FOOD FOR PEACE ACT, SECTION 202(E) FY 2016 Snapshot

MWANGI KIRUBI FOR USAID

TABLE OF CONTENTS

OVERVIEW 1

FISCAL YEAR 2016 GRANTS 2 REGIONAL HIGHLIGHTS 2

COLOMBIA 4

ETHIOPIA 4 LAKE CHAD BASIN 5

MADAGASCAR 6

APPENDIX A: EMERGENCY ENHANCED AND PROGRAM 202(E) 7

APPENDIX B: DEVELOPMENT ENHANCED AND PROGRAM 202(E) 8

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OVERVIEW

Since 1954, USAID’s Office of Food for Peace has provided support to those who are hungry around

the world by providing immediate, life-saving food assistance to people affected by both conflict and

natural disasters. Food for Peace also works to address the root causes of hunger through long-term

activities to equip families with knowledge and tools to feed themselves, reducing the need for future

food assistance.

While Food for Peace has provided food assistance around the world for more than 60 years, additional

flexibility provided in the Agriculture Act of 2014 significantly impacted both emergency and

development food assistance programs. The Agricultural Act of 2014 instituted changes to the Food for

Peace Act, as follows:

Increased available Title II Section 202(e) funds from “not less than 7.5 percent nor more than 13

percent” to “not less than 7.5 percent nor more than 20 percent” of annual Title II

appropriations.

Expanded the definition of Section 202(e) to authorize its use to: a) Fund development activities

previously supported by monetization; and b) Enhance any existing Title II program.

Rather than relying on monetization to generate cash for Title II development programs, program

Section 202(e)1 flexibility enables USAID to pay directly for the costs associated including training and

supplies. Enhanced Section 202(e)2 funds also allow USAID to use market-based tools, including local

and regional procurement and food vouchers, in emergency and development settings. More

information on how 202(e) funds may be used in Title II programs is available in the draft Food for Peace

Information Bulletin “Eligible Uses of Section 202(e) and CDF for FFP Awards”3.

These changes mean that USAID reaches more people, fills critical food assistance gaps, supports local

market recovery, builds community assets and improves dietary diversity. Additionally, by using food

voucher or cash transfer programs where markets are working, USAID prioritizes Title II in-kind food

for nutrition interventions or where markets are less functional.

LIMITATIONS

Enhanced Section 202(e) is only approved for countries where there is an ongoing Title II U.S. in-kind

program or where an in-kind component will soon begin. This means these funds cannot be used in all

countries where Food for Peace is currently operating. That said, Enhanced Section 202(e) is especially

welcomed in Title II countries because ongoing Title II programs can be rapidly amended to incorporate

these funds when changed conditions on the ground require it, rather than initiating a separate award

process for International Disaster Assistance Funds (IDA) that are available under the Emergency Food

1 USAID refers to non-administrative activities that were previously funded through monetization as “Program Section 202(e)”

and can include activities that complement Title II U.S. in-kind food assistance such as seed distribution or program evaluations. 2 USAID refers to as “Enhanced Section 202(e)” as market-based activities (local and regional procurement of food, cash

transfers, and food vouchers) as well as administrative costs to implement such activities, which enhance an existing Title II

program. 3 FFPIB 17-01 https://www.usaid.gov/documents/1866/food-peace-information-bulletin-17-01

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Security Program. An example of a Title II program adapting to a crisis is illustrated in the Madagascar

regional highlight later in this report, when a. crisis modifier enabled our partners to respond more

quickly and more efficiently.

FISCAL YEAR 2016 GRANTS

This document provides a snapshot of how USAID used Food for Peace Act, Section 202(e) funding in

Fiscal Year (FY) 2016 to enhance the impact of the Office of Food for Peace’s Title II programming.

Based on a preliminary analysis, USAID estimates that it was able to reach approximately

818,000 additional beneficiaries in FY 2016 as a result of increased flexibility through

Enhanced 202(e) Funds4. USAID is currently conducting both internal and external analyses on its

beneficiary reach across modalities and funding streams and looks forward to providing additional insight

on beneficiary impact in the near future.

In FY 2016, USAID used Enhanced and Program 202(e) in the following responses: Chad, Colombia, the

Democratic Republic of Congo (DRC), Ethiopia, Kenya, Lesotho, Madagascar, Malawi, Mozambique,

Niger, Nigeria, Somalia, South Sudan, Swaziland, Tanzania, Uganda, West Africa Region, Yemen, and

Zimbabwe. Specific examples are highlighted in the next section of this report.

In total, USAID spent more than $124 million dollars in Program 202(e) and Enhanced 202(e) –

approximately 5.4 percent of total funding for emergency activities and 13.0 percent of total funding for

development activities in FY 2016. The tables in the appendices provide a breakdown of Program and

Enhanced 202(e) by country, partner, modality, and funding amount. A complete breakdown of funding

by country can be found in the appendices.

REGIONAL HIGHLIGHTS

These examples highlight activities using Enhanced 202(e) to enhance Title II programs through the use

of local and regional procurement, cash transfers, food vouchers, or other activities. Title II

development activities now funded by Program 202(e) rather than through monetization are part of the

Agency’s ongoing Title II development awards. Development program results are captured through

independent baseline and final evaluations, which are regularly reported through the annual U.S.

International Food Assistance Report (IFAR) and were highlighted in a special publication entitled Voices

from the Field.5 In FY 2016, USAID monetized $15.6 million in only one country, Bangladesh, in order to

meet the 15 percent minimum monetization statutory requirement. Comparatively, in FY 2011, USAID

used $156.6 million to monetize commodities in numerous countries. This is an important shift: a 2011

Government Accountability Office (GAO) study on monetization highlighted the fact that the process of

monetization results in a loss, on average, of 24 cents on every $1 dollar spent – a significant loss of

4 The number of additional beneficiaries reached is based on preliminary data analysis that evaluated the efficiencies of marke t

based modalities on an annual basis. Final analysis is ongoing. 5 Voices from the Field is available at: https://www.usaid.gov/sites/default/files/documents/1866/Food%20for%20Peace%20-

%20Voices%20from%20the%20Field%20-%20online%20version%20rev.pdf

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food in a world where hunger is increasing6. Through Program and Enhanced 202(e), USAID is able to

feed more people at a lower cost than if programs were monetized.

6 http://www.gao.gov/products/GAO-11-636

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COLOMBIA

In Colombia, a half century of conflict between the government and guerilla movements has internally

displaced over five million people, approximately 80 percent of whom are women and children. Despite

a recent peace agreement between the government and the largest guerilla movement, the

Revolutionary Armed Forces of Columbia (FARC), the impacts of the conflict continue to burden those

who were forced to leave their homes to find safety, as well as the host communities that have

sheltered them. Due to few employment opportunities in displaced communities, households are unable

to afford enough nutritious food for their children. As a result, almost 24 percent of displaced children

suffer from chronic malnutrition, a rate that is twice the national average in Colombia. USAID supports

the UN World Food Program (WFP) to assist approximately 193,000 vulnerable and food-insecure

Colombians struggling to get back on their feet after decades of armed conflict.

In FY 2016, USAID provided $2 million in Enhanced 202(e) for food vouchers that supply conflict-

affected households with a means to feed their families. The vouchers allow households to purchase a

wide variety of local, fresh fruits, vegetables, proteins and other nutritious foods. Additionally, nutrition

training on the importance of a diverse diet accompanies the distribution of vouchers. Providing conflict-

affected Colombians with both the means and knowledge to improve their diets helps to address the

vitamin, iron, and protein deficiencies common among displaced households. The voucher program also

supports local economic, agricultural, and market recovery by linking smallholder farmers with the local

shops where food vouchers are redeemed.

The Enhanced 202(e) complemented $4.4 million in Title II U.S. in-kind food assistance in FY 2016. By

combining U.S. in-kind food commodities with market-based food assistance, USAID addresses food

insecurity by meeting both the food and nutrition needs of displaced Colombian communities, while

simultaneously supporting longer-term economic recovery.

ETHIOPIA

The 2015-2016 El Niño hit Ethiopia hard; the country experienced its worst drought in 50 years. It

surpassed in scope and scale the historic drought of 1984, when some estimate that more than a million

lives were lost. To worsen matters, consecutive prior poor seasonal rains and harvests compounded the

impact of El Niño.

USAID responded quickly and robustly to support the 10 million people in need of drought related

emergency food assistance. In FY 2016, FFP mobilized over 680,000 metric tons of U.S. in-kind food –

valued at an estimated $385.5 million – and fed more than four million people.

To complement this Title II in-kind relief response, USAID also supported Ethiopia’s Productive Safety

Net Program (PSNP). Established in 2003 after a series of hunger crises, the Government of Ethiopia

(GoE)-led PSNP supports eight million chronically food insecure people with predictable, seasonal food

and cash transfers in exchange for participants’ support in the creation of community assets and social

infrastructure (e.g. schools, health posts). USAID reaches more than 1.6 million people through an

annual contribution of approximately $100 million to provide the PSNP recipients with approximately

115,750 metric tons of food.

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USAID used the PSNP development program platform to also ensure farmers had the seeds needed to

plant their fields before the rains began. While providing in-kind food assistance helped families meet

their most immediate food needs, getting good quality seeds into the hands of farmers helped foster

resilience and quicken recovery after the drought had subsided.

USAID approved the use of $2.6 million in Program 202(e) for development partners to provide direct

seed distributions to over 100,000 farming households in drought-affected Amhara and Tigray regions.

Along with other seed actors – including GoE, the UN Food and Agriculture Organization (FAO) –

USAID through its partners distributed drought-resistant crop seeds, vine cuttings and seedlings, and

vegetable seeds to approximately 7.5 million people in Ethiopia, giving farmers access to good quality

seed in time to plant for the next harvest and making them more resilient to drought. This response was

critical in minimizing the loss of critical household assets to pay for seeds, as well as facilitating

agricultural recovery and a return to household food security. FAO estimates that the GoE and

humanitarian community saved nearly $1 billion in emergency assistance by providing seed support7.

Providing seeds to farmers not only resulted in faster recovery times, it also resulted in significant cost

savings.

LAKE CHAD BASIN

In FY 2016, USAID played a major role in addressing acute food insecurity caused by Boko Haram-

related conflict in the Lake Chad Basin region of West Africa. Mass displacement, border closures, and

violence resulted in increased food prices, reduced food availability, and limited land access and

livelihood activities, which has led to a food and nutrition crisis in the Lake Chad Basin region –

Cameroon’s Far North region, Chad’s Lac region, northeastern Nigeria, and Niger’s Diffa region. To

help respond to urgent food needs, USAID provided $3.8 million in Program 202(e) for capacity

building, local procurement of food, and food vouchers to the WFP emergency operation in the region.

In Chad, USAID contributed $1 million in Enhanced 202(e) to WFP to provide food vouchers to 14,300

Nigerian refugees and internally displaced persons (IDPs). With food vouchers, beneficiaries were able

to diversify their diets by purchasing nutritious food items of their choice in local markets. In Niger,

USAID contributed $2 million to WFP to provide food vouchers to 35,000 people living outside of

camps, in areas where markets were functional and would be supported further by the use of a cash -

based modality. WFP also used Enhanced 202(e) to provide locally procured food to Nigerian refugees,

returnee populations, IDPs, and vulnerable host communities. By purchasing commodities locally, WFP

was able to include millet, beans, and nutrient-enriched oil in the beneficiaries’ monthly food basket.

In northeastern Nigeria, USAID provided $800,000 in Program 202(e) to support WFP’s work in

strengthening the capacity of the Government of Nigeria’s National Emergency Management Agency

(NEMA) to respond to the urgent food crisis. With this funding, WFP worked to strengthen food

security information systems, which are critical in ensuring that the most vulnerable beneficiaries are

reached, coordination among food security actors is improved, and markets and the food security

situation are monitored. WFP also worked with NEMA to strengthen the agency’s technical capacity by

7 FAO. (November 14, 2016). “Ethiopia’s historic seed campaign leads to USD 1 billion in savings” Available at:

http://www.fao.org/emergencies/fao-in-action/stories/stories-detail/zh/c/452242/

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providing training sessions on topics including the provision of nutrition assistance, monitoring the

quality and coherence of assistance, and conducting food security analyses and assessments.

Overall, Enhanced 202(e) ensured that urgent food needs were met through market-sensitive

approaches in a timely manner. These funds were critical in helping to improve the capacity of the

Government of Nigeria to respond to the humanitarian crisis in northeastern Nigeria. Through these

types of activities, USAID and its partner, WFP, ensured that urgent food needs in the region as a whole

were met, while also working to improve the emergency food security response in northeastern

Nigeria, where food insecurity needs were most acute in scale and scope.

MADAGASCAR

Madagascar is vulnerable to acute food insecurity due to frequent natural disasters, including cyclones,

flooding, droughts, and locust infestations. Over the past 35 years, more than 50 natural disasters have

struck the country, affecting more than 11 million people. In FY 2015, drought hit southern Madagascar,

resulting in alarming levels of acute food insecurity and USAID responded with emergency food

assistance. When the 2015-2016 El Niño phenomenon began, it exacerbated these drought conditions.

USAID worked with its partner Catholic Relief Services (CRS) to scale up the U.S. Government’s

response to the emergency in the south. Prior to the drought, CRS undertook development food

security activity in regions of Madagascar outside of the drought-affected south. As part of the

development activity, CRS had in-country stocks of food assistance commodities. On multiple occasions,

USAID authorized CRS to transfer and distribute development food assistance commodities to meet

life-saving food needs of the most severely drought-affected households in the south. In order to ensure

there was no disruption to CRS’ development activities, USAID provided $400,000 worth of Enhanced

Section 202(e) funds, which CRS distributed as cash transfers in lieu of food transfers to beneficiaries of

CRS’ development activity.

Overall, these Program 202(e) enabled USAID’s partner to meet Madagascar’s most urgent food needs

in the south of the country while continuing to support beneficiaries under its development project. The

provision of these funds was instrumental to affording CRS flexibility in its response to the varied food

security situations in the country.

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APPENDIX A: EMERGENCY ENHANCED AND PROGRAM 202(E)8,9

COUNTRY AWARDEE MODALITY PROGRAM 202(E)

FUNDING

Chad WFP Food Voucher $1,000,000

Colombia WFP Food Voucher $2,000,000

DRC WFP Cash Transfer $3,685,000

DRC WFP Food Voucher $ 1,815,000

Kenya WFP Program Costs (Twinning10) $ 500,000

Kenya WFP Cash Transfer $ 9,500,000

Lesotho World Vision Program Costs $ 3,104,200

Lesotho World Vision Regional Procurement $ 238,900

Madagascar WFP Program Costs $1,227,752

Madagascar WFP Local Procurement $ 181,600

Madagascar WFP Regional Procurement $ 942,312

Malawi WFP Regional Procurement $2,000,000

Mozambique World Vision Program Costs $ 1,649,663

Niger U.N. Children’s Fund Local Procurement $1,796,040

Niger WFP Local Procurement and Vouchers $2,000,000

Nigeria WFP

Program Costs (Capacity building,

training, and technical support of

Host Government)

$800,000

Somalia Save the Children Program Costs (Evaluation) $ 247,764

South Sudan WFP Local Procurement $7,000,000

South Sudan WFP Regional Procurement $3,000,000

Swaziland World Vision Regional Procurement $ 2,214,500

Tanzania WFP Local Procurement $3,000,000

Uganda WFP Local Procurement $ 320,100

Uganda WFP Local Procurement $ 446,200

West Africa Regional WFP Program Costs (Replace Damaged

Bags) $27,600

Yemen WFP Local Procurement $20,000,000

Yemen WFP Food Voucher $ 6,598,767

Zimbabwe WFP Program Costs (Evaluation) $125,000

TOTAL $75,920,398

8 Enhanced and Program 202(e) for emergency responses must be awarded to partners that managing existing Title II in-kind

activities. Currently, the U.N. World Food Program is the primary partner for emergency food assistance globally and, as a result, they received a significant proportion of Impact Fund resources. 9 Program costs in this table refer to non-administrative activities that were previously funded through monetization. These

activities complement Title II U.S. in-kind food assistance, such as seed distribution or program evaluations. Program costs are

specified in the table if stated in the award documentation. 10 Twinning pairs in-kind food contributions from a host government with contributions from Food for Peace to cover the cost

of processing, transportation, and distribution of the food.

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APPENDIX B: DEVELOPMENT ENHANCED AND PROGRAM

202(E)11

COUNTRY AWARDEE MODALITY PROGRAM 202(E)

FUNDING

DRC Food for the Hungry Program Costs $ 3,752,100

DRC Mercy Corps Program Costs $ 2,025,200

Ethiopia Catholic Relief Services Program Costs $7,172,000

Ethiopia Catholic Relief Services Cash Transfer pilot $127,258

Ethiopia Food for the Hungry Program Costs $ 4,964,165

Ethiopia Food for the Hungry Cash Transfer $ 2,392,035

Ethiopia Food for the Hungry Program Costs (Seed distribution) $ 1,865,330

Ethiopia REST Program Costs $ 6,916,739

Ethiopia REST Cash Transfers $ 2,510,297

Ethiopia REST Food Vouchers $ 93,364

Ethiopia World Vision Program Costs $ 12,153,017

Ethiopia World Vision Cash Transfer $ 191,738

Malawi Catholic Relief Services Local Procurement $ 1,261,728

Zimbabwe WFP Local Procurement $ 244,280

Zimbabwe WFP Cash Transfers $ 2,111,800

Zimbabwe WFP Program Costs $ 755,711

TOTAL $ 48,536,762

11 Program costs in this table refer to non-administrative activities that were previously funded through monetization. These

activities complement Title II U.S. in-kind food assistance, such as seed distribution or program evaluations. Program costs are

specified in the table if stated in the award documentation.