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Printed for the Cabinet. June 1952
SECRET
C. (52) 201
18th June, 1952
CABINET
Copy No. 73
THE DOLLAR GAP: FOOD IMPORTS
MEMORANDUM BY THE MINISTER OF FOOD
I have already circulated to my colleagues a note by my Scientific Adviser on the adequacy of our national diet (C. (52) 200). There are certain matters relating to supplies of basis foods which arise immediately on the Report by the Programmes Committee circulated by the Chancellor (C. (52) 195) and which I think the Cabinet should have before them in discussing the situation described in the Chancellor's memorandum.
Danish Bacon and Eggs Contracts
2. Paragraph 8 of the Supplementary Note to the Report by the Programmes Committee refers to the consequences of eliminating from the Programme altogether the uncommitted purchases of rationed foods amounting to £24 million. The paragraph refers in the last sentence to the reprisals which would be provoked if we completely stopped the import of Danish bacon and eggs.
3. Almost from the very day that Denmark was liberated the United Kingdom has done its best to encourage the Danes, by means of the guarantees contained in the long-term contracts for butter, bacon and eggs, once again to base their agricultural production upon this market. Through the Danish bacon and egg industries alone the Danish economy is now linked to ours to the tune of some £50 million worth of reciprocal trade per annum, and even tó hint at putting an end to this now would cause a very grave shock to our relations with a particularly friendly country and would undoubtedly provoke reprisals against our exports. These purchases are, therefore, only uncommitted in the sense that the existing contracts terminate in September and to the extent that we may be prepared to place limits upon our future purchases and face the consequences. The Economic Policy Committee (E.A. (52) 13th Meeting) approved, in principle, my proposal to negotiate further contracts covering the procurement of bacon for two years and eggs for one year from Denmark.
4. I understand that the Chancellor is inclined to the view that a ceiling limitation ought to be imposed on the quantities of bacon we take from Denmark. The contract which expires at the end of September next committed the Danes to supply and us to buy 90 per cent. of their export surplus, and I would like to conclude a two-year contract on a similar basis.
5. In the contract year 1952-53, in addition to supplies from Denmark (about 140,000 tons), we should also receive 30,000 tons from Holland, and perhaps 40,000 tons from Poland, and this, in addition to some 280,000 tons of home supplies, would give us a total of nearly 500,000 tons and would enable us, I hope, although not too confidently, to maintain an average ration of 5 oz., of which the Danish supplies would provide about 1 oz. and are, therefore, of crucial importance. On the basis of pre-war consumption, and making allowance for the increase in popu- lation, our best estimate is that bacon cannot be freed from control and rationing until supplies of at least 600,000 tons are secure. It is true that in the recent Agricultural White Paper there was foreshadowed a substantial increase in the home supplies of pigmeat, but this is all desperately needed in support of the meat ration,
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