FY 2007 FOOD FOR PROGRESS REQUEST - EL SALVADOR

UNCLAS SAN SALVADOR 001845

SIPDIS

FOR USDA/FAS/EXPORT CREDITS ROBIN TILSWORTH AND RON CROUSHORN.

SIPDIS

E.O. 12958: N/A
TAGS: OTRA EAGR AMGT ASEC ES
SUBJECT: FY 2007 FOOD FOR PROGRESS REQUEST - EL SALVADOR

REF: SECSTATE 099922

1) Amount Requested: Government to Government donation of $5
million in wheat.

2) Use of Commodities: The Government of El Salvador (GOES) will
monetize the FFP donation and use the proceeds in 2 activities:
trade capacity building (TCB) and rural development. El Salvador is
one of 4 Central America- Dominican Republic Free Trade Agreement
(CAFTA-DR) countries that have implemented the Agreement. A major
constraint to full and successful implementation is weak Salvadoran
SPS and regulatory institutions; this weakness creates non-tariff,
technical barriers to increased US food and agricultural exports.
For example, US exports of meat and poultry products face a variety
of problems caused by El Salvador's inability or unwillingness to
apply science-based principles to import regulations. USDA is very
active in El Salvador providing needed training and equipment, but
the need far exceeds the resources. This donation will be used to
supplement USDA's successful TCB activities by paying for travel and
per diem expenses for Salvadoran attendees at USDA TCB training, by
providing needed equipment, and supplementing TCB in other ways.

3) The GOES will use a portion of the proceeds to support on-going
rural diversification and rural development activities. El Salvador
is a land-poor country; to provide for its rural population, farmers
must move away from subsistence crop production into high-value
crops or into processed products production. Previous FFP donations
have been used very successfully in agricultural diversification
programs, such as fruit and tilapia production. El Salvador will
carry out similar projects with this donation.

BUTLER