Foreign Relations of the United States, 1981–1988, Volume XXXVIII, International Economic Development; International Debt; Foreign Assistance

70. Minutes of a Meeting¹

Cancun, October 22, 1981, 5:10–7:32 p.m.

Trudeau

We will start with food and agriculture tomorrow—1 hour on each of other subjects and p.m. tomorrow for general topics.

I. Points on which we all agreed:

1) Problem of hunger is global affecting 1/4 of human race

2) Is as much a problem of producers as consumers thus a problem

3) Will need rich and poor, producers and consumers to solve this problem

II. Has to be solved.

III. Is an international problem.

IV. Primary objective of most countries is to self provide.

V. Food aid is a temporary problem and is a platitude.

Remaining problems:

1) Self reliance—who can attain?

2) Can all be self reliant if helped?

No answers here—but we must begin to tackle.

Role of internal policies

a) prices are set administratively in many LDCs—do they help or hinder. We all subsidize, does this hurt producers so he doesn’t produce any more and he moves to city

b) available funds—do rural areas get sufficient funds? It’s easy to build roads and cities politically. Have LDCs put enough into rural areas

c) research, production, storage—transportation

d) population—controversial—self sufficiency will never be achieved in some countries till population is controlled

External problems of developed countries

1) Role of free markets, in international food trade—protectionism in food production as in common market

2) Will LDCs put up enough aid funds to solve these problems—as in Sahara. Teach them to fish—but give them nets (aid) first

3) Will IMF help in storage of lumber stocks for future crop failures. Who will pay for this.

These questions are as hard provocatively. Hopes all contribute to answering others.

5:25 Nigeria

Read a statement—(prepared for this) More than 400 million people without enough to eat. He is Africa spokesman.

36 African countries in deep food crisis—since 1967—not enough food production in Africa. Food ration less now than 10 years ago. Depending on food imports 64 million average cost per country per annum $155 million by 1990 $225 in 2000 or $8.6 billion.

Livestock products also need to be imported—235 million per year 10 years ago and rising 862 million in 1980 now 100 million and per country. Same way for S.A. and Asia.

A solution to food and grain problems would lessen bitterness, and help solve other social and economic problems.

Most of problem is domestic—self reliance is goal. African nations agree on this—goal is 2000 for most countries.

Problems—drought, soil erosion, refugees,

Foreign aid and assistance (technical and machinery) is needed to help. Must come from North. And was 3 billion last year—needs to be $10 billion.

IMF must broaden its funds to help where unexpected costs and balances due to crop failure and large imports.

Food aid convention must be continued.² World food programs also must be continued.

International Food Reserve is also needed IFAD must be central in this and funds replenished.

International community must ? hunger—may be a new conference is needed.

Africa must be helpful.

Exports are also dropping in food crops. Prices falling, etc. Some form of stabilization is needed in prices. High interest rates also impede production.

Cancun can be a start in all these areas. African problem is a serious one.³ statement is important Trudeau interrupted—14 minutes! Must not repeat this a.m.

Suzuki—Japan 5:43

Hunger is important problem (read statement—obviously prepared for this intervention in advance.)

Population is growing. Agriculture important to all countries of the world.

2 billion people live in rural areas. Excessive urbanization can be cured by higher farm incomes.

(Read very quickly—hard to get notes down)

Inadequate agriculture forsees some countries to spend too much on imports.

Self reliance is needed—promoted by International assistance.

Rural development is needed including social structure.

LDCs must place highest priority on food and agriculture. Social systems must be reformed

Quoted from Rome—1979 conference.⁴

Japan places great stress on agriculture and rural areas.

Appropriate tax and marketing policies needed. More productivity as in Japan, ⁵ per household in Japan yet policies make Japan very self reliant in agriculture.

Official Development Assist (ODA) by Japan 837 Million 3 fold up from 1977 and 25% of all ODA in 1980 and will be continued.

Have a joint cooperation plan with Indonesia. Technical assistance. Forestry—rice, etc.

Also doing this with Bangladesh and other ASEAN countries including Philippines.

Japan also working and cooperating with United Nations and other agencies in food. We’ll fund its obligation to IFDA.

India 6:08 p.m.

This is unexpected.

India tried to be self reliant but not much progress till 1966 and crop failures and independence.

Making small farmer independent and owner of land was started—not finished.

Assistance from World Bank, and Ford Foundation was very helpful. Rice from Philippines and Indonesia improved seeds—rust resistant grains, etc.

At independence was 50 million, now 130 million, by 1984 200 million.

Need more [garble], machinery 75% of population dependent on agriculture.

Lobby for farmers is very powerful.

Have a price support system on downside.

Are trying crop insurance but this is too big an undertaking.

Population explosion is a real problem in India.

Are 39 million people fewer than if they hadn’t had controls.

If any country sets its mind to it it can succeed.

Have market prices, but sets minimum.

President Reagan 6:00 p.m.

Interested in what he has heard from Nigeria, in agriculture skills from 19 food production grew from 2.4—but no 40.

Africa did not grow at the rate S.A. did.

Most people are straddling law.

If we could bring agriculture up to U.S. standards all world could be fed from 1/10 of land now used.

So better technology is needed. Subsidies are deceptive. If not in market then in taxes.

Task forces to look at land to see if what is being produced.

Self reliance may be deceptive. What does land lend itself to?

Technology, extension courses are needed. Used school in Greece as example.

Collective farming in Soviet led to bad morale. Farmers given a small piece of the land 3% is private but produces, 30% of eggs, 33% of vegetables and 61% of potatoes.

As he said this a.m. food from U.S. to tide over, but need task forces to teach how to farm proper products in long run.

Tanzania 6:07

We can now begin to address each other. Two days is not enough to discuss, to say, what exactly we mean!!!

He wants to know what help he can expect.

He subsidizes farmers, others say “don’t subsidize.” Who doesn’t subsidize?

Does Canada subsidize? Does U.S. subsidize?

U.S. has a target price. If free price falls below farmer is subsidized. What about Gt. Brit, or France?

He doesn’t fix price of coffee—London, or Washington—says. If too low to subsidize.

Reagan

Since great depression we have subsidized. We want to get rid of this. A few years ago we almost did away with it—farm income up 16%. Last Administration did away with this, income down.

3 1/2 million farmers feed 56 Americans and 1/4 of crop left over to export to other countries.

Such a level is achievable elsewhere.

Tanzania

90% of farming done by peasants who own land in a fashion.

Needs minimum education for farmer—this is rural development better health, better roads, transportation.

Reagan

No argument—This is what new task forces could find out what the problem is.

Tanzania

Gandhi

Agrees on educational needs, but shrewd peasants, uneducated, can produce a green revolution and more production.

Genscher, Germany6:20

Agrees on needs for production. Needs are more technology, will each country (LDC) agree to prioritize.

Would DC agree to put technical assistance up front to help.

Marcos 6:22

He has produced a document on food for distribution here.

1) Feeding in countries where there is no possibility of having social reform is important.
Education takes time. Philippines had to import while it was teaching farmers, and changing social problems.
8 countries are severe countries, 23 are in bad shape. Why not net right aid to these 31? Emergency basis.
IMF should give concessionary loans to them.

2) IFA—Food fund is in trouble. U.S. and OPEC need to get up their funds. It works under United Nations.

3) Some agencies in agricultural FAO, World Food, Council Group, World Food Council, etc. are counter productive. Should be consolidated and roles spelled out to prevent waste.

They should work out President Reagan’s idea of task forces, and not waste time and money.

IFA & IMF are sources of funds.

Thatcher—Gt. Britain

She also listens to BBC to find out what farmers will complain about.

All countries protest and subsidize farmers as well as manufacturers.

Division between farm and town must be balanced and kept.

Most western countries grow some crops for security in case you have to feed yourself. This is answer to President Reagan’s one crop or best crop basis.

What about food surpluses. Temptation is to produce more to export.

What is better, aid, or developing self-reliance.

Also what type of aid is best, if it goes to agriculture it can’t go to energy.

International institutions are changing. For example:

IMF has a compensatory facility and it has responded well. We don’t recognize this.

Nyerere—Tanzania

Is a major problem in Africa, don’t remain in agriculture.

President Reagan

When we are helping with food, much of it is wasted in improper storage and help is needed here.

Algeria 6:40

This is a very important problem. Needs a long range solution.

We should agree to fight hunger. How to do it should be left to the existing organizations.

Sweden 6:42

Prices to farmers have led to a lively debate. Has personal experience as a small farmer.

1) Farmers who have a good climate (economic) can increase productivity. How can the market work. Wheat in 1974 reduced 3% prices up 350%!

2) It should be possible to transfer food from one country to another. International coordination of food stocks needed and a new wheat agreement.

3) Meager resources in LDC’s result in cutting down forests and eroding arable land. Deserts expanding.

Productivity in agriculture is due to chemicals and cheap energy. Dangers in chemicals to land—ecological dangers. Need more research in biology for another revolution.

Bangladesh 6:50

Topmost priority to agriculture. Setting up irrigation.

Food for 90 million people or 98% of population. Deficit down from 2 million tons to 1 million. Will be even in 3 years and hopes for surplus in 5!

Natural gas is producing fertilizers. Thanks the U.S. help. Have plenty of gas. This helps self reliance.

Grant or easy loans is needed for imports.

Storage of reserves is needed. Must increase food production 4% annum.

Brazil 7:52

One is immediate problem is aid. Second is how to develop production and productivity.

Second is most important problem technology and investment are the key to solving it.

Brazil is trying to eliminate subsidies. No recipe for every country.

Subsidy is strategically needed in many cases.

China 7:58

Many countries have increased productivity. China needs irrigation and technology. Requires capital so it has difficulties.

It needs international cooperation and aid.

Food security reserves is worth extending. It is equitable principle.

Collective vs. individual production is not one he wants to discuss. But collective has raised output in China, but has shortcomings.

Have succeeded on 7% of worlds arable land support 25% of population in food sufficiency.

When under individual production had disasters, and starvation was going on regularly.

Mitterrand, France 7:03

Agrees it is a hard problem. France is industrialized, but has strategic reasons for agriculture. A question of life and death in food as in Tanzania.

Also expressed a lot of what has been previously said about helping LDCs without turning world upside down.

Not much more money is needed.

Aid comes after agricultural development.

World food reserve—is it sufficient? He has heard it is not. Needs more than one crop season.

Does present fund cover medium term? He thinks it should.

Farmers need guaranteed income. France does this so does EEC. But it is hard for LDCs to do this especially in one crop countries.

Producers are not responsible but they suffer.

Speculators control, not free market. Need guaranteed prices. Must be monetary stability also. For 5 years have been trying to get fixed prices on wheat. Why?

Cancun should be a place to take a decision on this. Try to guarantee incomes for farmers internationally.

Lopez-Portillo—Mexico 7:12

All of us give agriculture a fundamental status as a problem. We must prioritize hunger and establish solutions.

Two solutions:

a) coordinate internal strategy with international aid and agencies available

Production, productivity guaranteed incomes, technology investment must be coordinated. International agencies not well coordinated. FAO with IBRD for example.

b) Long term solutions must be found. Teaching people to fish. Emergency supplies needed. Education needed for production.

Waldheim, United Nations 7:18

Agrees with President Reagan on task forces. It is what FAO, World Bank are trying to do. Means are limited. Needs technical assistance particularly financial help in this area. Helping 60 countries now.

IFA is case in point. Countries need food aid until they can become self-sufficient.

Mitterrand has said this. U.N. paper has a possible solution for this. It is being circulated to members of Cancun.

He is concerned, as Marcos is, about overlapping of institutions set up by membership not Secretariat.

Better coordination is justified. Define roles of agencies especially FAO, and World Fund Council and bring it up in U.N.

President Reagan, U.S. 7:25

He can set up task forces of experienced farmers on short notice. Problem is not as large as it seems

Venezuela 7:26

If there is more grain needed what prevents it from being done? What does it cost? Can it be done? Let’s find out.

Trudeau 7:28

We only covered one subject. Appreciates exchange, and dialogue makes meeting worthwhile. Let’s continue over dinner.

Begins at 10:00 a.m. tomorrow.

Subjects:

Trade

Energy

Financial and related

After Lunch:

Global Negotiations

Free Wheeling

Ivory Coast

Does trade cover raw materials? Answer. yes. This was set at preparatory meeting, but can be discussed for only 1 hour. Be brief in setting out problems.

G.N. is important to discuss.

Adjourn 7:32

1. Source: National Archives, RG 56, Records of the Office of the Secretary of the Treasury, Subject Files, 1982–1985, UD–11W, 56–86–1, Box 13, [No folder title]. No classification marking. No drafting information appears on the minutes.
2. The International Grains Arrangement of 1967 consisted of two legal instruments: the Wheat Trade Convention (WTC) and the Food Aid Convention (FAC). The FAC committed its signatories to providing a fixed amount of commodities to developing nations. In 1971, the signatories negotiated a new umbrella agreement for the WTC and FAC and renewed it in 1974, 1975, and 1976. In 1980, the signatories approved a new FAC.
3. Omission is in the original.
4. A reference to the World Conference on Agrarian Reform and Rural Development, held July 12–20, 1979, in Rome.
5. Omission is in the original.