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222. Memorandum From the President’s Special Assistant for Health Issues (Bourne) to the President’s Assistant for Domestic Affairs and Policy (Eizenstat)1

SUBJECT

  • Food Aid Assistance

As I discussed earlier today, I suggest we carefully examine the potential economic and political benefits of establishing a Federal purchase guarantee of five or six million tons under a new Title III of the Agricultural Trade and Development Assistance Act (PL–480). The floor would assure American farmers, business, and government planners that this amount of grain would be purchased by the Federal Government. The budget impact is roughly $1.2 billion. This policy would include authorizing the Secretary of Agriculture to decrease the floor if there was a crop failure and increase the floor if there was a bumper crop. The Secretary’s determination would require that an increase in food aid under this program would not jeopardize the price of food in the U.S. marketplace. The developing countries would be assured of a minimum available amount; this would have the potential to encourage them to meet requirements we could predetermine such as using the proceeds from the purchase of grain toward agricultural development (self-reliance criteria), showing evidence that equity was a factor in making available the grain to people and, where feasible, that government efforts demonstrated policies which encourage more small farmers to enter into the production of food.

Domestically, food policies are potentially one of the key “engines” of inflation. The President can use the guaranteed 6-million-ton floor (the average annual U.S. food aid commitment to developing countries in the last 20 years) in periods of long supply years as the past few have been as a two-edged sword to improve the psychological and economic relationship with farmers and business and at the same time encourage more food aid by Canada and Australia. It also signals others that the President means it when he speaks about a commitment to assisting in the economic development of the poor countries of the world. The insecurity and unpredictability of the present PL–480 program which requires individual determinations by the Secretary of Agriculture concerning excess commodities should be eliminated through this scheme.

This is, of course, a complex issue, one which I am still working on in connection with the President’s World Hunger Initiative which he has asked me to undertake.

  1. Source: Carter Library, Staff Office Files, Domestic Policy Staff, Eizenstat Files, Box 324, World Hunger [2]. No classification marking. A notation on the memorandum indicates that a copy was sent to Daft. Another copy of the memorandum is in the National Archives, RG 59, Central Foreign Policy File, P770173–0348.