1. The Government of the United States through the United States Secretary of Agriculture has invited the Government of Canada to participate in meetings in Washington to consider the "Food for Peace" proposal recently made by President Eisenhower.⁵⁶⁹ The United States wishes to limit the initial discussions to wheat and, with this in mind, has invited only major wheat exporting countries, Argentina, Australia, France and Canada. The Director General of the Food and Agriculture Organization has also been invited to attend.

2. The first stage of the meetings would run from April 27th to 29th and would be at the official level. The purpose of the meeting of officials would be to prepare material and, if agreement is reached, to bring forward proposals which could be considered at the Ministerial meeting which is to begin with a dinner on the evening of May 4th and continue on May 5th. Argentina and Australia will be represented by senior officials and not by Ministers at the meeting on May 5th. Mr. McEwen who had intended to be present, will have to be in Australia at that time, to serve as Acting Prime Minister in the absence of Mr. Menzies.

3. The agenda proposed by the United States is as follows:

I. Opening Remarks (U.S.A. Chairman).

II. Consideration of Agenda.

III. Preliminary Comments by Country Representatives:
1. Argentina
2. Australia
3. Canada
4. France
5. F.A.O.

IV. Present Wheat Policies and Programmes:

1. Policies affecting supply and exportation of wheat with special reference to: (a) Normal Marketing; (b) Alleviation of food shortages; and (c) Economic Advancement in Under-Developed Countries.

2. Suggestions for improvements.

V. Agricultural Abundance and Food Needs:

1. Estimate by country representatives of available wheat surpluses over next several years;

2. Indicated requirements by major areas and practical problems of bringing available supplies to meet known shortages.

VI. New proposals for using available agricultural surpluses to alleviate food shortages and assist in the economic development of under-developed countries, either bilaterally or multilaterally.

VII. Conclusions and recommendations for future action with respect to wheat and other commodities.

VIII. Communiqué.

IX. Closing.

Assessment of the United States Position

4. While the United States Secretary of Agriculture has expressed the hope that the meeting would also discuss problems affecting the production of and the trade in wheat and while the President's proposal is couched in terms which give it great humanitarian appeal, there seems little doubt that the main interest of the United States is surplus disposal. The reasons for the U.S. emphasis on surplus disposal can be readily understood by looking at the present and projected wheat carryover. During the period 1949/50 to 1953/54, the United States held approximately one-half of the average wheat carryover of 1 billion bushels held by the six principal wheat exporting countries; at the end of the current crop year the United States will hold more than two-thirds of the greatly expanded carryover of 2 billion bushels. The increase in the U.S. stockpile has taken place despite very large surplus disposal programmes which have been a continuing threat to Canada's commercial marketings. With this expansion in the U.S. carryover, it is evident that the United States Government is under increasing pressure to expand its surplus disposal programme. It would appear that this expansion in the United States carryover has prompted a reappraisal of United States surplus disposal programmes, with a view to increasing the outflow of surplus wheat and using it as a more effective instrument of foreign policy to counter the Soviet economic offensive. The United States would like to do this without inviting further criticism and complaints from competing exporting countries.

Canadian Position

5. While Canadian stocks of wheat are large, the position in this country is obviously much different than that in the United States. For the most part, the wheat is produced without subsidy and sold in the commercial markets of the world. While stocks are large, they are manageable. This situation would, of course, be affected by an abnormally large or small crop.

6. Canada, as attested by its participation in a number of aid programmes, supports the general humanitarian objectives of the President's "Food for Peace" proposals. We have provided wheat and flour under gifts and loans to Colombo Plan countries and international agencies in an aggregate amount of $111 million since 1945. The use of surplus foodstuffs is likely to be a continuing feature of Canada's aid programmes.

7. At the same time, as a major producer and exporter of wheat, Canada's primary interest is to protect its commercial markets. The root of today's wheat surplus problem and of the harmful surplus disposal activities that result therefrom lies in subsidized over-production. President Eisenhower's proposals should be approached with these basic considerations in mind, for there is a real danger that the proposal might be developed in such a way as to make it even more difficult for Canada to protect its legitimate trading interests. It is essential, therefore, that any scheme envisaged under the "Food for Peace" proposals should not in any way give encouragement or general international sanction to the maintenance of subsidized overproduction or at the expense of the commercial exports of traditional suppliers; nor should it restrict Canada's right to criticize or to seek redress against the adverse effects of any such policies.

8. Canadian participation in a multilateral "Food for Peace" programme should, therefore, depend on the extent to which commercial markets are protected from continual erosion by give-away programmes under any guise.

9. Bearing in mind this basic consideration, the "Food for Peace" proposals made by President Eisenhower could be used to forward the Prime Minister's proposal to establish a world Food Bank.⁵⁷⁰ In a recent statement to the House, the Prime Minister expressed the hope that at the meetings in Washington consideration would be given to a proposition which he placed before NATO in December 1957.⁵⁷¹ At that time, he suggested the establishment of a food bank to store surpluses against the probability of crop shortages or failures in the future. The bank would constitute of storehouse for the assistance of those countries which find themselves and their populations short of necessary food.

10. The proposals for a World Food Bank are quite distinct from the other proposal put forward by the Prime Minister for the creation of strategic food reserves in NATO countries. Canada has already offered to provide flour for these strategic reserves and discussions are taking place with a number of countries which have indicated their interest in the Canadian offer.⁵⁷²

Proposed Approach

11. In order to forward the objectives of the Prime Minister's proposals for a World Food Bank while at the same time protecting our commercial interest, the Canadian Delegation might propose the establishment of an Intergovernmental Coordinating Committee of donor countries which would meet at regular intervals to determine the eligibility of countries to receive surplus agricultural products under the programme and to co-ordinate the distribution of surplus food.

12. As to eligibility, the Committee would divide countries into three groups to be reviewed periodically, as follows,

(a) Countries in the first group would be those which, by common agreement among the exporters of wheat, would not be given any wheat on concessional terms and which, therefore, would have to meet all their requirements through normal commercial channels. Included in this group would be Western Europe and Japan.

(b) The second group would include countries whose requirements could be met partly through the commercial market and partly through surplus disposal. The minimum amount to be purchased commercially would be established for each country in this group. All their other needs could, if necessary, be met through surplus disposal. However, exporters would agree not to provide surplus wheat to a country unless it had made or intended to make its commercial purchases. Most of the less-developed countries would fall into this group.

(c) The third group would consist of those countries all of whose needs could be met through surplus disposal. There would be few, if any, countries falling into this group.

13. To co-ordinate the "Food for Peace" programme, the Committee, having defined the commercial market in this way, would consider and determine the nature and extent of possible additional non-commercial needs. After prospective recipient countries had indicated the amount of foodstuffs they would like to receive over and above their normal commercial requirements and after the Committee had agreed that such additional amounts could move under a "Food for Peace" programme, each prospective donor country could indicate the amount of this additional need which it was prepared to provide on concessional terms. It would not be necessary for donor countries to provide each year the full amount of foodstuffs which recipient countries indicated they would like to receive under such a programme.

14. In summary, the functions of the Co-ordinating Committee would be to:

(a) group countries into the three categories suggested in the preceding section;

(b) determine the minimum commercial imports of countries falling into the second group on the basis of agreed criteria;

(c) consider requests from countries in the second and third categories;

(d) co-ordinate the distribution of surplus food made available to meet these requests, on the understanding that the identity of the assistance provided by each country would be maintained and that each national programme would be administered and controlled in accordance with the pertinent national legislation.

Complementary Measures

15. Surplus disposal alone will neither solve the problem of surplus accumulation nor enhance the purchasing power of recipient countries to meet their increased consumption needs on a commercial basis. It is important, therefore, that appropriate complementary measures are taken in exporting countries to curtail uneconomic production which results in surplus accumu-lation. At the same time, as far as the recipient countries are concerned, it is essential to ensure the effective use of counterpart funds for capital development and technical assistance in order to raise the level of agricultural and industrial productivity so as to prevent any increase in demand in recipient countries from becoming a self-perpetuating obligation on donor countries.

16. If some such arrangements as those described above, for the safeguarding of normal commercial markets, were agreed upon, their effect might appear to be to limit or even to reduce the scope for surplus disposal under existing programmes and methods. It may be necessary to try to reconcile increased protection of our normal commercial markets with an increase in surplus disposal under a "Food for Peace" programme, that is, to find ways to achieve an effective increase of consumption in the food deficit areas. Unless this is given due weight in the discussions in Washington there will be some risk that the United States will not be prepared to accept the essential components of a scheme to safeguard commercial markets and might be tempted to place the blame for the eventual failure of the U.S. proposals on Canada and other commercial exporters.

17. New ways to increase food consumption have been discussed in the FAO for some years. Variations on some of these might provide workable formulas which would have considerable public appeal. For example, exporting countries might offer to finance the food costs of constructing "x" miles of irrigation canals, or "x" miles of roads to connect towns with outlying rural districts, or "x" storage elevators. In under-developed countries the provision of food for workers on particular projects can be expected to represent a significant proportion of the operating costs.

18. Industrially advanced countries that are not exporters of food might therefore participate in projects in the form of technical and capital assistance e.g. by defraying costs of transpor-tation or providing some of the equipment or machinery required. Another possibility to expand consumption would be to develop school feeding programmes in food deficit areas. It is by undertaking new projects of this type that an increase in surplus disposal could actually serve the purposes set out by the President and the Prime Minister without interfering with normal commercial markets.

Recommendations

19. It is recommended that:

1. Canada should be represented at the meetings to be held in Washington on April 27th to 29th and on May 4th and 5th;

2. Canadian representatives at the meetings should make clear that Canada shares the humanitarian objectives of the U.S. proposals and to that end should indicate a willingness to explore new ways to use surpluses which would increase consumption in food deficit areas and facilitate economic development, in keeping with the Prime Minister's concept of a Food Bank;

3. Canadian representatives should press strongly for the effective protection of normal commercial markets against surplus disposal activities along the lines suggested in this memorandum or along lines which would provide equally effective protection; and

4. Canadian representatives should seek the acceptance of the principle that other industrially advanced countries that are not exporters of food should be invited to contribute as appropriate.⁵⁷³

⁵⁶⁹ Le président Eisenhower a proposé son programme « l'alimentation pour la paix » dans une lettre destinée au Congrès le 29 janvier 1959. Voir le texte de la lettre dans le New York Times du 30 janvier 1959, p. 12.
President Eisenhower had proposed his "Food for Peace" plan in a letter to Congress on January 29, 1959. For the text of this letter see New York Times, January 30, 1959, p. 12.

⁵⁷⁰Voir/See Volume 24, Document 254.

⁵⁷¹Voir Canada, Chambre des Communes, Débats, 1959, volume III, p. 2779.
See Canada, House of Commons, Debates, 1959, Volume III, p. 2655.

⁵⁷²Voir/See Volume 24, Document 301.

⁵⁷³Approuvé par le Cabinet le 23 avril 1959./Approved by Cabinet on April 23, 1959.