[Page 707]

223. Memorandum From the President’s Special Assistant for Health Issues (Bourne) to President Carter 1

SUBJECT

  • Bergland Memorandum dated August 15, 1977, re Report on International Food and Agriculture

The comments contained in this memo were coordinated with the NSC, DC, OMB, OSTP, CEA, and the Cabinet Secretary.2

I. Summary Analysis

Secretary Bergland’s excellent report is encouraging in that he proposes that the Department of Agriculture become a full collaborator on international food policy governmentwide, and expresses a concern for food policies which address the basic human needs of the poor in the world. The key step to take now is to establish, where possible, specific Administration goals to achieve by 1980 which will dictate the policies to pursue. The flaws in the report are the absence of specifics concerning a procedure to arrive at an Administration position, a temporary coordinating mechanism, and lack of emphasis on particular aspects of the needs of the poor in the developing world. However, this can be resolved through a deliberative forum where the views of primary departments and agencies (State, Agriculture, AID, Treasury, the Peace Corps, etc.) and the private sector (in particular, farmers, businessmen) are taken into consideration in molding Administration food policy.

II. Key Proposals of Importance

A UN speech by the President. It was felt that the UN speech should be considerably broader than simply a discussion of the world [Page 708]food problem, and indeed broader than basic human needs. It needs to lay out the President’s global approach, particularly focusing on the type of world we envisage in coming decades. In so doing, however, it should communicate clearly the necessity of addressing the world food problem. The view was that an early October speech would be premature and that the President should await development of specific policies first.

An expanded role for the Department of Agriculture. This newly expanded role should be developed in close collaboration with State, AID, NSC, OMB, and the White House, also with adequate involvement of the private sector as well as Congress.

U.S.D.A.’s approach to commercial food sales, food reserves, trade, and food aid. However, what is required is the balancing of interests in this area with other interests including ensuring more equitable distribution of food to the poor, the relationship of our present U.S. and foreign agricultural production policies to nutrition (both at home and abroad), and the institutional linkages required to bring about a coordinated policy in these areas.

Foreign Food Assistance. Provided, however, that the emphasis is on the poor nations.

Scientific and technical collaboration. Provided, however, that the emphasis is on useful technology in support of the poor producers. Investment in basic agricultural research both here and abroad will be necessary in order to enhance the world’s productive capacity for the intermediate and longer term. This is essential both to provide adequate food supply abroad as well as to keep food costs down domestically.

International trade arrangements.

III. Specific Negative Attributes of the Report

The report, though well conceived, was developed in somewhat of a policy vacuum. To the best of our knowledge, many of the principals in and out of government did not officially engage in collaborative consultation with Agriculture in developing the report. This can easily be rectified by convening a steering group made up of the principal agencies, to develop a set of governmentwide recommendations for the President to consider.

The report lacks a budget impact analysis.

The report lacks a specific set of measurable goals which identify what it is that all these policy initiatives will accomplish.

Downplays the conflicting, competing, and overlapping policies now in place among the many agencies (26 agencies involved) and does not suggest how these problems will be worked out beyond consultation. [Page 709]Much more is required and leadership from the Executive Office could ensure that all views were considered in a policy evaluation.

In fact, what appears to be needed is to reform the present patchwork set of authorities and functions and, during the interim, establish a temporary coordinating mechanism which ensures that the various government and private interests are taken into consideration in making and executing policy over the short run and until the reforms are implemented.

More attention should be given to the “demand” side of hunger, i.e., the ability of people to buy food. One key element in overcoming world hunger is to promote adequate development to enable people to earn enough money to buy the food they need. Simply focusing on increased production might lower food costs, but unless the question of hunger is looked at in an overall developmental context, we will be addressing only the supply side and not the demand side. This argues for avoiding too much of a shift from AID to the Department of Agriculture in dealing with the problem of world hunger.

There is no objective analysis of the advantages and disadvantages of policy recommendations, and no alternatives suggested. The President needs to know the political and economic implications of a recommendation and the various alternatives available before deciding on a policy. Otherwise, there is no way to judge how one recommendation impacts on overall Administration objectives in this area.

The report does not address the OMB Food Policy Reorganization Initiative or the AID and Brookings Development Assistance studies.3

IV. Next Steps

A. It is recommended that you send a memorandum to Secretary Bergland commending him for the very welcome, thoughtful, and innovative report. Furthermore, the letter should indicate that plans are to include Secretary Bergland as a principal participant in the international food policy issue. A proposed draft letter to the Secretary of Agriculture is attached.4

[Page 710]

B. As you may recall, you requested Peter Bourne, Zbig Brzezinski, Stu Eizenstat and Frank Press to suggest a plan on World Hunger. We have been working on this and within the next two weeks will be submitting for your consideration a memorandum that proposes some initial steps needed to develop a coordinated world food policy.5

Attachment

Report by Secretary of Agriculture Bergland to President Carter 6

INTERNATIONAL FOOD AND AGRICULTURE

Situation

You have made clear your commitment to fulfilling basic human needs in the United States and abroad. You have emphasized that food is a centerpiece of your foreign policy. These policy positions have to be translated into action.

The United States exports $24 billion worth of agricultural products each year. Our surplus in agricultural trade is the dominant factor in our foreign exchange earnings. This Administration’s actions must reflect this economic reality.

Now that domestic farm legislation is taking shape, the Carter Administration should focus on initiatives in international food and agriculture. In this report I suggest the directions these initiatives should take.

International Organizations

At the World Food Council meeting in June the United States moved into leadership on problems of food in the Third World.7 This advantage will be lost unless we exercise further leadership promptly and consistently.

—I understand you are considering a speech before the United Nations General Assembly in September. This would be an excellent forum for you to specify initiatives on basic human needs, especially food, and to specify objectives we seek in international organizations [Page 711]concerned with food and agriculture. I will send you suggestions for topics to be included in such a speech.

—The meeting of the Food and Agriculture Organization in Rome in November provides another opportunity for this Administration to make a positive turn in American policy. Mainly because of attitudes carried over from the past, the United States is seen as being more interested in haggling over FAO’s budget than in FAO’s real purposes. In my speech to the meeting in Rome I plan to emphasize this Administration’s commitment to the FAO as a principal instrument for progress in world food and agriculture as well as our commitment to helping improve the effectiveness of the FAO.

—In order to sustain our leadership in international organizations concerned with food and agriculture, Secretary Vance and I need to work out better means for exercising that leadership. Because of habits from the past, the Departments of State and Agriculture (and some other departments) tend to compete for leadership rather than concentrate on substance. Our working arrangements should reflect the facts that the Department of State has primary responsibility for coordinating foreign policy and that the Department of Agriculture has primary responsibility for substantive and technical decision-making on food and agriculture. I will work out necessary arrangements with Secretary Vance.

—The Department of Agriculture also needs to work closely with international development banks on agricultural projects. In 1976 agricultural projects financed by these banks amounted to about $3 billion. The World Bank has invited our participation, and we will take up that invitation.

Foreign Food Assistance

In September you will receive recommendations from the Development Coordinating Committee and the Brookings Institution about the overall shape and scale of the United States’ official development assistance. Probably you will have to choose among divergent options on substance and organization.

In my view, this Administration’s foreign assistance program should be built on effective actions to deal with malnutrition and with inadequate rates of growth of food production in poor countries. I believe there is widespread support among the American people and in the Congress for this approach. But the structure we have inherited—with its confused objectives and complicated administration—is not delivering the goods.

I will submit for your consideration:

—Proposed legislation to improve foreign food assistance now carried out under Public Law 480. The legislation would provide spe[Page 712]cific programs and specific budget items for: emergency assistance, including food-security arrangements for poor countries; humanitarian assistance directed to malnourished poor people and combined with local self-help projects for these families to raise their incomes; food for development, both to support major developmental projects such as land reform and to support long-term developmental policies by the governments of poor countries; and supporting assistance for situations, such as the Middle East, where the United States’ strategic interests are involved. The legislation would provide for multiple-year commitments and reserve stocks of American food to back up these commitments. The legislation also would provide for active participation by voluntary organizations and land-grant universities and for collaboration between the Department of State/Agency for International Development and the Department of Agriculture in administering foreign food assistance.

—Recommendations for introducing effective management of foreign food assistance. Now the lines of responsibility and authority in Washington and the field seem designed to maximize conflict and minimize accomplishment. The P.L. 480 Interagency Staff Committee—a group composed of non-policy-level people, many of whom have inadequate knowledge of food and agriculture and the countries to which our food assistance is directed—should be abolished. After consulting with Secretary Vance and Governor Gilligan, I will recommend to you an arrangement between State/AID and the Department of Agriculture which will establish executive responsibility for P.L. 480 and will bring together our foreign policy and developmental interests with professional knowledge of food and agriculture in developing countries.

Scientific and Technical Collaboration

On June 20 the National Research Council (NRC) submitted to you an excellent analysis of the world food and nutrition situation and recommended actions by the United States Government to deal with that situation.8 The NRC stressed the need to expand food production in poor countries and to improve the distribution of the benefits of that increased production to satisfy nutritional needs of the poor. The NRC also emphasized that efficient food production here and abroad requires sustained scientific and technical collaboration between the United States and other countries. In fact, such collaboration supports both our developmental interests and our commercial interests.

Already the Department of Agriculture has collaborative arrangements with some 20 countries outside the group of countries served by [Page 713]the AID. Taking these two groups of countries together, the existing and prospective demand on the United States’ scientific and technical resources in food and agriculture is huge. These resources exist primarily in land-grant universities and the Department of Agriculture and, to a lesser but significant extent, in the private sector.

However, the United States Government is not organized to marshall these resources and put them to work. For example, except for arrangements which are fully financed by other countries, such as Saudi Arabia, and particular projects financed by the AID, the Department of Agriculture has no specific funds for international scientific and technical collaboration in food and agriculture. Although existing foreign assistance legislation authorizes funds for collaboration by land-grant universities and this Department on problems of food and agriculture in developing countries, in fact these funds are not being used. The result is piecemeal efforts far short of what the NRC recommends.

In the Department of Agriculture’s budget estimates for fiscal year 1979, I will recommend funds to be used by land-grant universities and this Department to undertake scientific and technical collaboration with other countries—both developed and developing—along the lines recommended by the NRC. These estimates will include funds for the universities and this Department to develop resources for serious, sustained contributions to developing food and agriculture in poor, food-deficit countries. I don’t propose to go into competition with the AID abroad, but I do intend to press the case for this Department’s having sufficient funds and expertise to sustain scientific and technical work on international problems of food and agriculture.

—I am designating a senior officer of the Department of Agriculture to be responsible for organizing this Department’s participation in and our arrangements with land-grant universities for scientific and technical collaboration with other countries.

International Trade Arrangements

Negotiations in the International Wheat Council (IWC) and the Multilateral Trade Negotiations (MTN) will begin in earnest in Autumn 1977. Our basic objectives in these trade negotiations are to dampen wide swings in prices for producers and consumers, improve world food security, and expand trade flows of agricultural products.

The Office of the Special Trade Representative (STR) and the Department of Agriculture are collaborating closely in these negotiations. This Department is providing staff to the STR and is doing substantive and technical analyses for the agricultural trade negotiations.

—The Carter Administration should give prominence to our agricultural objectives in these multilateral negotiations, because agriculture may be the knottiest area. So you can put your personal stamp on [Page 714]the negotiations, I suggest that you, Ambassador Strauss, and I meet in the White House with Congressional leaders to discuss our agricultural objectives and that you then meet with the press. This best could be done in September, before serious discussions in the IWC and the MTN begin.

—In parallel with our seeking dependable multilateral arrangements, we should make clear our intention to be affirmative marketers of America’s agricultural products. Among other things, this might impose some discipline on our competitors and encourage them to take the multilateral negotiations more seriously. In the following section I outline initiatives in commercial export promotion. We should proceed now with bilateral arrangements with centrally-planned countries which do not participate in the MTN and with other initiatives which do not conflict with multilateral negotiations.

Commercial Export Promotion

Commercial sales are by far the predominant element of our international agricultural trade. We need an effective commercial export strategy and effective program management to support that strategy. This Administration should assure that the United States is a dependable supplier of high quality agricultural products to the world.

The Department of Agriculture is taking these actions:

—We are analyzing individual countries abroad, and we are looking especially for those situations where rising economic demand can create rising markets for American agricultural products, now and in the future. Using this information, we will design three- to five-year plans with American agricultural export-promotion associations for markets in individual countries. Depending on the characteristics of each market, these plans will combine market-development activities by the private export-promotion associations, credit facilities from the private sector and from the United States Government, and commercial supply arrangements backed up by appropriate commitments from the Commodity Credit Corporation (CCC). We intend to complete these plans for major countries by June 1978 or earlier.

—We will examine whether American agricultural cooperatives need special help from the Department of Agriculture to operate directly in foreign markets. Our international grain trade is dominated by a handful of private companies which operate as multinationals; they do not seek to optimize American exports. American cooperatives might enliven competition and expand exports of American grain. We will consult with cooperatives in order to develop definite plans by the end of 1977.

—We will design an intermediate credit program to fill in the gap between the one- to three-year credits now available from the CCC and [Page 715]the 20- to 40-year loans available under P.L. 480. This new credit program would address situations, such as Korea and Portugal, where development is not a primary consideration and help us market products, such as breeding cattle, for which the CCC’s three-year credit maximum is unrealistic. The intermediate credit program will be designed this year, in time to be included in the budget for FY 1979, but probably should be held in reserve pending the outcome of multilateral trade negotiations. We will work with the Export-Import Bank in designing this program.

—In our budget for FY 1979 we will recommend establishing a first group—perhaps half a dozen—of American agricultural trade offices abroad. IBM, Chase Manhattan, and Pan Am maintain highly visible presences abroad, but American agriculture does not. These trade offices would be operated on contract in collaboration with American export-promotion associations and would bring together some activities now conducted independently by these associations and by agricultural attaches.

—We are acting to assure the quality of American agricultural exports through better inspection arrangements. These actions include tighter licensing and monitoring of inspectors, better means for fumigating stored grain and for detecting hidden insect infestation, and better testing of the protein content of wheat.

—We will work with private industry and governmental agencies to help develop storage and distribution facilities in countries whose imports are constrained by lack of such facilities. These facilities are especially important to poor, food-deficit countries.

I plan to highlight these initiatives in commercial export promotion in speeches during the coming weeks.

Program Management

Many of the initiatives I have outlined in this report interact with each other. A foreign food assistance program along the lines I have sketched requires a different approach to reserve stocks and forward planning than the United States has practiced until now. Multilateral trade negotiations interact with both our assistance to poor countries and our commercial trade. And so on. Because of these interactions, the Carter Administration needs to develop a pattern of policies and actions which links our domestic and foreign concerns in food and agriculture.

The absence of such a pattern can be painful to people in the United States and to people in other countries. For example, because our predecessors had no strategy for dealing with changes in international supply and demand for agricultural products, the United States’ trade has had to absorb most of the fluctuations in world market condi[Page 716]tions. For the same reason, food supplies for hungry people in the poorest countries were curtailed when their needs were critical.

In order to create a pattern for dealing with international food and agriculture, the Department of Agriculture is analyzing these program-management instruments and how they fit together:

—Farmer-controlled stocks to be used primarily for stabilizing domestic market conditions in the interests of producers and consumers in the United States.

—Government-controlled stocks to be used primarily for exercising the United States’ obligations in international agreements—both multilateral and bilateral—and in food-security and developmental arrangements with poor, food-deficit countries.

—Adjustments in agricultural production in the United States, through acreage adjustments and other means, to maintain appropriate supplies for stocks and for current demand.

—Bilateral and multilateral trading arrangements as they interact with the above instruments.

We intend to complete much of this analysis by the end of 1977. We expect this analysis will yield legislative recommendations.

Also, in analyzing the food and agricultural situations in developing and developed countries abroad, we are examining the range of instruments available to the United States for dealing with individual countries. Particular countries may be candidates simultaneously for food assistance, scientific and technical collaboration, commercial export-promotion, bilateral agreements, and multilateral commodity agreements. To fit this range of instruments to individual countries requires information, planning, and management which by and large have not been done until now. We also intend to complete a first round of these country plans by the end of 1977.

Action

I have outlined the several actions underway in the Department of Agriculture.

The FY 1979 budget and the legislative agenda for 1978 will be vehicles for your taking decisions on items which represent significant new departures or financial commitments.

Many of the items in this report should be included in formal Presidential messages at the beginning of 1978 and in speeches between now and then. My colleagues will work with Stuart Eizenstat to see that you receive recommended language for these messages and speeches.

If you agree it will be useful, I will plan to present informal reports on international food and agriculture to you and the members of the Cabinet each quarter.

  1. Source: Carter Library, Staff Office Files, Domestic Policy Staff, Eizenstat Files, Box 324, World Hunger [2]. No classification marking. A notation in Carter’s handwriting reads: “Stu, advise. J.” A stamped notation at the top of the page reads: “The President has seen.” An earlier version of the memorandum, prepared by Bourne on August 17; an undated draft response to Bergland; and covering memoranda attached to Bergland’s report, attached below, are ibid.
  2. Comments on Bergland’s proposal are contained in an August 17 memorandum from Cutter to Hutchenson; an August 17 memorandum from Schultze to Carter; an August 17 memorandum from Eizenstat and Daft to the President; and an August 19 memorandum from Hormats to Dodson. All are ibid. In their memorandum to the President, Eizenstat and Daft noted that the proposal “represents an excellent first-cut at framing the Administration’s policy on international food and agriculture. It does a particularly nice job of tying together the several loose ends, including commercial trade policy, food assistance, and research.”
  3. For information regarding the AID/DCC and Brookings studies, see footnotes 8 and 9, Document 216. As part of a larger review of the economic policy and analysis machinery of the Federal government, the President, in an August 25 memorandum to heads of Executive Agencies and Departments, indicated that he had directed OMB’s Reorganization Project Staff to begin a review of the organization and structure of Federal food and nutrition programs. The review would focus on seven areas: food production and marketing; regulatory activities affecting food; food research and education; international activities; commodity procurement and distribution; aquaculture activities; and conservation activities. (Weekly Compilation of Presidential Documents August 29, 1977, pp. 1249–50)
  4. A draft undated and unsigned memorandum from the President to Bergland is attached but not printed.
  5. See Document 227.
  6. No classification marking.
  7. See Document 221.
  8. See Document 212.