13. The Minister of Trade and Commerce, as Acting Prime Minister submitted a report from the Department of Agriculture concerning initial talks about possible food agreements with the United Kingdom for 1951. On November 3rd, the United Kingdom had submitted proposals by the Ministry of Food for a cheese contract covering 90 per cent of the Canadian exportable surplus up to a total of 70 million pounds at 25¢ per pound (the 1949 contract price) and 60 million pounds of bacon at $29.00 per cwt if the Canadian Government was prepared to maintain export and import controls on bacon. If the Government was not prepared to maintain controls, the U.K, might consider purchasing Canadian bacon competitively at the current contract price of $29.00. The proposals had been discussed by telephone with the Minister of Agriculture who had said that the U.K. officials should be informed that prices offered were unsatisfactory and unlikely to be acceptable to the Canadian Government. This view had been communicated to U.K, officials and further information from the United Kingdom should be available shortly.

An explanatory memorandum was circulated.

(Memorandum, Acting Minister of Agriculture, Nov. 13, 1950 Cab. Doc. 157 50)t

14. Mr. Howe referred to the difficulties met with in attempting to fill the 1949 contracts. The National Dairy Council estimated that cheese production would be down in 1951 and recommended against any contract with the United Kingdom for a firm amount. It seemed desirable that there should be no further negotiations about 1951 contracts pending further discussion.

15. The Minister of Finance said that the undesirable features of the export embargoes which had been related to the contracts and which had prevented sales to the United States were quite clear. On the whole it seemed desirable to discontinue government contracts.

16. The Cabinet, after considerable discussion, agreed that there be no further negotiations with the United Kingdom concerning cheese or bacon contracts for 1951 pending further discussion after return of the Minister of Agriculture.