1. On October 3rd, 1958, Cabinet approved the recommendation of the Prime Minister that the Canadian representative to the NATO Senior Civil Emergency Planning Committee be authorized to offer Canadian flour to NATO countries for emergency stockpiling, subject to a limit of $10,000,000 for the possible cost to Canada of such a program for the fiscal year 1959-60.²²⁶ The offer was formally made at the 5th meeting of the Senior Civil Emergency Planning Committee on October 15-16, 1958 and provision has been made in the Supplementary Estimates of the Department of External Affairs for $10,000,000 to cover the cost of supplying flour to NATO countries for emergency stockpiling.

2. Subsequent to the Canadian offer, the following countries have indicated an interest in obtaining Canadian flour for emergency stockpiling purposes: United Kingdom, Norway, Denmark, The Netherlands, Turkey and West Germany.

3. One of the conditions in the Canadian offer was stated in paragraph 3(f) of the Memorandum, which was approved by Cabinet on October 3rd, 1958, as follows:

"That the recipient country would undertake that the stockpile would be reserved for wartime emergency purposes and that as its replacement became necessary, it would be disposed of in a manner that would interfere with normal commercial transactions in wheat and wheat flour as little as possible, and would not be used for human consumption."

4. Officials of the United Kingdom Government, while expressing their appreciation of the generosity of the Canadian offer, have referred to serious difficulties in carrying out either the physical destruction of stocks of flour which have become unfit for human consumption following a prolonged period of storage, or its diversion to livestock feeding as implied in the undertaking "would not be used for human consumption." They have suggested as an alternative that the flour stockpile to be provided by Canada be rotated periodically, a portion of the stock being withdrawn at certain intervals for consumption and replaced from commercial sources.

5. In preliminary discussions a representative of the Netherlands indicated that the Netherlands may wish to use the flour provided by Canada for processing into biscuits for emergency stockpiling.

6. The representation of Norway has requested that, in view of the conditions under which the flour would be stored in outlying areas of Norway, up to 20 percent of their 25,000 ton requirements should be packed in tins.

7. On instruction from his Government, the representative of the Federal Republic of West Germany advised that his Government desired to take advantage of Canada's offer but would probably not be in a position to do so until 1960.

8. I Therefore Recommend:

(a) That in negotiating arrangements with interested countries covering the supplying of flour by Canada for stockpiling in NATO countries, a primary objective should be to maintain maximum flexibility of conditions so that administrative arrangements may fit the particular system of stockpiling in effect in individual recipient countries, while at the same time ensuring that supplies of flour provided for stockpiling do not adversely affect commercial trade.

(b) That the proposed system of stock rotation be approved on the understanding that, except on a declaration of an emergency by NATO, any reduction in the levels of the security flour stockpile would be effected only after consultation with appropriate Canadian Government authorities with respect to the disposition of that component of the stockpile supplied by Canada.²²⁷

[G. CHURCHILL]

²²⁶Voir/See Volume 24, Document 301.

²²⁷Approuvé par le Cabinet le 16 juillet 1959./Approved by Cabinet on July 16, 1959.