865.5018/4–748
Memorandum of Conversation, by the Assistant Secretary for Economic Affairs (Thorp)
| Participants: | Mr. Thorp |
| Mr. Tarchiani, Italian Ambassador | |
| Mr. Ronchi, Italian High Commissioner for Food | |
| Mr. Rogers, Italian Technical Delegate | |
| Mr. Dowling, SE | |
| Mr. Linville, IR |
Subject: Italian Grain Requirements
The Italian Ambassador said that Mr. Ronchi had just come over from Rome and wanted to outline the critical food situation which Italy faces.
Mr. Ronchi showed a chart indicating that stocks of grain on hand and afloat assure all of the Italian provinces of enough grain to insure existing cereals rations beyond the election. The chart also indicated that additional supplies which are in prospect will only carry Italian consumption until about June 10. Additional supplies are needed for the remainder of that month. When questioned about the amount of grain which it is anticipated will be obtained from Argentina, it was found that only 514,000 tons was included for arrival in the January–June period, of which about 450,000 tons was shipped by the end of March. The Italians hope that they will be able to obtain an additional 100,000 to 150,000 tons, but this has not yet been purchased, and Mr. Ronchi emphasized that at best, Argentine shipments are most uncertain as well as expensive.
Mr. Ronchi was told that United States officials have been assuming that only very small stocks of old-crop grain will be required as of July 1. Mr. Ronchi insisted that 250,000 tons would be needed. Bakers and pasta manufacturing plants will have sizeable stocks on hand. Considerable stocks of rice and corn will also be needed, since the new crop of these grains will not be harvested until later in the year.
Mr. Ronchi said that Italy should not plan to consume any of its 1948 wheat in June. It would, of course, be possible to make some early collections, as was done last year. However, this would make the peasants feel that their grain will be badly needed during the coming year, and would make them reluctant to part with it. An active collection campaign would also be unpopular politically at a time when conditions in Italy are likely to be unsettled.
When asked about the saving of rice which had resulted from the failure of some consumers to purchase their entire rice ration, Mr. [Page 872] Ronchi stated that the amount involved would not amount to more than 20,000 or 30,000 tons. Even if Italy purchases 100,000 to 150,000 tons of wheat in Italy, Mr. Ronchi stated that an additional 110,000 tons would be needed from the United States. This would mean that the United States May allocation of 40,000 tons should be raised to 150,000 tons.
The Ambassador emphasized that there are likely to be strikes and disturbances in Italy after the elections, and that inadequate supplies of grain might have most serious consequences. He said that he and his colleagues had talked with Under-Secretary of Agriculture, Mr. Dodd, earlier in the day. Mr. Dodd had expressed the opinion that Congress will eliminate the requirement that the United States have a carry-over of 150 million bushels of wheat on July 1, 1948. If this provision is eliminated, U.S. exports can be increased substantially. The Ambassador emphasized the importance of making substantially larger shipments to Italy if this should occur.
Mr. Thorp told the Italians that the United States is very anxious to do what it can for Italy. He hoped additional quantities of grain can be made available for that country. However, we do not know whether we can increase our total shipments above the levels now programmed. If this becomes possible, we shall have to examine the requirements of the various importing countries in order to see which need supplies worst. It is not clear whether Italy will be one of these. It is unfortunate that Italy must depend heavily on Argentine supplies but that can hardly be avoided. Italy has been more successful than most other countries in obtaining supplies from Argentina, and we must depend on countries which can obtain supplies there to buy as much as possible. It would be a mistake for the Italian Government to refrain from maximizing its procurement in Argentina because of the hope that it can obtain more from the United States.
Note—After the meeting Mr. Linville told Mr. Rogers that the United States had been considerably concerned about the psychological effect of announcing the greatly reduced wheat export allocation for Italy in May. It is felt here that this allocation will be quite adequate to permit Italy to maintain its ration, but it was feared that uninformed people might think that the United States was making an unjustified reduction in shipments to Italy, and the opposition in Italy might take advantage of this fact. As a result, the following statement was included in the Department of Agriculture press release announcing the May allocation:
“The Department stated that the May allocation to Italy, in addition to quantities being exported to that country from other sources, appears to be adequate to maintain the cereals rations until indigenous supplies become available. However, it was stressed that if subsequent [Page 873] developments threatened maintenance of the Italian cereals ration at present levels, such as a sudden, drastic reduction in shipments from other supplying areas, the United States would make every effort to allocate and ship such emergency quantities as might be required.”
This statement was made to quiet unwarranted fears, but it appears unlikely that the United States will be able to ship more than 40,000 tons of grain to Italy in May. The possibility of such shipments is so slight that Italy should by no means relax its efforts to obtain grain from Argentina. Mr. Linville said that if the above statement from the press release has been sent to Rome, he hoped Mr. Rogers would also transmit the interpretation which had just been given to him. Mr. Rogers said that he would be glad to do this, and that his country would certainly buy as much grain as possible in Argentina.