54. Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Robertson) to the Under Secretary of State (Hoover)1
SUBJECT
- Countries Where Agricultural Surplus Disposal Creates Foreign Policy Problems
Burma:
The most acute conflict between our foreign policy and foreign agricultural disposal objectives is in Burma. The Burmese economy, which is almost entirely dependent on rice for its existence, has been faced with large unsalable surpluses of rice. The entire Communist bloc, acting in concert during the last nine months, chose to exploit this situation by taking the greatest part of Burmese surplus rice under so-called barter transactions. The net result is that almost one third of the Burmese foreign exports are now going to the Communist bloc and Burma is accordingly heavily susceptible to Communist [Page 166] pressures. The substantial enhancement of Communist influence in Burma finally culminated in the Bulganin–Krushchev talks. The Burmese have repeatedly and officially requested the United States to desist from disposal of surplus wheat and rice in their normal market area Asia and, right or wrong, believe that it has been U.S. agricultural surplus disposal policy which has forced them into the arms of the Communists. U Nu has stated that he agreed to accept the most recent Communist offers only after his appeal to the United States to buy some of Burma’s surplus agricultural rice had been rejected.
Thailand:
Thailand, like Burma, has had a large surplus of rice. The Thais have succeeded in moving the greater part of the surplus to their normal customers only through marked reduction in price. The Thais have made representations to us to desist from disposing of U.S. surplus agricultural products in the Far East and criticized the U.S. in international forums on the grounds that the effect of U.S. policy is to deprive them of their normal customers and to depress the price.
Indonesia:
Indonesia has requested a very large agricultural surplus program involving among other things wheat, dairy products and rice. To accommodate the Indonesian’s desire would antagonize the Australians on wheat, the Dutch on dairy products and the Burmese and Thais on rice. The Indonesians and the Department of Agriculture are talking about a total of 250,000 tons of rice under PL 480 to Indonesia.
Philippines:
Rice is the sorest point in the Philippines, since the Burmese and the Thais look on the Philippines as an Asian market. A rice purchasing mission was in Burma from the Philippines and returned home as soon as it became known they could obtain rice under PL 480. Secondarily, inclusion of a substantial amount of tobacco in a PL 480 agreement has engendered some friction, since it is regarded as conflicting with the interests of the small tobacco growers of Luzon.
Korea:
The Department of Agriculture has been insisting that if we supply Korea with foodstuffs under PL 480 we must require a pledge from them not to export rice. From the standpoint of our objectives in Korea, that country must export rice if it ever is to approach a viable economy.
[Page 167]Japan:
Japan wants to buy rice from Burma and Thailand in an effort to extend her relations in Southeast Asia and create new markets. To the extent we insist on high usual marketings in addition to PL 480 transactions, we are indirectly blocking the development of new Japanese markets.
- Source: Department of State, Central Files, 890b.20/12–855. Confidential.↩