223. Memorandum From the President’s Special Assistant for Health Issues
(Bourne) to President Carter1
Washington, August 26, 1977
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
Carter6
Washington, August 15, 1977
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.
