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Food Aid Proposal Entry

McGovern-Dole International Food for Education Program

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Proposal Submit Number:					Help
PIN Number:
Proposal Status:

Distribution Methods (Section 6, 7 C.F.R. 1599.4)
Description of Transportation and Storage, Description of Any Reprocessing or Repackaging, and Logistics Plan *

Commodity for Monetization
JKL requests that the shipment of 5,000 MT of corn to be monetized be sent to Port Framat located in the southern part of the Republic of Hopestan.

The commodities will be passed from JKL to the buyer as soon as the original shipping documents are received and endorsed to the buyer.  The buyer will be responsible for all port costs, import taxes, storage and transport from the port to Hopestan City.  Therefore, JKL will not incur any storage or transportation costs for the commodity that will be sold.

Commodities for Distribution
For the commodities that will be distributed or bartered, JKL requests the use of sealed containers to assure that the products will be received in sound condition.   The commodities should arrive at the Port of Honcha located in the northeastern part of the Republic of Hopestan. The food will be temporarily stored in JKL�s warehouse, and then distributed to local partner organization�s warehouses in the states of Brixel, Fonduk, and Huepel.

At this moment, JKL has a warehouse in Port of Honcha, Port of entry for commodities for regular distribution.  It is 800 square meters and it holds approximately 1,500 MT of commodities.  JKL also has a warehouse in Hopestan City that measures 2025 square meters and holds about 2,400 MT of commodities. From one of these JKL warehouses food will be distributed to the three local partners for the FFE, and from the local partners to the communities under this program.

JKL has developed, refined and installed proper controls to prevent theft and losses.  Both warehouses are solidly constructed out of cement and blocks, equipped with fire extinguishers and JKL security personnel.

Local partners will maintain a warehouse in each of the three regions to receive food until it is transported to the communities. These warehouses will be smaller, but will have the same general characteristics as the JKL Warehouse.

(b) Description of Reprocessing or Repackaging of the Commodities

Commodity for Monetization
JKL will not re-process or package the commodity for monetization.

Commodities for Distribution
Parents and CECs will repackage the food for distribution with technical assistance from food distribution supervisors and local partner organizations� staff, according to the established ration per student and teacher.

Commodities for Barter
JKL will not re-process or package the commodities for barter.

Commodity for Monetization
The commodity for monetization (corn) should arrive at Port Framat, on the south coast of Hopestan, about 100 kilometers from Hopestan City.  This port is equipped with the facilities to receive bulk cargo.

Payment in full is made by irrevocable letter of credit upon delivery of the shipment documents to the bank.  Due to the fact that the buyer will take possession of the product the moment it arrives in port, all cost related to storage and transportation will be the buyer�s responsibility.

Commodities for Distribution
Commodities to be distributed should arrive at Port Honcha, which is equipped to manage containers.  JKL will manage the transfer of the food to the JKL warehouse located five kilometers from this port or to the JKL Hopestan City warehouse.  The food will then be transported to warehouses of local partner organizations in the states of Brixel, Huepel and Fonduk for subsequent transport to distribution centers, from which it will be delivered to beneficiaries every three months.

The JKL warehouses meet certain security and safety standards.  The doors are made of iron, windows have bars and the roof is solid.  There is 24-hour presence with a daytime supervisor and nighttime security guard.  No smoking is allowed inside the warehouses.  JKL has provided a pressure water pump, fire extinguishers and a medical kit.  Care is taken to store commodities on proper pallets.  JKL local partner organizations will be held to these same standards in the selection and operation of food storage facilities in target areas.

Ultimately, the PTAs, assisted by local partner organizations� staff, will facilitate distribution.  Each of these local partner organizations will hire a warehouse supervisor who will maintain a record of food coming in and going out of the warehouse.  JKL Food Supervisors will provide technical support and verification of these records.

Duty Free Entry (Section 7, 7 C.F.R. 1599.4) *
The Government of Hopestan passed Legislative decrees 1770 and 1771-95 in 1995 that provide duty- and tax-free entry for all commodities to be distributed and used for humanitarian purposes. This provides JKL with an exemption from import taxes, storage and port service fees. JKL will clear the commodities through customs, for distribution without paying duty taxes or port service fees. Commodities used for direct feeding or barter activities with residents who receive assistance from the Ministry of Welfare are also duty-free. JKL has discussed its program with relevant ministries and confirmed that any donated food used in barter activities will be exempt from duties and taxes. Article I, (A) of the July 23, 1995 Agreement Between the Government of the United States of America and the Government of Hopestan Regarding Cooperation to Facilitate Humanitarian and Technical Economic Assistance states the following: "Commodities, supplies, and other property provided or utilized in connection with United States assistance programs may be imported free from any tariffs, dues, customs duties, import taxes, and other similar taxes or charges imposed by Hopestan, or any subdivision thereof." The Government of Hopestan will apply a 20 percent VAT on the monetized corn. JKL will arrange for the buyer to pay this tax before receiving the commodities at JKL's warehouse or directly into the buyer�s warehouse.

Economic Impact (Section 8, 7 C.F.R. 1599.4) *
Information compiled on the national market indicates that the importation of corn will not have a negative impact on local sales. Corn production in Hopestan is minimal and does not meet the local demand. The corn requested represents only 6% of the local market this year. Job creation is an expected side-benefit to the FFE program because the three bakeries (one per region) chosen to make the nutritious biscuits will each have to employ approximately 15 new employees. If the biscuit is introduced onto the commercial snack food market, obviously production will increase as will the number of employees needed.

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Questions or comments can be directed to the Program Planning, Development and Evaluation Division at 202-720-4221
or via e-mail at PPDED@usda.gov.