260. Briefing Memorandum From the Assistant Secretary of State for Economic and Business Affairs (Katz) to Secretary of State Vance1
SUBJECT
- Food Security Act of 1979
Issue
Status of the Food Security Act of 1979.
Background:
The Food Security Act of 1979 (H.R. 4489),2 introduced in April, would authorize the establishment of a wheat reserve of up to 4 million metric tons. It would be used to meet our food aid commitments to developing countries during periods of tight supplies and high prices, while avoiding disruption to normal commercial markets. It would also allow release of a small portion of the reserve (up to 300,000 metric tons) to provide urgent humanitarian relief in a developing country suffering from a major disaster.
This bill is nearly identical to the International Emergency Wheat Reserve Act (H.R. 13835)3 which last year cleared the House Committees on Agriculture and International Affairs. Despite the Administration’s strong support, it did not clear the Senate Agriculture Committee largely because of the concern by farmer groups that release of such a reserve would undermine wheat prices. Senator Dole proposed alternative legislation to establish a $500 million food reserve fund.4 The Administration opposed the Dole bill because it might be unfeasible politically and unwise to use such an emergency fund, which could drive prices higher in a tight market situation.
Progress to Date:
On July 10, 1979, the House Agriculture and Foreign Affairs Committees held joint hearings. Secretary Bergland testified in favor of the bill. Although State was not asked to testify, we support passage of this [Page 856] bill as a useful means to guarantee normal food aid flows in times of scarcity and to ensure compliance with our pledge to provide at least 4.47 million tons of food aid annually.
A number of Congressmen oppose the bill questioning the possible market disrupting effects of organizing and disposing of such a reserve. There is also concern over the overall costs of establishing and maintaining the reserve.
No committee mark-up sessions have been held on the Security Act because of opposition to the measure itself and the desire of some to link this bill with measures opposed by the Administration to raise 1979 and 1980 target prices for wheat and feedgrains. Some members believe organizing and dispensing of the reserve could disrupt the market and that the costs would be high. In addition, some non-government experts believe the bill has drafting defects which could seriously limit the usefulness of the reserve.
Possible Action:
It is unlikely that the House Agriculture Committee will take further action on the Food Security Act this year unless the Administration gives concessions on the domestic price support program. USDA is now working on a set of price proposals which it plans to circulate among concerned agencies within a week or two before taking the matter to the Hill. Until USDA is ready to make its move, no action on your part is necessary.
- Source: National Archives, RG 59, Central Foreign Policy File, P790149–0032. No classification marking. Drafted by John Pitts (EB/OFP/FPG) on September 10; cleared by Calingaert, Hart, and Alvin Adams (EB/IFD/BP). Adams did not initial the memorandum. A stamped notation on the memorandum indicates that Vance saw it.↩
- See footnote 7, Document 255.↩
- See footnote 4, Document 225.↩
- Presumable reference to S.3460, International Emergency Food Fund Act, which Dole introduced on August 24, 1978.↩