487. Memorandum of a Conversation Between the Thai Ambassador (Pote Sarasin) and the Deputy Assistant Secretary of State for Far Eastern Affairs (Sebald), Department of State, Washington, March 6, 19561


  • Disposal of U.S. Surplus Rice in Asia; Sale of Rice to Communist China
[Page 857]

The Thai Ambassador called at his request to discuss the problem of the disposal of U.S. surplus rice in Asia with particular reference to the recent PL–4802 Agreement with Pakistan.3

The Ambassador stated that a Pakistan rice purchasing mission had been in Burma negotiating for a purchase of rice there and, it was understood, had intended to go on to Bangkok and purchase 50,000 tons from Thailand. Unfortunately, however, the news of the U.S. Public Law 480 program for Pakistan reached the Pakistani Purchasing Mission and they naturally then found it unnecessary to submit a bid for Thai rice which was available.

The Thai Ambassador pointed out forcefully that Thailand must export rice to get the foreign exchange it needs so badly. He appreciated fully the domestic political pressure on the Administration from the farmers of America and understood present U.S. policy of seeking to avoid disturbance of normal marketings.

He pointed out, however, that famines and disasters had occurred in Asia from time immemorial and that Thai prosperity depended not only on its normal marketings in good times, but also on abnormal sales which seemed to be required each year in some distressed area of the Far East. He stated that Pakistan in the past had purchased rice from Thailand when emergency conditions there required importation of food.

The Ambassador stressed the increasing pressure which was being placed on the Thai Government to move its rice each year, and pointed out that sufficient revenue for economic development in Thailand could not be derived from receipts of normal marketings.

U.S. policy with regard to U.S. surplus sales in Asia was again explained to the Ambassador. It was indicated that the U.S. was carefully seeking to avoid interfering with normal marketings of rice in Asia, and the example of prior consultation with Burmese and Thai representatives concerning the projected Indonesian purchase of rice was cited.4 The U.S. was insisting in each case that purchasers of U.S. rice obtain from their normal suppliers a quantity of rice not less than that purchased in previous years. This stipulation, it was hoped, would minimize the impact of U.S. entrance into the rice market, and carry out the assurances given to both Burma and Thailand [Page 858] by Mr. Charles Baldwin during his recent mission to these countries.5

The Ambassador raised the question of selling rice to Communist China, pointing out that China had been in times past one of Thailand’s largest rice customers. He indicated his awareness that Thailand had placed rice on its UN embargo list, but expressed his understanding that rice was not a strategic material and could be removed voluntarily at any time from the UN embargo list. He stated that Communist Chinese goods were finding their way into Thailand via Hong Kong, and that at present this trade was resulting in a loss of Thai foreign exchange.

The fear was expressed to the Thai Ambassador that the sale of Thai rice to Communist China could give the Chinese Communists a political hold over Thailand. Such an economic leverage could severely restrict Thai freedom of action in determining its national interest.

The Thai Ambassador indicated his appreciation of the danger to Thailand in this regard, but indicated his distress that no other alternative appeared possible at this time. Communist China needed Thai rice, Thai rice must be sold, yet Thailand’s traditional Free World customers were receiving their requirements from the United States at a subsidized price which Thailand could not possibly hope to match.

  1. Source: Department of State, FE/SEA Files: Lot 58 D 782, Rice—Thailand. Official Use Only. Drafted by Foster.
  2. Public Law 480, Agricultural Trade Development and Assistance Act of 1954, signed July 10, 1954. (68 Stat. 454)
  3. For text of the Surplus Agricultural Commodities Agreement between the United States and Pakistan, signed February 9, 1956, see 7 UST 359.
  4. On March 2, the United States and Indonesia signed a Surplus Agricultural Commodities Agreement, under which the United States agreed, inter alia, to finance the sale of $35.8 million of rice to Indonesia during fiscal years 1956 and 1957. For text of the agreement, see 7 UST 361.
  5. Regarding the visit of the Baldwin rice mission to Rangoon in May 1955, see Document 8. Regarding the subsequent visit of the mission to Thailand, see Document 473.