US embassy cable - 02ROME2673

UNCLAS ROME 002673 
 
SIPDIS 
 
FROM U.S. MISSION IN ROME 
 
STATE FOR A/S PRM, PRM/P, EUR/WE, SA/PAB AND IO/D 
USAID FOR A/AID, AA/DCHA, AA/ANE, DCHA/FFP, PPC/DP, PPC/DC 
                       UNCLASSIFIED 
 
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USDA/FAS FOR MCHAMBLISS/GAINOR 
GENEVA FOR RMA AND NKYLOH/USAID 
BRUSSELS FOR KFULLER AND KDEBLAW 
USUN FOR LSHESTACK 
NSC FOR JDWORKEN 
 
E.O. 12958: N/A 
TAGS: EAID, EAGR, AORC, PREF, KUNR, WFP, UN 
SUBJECT:  WFP POST-DELIVERY LOSSES IN BANGLADESH 
 
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SUMMARY 
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1. IN BANGLADESHI PORTS DURING 2001, WFP SUSTAINED POST- 
DELIVERY LOSSES OF 2,824 METRIC TONS (VALUED AT USD 
343,388). WFP HAS INSTITUTED A POLICY (CONTAINED IN ITS 
2001-2005 COUNTRY PROGRAM OPERATIONAL CONTRACT WITH THE 
GOB) WHICH STIPULATES THAT FOR BULK WHEAT SHIPMENTS LANDED 
QUANTITIES WILL EQUAL BILL OF LADING QUANTITIES AS 
CONFIRMED BY DRAFT AND LIGHTER SURVEYS. ON ENDEMIC LOSSES, 
A TASK FORCE COMPOSED OF THE GOB AND FOUR MAJOR DONORS IS 
UNDERTAKING A FOUR-MONTH ANALYTICAL STUDY OF THE COMMODITY 
LEAKAGE PROBLEM, WITH A FINAL REPORT WITH RECOMMENDATIONS 
TO REDUCE LEAKAGES DUE IN EARLY 2003. END SUMMARY. 
 
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BACKGROUND 
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2. IN MAY 2001, THE WFP SECRETARIAT INFORMED OF A MAJOR 
                       UNCLASSIFIED 
 
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DIALOGUE WITH FOOD AID DONORS (U.S., CANADA, OTHERS) TO 
ADDRESS THE PROBLEM OF SUSPECTED FOOD LEAKAGES TO NON- 
TARGETED BENEFICIARIES THROUGH UNAUTHORIZED DISTRIBUTION 
CHANNELS. WFP'S INITIAL MISGIVINGS CAME FROM A 1997 REQUEST 
IT MADE TO THE INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE 
(IFPRI) TO CARRY OUT A PRELIMINARY STUDY TO INVESTIGATE THE 
MAGNITUDE OF THE PROBLEM OF FOOD AID LEAKAGES AND DEVELOP A 
MONITORING METHODOLOGY. IN 1998 A COMPREHENSIVE FOOD 
COMMODITY TRACKING SYSTEM APPRAISAL WAS CARRIED OUT. IN 
1999, THE WFP COUNTRY OFFICE ESTABLISHED A FOOD TRANSPORT 
AND STORAGE MONITORING UNIT. SINCE THEN, EFFORTS HAVE BEEN 
MADE TO INFORM VULNERABLE GROUP AND EMERGENCY OPERATION 
BENEFICIARIES, AS WELL AS THE PUBLIC AT LARGE, OF THEIR 
RIGHTS AND ENTITLEMENTS RELATED TO RATIONS. 
 
3. IN 2001, WITH THE ASSISTANCE OF THE GERMAN AGENCY FOR 
TECHNICAL COOPERATION (GTZ), THE WFP COUNTRY OFFICE 
DESIGNED A MONITORING AND EVALUATION (M&E) SYSTEM, WHICH 
WFP HAS REPORTEDLY INTRODUCED ON A SYSTEMATIC BASIS IN ALL 
ITS ACTIVITIES. SIX SUB-OFFICES HAVE BEEN ESTABLISHED USING 
31 FIELD MONITORS. IN THE VULNERABLE GROUP DEVELOPMENT 
ACTIVITY, THE FIRST THREE OF A PLANNED FORTY WHEAT FLOUR 
MILLING AND FORTIFICATION PLANTS BEGAN OPERATING IN MARCH 
2002, PROVIDING FORTIFIED WHEAT FLOUR TO BENEFICIARIES IN 
SEALED BAGS, THUS REDUCING THE RISK OF LEAKAGE. 
 
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PORT LOSSES 
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4. WFP HAS ENGAGED ON A TEMPORARY BASIS A PORT CAPTAIN WHO 
                       UNCLASSIFIED 
 
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HAS RECOMMENDED THAT WFP ONLY USE ONE DISCHARGE PORT IN 
FUTURE (CHITTAGONG), AND EMPLOYMENT OF COASTAL LIGHTERS TO 
FORWARD FREIGHT NEEDED IN MONGLA PORT. LIMITING THE USE OF 
MONGLA IS DUE TO PAST SIGNIFICANT LOSSES EXPERIENCED WITH 
BULK WHEAT, OWING MAINLY TO WASTAGE DURING LIGHTERING OF 
BULK COMMODITIES FROM LARGE VESSELS. 
 
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COMMENT 
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5. EVERY CASE OF COMMODITY HEMORRHAGING IN TODAY'S 
CONSTRAINED BUDGETARY ENVIRONMENT HAS TO BE SWIFTLY AND 
VIGOROUSLY ADDRESSED. SUSPECTED FOOD LEAKAGES BOTH IN 
BANGLADESHI PORTS AND TO NON-TARGETED BENEFICIARIES THROUGH 
UNAUTHORIZED DISTRIBUTION CHANNELS HAVE CONSTITUTED A LONG- 
TERM PROBLEM FOR THE WFP PROGRAM. IT IS EXPECTED THAT THE 
WFP-DONOR STUDY WILL INDUCE THE GOVERNMENT OF BANGLADESH TO 
TAKE THE REMEDIAL ACTIONS NECESSARY TO EFFECTIVELY END 
LOSSES ASSOCIATED WITH WFP EFFORTS IN BANGLADESH. HEILEMAN 
 
                       UNCLASSIFIED 
 
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 2002ROME02673 - Classification: UNCLASSIFIED