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The diplomacy of world food: goals, capabilities, issues and arenas

Published online by Cambridge University Press:  22 May 2009

Henry R. Nau
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Abstract

Food is a factor in international diplomacy as a direct instrument of policy and as a condition underlying policy. Grain trade is particularly important. For most of the postwar period, principal grain exporting countries pursued policies designed to support domestic prices, using foreign agricultural policy to dispose of accumulated surpluses and to pursue broader non-food (political and economic) objectives. Grain importing countries came to rely on cheap food supplies in international markets, neglecting incentives to stimulate domestic production. Worldwide food shortages in 1973–74 made clear the need to consider international as well as domestic food requirements. Food considerations acquired a foreign policy dimension, while foreign policy considerations sparked a debate about the use of food for power. A return to surplus conditions in world food markets reduces the opportunities for the exercise of food power, while creating the conditions to meet historically unattainable food goals. To accomplish this, a system of international coordination and review of separate national food policies may be needed. Such a system would ensure greater accountability of private groups to governments and governments to one another without relying excessively on either automatic market forces or a centralized world food authority.

Type
Section III Economics, Politics, and the World Food System
Information
International Organization , Volume 32 , Issue 3: Special Issue: THE GLOBAL POLITICAL ECONOMY OF FOOD , Summer 1978 , pp. 775 - 809
Copyright
Copyright © The IO Foundation 1978

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References

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2 See his essay, “Of Commerce,” in Essays: Moral, Political and Literary, Vol. 1 (London; Longmans, Green and Co., 1912), p. 294. I am indebted to Nannerl Keohane for drawing this reference to my attentionGoogle Scholar.

3 From War Memoirs of Lloyd George, Vol. III (Boston: Little Brown, 1934)Google Scholar, cited in Caldwell, Dan, Some Hypotheses on Food and World Politics (Sage Professional Papers in International Studies, forthcoming)Google Scholar. Caldwell offers an interesting comparative discussion of the role of food in World Wars I and II.

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6 USDA/ERS, Foreign Agricultural Trade of the United States (hereafter FATUS), (12 1975), p. 16Google ScholarPubMed.

7 Other essays in this volume deal more directly with the role of private and lower level public actors in world food relations.

8 In this essay, the focus is on the international or foreign policy goals of governments in food relations. Obviously, foreign policy goals reflect a mix of domestic and international factors. Indeed, one of the interesting questions is how this mix changes over time and objectives regarded primarily as domestic in one period (e.g., domestic stabilization programs for food in most industrialized countries) become international in another (e.g., interest today in an international stabilization program or grain reserve). Nevertheless, foreign policy goals may be distinguished analytically as those goals that emerge in relationships among countries rather than within countries. Thus, in the case of export controls, the foreign policy goal is to protect domestic consumers from foreign buyers; the domestic goal is to prevent (reduce) rising prices between domestic consumers and domestic producers.

9 For a stimulating, though perhaps overly pessimistic, view of the role of politics in famine relief, see McHenry, Donald F. and Bird, Kai, “Food Bungle in Bangladesh,” Foreign Policy (Summer 1977) pp. 72–88Google Scholar. Politics is cited in this essay as the problem, which it often is, but not recognized also as the solution, which it inevitably must be.

10 For an evaluation of food power from this narrowly defined perspective, see Paarlberg, Robert L., “The Failure of Food Power,” paper prepared for the 1977 Agricultural Policy Symposium, Washington, D. C, 07 25, 1977Google Scholar.

11 Visibility alone is not enough, because as choices and consequences are made more explicit, opportunities arise for harmful as well as helpful uses of food.

12 Figures are averages for 1970 to 1974 and are taken from United Nations, Yearbook of International Trade Statistics 1975, Vol. I, Trade by Country, Special Table G, p. 86Google Scholar. Cereals include wheat, rice and coarse grains and represent by far the largest source of human food energy intake, about 56 percent. Other principal sources of food include root crops and animal products (meats, dairy products, etc.). See Brown, Lester R. with Eckholm, Erik P., By read Alone (New York: Praeger, 1975), p. 24Google Scholar.

13 Mineral fuels and related materials constituted in 1974 20 percent of total trade, while grains represented in the same year about 3 percent.

14 The figure 1976/77 is an estimate from documents prepared for the Third Session of the World Food Council, Manila, June 20–24, 1977. See United Nations, WFC, Assessment of the World Food Situation and Outlook, WFC 34, 03 30, 1977, pp. 5 and 9Google Scholar. Other figures calculated from United Nations, FAO, Production Yearbook and Trade Yearbook, 1975 and earlier yearsGoogle Scholar.

15 United Nations, FAO, Provisional Indicative World Plan for Agricultural Development, Vol. 1, p. 49Google Scholar.

16 These percentages are even higher if France is included in an EEC grouping in both the earlier and later periods. This is due to the fact that a larger share of French exports than either US or Canadian exports go to other EEC countries, thereby reducing France' share and raising the US and Canadian share of world exports outside the EEC.

17 All else being equal, the advantages should go to exporters since they acquire a larger number of alternative markets while importers remain dependent on a few suppliers. For a general and pathbreaking discussion of influence in international trade relations, see Hirschman, Albert O., National Power and the Structure of Foreign Trade (Berkeley: University of California Press, 1945)Google Scholar.

18 On these concepts of sensitivity and vulnerability, see Keohane, Robert O. and Nye, Joseph S., Power and Interdependence (Boston: Little Brown, 1977). especially chapter 1Google Scholar.

19 The importance of grain trade for foreign exchange purposes, of course, is also a function of the overall balance of payments. If a country is in deficit, as the US has been for much of the past two decades, a large surplus from grain trade can be very important in offsetting deficits in other areas (for the US, for example, in the capital account).

20 The OPEC states are not included in Tables 3 and 5 since their imports have increased only recently. For some data on recent OPEC imports, see note 71; also see Paarlberg, in this volume, for details on advanced country importers.

21 For example, reducing the European Community's per capita consumption by one-half would still leave it well above per capita consumption in Central and East Africa, and South and East Asia. See USDA/ERS, World Agricultural Situation, WAS–12, 12 1976, Table 12Google Scholar.

22 For a detailed and insightful comparative analysis of the objectives and institutions of advanced countries in general foreign economic policy areas, see Katzenstein, Peter J., “Between Power and Plenty: Foreign Economic Policies of Advanced Industrialized States,” International Organization, Vol. 31, No. 4 (Autumn 1977)Google Scholar.

23 For information on grain trading institutions in major exporting and importing countries, see inter alia, General Accounting Office (hereafter GAO), “Grain Marketing Systems in Argentina, Australia, Canada, and the European Community; Soybean Marketing System in Brazil,” 05 28, 1976Google Scholar; Sorenson, Vernon L., International Trade Policy: Agriculture and Development (East Lansing: Michigan State University International Business and Economic Studies, 1975), chapter 5Google Scholar.

24 See US Senate, Committee on Foreign Relations, Subcommittee on Multinational Corporations, Hearings on International Grain Companies, Second Session, 06 18, 23, and 24, 1976, Part 16 (Washington: GPO, 1977), p. 2Google Scholar.

25 For a brief description of grain trading policies and organizations in various countries, see United Nations, FAO, National Grain Policies 1975.

26 See Organization, Scale and Performance in the Grain Trading Industry(Cambridge: Harvard Institute of Economic Research, Discussion Paper #546, April 1977)Google Scholar.

27 For a discussion of the flaws in analyzing international economic and technological issues from a purely functional or systemic view, see Haas, Ernst B., “Is There a Hole in the Whole?” International Organization, Vol. 29, No. 3 (Summer 1975), pp. 827–877CrossRefGoogle Scholar.

28 The two axes of Table 7 are independent to the extent that nature may intervene to increase or reduce food harvests. They are dependent to the extent that countries may adopt domestic or foreign policy goals that actually seek to create surplus or shortage conditions. See Rothschild, Emma, “Food Politics,” Foreign Affairs, Vol. 54 (01 1976), pp. 285–308.CrossRefGoogle Scholar

29 Such political issues may include institutional questions in economic areas such as those involved in the debate concerning the new international economic order.

30 See United Nations, WFC, International System of Food Security, WFC/37, 03 26, 1977Google Scholar. By contrast, as surpluses have reemerged, some decline in emphasis on production increases may be evident. Preliminary estimates suggest that in 1976 external resources for expanding food production did not increase and may have actually declined for the first time in four years. See United Nations, WFC, Progress Toward Increasing Food Production in Developing Countries, WFC/36, 03 25, 1977, p. iiGoogle Scholar.

31 Figures are taken from United Nations, FAO, World Grain Trade Statistics 1973/74, Tables 11 and 14–18, pp. 30–31 and 36–42Google Scholar.

32 “Toward the Integration of World Agriculture,” a tripartite report by fourteen experts from North America, the European Community, and Japan, Brookings Institution, 1973, p. 12Google Scholar. For a comprehensive analysis of OECD agricultural policy issues, see also Johnson, D. Gale, World Agriculture in Disarray (New York: Macmillan, 1973)Google Scholar, and Coppock, John O., Atlantic Agriculture Unity: Is It Possible? (New York: McGraw-Hill for the Council of Foreign Relations, 1966)Google Scholar.

33 From 1961 – 71, as Paarlberg notes, grain production in Japan decreased by 2.2 percent annually, while grain consumption increased by 3.3 percent annually. The difference was made up by imports.

34 See Hedges, Irwin R., “Kennedy Round Agricultural Negotiations and the World Grain Agreement,” Journal of Farm Economics, Vol. 49 (12 1967), pp. 133–34CrossRefGoogle Scholar.

35 Grogan, F. O., International Trade in Temperate Zone Products (Edinburgh: Oliver and Boyd, 1972), p. 46Google Scholar.

36 GAO, “Grain Marketing Systems…,” p. iiGoogle Scholar.

37 The 1962 International Wheat Agreement worked only because the United States and Canada maintained firm selling and stockpiling policies. By 1965–66, however, these stocks were largely liquidated through large requirements in the centrally planned countries (China and the Soviet Union) and several developing states (Pakistan and India). They were built up again after 1966, and Canada supported (through stockpiling) the minimum price floor in the 1967 Agreement long after others, including the United States, abandoned it. Nevertheless, production limitations after the mid-1960s sharply reduced the levels of reserves held by North American exporters over what they might have been otherwise.

38 See comments on cartel–like collaboration among the United States, Canada and Australia by Martin, Edwin M. in Wallace, Don Jr, and Escobar, Helga (eds.), The Future of International Economic Organization (New York: Praeger, 1976), p. 33Google Scholar.

39 U.S. agricultural exports have more than tripled in this decade to an estimated $24 billion in fiscal 1977.

40 For details of these events, see the article in this volume by I. M. Destler.

41 EEC expenditures for support and stockpile programs are much higher for non-cereals (butter, dried milk, etc.) than cereals. Nevertheless, in 1973, expenditures for cereals alone amounted to $1 billion (out of a total cost of $3.7 billion).

42 USDA/ERS, World Agricultural Situation, WAS–12, 12 1976, p. 18Google Scholar. See also Brown, , “The Politics and Responsibility of the North American Breadbasket,” Worldwatch Paper 2, 10 1975, p. 15Google Scholar.

43 For example, Soviet wheat purchases from Canada reached 200 million bushels a year in 1966 and then dropped to nearly zero in 1968. GAO, “Grain Marketing Systems…,” p. 44Google Scholar.

44 The offer was at a much higher price than they paid for grain in the United States, of course. See Paarlberg.

45 USDA/ERS, The World Food Situation and Prospects to 1985, Foreign Agricultural Economic Report No. 98, p. 42Google Scholar.

46 See USDA/ERS, USSR Agricultural Situation: Review of 1976 and Outlook for 1977, Foreign Agricultural Economic Report No. 132, 04 1972, Table 25, p. 43Google Scholar. US agricultural exports to China rose from $200 million in fiscal year 1973 to $838 million in fiscal year 1974 and back to $328 million in fiscal year 1975. See USDA/ERS, FATUS, 12 1975, pp. 36, 33Google Scholar. Since the first quarter of 1975, however, China has imported no agricultural commodities from the United States.

47 The priority of the commercial objectives is suggested by a comment made by the Soviet Trade Minister in May. After being informed about the US mining of Haiphong and bombing of Hanoi, he turned to his negotiating partner, Secretary of Commerce Peterson, Peter, and said: “Well, let's get back to business.” Wall Street Journal, 10 20, 1972Google Scholar. Cited in Caldwell, Dan, “Appraising Detente,” paper presented at International Studies Association Convention, St. Louis, 03 16–20, 1977Google Scholar. For details on the Soviet purchase, see Goldman, Marshall, Detente and Dollars (New York: Basic Books, 1975), chapter 7Google Scholar.

48 See GAO, “Russian Wheat Sales and Weaknesses in Agriculture's Management of Wheat Export Subsidy Program,” 07 9, 1973, p. 22Google Scholar.

49 See the book with this title: Trager, James, The Great Grain Robbery (New York: Ballantine, 1975)Google Scholar.

50 The US-Soviet agreement covers a five-year period and requires the United States to sell at least 6 m. tons of wheat and corn to the Soviet Union each year and the Soviet Union to purchase no more than 8 m. tons per year. The agreement however, is not self-executing and calls only for consultation when the limits are reached.

51 For a similar argument, see Paarlberg's essay in this volume.

52 See Rebuilding Grain Reserves: Toward an International System (Washington: The Brookings Institution, 1976), p. 34Google Scholar.

53 Prior to independence, as Christensen notes in her article in this volume, agriculture in developing countries was often organized to serve foreign interests. See also Lappé, Frances Moore and Collins, Joseph, Food First: Beyond the Myth of Scarcity (Boston: Houghton Mifflin, 1977)Google Scholar.

54 United Nations, WFC, Progress Toward Increasing Food Production in Developing Countries, WFC/36, 03 25, 1977, p. 5Google Scholar. For more on developing-country policies toward agriculture, see Nicholson and Esseks in this volume.

55 See OECD, Development Assistance Committee, Development Cooperation: 1976 Review, 11 1976Google Scholar and previous annual reviews. The basic US legislation for food aid is Public Law 480 (PL480) passed in 1954 to facilitate marketing of “surplus” American commodities to countries on terms more favorable than those in commercial markets. About 70 percent of PL480 shipments is sales at subsidized rates (Title I); the rest is donations for disasters, regular nutrition programs, etc. (Title II).

56 See Kay, David, “The Behavior of International Organizations in the World Food Arena,” in Pontecorvo, Giulo (ed.), The Management of Food Policy, (New York: Arno Press, 1976), p. 126Google Scholar.

57 See McHenry and Bird, “Food Bungle…” For an extensive analysis of the multiple impacts of food aid on agricultural development, see Iseman, Paul J. and Singer, H. W., “Food Aid: Disincentive Effects and Their Policy Implications,” Economic Development and Cultural Change, 01 1977, pp. 205–237Google Scholar.

58 The Food for Peace Act of 1966 formalized the link between PL480 and local agricultural development, requiring that each Title I sales agreement contain a “self-help” statement by the recipient country concerning the program to be followed in expanding its food production. The Act further stipulated that PL480 could be terminated if such a program were insufficiently implemented. In practice, the impact these “self-help” provisions had on development goals was probably marginal, both because surplus conditions ensured ultimate disposal and because the United States continued to have strong non-food reasons for making PL480 shipments.

59 See Kriesberg, Martin, International Organizations and Agricultural Development, Foreign Agricultural Economic Report No. 131, USDA/ERS, 05 1977, p. 66Google Scholar.

60 See Weiss, Thomas G. and Jordan, Robert S., “Bureaucratic Politics and the World Food Conference: The International Policy Process,” World Politics, Vol. XXVII (04 1976), pp. 422–440CrossRefGoogle Scholar.

61 Ibid., p. 435.

62 Ibid., pp. 433–34.

63 Total pledges for IFAD now equal $1,022 b.—$567.3 m. from developed countries, $435.5 m. from OPEC-developing donors, and $9 m. in convertible and $10.3 m. in nonconvertible currencies from developing recipient countries. Operation of this fund will add some $300 m. per year to external agricultural assistance.

64 United Nations, WFC, Progress Toward Increasing Food Production in Developing Countries, WFC/36, 03 25, 1977, pp. 13–14Google Scholar.

65 OECD, Development Cooperation: 1976 Review, pp. 148–149Google Scholar. See Paarlberg in this volume for further details of EEC, Japanese and Soviet contributions.

66 Ibid., p. 134.

67 See WFC/36, pp. 18–19; and WFC/34, p. 2.

68 From 1970–75, for example, the agricultural trade balance of developing countries improved by $5.1 b. (from $8.3 b. to $13.4 b.), but this increase was completely erased by a rise in cereal imports of $6.4 b. (from $1.7 b. to $8.1 b., excluding OPEC).

69 United Nations, WFC, Food Trade, WFC/42, 03 30, 1977, pp. 12–13Google ScholarPubMed.

70 The Lomé Convention granted non-reciprocal access to EEC markets (earlier association agreements provided for reciprocal access of EEC exports to developing country markets) and included most agricultural products covered under CAP (which had been excluded from earlier association agreements). Except for sugar, which is dealt with in a separate protocol, 99.2 percent of all imports from developing country signatories now enter the EEC free of duty and other restrictions. The Convention also establishes a fund to stabilize developing country earnings in the event of export shortfalls. See Gruhn, Isebill V., “The Lomé Convention: Inching Toward Interdependence,” International Organization, Vol. 30 (Spring 1976), 241–263CrossRefGoogle Scholar

71 From 1971 to 1976 (estimated), total agricultural imports in Iran increased from $250 m. to $1,020 m., in Iraq from $220 m. to $1,025 m. and in Saudi Arabia from $225 m. to $1,030 m. See Table 1 in Parker, John B. Jr, “Agricultural Imports by Major Developing Countries,” Foreign Demand and Competition Division, USDA/ERS, 08 1976Google Scholar.

72 FATUS, March 1975, However, these imports decreased in fiscal year 1975 when Iran, benefiting from record grain harvests, cut back her US food purchases from $757 million to $148 million.

73 December 15, 1975, p. 54.

74 CIA, Office of Political Research, “Potential Implications of Trends in World Population, Food Production, and Climate,” 08 1974, p. 3Google Scholar.

75 If such options are limited, the Soviet Union may indeed refrain from political actions that could jeopardize US-Soviet grain trade. Secretary of Agriculture Earl Butz clearly believed that “food power” had this effect in 1974: “I couldn't prove it if my life depended on it. But I think everybody agrees that the Soviets could have stopped the Sinai agreement that Secretary Kissinger worked out between Egypt and Israel. They sat on the sidelines…I am convinced that they knew they had to come into our market for more grain. This is no time to rock the boat.” See his testimony before Senate Agriculture Committee, “Who's Making Foreign Agricultural Policy,” 01 1976, p. 19Google Scholar.

76 For example, PL480 agreements with Egypt and Syria helped Henry Kissinger in his Mideast diplomacy in 1974, just as more food aid enabled the US to extract concessions from South Korea on textiles in 1971. On the latter, see GAO, “Economic and Foreign Policy Effects of Voluntary Restraint Agreements on Textiles and Steel,” 03 21, 1974, p. 29Google Scholar; and Washington Post, May 20, 1976.

77 This resulted in what Richard Cooper described as a “two-track” system. See “Trade Policy Is Foreign Policy,” Foreign Policy, Number 9 (Winter 1972–1973), pp. 18–36Google ScholarPubMed.

78 “Food Politics,” p. 290.

79 The same motivation exists in US policy toward an international grain reserve—to get others like the Soviet Union and Japan to bear some of the costs of maintaining reserves.

80 For such an argument, see Gilpin, Robert, “The Politics of Transnational Economic Relations,” in Keohane, Robert O. and Nye, Joseph S. Jr, (eds.), Transnational Relations and World Politics (Cambridge: Harvard University Press, 1972), pp. 48–70Google Scholar.

81 See discussion in Oppenheim, V. H., “Why Oil Prices Go Up, (1), The Past: We Pushed Them,” Foreign Policy (Winter 1976–1977), pp. 50–51Google Scholar.

82 For example, as a recent Agriculture Department study noted, “The cancellation of US soybean contracts in 1973 at least partially caused Japan's negotiating in 1974 a contract with Brazil for the production and purchase of soybeans.” Hanrahan, Charles E. and Kennedy, Richard M., “International Considerations in the Development of Domestic Agricultural and Food Policy,” in USDA/ERS, Agricultural-Food Policy Review, 01 1977, p. 132Google Scholar.

83 FATUS, December 1975, p. 13. In fiscal years 1955 through 1973, India imported $5.5 billion in US agricultural commodities; $5.06 billion of this was financed by US government programs, mainly PU80. (USDA/ ERS, US Agricultural Exports Under Public Law 480, 10 1974, p. 216Google Scholar.) In 1975, notwithstanding the resumption of PL480 wheat imports, India imported $544 million commercially, and just $215 million with government financing. For fiscal 1976, the figures were $647 million commercial and $93 million concessional. For LDCs taken as a whole, the figures for fiscal 1976 were $5,828 million and $852 million, respectively. (USDA/ERS, Foreign Agricultural Trade Statistical Report, Fiscal Year 1976, 09 1976, pp. 24–25Google Scholar.)

84 USDA/ERS, World Agricultural Situation, WAS–13, 07 1977, p. 8Google Scholar.

85 See Ahalt, J. Dawson, “Agricultural and Food Policy: An Insiders View,” in Pontecorvo, (ed.), The Management of Food Policy, p. 253Google Scholar.

86 United Nations, WFC, International System of Food Security, WFC/37, 03 26, 1977, p. iiiGoogle ScholarPubMed.

87 The wheat price in summer 1977 of $2.40 per bushel was much lower than the 1971 price relative to production costs. Ibid., p. 5.

88 With some markets protected, adjustment falls unevenly on unprotected markets, exaggerating fluctuations in these markets. Johnson notes, for example, that, under liberalized conditions, the EEC would have borne a greater measure of price adjustment in 1972–74 rather than most of this adjustment being absorbed by the United States. See Johnson's, World Food Problems and Prospects, American Enterprise Institute for Public Policy Research, 06 1975, pp. 33–34Google Scholar. See also the article by Seevers in this issue.

89 By the end of 1976, only Canada, the EEC and Sweden had adopted medium term (three years) indicative planning for food aid commitments.

90 The proposal put forward by the World Food Conference Secretariat “spelled out comprehensive institutional alterations complete with organizational flowcharts, designed to integrate all the UN's activities relating to food and agricultural matters and to solicit more adequate funding for them.” The proposal was subsequently dropped by the Secretariat when opposition proved to be too strong. See Weiss, and Jordan, , “Bureaucratic Politics and the World Food Conference,” p. 433Google Scholar.