Speech

FOOD FOR THE ftORLD Address by Chester C. Davis President, Federal Reserve Bank of St-, Louis Before the American Institute of Cooperation Purdue University, Lafayette, Indiana Monday evening, August 26, 1946 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FOOD FOR THE WORLD Seven years have passed since I last met with many of you in the American Institute of Cooperation, Looking back, it seems like a century, so much has happened. Organized human society has had another warning - which may be its last - that man's social and economic and political develop ment is lagging thousands of years behind his scientific and technological progress. We have taken a long stride nearer to an answer to the question whether, after all, man is going to be able to master the machines he has built before they destroy him - and only those of purest faith are con fident of an affirmative answer to that question^ These intervening years have seen miracles of food production wrought by American agriculture, with the help of the benevolent Providence which dispenses weather. With only 15 percent of the nation's labor force in their ranks, the farmers of the United States brought food production 30 percent above the pre-war level and held it there. During the war the food and fiber sustained our armed forces and those of our Allies, and helped keep civilian life going in friendly lands abroad* Then after five years of war had exhausted food stores abroad, and general drought had teamed up with wur:s exhaustion to cut world food production by one-eighth in 1945, it was the food production of the United States, particularly our wheat, that played a major part in averting the mass starvation that threatened many millions of the earth's population. In treating this subject tonight I want first to deal briefly with the immediate situation to which the Famime Emergency Committee and the responsible government agencies arc devoting their attention now. Then I want to take a look at some longer range questions which the current battle with starvation has raised. The total of all food shipped from the United States in the year ending June 30 amounted to 16 and a half million lon gtons. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 2 - Never in the history of the world has there heen any movement of food to compare with it. When theFamine Emergency Corrr.ittee first met last March, the task of making up for a serious lag, and attaining the goal of 6,000,000 long tons of wheat set for relief exports during the first six months of 1946 looked almost impossible to perform. That was 225.000,000 bushels of wheat. The goal was reached and passed by the middle of July* From July to July this country exported 417,000,000 bushels of wheat, along with huge quanti ties of fats and oils, meats, dairy products, and ether foods* It was truly a colossal accomplishment, due to the splendid cooperation of consumers, farmers, the trades, the press and radio, with the agencies of government. Once more fortune has smiled on our farms and fields". A corn crop and a wheat crop that set new records are not improbable. The world needs what we can spare from this abundance. Its famine crisis has not ended. Even with favorable weather abroad, it will net end until the. 1947 crcps are ready to eat. >/ve are gaining a breathing spell as the crops are harvested in Europe and Asia this summer and fall. People who have been face-to-face with starvation will eat more. But reserve stocks are dangerously low, and North America once more will be called on to make heavy shipments. So the shadow of hunger is likely to spread over the world once more as the winter wears crway. By late September, after the F.A.O. meeting in Denmark has ended, we will all be able to see mere clearly what the world will need, and what this country will be called on to supply. In the meantime, we oan ease up somewhat from the pressure of the last few months. Some of the grain- conservcticn regulations will be relaxed. But a word of warning is in order. Before the crops of 1947 are harvested, Europe and Asia will be dependent en heavy food shipments from North America to keep going. If the United States exports the equivalent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis cf 400,000,000 bushels of all cereals frcrn the 1946 crep, ;,nd if we build back our reserves so that the carryover next July is not dangerously lev/ as it was this year, there will be ne wheat for us be waste. There will net be enough to go around if we eat it and feed it and use it up at the rate we did in 194? and 1944 and 1945. So while the appeal to save and share the wheat will n.:t be as loud the next few months as it has been in the months just past, we cannot with safety ignore it. Right now the export and relief problem is ene of transportation. Washington agencies and the railroads are trying hard to break the bottle neck. It will get worse before it gets better. In Washington on Thursday, Director General PitzG-erald .,f the F.A.O. told me that September and early October will be a desperate period. It is easy for us to forget that the 1946 rice crop will not bo available in ;,sia until our late fall or early winter • I a in convinced that everything is being done that can be done to work out of the traffic jam. If that is axe, the short-tine phase of the famine fight, the one this country faced in. dead earnest late last winter, will be brought to a conclusion that is highly creditable to this country when you consider bow late it was when the full extent of the world's f^od shortage became apparent. vYhen we turn to its long-range aspects, the world food problem presents many questions, os varied almost as human life itself. .ithin the limits 'f this talk, it is only possible tr touch them with a very broad brush. Some answers can be suggested by considering whether China and India, with their combined population of 8e0 millions straining at the limits of food resources, must always live perilously close to the border line cf famine; whether new s.urces cf food dupply can be developed, par ticularly in Latin America; and finally, .hew long will the mcior food relief Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis burden rest en the United States, and in what direction are longer-term forces moving us in terms --f f.-od product?! en and use. These questions leave untouched one of perhaps greater immediate importance - how sc^n will .Europe regain pre-war status in food production? It did not take long after Y»orld War I, but this w&r left a far greater lega cy of weakness, of uprooted peoples, destruction of human and animal life, machines, transportation, factories and seed stocks. The process of recovery will be slower, but restoration of farm production will have A-l priority. Shipments of food from the United States to Europe will diminish as rapidly as Europe can replace them with food grown at home or purchased by barter elsewhere. My guess is that will happen in less time than now seems possible. In India and China, with their hundreds of millions pressing always up to and beyond the means of subsistence, a fall in food pro due Li on- from any cause means famine and death. Xie in this country are inescapably involved with them. In lands where hunger, pestilence and war remain the major con trols of population growth, recurrent disasters will shock the conscience of the world. The United States and oth^-r nations with relative abundance can help moderate the effects of these catastrophes, but large imports of food, even if they could be maintained indefinitely, would work no permanent cure. Unless some bo sic changes are made, population would merely move up to absorb the new supplies. The problem is not hopeless. There is an answer, although it is not a simple one. A large expansion of food production is possible in India and China as a result of new techniques, better seeds and livestock, improved implements, better transportation and more capital. But to raise the level cf living and to have a margin of safety from famine demand a far-reaching, integrated program cf modernization in which eventually theindividual human being v/ill assume dignity and importance. Human fertility will yield place to better living only when people* develop new interests, wants, and aspira- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis tions as a result of contact with foreign cultures. Notwithstanding more remote prospects, cur immediate interests in the United States lie in the direction of modernization of backward peoples. Such a program to succeed must modify the colonial arrangement where regions are developed and held merely as sources of raw materials• It calls for intelligent cooperation between the dominant powers and leaders of the areas concerned. Broad international machinery must be developed under which this development can be guided and hastened. Perhaps it is naive to suggest that the United States can contrib ute tc such a development when we have yet to demonstrate what we can do with vastly smaller but not wholly dissimilar problems of adjustment in distressed areas of our own agriculture - and in Puerto Rico. The process admittedly will be difficult. We can contribute more to its solution by exporting our farming know-how, our machines and tools, than by continuing tc supply large quantities of relief food after this emergency has passed. The challenge to international leadership involved in helping India and China increase their product and hold the gain in higher living standards, is no greater than the one nations must meet anyway if they are going to survive in this atomic age. The areas cf the world where fertile and productive soil exists are know with reasonable accuracy. Many of the countries having the highest undeveloped potential for food production also have great need for more food themselves. It is so with many of the Latin American countries. Aside from Argentina which produces surpluses of temperate zone cereals and meat, most of Latin America is far from self-sufficient in food, even at very low con sumption levels. Exports of coffee, cocoa, bananas, and sugar are offset by the wheat, flour, lard, and corn they imported at the rate of one and half billion tons a year before the war. The problem in South and Central America is not so much caused by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 6 - shortage cf natural resources as by pc-r farming methods, primitive trans portation and one-crop production for expert. The solution is neither simple nor easy, but the job hasn't really boon tackled yet. There is need for the know-how in producing, storing, transporting, and processing food. This we are able to supply and it is in our long-run interest to do it. Even though their products are much like our own, 11 million Canadians, because they produce :m re and have mrre money to spend, buy from us only slightly less than do 133 million Latin Americans. The world will continue to fall far short of reaching the limit of its ability to produce food as long as the surface is scarcely scratched in Latin America and in other undeveloped areas of the earth. I repeat, the know-how exists, the tools and capital are :r can be made available. The task cannot be performed without intelligently directed, integrated inter national cocperation. Now letfs take a look at the situation here at home. During the last four years of war the f\.od production of the United States climbed and climbed until it reached a high of abcut 30 percent above pre-war levels. The average this year has boon large enough and the weather ao far has been good enough, to yield another near-record food crop. There will be demand, at home and abroad, for more food than we can possibly produce in 194-6. The market at h:mo will be string as long as consumer purchasing power is high. Abroad it will last in volume only as long as foreign pro duction is lev.. V,hen Europe end Asia can grow their food, or can get it fr:m newer countries in exchange for their exports, they will nc longer depend on large shipments from the United States, The world needs the largest crcp we could grow in 1946. Next year the nee-'s will still be great, but the American farmer should be able to pay more attenticn to soil protection and rosteratim than was possible during the war. After 1947, the large volume export oemano may persist f•• r a while, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis _ 7 - but I doubt it. Foreign countries will hunt their food where they can pay for it with their exports, preferring not to spend all their dollar exchange for our wheat and lard if they can use it to buy some of our machines* I do not believe that in the long run continued world hunger will force the consumers in this country to cut down their consumption of dair.y products, meat, and poultry in favor of a diet more heavily loaded with cereals* On the contrary, if industrial production and employment remain high, I would expect an accelerated trend toward the consumption of more animal products, more protective foods, and a more diversified diet. It is true that an acre of wheat will keep 10 to 13 times as many people alive as an acre of feed turned into meat, but if our people can command the in come, they are going to eat meat and milk, fresh fruits and vegetables, and the American farmers will be able to produce plenty of these things. For we haven't yet begun to use cur soil resources to their best advantage in the United States. We know how to do a much better job than we are doing, but too many of us are like the old farmer who answered an invitation to attend a soil conservation meeting by saying: "There's no use in my going there to hear that young man talk about farming better, I donft farm as good as I know how to now." Good grass should be growing on hundreds of thousands of hills and slopes which are now rcw-cropped but are too steep for safe farming* The air is full cf nitrogen which the soil needs, and we have the plants that will put it there. Limestone deposits are nearly everywhere, and most of our farm lands badly nee± lime. YJe have enormous deposits cf phosphate rock in the Northwest that have never been touched, and yet much cf our pasture and crop land is starving for phosphates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 8 - vVe have enough idle capital and the potential labor in this country to build a revolution in fanning methods, ana brin.j; now vitality and vigor tc cur soil and to the people who live on it© Across the middle and southern bolts, all-year-round pasture systems capable of feeding vastly increased numbers of livestock can be maintained. New capital invested in complete programs of soil and water management pays rich returns in increased production and lower unit costs. In our short life as a nation we haven't managed our soil well. 1/Ve have destroyed a hundred million or more acres of once fertile land, and are going ahead blindly wasting more of it. We have used up soil minerals without replacing them, and even though the depleted fields grow crops, the animals and human beings that feed on them are deficient in health. There is no sense in getting alarmed ever prospective inability of American farms to produce in abundance all the f oc d this nation will re quire, when even now we have not begun to use our soil resources to our best national advantage, 7«e know how to stop sc.il erosi'/n; we hove the lime, the phosphorous, the nitrogen, and we have, or can get, the other minerals we need for com plete, healthy soils. Poor land means p^or people, and our land does not need to be poor, healthy soil m/.-ans healthy people, and we can have healthy soil if we are willing tc work f;r it and to pay for it. The world will not move in the Jircction of fuller use of its food resources except as it progresses in world cooperation raid organization.. The Food and Agriculture Organization of the United Nations has the opportunity and the obligation to move forward in that field. Organized cooperation will be necessary at home, too, in •, rder to meet the tremendous problems of adjustment that lie ahead. The peace time world may not require Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis - 9 - billion bushel wheat crops from us but it will require many other forms o f food that can be absorbed in higher standards of living. In conclusion: I have been surprised to realize, as I have been talking to y,-\x in a field remote from cooperative marketing, hew frequently that word "cooperate" has cropped up. That is because it is the keynote of satisfactory human behavior. The inhabitants of this plo.net are going to have to practice international cooperation, not just intermittently and by jerks, but eternally and with ceaseless vigilance, if civilised and organized institutions of mankind are to be saved from destruction. It is so with food - access to which is so essential to the peace of the world* YJe of the United States have much to share an ; contribute, but it isn't a one-nation job or responsibility - it is a number one subject for world cooperation, and I am privileged to be able to discuss it with this institute which is dedicated to the principle of cooperation at home. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Chester C. Davis (1946, August 25). Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/speech_19460826_davis

@misc{wtfs_speech_19460826_davis,
  author = {Chester C. Davis},
  title = {Speech},
  year = {1946},
  month = {Aug},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/speech_19460826_davis},
  note = {Retrieved via When the Fed Speaks corpus}
}