FRUS 1964-68, Vol. XXV, South Asia: 247

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, AGR 1 INDIA. Confidential; Immediate; Exdis. Passed to the White House.

1274. For Agr Sec Freeman from Bowles. Minister of Agriculture Subramanian is eagerly looking forward to opportunity to visit with you at FAO Conference in Rome where I understand you will both be on Nov. 19. The difficult agricultural situation with which Subramaniam is dealing, as you know, is now further complicated by what appears to be worst monsoon pattern in fifty or sixty years.

For the long haul GOI is deeply committed to an all out program of increased fertilizer output, better seeds, better use of water, expanded extension [service?], etc. Much of their new fertilizer and improved seed effort is to be concentrated on 30 million specially selected irrigated acres where they believe they can double present output in next five years.

Although we must of course continue to carry out the plans which they have laid down, it is also important that we convince Subramaniam that we have confidence in him personally. He is by all odds the ablest Minister in cabinet, vigorously pro-American and with great amount of courage. In the last two weeks he has performed valiantly answering attacks of left wing element who have charged that we have been using PL480 food as political lever. However, he is genuinely baffled when he reads statements in US press that his Ministry is not doing all it should in regard to agriculture since he has adopted just about every suggestion we have made in the sixteen months he has had job.

Therefore I earnestly hope you will encourage him and thank him for all he has done for India's future. He needs to feel that we are behind him. He has stuck his neck out politically in our behalf and his political career is committed to cooperation with the United States.

He will want to know from you about (a) outlook for a long-range PL480 agreement; (b) our ability to go beyond 500,000 tons per month if the supply situation becomes really desperate and (c) possibility of freeing some US foreign exchange to enable him to buy 700,000 tons of fertilizer (which we have been insisting upon) in time to affect crops which will be planted next June or July.

Although I know your time is short before you leave for Rome it would be most useful if you could arrange to bring Subramaniam back from Rome to Washington for further talks with some of the people there who are not aware of what India has now committed itself to do and who are therefore genuinely sceptical that India will follow through on this effort.

If this not possible I would appreciate somehow arrange with Subramaniam to [visit] India to see for yourself what has been undertaken here since your last visit eighteen months ago and to share with GOI our thinking about what more they ought to be doing.

With considerable difficulty we have been sitting on the lid here for several months and I am confident that India is now at a turning point. It could move strongly in our direction but if we should twist the screws a bit too tight we may lose all we are seeking to gain. Do let me know whether you can invite Subramaniam back to Washington or if not, whether you might possibly be able to come to India yourself soon.

248. Memorandum From the President's Deputy Special Assistant for National Security Affairs (Komer) to President Johnson/1/

/1/Source: Johnson Library, National Security File, Name File, Komer Memos, Vol. II. Secret.

Here are the papers Arthur Dean mentioned today./2/ Since aid to India and Pakistan is so central to the FY 1967 foreign aid problem now under review for you, we made a special effort. The attached papers are the result, and we are shooting them at your tough-minded friends.

/2/Reference is to a 29-page paper dated November 8 entitled "A United States Assistance Strategy for India," and a 21-page paper dated November 9 entitled "United States Assistance Strategy for Pakistan." There is no drafting information on either paper, but a covering memorandum by Komer, November 10, forwarding the India paper to the President states that it was drafted by "us ‘soft on India' types." (Ibid., Country File, India, Vol. VI, Cables, Memos and Miscellaneous, 9/65-1/66) A copy of the India paper is ibid.; a copy of the Pakistan paper is in Washington National Records Center, RG 330, OASD/ISA Files: FRC 70 A 3717, 092 Pakistan)

We've made every effort to be hard-nosed, to put the alternatives coldly, and to give you a basis for choice. But we just can't get around two basic propositions: (1) that India is (with Japan) one of the two really key countries in Free Asia--so merits a comparable investment almost despite the Indians; (2) that Pakistan can complement our effort in India, or greatly complicate it if it goes the Chicom route.

Because these two big programs are the key variables, you may want to read parts of the argument before the aid review. If you wish to scan only the key portions, these are:

pp. 5-7 which argue that India has actually done reasonably well with our money, and is basically going our way. Thus our real problem is less India's basic outlook than its performance.

pp. 8-10 on how we can't "buy" a Kashmir settlement, even if we throw all our aid in the balance. So we can't afford to make this the keystone of our policy.

pp. 16-19 which say that what we need is a new policy--not in content but in method--which would directly bargain continued massive aid for sharply improved Indian self-help. We would make this bargain self-enforcing by adjusting aid flow to Indian performance--especially in agriculture.

pp. 21-22 on how this sort of bargain can be struck by you and Shastri at the summit--the earlier the better.

pp. 1-4 which describe our cruel dilemma--how just when our economic aid begins to pay off we find ourselves on divergent political courses.

pp. 7-11 on the urgent need for a meeting of minds at the summit and the political bargain we must insist on if our aid is not to be wasted.

pp. 16-19 on how it makes sense to support Pak development if we can reach a political understanding, and how tactically we might handle Mr. Ayub.

249. Memorandum From the President's Special Assistant for National Security Affairs (Bundy) to President Johnson/1/

/1/Source: Johnson Library, National Security File, Country File, India, Vol. VI, Memos & Miscellaneous, 9/65-1/66. Secret.

1. I spoke to Orville Freeman this morning about getting the Indian Agricultural Minister, Subramaniam, over here. Orville is going to an international agricultural meeting in Rome this week, and will be seeing Subramaniam there. He has undertaken to explore the matter fully, and he strongly supports the basic idea of the Subramaniam visit.

2. Orville pointed out that Subramaniam might find it difficult to come if there were no prospect that he could reach any understanding on help for Indian agriculture--because for him to go home empty-handed--as a well-known friend of the United States--might be politically tough. I told Orville that you were not ready to give any blank checks on this, and that I thought he should make his own estimate in the light of all the evidence as to whether it was likely that Subramaniam's visit would lay a base for a hard-boiled recommendation that limited interim assistance be given in such a matter as, for example, for fertilizer.

3. Orville and I agreed that your own freedom of action should be protected, but I pointed out that you had repeatedly emphasized in the last week that you were looking to the Department of Agriculture for determined efforts to make sure that every single action of the United States in the food aid field was effectively related to agricultural self-help by the receiving country. I said that I thought that since this was your position, you would be prepared to give due weight to a really well-considered and carefully limited recommendation growing out of a Subramaniam visit--if it had the signature of the Secretary of State for policy, the Secretary of Agriculture for food, the Secretary of the Treasury for dollar drain, and the Directors of AID and the Budget from their points of view. I said that the loans in question had no balance-of-payments import that I could see, so that I thought Freeman himself was the key figure.

4. On this basis, Freeman undertook to have a hard talk with Subramaniam in Rome and make a judgment on the visit at that time. We agreed to report this plan to you in case you had any objection to it.

5. I have since talked to Komer about my conversation with Freeman, and he believes that Subramaniam can fairly easily come here for a "planning" visit without taking any commitments home with him, if it seems better to you when the time comes to play it that way. Moreover, Komer thinks that in the light of the very bad Indian harvest, straight food shipments may turn out to be more important right now, both to the Indians and to us, than fertilizer. So I have agreed again with Freeman that he should be sure to give absolutely no assurance that a visit here would lead to a specific prize for Subramaniam.

6. Meanwhile, a cable/2/ is going to Bowles telling him to explain politely to Shastri that while you would like to receive him at any time, and quite understand that he cannot come in December, the dates proposed in the first weeks of January are difficult for the reasons you stated to me yesterday. Bowles is requested to suggest to the Indians that Shastri propose himself for any date that is convenient to him after January 20.

/2/Telegram 895 to New Delhi, November 18. (National Archives and Records Administration, RG 59, Cental Files 1964-66, POL 7 INDIA)

7. We are also going forward to make sure that Ayub knows he will be welcome on agreed dates in December--if indeed he still wants to come then./3/

/3/Bundy sent a cable to the LBJ Ranch on November 26 to report that Ayub had proposed a visit to Washington December 14-16, following a speech to the UN General Assembly on December 13. (Telegram CAP 65753 from Bundy to the President; Johnson Library, National Security File, Country File, Pakistan, Ayub Visit, 12/12-16/65)

250. Telegram From the Department of State to the Embassy in the United Kingdom/1/

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 27 INDIA-PAK. Secret; Limdis. Drafted by Laise on November 20; cleared by Judd, Hare, and Handley; and approved by Ball. Also sent to New Delhi and Karachi, and repeated to USUN.

2919. U.S.-U.K. talks conducted November 16-18/2/ covered British assessment of situation in subcontinent, of positions of India, Pakistan, Russia and China, and consequences for British policy. Sir Patrick Dean led off for Brits in meeting with Acting Secretary Ball and tabled paper/3/ which will be pouched. Purpose of talks and visit of Pickard and Belcher seemed to be to convey to U.S. that gravity of situation and special circumstances (including substantial investment) which characterize U.K. relations with India and Pakistan have led to British assessment that it is in our common interest for U.K. to move ahead with economic aid and selected military sales. One area of doubt was question of supplying Gnat components to India and on this point U.S. views were specifically requested. Implicit in British presentation was hope U.S. would relax its current aid policies in both India and Pakistan. In their view both countries realize U.S. arms embargo had had profound effect on Indo-Pak conflict which had greatly benefited India. Realities of this situaton necessitated at least sales of spares to Paks, particularly for Air Force.

/2/Memoranda of conversation on these talks, which took place in Washington, are ibid., POL 27 INDIA-PAK, POL 2 ASIA, and POL 2 ASIA SE. The U.S. participants in the talks included Ball, Mann, Hare, AID Director Bell, and McNaughton (DOD/ISA). The British participants included Ambassador Dean, Cyril S. Pickard, Superintending Under Secretary for the Asia and Atlantic Division of the Commonwealth Relations Office, and Ronald H. Belcher, Under Secretary of the Asia Division of the Ministry of Overseas Development.

Constant British refrain was pessimism about progress on Indo-Pak front and risks to Western interests of aid being used to extract political concessions. Brits held political pressure would, in present mood of two countries, be likely to drive each to act illogically and against its own national interest. Pakistan might move decisively toward China; India might elect economic stagnation and dependence on USSR. End result could be chaos and beyond retrieving by any efforts we might then make. Pickard thought situation in Pakistan already so explosive and Ayub under such severe pressures from military that it was difficult to see how satisfactory Washington conversations could take place unless Ayub were to go home with arms and/or guarantees against India and some agreement on Kashmir. If U.S. were to pay his price, however, impossible problems would be created for Shastri visit. U.K. has concluded it can best contribute to our common objective by maintaining complementary rather than parallel aid policies, thus trying to maintain what little influence it has and using it to reduce risks and to create reasonable political climate in which more massive U.S. leverage can be used to good effect.

Acting Secretary Ball stated that U.S. posture is to take very hard look at very important but complicated situation which exists on subcontinent. Before continuing to pour very large resources into subcontinent that makes development difficult for itself by its actions, we would want some assurance both on political side and on economic measures for self-help. We have had difficulty explaining to Congress why we were pouring our diminishing surplus stocks into an India that is not moving toward self-sufficiency. To continue to do so may be doing them a disservice. Pakistan has done better on this score but we still face problem of whether it is prudent and wise to provide resources to two nations which are more obsessed with each other than with their own development. These are questions which need answering.

Difference between U.S. and U.K. approach appears to be one of timing--how soon we should move and what should be understandings connected with these moves. Mr. Ball noted that U.S. is expecting Shastri and Ayub. He anticipated that visits would take place before February. We are very much looking forward to having frank talks. Out of these we will have clearer view of what we can expect of each other. We are not keen on rushing back and putting resources into an area where we do not know what is going to happen. Acting Secretary expressed hope that U.S. and U.K. could have sufficient agreement on requirements to move together. In light of this, resumption of sales of military equipment by U.K., particularly components for Gnats, frankly concerns us and it will intensify Pakistan anxieties. Therefore, it seemed desirable to reach some common conclusions on timing.

Throughout talks U.S. officials emphasized U.S. policy was unchanged for present and lack of parallelism of U.S.-U.K. policies would create problems for us. At conclusion of talks we confirmed to Brits that U.S. hoped U.K. would defer action on allowing sales of Gnat components to India until after Ayub, Shastri visits. In farewell conversation with Department officer Pickard stated on basis of what he had just learned about Indian deals with USSR and Czechs, he thought U.K. could pin holding line on Gnats to this new development.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, SOC 10 INDIA. Confidential; Priority; Exdis. No time of transmission is on the telegram. Received at 8:21 a.m. and passed to the White House at 8:56 a.m. Freeman was in Rome for meetings of the UN Food and Agriculture Organization.

1377. Dept pass Texas White House--Eyes Only for President. From Secretary Freeman.

Earlier estimates appear optimistic in light of latest evidence. 1964-65 food grain production of 88 million tons will drop at least 10 million tons. Drouth most serious of this century. Virtually every area of India hit. Current actual consumption is estimated 174 kilograms of grain per capita, well below minimum FAO nutritional standards. If 10 million tons less food grains available, intake will drop to 152 kg per capita.

Prediction that 10 million tons cut in availability of food grains would result in substantial starvation appears to be valid.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 27 INDIA-PAK. Secret; Noforn; Limdis. Received at 1:04 p.m.

1. During meeting with AID Director Williams in Rawalpindi, November 24, Finance Minister Shoaib stated that President Ayub had deep-seated suspicion that American CIA was attempting to undermine his position and bring about his downfall. Shoaib said he had been working with Ayub in preparation for the visit to Washington, but that he had not been able to remove Ayub's suspicion or even entirely plumb its full extent. It was a central point being actively played upon by those who advocated an alternative course in Pakistan foreign policy orientation, Shoaib said. He asked that this information be conveyed to the Ambassador and Secretary of State and he (Shoaib) recommended that reassurance to Ayub on this point be undertaken by President Johnson as "the first order of business" during the forthcoming visit.

2. Shoaib also said that the feeling was growing in Pindi that the US had let Pakistan down despite membership in SEATO and CENTO and specific pledges against Indian aggression. These points were being made in National Assembly and they were becoming harder to counter. US arms supplied to India had been used against Pakistan. Shoaib observed that he would meet again with President Ayub that evening and appeared to be inviting counter arguments. Williams replied that the US Government had fully met its pledge to come to Pakistan's assistance in a situation where the origin of hostilities was confused. We had produced the cease-fire at a time when it was desperately needed and we had "taken India's food supply by the throat," with short rein month-to-month approval, in support of the cease-fire. The ratio of US arms assistance was ten to one in favor of Pakistan over India and no country had received such generous economic assistance as Pakistan. The US was Pakistan's best friend by any standard of reasoning, AID Director Williams concluded.

3. Shoaib expressed concern about the increased military budget. He was afraid an enlarged army would become a permanent factor, but he said he was powerless to resist diversion of financial resources to defense, given the present mood and the need to replenish arms lost in the war. Williams hoped that no significant arrangement for arms from Communist China would be concluded before President Ayub's visit to Washington. Shoaib was visibly disturbed, saying that Pakistan had to replenish arms from somewhere; the Indians were building up and reportedly getting US arms from Israel and Formosa. Shoaib said he had kept out of the attempts to make alternative arrangements for arms, but he appeared to accept validity of the point that a major arms deal with Communist China would prejudice the success of Ayub's visit to the US.

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, AID (US) 15-8 INDIA. Confidential; Priority. No time of transmission is on the telegram. Received at 2:24 p.m. and passed to the White House at 4:24 p.m.

1381. Dept pass Texas White House--Eyes Only for President From Secretary Freeman. Embtel 1373./2/

Title: Agreement between Secretary of Agriculture Orville L. Freeman and Minister of Food and Agriculture C. Subramaniam, November 1965, Rome, Italy. End title.

It was agreed that it was very much to the benefit of both India and the United States to reverse the disturbing downward trend in per capita food production.

It was agreed that the quantity of resources allocated to agriculture has not been adequate in recent years.

1. Investment in agriculture during the fourth Five Year Plan (1966-67 to 1970-71) would be 2,400 crore rupees (nearly 5 billion dollars) or more than double the investment levels during the third plan period ending this year.

2. Investment in agriculture during the coming year (1966-67) would be increased by at least 40 percent above the current year even though the emergency might require cutbacks in other areas of investment.

3. Investment in agriculture next year (1966-67) will be 410 crore rupees as against 304 this year.

1. The Government of India will publicly announce and endorse the fertilizer consumption targets for the next 5 years agreed to by the Indian Ministry of Food and Agriculture. These quantities of fertilizer, to be made available through imports, if domestic production is inadequate, are as follows:

	N	P205	K20
	(million metric tons)
1966-67	1.00	0.37	0.20
1967-68	1.35	0.50	0.30
1968-69	1.708	0.65	0.45
1969-70	2.00	0.80	0.55
1970-71	2.40	1.00	0.70

2. Basic policy changes encouraging foreign private investment in the manufacture and distribution of fertilizer will be implemented.

A. The Government of India will announce a plan before January 1, 1966 to purchase any fertilizer produced in excess of market demand at world market prices.

B. The government of India will announce the removal of any geographic constraints on fertilizer marketing before January 1, 1966 to take effect as soon as fertilizer supplies are adequate, now expected in 1968-69.

C. The Government will reduce the role of the central nitrogen pool from its present near-monopoly position to one in which it handles only a minor part of the fertilizer supply. All manufacturers of nitrogenous fertilizer will be authorized to establish their own distribution arrangements.

3. That steps would be taken by the government to operate its own fertilizer plants at full capacity by allocating enough foreign exchange to ensure adequate supplies of raw materials and spare parts and by carefully reviewing periodically the level of management effectiveness.

4. That if modifications in the procedures for approving and licensing foreign private investment in the manufacture and distribution of fertilizer do not sufficiently shorten the time required for negotiations that further administrative and procedural changes will be made.

5. A cabinet level committee, now chaired by the Prime Minister will make a continuing effort to see that bureaucratic procedures do not hinder or discourage private foreign investment in fertilizer production and distribution. It will also pass judgment on basic policy questions which if unresolved might hinder investment.

6. That there will be no tie-in between credit and distribution. That is, farmers will be given credit regardless of where they buy their fertilizer.

7. That the Government of India will not require government participation in the ownership of fertilizer plants in the private sector.

It was agreed that the current system of credit cooperatives was not adequate and that the following actions would be taken to remedy this:

1. A cabinet level committee on agricultural credit chaired by the Food and Agriculture Minister would explore alternative avenues of supplying credit to farmers.

2. The government will systematically review and test alternative credit possibilities. The following will be tested on a pilot basis.

A. The food corporation will supply credit to farmers against advances on their crops.

B. Current private credit institutions will be urged to extend credit availabilities and the possible need for credit subsidies will be evaluated.

3. The possibility of an all-India agricultural credit organization to supplement the credit supply of the cooperative sector will be actively explored.

It was agreed that new instrumentalities such as the agricultural production board, a committee of cabinet members and other key officials chaired by the Food and Agriculture Minister and vested with the authority to make binding decisions on matters of agricultural production, will be used to achieve the necessary allocation of resources to Indian agriculture.

1. 32 million acres of the most productive land farmed by the more efficient farmers will be designated for a crash production program with a target of 25 million tons of additional food grains by 1970 on this selected acreage.

A. The new fertilizer responsive varieties of food grains will be planted on well irrigated land, applying from 100 to 150 pounds of fertilizer per acre as compared with a national average of 3 to 5 pounds per acre. These new varieties, planted on the best irrigated land, would get the necessary fertilizer even though this might require a cutback on some other land if fertilizer were in short supply.

B. If the seed multiplication program for the new imported varieties (wheat from Mexico and rice from the International Rice Research Institute in the Philippines) falls behind schedule, foreign exchange will be made available for the import of additional supplies of suitable seed.

C. New irrigation techniques, going from the traditional flow method to controlled maximum irrigation, will be selectively applied. For this purpose resources will be made available wherever it is demonstrated practicable. In addition, adequate resources will be made available to develop minor irrigation sources to attain a water balance for multiple cropping. With this new intensive irrigation more and more land will be multiple cropped.

It was agreed that price policies will be reviewed periodically to ensure a continuing favorable relationship between the price of food grains and the price of purchased inputs such as fertilizer.

It was concluded that the new legislation establishing the food corporation and the recent amendments to the Defense of India rules along with the basic constitutional provisions did give the center government adequate authority to control the movement and distribution of grain between the states. The Minister made it clear that the central government now had the authority to develop and implement a rational food policy.

It was agreed that efforts to dramatize and mobilize public sentiment to demonstrate the urgency of action in agriculture would be made. Such actions as public statements by the President, Prime Minister and other leading public officials will be used even more in the future.

1. Highest priority will be given to agricultural development and allied programs in the fourth Five Year Plan. This priority will also apply to the allocation of foreign exchange to agriculture. It is noted that the agricultural program detailed above would require foreign exchange of the order of 2 billion dollars for the fourth Five Year Plan.

2. To meet food production targets the import of 500,000 tons of nitrogen fertilizer (in terms GF N) for the 1966-67 crop is essential. Out of this total quantity needed, arrangements will be made to import 100,000 tons from available resources. Every effort will be made to find the balance of the resources required to reach the target. Minister Subramaniam emphasized the critical importance of reaching this target, stating that in view of the severe limits on the availability of foreign exchange that immediate United States aid is imperative.

It was agreed that the Government of India will make the following food aid phase-out schedule an integral part of its fourth Five Year Plan for agriculture.

Year	Cereals Surplus (plus) or Deficit (minus)	Import Requirements for Buffer Stocks (in million tons)	Total Import Requirements
1966-67	(minus) 6.2	0.8	7.0
1967-68	(minus) 3.8	1.7	5.5
1968-69	(minus) 2.0	2.0	4.0
1969-70	(minus) 0.2	2.3	2.5
1970-71	(minus) 0.9	Nil	nil

Signed Orville L. Freeman, Secretary of Agriculture, United States of America; C. Subramaniam, Minister of Food and Agriculture, India. Date November 25, 1965. End text./3/

/3/This agreement, subsequently referred to as the "Treaty of Rome," was hailed by John P. Lewis, Minister of Embassy in New Delhi and Director of the AID program in India, in a December 28 memorandum to Komer as more solid in content and promise "than any comparable program since Independence." Lewis' assessment was that the United States "has helped engineer what could be a breakthrough for Indian agricultural expansion." Lewis saw that expansion as an important part of an effort to speed up Indian economic growth, an effort being described by AID and the World Bank as "the Big Push." Lewis noted that the success of "the Big Push" would also depend on a revamped assistance program for India. (Johnson Library, National Security File, NSC History, Indian Famine, August 66-February 67, Vol. II)

254. Memorandum From the President's Deputy Special Assistant for National Security Affairs (Komer) to President Johnson/1/

/1/Source: Johnson Library, National Security File, Country File, India, India's Food Problem, Vol. I. Secret. A handwritten notation reads: "Rec'd Ranch 11-28-65, 8:30 p."

Attached is Rusk's request for another monthly 500,000 tons of food for India and 175,000 tons for Pakistan./2/ Freeman's cables to you confirm that a new Indian food crisis is upon us. As a result, there will be pressure for a sharp increase in monthly shipments, perhaps from 500,000 to 700,000 tons. In fact, after Rusk's memo was drafted, we got an official Indian request for 650,000 tons (including 100,000 tons of milo) next month.

/2/Attached was a November 26 memorandum from Rusk to the President recommending the release of grain for India and Pakistan under existing P.L. 480 agreements.

We're looking into this, but suggest going ahead on the old basis now and awaiting Freeman's recommendation on anything further. The reason for moving fast is that we've actually been taking five weeks to make each four week allocation, which means that we're really shipping at a slower rate when the problem is growing.

Freeman seems to have gotten quite an impressive set of commitments from Subramaniam (though without any reciprocal commitments on our part). Thus we're making progress on the long-term problem, though we still have the short-term food crisis to sort out. Freeman clearly wants to come to the ranch to report. Would you prefer to have us ask him to give his recommendations in writing first?

Approve India/Pak allotment
Ask Freeman to report in writing/3/
I'll handle Freeman

/3/Johnson indicated his approval of this option by completing the sentence in his handwriting to read: "first and I'll see him as soon as possible." Komer noted in the margin: "I told Schnittker 29 Nov 65."

255. Memorandum From Secretary of Agriculture Freeman to President Johnson/1/

/1/Source: Johnson Library, National Security File, NSC History, Indian Famine, August 1966-February 1967, Vol. I. No classification marking.

I. For the first time the Indian Government through its Agricultural Minister Subramaniam has made concrete specific commitments to the United States which will if carried out vigorously significantly improve India's agricultural performance.

II. The critical question remains--How the United States can make certain that pledges are followed by performance.

III. It is expected that the Indian Government in the near future will make a public pronouncement on agriculture incorporating the agreed upon actions and targets with a commitment to accomplish them. Subramaniam indicated to me the likelihood that he would be speaking to the Council of State on December 8 to spell out a plan of action to meet the current crisis and that he would incorporate the commitments made at Rome in such a presentation.

IV. The public commitment by the Indian Government can be reinforced by the United States as follows:

(a) Length of Public Law 480 agreements can be conditioned to the performance of the Indian Government.

(b) The agricultural action commitments can be incorporated into the AID arrangements with disbursements conditioned on the Indian Government meeting its agricultural commitments. Precise detailed criteria to measure performance and insure action can be negotiated. Failure on the part of the Indian Government to perform will be surfaced under such a procedure and the appropriate action decision can be made accordingly.

(a) Communicate to Prime Minister Shastri that spelling out as the plan of the Indian Government the commitments made in Rome would be favorably received by the United States Government.

(c) Following Indian Government public commitment perhaps through Subramaniam's proposed December 8 speech to the Council of State, U.S. Government would then compliment the Indian Government on strong new efforts and announce the opening of negotiations for a further extension of P.L. 480 for a longer period (but still limited).

(d) When the U.S. Government resumes negotiations for economic assistance it will be made perfectly clear privately that assistance will be geared to the Indian performance in meeting their agricultural commitments and targets. In the alternative the President might direct that negotiations quietly resume prior to the Shastri visit. Such negotiations could provide a useful backdrop for the President's use at the time of the Shastri visit.

Recent events and my meeting with Subramaniam in Rome encourage me where Indian agriculture is concerned.

1. It appears that the Prime Minister is at last convinced of the need to depart from traditional agriculture techniques and use modern inputs, such as chemical fertilizer.

2. It appears that the Prime Minister's attitude which hitherto might be described as Fabian Socialist toward agricultural development has changed. Today agriculture commands a position at the top rather than at the bottom of the totem pole in priorities.

3. Recent public statements by the Prime Minister substantiate the changed attitude and increased attention now given to agriculture.

4. Food and Agricultural Minister Subramaniam impressed me. He has drive and ability. He appears to hold a strong position in the Indian Cabinet and to have a good deal of political skill. He has been a steadfast supporter of the United States.

VII. Finally, it is my judgment, supported by the Indian specialists on my staff, that India can make the grade. It does have the physical resources. Its soils are for instance inherently far superior to those of Japan. Now that the Indian Government is targeting its goals and appears to be giving necessary priority in allocating its resources and we have some strong leverage to insist that they continue to do so, I believe significant progress can be made. It will be slow and tough, but it can be done.

256. Telegram From the President's Special Assistant for National Security Affairs (Bundy) and Deputy Special Assistant for National Security Affairs (Komer) to President Johnson in Texas/1/

/1/Source: Johnson Library, National Security File, Country File, Pakistan, Vol. V, Memos, 9/65-1/66. Secret.

CAP 65788. We've landed Shastri too. His private secretary has asked Bowles if the first week in February is convenient to you. This is in response to our suggestion that mid-January, as he earlier proposed, was bad for you but that any time after the 20th would be fine.

Shastri has apparently been maneuvered (by Ayub's acceptance) into going to Tashkent at the end of the year./2/ This is an added reason for his eagerness to sign up with you first lest we misunderstand. In fact, however, Tashkent may prove a blessing in disguise. When Ayub hits you on Kashmir, you can say work it out with Shastri at Tashkent. If (remote chance) the Soviets do work out a Kashmir deal, we'll gain as much from it as the Soviets. More likely, the Soviets will find themselves in the same box we've been in.

/2/According to press reports from New Delhi, Shastri announced on December 1 that he had agreed to meet Ayub at Tashkent in late December or early January. (Telegram 1401 from New Delhi, December 2; National Archives and Records Administration, RG 59, Central Files 1964-66, POL INDIA-PAK)

We suggest you take up Shastri visit with Rusk tomorrow, and decide on a firm date.

On Indian food, it looks as though a combination of the short rein strategy, Freeman's recent prods, and India's own desperate straits have finally made them think big. We like Freeman's strategy, but suspect that you'll want to keep Indians on a short rein tactically till you and Shastri strike the bargain. This is do-able, provided that our monthly interim shipments are big enough to keep India afloat till then. So we'd again argue for a quick monthly OK of as much as Freeman thinks desirable (plus the interim fertilizer loan--which we'd see as shrewd but not essential).

/1/Source: National Archives and Records Administration, RG 59, Central Files 1964-66, AGR 1 INDIA. Secret; Immediate; Exdis. Drafted by Freeman. The telegram bears a handwritten notation that reads: "OK/L," indicating that it was cleared with the President. Coon and Sober were informed.

976. For Ambassador from Secretary Freeman. Please communicate to Subramaniam that I have reviewed our Rome agreement with the President who is pleased with the steps taken and contemplated by the Indian Government to strengthen Indian agriculture. The President looks forward to Subramaniam's outlining his program including points agreed upon at Rome publicly as soon as possible, perhaps when he addresses Council of State as he suggested at Rome he would do soon./2/ Decision of PL-480, both extension period and amount, and fertilizer loan under active consideration.

/2/Bowles reported on December 3 that he had conveyed this message to Subramaniam who indicated that he intended to present his proposals for agricultural reform to the Cabinet and expected its approval. (Telegram 1413 from New Delhi; ibid.)

258. Memorandum From the President's Deputy Special Assistant for National Security Affairs (Komer) to President Johnson/1/

/1/Source: Johnson Library, National Security File, NSC History, Indian Famine, August 1966-February 1967, Vol. I. Secret.

India Food Catastrophe. Freeman's best expert is just back with the considered judgment of the people out there that the food crisis is even more catastrophic than previously estimated./2/ The shortfall will probably run as high as 20 million tons instead of 10-12 million (we're shipping at an annual rate of 6 million). Some famine and starvation seem inevitable, almost despite whatever we do. The whole crisis is now public, with major coverage in the Sunday papers here.

/2/The expert was Lester Brown, a staff economist in the Department of Agriculture and Freeman's adviser during his meetings with Subramaniam in Rome. On December 6 Freeman sent a portion of the report prepared by Brown after his trip to India to President Johnson. (Memorandum from Freeman to President Johnson; ibid.)

On the longer term front, you've seen Bowles' report (Delhi 1430)/3/ that Indian cabinet bought almost all of the Subramaniam/Freeman recommendations. They will be announced Tuesday. India is also allocating $52 million equivalent to buying fertilizer.

/3/On December 6 Bowles reported that the Indian Cabinet had accepted the agreement reached at Rome with one minor exception relating to fertilizer distribution, which was to be studied by a subcommittee before final decision. (Telegram 1430 from New Delhi; National Archives and Records Administration, RG 59, Central Files 1964-66, SOC 10 INDIA) On December 7 Subramaniam made parallel statements in the Lok Sabha and the Raj Sabha reporting the Cabinet decisions concerning agriculture policy. (Telegram 1440 from New Delhi, December 7; ibid., AGR 1 INDIA)

Recommended US Response. We are already past the 4 December deadline if the pipeline is not to be interrupted. The tactics of our response should be to go big enough to seem generously responsive, yet limited enough to retain full bargaining leverage. The sheer magnitude of India's food crisis makes this easy.

A. Make the next allocation 2 or 3 months. The case for a longer period is to reduce panic and hoarding in India by showing that the US will come through. A secondary reason for 3 months is to carry us through Shastri visit, so he won't have to come beg. However, we could stick with 2 months or even one if we went big on amount.

B. 500,000 tons per month would now seem utterly incommensurate with the need (which may be three times higher). With some famine inevitable, should we open ourselves to accusations later that we share the responsibility for having shipped less than Indian capacity to receive? Given all the crisis publicity, our response won't look credible any longer if we keep shipments at 500,000 tons. However, port capacity gives us a ceiling well below the need; thus, going to 750,000 tons would show responsiveness, while still making India come to us. Even one month of this would look much better than 2-3 months at 500,000. Bell favors staying at 500,000 Title I but adding on 250,000 Title II disaster relief. We pay the freight on the latter, but it looks better and protects us against Krishna Menon-type allegations that we charged money for food when Indians were starving.

C. $50 million Fertilizer Loan will save 4 million tons of grain we'd otherwise be pressed to give later, though it alone will not meet the immediate problem in the months before the new crop comes in. Bell feels strongly that we should tie conditions to this loan which will force Subramaniam to carry out his promises.

If Subramaniam comes through publicly, we recommend a reciprocal White House statement (attached)/4/ tailored to your decisions above. It should get a good reaction here and abroad, make the Indians your debtors, and usefully remind Ayub we won't play Kashmir politics with food. But it still leaves India's food crisis unsolved (and only we can solve it), so keeps Shastri coming to you.