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

252. Telegram From the Embassy in the United Kingdom to the Department of State¹

London, February 17, 1965, noon.

3960. Department pass STR for Hedges and Agriculture. U.S.-U.K. Cereals Agreement.

1. British Embassy Washington will be transmitting to Department today note in reply to U.S. note on cereals arrangements.² Engholm asked Embassy officer to pass personal message to Hedges giving a little more background and explanation for vague language of note.

2. Engholm said in light of his statements in December he had argued strongly for greater degree of commitment at this time to foreign suppliers. His position, however, was turned down by his Minister on grounds that possible leak of such assurances might cause serious difficulty with farmers and in House of Commons. Fact that reply had to be given to all four principal suppliers and belief that reply would certainly be leaked by Argentines, as in case of agreement last year, led Minister to be very careful.

3. Engholm wished to stress point on personal basis, however, that our views as expressed in note will be firmly in mind of MinAg officials as they proceed with price review. Key question will be adjustment of standard quantities. After discussion with farmers, Ministers will have to make their decision on this point. Engholm hoped that we would understand that lack of assurance at this time, while review with farmers still in process, should not be taken by us as sign that U.K. will not fulfill its responsibilities under agreement. He added that he personally thought result would satisfy US.

Comment:

Embassy believes that civil servants were indeed anxious to put specific assurances in reply to our note in order help gain Ministerial commitment which would give them additional support in their dealings with farmers. We do not believe Minister’s refusal should be taken as sign of reluctance to stand up to farm pressures but rather as genuine fear that leak might occur. Embassy believes we still may, however, have differences of view with government about what constitutes satisfactory adjustment of standard quantity. Labor government with small majority will be under great pressure from farmers and we have heard already that they are telling government that farmers could affect election outcome in twenty marginal seats now held by Labor. Therefore, between end of price review and final Ministerial decision, we may have to create opportunity for further statement of our views in order support civil servants with strong counter pressures to those they have been facing for past month.

Bruce

1. Source: Department of State, Central Files, INCO–GRAINS 4 UK-US. Limited Official Use; Priority; Limdis; Noforn. Repeated to Geneva for GATT and passed to the White House.
2. These notes have not been found. A commentary on the British note is in telegraph 4009 from London, February 18. (Department of State, Central Files, INCO–GRAINS 4 UK-US)