Public Law 480: The Critical Choices

P.L. 480 represents 30% of total U.S. development assistance, yet it is only a minor part of total private and public investments in recipient countries. While the U.S. share of total world food assistance declined from 94% in 1965 to 68% by 1976 (Maxwell and Singer, p. 266), P. L. 480 was still valued at roughly $1.6 billion in fiscal year 1980.1 Moreover, P.L. 480 is viewed by both the United States and recipient nations as serving important objectives, such as meeting emergency food and nutrition needs, providing balance of payments support, and promoting economic development. Additional P.L. 480 objectives include assisting in domestic supply management, expanding markets for U.S. products, and achieving foreign policy objectives. Among these objectives, the USDA Special Task Force on P.L. 480 gave priority to the humanitarian and developmental objectives which it felt were consistent with long-term U.S. foreign policy. In view of growing world food needs, the developmental use of food aid could be an important way of promoting employment in recipient countries and supporting their participation in world markets, particularly if the United States follows the recommendation of the Presidential Commission on World Hunger "to make the elimination of hunger the primary focus of its relationship with the developing countries." Accordingly, this paper will propose and discuss three selected conditions underlying a serious commitment to shape P.L. 480 into an effective tool for economic development. Resolution of the following three issues will require that (a) a politically strategic and creative international role for P. L. 480 must be firmly established and protected; (b) the alternative investment streams created by P. L. 480 must be identified, measured, and integrated into an investment program that fits the conditions of the recipient country; and (c) production disincentives in the recipient country must be minimized or avoided entirely.