Foreign Relations of the United States, 1955–1957, Foreign Economic Policy; Foreign Information Program, Volume IX

49. Letter From the Chairman of the Interagency Committee on Agricultural Surplus Disposal (Francis) to the Chairman of the Council on Foreign Economic Policy (Dodge)¹

Washington, October 31, 1955.

Dear Mr. Dodge: I am pleased to transmit to you the study “Prospects of Foreign Disposal of Domestic Agricultural Surpluses” which the Council on Foreign Economic Policy, on June twenty-first, requested the Interagency Committee on Agricultural Surplus Disposal² to conduct.

Through the magnanimity of the Federal Reserve Bank of Chicago, we were able to obtain the services of Assistant Vice President Ernest T. Baughman as Chairman of the study group. If the study has merit, the credit is due in no small measure to the background knowledge and study, the good judgment, and the objectivity Mr. Baughman brought to the work during three months assiduous application.

The other members of the study group, assigned by ICASD members from their respective departments or agencies, varied in numbers and participation as the needs from time to time required. Without their spirit of cooperation the work would obviously not have been possible. I wish to record my appreciation for their special helpfulness.

In seeking the most useful term in which to cast the report, we have tried to follow the middle course between a paper of a single-unequivocal point of view and one representing the compromise among all points of view. The former would run the risk of being doctrinaire, the latter of failing to comply with your directive. Consequently, the study is submitted as a staff document, rather than one representing the unanimous position of the Committee. While its conclusions and recommendations correspond to my views and, in any given case, I believe, the views of a substantial majority of the Committee, they do not necessarily in every case represent the position of the member departments and agencies. Committee members have been content in the prospect of having their non-concurrencies presented in the Council in due course.

In submitting the report, I feel I should recognize a fact which is occasionally adverted to in its text. The attempt to access disposal opportunities without reference to domestic policies responsible for the accumulation lends the study a certain air of unreality. I’m sure the Council was completely conscious of this in so restricting the study, nor do I think this shortcoming vitiates its form.

Sincerely,

Clarence Francis

[Enclosure]

³

PROSPECTS OF FOREIGN DISPOSAL OF AGRICULTURAL SURPLUSES⁴

October 1955.

Introduction

This study was undertaken pursuant to a request of the Council on Foreign Economic Policy that the Interagency Committee on Agricultural Surplus Disposal submit “a report and such recommendations as may be appropriate concerning the present laws, policies and programs for disposing of agricultural surplus products abroad.” The request noted that it was hoped to learn from the report “the extent to which it is practicable and desirable to depend upon foreign disposal to meet the domestic agricultural surplus problem and the most appropriate and effective means of accomplishing such disposal.” Mentioned specifically for consideration, “among such other things as may be pertinent,” were the following:

“The nature and purpose of existing authorities and programs for disposal of agricultural surpluses abroad and relationships among them;

“Past and possible future accomplishments under existing authorities and programs;

“Barriers to or limitations on greater accomplishments;

“Any desirable changes in the authorities and programs …;⁵

“An appraisal of the domestic and international effect of existing or possible increased disposals under present authorities and as a result of changes recommended” …

The pertinent findings are presented at the front of the report in a brief section entitled “Conclusions—Summary—Policy Issues”.

Conclusions

There is little possibility of achieving a large enough increase in exports to make substantial inroads on current surpluses of agricultural commodities in the next few years. “Special” export programs initiated or expanded in 1954–55 apparently have achieved some increase in United States exports and a further moderate increase is indicated for 1955–56, However, only in the event of widespread and repeated crop failures in important producing countries would exports be likely to make substantial reductions in current surpluses.

The best opportunities for increasing exports without causing substantial displacement of United States exports for dollars or of “usual” exports of friendly countries exist in the low-income, low-consumption areas. Agricultural surplus commodities can make an important contribution to programs designed specifically to accelerate capital development and increase consumption in such areas. Any additional efforts to expand non-commercial exports of United States agricultural surpluses, therefore, should give primary consideration to opportunities to use them in support of investment programs, especially in the underdeveloped countries. A program which emphasized that use of surplus commodities would be essentially a foreign aid program; the financial return to the United States would be small. Over the long-term, however, an increase in productivity in the low-income areas could result in the development of expanded export markets for United States commodities. Since capital development programs require several years for completion, it would be necessary to commit supplies of surplus commodities in support of such programs for periods up to possibly 3 to 5 years.

[Here follow “Summary” and “Policy Issues”, which are printed in Department of State Bulletin, June 18, 1956, page 1019. A copy of the full report is in Department of State, E–CFEP Files: Lot 61 D 282A.]

1. Source: Department of State, E–CFEP Files: Lot 61 D 282A, Authorities and Programs for the Disposal of Surplus Agricultural Products Abroad—CFEP–528.
2. President Eisenhower established the Interagency Committee on September 9, 1954, to coordinate the administration of Public Law 480. The Committee, headed by White House Special Consultant Clarence Francis, consisted of senior officials from the Departments of Agriculture, Commerce, the Treasury, and State, the International Cooperation Administration, and the Bureau of the Budget. The texts of the President’s letters to Francis and the agency heads defining the responsibilities of the Committee are printed in Department of State Bulletin, October 4, 1954, pp. 500–501.
3. Official Use Only.
4. Distributed to the Council as CFEP 528/2.
5. All ellipses are in the source text.