Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976

276. Memorandum From the Director of the Office of Management and Budget (Ash) to President Ford ¹

Washington, November 9, 1974.

SUBJECT

• Announcing an increase in P.L. 480 Food Aid at the World Food Conference

Under pressure from other countries and Senators Hatfield,² Clark,³ and Humphrey, Secretary Butz has requested that you authorize the U.S. delegation to announce a one million ton increase in P.L. 480 food aid for this year. Pressure is building in the press for a favorable response.

Your instructions to the delegation as recommended by the Economic Policy Board ruled out any commitments to specific increases in food aid at the World Food Conference. This was consistent with your earlier decisions to increase the amount we spend on food aid, to defer final decision on total program size until later in the year, and to review levels on a quarter-by-quarter basis, in part because of uncertainties about:

(a) commodity situation. There was uncertainty about U.S. production, due to unassessed damage from early frost, and about export demand. The commodity situation is worse than expected. Frost damage has been serious and the Soviet grain purchases⁴ added additional pressures on supplies. There is no corn available for additional P.L. 480; the one million ton increment would have to come from wheat, where the supply situation is also tightening and prices have been rising.

(b) budget restraint. The proposed increase would add over $200 million to 1975 budget outlays. If a decision were made to announce the increase, offsetting rescissions and deferrals would have to be found for the package being prepared for Congress.

The Question of Timing. The decision to delay your examination of the full year P.L. 480 levels until mid-December still seems appropriate. The information on crop conditions and especially on foreign commercial purchases should improve by then, giving us a better appreciation of commodity availabilities and potential effects of large shipments on domestic prices.

The Special Title II Problem. Press reports suggest that the one million ton increase proposed by Secretary Butz will be in the Title II food grant program (largely administered by the voluntary agencies), rather than the larger Title I credit sales program. If the proposed increase is applied only to Title II, it would raise the Title II grant program about 30 percent above the level in the high option for the full year which was presented to you earlier.⁵ It would also reverse our long term efforts to tighten up the less effective Title II grant program, and could divert food from higher foreign policy priorities under Title I.

Recommendation. That the Delegation not be authorized to commit the United States to an increase in P.L. 480 of one million tons at this time. The Delegation should be instructed to confine itself strictly to the language of Secretary Kissinger’s speech which was your approved guidance.

“During this fiscal year, the United States will increase its food aid contribution, despite the adverse weather conditions which have affected our crops. The American people have a deep and enduring commitment to help feed the starving and the hungry. We will do everything humanly possible to assure that our future contribution will be responsive to the growing needs.”

The Delegation could also state that the final level of food aid for 1975 is still under review within the U.S. Government.⁶

1. Source: Ford Library, President’s Handwriting File, Subject File, Box 21, Foreign Affairs—Foreign Aid (1). No classification marking. Sent by Ash on behalf of Simon, Seidman, Greenspan, Eberle, and Scowcroft. A stamped notation on the memorandum indicates the President saw it.
2. Senator Mark Hatfield (R–Oregon).
3. Senator Richard Clark (D–Iowa).
4. On October 19, the Ford administration announced that the Soviet Union would buy 2.2 million metric tons of grain from the United States.
5. See Document 264.
6. The President initialed his approval. During a November 13 conversation with Kissinger, Ford asked, “Butz—should we bring him back?” Kissinger replied, “It is not right that the whole issue of the World Food Conference revolved around the food aid question. There is the whole issue of the organizational arrangements for handling the basic problem.” (Ford Library, National Security Adviser, Memoranda of Conversation, Box 7) In a subsequent undated message to Kissinger, Scowcroft reported: “The President also saw Butz, supposedly to receive the report on the World Food Conference. Butz apologized for the foulup on food aid and the President gave him a pretty rough going over on it.” (Ibid., Scowcroft Daily Work Files, Box 9, 11/19–30/74)