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mit that will come out of the Clinton-Yeltsin meetings, a program 

 that then will be operationalized in ways that are concrete and, as 

 Secretary Christopher said, bring our assistance to the grassroots 

 level, 



Mr. Penny. That leads into my next question. It's clear in your 

 testimony that agriculture has been and will continue to be central 

 to our efforts of assistance for the former Soviet Republics, both in 

 terms of general commodity sales as well as technical assistance 

 and direct food aid. You seem to imply in your testimony that we 

 need to think small and think local, think grassroots, in terms of 

 our aid efforts here. 



Can we expect an expansion of the farmer-to-farmer exchange ef- 

 fort? Can we expect more creativity on the part of the administra- 

 tion in terms of targeting some of our food aid, perhaps monetizing 

 that aid in the local economy so that that money can stay there to 

 support democracy and market reforms? What glimpse can you 

 give us in terms of our policy in that regard? 



Mr. Kauzlarich. I think at this stage, certainly in this period 

 just before the summit, we're still putting together that package of 

 measures, including those from the agricultural area, and I'd feel 

 a little better if these hearings were after the summit, and then I 

 thiri we could probably get into more detail than I can this morn- 

 ing. I'd welcome perhaps some follow-up after the summit on that. 



I think the areas that you identified are areas that we see, as 

 I've mentioned in my testimony, as being very important to making 

 this grassroots contact work. The monetization issue is one that 

 we've looked at as well. So far, at least, we've followed a dual ap- 

 proach in our food aid programs, both targeting nutritional pro- 

 grams to ensure that the food reaches the most vulnerable popu- 

 lations, and some monetization through PDO's or recipient govern- 

 ments. 



I think on the monetization side, it's important to keep three fac- 

 tors in mind if you're going to have a monetization program that 

 really works. One, you have to make sure that local production is 

 not going to be disadvantaged by the introduction into the market 

 of U.S. commodities and, most important, I think, that the value 

 of the commodities is not lost, especially when you're looking at in- 

 flation rates in Russia and many of the other Republics of 20 to 30 

 percent a month. If you have a slow or inefficient monetization 

 process and disbursement process, you're going to reduce the value 

 of any monetization program. Finally, and perhaps self-evidently, 

 you have to make sure that the proceeds are going to be used for 

 what you want them to be used for. 



But, yes, we're looking at that. As I say, we have used it in the 

 past. I would only point out at the end that there is some resist- 

 ance to this kind of program in Russia, but still it's been used and 

 deserves to be looked at. 



Mr. Penny. Before I yield to Mr. Allard for his questions, it's my 

 understanding Mr. Bishop has kind of a follow-on question to my 

 line of questioning. 



Mr. Bishop. Yes. Thank you very much, Mr. Chairman. 



This follows up on the monetization issue of some of our food aid 

 programs. Are you exploring looking at — and I understand your re- 

 luctance to go into it prior to the summit — the possibility of mone- 



