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Tuesday, 10 May 1960

Mr McEWEN - An agreement was signed in Washington last week, I understand, between the United States Administration and the Government of India. It is an agreement of great significance both in respect of giving aid to India in the form of food and in respect of the establishment of certain principles upon which the Australian Government has based its views on the export of surplus food stocks. This agreement provides that over the next four years 16,000,000 tons of United States wheat and 1,000,000 tons of United States rice will be made available to India. In each of the four years, 3,000,000 tons of wheat, or a total of 12,000,000 tons will be shipped to meet a large part of India's estimated import requirements. The remaining 4,000,000 tons of wheat and the 1,000,000 tons of rice will be used to establish in India a food reserve to be drawn upon by agreement between India and United States in the event of an emergency in India.

This generous provision has been made by the United States under its Public Law 480. Payment is to be made not in dollars but in Indian rupees, and the United States will itself provide from its fund of rupees so gained loans and grants to the Government of India for important and essential developmental projects. This arrangement has the blessing and approval of the Australian Government. I am sure that we shall all recognize the magnitude of the gesture by the United States, and the magnitude of the benefit that India will receive from it.

At the same time, 1 am able to say that, under the arrangement which was reached in negotiations when I went to Washington a year ago - the so-called Food for Peace arrangement - Australia was brought into consultation before this business was done, as were the other wheat exporting countries. The United States, of its own initiative, added the sole condition that during the period of the provision of these enormous sums for India, there should be a recognition that that country was not without some capacity to buy commercially. Consequently, India, by arrangement, will buy, in each of these years, 400,000 tons of wheat on a commercial basis.

The Indians recognize Australia as the natural and traditional provider of their wheat. Therefore, we, as the country capable of quoting the lowest sale price will enjoy the major benefit of this commercial purchase. In this current financial year, the United States has provided 3,000,000 tons of wheat for India on a similar basis, and in this year India has already purchased about 280,000 tons of wheat commercially, of which about 250,000 tons has been purchased in Australia. This position represents a reconciliation of the desire of the United States to assist a country such as India with a recognition of the normal commercial interests of a country such as ours.

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