A World Food Reserve

MAC/WFY

Page-49

0230_553559_09_cha05

and trade. The explosion in the scale and pace of technological advance in
US agriculture, and government support programmes enacted to help farming
communities through the years of economic depression of the 1930s, led to ever-
increasing surpluses as supply outstripped domestic and international commercial
demand (Benedict and Bauer, 1960, pp. 601). Hoping that the problem would
go away, the US Congress and the White House adopted ad hoc measures, which,
in reality, supported high levels of production long after changes in post-war
demand for US farm products had indicated the need for a major adjustment
in national agricultural policies. It was at this point that a mixture of political,
economic, social and humanitarian objectives was fused in fashioning the US food
aid programme largely in the form that we know it today (Austin and Wallerstein,
1978; Ruttan, 1996).

In the late 1940s, the United States faced new economic and political challenges

as European countries began to emerge from the devastation of war and rebuild
their economies. Despite persistent imbalance between agricultural production
and demand, leading to huge surpluses, US farmers had benefited from a large
and growing overseas market and a considerable food aid programme. Now, new
challenges were emerging. European agricultural production began to rebound
and demand for US farm commodities declined as competition increased and the
need for a large US food aid programme in Europe receded. However, the US farm
price support system instituted in the 1930s remained largely in place, and the
impact of new technologies helped create enormous food stocks in government-
held inventories, draining financial reserves, and leading to heated political debate
about how to resolve the problem.

At the same time, the United States emerged as the world's pre-eminent, free-

market, economic power, facing the Soviet Union in what became known as the
Cold War. This brought new global political leadership and responsibility. The
United States began to assume a more vigorous role in world affairs, including
the all-consuming interest in halting and containing the spread of Communism,
particularly in poor, developing countries. One way to secure the allegiance of
such countries was to provide economic assistance, including, and especially, food
aid. The rationale of prominent political leaders was that countries receiving US
aid were more likely to be US allies. And if they received US food aid, they would
eventually become commercial markets for US agricultural commodities as their
economies developed. Food for war and food for peace became the order of the
day (Wallerstein, 1980). At the same time, a large-scale food aid programme would
relieve the economic pressures of mounting food stocks held by the government at
the taxpayers' expense, and avoid the necessity for awkward domestic agricultural
reform measures and their political consequences.

Out of this mixture of conflicting economic, social, humanitarian, political and

foreign policy motives came the historic Agricultural Trade Development and
Assistance Act of 1954, which became widely know by its number, Public Law (PL)
480 (US, 1964a; Baker, 1979, pp. 107; Epstein, 1987). This marked the beginning
of a systematic attempt to utilize US agricultural surpluses along lines tentatively
laid down in section 550 of the Mutual Security Act of 1951. The act institutional-
ized and provided the legal framework for the US food aid programme basically in

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Useful links	A World Food Reserve MAC/WFY Page-49 0230_553559_09_cha05 A World Food Reserve 49 and trade. The explosion in the scale and pace of technological advance in US agriculture, and government support programmes enacted to help farming communities through the years of economic depression of the 1930s, led to ever- increasing surpluses as supply outstripped domestic and international commercial demand (Benedict and Bauer, 1960, pp. 601). Hoping that the problem would go away, the US Congress and the White House adopted ad hoc measures, which, in reality, supported high levels of production long after changes in post-war demand for US farm products had indicated the need for a major adjustment in national agricultural policies. It was at this point that a mixture of political, economic, social and humanitarian objectives was fused in fashioning the US food aid programme largely in the form that we know it today (Austin and Wallerstein, 1978; Ruttan, 1996). In the late 1940s, the United States faced new economic and political challenges as European countries began to emerge from the devastation of war and rebuild their economies. Despite persistent imbalance between agricultural production and demand, leading to huge surpluses, US farmers had benefited from a large and growing overseas market and a considerable food aid programme. Now, new challenges were emerging. European agricultural production began to rebound and demand for US farm commodities declined as competition increased and the need for a large US food aid programme in Europe receded. However, the US farm price support system instituted in the 1930s remained largely in place, and the impact of new technologies helped create enormous food stocks in government- held inventories, draining financial reserves, and leading to heated political debate about how to resolve the problem. At the same time, the United States emerged as the world's pre-eminent, free- market, economic power, facing the Soviet Union in what became known as the Cold War. This brought new global political leadership and responsibility. The United States began to assume a more vigorous role in world affairs, including the all-consuming interest in halting and containing the spread of Communism, particularly in poor, developing countries. One way to secure the allegiance of such countries was to provide economic assistance, including, and especially, food aid. The rationale of prominent political leaders was that countries receiving US aid were more likely to be US allies. And if they received US food aid, they would eventually become commercial markets for US agricultural commodities as their economies developed. Food for war and food for peace became the order of the day (Wallerstein, 1980). At the same time, a large-scale food aid programme would relieve the economic pressures of mounting food stocks held by the government at the taxpayers' expense, and avoid the necessity for awkward domestic agricultural reform measures and their political consequences. Out of this mixture of conflicting economic, social, humanitarian, political and foreign policy motives came the historic Agricultural Trade Development and Assistance Act of 1954, which became widely know by its number, Public Law (PL) 480 (US, 1964a; Baker, 1979, pp. 107; Epstein, 1987). This marked the beginning of a systematic attempt to utilize US agricultural surpluses along lines tentatively laid down in section 550 of the Mutual Security Act of 1951. The act institutional- ized and provided the legal framework for the US food aid programme basically in back to top Next page
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