Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

124. Circular Telegram From the Department of State to Certain Posts¹

Washington, July 25, 1966, 6:50 p.m.

14659. CEDTO-ADCOR. DAC High Level Meeting, Washington, July 20–21.

The High Level Meeting of DAC, July 20–21, was devoted to two principal themes:

1. General policy discussions of members’ aid programs in 1965 using Chairman’s draft report² as basis for discussions and

2. Food problems of LDC’s.

The first day of the meeting was given over to general policy discussion with all members expressing views on future of the joint aid effort and their own respective aid programs in 1965 and in the future. In addition, statements made by President IBRD and Managing Director IMF. In opening discussion DAC Chairman Thorp indicated importance developments in 1965 as (1) increase of $1 billion in total net flow financial resources (including technical assistance) largely in the form of private capital, (2) some hardening average loan terms in spite of improvement by several members and continuing rapid increase in LDC debt burden, (3) increase in realization of problems resulting from failure agricultural production to keep pace expanding population and (4) increased donor cooperation through formation new consultative groups.

General policy discussions indicated agreement by DAC members, IBRD and IMF of need to augment flow of resources, with emphasis placed on stimulating official flows and inconstant nature private capital flows which accounted for large share increase in 1965. Chairman indicated that total flow of resources to LDC’s from all sources in 1965 approximately $11 billion, of which $10.1 billion contributed by DAC members. Committee agreed to work toward larger volume aid and in this connection equitable sharing of burden. Also agreed that additional effort needed in meeting growing debt burden. In this connection approval given to the new proposed expanded reporting system of DAC and IBRD which will improve information on LDC debt and give all donors better appreciation of problem.

In general policy discussion SecState placed primary emphasis on food problems LDC’s, suggesting increased collective effort through World Food Program, World Food Reserve and stabilization of population growth.

AID Administrator Bell followed the Secretary and noted the importance of giving serious consideration to the conclusion of Thorp and Woods that the developed countries were not meeting the development needs. He stressed that it was important to distinguish among the various LDC’s noting that many were making good progress and can look forward to self-sustaining growth. He felt that some countries are now better able to use aid more effectively than in the past. While recognizing with regret that terms of aid hardened in 1965, he pointed out that US terms were still well within DAC targets. He said that a number of suggested areas of work are significant but proposed that three be given priority attention: (1) Food and agriculture, (2) debt problems, including export credits, and (3) absorptive capacity.

At lunch on first day hosted by SecState, Vice President restated main elements of food problem in US view and called for a collective effort to (1) provide LDC’s with aid required to increase food production, (2) meet emergency needs for food shipments while development programs created and put into operation, and (3) to give assistance, on request, in family planning programs.

Discussion of DAC Working Party reports and direction of future work, originally scheduled for first day, deferred until end of second day to allow sufficient time to discuss proposed draft recommendation on food problems in LDC’s. Discussion this subject began with statements by Sec General OECD and Director-General FAO Sen and followed by Secretary Freeman who presented facts underlying present US concern overall food problem, including declining world reserves, population growth, needs for agricultural inputs, changing character and magnitude of US production, and need for greater effort by developing countries. Freeman emphasized “urgent importance of allocating greater proportion of assistance to agricultural sector in developing countries” and need to “include accelerated agricultural development in their country plans.” He made clear that the answer could be found “within the resources of the nations that make up DAC” and expressed the hope that they would be “effectively and efficiently coordinated and made available as and where needed.”

Following discussion DAC adopted recommendation essentially as presented to the group.³ Some discussion was devoted to Swedish proposal to augment recommendation with language emphasizing importance of family planning. Swedish proposal not accepted since population and family planning had not been discussed in DAC when draft recommendation being prepared. Recommendation was changed slightly however to reflect importance of an appropriate balance between “growth of population and food supplies.”

The recommendation adopted calls for action by DAC, members individually, and OECD Secretary General. It calls upon the DAC to keep itself informed on the food situation in the LDC’s, review activities of members in providing assistance with a view to increasing its effectiveness, consider general issues of policy regarding food aid or long term agricultural development when it appears that the coordinated effort would contribute to meeting the problem of food supply in LDC’s. The recommendation calls upon member governments to encourage LDC’s to emphasize the agricultural sectors, to give more emphasis to assistance to support domestic policies in LDC’s which would lead to greater productivity in agriculture, to ensure that proper attention is given this matter in all international and other agencies and to provide food aid under conditions which will encourage LDC governments and farmers to increase their own agricultural productivity. Finally the recommendation requests the OECD Council to ask the Secretary General to consult with member governments and heads of international organizations and to report on how to increase the effectiveness and coordination of bilateral and multilateral programs aimed at increasing food production and improving nutritional levels in LDC’s.

Following adoption of the recommendation on food problems, the Committee reviewed the reports of its various working parties and discussed briefly the future direction of its work. In noting and accepting the reports it was agreed that various substantive issues presented to the Committee would be taken up more fully at meetings of the DAC in Paris in September.

In addition to the formal sessions, several background press briefings were held both before and after the meeting to provide an understanding of the structure and purpose of the DAC and to dramatize the importance of the food issue.⁴ Receptions were held for participants on the evening of the 20th by SecGeneral OECD and Chairman DAC and 21st by AID Administrator Bell and Secretary Freeman.

At the conclusion of the meeting Secretary Rusk read a Presidential message to the DAC which congratulated DAC on a successful meeting and on its recommendation with respect to food. In his message the President emphasized the need for joint action to prevent “mass famine” in the years ahead and expressed the view that by adopting the recommendation the DAC was joining with the developing nations to win the war on hunger. He pledged the support of the US “to this cause in which all of us now join.”

Copies important statements and the adopted recommendation are being assembled for transmittal to addresses. More detailed account of the proceedings will follow by airgram.

Rusk

1. Source: Department of State, Central Files, AID 1. Limited Official Use. Drafted by Karmish (AID/PC/FWA) on July 22, cleared by Anthony C. Albrecht (EUR/RPE) in substance and James M. Kearns (AID/EXSEC), and approved by Jo W. Saxe (AID/AA/PC). Sent to all NATO capitals, Bern, Canberra, Dublin, Madrid, Stockholm, Tokyo, and Vienna.
2. Not found.
3. A copy of the adopted resolutions, July 21, which are summarized in the telegram, is attached as an annex to a November 17 talking paper on the world food problem (OECD/TP–24) prepared by the Department of State for the OECD Ministerial Meeting November 24–25, 1966. (Washington National Records Center, RG 286, DAC Material: FRC 70 A 5922, Meetings—OECD Ministerial November 24–25, 1966)
4. No transcripts of these background briefings have been found.