264. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Ford 1
- Food for Peace Program for FY 1975
Roy Ash’s memorandum is a balanced and succinct presentation of the choice before you. Although the competing factors of inflation/fiscal control on the one hand and foreign policy concerns on the other are correctly described and the illustrative allocations accurately reflect our foreign policy priorities, the characterization of the options may be so cryptic as not to portray clearly the foreign policy implications of each. In my judgment, those implications are as follows:
- —The first (low) option, which reduced the commodity level by one-third, does meet the requirement in Indochina and is a minimal program for the Middle East and for humanitarian purposes. What remains cannot provide for sizeable programs in Korea, Indochina and India as well as smaller but still important ones in Bangladesh, Pakistan and Chile. We would face a choice in which our foreign policy objectives in two of the larger countries, and in one or all of the smaller triad, would have to be changed drastically. In addition, we would have no flexibility other than that provided by a later, upward revision of the budget level. It should be noted that the amounts indicated for Bangladesh, Chile, Pakistan and Indonesia under this option reflect residual, unfulfilled obligations from last year or first quarter shipments. [Page 934]In no wise can they be construed to make minimal provision for the achievement of our policy objectives in these countries.
- —The second (middle) option does make very minimal provision for all our foreign policy objectives, and thereby gains the advantage of avoiding a major revision of international posture, but only by accepting what I judge to be the considerable risk of failing in any one or several of the areas by spreading ourselves too thin. Alternatively, we could avoid this risk, but only at the cost of having still to eliminate one of the three large country programs (Korea, Indonesia or India) with corresponding effect on our policy objectives there. Moreover, however the resources of this option are allocated, we can assure a significant increase to at least partially offset the likely long Congressional delay in making other assistance available for any Middle East efforts only at the cost of serious disruption of those large high-priority country programs.
- —The third (high) option fully meets all foreign policy objectives and runs little risk of failure. It also provides the flexibility that has now become even more important given the unlikely, early enactment of this year’s foreign assistance appropriation. Were it not for the fact that, as you know, we likely face an extended period without an aid appropriation, the middle option could have afforded a helpful balancing of the fiscal/inflation imperatives on the one hand and vital foreign policy concerns on the other. The Continuing Resolution with which we have to live, however, provides no funds for our vitally important Middle East diplomacy and low levels of funding elsewhere, so that the capability to use food aid as a substitute has become even more important.
This is an important and difficult decision. Any increase of a major foreign policy budget item (and that goes for the middle option about as much as for the high option) would expose you for controversy on the Hill, when at the same time you hold the line on domestic expenditures.
For that reason and because of the possible price impact on the markets, it would be best not to announce a fiscal year total.
However, I recommend that you adopt the high option (Option III) for internal planning purposes with allocations to be made quarterly. This will give you the opportunity to make revisions should (contrary to expectations) the domestic food supply position gets tighter. Some other refinements such as a continuous effort to substitute rice (which is abundant) for wheat, and to scrub up some of the Title II Voluntary Agency programs, are also in order. Finally, I think that we should agree to phase out this year the Indonesia program as no longer appropriate to a major oil producer.[Page 935]
- Source: Ford Library, National Security Adviser, Presidential Subject File, Box 6, Food (2). Confidential. A stamped notation on the memorandum indicates the President saw it. A September 16 covering memorandum from Kennedy and fellow NSC staff member A. Denny Ellerman to Kissinger reads: "We have worked closely with OMB, State and Agriculture in the development of the Ash memorandum (Tab A). It fairly presents the core issue which must be decided—the fiscal/inflation question as balanced against the foreign policy concern. We were not able, however, to fully explore in the paper the foreign policy ramifications and believe that the way they are now stated, although for the most part accurate, is too cryptic. The memorandum at Tab I would inform the President more fully as to the real ramifications in the foreign policy sense of the three options. It clearly points out that short of the high option (Option three), there are significant policy costs which must be accepted."↩
- No classification marking.↩
- On Wednesday, September 18, President Ford addressed the 29th Session of the United Nations General Assembly. For the text of his remarks, see Public Papers: Ford, 1974, pp. 156–161.↩
- Each of the optional dollar levels is the cost of commodities, plus freight costs, minus repayments from prior year food shipments. Thus actual program levels will be about $75 to $130 million higher than these net outlay estimates, as shown in Tab A. [Footnote is in the original. Tab A, an undated chart entitled "Illustrative Distribution of Option P.L. 480 Funding Levels Among Priorities and Country Programs," is attached but not printed.]↩
- Briefing papers for the September 19 meeting, as well as a memorandum on the meeting’s decisions, are in the Ford Library, U.S. Council of Economic Advisers Records, Alan Greenspan Files, Box 45, Subject Files, Food (2).↩
- President Ford did not indicate his approval or disapproval of any of the three options.↩
- Treasury will support Option II with the understanding that no decisions will be announced but programs will be adjusted upward, and a maximum effort will be made to substitute rice for wheat. [Footnote is in the original.]↩
- President Ford did not indicate his approval or disapproval of either option. In his September 18 speech to the UN General Assembly, the President said: "Finally, to make certain that the more immediate needs for food are met this year, the United States will not only maintain the amount it spends for food shipments to nations in need but it will increase this amount this year." He also said that the United States would offer "comprehensive proposals" at the November World Food Conference. (Public Papers: Ford, 1974, p. 160)↩