SECRET
C.(52) 168
20th MAY, 1952.
CABINET OFFICE
RECORD COPY
CABINET
Page 68
OVERNMEN
(ENT)
COPY NO.
69
FOOD SUPPLIES AND BALANCE OF PAYMENTS.
Memorandum by the Minister of Food
I think I ought to let my colleagues know how currency and balance of payments difficulties affect our efforts to procure more food,
2.
Here are a few examples:-
3.
(a) There are ample dollar sugar supplies available to restore the jam
making bonuses which we have had to cut - possibly to abolish sugar rationing at an early date.
(b) We could probably buy some 50,000 tons of additional pork meat
this year in Europe and Canada.
(c) We could buy, at reasonable prices, in Europe, Indonesia
and the Belgian Congo, adequate supplies at reasonable prices of ingredients to make more margarine to compensate for a reduction from 3 ozs. to 2 ozs. in the butter ration which will be inevitable for a period in the autumn of this year owing to a world shortage of butter.
(d) We could buy substantial quantities of cheese in North America
we bought 47,200 tons last year, which is equal to 1 oz. on the ration for 32 weeks. Present prospects of supplies from sterling sources are such that we shall have difficulty after the end of
this year in maintaining even the present 1 oz. ration,
I have fully accepted the necessity of a policy of import restrictions to meet our balance of payments difficulties and cuts in food imports have made a bigger contribution to the carrying out of this policy than those in any other single sector of the economy. The full effects of these cuts have not yet been felt. Moreover some fairly substantial cuts in expenditure e. g. in the case of sugar and oils and fats have been made by eating into stocks. This is an operation which cannot be repeated and if we want to continue to make cuts at this rate they will have to be directly at the expense of consumption. If we are to continue the policy of import cuts for any length of time, I would ask my colleagues to recognise that we must accept the unpopularity attendant on it, while defending it as a positive step to avert the worse fate of national bankruptcy.
4.
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There is a risk that such a policy, if continued for long, may damage home morale and ultimately restrict our own export markets. I assume therefore that we cannot contemplate the indefinite continuance of this policy in relation to food supplies.
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Page 6923yrpose of this note is to remind my colleagues that fo we could earn more currency of the right kind
:་
and so could afford to
allocate more to food we could soon begin to restore the buying of food to the trade. I am satisfied that this is the right way to increase supplies of many of our important foods. But any attempt to move in this direction is for the time being largely frustrated by currency difficulties whenever we have to look beyond the sterling area for larger supplies. The limitation of supplies involves the maintenance of rationing and price control which are in themselves deterrents to effective private trading: and so the vicious circle is complete. At present therefore we are exposed to the full blast of the criticism which can be directed against rising food prices, without the compensation of being able to offer people more to eat.
6.
I invite my colleagues to review our food policy in the light of this note.
69
Ministry of Food, S.W.1.
20th MAY, 1952.