U.S. Food Assistance

Section 201 of the International Development and Food Assistance Act of 1975 (P.L. 94-161; 89 Stat. 849), approved December 20, 1975, added the following statement of policy to Section 2 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1691):

In furnishing food aid under this Act, the President shall

(1) give priority consideration, in helping to meet urgent food needs abroad, to making available the maximum feasible volume of food commodities (with appropriate regard to domestic price and supply situations) required by those countries most seriously affected by food shortages and by inability to meet immediate food requirements on a normal commercial basis;

(2) continue to urge all traditional and potential new donors of food, fertilizer, or the means of financing these commodities to increase their participation in efforts to address the emergency and longer term food needs of the developing world;

(3) relate United States assistance to efforts by aid-receiving countries to increase their own agricultural production, with emphasis on development of small, family farm agriculture, and improve their facilities for transportation, storage, and distribution of food commodities;

(4) give special consideration to the potential for expanding markets for America's agricultural abundance abroad in the allocation of commodities or concessional financing; and

(5) give appropriate recognition to and support of a strong and viable American farm economy in providing for the food security of consumers in the United States and throughout the world.

Section 202 of P.L. 94-161, supra, added a new Section 3 to the Agricultural Trade Development and Assistance Act reading as follows:

Pursuant to the World Food Conference recommendation that donor countries provide a total of at least ten million tons of food assistance to needy nations annually, the President is urged to maintain a significant United States contribution to this goal and to encourage other countries to maintain and increase their contributions as well.

Section 207 of P.L. 94-161, supra, added the following new Section 111 to the Agricultural Trade Development and Assistance Act:

Not more than 25 per centum of the food aid commodities provided under this title in each fiscal year shall be allocated and agreed to be delivered to countries other than those with an annual per capita gross national product of $300 or less and affected by inability to secure sufficient food for their immediate requirements through their own production or commercial purchase from abroad, unless the President certifies to the Congress that the use of such food assistance is required for humanitarian food purposes and neither House of Congress disapproves such

use, by resolution, within thirty calendar days after such certification. In determining per capita gross national product for the purposes of this section, the President is authorized and directed to make use of data developed by the World Bank for its most recent annual report and relied upon by the Secretary of the Treasury. A reduction below 75 per centum in the proportion of food aid allocated and agreed to be delivered to countries with a per capita gross national product of $300 or less and affected by inability to secure sufficient food for their immediate requirements through their own production or commercial purchase from abroad which results from significantly changed circumstances occurring after the initial allocation shall not constitute a violation of the requirements of this section. Any reallocation of food aid shall be in accordance with this section so far as practicable. The President shall report promptly any such reduction, and the reasons therefor, to the Congress.

Section 321 of P.L. 94-161 (22 U.S.C. 2220a note), supra, provides:

No debt owed to the United States by any foreign country with respect to the payment of any loan made under any program funded under this Act may be settled in an amount less than the full amount of such debt unless the Congress by concurrent resolution approves of such settlement.

International Structures for Food Assistance

Hemisphere Group

Secretary of State Henry A. Kissinger, in an address in Houston, Texas, on March 1, 1975, announced a U.S. proposal to establish a Hemisphere Agricultural Consultative Group under the InterAmerican Development Bank for the purpose of improving food production in Latin America. He stated that its goal should be to generate annual production increases in the range of 32 to 4 percent, to be achieved through:

-new investment in regional and national agricultural pro

grams;

-integration of agricultural research efforts throughout the hemisphere;

-adoption of improved national food and nutrition programs. The Consultative Group, he said, should also recommend urgent steps to reduce the waste and spoilage which were consuming between 20 and 40 percent of total Latin American food output.

The Secretary also made proposals regarding research centers and information exchange centers. The following is an excerpt from his address:

Agricultural research is a central element in attaining adequate nutrition for all. But too often research is unrelated to local needs and efforts elsewhere.

To make research more adequately serve local needs, we will assist the international research centers in Mexico, Colombia, and Peru to extend their projects and programs to other countries in the hemisphere through closer collaboration with national research institutions.

To foster better exchange of agricultural research information, we propose that a new center be established for Latin America, under the auspices of the Hemisphere Consultative Group, and linked to the Agricultural Information Exchange Center of the Smithsonian Institute in the United States.

The United States is prepared to join with other countries and institutions to finance the local extension efforts of the international research centers and the information exchange center.

Finally, we propose that the U.S. and Latin America jointly establish and finance research centers in nutrition and food technology; that a new generation of Latin American agriculturalists be trained through internships and research in these centers as well as in government and private laboratories and institutions in both continents.

Dept. of State Bulletin, Vol. LXXII, No. 1865, Mar. 24, 1975, pp. 361–369.

Food Aid

Secretary of State Kissinger, in an address on May 28, 1975, before the Ministerial Council of the Organization for Economic Cooperation and Development (OECD) at Paris, expressed the view that food aid "is an international responsibility-to be shared by all financially able countries." He noted that the United States had pledged that it would make every effort to provide at least four million tons of food annually, but pointed out that a long term solution would require a great increase in world food production capacity, especially in the developing countries, and an international system of grain reserves.

To increase world food production capacity, the Secretary stated that the United States supported two new international mechanisms, which he described as follows:

-First, the International Fund for Agricultural Development. This fund, proposed by the oil-producing nations, is designed to bring together all nations who are prepared to contribute additional resources, over some agreed base year, to agricultural developments. President Ford has asked me to announce that the United States will participate in the creation of such a fund. We believe its resources should total at least $1,000 million a year.

-The link between funding and effective agricultural development strategies should be provided by a second organization, the Consultative Group on Food Production and Investment,

which has already been organized as a result of the World Food Conference. This group-sponsored by the World Bank [International Bank for Reconstruction and DevelopmentIBRD], the U.N. Development Fund, and the Food and Agriculture Organization . . . should be the central mechanism for cooperation among traditional donors, new donors, and the developing countries.

On the matter of an international system of grain reserves, Secretary Kissinger outlined the following suggested principles for such a system which the United States was prepared to negotiate:

-First, total world reserves must be large enough to meet potential shortfalls in food grains production.

-Second, grain exporters and importers should agree on a fair allocation of reserve holdings, taking into account wealth, productive capacity, and volume of trade.

-Third, there should be agreed international rules or guidelines to encourage members to build up reserves in times of good harvest.

-Fourth, each participating country should be free to determine how its reserves will be maintained and what incentives will be provided for their buildup and maintenance.

-Fifth, rules or guidelines should be agreed for the drawdown of reserves, triggered by shortfalls in world production. There must be a clear presumption that all members will make reserves available when needed and, conversely, that reserves will not be released prematurely or excessively, thereby depressing market prices.

Sixth, in times of shortage the system must assure access to supplies for participating countries.

Seventh, there must be special provisions to meet the needs of the poorer countries.

-Finally, the system must encourage expanded and liberalized trade in grains.

The Secretary stated that the United States was prepared to hold an important part of an agreed level of world reserves.

For the full text of Secretary Kissinger's address, see Dept. of State Press Release No. 302, May 28, 1975; Dept. of State Bulletin, Vol. LXXII, No. 1878, June 23, 1975, pp. 849-855.

International Food Reserve System

Legislative authority and support for an international food reserve system was provided by Section 212 of the International Development and Food Assistance Act of 1975 (P.L. 94-161; 89 Stat. 855), approved December 20, 1975, which amended the Agricultural Trade Development and Assistance Act of 1954 by adding the following new section (7 U.S.C. 1736f):

SEC. 412. The President is authorized and encouraged to seek international agreement, subject to congressional approval, for a system of food reserves to meet food shortage emergencies and to provide insurance against unexpected shortfalls in food production, with costs of such a system to be equitably shared among nations and with farmers and consumers to be given firm safeguards against market price disruption from such a system. Section 213 of P.L. 94-161, supra (7 U.S.C. 1691a note), provides:

The Congress calls upon the President to strengthen the efforts of the United States to carry out the recommendations of the World Food Conference. The President shall submit a detailed report to the Congress not later than November 1, 1976, with respect to the steps he has taken to carry out the recommendations of the World Food Conference, including steps to fulfill the commitment of the United States and to encourage other nations to increase their participation in efforts to improve the food security of the poorest portion of the world's population.

International Grain Reserve System

The United States presented a proposal for an international grain reserve system at a meeting of major grain producing, consuming, and trading countries, called in London in September 1975 in the framework of the International Wheat Council.

The text of the U.S. proposal, excluding the introduction, follows:

SIZE AND COMPOSITION OF RESERVES

Reserves, for this purpose, would be holdings in excess of normal working stocks. These are estimated to be 10 percent of national production or consump tion, whichever is larger. On this basis, world working stocks are approximately 100 million metric tons of all grains. Reserves would be stocks above this level. The reserve stocks would need to be large enough to meet a substantial portion of major production shortfalls. A reserve sufficient to offset potential production shortfalls completely would be unrealistically large and costly. A reserve adequate to offset at least 90 percent of production shortfalls would significantly enhance food security while being more feasible from the standpoint of size and cost.

Since the emphasis is on improving food security, a reserve of 30 million tons of wheat and rice, the most generally consumed food grains, should be established. Wheat is the most widely traded food grain and is highly substitutable for rice. The reserve could be divided along the lines of 25 million tons of wheat and 5 million tons of rice. This stock would be sufficient to offset over 90 percent of projected deviations below the world production trend and would meet all of the criteria proposed here.

Consideration should be given to whether stocks of coarse grains are needed, since these are used for food in some areas of the world and a shortfall in the production of feed grains increases the demand for wheat as animal feed.

DISTRIBUTION OF RESERVE HOLDINGS

The responsibility for holding reserves will need to be equitably shared among participants. The criteria for determining these shares should take into account historic role of participants in grain production and trade and financial capacity, and should be based upon generally available and accepted data. Measures of trade in food grains, gross domestic product, and variance in production meet these criteria.