252. Memorandum From Marshall Wright of the National Security Council Staff to the President’s Special Assistant (Rostow)1
SUBJECT
- Wheat to Indonesia
You have on several occasions stressed the importance of maximizing wheat to Indonesia. As of November 1 we had agreed to sell them 10,000 tons of bulgur. In the intervening three months we have raised this to 125,000 tons of bulgur and 27,000 tons of wheat and wheat flour.
We have, however, almost succeeded too well. Suharto has now asked us for 350,000 to 450,000 tons of bulgur during calendar year 1968.
We do not have the capacity to meet that request. At the present time the bulgur processing capacity in the United States is 250,000 tons a year. It is being increased, and we will be producing at a yearly rate of 400,000 tons by June. We have already earmarked almost all of the increased production for Indonesia.
To get an additional capacity of 400,000 tons would require an investment of about $5 million and a lead-time of six to nine months. It would be an extremely perilous investment in view of the fact that the acceptability of bulgur on the Indonesian market has yet to be determined.
[Page 543]Our present bulgur shipments will be enough to handle the bulgur component of the rice ration planned by Suharto (one-fifth for military, one-fourth for civilians). Suharto wants to put the additional 2–300,000 tons on commercial sale. There might—or might not—be any buyers. (We do not yet know even the reaction to bulgur when mixed with rice in the ration. The use of bulgur in the ration will not begin until March.)
We no longer have a problem in pushing wheat. Everybody is a believer (AID, State, Suharto, the Embassy—Marshall Green serves so much bulgur to his guests that they are beginning to complain). Our problem is to make sure we don’t choke this promising infant to death before he develops a man-sized appetite.
We’ll continue to watch this closely—with particular attention to the balance between genuine demand and production capacity.
I call this to your attention partly because of your interest in the whole matter—and partly because I do not want you to hear a distorted version in which we refused a Suharto request for 450,000 tons of bulgur.
- Source: Johnson Library, National Security File, Country File, Indonesia, Vol. VIII, 6/67–6/68. No classification marking.↩