285. Memorandum From Robert Hormats of the National Security Council Staff to Secretary of State Kissinger 1

SUBJECT

  • FY 75 PL–480

A decision is needed on PL–480. Two months have already gone by. Further delay will only precipitate criticism that we are not responding to the MSA problem out of concern for the "political" content of the program. And it will mean that, however generous the final decision, we will be unable to ship the food contained in the program.

Instead of hoping that further negotiations with Humphrey, Hatfield et al. will lead to a mutually satisfactory compromise (it has not so far and time is on his side); it would be better to reach a decision [Page 984]on over-all level and to continue work for a more reasonable interpretation on country allocation under that level in the context of your proposal to establish new relations with the Congress. In the interim we can begin to ship to a number of needy countries.

The choice under these circumstances concerns budget outlay level only—between the new option, which I proposed and you agreed to earlier, (1283 outlay/1413 commodity cost), and the earlier Presidential decision (1165 outlay/1299 commodity cost).2 Neither precludes an arrangement which would increase the percentage of the program available for non-MSA’s. The former gives you $301 for non-MSA’s as opposed to $267 in the latter.3 The higher level permits some flexibility with Indonesia, Korea, and Chile so long as Vietnam does not take its rice allocation. Less room is provided than what you need, but we can still work with Humphrey for relaxation of the 30/70 provision in order to revise the non-MSA level to $375.4 The shipments to India and Bangladesh will be much greater than either of them has expected.

Recommendation

That you now recommend to the President the higher 1283/1413 level.5

  1. Source: Ford Library, National Security Adviser, Presidential Subject File, Box 17, PL–480. No classification marking. Sent for action. The attached NSC correspondence profile indicates that Kissinger noted the memorandum.
  2. All four figures are in millions of dollars. Attached but not printed is a table concerning the dollar distribution of these two options.
  3. Both figures are in millions of dollars.
  4. This figure is in millions of dollars.
  5. On February 3, Butz announced that the United States would provide $1.6 billion in food aid during the 1975 fiscal year. The New York Times noted of this decision: "Both the funding of $1.6-billion and the amount of food it will provide correspond roughly with the highest of three budget options top advisers proposed to President Ford nearly two months ago." (The New York Times, February 4, 1975, p. 5)