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Improvements in Program Management: Food for Peace Operating Environment

This presentation discusses the improvements in program management for the Food for Peace operating environment, including a new prepositioning strategy, enhanced allocation tracking tools, and improved program monitoring.

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Improvements in Program Management: Food for Peace Operating Environment

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  1. Improvements in Program ManagementKeith B. AdamsU.S. Agency for International DevelopmentOffice of Food For Peace April 16, 2008

  2. What we will cover today • Food for Peace Operating Environment • New Prepositioning Strategy • Improved Allocation Tracking Tools • Enhanced Program Monitoring

  3. FFP’s Operating Environment – Many Stakeholders Food Processing Interests -Bagging, fortification, milling United Nations -WFP, FAO WTO FFP USDA/OMB Congress Also of note: FACG FAPC FAC PVOs U.S. Agribusiness U.S. Shipping Industry

  4. Congress/President Authorizes Program The Funding Process USDA/USAID Requests Funds Congress/President Appropriates OMB Apportions Approved 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

  5. Getting Food to the Hungry

  6. Procurement: Long Lead Time Required (Processed Commodities) Simplified Allocation, Procurement, and Transportation Timeline *Bulk commodity timeline is faster

  7. 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 When is flexibility required?

  8. Prepositioning Update

  9. 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)

  10. 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

  11. 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

  12. Enhancing ProgramMonitoring

  13. 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

  14. 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 Emergency Food Aid Funding by Region

  15. 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

  16. 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

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