Food Aid Internet System

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Food Aid Proposal Entry

Food for Progress Program

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Proposal Submit Number:
PIN Number:
Proposal Status:

Use of Funds or Goods and Services Generated (Section 6, 7 C.F.R. 1499.5)

Amount of Sales Proceeds Anticipated *
Commodity	Amount to be Sold (MT)	Estimated Sales Prices Per MT	Estimated Proceeds	Delivery Year
Total


Anticipated Interest Earned

Barter Activities *
Commodity	Qty (MT)	Kind of Goods or Services Expected from the Barter/Food for Work	Quantity of Goods or Services	Total $ Value of Goods or Services Received from the Barter/Food for Work

Impact on Other Sales *

The sale of 5,000 MT of soybeans is not expected to displace or interfere with local sales in Elbonia. The soybeans will be sold to Elbonian soybean processing companies.  Demand for soybeans is high in Elbonia, and the demand will increase with the introduction of this new protein supplement.  
The sale of the soybean oil will not affect any sales of like commodity exported to Elbonia or local sales within the country.  Elbonia, with a population of 10 million and a 3.6 percent growth rate, consumes approximately 300,000 MT of vegetable oil each year.  Production is limited to only 150,000 MT of oil due to limited oilseed production in country and antiquated equipment in the two main factories.  The sale of 3,000 MT of soybean oil represents only one percent of total consumption. In the past Elbonia wholesalers have purchased vegetable oil from Italy, Argentina and Nigeria, but purchases were small averaging less than 1,000 MT.  Annual imports have not surpassed 20,000 MT.  Elbonia suffers from chronic scarcity of foreign exchange.  The importation of U.S. soybean oil donated under this agreement will enable sales on the local market without creating additional demand for foreign exchange.
The donation of the peas will not affect other sales.  The recipients lack the financial resources to satisfy their nutritional requirements, and the quantity provided to each recipient is small compared to each household�s consumption needs.

Private Sector Participation in the Sale of the Commodities *

ABC will advertise the availability of the commodities in local newspapers and radio stations. Buyers will need to submit written bids for the soybean oil and soybeans. ABC will review the bids and select those bids with the highest prices, if the bids meet the requirements in ABC's tenders.  If the bids are below the pre-set floor price of ABC, a second bidding process will take place, with possibly smaller lot sizes. The private sector owns 90 percent of the vegetable oil distribution capacity and 95 percent of the soybean crushing capacity in Elbonia. The bidding process will be open to private and public sector buyers.  ABC anticipates receiving bids from at least 40 of the more than 100 potential buyers.

Use of Sales Proceeds *

Expense Category	Estimated Dollar Amount of Monetization Proceeds
Direct Costs:
- ITSH
Enter Activities Below:
1.
2.
3.
4.
5.
Add a row
- All Other Direct Costs
Subtotal of Direct Costs
Indirect Costs:
- Applied in accordance with the NICRA
TOTAL DIRECT and INDIRECT COSTS

Please describe the specific uses of sales proceeds and how these activities will be implemented. *

If actual proceeds are less than expected, the shortfall in proceeds will be proportionately allocated among program activities.  If proceeds are more than expected, the additional proceeds will be allocated solely to the micro-credit program. 

Food Production

ABC will use $2,000,000 of the proceeds to purchase new local equipment for the production of a protein-fortified, consumer-ready product.  Equipment will be procured from local manufacturing companies that specialize in building food processing machinery.  ABC will select five companies to receive the new equipment in their facilities.  Each machine is valued at approximately $400,000 and will enable the plants to produce soy-based products, including yogurt, soymilk, and ice cream.  Each product will be inventoried and marketed to local kiosks and grocery stores to generate revenue for the production companies. 

Food Processing Training

ABC will arrange for locally-hired consultants to train select food processing companies in proper production and operational procedures.   Processors will also be shown how to add local ingredients to enhance the flavor for the targeted beneficiary population. 

Production Assembly Training

ABC will arrange for a local consulting group with experience in marketing to train select workers to assemble the new machinery.  Workers will attend a three-day training seminar hosted by the consulting group to learn proper assembly, operation and maintenance of the new machines prior to installation in the production plants.  The final day of training will include a hands-on session for each worker to assemble and operate the machines.    
Microcredit to Expand Agribusiness or Food Production for Women
ABC will use $180,000 of the proceeds to provide micro-credit loans to roughly 2,000 women in the Dry Valley of Elbonia.  Loans will range from $50 to $1,000.  The loans will be aimed at creating, improving or expanding agribusinesses or food production activities.  Each applicant must submit an application for credit to ABC�s loan office in order to be considered for a loan.  When an application is approved, ABC will notify the applicant of approval.  A common income-generating source for rural women is through home or bazaar-based economic activities.  Generally, women chosen to receive micro-credit loans often use the money in support of agricultural production and food processing of their local crops.  The money is also sometimes used to support income-generating activities such as marketing their handicrafts in bazaars, and selling various local food items, including fresh meat, bread, and soft drinks at roadside kiosks.  
The loans will be repaid after one year, and the interest rate on the loans will be 10 percent.  Any loan recipient who does not pay according to the terms will not be eligible for a future loan under the program unless overruled by ABC due to circumstances beyond the loan recipient�s control.

Procedures for Assuring Receipt and Deposit of Sale Proceeds *

ABC expects to receive payment for the commodities from the buyer through an irrevocable letter of credit. ABC will require that the letter of credit be confirmed to ABC prior to the export of the commodity. ABC expects full payment for the commodities upon presentation to the buyer of export documentation. ABC will deposit the proceeds into a separate interest bearing account in Elbonia until needed. This account will be under the sole authority of ABC. The country director will approve all disbursements from the account.

* Required field

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