usaid office of food for peace guatemala bellmon estimation

Chapter 5. Monetized Food Aid
5.1. Introduction
Prepared by Fintrac Inc.
This Chapter is meant to inform USAID in its determination of the appropriateness of
monetization in Guatemala during FY12. It covers four critical areas of inquiry:
1. How appropriate is monetization for Guatemala for FY12 under a new Title II
development program?
2. If monetization is appropriate during this period, which commodities are the most
appropriate to monetize?
3. What is the approximate maximum tonnage feasible for monetization for each
commodity?
4. Are there special consideration (e.g. sales platform or timing of sales) that should be
taken into account when considering/undertaking monetization in Guatemala?
The content of this analysis is broken into five core sections: a brief overview of historical
monetization in-country, a summary of challenges inherent in monetizing food aid in Guatemala,
initial commodity selection, individual commodity-specific market analyses and
recommendations, and a final recommendation to consider third-country monetization as an
optional supplement to in-country monetization. For the complete methodology for determining
the potential impact of monetized food aid, please see Annex IV.
5.2. Monetization History
Large-lot Crude Degummed Soybean Oil (CDSO) monetization has been the mainstay of the
Title II monetization program in Guatemala for nearly ten years, from 2003 to present. Prior to
2002, Title II Awardees monetized primarily yellow maize and soybean meal, commodities
which are commonly used for the manufacture of animal feed in Guatemala. However, FFP/W
indicated that monetization of animal feed would no longer be allowed after 2002, which led the
Consortium to switch to monetizing solely CDSO from 2003 on (Carlos Chacon, 2007). Title II
partners have long discussed the need to diversify the commodities for monetization because of
the dependence on a single commodity to support Title II food security programming.
In support of Food for Progress (FFPr) and The McGovern–Dole International Food for
Education and Child Nutrition Program programming, USDA Awardees have continued to
monetize soybean meal and, to a lesser extent, yellow maize. There was also a USDA
monetization of tallow in 2006.
Catholic Relief Services (CRS) has been the lead monetization agent for all implementing PVOs
receiving resources from USAID since 1999. CRS has also monetized on behalf of some, but
not all, USDA partners. The table below provides an overview of the tonnages monetized by
USAID and USDA implementing partners during FY07-FY10, and planned for FY11.
BEST Analysis – Guatemala Chapter 5 – Monetized Food Aid 50