Foreign Relations of the United States, 1977–1980, Volume II, Human Rights and Humanitarian Affairs

258. Memorandum From the Assistant Secretary of State for Economic and Business Affairs (Katz) to the Under Secretary of State for Economic Affairs (Cooper)¹

Washington, undated

SUBJECT

• U.S. Food Policy Objectives and Activities

Policy Objectives

Since the 1974 World Food Conference, U.S. food initiatives have been directed toward the broad goal of world food security. The world food crisis of the early 1970’s demonstrated the need for actions to ensure adequate food supplies in the event of major crop shortfalls, either locally or globally. In 1975 the FAO estimated a food deficit of more than 20 million tons in the developing countries and that 455 million people suffered from malnutrition. For the 1990’s LDC food deficits have been projected at over 100 million tons and the number of people affected by hunger and malnutrition at one billion.

U.S. efforts to enhance world food security have three objectives:

1. improving food production in the developing countries;

2. introducing stability in wheat supplies through nationally-held reserves in developed and developing countries;

3. providing food aid to meet immediate food needs of developing countries.

U.S. Activities and Programs

1. Food Production

The U.S. has accepted the World Food Conference target of 4% growth of food output in those countries with the highest incidence of hunger and malnutrition. U.S. activities directed at that end include:

a) Bilateral assistance. Roughly half (about $600 million in FY 79) of AID’s development assistance budget is allocated to food and agriculture projects emphasizing the rural poor.

b) Food losses. AID-supported programs to help eliminate food losses from inefficient harvesting practices and poorly maintained storage facilities will amount to $35 million in FY 80. In 1979 we contributed $3 million to the FAO’s Fund for Prevention of Food Losses.

c) Agricultural Research. The U.S. provides about 25% of the resources of the Consultative Group on International Agricultural Research (CGIAR). It is a network of 11 agricultural research centers located in developing countries that work on basic LDC food crop production problems. The Summit countries have endorsed greater efforts in agricultural research.

d) Multilateral assistance. With U.S. encouragement, the multilateral development banks (MDBs) are increasing financing for rural development projects. About 35% of the lending by the MDBs is now dedicated to agricultural development. In FY 79 the U.S. will contribute approximately $1.6 billion to the MDBs. In addition, the U.S. contributes $450 million to the UN development organizations involved in food and agriculture. We funded 20% of the billion dollar International Fund for Agricultural Development.

2. Food Reserves

Until the February adjournment, international efforts to stabilize wheat supplies were tied to the UNCTAD-sponsored negotiations for a new International Wheat Agreement (IWA). The proposed agreement would have established an internationally coordinated system of nationally-held wheat reserves. The International Wheat Council (IWC) agreed in June that in addition to the unresolved issues which prevented conclusion of negotiations, more recent market developments (increased production costs, transportation problems in Australia and Canada, and anticipated crop shortfalls) have introduced new objective conditions which require careful study. At their November 1979 meeting IWC members will review whether the negotiations to achieve a new IWA should be resumed.

While it remains our objective to enhance world food security through an international system of wheat reserves, it may require another cycle of short supplies and relatively high prices to persuade other developed and developing countries that the costs of establishing a meaningful system would be worthwhile in terms of their own interest. In the meantime the U.S. will continue to support other international activities aimed at creation of food reserves including:

a) FAO Five Point Plan. The plan, developed in response to adjournment of the IWA negotiations, calls for best efforts by nations to:

(1) adopt foodgrain stock policies;

(2) establish criteria for management and release of national stocks;

(3) assist low-income food deficit countries to meet current import requirements and emergency needs;

(4) make special arrangements for food security assistance to the developing countries;

(5) promote collective self-reliance among developing countries.

Implementation of the plan can be furthered by national food sector strategy studies which the Summit countries have encouraged the IBRD and World Food Council to undertake.

b) IBRD Program for Storage Facilities. The IBRD is considering financial and technical assistance to developing countries for construction and management of a 7–8 million ton reserve storage system. The Tokyo Summit communiqué encouraged such an effort. These facilities could make an important contribution to food security in LDCs and, if negotiations are concluded, could be integrated into the IWA framework.

3. Food Aid

Food aid provides relief in emergency situations and helps poor countries and vulnerable groups meet basic food requirements which they are unable to provide for themselves. Food aid is a large component of U.S. food security efforts:

a) PL 480. The U.S. provides about 2/3 of the world’s food aid. While a large portion is devoted to emergency and supplemental feeding programs, U.S. food assistance under PL 480 is increasingly developmentally oriented. Title III (Food for Development) is programmed on a multi-year basis to support agricultural development programs in the recipient country.

b) World Food Program. The U.S. annually pledges 23% of the target of the World Food Program (WFP). The WFP provides about 15% of the world’s food assistance, mostly to support agricultural production projects and programs for increasing the nutritional status of vulnerable groups. The U.S. meets its pledge through PL 480 Title II assistance.

c) International Emergency Food Reserve (IEFR). Established under the auspices of the WFP, the resources of the IEFR are used only for emergency relief. The U.S. contribution has been 25% of the annual 500,000 ton target and is carried out through PL 480 Title II assistance.

d) Food Aid Convention (FAC). The U.S. pledged 4.47 of the total 7.59 million metric tons of minimum annual cereals aid pledged at negotiations for a new FAC. The pledges were conditional upon achievement of a new IWA and are not yet in force. The U.S. pledge would be met through PL 480 assistance, which currently delivers over 6 million tons of food aid annually.

The U.S. has launched an effort to persuade other donors to complete the text of a new Food Aid Convention regardless of the status of negotiations for the Wheat Trade Convention—in essence “delinking” the two. The U.S. has also announced that it would implement its higher food aid pledge made during the negotiation and called on other donors to do likewise. In addition, the U.S. has helped to recruit new donors to the Food Aid Convention, to make it the comprehensive instrument for achieving the 10 million ton annual cereals food aid target of the World Food Conference.

e) Food Security Reserve. The Administration has introduced into both the House and the Senate a Food Security Act which would establish a four million ton grain reserve to backstop our PL 480 programs in years of U.S. production shortfall.² In addition, 300,000 tons may be made available to meet emergency requirements rapidly. Prospects for enactment this year are uncertain.

1. Source: Carter Library, RG 220, Presidential Commission on World Hunger, Subject File, 1978–1980, Box 14, Food Production. No classification marking. Drafted by Kolar on July 26; cleared by Michael Calingaert (EB/ORF); Hart; Dane F. Smith Jr. (EB/OFP/FPD); and Parsons. Katz did not initial the memorandum.
2. See Document 260.