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) [email protected]