199 McDougall to Hodgson

Memorandum (extracts) WASHINGTON, 19 June 1944

FOOD AND AGRICULTURE

Now that the Interim Commission [1] is approaching the completion of its task on the constitution of the F.A.O., it may be useful if I return to a subject touched upon in several of my memoranda, namely, the importance of the early establishment of the F.A.O.

This issue can be viewed from a number of angles including (1) the standpoint of world welfare, (2) its bearing upon the Australian view of international economic policy, (3) its relation to Australian commercial interests.

[matter omitted]

2. Australian International Economic Policy The Australian view regarding international economic affairs is based upon the assumption that what may be described as Part I of Article VII of the Mutual Aid Agreement (i.e., increase in production, employment, exchange and consumption of goods) is a prerequisite to successful international action concerning commercial policy.

I believe this view to be based on valid political, economic and social considerations.

Vigorous international action in the field of food and agriculture can make a large contribution towards the fulfilment of this Part I of Article VII. It is by no means certain that agreement will be reached in the near future on questions of commercial policy or on the other points of the Article VII discussions. if, however, the F.A.0. can be launched upon its duties at a moment when the world is especially food conscious, it may well set a pattern towards an expansive economy. While the general acceptance of policies of 'full employment' by the industrialized nations may prove of the greatest importance, the advocacy of employment policies needs to be kept closely related to progressive improvements in living standards. Food and agriculture is a relatively non-controversial approach to improvements in living standards.

Australia has played a leading role in bringing the economics of welfare on to the international stage, i.e., Food and Agriculture, and Full Employment. The early establishment of the F.A.0. and vigorous international action to secure that as many nations as possible take action to put into effect the recommendations of the Hot Springs Conference is therefore entirely in harmony with Australian international economic policy.

3. Australian Commercial Interests The policies adopted by other countries regarding the production and consumption of agricultural products are obviously of great interest to Australia.

If the nations, and in particular U.K., U.S.A., and Western Europe really give the nutritional needs of their own peoples full consideration in the framing of policies, the results should be substantially to increase world demand for many food products.

As a recent paper [2] by Professor Scott Watson [3] (forwarded to External Affairs) has shown, a continuance after the war of war- time measures to ensure adequate milk for the women and children of the U.K., together with a return to pre-war consumption by the normal consumers, would require a 30% increase in British dairy herds. A somewhat similar position would occur in Western Europe.

Sound nutritional policies should also result in the United States devoting more land to dairying and probably less to wheat.

The consequence of such policies upon world import demand for wheat might be of the order of Some 200-300 million bushels. Wheat imports into continental Europe (i.e., excluding the U.K.) for the period 1925-29 were around 300 million bushels and from 1935-39 nearer to 150 million.

If milk consumption is substantially increased to meet nutritional needs, import demands for butter and cheese should continue to be stimulated.

World import demands for meat during the first five years following the peace will depend upon importing countries having means of payment.

The present trend of nutritional research is emphasising the value of high quality proteins to disease resistance and this may be reflected in new standards of adequacy for such foods as meat, fish and cheese.

World demand for wool and other agricultural textiles is likely to depend upon whether the nations put levels of employment with rising standards of living in the forefront of their economic social policies. Here, however, the competition of synthetic fibres will have to be reckoned with.

F. L. MCDOUGALL

1 Established at the recommendation of officials meeting at Hot Springs in May and June 1943, to draw up a constitution for a permanent Food and Agriculture Organization. McDougall represented the Commonwealth Govt on the Commission.

2 Not located.

3 Agricultural Attache, U.K. Embassy in Washington.

[AA:A989, 44/735/743/1]