Food for Progress is administered by the USDA Foreign Agricultural Service. The purpose of the program, created under the Food for Progress Act of 1985, is to help emerging democracies introduce and expand free enterprise in the agricultural sector. The commodities donated to recipient countries are often sold and the proceeds used to support agricultural, economic or infrastructure development programs.
Food for Progress receives funding from two sources. The main source of funds is the USDA Commodity Credit Corporation (CCC), which is authorized to provide commodities and up to $40 million each fiscal year to ship those commodities overseas. In fiscal year 2009, CCC funding financed the purchase and shipment of 274,230 MT of commodities to 14 countries, with an estimated value of $216 million. Another source of funding is from the Food for Peace Title I program, which supported a $22 million program that provided 14,300 metric tons of commodities.
How it Works
Eligible organizations include private voluntary organizations, cooperatives, nongovernmental organizations, intergovernmental organizations and foreign governments. USDA issues regulations, guidance and an electronic proposal format for nongovernmental organizations and foreign governments that are interested in submitting proposals for Food for Progress. The fiscal year 2014 guidance is currently on the USDA website.
There are a wide range of options, including different varieties of wheat, feed grains, rice, soybeans, dry beans, dry peas and lentils, vegetable oils, several types of flour, soybean meal, cornmeal, soy protein products and blended and fortified foods.
The application must include a description of the applicant’s capabilities, the situation in the country, why the program is warranted, and the operational plan, which has the objectives, activities, a method for measuring progress (“indicators” such as increased household incomes as a result of improved agriculture production and marketing), choice of commodities, and the commodity distribution or monetization (sales) plan.
For each fiscal year, USDA provides a list of priority countries. Eligible countries must meet the following criteria:
- per capita income at lower or lower-middle income standards (using World Bank statistics);
- greater than 20-percent prevalence of undernourishment as a proportion of the total population (World Health Organization (WHO) of the United Nations data); and
- positive movement toward freedom, including political rights and civil liberties (as defined by Freedom House).
USDA advises applicants to focus on private sector development of the agricultural sector, such as improved agricultural techniques, marketing systems, farmer education and cooperative development, expanded use of processing capacity, and development of agriculturally related businesses. Each proposal is analyzed by USDA to ensure that:
- commercial markets are not disrupted;
- tangible benefits exist for the country’s agricultural sector;
- tangible, quantifiable outcomes are defined;
- it is well developed and articulated;
- it identifies appropriate commodities and tonnages for the target country; and
- the organization’s capability and experience to carry it out is demonstrated.
Once a Food for Progress program is approved and an agreement is signed with USDA, the applicant is called a “Cooperating Sponsor” and it can order (“call forward”) the commodities for delivery.
The USDA Kansas City Commodity Office is responsible for buying the types and amounts of commodities identified on Cooperating Sponsor’s call forward. USDA procures the requested commodities by issuing a tender to commodity suppliers and processors. USDA evaluates the commodity bids and picks the one(s) that would result in the lowest landed cost based on a combination of the cost of the commodity and the cost of shipping it to the destination country. USDA awards the commodity contract, which identifies the dates that the commodities must arrive at U.S. port and be ready for shipping.
The Cooperating Sponsor, through a tender process, arranges for the cargo to be shipped from the U.S. port and to the recipient country. The Cooperating Sponsor is responsible for handling and management of the commodity throughout the program, including delivering the food aid in accordance with its Food for Progress agreement with USDA. The organization must submit progress reports every 6 months to USDA.
|Country||Program Participant (Commodities*)||Number Benefited||Estimated Value ($Millions)|
|Afghanistan||American Soybean Association (Soy Flour, Soybeans, Soybean Oil)||223,150||$26.9|
|East Timor||ACDI/VOCA (Rice)||21,870||$11.7|
|El Salvador||Government of El Salvador (Wheat)||30,000||$12.0|
|Guatemala||Universidad del Valle de Guatemala (Yellow Corn)||62,050||$3.9|
|Honduras||FINCA International, Inc. (Wheat)||91,462||$7.8|
|Liberia||ACDI/VOCA (Wheat, Rice)||53,000||$9.7|
|Nicaragua||Government of Nicaragua (Tallow, Vegetable Oil)||200,000||$7.9|
|Pakistan||Winrock International (Soybean Oil)||1,037,000||$30.3|
|Tanzania||Land O’Lakes, Inc. (Wheat)||1,655,679||$8.9|