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235. Memorandum From the Director of the Office of Management and Budget (McIntyre) to President Carter 1

SUBJECT

  • Future Budget Commitment for World Food Program

In accordance with your procedures established to approve future international budget commitments, the Departments of State and Agriculture are requesting approval of a $220 million U.S. contribution to the UN World Food Program (WFP) for calendar years 1979 and 1980 (See Tab A).2 They wish to pledge this amount at an October 24, 1977, meeting which will set a total WFP budget target for 1978/80. By announcing the U.S. pledge now, rather than at the official pledging session early next year, the U.S. delegation hopes to influence the selection of a slightly lower target for the two year period.

Background

Established at U.S. initiative in 1963, WFP provides food grants to needy people in developing countries through projects of their governments, including food for work, school and preschool child feeding and disaster relief. The program has grown rapidly and now exceeds on an annual basis the P.L. 480 Title II feeding programs of the U.S. voluntary agencies. The U.S. share of the program has fallen from 50% to 25%. The table below shows the relevant statistics for the past two biennia and alternatives for the 1979/80 period.

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(In millions of dollars) 1979/80
1975/76 1977/78 WFP Proposal State/USDA Proposal
Total WFP Budget 674 750 950 880
US Contribution 120 188 238 220
Commodity costs 95 155 197 182
Freight costs 22 30 37 34
Cash (for Admin) 3 3 4 4
US as a % of WFP total (18%) (25%) (25%) (25%)

Food and freight costs are financed under PL 480 Title II, and the cash through AID funds for voluntary contributions to international organizations and programs. (The low figure of 18% for the U.S. share in the 1975/76 biennium is explained by extraordinary Canadian and Arab contributions).

Analysis

The WFP secretariat has proposed a $950 million level for 1978/80, a 27 percent increase in funding. At the current 25 percent share of total contributions, the U.S. portion would be $238 million. State and Agriculture believe the proposed WFP total could exceed recipient governments’ absorptive capacity given their management constraints, and may cause WFP to lower its own programming standards. WFP’s internal capacity to manage such a rapidly growing program is also questionable.

State/USDA’s proposed $880 million program would, they believe, permit more orderly growth while demonstrating continuing U.S. support for UN food aid focused on basic human needs. The U.S. proposed $220 million share (25% of the WFP total) would be presented as a maximum dollar amount. Thus, if other countries decided on a higher total (we do not have sufficient voting power for a veto), the U.S. percentage share would decline. Because other donors will probably not wish to make up for the reduction in the U.S. share, the proposed approach has a reasonable chance of success in limiting WFP growth. The proposed increase would utilize P.L. 480 Title II tonnage, using approximately one-third of the Congress’ recently mandated increase in Title II (the remaining two-thirds would go to U.S. voluntary-agency feeding programs.)

As a third alternative, an argument could be made for limiting total WFP funding to the level of the current biennium, $750 million. The fact that WFP has not presented specific proposals for additional funding and the lack of any rigorous plan for management improvement would argue for continuing the current level.

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Recommendation

OMB concurs with the State/USDA proposal. The proposed dollar increase is small, and any U.S. effort to hold to the current level would encounter strong opposition from the developing countries and possibly from Congress.

Options

1. $220 million U.S. pledge towards a $880 million WFP program (State, USDA, OMB)3

2. $238 million U.S. pledge towards a $950 million WFP program (Likely World Food Program proposal, no agency supports)

3. $188 million U.S. pledge towards a $750 million WFP program (Current level, no agency supports)

  1. Source: Carter Library, Staff Office Files, Domestic Policy Staff, Eizenstat Files, Box 324, World Hunger [1]. No classification marking. A stamped notation on the memorandum indicates the President saw it. McIntyre signed the first page. According to a covering note, the NSC Staff returned a copy to McIntyre on October 24 and sent additional copies to Eizenstat, Bourne, and Brzezinski. McIntyre’s handwritten comment on the note reads: “#1 was also our recommendation. J.” (Ibid.)
  2. Not attached; printed as Document 232.
  3. The President checked this option and initialed at the end of the memorandum.