The Secretary of State to the Brazilian Ambassador ( Martins )

Excellency: I have the honor to refer to your Embassy’s note of February 16, 1946 calling attention to circumstances which appear to aggravate difficulties encountered by the Brazilian Government in negotiations with Argentina looking to ensuring adequate imports of wheat and pointing to considerations which suggest the impossibility of compressing consumption by reducing utilization of bread or of lessening dependence upon imports by use of substitute grains.

The matter of the possible weakening of Brazil’s bargaining position in its negotiations with Argentina to secure wheat as the result of [Page 133] shipment of truck tires to the Argentine from the United States is understood to have been the subject of earlier exchanges of the Department with the Brazilian Embassy. The present communication addresses itself to the matter of Brazilian import requirements and available supplies.

The effort being made by the Combined Food Board Cereals Committee to reduce universally import requirements of wheat to a minimum is dictated by the inescapable fact that available export supplies of this important commodity in the first half of 1946 are sufficient to cover only 60 percent of world requirements. The inevitable resultant drastic reductions in consumption in United Nations member countries in Europe, where bread makes up from one-half to two-thirds of the entire calorie intake, has resulted in a total consumption for the average non-farm consumer in many countries of only 1,900 calories and in some of very considerably less. Further drastic reductions now appear inescapable for the critical months immediately ahead in spite of reduction of the basic rations in the American and British occupied zones of Germany to 1,275 and 1,000 calories respectively, with perhaps only 200 or 300 calories in addition from supplementary non-rationed foods.

As a consequence, all grain-importing countries are being urged to make the fullest use of other grains than wheat for human consumption both as an adulterant in bread and in other food preparations. In consonance with this effort, a resolution of the Cereals Committee of the Combined Food Board recommends that secondary grains moving in international trade be used only for human food and that Committee counts imports of such grains against bread-grain requirements. In the case of Brazil, it is suggested that the import requirement in wheat may be somewhat reduced by more extended use of corn both as a part of the bread grist and in other food preparations. This would appear to be a possibility in view of this season’s excellent Brazilian corn crop which is reported to be considerably in excess of normal domestic requirements.

As is already known to you, the rate of import of 400,000 tons of wheat per half year, or about 65,000 tons a month, has tentatively been considered by the Cereals Committee as a reasonable allocation to Brazil as against the stated requirement of 600,000 tons. It has fortunately been possible for the United States to ship 110,000 tons of wheat largely in the form of flour to Brazil during the first quarter of this year. The equivalent of 40,000 tons is also reported to have been furnished by Canada. It is understood, furthermore, that some wheat has moved to Brazil from Argentina during that period, although the exact amount has not been ascertained. Additionally, it is expected that some quantities of flour will be allocated from the United States for use in northern Brazil during the second quarter.

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The representative of Argentina on the Cereals Committee of the Combined Food Board has consistently indicated Argentina’s wish to be regarded as the source for the quantities still to be shipped to Brazil during the six months period, in addition to the quantities mentioned above, and since Brazil has historically received most of its wheat from that source, it is felt that this request cannot be ignored. It is the more essential to take account of it and to plan international distribution of wheat on this basis, in view of the fact that present commitments for shipment to other areas do not admit of the assumption by the United States of the primary responsibility for supplying Brazil. Furthermore, the wheat now in sight to meet the schedule of shipments of wheat already made for April covers less than half of the total amount called for.

It is accordingly our hope that arrangements will be effected whereby Argentina will in fact effectually assume the responsibility which she declares to be hers for supplying the needed wheat to Brazil. We are hopeful that internal transportation in Argentina has in so far been restored that greatly increased shipments of wheat from that country can soon take place. It is noted that the total movement during March is reported to have been considerably increased over January and February.

Accept [etc.]

For the Secretary of State:
William L. Clayton