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United States food policy 1972–1976: reconciling domestic and international objectives

Published online by Cambridge University Press:  22 May 2009

I. M. Destler
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US food policy is a product of four legitimate but competing concerns: (1)farm policy; (2) domestic economic policy; (3) foreign policy; and (4) global welfare and development policy. Five major policy episodes in 1972–76 illustrate their interplay: the Soviet grain sales of 1972; the soybean embargo of 1973; the food aid debate of 1974; the food reserves proposal of 1975; and the Soviet grain sales of 1974 and 1975. Competing policy concerns were more explicitly and effectively balanced in 1974 and 1975 than in 1972 and 1973, and policy tended to shift toward protecting domestic food prices in 1973, and meeting world food needs in 1974. But it shifted too late to salvage important policy concerns. The 1972–75 experience suggests that the State Department cannot be the lead international food policy agency because domestic farm and economic concerns are too deeply engaged. But interagency committees based in the Executive Office of the President (EOP) lost their effectiveness as crises waned and their members' attention turned to other things. The best organizational strategy for food would therefore be to accept the day-to-day predominance of the Department of Agriculture and seek to broaden the orientation of the secretary and his staff. Reciprocal State sensitivity to non-foreign policy concerns can help protect international economic and political interests; so can monitoring and intermittent intervention by EOP staffs.

Type
Section II Food Policies of Important Countries
Information
International Organization , Volume 32 , Issue 3: Special Issue: THE GLOBAL POLITICAL ECONOMY OF FOOD , Summer 1978 , pp. 617 - 653
Copyright
Copyright © The IO Foundation 1978

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References

1 For an extended discussion of food as leverage, see Nau's essay in this volume.

2 Using 1967 = 100 as a base, the ratio between the Consumer Price Index for food and the CPI for all other items was between 1.01 and 1.04 in 1955–58. It was 1.00 or below in every year from then until 1973 (except for 1966, when it was 1.02). Hathaway, Dale E., “Food Prices and Inflation,” Brookings Papers on Economic Activity 1974: 1, p. 65Google Scholar.

3 “Rural districts comprised 83 percent of an absolute majority in the House in 1966; the percentage dropped to 71 in 1969, and to 60 by 1973.” Barton, Weldon V., “Coalition-Building in the United States House of Representatives: Agricultural Legislation in 1973,” in Anderson, James E., ed., Cases in Public Policy-Making (New York: Praeger, 1976) p. 144Google Scholar.

4 See Cochrane, Willard, The City Man's Guide to the Farm Problem (Minneapolis: University of Minnesota Press, 1965), pp. 139–54Google Scholar.

5 See “A New U.S. Farm Policy for Changing World Food Needs,” A Statement by the Research and Policy Committee of the Committee for Economic Development, October 1974, pp. 29–37.

6 Sanderson, , “The Great Food Fumble,” Brookings Reprint No. 303 (Washington, D.C.: Brookings Institution, 1975) pp. 505–506Google Scholar. See also Trezise, Philip H., Rebuilding Grain Reserves: Toward an International System (Washington, D.C.: Brookings Institution, 1976), p. 1Google Scholar.

7 U.S. Department of Agriculture, Agricultural Statistics 1975, p. 4Google Scholar.

8 Hathaway, , “Food Prices and Inflation,” p. 87Google Scholar.

9 USDA, Agricultural Statistics 1975, p. 518Google Scholar.

10 This section draws upon interviews with officials and a wide range of public sources, particularly Hathaway, “Food Prices and Inflation”; Schnittker, John H., “The 1972–73 Food Price Spiral,” in Okun, Arthur M. and Perry, George L., eds., Brookings Papers on Economic Activity 2: 1973, pp. 498–507Google Scholar; Trager, James, The Great Grain Robbery,(New York: Ballantine Books, 1975)Google Scholar; House Committee on Agriculture, Subcommittee on Livestock and Grains, “Sale of Wheat to Russia,” Hearings, September 1972; and Senate Committee on Governmental Operations, Permanent Subcommittee on Investigations, “Russian Grain Transactions,” Hearings and Report, 1973 and 1974.

11 “Trade with the People's Republic of China,” Presidential Announcement of June 10, 1971, in Weekly Compilation of Presidential Documents, June 14, 1971, p. 891.

12 If one simply multiplied the acreage to be diverted, 25 million, by the average 1972 yield, 32.7 bushels per acre, one would conclude that bringing all the acres back would have led to about 800 million extra bushels of wheat being produced. However, it was known that these were among the less productive wheat acres—it was unlikely that all would be brought back into production on such short notice, and those that were would yield substantially less than the nationwide average. Ultimately the program was changed for spring wheat plantings, and only 7.4 million wheat acres were actually diverted. But if changing the program had increased winter wheat acres by 5 million, and if the average yield for these acres was 25 bushels, this would have meant 125 million badly-needed bushels to cushion the even sharper price rise that would come in the summer of 1973.

13 U.S. Congress, Senate, Senate Committee on Agriculture and Forestry, “Export Control Policy,” Hearings, (Washington: GPO, 07 11, 1973), p. 49Google Scholar.

14 US General Accounting Office, “Russian Wheat Sales and Weaknesses in Agriculture's Management of Wheat Export Subsidy Programs,” 07 9, 1973, p. 17Google Scholar.

15 Ibid., p. 23.

16 US Congress, Senate, Senate Government Operations Committee, “Russian Grain Transactions,” cited, pp. 31–32Google Scholar; GAO, “Russian Wheat Sales,” pp. 16 26Google Scholar.

17 As Treasury Secretary George Shultz described it later, the Cost of Living Council argued in 1972 ‘that we should expand the supplies of our agricultural products…the Secretary of Agriculture came to accept that point of view, and became an advocate of it.” (Interview in The Washington Post, April 14, 1974. Emphasis added.) Butz would later, of course, become a vocal advocate of full production.

18 Economic Report of the President, January 1973, p. 248.

19 New York Times, January 11, 1973, p. 32; Schnittker, , “1972–73 Food Price Spiral,” p. 503Google Scholar.

20 Sanderson, Fred H., “The Great Food Fumble,” p. 504Google Scholar. For an interpretation giving greater emphasis to other factors, see Hathaway, “Food Prices and Inflation.”

21 The subsequent account draws on contemporary accounts and interviews, and on two secondary sources: Graziano, Edward F., “Commodity Export Controls: The Soybean Case (1973),” pp. 18–32Google Scholar in Hamilton, Edward K. et al., Cases on a Decade of U.S. Foreign Economic Policy: 1965–74, Report of the Commission on the Organization of the Government for the Conduct of Foreign Policy (Washington: GPO, 1976)Google Scholar Appendix H; and General Accounting Office, “U.S. Action Needed to Cope with Commodity Shortages,” Report to the Congress, April 29, 1974.

22 Economic Report of the President, February 1974, pp. 300, 305.

23 Sanderson, , “Great Food Fumble,” p. 504Google Scholar; U.S. Department of Agriculture, Economic Research Service, “The World Food Situation and Prospects to 1985,” Foreign Agriculture Economic Report No. 98, 12 1974, pp. 3–4Google Scholar.

24 USDA, Agricultural Statistics 1975, p. 133.Google Scholar

25 Testimony of Stitt, Nelson A., Director, United States-Japan Trade Council, in Senate Committee on Agriculture and Forestry, “Export Control Policy,” Hearings, 07 11, 1973, p. 224Google Scholar.

26 Agricultural Statistics 1975, p. 129; USDA Crop Reporting Board, Agricultural Prices: 1974, p. 149Google Scholar.

27 Congressional Quarterly, June 16, 1973, p. 1484.

28 For the Presidential speech of June 13, see Weekly Compilation of Presidential Documents, June 18, 1973, pp. 765–69.

29 US Congress, Senate, Committee on Agriculture and Forestry, Subcommittee on Foreign Agricultural Policy, “Export Control Policy,” Hearing, 07 11, 1973, p. 49Google Scholar.

30 GAO, “Commodity Shortages,” p. 29.Google Scholar

31 Weekly Compilation of Presidential Documents, June 18, 1973, pp. 765–77.

32 Stein and Seevers discussed these alternatives publicly on June 25, but without the strong prescriptive tone of the internal memo. (New York Times, June 26, 1973, p. 20.)

33 GAO, “Commodity Shortages,” p. 187;Google ScholarLazarus in Senate Agriculture Committee, “Export Control Policy,” p. 56Google Scholar.

34 This section draws particularly on interviews; two National Journal articles by Daniel J. Balz; and Gelb, Leslie H. and Lake, Anthony, “Washington Dateline: Less Food, More Politics,” Foreign Policy (Winter 1974–1975): 176–89Google Scholar.

35 USDA, Foreign Agricultural Trade of the United States (FATUS), 12 1975, p. 16Google Scholar; USDA, Agricultural Statistics 1975, p. 4Google Scholar.

36 PL 480 food moves under two titles. Under Title I, food is sold to recipient governments on subsidized credit; the food is then usually sold to people within the recipient country, at prevailing market prices or through low-price government stores. Under Title II, US food is donated — bilaterally, through the UN/FAO World Food Program, through voluntary private relief agencies like CARE — and distributed directly to recipients in school feeding, relief, food-for-work programs, etc.

In recent years, Title I sales have totalled about 70 percent of all PL 480, and it was these sales around which the allocation dispute was centered. In this article, however, “food aid” figures generally include both Title I and II, as well as a modest amount of subsidized sales under other foreign assistance legislation.

37 FATUS, December 1975, pp. 40–43; Balz, Daniel J., “Agriculture Report: Politics of Food Aid Presents US with Policy Dilemma,” National Journal (11 23, 1974): 1764Google Scholar.

38 Department of State Bulletin, May 6, 1974, p. 480.

39 Weekly Compilation of Presidential Documents, September 20, 1974, p. 1168.

40 New York Times, February 4, 1975; FATUS, December 1975, pp. 12–13, 17, 31.

41 “World Food: Prices and the Poor,” p. 534.

42 Totals calculated for wheat and products, feedgrains and products, and rice from USDA/ERS, “US Agricultural Exports under Public Law 480,” ERS-Foreign 395, October 1974, pp. 7–8 and 16–18; and FATUS, December 1975, p. 17.

43 Address to the UN General Assembly, September24, 1973, in State Department Bulletin, October 15, 1973, p. 472.

44 US Congress, Senate, Foreign Relations Committee, “Nomination of Henry A. Kissinger,” Part 1, 09 1973, p. 148Google Scholar.

45 The following figures for shipments of Title I PL 480 commodities are illustrative. (Figures are for total shipments, thousands of metric tons.)

(USDA/FAS, “Title I, Public Law 480: Total Amounts Shipped Through June 30, 1975, By Country and Commodity,” p. 169.)

46 One official involved in drafting remembers a careful effort to word this section so that it could mean an increase over either the calendar or the fiscal year, which ever proved easier to accomplish.

47 Economic Report of the President, February 1975, p. 163. World production in 1974/75 was still slightly above that of 1971/72, because of a large increase in production in 1973/74.

48 Economic Report of the President, February 1975, p. 160.

49 New York Times, September 22, 1974.

50 This account, based on interviews, is essentially consistent with the account in Balz, Daniel J., ”Agriculture Report: Politics of Food Aid Presents U.S. With Policy Dilemma,” National Journal, (11 23, 1974): 1762Google Scholar.

51 State Department Bulletin, December 16, 1974, p. 826.

52 Under the middle option, $612 million in Title I aid was to go to Cambodia, Vietnam, South Korea, Indonesia, Chile, Pakistan, and the Middle East; $194 million for India, Bangladesh, and Sri Lanka.

53 Morgan, Dan in Washington Post, 12 9, 1974Google Scholar; Robbins, William in New York Times, 12 9, 1974Google Scholar.

54 Congressional Record, December 4, 1974, p. S20602 (unbound).

55 New York Times, January 21, 1975, New York Times (Anthony Lewis), January 23, 1975; and New York Times, February 4, 1975.

56 Unfortunately, most PL 480 grain sent to Bangladesh arrived after that country's food crisis peaked in November 1974. Only 68,000 tons of US foodgrain aid reached Bengali ports in August-November, though US shipments of Title I wheat to that country totalled 558,000 tons for FY 1975 as a whole. A major international development organization estimated 20–30,000 deaths by starvation during that period when “arrivals came too late,” and a rough extrapolation by Lester R. Brown yielded an estimated increase in deaths of ten times that amount during that fall. (New York Times, October 27, 1976.) Of course, internal distribution problems, and the “political” allocation of PL480 grain by the Bangladesh government, also contributed to the disaster.

For statistical information, see “Schedule of Vessels Arrived/Expected at Bangladesh Ports Carrying Foodgrain, Other Foods, and Fertilizers, August 1974-January 1975,” Annex G to report of December 13, 1974 (BD–4094) from the US Agricultural Attaché, and USDA/FAS, “Title I, PL 480: Total Amounts Shipped,” p. 7. This U.S. policy-making episode is treated more extensively in the broader Brookings study from which this article is drawn.

57 This section draws particularly on interviews; Trezise, Philip H., Rebuilding Grain Reserves: Toward an International System (Washington, D.C.: Brookings Institution, 1976)Google Scholar; and Balz, Daniel J., “State Agriculture Feud Delays Grain Reserve System,” National Journal (06 28, 1975): 951–59Google Scholar.

58 Butz, Earl L., quoted in Balz, Daniel J., “Economic Report: World Food Conference Prompts U.S. Farm Policy Review,” National Journal (06 1, 1974): 804Google Scholar.

59 For summaries of the U.S. proposal, see Trezise, , Rebuilding International Grain Reserves, pp. 52–55Google Scholar; and National Journal (November 11, 1975): 1427.

60 Watergate contributed to instability in economic policy coordinating institutions. In May 1974, economic “czar” Shultz departed, replaced by William Simon at Treasury and Kenneth Rush in the White House. Then, when Nixon resigned, Rush departed, and Ford instituted the Economic Policy Board to coordinate all domestic and international economic policy decisions.

61 “Strengthening the World Economic Structure,” Address by Secretary of State Henry A. Kissinger before the Kansas City International Relations Council, May 13, 1975, reprinted in Department of State Bulletin, June 2, 1975, p. 718.

62 For the text from which these quotations are taken, see U.S. Information Service, Wireless Bulletin from Washington, 09 30, 1975Google Scholar.

63 This section draws particularly on interviews; Congressional hearings as cited; Balz, Daniel J., ‘Soviet Grain Purchases Prompt Informal Export Controls,” National Journal (09 6, 1975): 1259–64Google Scholar; and Raymond F. Hopkins, “Global Food Management: U.S. Policymaking in an Interdependent World,” in Nye, J. S. Jr, Keohane, Robert O., et al., “Organizing for Global Environmental and Resource Interdependence,” Appendix B to the Report of the Commission on the Organization of the Government for the Conduct of Foreign Policy (Washington: GPO, 1976), pp. 141–44Google Scholar.

64 The 2.3 million tons of corn and 900,000 tons of wheat were less than 2 percent of US production, respectively, for these crops. The 1972 wheat sales were about 25 percent of US production.

65 Edward W. Cook, Chairman of the Board of Cook Industries, asked that the government put its ”request” in writing, and Simon sent him a mailgram stating: “These contracts are not in the national interest at this time and Cook Industries should not proceed to implement them.” (Emphasis in original.) A similar mailgram was sent to Continental. For the full text, see US Senate Government Operations Committee, “Sales of Grain to the Soviet Union,” Hearing, 10 8, 1974, pp. 20, 37Google Scholar.

66 New York Times, September 10, 1975. See also a chronology prepared for the Senate Agriculture Committee by the Congressional Research Service, in “Who's Making Foreign Agricultural Policy,” Hearings, 1976, pp. 126–29Google Scholar, and Kaiser, Robert G., “Old Grain Policy Unworkable, US Officials Found,” Washington Post, 09 11, 1975Google Scholar, reprinted ibid., pp. 111–113.

67 Weekly Compilation of Presidential Documents, May 5, 1975, p. 475.

68 White House press conference of October 20, 1975 on the Soviet grain agreement, reprinted in House Committee on International Relations, “United States Grain and Oil Agreements with the Soviet Union,” Hearing, October 28, 1975, p. 61.

69 Senate Agriculture Committee, “Who's Making Foreign Agricultural Policy,” p. 15Google Scholar.

70 USDA would estimate on July 31 that the sales to Russia contracted during that month would increase the average price of wheat in 1975–76 by 75 cents a bushel above what it would be in the absence of such sales. The comparable figure for corn was 30 cents. (US Senate Government Operations Committee, ”Grain Sales to the Soviet Union,” Hearings, 07 31, 1975, p. 31Google Scholar.)

71 Balz, , “Soviet Grain Purchases,” p. 1262Google Scholar.

72 Testimony, in “Grain Sales to the Soviet Union,” p. 26Google Scholar.

73 Balz, Quoted in, “Soviet Grain Purchases,” p. 1264Google Scholar.

74 Ibid.

75 Quoted ibid.

76 Remarks on March 5, 1976, in Weekly Compilation of Presidential Documents, 1976, pp. 338–45.

77 Seevers, Gary L., “Food Policy: Implications for the Food Industry,” American Journal of Agricultural Economics (05 1976): 274Google Scholar.

78 For an argument stressing the value of politicization and controversy in drawing attention to neglected concerns, see Keohane, Robert O. and Nye, J. S., “Organizing for Global Environmental and Resource Interdependence,” Appendix B (Volume 1) to the Report of the Commission on the Organization of the Government for the Conduct of Foreign Policy, pp. 52–54Google Scholar.

79 Barton, Weldon V., “Food, Agriculture, and Administrative Adaptation to Political Change,” Public Administration Review (03/04 1976): 150Google Scholar.

80 Calls from within the Agriculture Department for responsiveness to a wider range of concerns and constituencies include: Paarlberg, Don, “The Farm Policy Agenda,” Address to the National Public Policy Conference, Clymer, New York, 09 1975Google Scholar; “USDA and Food Policy Decisionmaking: A Report of the Agriculture Department's 1976 Young Executives Committee,” January 1977; and USDA/ERS, “Agricultural-Food Policy Review,” 01 1977Google Scholar.