Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

121. Memorandum From the Under Secretary of State for Economic Affairs (Dillon) to the Director of the International Cooperation Administration (Smith)¹

Washington, January 5, 1959.

SUBJECT

• Government of Afghanistan’s Request for United States Wheat to Offset Partial Crop Failure

As you are aware, the Government of Afghanistan, on November 6, 1958 requested that this Government furnish 50,000 tons of wheat under Title II of PL–480. This request was presented by Finance Minister Malikyar of the Government of Afghanistan to Ambassador Mills. On December 23 and December 29, 1958 Ambassador Maiwandwal of Afghanistan called at the Department to stress the urgency of the request and the need for speedy relief supplies if the possibility of serious social unrest was to be avoided early this spring.

At the request of the Departments of State and Agriculture and of the International Cooperation Administration (Deptel 272 of November 19, 1958),² our Embassy and Mission have carefully evaluated the Afghan wheat request and specifically in terms of the possible utilization of Title II of Public Law 480 as a means of providing the wheat needed. The Embassy’s analysis of the rather detailed statistics furnished by the Government of Afghanistan regarding its current and prospective wheat supply situation, which takes account of the fact that the statistics provided are subject to a wide margin of error, concludes that Afghanistan faces a bona fide relief need in the coming months because of the partial failure of the 1958 wheat crop.

Specifically, it is estimated that the shortfall in the 1958 crop will amount to 31 per cent, with the provinces of Herat, Kandahar, Mazari-Sharif, Maimana and Girishk especially hard hit. I believe that you are familiar with the threatened starvation in the northeastern province of Badakhshan due to the Government’s decision to ban production of opium, the traditional cash crop and with which the farmers purchased their food requirements. The Government believes that there also will be an emergency situation in Kabul city area this spring unless relief is obtained.

Thus it appears that there is a need for wheat for relief purposes which can properly be met under the provisions of Title II. It is understood that the International Cooperation Administration is reluctant to approve a Title II program for Afghanistan in view of the intention that the wheat would be sold by the Afghan Government and the proceeds used for general economic development. Given that the transfer of the wheat itself will meet a bona fide relief need, the statute permits the transfer to take place on such terms and conditions as are deemed appropriate. As you know there were Title II transfers to Afghanistan in previous years on similar terms. Due to the conditions peculiar to Afghanistan, and in the light of the current situation in that country, we believe it is politically necessary to proceed with the program proposed despite the reservations expressed by members of your staff.

If for one reason or another the United States fails to supply the requested wheat, Afghanistan will reluctantly be forced to turn to the USSR for assistance. Under such circumstances the USSR undoubtedly would quickly fill the gap created by the United States’ unwillingness to act. As was the case in 1956 and 1957 when Afghanistan faced a similar wheat shortage, the country has requested the United States in the first instance to supply the wheat, and we believe that there is strong political necessity that we do so. It is our belief that at the present time Afghanistan is under heavy pressure to align itself more closely with the USSR, and a gesture on our part—such as the speedy furnishing of the relatively small amount of wheat requested—might be of great significance to Afghanistan in enabling it to maintain its posture of neutrality at the present rather serious time in its affairs.

The Department has given full consideration to the possibility of negotiating an agreement with Afghanistan to permit it to obtain the needed wheat through purchase under Title I, but does not consider this to be a practicable alternative to the use of Title II which it considers justified. As in the past, there seem to be numerous and perhaps unsurmountable difficulties in the utilization of Title I to offset the Afghan shortfall, including those regarding an acceptable exchange rate, the opposition of the Afghan Government to underwriting a dollar denominated loan, and in lieu of the loan the considerable length of time which would be required to obtain the Presidential waiver to obtain a grant under Section 104 of Public Law 480.

Because of the great political desirability of moving speedily in this matter, I hope that you will give it your early and sympathetic consideration.³

Douglas Dillon⁴

1. Source: Department of State, Central Files, 411.8941/1–559. Confidential. Drafted by Dudley C. Bostwick and John O. Bell.
2. Not printed. (Ibid., 411.8941/11–658)
3. On January 12, the Department of State announced that, at the request of the Government of Afghanistan, the United States would send up to 50,000 tons of wheat to Afghanistan to avert a food grain shortage which was developing there due to recent crop losses. The wheat was to be provided under Title II of P.L. 480. For text of the Department’s press release, see Department of State Bulletin, January 26, 1959, pp. 164–165.
4. Printed from a copy that bears this typed signature.