Pursuant to Senate Report 114-82, accompanying S. 1800,1 the U.S. Agency for International Development (USAID) is pleased to submit this report, which outlines how USAID used Food for Peace Act, Section 202(e) funding in Fiscal Year (FY) 2015 to enhance the impact of the Office of Food for Peace’s Title II programming.

The Agricultural Act of 2014 instituted changes to the Food for Peace Act, as follows:

• Increased available Title II Section 202(e) funds from “not less than 7.5 percent nor more than 13 percent” to “not less than 7.5 percent nor more than 20 percent” of the Title II account.
• Expanded the definition of Section 202(e) to authorize its use to: a) Fund development activities previously supported by monetization; and b) Enhance any existing Title II program.

USAID issued updated guidance, 2 as required under the law, to explain how it would implement these changes in Section 202(e). USAID refers to the Section 202(e) funds applied for the purposes of offsetting monetization or enhancing Title II programming as “Impact Funds.” This distinguishes Impact Funds from the other administrative and programmatic uses of Section 202(e) funds, including administrative, management, personnel, transportation, storage and distribution costs for carrying out Title II in-kind food assistance programs.

For the past two years, these changes have had a significant impact on both emergency and development food assistance programs. Impact Funds have allowed for a decrease in the use of monetization in Title II development programs, enabling USAID to pay directly for the costs associated with community-based asset building programs, for example, rather than relying on monetization to generate cash for programs. Impact Funds have also allowed for the use of market-based tools, including local and regional procurement and food vouchers, in emergency and development settings.

USAID and its partners have used the new authorities and resources to: 1) reach more people; and 2) fill critical food assistance gaps, support market recovery, build community assets and improve dietary diversity. USAID has used Impact Funds to support food insecure beneficiaries with food voucher or cash transfer programs where markets are working, enabling USAID to prioritize Title II in-kind food for nutrition interventions or where markets were less functional.