March 31, 2003.
                                            I
                                            The cumulative total of beneficiaries cannot be calculated since the same beneficiaries may have
                                            been served multiple times during the 4-year period.




                                            Page 15                                                            GAO-03-607 Foreign Assistance
                        WFP implemented a number of different types of food assistance projects,
                        including free food distribution; institutional feeding programs; bakeries;
                        food-for-work, -seed, -education, -training, and -asset-creation projects; and
                        projects targeted at refugees, internally displaced people, and civil
                        servants. (See app. II for a list and description of WFP’s projects.) Food-for-
                        work and food-for-asset-creation projects provided essential food
                        assistance to the most vulnerable members of Afghanistan’s population
                        while enabling the beneficiaries to help rehabilitate local infrastructure and
                        rebuild productive assets such as roads and schools. Between July and
                        September 2002, these projects employed 1 million laborers per month,
                        paying them in food commodities.14

                        U.S. food assistance to Afghanistan, provided by USAID and USDA,
                        accounted for approximately 68 percent of the cash contributions and 67
                        percent of the commodities delivered by WFP from 1999 through 2002 (see
                        table 1). The U.S. provides cash to WFP to cover transportation and
                        administrative costs associated with its in-kind contributions of
                        commodities.15 USAID’s authority to donate to WFP operations derives
                        from Title II of the Agricultural Trade Development and Assistance Act of
                        1954 (P.L. 480). Title II authorizes the agency to donate agricultural
                        commodities to meet international emergency relief requirements and
                        carry out nonemergency feeding programs overseas. USDA also provides
                        surplus commodities to WFP under section 416(b) of the Agricultural Act
                        of 1949. U.S. contributions consisted of in-kind donations of commodities
                        such as white wheat and cash donations to cover the cost of transporting
                        the commodities from the United States to Afghanistan.



Food Assistance         WFP managed the distribution of U.S. and international food assistance to
Distribution Was Well   Afghanistan effectively despite significant obstacles, including harsh
                        weather and a lack of infrastructure to deliver food to beneficiaries. To
Managed
                        accomplish this, WFP appointed a special envoy to direct operations and
                        employed a dedicated staff of local nationals. It also used various
                        monitoring and reporting mechanisms to track the delivery of food.



                        14
                         For example, food-for-work participants earn 7 kilograms of wheat per day, valued at
                        $1.00. Wage rates across Afghanistan range from $1.50 to $3.40 per day.
                        15
                         WFP requires donors to provide funding to cover transportation and administrative costs
                        for in-kind contributions of commodities. The cash that the U.S. contributes for this purpose
                        cannot be used by WFP to purchase commodities.




                        Page 16                                                      GAO-03-607 Foreign Assistance
WFP’s Management Overcame   In distributing the food assistance, WFP faced significant obstacles related
Many Obstacles              to political and security disturbances in Afghanistan as well as physical and
                            environmental conditions. These obstacles included limited mobility due to
                            continued fighting between the Taliban and the Northern Alliance and
                            coalition forces; religious edicts issued by the Taliban limiting the
                            employment of women by international organizations; difficult transport
                            routes created by geography, climate, and lack of infrastructure (see fig. 4);
                            and attempts by Afghan trucking cartels to dramatically increase trucking
                            fees. To overcome these obstacles, WFP negotiated with the Taliban to
                            allow the movement of food to areas occupied by the Northern Alliance; it
                            also threatened to cancel certain projects unless women were allowed to
                            continue to work for WFP. Further, WFP found ways to deliver food to
                            remote areas, including airlifting food and hiring donkeys (see fig. 5). In
                            addition, it purchased trucks to supplement a fleet of contracted trucks.
                            Using these trucks as leverage against the Afghan trucking cartel, WFP
                            forced the cartel to negotiate when the cartel attempted to dramatically
                            increase transport fees.




                            Page 17                                            GAO-03-607 Foreign Assistance
Figure 4: Road Conditions Faced by WFP Truckers in Afghanistan




Page 18                                             GAO-03-607 Foreign Assistance
                                  Figure 5: Use of Donkeys to Deliver Food to Remote Areas




Special Envoy and Staff Ensured   WFP created the position of Special Envoy of the Executive Director for
Effective Delivery                the Afghan Region to lead and direct all WFP operations in Afghanistan and
                                  neighboring countries during the winter of 2001–2002, when it was believed
                                  that the combination of winter weather and conflict would increase the
                                  need for food assistance. WFP was thus able to consolidate the control of
                                  all resources in the region, streamline its operations, and accelerate the




                                  Page 19                                             GAO-03-607 Foreign Assistance
                                 movement of assistance.16 WFP points to the creation of the position as one
                                 of the main reasons it was able to move record amounts of food into
                                 Afghanistan from November 2001 through January 2002. In December 2001
                                 alone, WFP delivered 116,000 metric tons of food, the single largest
                                 monthly food delivery within a complex emergency operation in WFP’s
                                 history.

                                 WFP also credits its quick response to its national staff and the Afghan
                                 truck drivers it contracted. WFP employed approximately 400 full-time
                                 national staff during 1999–2002. These staff established and operated an
                                 extensive logistics system and continued operations throughout
                                 Afghanistan, including areas that international staff could not reach owing
                                 to security concerns, and during periods when international staff were
                                 evacuated from the country. The truckers who moved the food around the
                                 country continued working even during the harshest weather and in areas
                                 that were unsafe because of ongoing fighting and banditry.

WFP Monitoring Shows Effective   WFP uses a number of real-time monitoring mechanisms to track the
Distribution and Negligible      distribution of commodities in Afghanistan, and the data we reviewed
Losses                           suggested that food distributions have been effective and losses minimal.
                                 (For a description of WFP’s monitoring procedures, see app. III.) During
                                 our visits to project and warehouse sites in Afghanistan, we observed
                                 orderly and efficient storage, handling, and distribution of food
                                 assistance.17 WFP’s internal auditor reviewed WFP Afghanistan’s
                                 monitoring operations in August of 2002 and found no material
                                 weaknesses. USAID has also conducted periodic monitoring of WFP
                                 activities without finding any major flaws in WFP’s operations. In addition,
                                 most of the implementing partners we contacted were familiar with WFP
                                 reporting requirements. However, 10 of the 14 implementing partners we
                                 contacted commented unfavorably on WFP’s project monitoring efforts,
                                 stating that monitoring visits were too infrequent. Finally, WFP’s loss
                                 reporting data indicated that only 0.4 percent of the commodities was lost
                                 owing to theft, spoilage, mishandling, or other causes.




                                 16
                                  The special envoy’s term ran from November 2001 to May 2002. A second envoy was not
                                 appointed.
                                 17
                                  Owing to security restrictions, we were able to conduct only limited site visits in
                                 Afghanistan.




                                 Page 20                                                       GAO-03-607 Foreign Assistance
Inadequate International      Inadequate and untimely donor support disrupted WFP’s food assistance
Support Disrupted Food        efforts in 2002 and could disrupt efforts in 2003; in addition, U.S. assistance
                              to Afghanistan, both through WFP and the Department of Defense, was
Assistance; U.S.              costly. In 2002, interruptions in support forced WFP to delay payments of
Contributions Costly and      food, curtail the implementation of new projects, and reduce the level of
Slow                          rations provided to repatriating refugees. WFP expressed concern that
                              donor support in 2003 may be similarly affected, as a growing number of
                              international emergencies and budgetary constraints could reduce the total
                              funding available for food assistance to Afghanistan.18 In addition, WFP
                              could have delivered more food and reduced delivery times if the United
                              States had provided either cash or regionally purchased commodities
                              instead of shipping U.S.-produced commodities and airdropping
                              humanitarian daily rations.

Limited International Donor   Obtaining donor support for the emergency food assistance operation for
Support Disrupted Food        the April 2002 through December 2002 period was difficult owing to the
Assistance in 2002, Could     donor community’s inadequate response to WFP’s appeal for contributions.
Disrupt Efforts in 2003       WFP made its initial appeal in February 2002 for the operation and it made
                              subsequent appeals for donor support throughout the operation. The
                              operation was designed to benefit 9,885,000 Afghans over a 9-month period,
                              through the provision of 543,837 metric tons of food at a cost of over $295
                              million.19 It was also intended to allow WFP to begin to shift from
                              emergency to recovery operations with particular emphasis on education,
                              health, and the agricultural sector. When the operation began in April 2002,
                              WFP’s Kabul office warned that it might have to stop or slow projects if
                              donors did not provide more support. At that time, WFP had received only
                              $63.9 million, or 22 percent of the required resources. The United States
                              provided most of this funding. (See app. IV for a list of donors and their
                              contributions for the operation.) From April through June—the preharvest
                              period when Afghan food supplies are traditionally at their lowest point—
                              WFP was able to meet only 51 percent of the planned requirement for


                              18
                               According to WFP, approximately 44.6 million people needed food assistance in Africa and
                              North Korea in 2002. Meanwhile, declining global food production and donor food
                              assistance contributions are expected to reduce aid levels worldwide in 2003. As of May
                              2003, based on donor pledges received, WFP estimates that donor contributions to
                              Afghanistan will be adequate to meet projected requirements.
                              19
                               Emergency Operation 10155.0 “Emergency Assistance to Afghanistan.” The period of the
                              operation was originally 9 months but was extended to 15 months to ensure a continued
                              pipeline of food and a smooth transition between this operation and the subsequent
                              operation.




                              Page 21                                                    GAO-03-607 Foreign Assistance
assistance. WFP’s actual deliveries were, on average, 33 percent below
actual requirements for the 10-month period April 2002–January 2003.
Figure 6 illustrates the gaps in the operation’s resources for the 10-month
period.



Figure 6: Resource Requirements vs. Actual Deliveries for WFP Emergency Food
Assistance Operation in Afghanistan, April 2002–January 2003




Note: The large drop in requirements from July through August resulted from the suspension of free
food distribution during the harvest period. WFP suspended this program in an effort to prevent its
assistance from negatively affecting the price of domestically produced wheat in Afghanistan. The
increase in requirements from October through December resulted from the need to stockpile food for
vulnerable populations during the winter.




Page 22                                                          GAO-03-607 Foreign Assistance
Lack of timely donor contributions and an increase in the number of
returning refugees forced WFP and its implementing partner, the UN High
Commissioner for Refugees, to reduce from 150 to 50 kilograms the rations
provided to help returning refugees and internally displaced persons
reestablish themselves in their places of origin. The rations are intended to
enable these groups to sustain themselves long enough to reestablish their
lives; reducing the rations may have compromised efforts to stabilize
population movements within Afghanistan. The lack of donor support also
forced WFP and its implementing partners to delay for up to 10 weeks, in
some cases, the compensation promised to Afghans who participated in the
food-for-work and food-for-asset-creation projects, resulting in a loss of
credibility in the eyes of the Afghans and nongovernmental organizations.
Similarly, because of resource shortages, WFP had to delay for up to 8
weeks in-kind payments of food in its civil service support program,
intended to help the new government establish itself, and it never received
enough contributions to provide civil servants with the allocation of tea
they were to be given as part of their support package. In addition, WFP
was forced to reduce the number of new projects it initiated, thus limiting
the level of reconstruction efforts it completed.

In January 2003, WFP expressed concern that the problems it encountered
with donor support in 2002 could recur in 2003. Despite the expansion of
agricultural production in 2002 because of increased rainfall, 6 million
Afghans will require food assistance in 2003. Although the United States
was the largest donor of food assistance to Afghanistan in 2002, the U.S.
contribution may be smaller in 2003 than in previous years owing to
reduced surpluses of commodities, higher commodity prices, and
competing crises in Africa, North Korea, and Iraq.20 The UN forecasts
Afghan cereal production for July 2002 through June 2003 at 3.59 million
metric tons, a cereal import requirement of 1.38 million metric tons, and
Afghan commercial food imports at 911,000 metric tons. Thus, an estimated
total deficit of 469,000 metric tons remains to be covered in the 12-month
period by international food assistance.



20
 Section 416(b) of the Agricultural Act of 1949 provides a permanent authority for USDA to
donate surplus commodities in Commodity Credit Corporation inventories to carry out
programs of assistance in developing and other foreign countries. The administration has
decided to sharply reduce reliance on this program. The administration expects to use only
$50 million in 416(b) commodities worldwide in 2003, compared with $360 million in 2002
and $634 million in 2001. It has increased P.L. 480 Title II funding by approximately $800
million in fiscal year 2003 in part to offset the decrease.




Page 23                                                    GAO-03-607 Foreign Assistance
U.S. Food Assistance            The U.S.-produced commodities and humanitarian daily rations provided
Contributions Were Costly and   by the United States to Afghanistan resulted in lower volumes of food than
Inefficient                     if the United States had provided regionally purchased commodities or
                                cash donations. If it had provided WFP with cash or commodities from
                                countries in the Central Asia region, the United States could have
                                eliminated ocean freight costs. We estimated that the savings in freight
                                costs would have enabled WFP to provide food assistance to
                                approximately 685,000 additional people for 1 year. In addition, we
                                estimated that if the United States had donated cash or regionally
                                purchased commodities instead of air-dropping rations, WFP could have
                                provided food assistance for another 1.0 million people for a year.

                                U.S.-Produced Commodities Raised Costs and Slowed Delivery

                                Most of the food assistance that the United States donated to Afghanistan
                                in 1999–2002 was provided through WFP as in-kind donations of U.S.
                                agricultural products as well as cash to cover shipping and freight costs.
                                Since the commodities were purchased in the United States, much of the
                                cost of the assistance represented shipping and freight costs rather than
                                the price of the commodities. Figure 7 provides a breakdown of the costs
                                associated with U.S. food assistance to Afghanistan from 1999 through
                                2002. (See app. V for additional cost data.)




                                Page 24                                          GAO-03-607 Foreign Assistance
Figure 7: Costs for U.S. Food Assistance to Afghanistan, Fiscal Years 1999–2002




Legend
Admin. and misc. = administrative and miscellaneous. Includes administrative costs associated with
the delivery of assistance
ITSH= internal transport, storage, and handling within Afghanistan
Inland freight = freight costs from port of arrival to Afghan border
Ocean freight = freight costs from U.S. port to port of arrival




Page 25                                                                GAO-03-607 Foreign Assistance
We estimated that if the United States had provided cash or regionally
purchased commodities instead of U.S.-produced commodities in 2002,
WFP could have purchased approximately 103,000 additional metric tons
of commodities and saved 120 days in delivery time. WFP officials in Rome
and Cairo21 stated that cash was greatly preferable to in-kind donations
because it allows for flexibility and for local and regional purchases. Other
contributors to WFP efforts in Afghanistan have provided cash, allowing
WFP to make the purchases it deemed most expedient, including
purchases from Central Asian countries that produced large surpluses in
2002.22 Ninety-three percent of the commodities WFP purchased for the
emergency operation that began in April 2002 (157,128 metric tons) were
from Kazakhstan and Pakistan.23 WFP also stated that it could have saved
approximately 120 days in delivery time if it had received U.S.
contributions in cash that it could have used for regional purchases.




21
 WFP’s Regional Bureau for the Mediterranean, Middle East, and Central Asia is located in
Cairo, Egypt, and is responsible for operations in Afghanistan.
22
 In March 2002 testimony before the Senate Foreign Relations Committee, the
Administrator of USAID stated, “The countries surrounding Afghanistan had plenty of
surplus food available, thus ensuring price stability, to meet the needs of the Afghan people.
However, the tools did not exist for the U.S. government to respond more effectively and,
possibly, at lower cost to the taxpayer.” In 2002, Kazakhstan exported 6 million metric tons
of wheat and Pakistan exported 1.6 metric tons.
23
 In 2002, WFP purchased approximately 33 percent of all commodities it distributed in
Afghanistan and received the other 67 percent from donor nations.




Page 26                                                       GAO-03-607 Foreign Assistance
Although the commodity costs and some of the freight costs for regional
purchases are lower, the largest portion of the savings from regional
purchases comes from eliminating ocean freight costs. In 2002, USDA spent
$5.6 million on ocean freight, or 31 percent of the value of the aid it
provided to Afghanistan. USAID spent $29.4 million on ocean freight, or
18.3 percent of the value of the aid it provided to Afghanistan. Overall,
USDA and USAID spent approximately $35.0 million on ocean freight and
commissions, or 19.6 percent of the total value ($178,068,786) of the food
aid they provided through WFP to Afghanistan. Had this money been spent
on regional purchases instead of on ocean freight, it could have paid for
103,000 additional metric tons of commodities, or enough to provide food
assistance for approximately 685,000 people for 1 year. 24 However, the laws
governing the main food assistance programs under which most of the U.S.
assistance was provided to Afghanistan through WFP do not provide for
USAID and USDA to purchase food assistance commodities regionally or
provide cash to WFP to make regional purchases. All of the assistance must
be provided in the form of U.S. commodities, and 75 percent of the
commodities by weight must be shipped on U.S.-flag vessels.25 According to
USDA, this requirement referred to as “cargo preference” accounts for 9
percent of the cost of U.S. food assistance shipments worldwide. In this
case, it accounted for approximately $16 million of the $35 million in ocean
freight. In prior reports we reported that the most significant impact of the
cargo preference requirement on U.S. food assistance programs is the
additional costs incurred.26 Using U.S.-flag vessels reduces funds available
for purchasing commodities, thus the amount of food delivered to
vulnerable populations is decreased. In its 2002 annual assessment of
management performance, the Office of Management and Budget
concluded that U.S. food assistance programs would be more cost effective


24
   Estimate based on the ration provided to refugees in Afghanistan: 12.5 kilograms (27.5
pounds) of wheat per person per month and regional commodity and transportation costs of
$340 per metric ton.
25
 The Merchant Marine Act, 1936 (P.L. 74-835), as amended by the Cargo Preference Act of
1954 (P.L. 83-664), generally requires that at least 50 percent of any U.S. government-
controlled cargo shipped by sea be carried on privately owned U.S.-flag vessels. In 1985, the
Merchant Marine Act, 1936 was amended to require that 75 percent of certain foreign food
aid be shipped on privately owned U.S. flag vessels.
26
 For further information on impact of shipping U.S. commodities on U.S. flagged cargo
vessels see Cargo Preference Requirements: Objectives Not Significantly Advanced When
Used in U.S. Food Aid Programs, GAO/GGD-94-215 (Washington, D.C.: September 1994).
Cargo Preference Requirements: Their Impact on U.S. Food Aid Programs and the U.S.
Merchant Marine, GAO/NSIAD-90-174 (Washington, D.C.: June 1990).




Page 27                                                      GAO-03-607 Foreign Assistance
and flexible if the requirement to ship U.S. food assistance on U.S.-flag
vessels was eliminated. In commenting on a draft of this report, USDA
stated that consideration should be given to waiving cargo preference
requirements in specific food aid situations.

In February 2003, the President announced a new humanitarian $200
million Famine Fund. Use of the fund will be subject to presidential
decision and will draw upon the broad disaster assistance authorities in the
Foreign Assistance Act. According to USAID, these authorities allow the
U.S. government to purchase commodities overseas to meet emergency
food assistance needs. However, this authority does not extend to the
United States’ fiscal year 2003 $2.6 billion food assistance programs under
existing food assistance legislation.

Humanitarian Daily Rations Were Expensive and Inefficient

The U.S. Department of Defense’s humanitarian daily ration program was a
largely ineffective and expensive component of the U.S. food assistance
effort. The program was initiated to alleviate suffering and convey that the
United States was waging war against the Taliban, not the Afghan people.
However, the program’s public relations and military impact have not been
formally evaluated. Airdrops of the humanitarian daily rations were
intended to disperse the packets over a wide area, avoiding the dangers of
heavy pallet drops or having concentrations of food fall into the hands of a
few. On October 8, 2001, U.S. Air Force C-17s began dropping rations on
various areas within Afghanistan. Drops averaged 35,000 packets per night
(two planeloads) and ended on December 21, 2001. In 198 missions over 74
days, the Air Force dropped 2,489,880 rations (see fig. 8).27




27
 In addition to dropping the rations, the Air Force dropped 21,000 55-pound sacks of wheat
and 42,000 blankets.




Page 28                                                    GAO-03-607 Foreign Assistance
Figure 8: Humanitarian Daily Rations




Note: A ration packet measures 8.5 by 12.5 inches, weighs about 2.2 pounds, and contains a complete
set of meals for 1 day for one person, totaling approximately 2,200 calories. The contents are chosen
to meet strict dietary considerations and as such are completely vegetarian.


According to WFP, one of the major problems with the ration program was
the lack of any assessment to identify the needs of the target populations or
their locations. WFP representatives were part of the coordination team
located at Central Command in late 2001 when the airdrops were made.
These representatives provided the Defense Department with general
information on drought-affected areas but were not asked to provide
information on specific areas to target. According to Department of
Defense officials, the drop areas were selected based on consultations with
USAID staff familiar with the situation in Afghanistan.

Defense officials told us that the rations are an expensive and inefficient
means of delivering food assistance and were designed to relieve
temporary food shortages resulting from manmade or natural disasters—
not, as in Afghanistan, to feed a large number of people affected by a long-
term food shortage. Defense officials responsible for the ration program
stated that the humanitarian, public relations, and military impact of the



Page 29                                                           GAO-03-607 Foreign Assistance
                          effort in Afghanistan had not been evaluated. According to these officials,
                          anecdotal reports from Special Forces soldiers indicated that vulnerable
                          populations did receive the food and that the rations helped to generate
                          goodwill among the Afghan people. However, reports from
                          nongovernmental organizations in Afghanistan indicated that often the
                          rations went to the healthiest, since they were able to access the drop zone
                          most quickly, and were hoarded by a few rather than distributed among the
                          population.

                          The cost of the rations was $4.25 per unit, or $10,581,990 for the
                          approximately 2.5 million dropped. The total cost of the program was
                          $50,897,769, or $20.44 per daily ration. Delivery cost is estimated at $16.19
                          per unit, based on the difference in the ration cost and the department’s
                          total expenditure. The rations accounted for only 2,835 metric tons out of
                          the total of 365,170 metric tons, or .78 percent of the total weight of food
                          aid delivered in fiscal year 2002. However, the cost of the rations equals
                          28.6 percent of the $178,068,786 that USAID and USDA spent on emergency
                          assistance to Afghanistan from October 2001 through September 2002. If
                          the United States had bought traditional food assistance commodities
                          regionally instead of dropping the 2,835 metric tons of rations, it could have
                          purchased approximately 118,000 metric tons of food, enough to provide
                          food assistance to 1.0 million people for 1 year.



Agricultural Assistance   The U.S. and international community’s agricultural reconstruction efforts
                          in Afghanistan have had limited impact, coordination of the assistance has
Has Had Limited           been fragmented, and significant obstacles jeopardize Afghanistan’s long-
Impact and Lacks          term food security and political stability. Because of drought and adverse
                          political conditions, agricultural assistance provided by the international
Coordination, and         community has not measurably improved Afghanistan’s long-term food
Major Obstacles           security. In 2002, collective efforts to coordinate reconstruction assistance,
Jeopardize Food           especially with the Afghan government, were ineffectual and, as a result, no
                          single operational strategy has been developed to manage and integrate
Security and Political    international agricultural assistance projects. Finally, the inadequacy of
Stability                 proposed agricultural assistance, and the increase in domestic terrorism,
                          warlords’ control of much of the country, and opium production all present
                          obstacles to the international community’s goal of achieving food security
                          and political stability in Afghanistan.




                          Page 30                                            GAO-03-607 Foreign Assistance
Impact of Agricultural   For most of the period 1999–2002, because of war and drought, FAO,
Assistance Limited by    bilateral donors, and more than 50 nongovernmental organizations in
                         Afghanistan focused resources primarily on short-term, humanitarian
Drought and Political    relief; consequently, the impact of this effort on the agricultural sector’s
Factors                  long-term rehabilitation was limited. The assistance was provided in an
                         effort to increase short-term food security and decrease Afghanistan’s
                         dependence on emergency food assistance. During most of the 4-year
                         period, FAO provided $28 million in assistance to Afghanistan partly under
                         the UN Development Program’s (UNDP) Poverty Eradication and
                         Community Empowerment program and partly as donor-funded response
                         to the drought.28 The poverty eradication program ended in 2002, but FAO
                         continues its projects in Afghanistan. FAO’s short-term activities focus on
                         efforts to enable war- and drought-affected populations to resume food
                         production activities. These activities include providing agricultural inputs
                         such as tools, seed, and fertilizer; controlling locusts; and making repairs to
                         small-scale irrigation systems (see fig. 9). Its longer-term activities include,
                         among other things, the establishment of veterinary clinics, assistance in
                         the production of high-quality seed through 5,000 contracted Afghan
                         farmers, and horticulture development. From 1999 to 2002, bilateral efforts
                         focused on the distribution of agricultural inputs and the repair of irrigation
                         systems. USAID activities currently include developing a market-based
                         distribution system for agricultural inputs as well as distributing high-
                         quality seed.29 As of March 2002, at least 50 of the approximately 400
                         national and international nongovernmental organizations working in
                         Afghanistan were involved in agriculture-related assistance, including
                         providing agricultural inputs, farmer training, microcredit, and the
                         construction of wells.




                         28
                          During the 1990s, FAO’s emergency and longer-term development efforts were conducted
                         under strategies and programs managed by UNDP.
                         29
                              USAID spent approximately $23 million on agriculture assistance in Afghanistan in 2002.




                         Page 31                                                        GAO-03-607 Foreign Assistance
Figure 9: FAO Irrigation Rehabilitation Project




For most of the 4-year period, the rise of the Taliban, the continuing
conflict with the Northern Alliance, and the ongoing drought prevented the
international community from shifting from short-term relief projects to
longer-term agricultural rehabilitation projects and reversed earlier
advancements in agricultural production. For example, by 1997, agriculture
in some areas had returned to prewar levels, and Afghanistan as a whole
had reached 70 percent self-sufficiency in the production of cereals. At the
time, assistance agencies were planning to implement longer-term
assistance activities but were unable to do so owing to drought and
conflict. These same factors resulted in decreases in cereal production and
livestock herds of 48 percent and 60 percent, respectively, from 1998
through 2001. In 2002, a number of longer-term agricultural rehabilitation
efforts were started, including efforts by USAID to reestablish agricultural
input and product markets. However, these efforts have not been
evaluated, and it is too early to determine their sustainability after donor
assistance ends or their long-term impact.




Page 32                                           GAO-03-607 Foreign Assistance
Weak Assistance            International assistance, including agricultural assistance, was not well
Coordination in 2002       coordinated in 2002, and, as a result, the Afghan government was not
                           substantively integrated into the agricultural recovery effort and lacks an
Hindered Afghan            effective operational strategy. In December 2002, the Afghan government
Government’s Involvement   and the international community instituted a new mechanism, the
and Development of         Consultative Group, to improve coordination. However, the Consultative
Operational Strategy       Group is similar in purpose and structure to a mechanism used earlier in
                           2002, the Implementation Group, and does not surmount the obstacles that
                           prevented the Implementation Group’s success. Because of the lack of
                           coordination, the Afghan government and the international community
                           have not developed a single operational strategy to direct the agricultural
                           rehabilitation effort; instead, all of the major assistance organizations have
                           independent strategies. Although documents prepared by the Afghan
                           government and others to manage assistance efforts contain some of the
                           components of an effective operational strategy, these components have
                           not been combined in a coherent strategy. The lack of an operational
                           strategy hinders efforts to integrate projects, focus resources, empower
                           Afghan government ministries, and make the international community
                           more accountable.



Assistance Coordination    Despite efforts to synchronize multiple donors’ initiatives in a complex and
Was Weak in 2002           changing environment, coordination of international assistance in general,
                           and agricultural assistance in particular, was weak in 2002. According to
                           the UN, assistance coordination refers to a recipient government’s
                           integration of donor assistance into national development goals and
                           strategies. From the beginning of the assistance effort in 2002, donors were
                           urged to defer responsibility for assistance coordination to the Afghan
                           government as stipulated in the Bonn Agreement.30 According to the UN,
                           coordination rests with the Afghan government, efforts by the aid
                           community should reinforce national authorities, and the international
                           community should operate, and relate to the Afghan government, in a
                           coherent manner rather than through a series of disparate relationships.31


                           30
                            Annex III of the Bonn Agreement states that the participants in the UN Talks on
                           Afghanistan hereby urge the UN, the international community, particularly donor countries
                           and multilateral institutions, to reaffirm, strengthen and implement their commitment to
                           assist with rehabilitation, recovery, and reconstruction of Afghanistan, in coordination with
                           the Afghan government.
                           31
                                Immediate and Transitional Assistance Program for the Afghan People, January 17, 2002.




                           Page 33                                                       GAO-03-607 Foreign Assistance
The Security Council resolution that established the UN Assistance Mission
in Afghanistan goes further; it states that reconstruction assistance should
be provided through the Afghan government and urges the international
community to coordinate closely with the government.32

In April 2002, the Afghan government attempted to exert leadership over
the highly fragmented reconstruction process. To accomplish this task, the
government published its National Development Framework. The
framework provides a vision for a reconstructed Afghanistan and broadly
establishes national goals and policy directions.33 The framework is not
intended to serve as a detailed operational plan with specific objectives and
tasks that must be pursued to accomplish national goals. Also, in 2002, the
Afghan government established a government-led coordination
mechanism, the Implementation Group (see app. VI for detailed
descriptions and a comparison of the coordinating mechanisms). The
intent of the Implementation Group was to bring coherence to the
international community’s independent efforts and broad political
objectives, such as ensuring Afghanistan does not become a harbor for
terrorists. The mechanism’s structure was based on the National
Development Framework. Individual coordination groups, led by Afghan
ministers and composed of assistance organizations, were established for
each of the 12 programs contained in the framework.

The Implementation Group mechanism proved to be largely ineffective.
Officials from the Afghan government, the UN, the Department of State,
and USAID, as well as a number of nongovernmental bodies, expressed
concern over the lack of meaningful and effective coordination of
assistance in Afghanistan in 2002. For example, a high-ranking WFP official
in Afghanistan said that coordination efforts since September 11, 2002, paid
only “lip-service” to collaboration, integration, and consensus. In August
2002, the Ministers of Foreign Affairs, Rural Reconstruction and
Development, Irrigation, and Agriculture stated that the donor community’s
effort to coordinate with the government was poor to nonexistent. A
USAID official characterized the coordination of reconstruction in 2002 as


32
     Security Council Resolution 1401 (2002), S/RES/1401, March 28, 2002.
33
 The framework is organized around three “pillars”: (1) humanitarian assistance and human
social capital, (2) physical reconstruction and natural resources, and (3) private sector
development. Under the three pillars there are 12 programs supported by a number of
subprograms. Subprograms for agriculture and irrigation fall under “Pillar 2, Physical
Reconstruction and Natural Resources, program for Natural Resources Management.”




Page 34                                                       GAO-03-607 Foreign Assistance
                                  an “ugly evolution” and “the most complex post-conflict management
                                  system” he had ever seen.

                                  The ineffectiveness of the Implementation Group mechanism resulted from
                                  its inability to overcome several impediments. First, each bilateral,
                                  multilateral, and nongovernmental assistance agency has its own mandate,
                                  established by implementing legislation or charter, and sources of funding,
                                  and each agency pursues development efforts in Afghanistan
                                  independently. Second, the international community asserts that the
                                  Afghan government lacks the capacity and resources to effectively assume
                                  the role of coordinator and, hence, these responsibilities cannot be
                                  delegated to the government. Third, no single entity within the
                                  international community has the authority and mandate to direct the
                                  efforts of the myriad bilateral, multilateral, and nongovernmental
                                  organizations providing agricultural assistance to Afghanistan.34 Finally,
                                  efforts to coordinate agricultural assistance were further complicated
                                  because the Ministries of Agriculture, Irrigation, and Rehabilitation and
                                  Rural Development share responsibility for agriculture development.

Efforts to Improve Coordination   In December 2002, the Afghan government instituted a new coordination
Have Been Implemented             system, the Consultative Group mechanism.35 The overall objective of the
                                  Consultative Group in Afghanistan is to increase the effectiveness and
                                  efficiency of assistance coordination in support of goals and objectives
                                  contained in the National Development Framework.36 According to the
                                  Afghan government, the program-level consultative groups established


                                  34
                                    Donor nations have taken the lead in other sectors. Specifically, the United States leads in
                                  training the national army, Germany in training the police, Italy in rebuilding the judicial
                                  system, and the United Kingdom in drug control. These donor nations, in consultation with
                                  the Afghan government and the international community, have developed strategies for
                                  reconstructing their respective sectors.
                                  35
                                   Consultative group is a World Bank term used to describe a process of consultations
                                  between the government of a recipient developing nation and the international assistance
                                  community. Typically, the process involves monthly group meetings in country on sectoral
                                  or thematic issues. Such working groups bring together interested parties, including
                                  ministry representatives, donors, nongovernmental organizations, and UN agencies, to
                                  discuss strategic planning and improve coordination.
                                  36
                                     There are 12 program area–based consultative groups that correspond to the 12 program
                                  areas contained in the Afghan government’s National Development Framework. Two
                                  additional consultative groups deal with national security issues (national army and national
                                  police). The groups report to a consultative group standing committee during an annual
                                  national consultative group meeting.




                                  Page 35                                                       GAO-03-607 Foreign Assistance
under this mechanism provide a means by which the government can
engage donors, UN agencies, and nongovernmental organizations to
promote specific national programs and objectives presented in the
government’s National Development Framework and the projects
articulated in the Afghan National Development Budget.37 According to
advisors to the Afghan government, the Consultative Group mechanism
provides a real opportunity for donors to provide focused support for
policy development, project preparation, implementation, monitoring, and
evaluation.

The Consultative Group mechanism in Afghanistan evolved out of the
Implementation Group and is similar in its National Development
Framework–based hierarchal structure, the role of the Afghan government,
the membership and leadership of sector specific groups, and stated goals
(see app. VI). One difference between the Implementation and Consultative
Group mechanisms is that, since the establishment of the latter, the Afghan
government has asked donor government and assistance organizations to
categorize their assistance projects under the subprograms in the National
Development Framework and to direct funding toward the projects in the
Afghan National Development Budget.

Despite the effort to develop a more effective coordination mechanism, the
Consultative Group mechanism has not surmounted the conditions that
prevented the Implementation Group from effectively coordinating
assistance. For example, in 2003, donor governments and assistance
agencies have continued to develop their own strategies, as well as fund
and implement projects outside the Afghan government’s national budget.
In addition, agricultural assistance is divided up among several
consultative groups including the groups for natural resources
management and livelihoods. Further, unlike food assistance where donors
primarily use one agency, WFP, for channeling resources, donors continue
to use a variety of channels for their agriculture assistance. Although the
Afghan government asserts that it is assuming a greater level of leadership
over the coordination effort, as of May 2003, we could not determine
whether the new coordination mechanism would be more successful than
earlier efforts.


37
   The budget contains three types of prioritized projects: (1) projects designed primarily by
the Afghan government and funded through the national budget, (2) projects primarily
designed by donors and funded and implemented by donors, and (3) conceptual projects for
which funding and implementation arrangements have not been determined.




Page 36                                                       GAO-03-607 Foreign Assistance
Lack of Coordination Prevented   Because of the inadequate coordination of agricultural assistance, the
Development of Operational       Afghan government and the international community have not developed
Strategy                         an operational agricultural sector strategy. Each assistance agency has
                                 published its own development strategy that addresses agriculture and
                                 numerous other sectors. The Consultative Group mechanism and the
                                 National Development Framework, as well as other documents prepared
                                 by the Afghan government and others to manage assistance efforts, contain
                                 some of the components of an effective operational strategy, such as
                                 measurable goals and impediments to their achievement. However, these
                                 components have not been incorporated in a single strategy. Without an
                                 integrated operational strategy, jointly developed by the Afghan
                                 government and the international community, the Afghan government lacks
                                 a mechanism to manage the agricultural rehabilitation effort, focus limited
                                 resources, assert its leadership, and hold the international donor
                                 community accountable.38

                                 Assistance Agencies Have Developed Separate Strategies

                                 No donor has taken the lead in the agricultural sector; consequently,
                                 multilateral, bilateral, and nongovernmental organizations, including the
                                 UN, FAO, the Asian Development Bank, the World Bank, USAID, and
                                 others, have prepared individual strategies that address, to varying degrees,
                                 agricultural reconstruction and food security.39 However, these strategies
                                 lack measurable national goals for the sector and have not been developed
                                 jointly with the Afghan government. For example, in August 2002, the
                                 Minister of Agriculture stated, “The ministry does not know the priorities of
                                 the international community for the agricultural sector, how much money
                                 will be spent, and where the projects will be implemented.” FAO claimed
                                 that the Ministry of Agriculture had endorsed FAO’s agricultural
                                 rehabilitation strategy. However, no letter of agreement or memorandum of
                                 understanding between the FAO and the ministry documents the
                                 acceptance of the strategy. The Minister of Agriculture told us, in
                                 December 2002, that the ministry had not endorsed FAO’s latest strategy.
                                 Further, the Ministry of Agriculture presented a list of more than 100
                                 prioritized rehabilitation projects to the international community. As of late


                                 38
                                  According to the UN, “assistance management” refers to the effective implementation of
                                 donor-funded development programs.
                                 39
                                  Assistance proposed in these strategies includes technical assistance, inputs such as seeds
                                 and fertilizer, capacity building for government staff, irrigation repair, water resource
                                 management, livestock rehabilitation, and credit to small farmers, among other things.




                                 Page 37                                                      GAO-03-607 Foreign Assistance
December 2002, the international community had not responded regarding
the ministry’s proposed projects.

Components of an Operational Strategy Have Not Been Integrated
into a Single Document

Although Consultative Group mechanism–related documents, the Afghan
National Development Framework, and other documents prepared by the
Afghan government and others to manage assistance efforts contain some
of the components of an effective operational strategy, these components
have not been incorporated in a single strategy. For an operational
agricultural strategy to be effective, all relevant stakeholders must
participate in its formulation. In this case, stakeholders include the Afghan
Ministries of Agriculture and Irrigation and key nongovernmental,
multilateral, and bilateral development organizations. Further, such
strategies must establish measurable goals, set specific time frames,
determine resource levels, and delineate responsibilities. For example, in
Afghanistan, one such goal might be to increase the percentage of irrigated
land by 25 percent by 2004 through the implementation of $100 million in
FAO-led irrigation projects in specific provinces. In addition, an operational
strategy should identify external factors that could significantly affect the
achievement of goals and include a schedule for future program
evaluations.40 Stakeholders should implement the strategy through projects
that support the measurable goals of the strategy and broader policy
objectives, such as those contained in the Afghan Government’s National
Development Framework (see fig. 10).




40
 Government Performance and Results Act of 1993 P.L.103-62. U.S. General Accounting
Office Congressional Review of Agency Strategic Plans, GAO/GGD-10.1.16 (Washington,
D.C.: January 1995). Office of Management and Budget, Circular A-11, Part 6—
Preparation and Submission of Strategic Plans, Annual Performance Plans, and Annual
Program Performance Results (Washington, D.C.: June 2002).




Page 38                                                GAO-03-607 Foreign Assistance
Figure 10: Hierarchy of Strategies for Agricultural Sector Reconstruction




The Implementation Group and its successor, the Consultative Group, as
well as the National Development Framework and other documents,
contain some of the essential elements of an operational strategy. These
elements include the involvement of key stakeholders, the development of
some measurable objectives, and the identification of external factors that
could affect the achievement of goals. However, since the National
Development Framework is a general national strategy and not a detailed
operational strategy, it is sufficiently broad that any assistance to the
agricultural sector could be considered supportive of the framework, even
if the assistance were not well targeted or made no significant impact. In
addition, the various elements of an effective operational strategy that are
contained in the National Development Framework and other documents
have not been effectively applied, nor has a single agricultural sector
strategy incorporating all of these elements been developed.

The UN Assistance Mission for Afghanistan’s management plan endorses
the formulation of joint strategies for reconstruction. In late December
2002, Afghanistan’s Minister of Agriculture told us that he would welcome
the development of a joint Afghan–international agricultural sector strategy
containing clear objectives, measurable goals, concrete funding levels, and
clearly delineated responsibilities. In January 2003, FAO’s Assistant
Director-General of Technical Cooperation stated that FAO would welcome



Page 39                                                GAO-03-607 Foreign Assistance
the opportunity to assist the Ministry of Agriculture in preparing a strategy.
The Consultative Group mechanism could serve as a vehicle to support the
development of such a strategy. In March 2003, Afghan government
advisors told us that consultative groups could develop strategies based on
the subprograms contained in the National Development Framework and
National Development Budget. Proposals for the development of strategies
pertaining to natural resources management, including agriculture, have
been drafted, and support for these proposals is being sought from the
international community.

Lack of Operational Agricultural Sector Strategy Limits Integration
and Oversight

The lack of an operational agricultural sector strategy hinders efforts to
integrate disparate projects, focus limited assistance resources, place
Afghan government ministries in a leadership role, and make the
international community more accountable to the Afghan government. In
its October 2002 National Development Budget, the Afghan government
cited the lack of a strategic framework for the natural resources
management sector, including agriculture, as an impediment to
rehabilitation. Absent an operational strategy, the Afghan government lacks
a mechanism to

• integrate disparate projects into an effective agricultural rehabilitation
  program,

• manage finite resources so as to ensure the greatest return on
  agricultural investment, and

• guide the efforts of the international community and assert the Afghan
  government’s leadership in agricultural reconstruction.

Finally, an operational agricultural sector strategy that includes measurable
goals and the means to assess progress against those goals could increase
accountability.41 Because no comprehensive integrated strategy exists, the
Afghan government lacks the means to hold the international assistance
community accountable for implementing the agricultural sector
reconstruction effort and achieving measurable results.



41
     Government Performance and Results Act.




Page 40                                            GAO-03-607 Foreign Assistance
Limited Funding and               Major obstacles to the goal of a food-secure and politically stable Afghan
Security Problems Present         state include inadequate assistance funding, as well as a volatile security
                                  situation, long-standing power struggles among warlords, and the rapid
Obstacles to Food Security        increase in opium production. Donor support has not met Afghanistan’s
and Political Stability           recovery and reconstruction needs, and future funding levels for
                                  agricultural assistance may be inadequate to achieve the goal of food
                                  security and political stability, primarily because assistance levels are
                                  based on what the international community is willing to provide rather than
                                  on Afghanistan’s needs. Meanwhile, the continued deterioration of the
                                  security situation, exacerbated by a rising incidence of terrorism, the
                                  resurgence of warlords, and near-record levels of opium production, are
                                  impeding reconstruction and threaten to destabilize the nascent Afghan
                                  government.

International Assistance May Be   Total assistance levels, including those for agricultural reconstruction,
Insufficient to Meet Needs        proposed at the Tokyo donors’ conference in January 2002 do not provide
                                  Afghanistan with enough assistance to meet its estimated needs.42 The
                                  preliminary needs assessment prepared for the January 2002 donor’s
                                  conference in Tokyo estimated that, in addition to humanitarian assistance
                                  such as food and shelter assistance, between $11.4 and $18.1 billion over 10
                                  years would be needed to reconstruct Afghanistan (see table 2). Others
                                  have estimated that much more is required. For example, the Afghan
                                  government estimated that it would need $15 billion for reconstruction
                                  from 2003 through 2007.




                                  42
                                     UNDP, Asian Development Bank, and the World Bank, Preliminary Needs Assessment for
                                  Recovery and Reconstruction (Tokyo: 2002). The assessment was prepared by UNDP, the
                                  Asian Development Bank, and the World Bank to help determine the requirement of
                                  external assistance to support Afghanistan’s economic and social recovery and
                                  reconstruction over the short and medium terms. During the January 2002 conference, the
                                  Afghan government identified agricultural and rural development, including food security,
                                  water management, and revitalizing irrigation, as one of six areas essential for
                                  reconstruction.




                                  Page 41                                                    GAO-03-607 Foreign Assistance
Table 2: Projected Cumulative Funding Requirements for the Reconstruction of
Afghanistan

(Billions of dollars)
Level                                   1 year               2.5 years         5 years       10 years
Low case                                  $1.4                   $4.2             $8.3          $11.4
Base case                                   1.7                    4.9            10.2           14.6
High case                                 $2.1                   $5.5            $12.2          $18.1
Sources: Asian Development Bank, UNDP, and the World Bank.

Note: Afghanistan Preliminary Needs Assessment for Recovery and Reconstruction (Tokyo: January
2002).


In January 2002, donors pledged $5.2 billion for the reconstruction of
Afghanistan for 2002–2006, or slightly more than half of the base-case
estimate for 5 years.43 For the period January 2002–March 2003, the donors
pledged $2.1 billion (see app. VII for donor pledges and donations).44 As of
March 2003, approximately 88 percent of the 2002 grant funding had been
disbursed. However, only 27 percent, or $499 million, was spent on major
reconstruction projects such as roads and bridges, which are essential for
the export of Afghan agricultural commodities and the import of foreign
agricultural supplies. Despite the importance that the United States and the
international community attach to the Afghan reconstruction effort,
Afghanistan is receiving less assistance than was provided for other recent
postconflict, complex emergencies. For example, per capita assistance
levels have ranged from $193 in Rwanda to $326 in Bosnia, compared with
$57 for Afghanistan. Given that the livelihood of 22 million Afghans
depends on agriculture, we estimated that if all of the assistance had been
provided only to people engaged in agriculture, each person would have
received $67 annually or about 18 cents per day for their daily subsistence
and agriculture production efforts in 2002. If Afghanistan were to receive
per capita aid consistent with the average amounts provided for other
recent postconflict reconstruction efforts, in 2002 it would have received



43
  This figure was revised from $4.5 billion because of increases in pledges. This total
included $3.8 billion in grants and $1.4 billion in loans. The initial pledge of $1.8 billion for
2002 was revised to $2.1 billion.
44
 Overall U.S. assistance to Afghanistan in 2002 totaled $717 million, or 6.2 percent of
worldwide U.S. bilateral assistance obligations in that year. Most of this amount was not for
reconstruction but for humanitarian assistance, including food aid.




Page 42                                                                  GAO-03-607 Foreign Assistance
                                   $6 billion in international assistance, and from 2002 to 2006 it would
                                   receive $30 billion, or nearly three times the base-case estimate.

Funding May Be Inadequate to       The funding proposed by donors for food security–related issues is limited
Rehabilitate Agricultural Sector   and may be insufficient to achieve the long-term goals of the Afghan
                                   government and the international community. Despite the Afghan
                                   government’s estimated annual need of $500 million for agricultural
                                   rehabilitation, agricultural assistance for Afghanistan in 2003 may total
                                   approximately $230 million.45 Afghanistan’s President has emphasized that
                                   the goal of food security and political stability is the Afghan government’s
                                   overarching priority, and the United States and other donor governments
                                   recognize the strong link between stability and food security. According to
                                   the U.S. Department of State, reconstruction is an integral part of the
                                   campaign against terrorism: the U.S. policy goal in Afghanistan is to create
                                   a stable Afghan society that is not a threat to itself or others and is not a
                                   base for terrorism. Because the agricultural sector forms the core of the
                                   Afghan economy, the pace of the sector’s recovery will largely determine
                                   the rate of overall economic recovery. Sustained investment in the
                                   agricultural sector, particularly the rehabilitation, upgrading, and
                                   maintenance of the nation’s irrigation infrastructure, is essential for the
                                   recovery of the Afghan economy and the country’s long-term food
                                   security.46 Despite improvements in agricultural production in 2002, owing
                                   primarily to increased precipitation, the fundamental weakness of
                                   Afghanistan’s agricultural infrastructure continues to threaten overall
                                   recovery efforts.




                                   45
                                    The international community has not published a figure for total agricultural assistance to
                                   Afghanistan. This estimate is derived from available Asian Development Bank, European
                                   Union, European Commission, UN, U.S., and World Bank data.
                                   46
                                        FAO estimates that it will take at least 10 years to rebuild the agricultural sector.




                                   Page 43                                                            GAO-03-607 Foreign Assistance
                                 The Ministry of Agriculture estimates that it needs $5 billion over 10 years
                                 to complete 117 key projects and other efforts important for the recovery
                                 of the sector. Despite these costs, the 2003 Afghan development budget for
                                 natural resource management, including agriculture, is only $155 million.
                                 Since the budget is funded almost entirely by the donor community, the
                                 budget reflects what the government expects to receive from the
                                 international community, not the Afghan government’s actual need. Afghan
                                 government budget estimates indicate that the natural resources
                                 management budget will increase to $298 million in 2004 and $432 million
                                 in 2005. International donors have budgeted approximately $230 million for
                                 agriculture-related assistance in 2003. USAID considers adequate funding a
                                 prerequisite for the success of the assistance effort and plans to spend
                                 approximately $50 million on agriculture in 2003 and similar amounts in
                                 2004 and 2005. USAID funding covers 32 percent of the Afghan
                                 government’s 2003 natural resources management program budget of $155
                                 million but only 10 percent of the Afghan Ministry of Agriculture’s
                                 estimated annual needs of $500 million.47

Increased Terrorism, Warlords,   The goal of a stable Afghan state is threatened by the rise in domestic
and Opium Production Are Major   terrorism, long-standing rivalries among warlords, and the rapid increase in
Obstacles to Food Security and   opium production. In March 2002, in a report to the UN Security Council,
Political Stability              the UN Secretary General stated that security will remain the essential
                                 requirement for the protection of the peace process in Afghanistan. One
                                 year later, in a report to the council, he stated that “security remains the
                                 most serious challenge facing the peace process in Afghanistan.” Others in
                                 the international community, including USAID, consider security as a
                                 prerequisite for the implementation of reconstruction efforts. In 2002 and
                                 early 2003, the deteriorating security situation was marked by terrorist
                                 attacks against the Afghan government, the Afghan people, and the
                                 international community.48 These incidents have forced the international
                                 community to periodically suspend agricultural assistance activities,
                                 disrupting the agricultural recovery effort.

                                 47
                                  The level of USAID’s agricultural assistance will remain the same in 2004 and 2005,
                                 accounting for about 16 percent of the Afghan government’s natural resources and
                                 management budget in 2004 and 11 percent in 2005.
                                 48
                                  Incidents included the attempted assassinations of the Minister of Defense and the
                                 President; the murder of an International Committee of the Red Cross staff member; rocket
                                 attacks on U.S. and international military installations; and bombings in the center of Kabul,
                                 at the International Security Assistance Force headquarters, and at UN compounds. There
                                 are approximately 4,900 International Security Assistance Force troops located in Kabul.
                                 These troops provide security only for the city of Kabul and the immediate vicinity.




                                 Page 44                                                       GAO-03-607 Foreign Assistance
Meanwhile, clashes between the warlords’ private armies continue to
destabilize the country and reduce the Afghan government’s ability to fund
agricultural reconstruction. The warlords foster an illegitimate economy
fueled by smuggling of arms, drugs, and other goods. They also illegally
withhold hundreds of millions of dollars in customs duties collected at
border points in the regions they control, depriving the central government
of revenues needed to fund the country’s agricultural reconstruction. The
warlords control private armies of tens of thousands of armed men. Across
Afghanistan, approximately 700,000 Afghan men are armed, and half of
these are combat trained. USAID considers the demobilization and
integration of these armed men a prerequisite for the success of the
international recovery effort.49 Currently, the unemployment rate in
Afghanistan is estimated at 50 percent. Without a revitalization of the
agricultural sector—the engine of the Afghan economy and the main
source of employment—it is likely that these men will remain in the employ
of the warlords.

Another destabilizing force that affects agriculture is the illicit international
trade in Afghan opiates. The drug trade was the primary income source of
the Taliban and continues to provide income for terrorists and warlords.50
On January 17, 2002, the President of Afghanistan issued a decree stating
that the existence of an opium-based economy was a matter of national
security and should be fought by all means. During the 1990s, Afghanistan
became the world’s leading opium producer accounting for approximately
70 percent of opium production worldwide. Despite being a central focus
of a number of international donors engaged in Afghanistan, opium poppy
eradication efforts implemented by the Afghan government and the
international community in 2002 failed. In July 2002, one of Afghanistan’s
vice presidents and leader of the Afghan government’s poppy eradication
campaign, Haji Qadir, was assassinated. In October 2002, the UN Office for
Drug Control and Crime Prevention estimated that, in 2002, Afghan farmers
produced 3,400 metric tons of opium.51 This level of production equals or
exceeds levels achieved in 9 of the last 10 years. Total 2002 revenue from
opium production totaled $1.2 billion, an amount equivalent to 70 percent



49
     USAID plans to spend $30 million in 2003 on demobilization efforts.
50
 In 2001, the United States estimated that the Taliban collected at least $40 million in taxes
on opium.
51
     UN Office for Drug Control and Crime Prevention, Geneva, October 2002.




Page 45                                                        GAO-03-607 Foreign Assistance
              of total assistance to Afghanistan pledged for 2002, or nearly 220 percent
              more than the Afghan government’s 2003 operating budget.52

              The UN Drug Control Program also estimated that the average poppy
              farmer earned $4,000 dollars from growing poppies in 2002. Owing to
              continuing drought, a poor agricultural marketing structure, and
              widespread poverty, farmers have turned to poppy cultivation to avoid
              destitution.53 Since the fall of the Taliban, irrigated acreage dedicated to
              wheat production has fallen by 10 percent, supplanted by opium poppies.
              In addition, it is estimated that 30 to 50 percent of Afghans are involved in
              opium cultivation. Many of the farmers continue to grow opium poppies
              because they lack the seed and fertilizer needed to grow alternative crops
              that generate revenues comparable to those from opium.54



Conclusions   The establishment of a new government in Afghanistan has provided the
              Afghan people, the international community, and the United States an
              opportunity to rebuild Afghanistan and create a stable country that is
              neither a threat to itself or its neighbors nor a harbor for terrorists. In 2002,
              U.S. and international food assistance averted famine, assisted the return
              of refugees, and helped to implement reconstruction efforts. However, U.S.
              food assistance and cargo shipping legislation limited the United States’
              flexibility in responding quickly to the emergency and providing support to
              WFP; the legislation does not provide for purchasing commodities
              regionally or donating cash to the UN for procuring commodities and
              requires that U.S. commodities be shipped on U.S. flag vessels.
              Consequently, the costs of food assistance were higher and delivery times
              were greater, fewer commodities were purchased, and a smaller number of
              people received food assistance. In addition, a lack of timely and adequate
              overall donor support disrupted WFP’s food assistance efforts. Meanwhile,
              in 2003, six million people will require food assistance in Afghanistan.


              52
               The value of Afghanistan’s 2002 opium crops was equivalent to 17 percent of its gross
              domestic product.
              53
               Although some poppy farmers are wealthy, many are poor farmers with just enough land
              and water for poppies but not enough resources to plant traditional or alternative crops. For
              many of these poor farmers, the decision to cultivate poppies causes moral anguish, as they
              regard its cultivation to be highly un-Islamic.
              54
               Prices paid to farmers range from $350 to $400 per kilogram. One kilogram equals 2.2
              pounds.




              Page 46                                                      GAO-03-607 Foreign Assistance
                      Because the economy remains overwhelmingly agricultural, the pace of
                      recovery in the agricultural sector will largely determine the rate of
                      Afghanistan’s overall recovery. Food assistance alone cannot provide food
                      security; Afghanistan’s agricultural sector must be rehabilitated.
                      Environmental and political problems have limited the impact of the
                      international community’s agricultural assistance efforts. In addition, in
                      2002, the assistance efforts were not coordinated with each other or with
                      the Afghan government. A new coordination mechanism established in
                      December 2002 is largely similar to earlier mechanisms, and it is too recent
                      for us to determine its effectiveness. Further, whereas U.S. and UN
                      agencies, bilateral donors, and nongovernmental organizations have
                      drafted numerous overlapping recovery strategies, no single Afghan
                      government–supported strategy is directed toward the effort to rehabilitate
                      the sector. Meanwhile, funding for the agricultural assistance effort is
                      insufficient and the nascent Afghan government is plagued with problems
                      stemming from domestic terrorism, the resurgence of warlords, and near-
                      record levels of opium production. These obstacles threaten the recovery
                      of the agricultural sector and the U.S. goals of achieving food security and
                      political stability in Afghanistan.



Matter for            To increase the United States’ ability to respond quickly to complex
                      emergencies involving U.S. national security interests, such as that in
Congressional         Afghanistan, Congress may wish to consider amending the Agricultural
Consideration         Trade Development and Assistance Act of 1954 (P.L. 83-480), as amended,
                      to provide the flexibility, in such emergencies, to purchase commodities
                      outside the United States when necessary and provide cash to assistance
                      agencies for the procurement of non-U.S.-produced commodities. In
                      addition, Congress may wish to amend the Merchant Marine Act of 1936, as
                      amended, to allow waiver of cargo preference requirements in emergencies
                      involving national security. These amendments would enable the United
                      States to reduce assistance costs and speed the delivery of assistance, thus
                      better supporting U.S. foreign policy and national security objectives.



Recommendations for   To increase the effectiveness of the agricultural assistance effort in
                      Afghanistan, we recommend that the Secretary of State and the
Executive Action      Administrator of the U.S. Agency for International Development work
                      through the Consultative Group mechanism to develop a comprehensive
                      international–Afghan operational strategy for the rehabilitation of the
                      agricultural sector. The strategy should (1) contain measurable goals and



                      Page 47                                           GAO-03-607 Foreign Assistance
                      specific time frames and resource levels, (2) delineate responsibilities, (3)
                      identify external factors that could significantly affect the achievement of
                      goals, and (4) include a schedule for program evaluations that assess
                      progress against the strategy’s goals.



Agency Comments and   We provided a draft of this report to WFP, Department of State, USDA,
                      USAID, and Department of Defense and received written comments from
Our Evaluation        each agency (see app. VIII, IX, X, XI, and XII respectively). We also received
                      technical comments from USDA, the Departments of Defense and State,
                      USAID, FAO, and the World Bank, and incorporated information as
                      appropriate.

                      Department of State, USDA, and USAID all commented on our matter for
                      congressional consideration related to amending food assistance
                      legislation. WFP supported our suggestion that Congress consider
                      amending the Agricultural Trade Development and Assistance Act of 1954
                      to allow the provision of non-U.S. commodities when such action supports
                      U.S. national security. However, State, USDA, and USAID did not support
                      the recommendation. Specifically, although State accepted our evidence
                      that purchasing commodities from the United States is not the most cost-
                      effective method of providing assistance, it believes that further study of
                      potential variables, such as regional customs fees, taxes, and trucking
                      costs, that may negate cost-benefit savings is needed before the act is
                      amended. USAID stated that an amendment is not necessary because other
                      authorities under the Foreign Assistance Act allow the provision of cash,
                      and the proposed $200 million Famine Fund announced by the President in
                      February 2003 would also increase the flexibility of U.S. assistance
                      programs. USDA stated that the flexibility to quickly respond to
                      humanitarian crises can be achieved through means, such as amending
                      cargo shipping legislation, that would not adversely affect the provision of
                      U.S. commodities. Specifically, USDA suggested adding a national security
                      waiver to the U.S. regulations that govern how U.S. assistance is
                      transported to eliminate the requirement to use U.S. flag vessels in certain
                      circumstances.

                      We do not disagree that under broad disaster assistance legislation U.S.
                      agencies may provide cash or purchase food aid commodities outside the
                      United States. However, we maintain that amending the Agricultural Trade
                      Development and Assistance Act of 1954 to allow the provision of cash or
                      food commodities outside the United States will greatly improve U.S.
                      flexibility in responding to crises that affect U.S. national security and



                      Page 48                                            GAO-03-607 Foreign Assistance
foreign policy interests. The act is the principal authority for providing food
assistance in emergency situations. In both 2002 and 2003 over $2 billion in
food assistance, the preponderant amount of this type of assistance, was
dispersed under this authority. Amending the act will provide the United
States with more flexibility to respond rapidly and at lower cost to events
that affect U.S. national security; this is particularly important given the
number and magnitude of crises requiring food assistance and decreasing
surpluses of U.S. commodities. We also agree with USDA that the cargo
preference requirement adds additional cost to food assistance and should
be waived in specific situations, and we have adjusted the matter for
congressional consideration contained in the report on this issue.

In its comments, USDA stated that the report did not provide enough
evidence about the existence of surpluses in 2002 in the Central Asia
region. It also stated that if the U.S. had procured greater levels of
commodities with the savings accrued by purchasing regional versus U.S. -
origin commodities, the additional commodities would have over burdened
WFP’s logistics system while generating only “marginal savings in time and
money.”

We have added additional information on the 7.6 million metric ton 2002
grain surplus in Kazakhstan and Pakistan. We disagree with USDA’s
assertions that additional regionally procured commodities would have
taxed WFP’s logistics system and brought only marginal gains. In
December 2002, while fighting between coalition forces, the Northern
Alliance, and the Taliban was still occurring, and winter weather was
complicating food deliveries, WFP delivered 116,000 metric tons of food to
Afghan beneficiaries, in the single largest movement of food by WFP in a 1-
month period. According to WFP, its Afghanistan logistics system was
capable of routinely moving more than 50,000 metric tons of food per
month. Further, we disagree with USDA’s statement that the potential
savings in cost and time by purchasing commodities regionally are
marginal. Savings from the elimination of ocean freight costs could have
fed 685,000 people for 1 year, and commodities purchased regionally are
delivered to beneficiaries within weeks of being purchased, compared with
the 4 months that it can take for commodities purchased in the United
States.

WFP, the Department of State, USDA, and USAID all agreed with the
report’s conclusion and recommendation pertaining to assistance
coordination and the need to develop a joint international-Afghan
agricultural rehabilitation strategy. WFP pointed out that although the



Page 49                                             GAO-03-607 Foreign Assistance
international assistance effort may have been aided by better coordination
in 2002, the overall level of assistance might have been too small in 2002 to
have any long-term impact on the agricultural sector. Although USAID
agreed with our recommendation, it stated it did not want to lead the
strategy development effort. We believe that USAID should take an active
and aggressive role in the development of a joint international–Afghan
government strategy, because the United States is the largest donor to
Afghanistan, agriculture rehabilitation is the focus of USAID’s assistance
effort in Afghanistan, and the achievement of U.S. goals in Afghanistan is
tightly linked to the rehabilitation of the country’s agricultural sector.
According to USAID’s assistance strategy for Afghanistan, restoring food
security is USAID’s highest priority.

Finally, the Department of Defense focused its comments on the report’s
discussion of the humanitarian daily ration program. Specifically, the
Department of Defense stated that (1) the report incorrectly characterized
the ration program as a food assistance program, (2) informal evaluations
of the program indicated that the program alleviated hunger and generated
goodwill from the Afghan people toward U.S. soldiers, and (3) although the
funds used to purchase rations could have been used to purchase bulk
food, the bulk food could not have been delivered to remote areas. The
report discusses both the food assistance and nonfood assistance aspects
of the rations program, and we have added information on page 30 about
the goodwill generated by the rations to the report. Finally, as discussed on
page 20 of the report, bulk food could have been delivered to remote areas
during the period of time (October-December 2001) when the ration
program was implemented. During the month of December 2001, WFP
delivered 116,000 metric tons of food to Afghanistan, a level of food
assistance that exceeds any 1-month total for any emergency operation in
WFP’s history.


We are sending copies of this report to the Honorable Richard J. Durbin,
Ranking Minority Member, Subcommittee on Oversight of Government
Management, the Federal Workforce, and the District of Columbia,
Committee on Governmental Affairs, and to the Honorable Frank R. Wolf,
Chairman, Subcommittee on Commerce, Justice, State, and the Judiciary,
Committee on Appropriations, House of Representatives. We also will
make copies available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at http://www.gao.gov.




Page 50                                            GAO-03-607 Foreign Assistance
If you or your staff have any questions about this report, please contact me
at (202) 512-4347. Other GAO contacts and staff acknowledgments are
listed in appendix XIII.




Loren Yager, Director
International Affairs and Trade




Page 51                                           GAO-03-607 Foreign Assistance
Appendix I

Scope and Methodology                                                                                  A
                                                                                                       A
                                                                                                       ppep
                                                                                                          nen
                                                                                                            d
                                                                                                            xIeis




             To examine the management, cost, and sufficiency of U.S. and international
             food assistance since 1999, we reviewed documents obtained from the
             World Food Program (WFP) and the U.S. Agency for International
             Development (USAID). Specifically, we reviewed program documentation
             for recent emergency and special operations; WFP Afghanistan Country
             Office quarterly and annual reports; WFP’s Emergency Field Operations
             Manual and Food Aid in Emergencies Redbook; country office monitoring
             guidelines; Afghanistan area office strategies; memorandums of
             understanding and letters of agreement signed by WFP and United Nations
             (UN) agencies, nongovernmental organizations, and the Afghan
             government; and monitoring reports prepared by USAID staff.

             In addition, we analyzed project monitoring and loss data to determine the
             frequency of monitoring visits, the experience and education level of
             monitors, and the level of commodities lost versus those delivered. We did
             not verify the statistical data provided by WFP. We also reviewed donor
             resource contribution data for recent emergency and special operations.
             We contacted by e-mail, or spoke with, 14 Afghan and international
             nongovernmental organizations1 to obtain their views on the delivery of
             assistance, WFP monitoring and reporting, and overall assistance
             coordination issues. We interviewed WFP management and staff at WFP
             headquarters in Rome, Italy; at the Regional Bureau for the Mediterranean,
             Middle East, and Central Asia, in Cairo, Egypt; at the Country Office in
             Kabul, Afghanistan; and at the Area Office in Hirat, Afghanistan. We also
             interviewed USAID, U.S. Department of Agriculture (USDA) and U.S.
             Department of State staff in Washington, D.C., and Kabul; U.S. Department
             of Defense Staff in Washington; the International Security Afghanistan
             Force, UN Development Program (UNDP), and UN Assistance Mission in
             Afghanistan (UNAMA) staff in Kabul; and UN High Commissioner for
             Refugees staff in Kabul and Hirat. Finally, we visited WFP project sites and
             warehouses in Kabul and Hirat. The number of sites visited was limited
             because of constraints placed on our movement within Afghanistan by the
             U.S. Embassy because of security considerations.

             We also examined cost data provided by USDA and USAID. The data
             included commodity costs; total ocean freight charges; inland freight;


             1
              We contacted the Agency for Technical Cooperation and Development (ACTED), Action
             Contre la Faim, Afghanaid, Canadian Relief Foundation, CARE International, Focus, Goal,
             International Rescue Committee, Islamic Relief, Madera, Norwegian Assistance Committee,
             Save the Children, Solidarte, and World Vision.




             Page 52                                                  GAO-03-607 Foreign Assistance
Appendix I
Scope and Methodology




internal transport, storage, and handling charges; and administrative
support costs. We used the data to calculate two additional expenses, per
USDA statements about the composition of costs and additional costs that
are not stated on the data sheets. First, the "freight forwarder" fees
represent 2.5 percent of the total cost of ocean freight. Thus, ocean freight
charges were divided between freight forwarder fees (total freight minus
total freight divided by 1.025) and actual freight costs (total freight minus
freight forwarder fees). This was true for both USDA and USAID
assistance. In the final analysis, the freight forwarder fee was included in
the ocean freight cost because it is an expense that would not have been
incurred if ocean shipping had not been used. Second, with each donation
to WFP, USDA provides an administrative support grant at the rate of 7.5
percent of the total value of the donated commodities. We calculated these
data accordingly.

We checked all USAID and USDA data for validity, where possible to the
level of individual shipment. We cross-checked USAID data with USDA
data. (USAID typically provided only estimated costs for commodities for
the period 1999–2002. Because USDA conducts almost all commodity
purchases for USAID, USAID estimates the commodity costs at the time it
places its order with USDA, based on the current market cost. However,
because USDA provided actual costs for USAID purchases in 1999, 2000,
and 2001, the USAID commodity costs we cited for 2002 are based on
USAID's estimate.) We then compared the cost of the U.S.-purchased
commodities with the cost of commodities purchased in the Central Asia
region to determine whether any savings could have been realized by
purchasing commodities regionally versus buying U.S. commodities.
Finally, using the level of rations that WFP provides to returning refugees,
12.5 kilograms per month, we calculated the amount of food assistance that
the United States could have purchased and the number of people that
could have received food assistance if it had purchased commodities in the
Central Asia region.

Further, we examined the costs associated with the Department of
Defense’s Afghan humanitarian daily ration program, implemented from
October 2001 through December 2001. Using the level of rations that WFP
provides to returning refugees, 12.5 kilograms per month, we calculated the
amount of food assistance that the United States could have purchased and
the number of people that could have received food assistance if it had
purchased commodities in the Central Asia region.




Page 53                                            GAO-03-607 Foreign Assistance
Appendix I
Scope and Methodology




In addition, we reviewed relevant food assistance legislation including the
Agricultural Trade Development and Assistance Act of 1954 (P.L. 83-480) to
determine whether provisions in the law allowed the U.S. government to
purchase commodities outside the United States or provide cash transfers
to assistance agencies for the provision of commodities from sources other
than U.S. suppliers.

To assess U.S. and international agricultural assistance, coordination,
strategies, and funding intended to help Afghanistan maintain stability and
achieve long-term food security, we reviewed documentation provided by
FAO, UNDP, and UNAMA; the World Bank; the Asian Development Bank;
USAID; and the Afghan Ministries of Agriculture and Animal Husbandry,
and Irrigation and Water Resources. We reviewed information pertaining to
past and current coordination mechanisms in the Afghan government’s
National Development Framework and National Development Budget. We
examined the structure and content of the assistance strategies published
by FAO, UNDP, UNAMA, the European Commission, the World Bank, Asian
Development Bank, and USAID, and we examined the proposed funding
levels contained in each strategy. Using the criteria contained in the U.S.
Government Performance and Results Act, we examined the strategies to
determine whether each contained the basic elements of an operational
strategy articulated in the act. Further, we examined the overall assistance
funding requirements contained in the January 2002 UNDP, World Bank,
and Asian Development Bank Comprehensive Needs Assessment, which
served as a guideline for international donor contributions for Afghanistan.
We interpolated the funding projection data to construct annual aid flows,
so that the cumulative totals were equal to those contained in the
assessment. Assuming that the first year of data referred to 2002, we
applied the U.S. gross domestic product deflator to convert the assumed
current dollar figures into constant 2003 dollars.

Further, we examined security reports produced by the Department of
Defense and the UN, as well as the UN Office on Drugs and Crime report on
opium production in Afghanistan, to determine the impact of warlords and
opium production on food security and political stability. In addition, we
discussed U.S. and international agricultural assistance efforts and food
security issues with officials from USAID in Washington and Kabul; FAO in
Rome and Kabul; UNDP and the Afghan Ministries of Communication,
Foreign Affairs, Interior, Rural Rehabilitation and Development, and
Irrigation and Water Resources in Kabul; and the Afghan Ministry of
Agriculture in Kabul and Washington.




Page 54                                           GAO-03-607 Foreign Assistance
Appendix I
Scope and Methodology




We conducted our review from April 2002 through May 2003 in accordance
with generally accepted government auditing standards.




Page 55                                       GAO-03-607 Foreign Assistance
Appendix II

World Food Program Projects in Afghanistan,
2002                                                                                                                                       AppenIx
                                                                                                                                                 di




Type of project                                Description
Free food distribution                         Free food is delivered to the most vulnerable populations.
Supplementary feeding                          Malnourished children, pregnant and nursing mothers, and people undergoing
                                               treatment for tuberculosis and leprosy are provided with a blended mix of either milled
                                               corn and soy or wheat and soy, in addition to sugar and oil, through feeding centers,
                                               hospitals, clinics, and orphanages.
Food for work                                  Returning refugees, internally displaced persons, and people involved in the poppy
                                               industry, among others, reconstruct and rehabilitate irrigation canals, roads, and other
                                               infrastructure. The program provides wages in the form of food and tools.
Food for asset creation                        Men and women of the community decide which families should receive food. Able-
                                               bodied households contribute their labor to construct or rehabilitate an asset, such as
                                               an irrigation canal, that benefits the entire community. Those who cannot contribute
                                               labor also receive food, and they benefit from the community asset.
Food for education and support to teachers     Food is distributed to students in school to encourage families to send their children to
                                               school. To encourage families to support the education of females, additional food is
                                               provided to female students. Food is also provided to teachers to supplement their low
                                               salaries.
Food for training                              Food is provided to women who participate in informal education activities including
                                               technical skills and literacy training.
Food for seed                                  Food is exchanged for improved seed grown by contract farmers. The seed is then sold
                                               to other farmers.
Urban and women’s bakeries                     Daily rations of bread are provided to more than 250,000 people. Women operate 41 of
                                               the 100 bakeries.
Civil servant support                          Approximately 270,000 civil servants were provided with pulses and oil to supplement
                                               their salaries and help the Afghan government reestablish itself.
Refugee and                                    Food assistance is provided as part of a resettlement package to help people
internally displaced person support            reestablish themselves in their home areas or chosen community.
Source: WFP.




                                             Page 56                                                        GAO-03-607 Foreign Assistance
Appendix III

Description of WFP Food Assistance
Monitoring Mechanisms                                                                                    Appen
                                                                                                             Ix
                                                                                                              di




               The World Food Program uses a number of mechanisms to minimize losses
               and ensure that its commodities are well managed. The mechanisms
               include real-time automated tracking, periodic monitoring visits to project
               sites, required periodic reports from implementing partners, and end-of-
               project evaluations. The program’s global automated tracking system, the
               Commodity Movement and Progress Analysis System, is intended to record
               and report all commodity movement, loss, and damage. Each WFP
               suboffice in Afghanistan has access to the system and employs a clerk
               dedicated to managing it. The system produces a number of reports,
               including stock, damage, and loss reports.

               WFP guidelines state that monitoring and reporting are essential parts of
               effective project management in the field, and it is WFP’s policy not to
               support any project that cannot be monitored. Monitoring activities are
               intended to assess the status of projects by comparing the actual
               implementation of activities to the project’s work plan. The responsibility
               for monitoring projects rests with the program’s country office in Kabul
               and five Afghan suboffices located in other cities. Each office employs
               between 6 and 24 local Afghan project monitors,1 and WFP has 22 program
               staff in Afghanistan who also monitor projects, in addition to their other
               duties. WFP’s Afghan country office has developed monitoring guidelines
               for its monitors and monitoring checklists for each type of activity (e.g.,
               food-for-work, food-for-seed, food-for-asset-creation, food-for-education).

               According to WFP, monitoring visits include an examination of project
               inputs, current operations, outputs, and immediate effects. Specific
               monitoring activities include an examination of food stocks held by
               implementing partners. The monitors spot-check the weight of randomly
               selected bags in storage and compare the total stock held with WFP stock
               balance reports. The monitors also survey local markets to determine
               whether any WFP food is being resold rather than used by beneficiaries.
               Projects are monitored on a periodic basis. WFP tries to visit each project
               when it starts, during its implementation, and when it is completed. The
               WFP data that we examined indicated that, on average, 2.4 monitoring
               visits were conducted on all projects implemented between April 2002 and
               November 2002 in Afghanistan.


               1
                WFP employs a total of 78 local monitors with an average of 3 years of WFP experience.
               Approximately 90 percent of these monitors have a college degree. In addition to the
               monitors, implementing partners make monitoring visits in areas where WFP staff cannot
               travel owing to security concerns.




               Page 57                                                   GAO-03-607 Foreign Assistance
Appendix III
Description of WFP Food Assistance
Monitoring Mechanisms




In addition to requiring the project monitoring visits, WFP requires its
implementing partners to report on the status of projects on a monthly
basis. WFP project proposals and the letters of agreement signed by WFP
and its implementing partners stipulate that monthly and end-of-project
reports must be submitted to WFP. The end-of-project reports include an
assessment of the achievement of project objectives and a breakdown of
budget expenditures.




Page 58                                         GAO-03-607 Foreign Assistance
Appendix IV

Donor Contributions to World Food Program
Emergency Operation 10155 as of May 12,
2003                                                                                        Appen
                                                                                                V
                                                                                                Id
                                                                                                 xi




                                                 Percentage                      Percentage
Donor                           U.S. dollars         of total     Tons               of total
Total (appeal)                  287,943,598         100.00%     550,171             100.00%
Australia                         4,087,975           1.42%       9,567               1.74%
Belgium                             985,222           0.34%       2,847               0.52%
Canada                            1,610,097           0.56%       4,662               0.85%
Denmark                           3,199,194           1.11%       6,648               1.21%
EC—EuropeAid                     21,897,321           7.60%      63,834              11.60%
Faroe Islands                       329,412           0.11%         897               0.16%
Finland                             437,445           0.15%       1,303               0.24%
Germany                           1,985,560           0.69%       6,497               1.18%
India                             7,444,108           2.59%       9,526               1.73%
Ireland                             469,484           0.16%       1,512               0.27%
Italy                             8,127,321           2.82%      16,091               2.92%
Japan—private                       442,881           0.15%       1,320               0.24%
Japan                            17,818,002           6.19%      45,436               8.26%
Korea, Republic of                   40,000           0.01%         109               0.02%
Luxembourg                          490,678           0.17%       1,466               0.27%
Netherlands                       4,374,453           1.52%      13,288               2.42%
Norway                            1,262,626           0.44%       3,809               0.69%
Private                              37,582           0.01%          61               0.01%
Switzerland                       4,039,157           1.40%       8,918               1.62%
United Kingdom                    5,633,701           1.96%      12,547               2.28%
United Nations                      185,000           0.06%        TBD
United States                   156,385,885          54.31%     309,770              56.30%
U.S. friends of WFP                 172,020           0.06%         195               0.04%
Multilateral funds                  832,005           0.29%       1,035               0.19%
Total (received)                242,287,129          84.14%     521,338              94.76%
Shortfall                        45,656,469          15.86%      28,833               5.24%
                      Legend
                      EC = European Community
                      WFP = World Food Program
                      TBD = to be determined
Source: WFP.




                      Page 59                                   GAO-03-607 Foreign Assistance
Appendix V

Cost Data for U.S. Food Assistance to
Afghanistan Provided to the UN World Food
Program, Fiscal Years 1999–2002                                                                                                                                     Appen
                                                                                                                                                                        V
                                                                                                                                                                        di
                                                                                                                                                                        x




                                                                                                                                      Administrative
                                              Commodity                                                                                         and
                                                   cost                 Ocean freight            Inland freight        ITSH freight   miscellaneous        Total cost
1999                                          $15,069,555                  $10,521,204                  $815,200          $756,800       $1,016,705      $28,179,464
                                                     53.48%                       37.34%                      2.89%         2.69%             3.61%
2000                                          $18,282,825                  $12,234,100               $2,905,600         $3,874,400       $1,131,903      $38,428,828
                                                     47.58%                       31.84%                      7.56%        10.08%             2.95%
2001                                          $46,866,434                  $20,639,750               $3,313,900         $8,738,300       $3,294,616      $82,853,000
                                                     56.57%                       24.91%                      4.00%        10.55%             3.98%
2002                                          $75,770,144                  $34,920,586             $25,987,600         $39,896,400       $1,494,056    $178,068,786
                                                     42.55%                       19.61%                      14.59%       22.40%             0.84%
Total                                       $155,988,958                   $78,315,640             $33,022,300         $53,265,900       $6,937,280    $327,530,078
Annual average                                       50.04%                       28.43%                      7.26%        11.43%             2.85%            100%
percentage
Percentage of total                                  47.63%                       23.91%                  10.08%           16.26%             2.12%            100%
                                                                   Legend
                                                                   ITSH = Internal Transport, Storage, and Handling
Sources: GAO analysis of U.S. Department of Agriculture and U.S. Agency for International Development data.




                                                                   Page 60                                                              GAO-03-607 Foreign Assistance
Appendix VI

International Donor Assistance Coordination
Mechanisms in Afghanistan                                                                               AppenV
                                                                                                             d
                                                                                                             xiI




               Between 1998 and 2003, as circumstances in Afghanistan changed, the
               coordination processes utilized by the international community and the
               Afghan government evolved (see table 3 and figure 11). Beginning in 1998,
               the international community employed a strategy of Principled Common
               Programming among United Nations agency, nongovernmental, and
               bilateral donor programs. The international community’s aim was to
               establish priorities and projects based on agreed upon goals and principles
               that would form the UN’s annual consolidated appeal for assistance. To
               implement Principled Common Programming, a number of coordination
               mechanisms were established, including the Afghan Programming Body.
               The programming body consisted of the Afghan Support Group, 15 UN
               Representatives, and 15 nongovernmental organizations and was
               responsible for making policy recommendations on issues of common
               concern, supporting the UN’s annual consolidated appeal for donor
               assistance, and promoting coordination of assistance efforts.1 The Taliban
               government had no role in the programming body. The programming body
               was supported by a secretariat; working level operations were conducted
               by a standing committee and thematic groups responsible for analyzing
               needs, developing strategies and policies, and setting assistance priorities
               within their thematic areas (e.g., the provision of basic social services). The
               Afghan Programming Body and its standing committee were incorporated
               into the Implementation Group/Program Group process established in
               2002. Table 3 describes the Afghan assistance coordination mechanisms in
               place in 2002.




               1
                In 1988 the Agency Coordinating Body for Afghanistan Relief was established to coordinate
               the efforts of national and international nongovernmental organizations conducting work in
               Afghanistan. The agency’s membership included 68 Afghan and international
               nongovernmental organizations. The Afghan Support Group formed in 1997 was a donor
               coordination group composed of 16 donor nations.




               Page 61                                                    GAO-03-607 Foreign Assistance
                                                            Appendix VI
                                                            International Donor Assistance
                                                            Coordination Mechanisms in Afghanistan




Table 3: Major Assistance Coordination Mechanisms in Afghanistan in 2002

Organization/                                                                                                             Date of formation/
suborganization                       Responsibility                               Members                                comment
Afghanistan                           Coordinate and mobilize international        More than 60 countries, the            November 2001
Reconstruction Steering               reconstruction funds.                        European Union, the members of
Group                                                                              the G-8,a the United Nations (UN),     Replaced by the Consultative
                                                                                   and the World Bank. Cochaired by       Group (December 2002) and
                                                                                   the United States, the European        Afghanistan High-level
                                                                                   Union, Japan, and Saudi Arabia.        Strategic Forum (March 2003).
Implementation Group                  Implement the strategy and policy of         The Afghan government, World    January 2002
                                      the Afghan Reconstruction Steering           Bank, UN Development Program,
                                      Group by facilitating coordination           Asian Development Bank, Islamic Transformed into Consultative
                                      among the Afghan government,                 Development Bank, and the       Group (December 2002).
                                      bilateral, multilateral, and                 Afghan Support Groupb
                                      nongovernmental organizations
                                      implementing projects in Afghanistan.
Implementation Standing Local working level coordination                           Afghan Assistance Coordinating         April 2002
Committee                                                                          Authority, UN Assistance Mission
                                                                                   in Afghanistan, donor                  Transformed into the
                                                                                   governments, international             Consultative Group Standing
                                                                                   financial institutions,                Committee (December 2002)
                                                                                   nongovernmental organizations
Program Groups/                       Further develop the 12 programs         Afghan government and UN,                   April 2002
Program Secretariats                  outlined in the Afghan government’s     bilateral, multilateral, and
                                      National Development Framework. A       nongovernmental organizations               The Consultative Groups
                                      lead ministry guides each program                                                   replaced the existing Program
                                      group. Technical support is provided by                                             Groups, and the Program
                                      a program secretariat led by a UN,                                                  Secretariats were replaced by
                                      multilateral, or nongovernmental                                                    the Consultative Groups’ Focal
                                      organization.                                                                       Points in December 2002.
Afghan Assistance                     Coordinate the flow of international         Afghan government                      February 2002
Coordination Authority                assistance in Afghanistan.
(Afghan government
agency)
UN Assistance Mission in Coordinate all UN programs in                             All UN agencies working in             March 2002
Afghanistan              Afghanistan.                                              Afghanistan
Regional/                             UN aid coordination organizations in         All UN agencies working in             Late 1990s/May 2002
Provincial                            major regions of Afghanistan/UN aid          Afghanistan
Coordination Bodies                   coordination organizations at the                                                   In 2002, the Afghan
                                      provincial level in Afghanistan                                                     government asked that the
                                                                                                                          bodies realign along provincial
                                                                                                                          lines.
Sources: UN and Afghanistan Research and Evaluation Unit.
                                                            a
                                                            The G-8 is comprised of Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the
                                                            United States.
                                                            b
                                                             The Afghan Support Group was founded in 1997 by the 16 largest donor nations providing assistance
                                                            to Afghanistan and the European Union. In January 2003, the group was dissolved and the Afghan
                                                            government assumed responsibility for assistance coordination.




                                                            Page 62                                                         GAO-03-607 Foreign Assistance
Appendix VI
International Donor Assistance
Coordination Mechanisms in Afghanistan




Figure 11: Organizations Responsible for Coordinating International Assistance in
Afghanistan, 1998–2003




In December 2002, the Afghan government instituted the Consultative
Group coordination process in Afghanistan. The process evolved out of the
previous Implementation/Program group processes. (Table 4 compares the
two processes.) The Consultative Group process retains the same basic
hierarchical structure that was established under the Implementation
Group process.2 For example, the new process includes 12 groups, each


2
 Terms of reference prepared by the lead ministry and presented to the group members for
further discussion and agreement will outline both specific and general responsibilities of
group members as well as set clear benchmarks for preparing and implementing national
programs. The terms of reference will also specify clear submission deadlines for the
national budget and programs and address reporting, including monthly updates of
indicators of progress in the program area and monitoring of benchmarks.




Page 63                                                     GAO-03-607 Foreign Assistance
Appendix VI
International Donor Assistance
Coordination Mechanisms in Afghanistan




lead by an Afghan government minister, organized around the 12 programs
contained in the Afghan government’s National Development Framework.
In addition to the 12 groups, 2 consultative groups covering national
security programs (i.e., the national army and police); and 3 national
working groups on disarmament, demobilization, and reintegration;
counternarcotics; and demining were established. Further, 5 advisory
groups were also established to ensure that cross-cutting issues, such as
human rights, are mainstreamed effectively in the work of the 12
consultative groups and reflected in the policy framework and budget.

Each consultative group will assist in policy management, as well as
monitoring the implementation of activities envisaged under the Afghan
government’s national budget. The groups will assist in preparing the
budget, provide a forum for general policy dialogue, monitor the
implementation of the budget, report on indicators of progress for each
development program, and elaborate detailed national programs. The
groups, with assistance from the standing committee, will also focus on
monitoring performance against benchmarks established by each group.
Each lead ministry will select a focal point, or secretariat, organization
from among donors and UN agencies. Each year, in March, the Afghanistan
Development Forum, or national consultative group meeting, will be held
to discuss the budget for the next fiscal year, review national priorities, and
assess progress. At that time, the consultative groups will report to the
Consultative Group Standing Committee.




Page 64                                             GAO-03-607 Foreign Assistance
                                                             Appendix VI
                                                             International Donor Assistance
                                                             Coordination Mechanisms in Afghanistan




Table 4: Comparison of Implementation Group and Consultative Group Processes

                                               Implementation Group                                   Consultative Group
Structure
Based on Afghan National                       Yes                                                    Yes
Development Framework
Hierarchy                                      •   Afghanistan Reconstruction Steering Group          • Afghanistan high-level Strategic Forum
                                               •   Implementation Group                               • National Consultative Group/Afghanistan
                                               •   Implementation Group Standing Committee              Development forum
                                               •   12 Program groups                                  • Consultative Group Standing committees
                                               •   Additional subgroups                               • 12 Program Consultative Groups
                                               •   1 Lead ministry per program group                  • 1 Lead ministry per program group
                                               •   12 Program group secretariats led by a donor       • 12 Program group secretariats led by a donor
                                                   agency                                               agency
                                                                                                      • 2 National Security Consultative Groups
                                                                                                      • 3 working groups
                                                                                                      • 5 advisory groups
Leadership                                     Afghan ministry leads each group.                      Afghan ministry leads each group.
Membership                                     Ministries, UN agencies, development banks, donor      Ministries, UN agencies, development banks,
                                               agencies/governments, and NGOs                         donor agencies/governments, and NGOs
Stated goals
Assist in budget preparation                   Yes                                                    Yes
Monitor performance of                         Yes                                                    Yes
programs and subprograms
Promote better coordination                    Yes                                                    Yes
between all parties
Formulate policy                               Not stated                                             Yes
Develop projects/programs                      Yes                                                    Yes
Prepare annual development                     Yes                                                    Not stated
plan
Set program                                    Yes                                                    Yes
benchmarks/targets
Sources: GAO analysis of UN and Afghan government data.




                                                             Page 65                                                   GAO-03-607 Foreign Assistance
Appendix VII

Major Donors’ Pledges and Contributions as
of December 31, 2002 (as reported by the
U.S. Department of State)                                                                                        AppenV
                                                                                                                      d
                                                                                                                      xiI




Dollars in millions
                       Tokyo conference                           Total disbursed
Country                         pledgea      Additional pledges           for 2002      Time frame
Canada                             62.8                                      31.3       15 months
France                              24                                         32       Unspecified
Germany                            285                      43                112       4 years
Italy                               43                                       43.9       1 year
Japan                              500                                        282       2.5 years
United Kingdom                     288                      55               77.5       5 years
United States                      297                                        600       Unspecified
Russiab                                                                        30       Unspecified
Austria                            11.6                     2.4              10.7       1 year
Belgium                            30.7                                      11.5       Unspecified
Denmark                             59                     16.5              31.9       Unspecified
Finland                             28                      10               12.1       4 years
Greece                              4.5                      1                1.7
Ireland                            12.3                                       9.8       4 years
Luxembourg                          4.5                      .1               3.6       2.5 years
Netherlands                         63                       5               78.9       2.5 years
Norway                             46.6                     10                 47       2.5 years
Portugal                                                     .8                         Unspecified
Spain                              104                      6.4                77       Unspecified
Sweden                              90                                         31       4 years
Switzerland                         20                                        6.7       Unspecified
European                           864                     78.4               133       5 years
Commission
Bahrain
Kuwait                              30                                          5       Unspecified
Oman
Qatar                                                                           .1      Unspecified
Saudi Arabia                       220                                       72.5       4 years
United Arab Emirates                36                      80               69.8       Unspecified
Iran                               560                                       32.7       6 years
Australia                           8.8                    14.6                19       1 year
South Korea                         45                                          5       2.5 years
Republic of China                   29                                                  3 years
(Taiwan)




                                   Page 66                                           GAO-03-607 Foreign Assistance
                                           Appendix VII
                                           Major Donors’ Pledges and Contributions as
                                           of December 31, 2002 (as reported by the U.S.
                                           Department of State)




(Continued From Previous Page)
Dollars in millions
                               Tokyo conference                                          Total disbursed
Country                                 pledgea        Additional pledges                        for 2002        Time frame
Turkey                                         5                          1.8                           2.9      5 years
China                                          1                         150                             30      Unspecified
India                                      100                                                         31.7      One year
Pakistan                                   100                                                         17.7      Unspecified
Total                                   3,972.8                          475                      1,949.95
Source: Department of State.
                                           a
                                            Pledges and disbursements do not include those of the World Bank, Asian Development Bank, and
                                           other international nongovernmental organizations.
                                           b
                                            Russia did not pledge at Tokyo – Russian assistance has been primarily in-kind donations.




                                           Page 67                                                            GAO-03-607 Foreign Assistance
Appendix VIII

Comments from the World Food Program                           AppenV
                                                                    diI
                                                                    x




Note: GAO comments
supplementing those in
the report text appear
at the end of this
appendix.




See comment 1.




                         Page 68   GAO-03-607 Foreign Assistance
Appendix VIII
Comments from the World Food Program




Page 69                                GAO-03-607 Foreign Assistance
               Appendix VIII
               Comments from the World Food Program




               The following are GAO’s comments on the letter from the United Nations
               World Food Program dated June 2, 2003.



GAO Comments   1. Although changes in the coordination mechanism utilized in
                  Afghanistan were introduced in 2003, the Afghan government and the
                  international community still lack a common, jointly developed
                  strategy for rehabilitating the agricultural sector. We believe that such a
                  strategy, including measurable goals and a means to evaluate progress
                  toward achieving the goals, is needed to focus limited resources and
                  hold the international community accountable for the assistance it
                  delivers.




               Page 70                                            GAO-03-607 Foreign Assistance
Appendix IX

Comments from the Department of State                          Appen
                                                                   X
                                                                   Id
                                                                    xi




Note: GAO comments
supplementing those in
the report text appear
at the end of this
appendix.




                         Page 71   GAO-03-607 Foreign Assistance
                 Appendix IX
                 Comments from the Department of State




See comment 1.




                 Page 72                                 GAO-03-607 Foreign Assistance
               Appendix IX
               Comments from the Department of State




               The following are GAO’s comments on the letter from the Department of
               State dated June 3, 2003.



GAO Comments   1. The U.S. Agency for International Development (USAID) currently
                  purchases limited amounts of regional food commodities in an effort to
                  respond quickly to humanitarian emergencies. Commodities purchased
                  in the United States by U.S. agencies must travel the same logistics
                  networks as commodities purchased regionally. For example, U.S.
                  commodities destined for Afghanistan in 2002 were shipped from the
                  United States to the Pakistani port at Karachi and moved to their final
                  destination via roads in Pakistan and Afghanistan. Commodities
                  purchased in Pakistan followed the same transit routes. Hence, the
                  overland shipping costs, such as for trucking, were the same for U.S.
                  origin commodities and Pakistani commodities. Further, regional cash
                  purchases of food would be made by U.S. government officials or World
                  Food Program (WFP) officials, the same officials that currently handle
                  hundreds of millions of dollars in assistance funds and millions of
                  metric tons of commodities; we are not suggesting that cash be
                  provided to local governments. Any purchases would be subject to U.S.
                  and UN accountability procedures, as such purchases are currently;
                  increasing the amount of commodities purchased locally would not by
                  itself create an opportunity for corruption.




               Page 73                                          GAO-03-607 Foreign Assistance
Appendix X

Comments from the United States Agency for
International Development                                      Appen
                                                                   X
                                                                   di
                                                                   x




Note: GAO comments
supplementing those in
the report text appear
at the end of this
appendix.




See comment 1.




See comment 2.




                         Page 74   GAO-03-607 Foreign Assistance
                 Appendix X
                 Comments from the United States Agency for
                 International Development




See comment 3.




See comment 4.




                 Page 75                                      GAO-03-607 Foreign Assistance
Appendix X
Comments from the United States Agency for
International Development




Page 76                                      GAO-03-607 Foreign Assistance
               Appendix X
               Comments from the United States Agency for
               International Development




               The following are GAO’s comments on the letter from the United States
               Agency for International Development dated June 6, 2003.



GAO Comments   1. We believe that the U.S. Agency for International Development
                  (USAID) should take an active and aggressive role in the cooperative
                  development of a joint international–Afghan government strategy
                  because the United States is the largest donor to Afghanistan,
                  agricultural rehabilitation is the cornerstone of USAID’s efforts in
                  Afghanistan, and the success of U.S. policy goals in Afghanistan is
                  tightly linked to the rehabilitation of the agricultural sector. According
                  to USAID’s assistance strategy for Afghanistan, restoring food security
                  is USAID’s highest priority. Consequently, agriculture assistance is one
                  of USAID’s main strategic objectives in Afghanistan. Further, according
                  to USAID’s Afghan assistance strategy documents, USAID’s overall
                  assistance program is based on several critical assumptions about
                  conditions in Afghanistan, one condition being that agricultural
                  conditions do not deteriorate further. The document states that if these
                  conditions do not prevail, USAID may not achieve its goals. We also
                  recognize the importance of the Food and Agriculture Organization’s
                  (FAO’s) involvement in the cooperative strategy development effort.
                  However, donor support for FAO’s Afghanistan program has been
                  limited.

               2. We agree that developing a broad-based agricultural rehabilitation
                  strategy would have been difficult in early 2002, given the nascent
                  nature of the Afghan government and the assistance coordination
                  mechanism then in use. However, the government has been in place
                  since June 2002, and the Consultative Group coordination mechanism
                  was introduced in December 2002. Hence, we believe that the
                  conditions now exist for the development of such a strategy. In
                  addition, we have discussed the development of a joint Afghan–
                  international community agriculture rehabilitation strategy with the
                  Afghan Minister of Agriculture and FAO. Both support the idea and
                  welcome the opportunity to develop such a strategy.

               3. No change to the title of the report is necessary. As stated in the report,
                  agriculture is of central importance to Afghanistan’s economy and the
                  livelihood of 85 percent of its citizens. Further, the link between food
                  security and political stability is recognized by the international
                  community not only in Afghanistan but also in other areas such as
                  southern Africa. In addition, as stated above, USAID’s assistance



               Page 77                                            GAO-03-607 Foreign Assistance
Appendix X
Comments from the United States Agency for
International Development




    strategy recognizes the importance of agriculture sector rehabilitation
    to the achievement of the U.S. policy goals in Afghanistan, including a
    politically stable state that is not a harbor for terrorists.

4. We agree that other authorities allow USAID to provide cash or
   purchase assistance commodities outside the United States. However,
   we believe that amending the Agricultural Trade Development and
   Assistance Act of 1954 to allow the provision of cash or food
   commodities outside the United States will greatly improve U.S.
   flexibility in responding to crises affecting U.S. national security and
   foreign policy interests. The act is the principal authority for providing
   food assistance in emergency and nonemergency situations. Amending
   the act will provide a permanent provision in this authority allowing the
   United States to respond rapidly and in a cost-effective manner to
   events that affect U.S. national security.

    USAID cites the recently proposed $200 million Famine Fund as
    providing the flexibility that the United States needs to address
    humanitarian crises. However, the fund proposal indicates that the fund
    will target dire unforeseen circumstances related to famine; thus, the
    fund does not appear to be designed to respond to nonfamine crises
    involving large amounts of food aid or national security. The fund
    amounts to less than 10 percent of the $2.2 billion and $2.6 billion
    appropriated for U.S. food aid in 2002 and 2003, respectively, a period
    marked by an increasing number of humanitarian food crises—for
    example, in Afghanistan, southern Africa, and North Korea—that did
    not entail famine but that did, in some cases, affect U.S. national
    security. The Famine Fund is inadequate to respond to the increasing
    number and size of such crises. Meanwhile, the availability of
    commodities in the United States for food assistance has declined in
    2003. Therefore, the need to procure commodities overseas in close
    proximity to affected countries has become more critical while also
    being more cost effective.




Page 78                                            GAO-03-607 Foreign Assistance
Appendix XI

Comments from the Department of
Agriculture                                                    AppenX
                                                                    d
                                                                    xiI




Note: GAO comments
supplementing those in
the report text appear
at the end of this
appendix.




See comment 1.




See comment 2.




                         Page 79   GAO-03-607 Foreign Assistance
                 Appendix XI
                 Comments from the Department of
                 Agriculture




See comment 3.




See comment 4.




See comment 5.




See comment 6.




                 Page 80                           GAO-03-607 Foreign Assistance
                 Appendix XI
                 Comments from the Department of
                 Agriculture




See comment 1.




See comment 7.




See comment 8.




                 Page 81                           GAO-03-607 Foreign Assistance
               Appendix XI
               Comments from the Department of
               Agriculture




               The following are GAO’s comments on the letter from the Department of
               Agriculture dated June 10, 2003.



GAO Comments   1. Although other legislation allows for the provision of cash or assistance
                  commodities from non-U.S. sources, we believe that amending the
                  Agricultural Trade Development and Assistance Act of 1954 to allow
                  the provision of cash or food commodities outside the United States
                  will greatly improve U.S. flexibility in responding to crises that affect
                  U.S. national security interests. The act is the principal authority for
                  providing food assistance in emergency and nonemergency situations.
                  Amending the act will provide a permanent provision in this authority
                  allowing the United States to respond rapidly and in a cost effective
                  manner to events that affect U.S. national security.

                   In addition, although the proposed $200 million Famine Fund may
                   provide some additional flexibility for responding to humanitarian
                   crises, the fund proposal indicates that the fund will target dire
                   unforeseen circumstances related to famine. Thus, the fund does not
                   appear to be designed to respond to nonfamine crises involving large
                   amounts of food aid or national security. The fund amounts to less than
                   10 percent of the $2.2 billion and $2.6 billion appropriated for U.S. food
                   aid in 2002 and 2003, respectively, a period marked by an increasing
                   number of humanitarian food crises—for example, in Afghanistan,
                   southern Africa, and North Korea—that did not entail famine but that
                   did, in some cases, affect U.S. national security.

               2. We agree with the U.S. Department of Agriculture (USDA) that the
                  cargo preference requirement adds additional cost to food assistance
                  and should be waived in specific situations, and we have adjusted the
                  matter for congressional consideration to reflect this. As stated in the
                  report, 19.6 percent of total food assistance costs in fiscal year 2002
                  were for ocean freight. These costs were incurred because of the
                  requirement that assistance commodities must be purchased in the
                  United States, and 75 percent of the purchased commodities by weight
                  must be shipped on U.S.-flagged carriers. In previous reports, we
                  analyzed the costs of cargo preference requirements on food assistance
                  and demonstrated the negative impact of these costs on U.S. food aid
                  programs.




               Page 82                                            GAO-03-607 Foreign Assistance
Appendix XI
Comments from the Department of
Agriculture




3. Additional information has been added to the report describing the
   commodity surpluses available in the region in 2002. For example, in
   2002, Kazakhstan harvested 16 million metric tons of wheat, a record
   harvest for that nation. Approximately 6 million metric tons of the 2002
   harvest was available for export. Similarly, Pakistan exported
   approximately 1.6 million metric tons of wheat in 2002. Consequently,
   these countries had nearly 7.6 million metric tons available for export,
   20 times the requirement for World Food Program’s (WFP’s) 2002
   emergency operation or 68 times the amount that WFP purchased from
   these two countries in 2002.

4. All of the obstacles cited by USDA, including road closures due to
   snow, were concerns for WFP in 2002. We describe many of these
   obstacles in the report and also demonstrate that WFP was able to
   overcome the obstacles. The same transportation routes were used to
   move both regionally procured commodities and U.S. origin
   commodities. As noted in the report, in December 2002, while fighting
   between coalition forces, the Northern Alliance, and the Taliban was
   still occurring and winter weather was complicating food deliveries,
   WFP delivered 116,000 metric tons of food to Afghan beneficiaries, in
   the single largest movement of food by WFP anywhere in a 1-month
   period. Further, according to WFP, its Afghanistan logistics system was
   capable of routinely moving over 50,000 metric tons of food per month.
   Consequently, adding 103,000 metric tons or 8,600 metric tons per
   month to the total food moved over the course of 2002 would not have
   overburdened WFP’s logistics system. Further, the cost and time saved
   by purchasing commodities regionally are not marginal. As indicated in
   the report, purchasing commodities regionally could have substantially
   reduced the delivery time and the increased level of purchased
   commodities could have fed 685,000 people for 1 year.

5. Although all commodities may not be available regionally in all cases, in
   2002, Afghanistan’s greatest need was wheat, which constituted the
   bulk of the commodities delivered to Afghanistan that year. As stated in
   the report, if the United States had purchased wheat regionally, or
   provided WFP with cash to make regional purchases, the United States
   could have saved approximately $35 million in 2002. While our analysis
   describes how much wheat could have been purchased regionally with
   the savings, higher-value, consumer-ready commodities such as corn-
   soy blend from U.S. companies could have been purchased instead of
   additional regionally produced wheat. In either case, the United States
   could have provided a greater volume of commodities to Afghanistan if



Page 83                                           GAO-03-607 Foreign Assistance
Appendix XI
Comments from the Department of
Agriculture




    it had used the savings realized through the purchase of regional
    commodities versus U.S. commodities to procure additional
    commodities. Further, WFP has commodity quality control standards
    and would not purchase commodities with donor funds that were
    objectionable to the donor providing the funds. Finally, much of the
    wheat that was purchased in the United States was shipped in bulk to
    ports in Pakistan where it was bagged for final distribution in bags
    clearly marked “USA.” Wheat purchased regionally with U.S. funds was
    packaged in Pakistan in the same type of bags. Thus, any regional
    purchases could be packaged in appropriately marked bags in the
    country of origin or at a bagging facility in a transit country. WFP uses
    this practice in other regions, such as southern Africa.

6. WFP made regional purchases during late 2001, but it also made
   regional purchases during 2002. As stated in the report, the amount of
   food available for food assistance in 2003 is less than in 2002, while the
   need for food aid continues to grow around the world, most notably in
   southern Africa. In addition, even if the U.S. grain infrastructure system
   is able to respond to ongoing demands for food aid, purchasing U.S.
   origin commodities and shipping the commodities via expensive ocean
   freight is not the most cost effective or quickest means either of
   supplying food to hungry people or of achieving U.S. national security
   and foreign policy objectives, such as stability in Afghanistan.

7. We agree that the donor community faced challenges in engaging the
   Afghan government in 2002. We believe that the mechanisms currently
   in place, including the Consultative Group coordination mechanism,
   provide an environment where the international community and the
   Afghan government can engage in a joint strategy development effort.

8. The report’s description of Afghanistan’s agriculture sector is based on
   discussions with and documents obtained from FAO, Asian
   Development Bank, USAID, and Afghan government officials. We have
   adjusted the language in the report in response to USDA’s comments.




Page 84                                            GAO-03-607 Foreign Assistance
Appendix XII

Comments from the Department of Defense                        AppenX
                                                                    d
                                                                    xiI




Note: GAO comments
supplementing those in
the report text appear
at the end of this
appendix.




See comment 1.




See comment 2.




See comment 3.




                         Page 85   GAO-03-607 Foreign Assistance
               Appendix XII
               Comments from the Department of Defense




               The following are GAO’s comments on the letter from the Department of
               Defense dated June 10, 2003.



GAO Comments   1. The report discusses both food assistance and nonfood assistance
                  aspects of the Humanitarian Daily Ration program. On page 30 of the
                  report, we state that the HDR program was initiated to alleviate
                  suffering and convey that the United States waged war against the
                  Taliban, not the Afghan people. Also, the HDR program is included with
                  the U.S. Agency for International Development’s humanitarian
                  programs in U.S. government tallies of total humanitarian assistance
                  provided to Afghanistan.

               2. Department of Defense officials responsible for the administration of
                  the HDR program stated that no formal evaluation of the HDR program
                  in Afghanistan has been conducted. In the report, we cite the informal
                  reporting that provided the Department of Defense with some
                  information about how the program was received by the Afghan people.
                  We have added information about the goodwill that the HDRs
                  generated according to the informal reports cited by the Department of
                  Defense in its comments on the draft report.

               3. The report describes how HDRs are designed to be used—to relieve
                  temporary food shortages resulting from manmade or natural
                  disasters—not, as in Afghanistan, to feed a large number of people
                  affected by a long-term food shortage. Further, as discussed in the
                  report, the World Food Program (WFP) has worked in Afghanistan for
                  many years, and during that period it developed an extensive logistics
                  system for delivering food throughout the country. Even during the rule
                  of the Taliban, WFP was able to deliver food to remote areas including
                  those controlled by the Northern Alliance. During the month of
                  December 2001, while Department of Defense was delivering HDRs,
                  WFP delivered 116,000 metric tons of food to Afghanistan, a level of
                  food assistance that exceeds any 1-month total for any emergency
                  operation in WFP’s history. As stated in the report, WFP’s logistics
                  system was capable of delivering commodities to remote populations
                  both by air or by donkey if necessary.




               Page 86                                          GAO-03-607 Foreign Assistance
Appendix XIII

GAO Contacts and Staff Acknowledgments                                                          AppenX
                                                                                                     diI
                                                                                                     x




GAO Contacts      Phil Thomas (202) 512-9892
                  David M. Bruno (202) 512-7280



Staff             In addition to the individuals named above, Jeffery T. Goebel, Paul Hodges,
                  and Reid L. Lowe made key contributions to this report.
Acknowledgments




(320108)          Page 87                                          GAO-03-607 Foreign Assistance
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