COMMITTEE COMMENT

This bill-the International Development and Food Assistance Act of 1975-is legislation of consolidation and progress.

It consolidates the gains made in 1973 when the Congress passed a comprehensive reform of the foreign aid program.

In the ensuing 2 years the Agency for International Development has attempted to redirect its program to fulfill the congressional objectives-namely, to help solve the most pressing problems of the poor majority of people in poor countries.

Those attempts, while not in every case satisfactory, have nevertheless demonstrated some significant achievements and a good-faith effort on the part of AID officials.

With the benefit of 2 years' experience, the committee has sought in this bill to build on the foundations of the 1973 reforms in order toGive the Agency further guidance on carrying out the "New Directions" mandate:

Eliminate or reorient funding categories which represent more traditional approaches to development aid;

Integrate "New Directions" policy and techniques, where possible, into the overseas distribution aspects of the Public Law 480 food aid program; and

Provide the redirected development assistance program an identification of its own, apart from military assistance and shortrange political aid.

In addition to its consolidating effects, this bill breaks new ground in the field of international assistance. Among the innovations it contains are

An effort to harness the capabilities of America's land-grant and other agricultural universities to the job of getting the results of research to the developing-country small farmer.

A new title which gives clearer focus and a special source of funding for U.S. efforts to help the victims of disasters;

An emphasis on helping countries solve their energy problems, perhaps the most serious challenge to development and stability since World War II:

Authorization for an expanded effort to develop and disseminate "intermediate technology"-technology tailored to the needs and capabilities of the less-developed countries; and

The committee believes that this bill represents the kind of foreign assistance legislation that the American people will support.

Representatives of civic, church, and other groups interested in foreign assistance have been virtually unanimous in their approval of this proposal, both in their testimony and in statements filed with the committee.

Further, a recent public opinion poll by the Chicago Council on Foreign Relations, sampling attitudes throughout the country, found that a strong majority of people (79 percent) said they would favor giving economic aid if they could be sure that it ended up by helping the people of the poor countries.

This poll confirmed the findings of an earlier poll by Peter D. Hart Associates for the Overseas Development Council which showed that fully two-thirds of Americans favored the idea of a responsible, mutually beneficial development aid program.

Americans want to know that U.S. assistance is genuinely benefiting poor people.

That also has been the idea behind the "New Directions" strategy. Since the congressionally inspired reforms of 1973, increasing amounts of foreign assistance have been focused directly on the needs of the poor-rather than "trickling down"-or not-to those at the bottom of the economic ladder.

For example:

In the Dominican Republic, tens of thousands of farmers with less than 5 acres of land under cultivation have, for the first time, become eligible for farm credit to buy needed inputs such as seed, fertilizer, and hand tools.

In Nepal, the incidence of malaria has been reduced through an AID program, from almost 2.5 cases per thousand in 1971, to 0.14 cases per thousand in 1975 in selected areas involving nearly 80 percent of Nepal's 11.5 million people.

In Kenya, the impact of an AID-supported maize breeding project has been felt, especially on small farms. Since 1963 use of the improved seeds has increased corn production by 50 percent, rendering Kenya self-sufficient in corn-86 percent of which is cultivated on small, family-size farms.

In Indonesia, as a result of the first 5 years of U.S. assisted efforts on the densely populated islands of Java and Bali, an estimated 2 million couples, about 14 percent of those eligible, are practicing family planning.

In Guatemala, a new approach to rural primary education which emphasizes practical experience and farming skills has increased test scores and reduced drop-out rates in 27 regional pilot schools. In the next 5 years the program will be extended through the entire rural school system.

In Pakistan, AID engineers have helped develop indigenous tools for land leveling and cultivation, an effort in intermediate technology which has created a business for a number of small rural manufacturers, has increased land-leveling operations, is improving the yields and economic return of the small farmer.

Despite such success stories, the challenge of development-as succeeding sections of this report will point out-remains a formidable

one.

This legislation, however, is another forward step in helping recipient countries meet that challenge.

For that reason, we believe H.R. 9005 deserves the support of the American people and those they have chosen to represent them in the House of Representatives.

DEVELOPMENT ASSISTANCE

A. THE CHALLENGE OF DEVELOPMENT

The problem of development is a human problem and is best seen in the perspective of human beings:

An estimated 800 million persons in the developing world suffer from malnutrition.

For the poorest, life expectancy is almost 30 years less than in the United States.

Infant mortality is nearly four times higher than in the United States. One of every five children dies before the age of 5.

There is no regular access to health services for 85 percent of the people in less-developed nations.

Current world population of 4 billion will double in 40 years if present growth rates continue. Population growth in the lessdeveloped countries will account for 85 percent of that growth. Through development assistance, the United States seeks to help solve those most pressing problems of poor people in poor countries. The total amount we spend in that effort, as the following chart. shows, is roughly one-seventh what we Americans spend annually on alcoholic beverages and about one-fourth what we spend on tobacco products.

Selected U.S. Personal Consumption Expenditures and Net Overseas Development Assistance (ODA), 1973

Source: U.S. Department of Commerce, Survey of Current Business, Vol. 54, No. 7, July 1974, p. 24.

56-851 O 752

As a result of the 1973 "New Directions" reforms, those funds have been concentrated in three general areas:

Agriculture, rural development, and nutrition;
Population planning and health; and

Education and human resource development.

Because of the importance of those areas to the concept of development, some consideration of each is valuable.

B. AGRICULTURE, RURAL DEVELOPMENT, AND NUTRITION

In recent years it has become apparent that the world is eating out of one pot.

Shortages of food anywhere drive up market prices and quickly make themselves felt in prices at the local supermarket.

It is clear now, as never before, that the American consumer and our Nation's economy have a vital stake in increasing the amount of food produced in the world.

That is one reason why the "New Directions" reforms have a major concentration on agriculture and rural development.

Furthermore, as the chart below shows, the population of most developing countries is predominantly rural:

In order to improve the quality of rural life in the less-developed countries, while at the same time increasing substantially the productive capacity of the average farmer, a variety of activities are required. Among them are

Creation and strengthening of local institutions linked to the regional and national levels:

Organization of a system of financial institutions which provide both savings and credit services to the poor;

Stimulation of small, labor-intensive enterprises in rural towns;
Improvement of marketing facilities and systems;

Expansion of local or small-scale rural infrastructure and utilities such as farm-to-market roads, land improvement, energy and storage facilities;

More equitable and more secure land tenure arrangements; and Systems to provide other services and supplies needed by farmers, such as extension, research, training, fertilizer, water, and improved seeds, in ways which assure access to them by small farmers.

The idea is to bring the farmer who may have only an acre or two under cultivation into a situation of productivity in which he cannot only feed his own family adequately, but have sufficient surplus to sell. He thereby can be a customer for the products and services of his rural market town and, beyond that, to the output of his nation's citieswithout becoming part of the city.

As one witness told the committee:

*** Over a 10- or 15-year period the best way to help the urban poor is to staunch the flood of rural migrants into the cities, and that, therefore, if one is to have priorities, the priority really ought to be given to the rural poor

If a balance between the rural and urban areas can be struck, then the chances are enhanced for an eventual balance between food production and population growth in the less-developed countries. The present imbalance is shown in the following chart:

C. POPULATION PLANNING AND HEALTH

The problem of rapid population growth remains crucial to the future of the less-developed countries, as this chart attests: