109. Telegram From the Embassy in Thailand to the Department of State 1

2569. Subject: PL–480 Rice Sales. Ref: (A) Bangkok 2359;2 (B) State 029914.3

Summary. In preliminary consultations concerning PL–480 aid to Indonesia during coming year, Thanat stressed gravity of Thailand’s rice problem at present, above all depressed price, and concern that US and Japanese activity would leave little room for commercial sales to Indonesia. Our willingness to begin consultations this early and our commitments re timing of agreements are major new positive factors, and were acknowledged as such by Thanat. End summary.

1.
I told Thanat at meeting on February 23 that Department had authorized me to open preliminary consultations with him concerning PL–480 portion of our aid to Indonesia for coming year. He was evidently appreciative of our willingness to begin process this early in the game. He said the rice problem, particularly severely depressed price, was a matter of deep concern to the RTG. This concern was shared by the King, he said, who was taking the closest interest in the problem. In all fairness, he said, they had to accept that there were a great many [Page 227]factors other than PL–480 which contributed to the problem. However, the latter did aggravate the problem at a time when it was already extremely serious. He said the RTG might well have to adopt a highly expensive price support program for rice this year to avoid widespread and serious hardship and dissatisfaction in rural areas. He said that the timing and magnitude of our PL–480 sales, while only one factor, could be an extremely important one.
2.
I then spoke as outlined in ref A as authorized and modified by ref B. I stressed that what I had given him and the fact that I had been authorized to open these consultations at this time was in further response to the Prime Minister’s request to the President made through Secretary Laird. Thanat took note of this and instructed his secretary (Birabhongse) to record the facts so that the substance of my presentation would be passed to the Prime Minister’s office.
3.
Commenting on the substance of our presentation, he noted that our planning figure of 350,000 was half of the minimum estimate of Indonesian requirements. Considering that the Japanese would be active in this market with non-commercial sales as well, he expressed concern that there would be precious little left for commercial sellers. He asked whether we knew what Japan was planning to do this year. I agreed to find out what if anything the USG held on that. (Thanat mentioned, incidentally, that RTG had also complained to GOJ concerning its rice program for Indonesia.)
4.
In discussion of level of commercial sales in past years, Thanat acknowledged that there were other competing suppliers, including Italy and Egypt. However, he said Thailand was much less concerned about them, considering their competition as commercial in contrast to that of US and Japan.
5.
Comment: It would be helpful to be able to go back to Thanat as promptly as possible with whatever information we can provide concerning Japanese intentions. This will of course have a bearing on the position RTG will take concerning the 350,000 ton figure. In any case, our commitment with respect to timing, which was obviously responsive to one of the primary concerns Thanat expressed prior to my presentation, will be of major help.
Unger
  1. Source: National Archives, RG 59, Central Files 1970–73, AID (US) 15–8 INDON. Secret; Priority.
  2. Dated February 20. (Ibid.)
  3. Dated February 23. (Ibid.)