Alicia Hogue

Eco 357

Cleaver

Summary of “U.S. Food Power; Ultimate Weapon in World Politics?”

Business Week, December 15, 1975

This article highlights the “intensifying debate over using the nation’s agricultural riches as an OPEC- type diplomatic tool.”

The United States has many sources of economic power: financial resources, technology, managerial know-how, and the bargaining strength in trade relations that comes from having the world’s largest domestic market. In the early 70’s food power, began to be recognized as one of these tools. While supplies of grain outside the U.S. were steadily declining, U.S. grain stocks were sharply rising. This tremendous capacity for agricultural production coincided with increasing world population and affluence, which led to greater demand for more and better food. As dependence on U.S. surpluses grew so did U.S. influence, particularly vis-a vis food-deficit countries. The likelihood also grew that in times of shortage the U.S. would face difficult choices about how to allocate surplus between affluent purchasers and the hungry world. Unlike other forms of economic leverage, there are limitations on the use of food power because of both moral and practical concerns.

At a time when non-farm products began to show heavy deficits, the balance of agriculture exports and imports began to shoot upward. Not only were world food supplies growing shorter, but the depreciation of the dollar made U.S. farm goods a bargain. Intense demand for U.S. grains from affluent nations was pushing world grain prices up. The increase of meat in Russian and Japanese diets further increased demand for grain, not to feed people, but to feed cattle. As a major exporter, the U.S. benefited by earning billions with which to pay its oil bill. Meanwhile, major industrial competitors of the U.S. faced the same big oil import bills as well as big food import bills. The trade result was more competitive price tags on U.S. exports.

This created domestic unrest. Food inflation on the domestic front (14%) caused consumers to protest the high price of food. Grain farmers were benefiting despite rising costs of fuel, fertilizer and tractors. Cattle farmers, however, were deeply hurt by high grain prices. Feed costs doubled but meat prices were frozen due to housewives boycotting beef. Sporadic, secretive Russian purchases of grain were partly responsible for inflation and instability in the grain market. So Washington established a national grains export policy, whereby Russia was guaranteed a certain amount of grain in order to regularize purchases. In addition, Russian was to ante up some oil on favorable terms and stay out of Kissinger’s negotiations on the Egyptian- Israeli trade accord.

Instead of the free reign allowed commercial grain exporters in the past, Ford interfered in the grain market to stabilize prices and garner additional benefits for the good of the United States. Traditionally republican, Midwestern farmers were infuriated. “We think the government is trying to manipulate the price of wheat because of political pressures from [AFL-CIO President] George Meany and the consumers” said Charles Drew, a Garden City Kansas wheat farmer. The Agricultural Department used to run grain export policy in a way that supported a constituency of farmers. Now the State Department was using it to further U.S. goals. Like any other sector, agribusiness is concerned with selling as much as they can for the highest price possible; they will certainly be a loud voice for protest against food power policy if too much freedom to do business is sacrificed to the national interest. This is one limit on its power.

There are many ways which food power can be wielded. One possibility is to link food resources with industrial commodity needs. In the case of 21 important minerals, the U.S. is 60 to 100% dependant on foreign suppliers- some of which are large importers of U.S. food. Especially in the case of developing nations, money doesn’t even have to play a role. Zaire, for example could trade copper for wheat. In oil, however, the U.S. has no leverage; the only oil producer that buys much U.S. food is Iran. Supply- access situations are another possibility: in exchange for reduced trade barriers and access to the foreign market, the U.S. continues to sell food to countries that buy large quantities.

There are both moral and practical arguments against the use of food to manipulate other countries. Food stirs up strong emotions because it is associated with the most primary human need, and some find it unacceptable that food should be manipulated for political ends. Said one State Department Official, “Grain power is power over people who are hungry—people we don’t want to be pushing around anyway.” A food embargo, unlike an oil embargo that shuts down national economies, may not have much effect. A food embargo on developed countries, already well if not over- fed, can just tighten their belt notches; developing countries already exist on subsistence diets; use of food power would be counterproductive because severely condemned on moral grounds. Threat to withhold food would be equivalent to the threat of starvation.

Food power also has its powerful proponents. Secretary of Agriculture Butz said that of two contesting commodity powers in the world, “agripower has to be more important than petropower. The single most important way we have of communicating with two-thirds of the world is food.” Lester Brown president of World Watch Institute suggests that the U.S should allot food exports liberally to countries doing a good job of increasing food supplies and give sparingly or not at all to food- production laggards. This would encourage the movement away from agricultural mismanagement and toward self - sufficiency.

There are reasons to doubt that food power, whether morally or politically sound, is inefficient and will not succeed. Using food as a tool requires extremely tight demand. In the long run too much manipulation of food supplies will create a backlash. Every small producer steps up production, leading to an increase in agricultural productivity in other nations. There is tremendous food production potential in developing nations. Oil exporting countries in particular placing high priority on expanding their regions agricultural output. Ultimately this article asserts that food policy is becoming an increasingly powerful and recognized tool. But it is also a new tool whose full political, social and humanitarian ramifications have not fully been explored and therefore it is a tool which should be wielded with great caution.