States initiated substantial food aid programmes under its Public Law 480 in
1948. Thereafter, and for almost twenty years, a system emerged whereby security
rested almost entirely on the stockholding policies of the major food exporting
countries, policies that were the by-product of domestic agricultural policies and
associated price and income support programmes. As we saw above, a number
of the features of the proposed ICCH were already incorporated in United States
food export and food aid policies and programmes before the Second World War.
These included the operations of an Export-Import Bank set up in 1934 to promote
US exports by providing loans at concessional rates to foreign governments and
businesses for the purchase of US commodities. A Grains Stabilization Board was
established to finance exports. And a Commodity Credit Corporation (CCC) was
set up to manage releases from the increasing government food stocks for food
aid and subsidized exports, thereby stabilizing, supporting and protecting farm
income and prices in the US. The Second World War gave a further boost to
food surpluses and stock held by the federal government in the United States.
Under the Lend-Lease Act of 1941, some $6 billion of agricultural products were
provided to European allies. The Surplus Act of 1944 and the Agricultural Act of
1949 authorized the CCC to sell stockpiled surplus commodities on the interna-
tional market at below market price. Surpluses were also made available for disaster
relief under special legislation. This legislation included the sale of US agricultural
commodities for local currencies.
bilateral aid programme in world history, popularly known as the Marshall Plan.
It proved to be a boon for US domestic agriculture by providing a guaranteed
export market for US farm output at the very time when high levels of peacetime
production were resumed. But the combination of the farm price support systems
instituted in the 1930s and explosion in the scale and pace of technological
advance in US agriculture led to ever-increasing surpluses as supply outstripped
domestic and international demand. This created enormous food stocks in govern-
ment inventories, draining financial reserves, and leading to heated debates in the
US Congress on how to resolve the problem. At the same time, under section 550
of the Mutual Security Act of 1951, the idea was introduced of stimulating the
disposal of US agricultural surpluses by offering to sell them to interested coun-
tries for local currency. The purpose was to facilitate the export of US products,
and create new and enlarge existing markets, while helping to ease the balance of
payments difficulties of developing countries.
the scheme, which would eventually have to be paid by food-deficit countries
in the form of exports, would be a burden that would tend to delay rather
than hasten their recovery. And payment for food bought at reduced prices
would further reduce the small hard-currency reserves of the deficit countries.