Improvements in Program Management

Keith B. AdamsU.S. Agency for International Development

Office of Food For Peace

April 16, 2008

What we will cover today

• Food for Peace Operating Environment• New Prepositioning Strategy• Improved Allocation Tracking Tools• Enhanced Program Monitoring

FFP’s Operating Environment – Many Stakeholders

FFP

U.S. Shipping Industry

Food ProcessingInterests

-Bagging, fortification,milling

WTOUnited Nations

-WFP, FAO

Congress

U.S. Agribusiness

USDA/OMB

PVOs

Also of note:

FACG

FAPC

FAC

The Funding Process

Congress/President Authorizes Program

USDA/USAID Requests Funds Congress/President Appropriates

OMB ApportionsApproved Funds to USDA

Via Transfer Authorization, USAID provides funds for Freight, 202(e), Other

USDA Obligates Funds Based On Call Forward Requests

USDA/KCCO Issues Contracts and Pays for Commodities

Getting Food to the Hungry

Procurement: Long Lead Time Required (Processed Commodities)

Dec Jan Feb Mar Apr May Jun Jul Aug

12/15WFP/W & FFP

meet on pipelines

12/18Every 3rd MonFFP finalizes

country allocations

12/18 - 1/4WFP-FFP coordinate

commodity needs, finalize

documentation

1/44th of Month

DeadlineUSAID providescommodity list

to USDA 1/15USDA issues commodity and freight

tenders

1/21 - 1/31USDA makesawards; WFP

finalizes freightcontracts

4/10 - 4/25Ship arrives at port,commodities loaded,

ship sails

5/25 - 7/10Commodity arrives at destination

1/31 - 4/10Vendors purchase, process and

transport commodities to port

6/2Average

West AfricaArrival

6/17Average

East AfricaArrival

7/2Average

AsiaArrival

12/15FFP receivesearly warning

report

Simplified Allocation, Procurement, and Transportation Timeline

*Bulk commodity timeline is faster

When is flexibility required?

Situations requiring speed

• Rapid-onset natural disasters

• Conflict and new displacement

• Failure of rains in areas with two rainy seasons

• Newly identified needs

• Unexpected program closures

• New biotech restrictions

• New phytosanitary restrictions

• Other donor actions

Response options

• Shift within regional programs

• Shift between country programs

• Borrow from FFP-funded programs with FFP repaying the loan

• Draw from FFP prepo sites

• Use expedited procurement and shipment

• Redirect commodities purchased but not yet loaded

• Divert ships

• Borrow from government stocks or non-FFP programs with FFP commodities repaying the loan

Prepositioning Update

What’s new in PREPO?

• DOMESTIC:

– JacintoPort International (Houston, Texas) was awarded contract April 11, 2007 (Through April 2009 with 2 year options)

• OVERSEAS:

– BMMI in Djibouti began operation March 2007 (2 year base period and three years’ worth of option periods)

Old Strategy

• Based on a staging approach commodities ordered based on reported needs for pre-determined

country programs PREPO used as a secondary source to speed delivery of smaller

amounts of commodities to prevent immediate pipeline breaks Majority of commodities to come from regular procurement process

Disadvantages Prevented allocations if circumstances in country/program changed

Difficult to switch commodities from one country/program to another

Less steady demand for PREPO Fewer options for allocation kept stocks in inventory longer than desired

New Strategy

• Based on a stockpiling approach standard basket/level of commodities is maintained in inventory PREPO used as the primary source for commodities with

remaining balances to be procured

Advantages to New Strategy Keeps inventory moving by ensuring more steady demand for

PREPO stocks Standard inventory allows for more flexibility Same inventory can be used across wider range of potential

recipients Greater predictability on availability of PREPO commodities

Enhancing ProgramMonitoring

Two New Tools to Monitor Price Increases

• Monthly Tracking of Commodity and Freight Costs: Estimates vs. Actual– Following each monthly procurement process– Influence funds available for future calls forward

• Food Price Increase (FPI) Working Group– Support FFP’s efforts to assess and address the impact of

increasing commodity and freight costs– Maintain information on the impact of such increases on

FFP-supported emergency and development programs

Africa$1.07 billion Latin America

$6.9 million

Asia/Near East$103 million

Emergency Food Aid

Overview• $1.175 bil in FY 07, 71 percent of total

emergency funding via WFP• Direct distribution and food for work • Prioritized based on magnitude,

severity of needs • Many operations in high risk

environments

Ten Largest Emergency Programs

Funding by Region

Country/Region

FY07 (USD mil)

Sudan $356.1

Southern Africa (primarily Zimbabwe) $198.4

Ethiopia $181.5

Kenya $80.9

Afghanistan $60.0

Uganda $44.4

Congo (DRC) $37.8

Chad (Eastern) $37.7

Somalia $35.3

West Bank/Gaza $19.5

Non Emergency Food Aid

Challenge of funding uncertainty• Reliance on supplementals, Emerson Trust• Continuing Resolutions

Requires flexible cash flow approach• Predict inflows• Phase funding based timing of peak needs and

3-6 month lead time for procurement/delivery• Predict and quickly react to changing needs via

early warning systems (FEWS NET)• Use supplementals for backfill• Carry over funds due to Sept order, MARAD

reimbursement and supplemental timing, short supply

• Set aside funds for potential commodity and transport price changes

Timing of Major Requirements

Country/region Peak Needs

Horn of Africa pastoralist areas

Dec-Feb hunger season

Ethiopia Jan-Jun safety net

Sudan/Chad Preposition before May rains

Sahel May-Aug hunger season

Central America and Caribbean

Jun-Nov hurricane season

Southern Africa Oct-Mar hunger season

Questions?

Contact Information:

Keith B. AdamsActing Chief, Program Operations DivisionOffice of Food for Peace1300 Pennsylvania Ave NW Rm 7.6Washington Dc 20523(202) 712-5567keadams@usaid.gov