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THIS DOCUME Page 598 of 109PERTY OF HIS BRITANNIC MPage1598 OfOVERNMENT)

SAN ANTON Se den ou

SECRET

C. P. (49) 231

11TH NOVEMBER, 1949

CABINET

COPY NO.1

THE EAST AFRICAN GROUNDNUTS SCHEME

Memorandum by the Minister of Food

When I circulated the final Annual Report of the Overseas Food Corporation (C. P. (49) 210) I undertook to submit my proposals for the future development of the East African Groundnuts Scheme. The programme for the next four years prepared by the Overseas Food Corporation has been examined in detail by my officials and, although commercial considerations alone do not provide justification for its acceptance, they have recommended that it should be adopted, having regard to the wider implications mentioned in this memorandum. I have discussed the plan with the Chancellor of the Exchequer and Secretary of State for the Colonies and they are agreed that the plan should be adopted. I therefore seek the authority of my colleagues for the following proposals for the further development of the East African Groundnuts Scheme.

Reasons for the present proposals

20

It became apparent at the beginning of 1949 that original estimates (both those made in Mr. Frank Samuel's original Scheme, and in the report of the Wakefield/Rosa/Martin Mission) of the cost of clearing the African bush were so faulty that there was no prospect of attaining the original White Paper (Cmd. 7030) estimates of cleared acres within the limits of the financial resources for which the Corporation had Parliamentary authority. The Corporation's first proposals (made in the light of their knowledge of actual clearing costs) envisaged a borrowing of some £67 million to clear 1,200,000 acres. But since their borrowing power is limited under the Overseas Resources Development Act to £50 million (plus £5 million which may be borrowed on short term) the Chancellor of the Exchequer and I felt unable to accept their programme and they were asked to put forward revised proposals which kept expenditure within the limits of their borrowing powers.

The present proposals

3.

The proposals which I have received from the Over- seas Food Corporation are set out in the annex to this memorandum. It represents what they consider to be the most economical use of the resources available to them for contin- uing their development work. Briefly, what they propose is that they should be authorised to proceed with development in the period up to 1954 on the basis that by the end of that time they will have achieved the clearing of 600,000 acres at a total estimated borrowing of about £47.6 million. After allowing for the £2 million already required for the promising Queensland Sorghum Scheme this will virtually commit.the present financial resources of the Corporation.

4. Page 59801097poration propose to makPage 598 of homic use of the resources which they have available to them. This will enable them to have cleared, by the end of 1953, 90,000 acres

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