Foreign Relations of the United States, 1981–1988, Volume XLI, Global Issues II

238. Information Memorandum From the Assistant Secretary of State for Economic and Business Affairs (McCormack) and the Assistant Secretary of State for African Affairs (Crocker) to Secretary of State Shultz¹

Washington, January 23, 1985

SUBJECT

• Implementation of the President’s “Food for Progress” Initiative

President Reagan announced, January 3, a new U.S. food aid policy (“Food for Progress”) intended to support selected African countries committed to agricultural policy reform.² The “Food for Progress” initiative was a key recommendation of Part II of Ambassador Robert B. Keating’s Third World Hunger Study dealing with chronic food deficit problems.³ Preliminary reaction from the Hill and farm sector representatives has been positive.

“Food for Progress” envisages the donation of up to 500,000 tons of government held CCC commodities annually over a period of four years to provide selected Third World governments with food assurance during the transition to market oriented agricultural policies.

Keating is seeking an innovative approach to encouraging policy reform in food deficit countries which will:

—provide additional US resources for reducing the political risks of near term food shortages resulting from agricultural policy reform;

—permit multi-year programming, free of commodity interest group pressures and competing objectives inherent in the PL–480 allocation process; and

—demonstrate to the Congress and the public the Administration’s willingness to match US owned food surpluses with Third World food needs.

Implementing Food for Progress using government-owned stocks would also avoid the “use or lose” budgetary constraint which has reduced the agricultural development impact of our other food aid programs. Most important, Ambassador Keating’s concept would co-exist with present PL–480 efforts and not dilute limited Title I resources.

Details of the President’s new food aid policy are discussed in NSDD–156 “U.S. Third World Food Aid: A “Food for Progress Program” (Tab 1).⁴ The NSDD leaves open, however, the crucial question of how to fund the President’s initiative. As mentioned in the NSDD, the NSC staff recently established an inter-agency committee to develop options for the President on this subject by February 6. The inter-agency committee has begun work on a series of options papers, one of which will address the funding question, for eventual submission to the Budget Review Board.⁵

OMB, supported by USDA, opposes Keating’s funding approach, mainly because it is more comfortable with current aid program methodologies and levels. OMB proposes funding “Food for Progress” from PL–480 resources. USDA has, thus far, reserved its opinion on funding methodologies.

We have argued that should “Food for Progress” be reduced to a PL–480 “re-allocation” exercise, it would no longer be viewed as a unique initiative with significant promise of achieving LDC agricultural policy reform. Because of the administrative barnacles built into PL–480 by law and agency practices, “Food for Progress” would lose many of its distinctive features, including operational efficiency and flexibility.

We conclude that “Food for Progress”, if permitted to access CCC held stocks, could begin to address one of the underlying causes of periodic food emergencies in Africa and advance our interests in that area. Given OMB’s current position that this new program must be funded from existing constrained foreign assistance resources, we may seek your intervention when this difference of opinion is raised to the Budget Review Board or the NSC for final adjudication. We believe “Food for Progress” will not prove to be an effective instrument without additive resources.

1. Source: Department of State, Deputy Assistant Secretary of State Subject Files, Edward Derwinski, 1984–1985, Lot 87D326, Food for Progress. Limited Official Use. Drafted by Billo on January 22 and cleared in EB/TDC/OFP, EB/TDC, EB, NEA/ECON, ARA/ECP, AF, C, T, and AID/PPC. Sent through Wallis and Derwinski.
2. See Document 236.
3. See Document 219 and the attachment thereto for Part I.
4. Attached, printed in Document 236.
5. See Document 244.