BI-LATERAL MEETING BETWEEN USAID/REDSO/FFP AND

UNCLAS NAIROBI 002369

SIPDIS

AIDAC

SIPDIS

USAID/DCHA/AA FOR WGARVELINK, LROGERS
DCHA/OFDA FOR GGOTTLIEB, CGOTTSCHALK, ATRACY, KCHANNELL
DCHA/FFP FOR JDWORKEN, JDRUMMOND, TANDERSON, TMACRAE
AFR/EA FOR JBORNS, SMCCLURE
ROME FOR FODAG
GENEVA FOR NKYLOH
BRUSSELS FOR PLERNER
NSC FOR JMELINE

E.O. 12958: N/A
TAGS: DJ ER EAID SO
SUBJECT: BI-LATERAL MEETING BETWEEN USAID/REDSO/FFP AND
WFP OPERATIONS DIVISION KAMPALA (WFP/ODK).


1. Summary: On May 3, 2006, USAID/REDSO/FFP and the
regional WFP Operations Division Kampala (WFP/ODK) held
their third annual bi-lateral meeting. These annual
meetings are designed to provide a forum for each party
to discuss topics of mutual concern in managing the
nearly 1.6 million MTs of Title 2 food aid that are
programmed in the East and Central Africa region every
year. Discussions centered on new developments within

each organization, Food for Peace and WFP; logistics
clusters, regional pipeline and procurement; WFP country
programs in the Great Lakes, the Democratic Republic of
Congo, Eritrea, Djibouti and Somalia. Specific follow-up
action points of the meeting follow.


Highlighted Changes in USAID and WFP/ODK



2. REDSO/FFP Director and WFP/ODK Director highlighted
significant changes in their respective organizations.
USAID shared the following:

New USAID Administrator and closer programming with
the U.S. Department of State.
New model of coordination between USAID and the U.S.
Department of Defense.
New Food for Peace Director and REDSO East Africa
Mission Director.
Famine Fund projects for the Horn of Africa combating
Cassava Mosaic Disease and Banana Wilt in Central and
East Africa.
The imminent establishment of additional pre-position
facilities for processed products in the region.


3. WFP/ODK shared the following highlights from their
side:

The implementation of a joint assessment for the
Great Lakes Region PRRO.
The departure of Sudan from the WFP/ODK office for the
establishment of its own country office.
Decreased resources for operations in WFP/ODK compared
to the past two years.
Child Hunger Initiative launched in collaboration
with UNICEF and the World Bank.

Logistics Clusters


5. Logistics Cluster meetings have been established by
WFP at the country level, involving Private Voluntary
Organizations (PVOs) and other agencies involved in the
movement of commodities (both food and non-food) in
order to improve logistics and programming in the
region. Food for Peace/East Africa (FFP/EA) expressed
their support for this initiative and indicated that it
would like to see the effort extended beyond the current
six month mandate, and be more institutionalized with
permanent personnel dedicated to cluster management. WFP
reminded participants that logistic cluster management
was not a WFP activity, but rather, they are the lead
for a mix of agencies. Financial support for the
initiative is lacking, but they are examining the
inclusion of a line item in future budgets. WFP noted
reserve that the main interest for the cluster is
generated by the situation in the Horn of Africa and the
main beneficiaries are the PVOs. Once the situation
stabilizes, the interest will also subside; a scenario
that has been played out in Angola and Somalia. FFP
indicated that given the substantial amounts of food aid
coming into various countries, this action may be
sustainable on the basis of food aid alone, and expand
to other commodities as the need arises.


6. The following action points were identified in
relation to logistics cluster:
The successes of the cluster should be highlighted by
WFP so that donors are inspired to contribute. FFP will
liaise with other donors to generate interest and
support.

Focus on food aid as a foundation for cluster
management. Look into REDSO/FFP's regular meetings with
Title II partners as a potential starting point.
Examine the possibility of private sector involvement
as a means to fund the mechanism.
WFP to incorporate cluster management as part of
their operational budgets.

REGIONAL PIPELINE


7. In a horizon tour, WFP gave pipeline highlights for
various countries. Somalia has relatively little other
donor support than FFP and that has created some
shortfalls. Rwanda and Burundi have insufficient funding
to cover the effects of their drought. The regional
market was "dry" for quick regional purchases (primarily
in Uganda). The Democratic Republic of Congo program has
an existing debt of $6.2 million through the WFP
Business Process Review (BPR),so that even if/when
contributions come in, they would go towards paying off
the debt, and in the interim no further advances can be
made.


8. WFP indicated that a total of 1.6 million MTs were
projected for 2006. Given the current situation in the
Horn of Africa, that estimate has increased to 2.1
million MTs, representing 39 percent of WFP's global
food aid budget. The USG's Continuing Resolution often
forces FFP to disburse funds late. Because no other
donor can match FFP's contribution, pipelines in the
region are often deeply affected.


9. Follow up action points in regard to the regional
pipeline included:
FFP should attempt to limit the number of Call
Forwards and place as many as possible in the first
quarter;
FFP should increase the pre-positioning of stocks to
avoid breaks and to provide faster response;
Both parties should follow up with the Kenyan
government in regards to a number of stringent controls
recently placed on food aid imports.

PROCUREMENT


10. WFP shared that there is a good history of
procurement in Uganda where 210,000 MTs were procured in

2005. However, in the current situation, local markets
have been depleted by drought in neighboring countries
and food commodities flowing to Rwanda, Kenya and
Tanzania. This has led to little food availability in
the market as well as higher prices. WFP indicated that
they do not issue small tenders to discourage traders
from going to the local market and buying out the local
supply. WFP cannot buy large quantities as the
available food is in the hands of three to four traders
offering little competition. FFP shared that there is
discussion in Washington to allow a limited cash
disbursement of up to 25% of FFP's annual budget for
local or regional procurement, while increased pre-
positioning of stocks would alleviate the need for cash
disbursements for quick purchase.


11. There was a lively exchange regarding the
flexibility of using cash as well as in-kind food
contributions. WFP indicated that they do not want to
appear to be clamoring for cash when their capacity and
the local market conditions may not allow for prompt
delivery, as is currently the case in Uganda. They
recommended that decisions on "cash versus food" should
be done based on proper research given the availability
of each.


ERITREA


12. WFP provided an extensive historical overview of
the current complicated situation in Eritrea. In short,
there are 68,000 MTs of food aid warehoused in Eritrea

that the government will not allow WFP to access. WFP
estimates that 47,000 MTs risks expiring within the next
three months. Apart from 7,000 MTs that were distributed
by CRS, the government will not allow targeted
distributions to occur and has indicated that it wants
the current stocks to be absorbed into their current
food security program. Meanwhile, WFP's 100 plus staff
are sitting idle since no distributions are occurring.
The running costs of the program leave WFP with limited
options regarding a continued presence in Eritrea.
However, at the same time, closing the operation is just
as costly with the payment of separation allowances.
WFP shared that the population has limited options as
well: trade has been restricted; there is limited cash
in the economy; female-headed households work as cooks
in military barracks; there has been a 20 percent cattle
loss due to the lack of fodder, etc. The WFP/ODK
Director is scheduled to visit Eritrea in mid May in
another attempt to find resolution to the issues faced
by WFP.

PRRO: Democratic Republic of Congo and the Great Lakes


13. Donors have recently requested that the PRROs in the
Democratic Republic of Congo (DRC) and the Great Lakes
Region be re-assessed to better reflect current
situations that would have direct bearing on food aid
programming in- country. In the case of the DRC PRRO,
FFP expressed concerns that though most of the analysis
was good, it seemed to be "rubber stamped", and
expressed their interest to be included in the process
much earlier. Further, the upcoming elections and its
outcome should be reflected in the final document.
Though WFP contends that the PRROs are designed with
enough flexibility to reflect key events as they occur,
they concurred with the need to delay its final
presentation to the WFP Executive Board scheduled for
November 2006. REDSO/FFP opined that the PRRO should be
extended for an entire year in order to conduct a proper
assessment, similar to the one recently completed for
the Great Lakes PRRO and to allow sufficient time to
adjust for fall-out from the July elections.


14. The findings of the Great Lakes PRRO assessment
were presented to REDSO/FFP in April 2006. The draft of
the assessment is expected to be available by mid-May,

2006. It is expected that the recommendations will guide
the next steps of Great Lakes PRRO and may mean the
disbanding of the regional program and shifting to
individual country programs to be presented at the
November 2006 WFP Executive Board meetings.



DJIBOUTI, SOMALIA, FAMINE FUND, NEXT MEETING


15. The Djibouti government has expressed its desire
handle food distributions directly and would like rice
instead of the wheat flour that has been provided these
past 10 years. WFP provided insight that it is likely
that this move has political undertones in light of the
upcoming elections. Rice is the preferred commodity of
the urban areas while wheat is most preferred in the
rural areas. Though the strategic interests of the
country are well known, WFP requested that FFP be
mindful that once rice is distributed, it will be
difficult to have them accept wheat flour again.


16. FFP briefed WFP on the Famine Fund which is a
regional initiative of USAID to combat Cassava Mosaic
Disease and Banana Wilt in Tanzania, Rwanda, Burundi,
Uganda, eastern DRC and western Kenya. The $5 million
dollar grant will be managed by Catholic Relief
Services. REDSO/FFP envisions food aid as a support
activity for this initiative and invites WFP to attend
the regional planning conference in Rwanda in June.

SUMMARY CONCLUSIONS


17. The summary of conclusions are as follows:
On logistics clusters: FFP encourages WFP to identify
means to sustain and institutionalize the forum.
Possibly through multi-donor food aid funding as the
basis for organization with flexibility to include non
food items as the demand arises; the encouragement of
private sector involvement; wider donor awareness.

On regional pipeline: the number of FFP Call Forwards
should be limited and the pre-positioning of food stocks
in the region should be increased.

On local procurement: cash disbursements versus in-
kind food aid should be done following adequate research
on each individual country's circumstances.

On Eritrea: decisions need to be made on WFP's
presence in the country in light of existing staff costs
and the stoppage of its operations by the government.

On DRC PRRO: WFP should examine the possibility of
extending the DRC PRRO for one year as opposed to the
current six month planned.

On Great Lakes PRRO: WFP is to share the final draft
of the Great Lakes PRRO assessment when it becomes
available and should also involve donors in future
planning for the Great Lakes.

On Djibouti: The Djibouti government should be
discouraged from requesting a change from wheat to rice
as rice is mainly the preference of the urban
populations that are ultimately less food insecure.

On WFP/ODK and REDSO/FFP bilaterals: that the next
meeting should be scheduled for September 2006, in
Nairobi.

BELLAMY