835.6131/5–2247; Airgram
The Ambassador in Argentina (Messersmith) to the Secretary of State
A–359. Concerning the International Emergency Food Council appeal of May 8, announced by Secretary-General Fitzgerald, for an increase of Argentine exports to 1,000,000 tons monthly during May, June and July, only official public expression of Argentine Government attitude to date has been remarks by Miranda, president of Central Bank and head of the Argentine Trade Promotion Institute, during joint press conference with President Perón on May 9. In its report of the Miranda remarks pertaining to the IEFC appeal, La Prensa of May 10 stated:
“With reference to another question regarding the steps taken by the Secretary General of the International Emergency Food Council, Mr. Miranda said that he had answered him ‘that we are shipping as much as we can and that if we are not shipping more, it is their fault. They left us without the elements to do it with and Europe will suffer hunger because of those who allowed our transportation to be destroyed without sending replacement. No more is being transported because it is impossible and as a consequence of allowing our port facilities to come to bits we must pay an increase of 55 percent on the freights. To the reproaches, I answer: If you want merchandise, send us the loading equipment. See what liberty has left us. If we had had the present system in other times, the situation would be different.’”
Present supplies in all positions in the country are unquestionably sufficient for the shipping rate urged by IEFC. In the opinion of several well-informed persons, equipment likewise is more than sufficient if grains were given top priority and maximum effort were applied. It is doubtful, however, that at best the rate could be attained in full before the end of July because of the time necessarily required for administrative reform and physical expansion of the pipe-line flow.
For one thing, only small supplies are now at ports. The Institute owns in volume only wheat and a fair proportion of the surplus, but relatively small tonnage of barley. The Institute began purchasing corn on May 5 but was offered only 2500 tons through May 9 because [Page 305] there is no premium on early delivery. On the contrary, the storage allowance to be paid farmers for unshelled corn in cribs will not become effective until July 1 and is set at a flat monthly rate. Thus, farmers seem inclined to delay deliveries to earn a larger cash return from the crop, ignoring the fact that part of the storage payment will be offset by shrink and deterioration. Also farmers having heard that the Institute has already committed itself to export something like 2,000,000 tons, may hope for the eventual addition of a bonus payment for prompt delivery, as was done with wheat.
Under the present system, the time lapse between purchases in the interior and completion of export loading is a minimum of 3 months and an average of 4 to 5 months.
Allowing for the expected seasonal progress of the corn harvest and movement and the anticipated practical adjustments to carry out the marketing program which the Argentine government is thought to have in mind in their own interest, the May-July monthly average of the five leading cereal grains may reach 700,000 to 725,000 metric tons at the May–June and July–September rates given in Embtel No. 453, April 22, 1947.28 This compares with the February-April 1949 average of only 295,000. Equipment alone should not prevent attainment of the aforementioned May–July average, notwithstanding the present small port supplies. These figures should be reached solely for national income and political reasons irrespective of appeal from outside sources but an expected faster and more efficient matching of grain arrivals at port with the issuance of allocations and permits and the presentation of steamers will be necessary. Coordination of grain arrivals with actual readying of ships has been necessary because of clogged warehouses and docks which have caused irregular loading. Such coordination will require cereal priorities to attain volume but priorities to exceed the aforementioned May–July volume would interfere with other supply schemes included under the Five Year Plan.
While as already pointed out, it is theoretically possible that shipments could reach the requested rate of 1,000,000 tons per month towards the end of July, it is not thought that activities could possibly be concentrated toward such end in view of the current administrative over-load and preoccupation with other objectives. Because of an apparent fear of over-extension on volume commitments or unwise export price negotiations by subordinates, export supply questions continue to be channelled through only one or two key officials, thus automatically stringing out many operational matters which might be disposed of simultaneously for maximum efficiency.
[Page 306]Under an Argentine Trade Promotion Institute resolution made known this week, but on which exporters had been forewarned April 19, efforts to increase grain exports over the next few months may be handicapped, but the present impasse in fine feed cereals should be partly resolved. All exporters with supplies of oats, barley and rye acquired before December 28, 1946, if sold to foreign accounts but not yet shipped, must now re-sell this grain to the Institute. These re-sales were supposed to have been completed by May 15. The foreign buyers involved are concerned over this decision because they fear (1) additional delay in getting export clearances, (2) a possible reduction in the volume released to them as compared with the quantity originally contracted, and (3) an increase in the price for such released volumes. The Institute has also indicated a desire to take over unshipped supplies already paid for by importing countries and this is understood to have brought a vigorous objection from at least one of the buyers, the French occupation administration of Germany.
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