107. Telegram From the Embassy in Thailand to the Department of State1

1492. Subject: PL–480 Rice.

In informal, wide ranging session with Deputy Prime Minister Praphat and two of his close aides and advisors (General Surakit Mayalarp and Dr. Malai Huvanandana), subject of PL–480 rice assistance to Indonesia came in for extended discussion. I ran through all of our principal arguments and found that he had been well briefed on them in advance by staff members to whom we had earlier provided background material.
All of our efforts, however, went for little because of the fact that he has also been informed that, when Thailand was negotiating for a commercial sale with Indonesia, the Indonesians, who at first showed considerable interest, later broke off the negotiations and told the Thais they had learned that the U.S. would be supplying Indonesia’s rice needs through a PL–480 deal. In light of this, he said it was of no use to try to “prove” that our program did not interfere with Thai exports to Indonesia.
He went on to make it quite clear that he regards this issue as potentially damaging in the extreme to the long standing friendship between the Thai and American peoples—to him it is not just a government-to-government matter. He said that virtually every Thai person knows about this issue and believes that it strikes at the very heart of Thailand’s economy, its rice production and trade. He said this was an issue which could easily put placard-bearing students on the march and which could get out of hand to the point where Americans could not appear on the streets of Bangkok “without getting their heads broken.” All this was said without any personal rancor on his part and in fact with explicit recognition of the political and economic problems we face at home and in full knowledge of the steps we have taken to try to ease the situation from Thailand’s point of view.
I think we must take this as a very serious indication from our friends in the RTG, in this case a most important one, that while they are prepared to accept the fact that nothing can be done about our rice shipments to Indonesia during the present Indonesian FY, they do not [Page 225] feel it will be possible to face a similar outcome next year without it spilling over to the serious detriment of our general relations with Thailand. (I am not sure myself that we will not feel those consequences a good deal sooner.)
With this in mind, I would appreciate the earliest possible indication of our planning with respect to the IGGI food aid package for the coming Indonesian FY, as well as our other plans for PL–480 rice programs in the region.2 With that information in hand I will come in with recommendations (a) as to how we should handle consultations with the RTG, and (b) for a broader economic strategy for Thailand in the context of which the PL–480 problem can hopefully be presented more successfully.
  1. Source: National Archives, RG 59, Central Files 1970–73, AID (US) 15–8 INDON. Secret; Priority; Exdis. Repeated to Djakarta.
  2. In telegram 23361 to Bangkok, February 10, the Department agreed “that Praphat’s remarks are a significant indication of how seriously RTG leaders have taken PL 480 program” and shared “your concern about future relations.” It noted, however, that “we have little flexibility as to what we can do with respect to U.S. rice shipments. Although it may not be possible completely to avoid untimely PL 480 sales, we hope that future agreements which involve Thailand’s traditional markets will not be signed during the November–April period when Thailand is searching for markets for its new crop and prices are particularly vulnerable.” (Ibid.)