USDA’s Local and Regional Purchase Pilot Program

1. Fiscal Years 2008 thru 2012 USDA’s Local and Regional Purchase Pilot Program

2. Overview of the USDA Pilot Program The Food, Conservation and Energy Act of 2008 (the Farm Bill) directs the Secretary of Agriculture to implement a five-year local and regional purchase pilot program in developing countries from Fiscal Years 2008 thru 2012.

3. Available Funding USDA is authorized to use the following levels of Commodity Credit Corporation (CCC) funding for the pilot program: $5 million in FY 2009 $25 million in FY 2010 $25 million in FY 2011 $5 million in FY 2012

4. Four Phases of the Pilot Program Study of prior local and regional purchases (FYs 2008 thru 2009) Development of guidelines (FY 2009) Implementation of field-based projects (FYs 2009 thru 2011) Independent evaluation (FY 2012)

5. Setting the Stage • Food crises and natural disasters frequently occur against the backdrop of persistent poverty and chronic food insecurity, particularly in sub-Saharan Africa. • Local and regional purchase is an important tool that has enabled food aid agencies to respond quickly to emergency food aid needs during and after such events.

6. Phase 1

7. Key Findings of the USDA Study that will Guide the Implementation of the Pilot Program • Food crises and disasters differ in their onset, phases and in the severity of their impact on different vulnerable groups. • Local and regional purchase can be a timely and effective complement to in-kind food aid programs. • Knowing when and how to use local and regional purchase methods appropriately is critical to meeting emergency food aid needs while avoiding harm to low-income consumers, producers and fragile market systems.

8. When is Local and Regional Purchase Most Often Used? Emergencies: Local and regional purchase has been used effectively during and after food emergencies to expedite the provision of urgently needed food aid to those affected by: • Rapid-onset Disasters • Floods • Earthquakes • Tsunamis • Slow-onset Disasters • Drought • Complex Emergencies • Food Price Crises

9. When is Local and Regional Purchase Most Often Used? Non-emergencies: During non-emergencies, local and regional purchase has been used to: • help affected populations to recover after the life-threatening phase of a food crisis or a disaster has passed; • respond to conditions of chronic food insecurity; • meet the increased nutritional requirements of HIV/AIDS patients; • strengthen existing markets; • promote agricultural development; and • raise farm incomes.

10. Commodity Quality and Safety • All locally and regionally purchased commodities are required to meet the quality and safety standards of the country in which they are purchased and the one in which they are distributed. • The USDA study found that WFP and the PVOs all maintain high standards for ensuring that only safe, high-quality commodities are delivered to food aid program beneficiaries.

11. Commodity Quality and Safety • Bulk whole grains are thoroughly tested for diseases such as aflatoxin in regions in which it is prevalent, as well as for signs of infestation and excessive amounts of foreign material or dust. • Processed commodities are tested to ensure that micronutrient levels are consistent and do not exceed recommended levels. They are also tested for signs of infestation.

12. Where to Find the USDA Study: • On January 16, 2009, the USDA study was sent by the Secretary of Agriculture to the House and Senate Agriculture Committees. • The study laid the foundation for the development of the pilot program implementation guidelines. It can be found online at: http://www.fas.usda.gov/info/communic.asp

13. Phase 2

14. Guiding Principles for Implementation of the USDA Pilot Program The primary objective of the USDA pilot program is to use local and regional purchase as a tool to help meet the urgent food aid needs of those affected by food crises and disasters in an effort to: • Protect against a decline in food consumption, and therefore • Save lives, and • Reduce suffering.

15. Guiding Principles of the USDA Pilot Program In accomplishing this objective, USDA must also ensure that its local and regional purchases: • Do not increase the price of food for low-income consumers, • Do not disrupt global agricultural commodity markets, • Do not disrupt normal patterns of commercial trade, and • Do not harm farmers in the recipient country or in a neighboring country in the region.

16. Organizational Capacity for Successful Local and Regional Purchases Pre-Purchase: • Ability to conduct vulnerability analyses and food needs assessments and identify appropriate responses • Knowledge of local and regional market conditions, as well as the volume and normal pattern of commercial trade

17. Organizational Capacity for Successful Local and Regional Purchases Purchase: • Experienced staff capable of undertaking local and regional purchases at reasonable market prices • Operational capacity to effectively manage the transportation, storage, handling and distribution of locally and/or regionally purchased commodities • A procurement plan that includes appropriate guidelines for ensuring commodity quality and safety and for minimizing trader default • Accountability standards to guard against commodity loss or damage

18. Organizational Capacity for Successful Local and Regional Purchases Post-Purchase: • Ability to monitor key indicators and conduct post-purchase impact assessments • Ability to provide timely and accurate status reports to USDA staff on a regular basis

19. Proposal Selection Criteria • USDA is currently drafting pre-qualification, proposal and program implementation guidelines. The guidelines will be made available for public review and comment prior to the launch of the pilot program. • USDA will be funding programs in “multiple geographical regions,” however, priority will be given to proposals for programs in Africa. • A majority of the funding will be used to support emergency program needs in order to expedite the provision of life-saving food aid to those who need it most. • A small amount of funding will also be reserved for development assistance.

20. Timeline for the Release of Guidelines During the summer, a draft of the guidelines will be published in the Federal Register for public comment. The public is encouraged to review the draft and provide feedback.

21. Future Information Sessions After the guidelines have been made available for public comment, USDA will be hosting information sessions for organizations interested in submitting proposals for pre-qualification. The public will have the opportunity to learn more about the guidelines, ask questions of USDA staff and provide feedback before they are finalized. All interested parties are encouraged to attend.

22. Future Information Sessions • The guidelines will include instructions in relation to applications for pre-qualification, the proposal submission process and program implementation. • Only pre-qualified organizations will be eligible to submit proposals for pilot program funds.