affecting United States and Canadian agricultural trade. The opportunity to address
this issue came with the Kennedy Round of tariff negotiations under the General
Agreement of Tariffs and Trade (GATT), which began in April 1963 (Wallerstein,
1980; Parotte, 1983; IWC, 1988). The primary focus of the Kennedy Round, as in
previous GATT negotiations, was to reduce tariff barriers on industrial goods. The
main participants, prompted by the United States and Canada, decided on this
occasion that agricultural commodities, and more particularly wheat and coarse
grains, should also be covered. Previously, agriculture had been excluded from
such negotiations as a `special case'. There was increasing concern in the early
1960s, however, about the degree and extent of agricultural protectionism, the
widespread resort to non-tariff devices, and the serious effect of these measures
on international trade in agricultural products.
In view of the concerns of the United States and Canada, the coverage of the
proposed new agreement was extended to include aid in grain commodities on
concessional terms and as grants (food aid). As the new aid commitments on a
regular basis would be costly for the non-traditional food aid donors to undertake,
concessions in their industrial trade sector were offered as part of the bargaining
process. As a result, an International Grains Arrangement was negotiated at a
conference convened by the International Wheat Council and UNCTAD in Rome
in July/August 1967 with two inseparable parts, an International Wheat Agreement
and, for the first time, a Food Aid Convention (IWC, 1988).
programme with the help of contributions for the benefit of developing countries'.
Aid could be provided in the form of wheat, coarse grains or grain products
(rice was included in subsequent FACs) suitable for human consumption and
of a type and quality acceptable to recipients, or cash to purchase grains from
signatories of the FAC for shipment as aid. A unique feature of the FAC was
that each member agreed to provide a guaranteed minimum quantity of food
in physical terms, irrespective of fluctuations in production, stocks and prices.
Minimum commitments were based on complex calculations involving donor
countries' grain production and consumption and GDP per capita. The United
States proposed an annual minimum of ten million tons of cereal food aid in
the aggregate. The 12 original members of the FAO finally agreed to provide a
minimum of 4.5 million tons.
than that they should be made to developing countries, or about whether they
should be provided on grant or non-commercial credit terms. (In fact, the food
aid provided under the 1967 FAC was provided entirely on a grant basis). Multi-
lateral channelling was, however, encouraged, with special reference made to the