surpluses of agricultural products arose beyond market demand. Governments
intervened to protect farmers' incomes and to provide food aid to needy countries.
The first major food aid operations evolved from the special post-war relief credits
voted by the US Congress for the period between the signing of the Armistice
in 1918 that marked the end of the First World War and the signing of the
Treaty of Versailles in 1919, and then for the so-called reconstruction period
in Europe from 1919 to 1926, when a total of 6.23 million tons of food was
shipped. The importance of this US initiative lay not only in the quantity of
relief provided. It established the precedent for operations of this type involving
prominent personalities, the most significant being President Herbert Hoover, and
brought a general realization of the value of food aid as a politically stabilizing
factor (Singer, Wood and Jennings, 1987).
ture in 1926, and with the United States still producing considerable surpluses of
cereals, moves were made to formalize the type of food aid arrangement started
in 1896 by the US Department of Agriculture. During this period, incomes from
agriculture fell drastically, in absolute terms as well as in relation to that of other
sectors of the national economies. Governments everywhere intervened to bolster
farm income. In the exporting countries, intervention usually took the form of
government or quasi-government marketing boards with monopoly powers. In
the importing countries, it mainly took the form of new devices for the control and
redistribution of imports, such as quotas, regulations and preferential and bilat-
eral trade arrangements. Government interventions in the importing countries
had the effect of stimulating domestic production and of reducing the demand
for imports of some agricultural products. But interventions in the exporting
countries did not, in general, lead to a reduction in exportable supplies. Thus, in
the late 1920s, excess stocks started to accumulate and world prices fell to very
low levels.