animal products, whereas in the under-privileged nations of the third world most of the grain is consumed directly as human food at about 400 pounds (180 kilos) per person.

There is a great difference whether you convert grain or whether you consume it directly. The animal is a very inefficient converter (8 pounds of grain to produce 1 pound of prime beef) but a very luxurious producer of prime steaks and other foods that we all take as being one of the requirements for the good life-but which is really not very basic if we went about balancing diets in other ways, although this would be less attractive to us than by converting grain to animal proteins.

So in 1972, because of droughts, world cereal production dropped less than 4 percent, 42 million tons, nevertheless it provoked the crisis that we are still faced with today. Soaring, skyrocketing prices for food became a major factor in worsening the general world inflation that has been going on in all countries. Skyrocketing food prices have adversely affected the American consumer-and provoked a public furor-but they have been ruinous to the economies of the developing

nations.

Senator HUMPHREY. Let me get the figure again, Dr. Borlaug.
You said a reduction of about 42 million tons?

Dr. BORLAUG. Roughly, over the base, and it provoked this kind of crisis.

Senator HUMPHREY. And that was the 42 million tons from a peak year of a billion 106 million tons in 1971 ?

Dr. BORLAUG. Exactly.

Senator HUMPHREY. Less than 4 percent, yet it precipitated a major food crisis.

Dr. BORLAUG. From this it becomes obvious that the world was not carrying adequate grain reserves. So we must look at the longtime history. Since World War II, the grain exporting nations inadvertently have been the warehousers of the reserves, the brokers and the bankers. Their governments, that is the United States, have been criticized-domestically-by their own constituents-which is 75 percent urban, with another 20 percent living in cities and towns of varying size, for having fostered policies which resulted in farm product surpluses, at the expense of the taxpayers. Until events of the past year, few people realized the role these so-called surpluses had played in maintaining low prices for food for consumers throughout the world.

The U.S. Government, as the committee well knows, responded to political pressures by trying to use various methods to prevent the further accumulation of "surpluses", while attempting to maintain farm income. These many devices had reduced stocks or reserves to what was thought to have been an adequate reserve about 2 years ago. Then came the drought! And look what has happened. Was it an adequate reserve? I think the question answers itself from the skyrocketing prices and the fright that has been precipitated around the world in commodity prices, in speculation that has gone with it, and in the hoarding that is going on at the present time in many of the fooddeficit foreign countries.

Now, this bad weather had to do with the severe winter kill in the 1972 winter wheat crop in Russia, followed by extreme droughts that summer which also affected not only the vast Russian spring wheat

area but also severely reduced the Chinese wheat crop and the Australian wheat crop. The poor wheat crops in the U.S.S.R., China, and Australia were followed last summer by a very bad monsoon in South Asia, which dropped the production of rice, sorghum and maize and these combined effects precipitated the present crises which is much worse in those parts of the world than in the United States. The result has been that grain prices, that is, wheat, have essentially tripled since July 1, 1972.

Now, the large movements of grain, from the United States to the U.S.S.R., had certain side effects also which complicated the situation even more. The transport, both railroad cars and ocean freighters, were all involved in moving these vast quantities of grain, not only to the U.S.S.R. but to the normal importers from the United States, Canada, and Australia who always are in short supply and must import. Freight rates doubled in a few months' time.

The shortage of shipping capacity also provoked a secondary crisis in that there were no carriers to move fertilizer to developing nations to increase their own production. As if that was not trouble enough, the world's demand for fertilizer overtook supply exactly at the time of the 1972 reduction in cereal production.

There had been a worldwide oversupply of fertilizer for the past 5 or 6 years and many of the companies, including American ones, actually went broke in the process. Production stagnated. But consumption, in the developing nations especially, kept climbing and no one watched this change in demand with sufficient anticipation.

The demand-supply curves crossed in the middle of the drought that was dropping production in the countries as I have already mentioned; and so fertilizer went into short supply and prices skyrocketed on both fertilizers, and on the shipping rates to move the fertilizer, if and when you could buy it.

As I have frequently said, most of us never think that bad weather on the ocean has anything to do with food production but it really does. The anchovy harvest of the west coast of Peru dropped during that same period because of unfavorable westerly winds that disrupted the ocean currents that produce the luxuriant plankton that these anchovies feed on. The result: A drop in the anchovy catch from the 12-million-ton harvest in 1971 to about 4 million tons in 1972.

This, of course, threw out of balance protein supplements for animal rations, since these anchovies go into the production of fishmeal which is used in animal rations that produce pork, eggs, and poultry. Then the whole burden for protein supplements for animal rations had to be carried by soybeans and this provoked soybean shortages and skyrocketing prices in soybeans. So all of these factors got tangled together, and the consumer was forced to pay more for beef, bacon, ham, eggs, chicken, and bread. The events of the past year and the impact of interrelated factors on food production, availability, and prices remind me of conditions resulting from shortages in World War II. When one production factor goes out of balance, it adversely affects many others. It is the "cobweb" or "entangled fishing line" effect.

Although we hear a lot of criticism about food prices in the United States, nonetheless, food is at least available, even though at much higher prices. I would like to indicate how close the world came to a

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major disaster from famine in South Asia in 1972-73. It escaped primarily because of the change in wheat production in recent years. Let me speak specifically about India to illustrate what has happened as the result of the application of new science and technology to their wheat production programs during the last 5 or 6 years. To show its significance, I will need to just cite a couple of figures. Indian wheat production in the very favorable Pre-Green Revolutionor perhaps more correctly Pre-Wheat Revolution-year of 1965, when climatic conditions were ideal, was 12.5 million metric tons. Last year, 1972, when harvests during this year were bad in the U.S.S.R. and China, India harvested 26.5 million metric tons, roughly a billion bushels, which made India the third largest wheat producer in the world after the U.S.S.R. and the United States. This was the fifth consecutive record-breaking harvest. It now appears, although data are still incomplete, that 1973 may again have been a record, perhaps a million tons more than the 1972 crop. Indian wheat production has conservatively increased by 15 million metric tons in the past 6 years. What is its significance? If one calculates that 200 kilos or onefifth of a metric ton is required for feeding of an ordinary person on a wheat diet for a year in India, it means that 5×15 million, or conservatively, 75 million people probably survived during this year of world food crisis because of the change in wheat production in recent years.

Where would India have found these 15 million additional tons of wheat with the market availabilities such as they were? Even had the grain been available where would she have found the foreign exchange to buy $5 per bushel wheat?

I should point out that a second factor also played a major role in averting disaster from famine in India during the past year. This was a national-Indian-reserve or buffer zone of 912 million tons of cereals, mainly wheat, which had been built up in recent years. When the monsoon failed in 1972 and rice, sorghum, millet, and maize crops were poor, it was this reserve that played a major role in carrying the nation through until the 1973 wheat harvest.

All food-deficit nations must be encouraged to follow the lead of India and build up food grain reserves in years of good harvests and carry them as a hedge against bad years. The food exporting nations cannot any longer alone justify carrying adequate reserve stockpiles to meet world needs.

Although there has been considerable increases in food production in many of the nations of the Third World, there is no room for complacency. There continues to be an extreme shortage of trained scientists. Budgets for the development of effective research and for the modernization of agriculture production and especially for inputs such as fertilizer are very inadequate in all developing nations. Fertilizer shortages is the biggest bottleneck of all. Today the world is in crisis on the fertilizer front also, because as I pointed out, the production and demand curves crossed 12 years ago. It will take the world fertilizer industry 3 to 4 years to get tooled up to meet the growing demand. Meanwhile it will be difficult to further increase world food production.

We have the ironic situation now that with this shortage and controls on fertilizer prices in the United States, there is a spread of

about $30 a metric ton between the domestic controlled price here in the United States and prices on the international market. This creates even more confusion and frustrations. It provokes high prices for fertilizers for the developing nations who are importing in greatly increasing amounts. It throws their whole economy out of whack because of prices, but at least they get a considerable amount more than if these U.S. controls were more rational. But it also results in a shortage of fertilizer on U.S. farms. The controlled U.S. price for fertilizer at present levels does not justify the investments to install new fertilizer factories to expand production.

Dr. R. Ewell from New York State University recently pointed out that to just keep pace with population growth, the developing nations of the world in the next 10 years will need to spend $28 billion $2.8 billion annually-to expand fertilizer plant production and imports. I think this is conservative. I think it should be more to meet their needs, especially with costs spiralling as they have been during the past year. But these nations generally say this can't be achieved. Perhaps not. But when we look at the priorities for armament we see these same developing nations collectively each year spend $26 billion on military hardware, following the bad examples that the big military powers of the world set for them. Therefore, the question becomes can they afford not to invest $2.8 billion or $3.0 or $3.5 billion annually on fertilizer production and imports so as to increase their food production.

Senator HUMPHREY. I would like to pin this one down.

Do you mind, Dr. Borlaug, if either Senator Huddleston or I interrupt you occasionally?

Dr. BORLAUG. Not at all.

Senator HUMPHREY. As I understand you, the developing countries, following the example of the superpowers, including ourselves, are spending $26 billion a year on armaments; is that correct?

Dr. BORLAUG. Yes, sir. And I suppose that the global picture is about $220 billion now for the whole world. So you see the big military powers have set a bad example for them to follow.

Senator HUMPHREY. And their great need is for fertilizer in order to be able to come anywhere near meeting some of their essential food needs, and the estimate by your colleague at New York University is about $28 billion over a 10-year period.

Dr. BORLAUG. Right. $2.8 billion a year.
Senator HUMPHREY. $2.8 billion a year.

What would be the effect, Dr. Borlaug, if that fertilizer industry is not developed?

Dr. BORLAUG. Unless this fertilizer industry is constructed, and done so promptly, we will have ever-growing hunger and growing political chaos in the world. Hungry people are not going to lie down and die peacefully. This is my firm conviction.

Senator HUMPHREY. Would you say that if those fertilizer plants are not built and operative on a modern efficient basis in the coming years you could have mass famine in many areas of the world?

Dr. BORLAUG. Yes. It is my fundamental belief that this year the ice was so thin that it was only due to the good summer rainfall, this monsoon that is just finishing in South Asia, that prevented the world from having a famine where somewhere between 50 and 100 million people could have perished, many more than died in World War II, according to the way I remember the figures. Now we have little reserve food

stocks to fall back on. It is estimated that by July 1, 1974, world grain reserves will be at the lowest level in 20 years. But the situation is much more serious than meets the eye at first glance, for today there are 1.1 billion more people in the world than there was 20 years ago.

So, let us not deceive ourselves by thinking that we are dealing with an issue of rather little significance. Without this fertilizer there is no chance to produce the food. I have seen with my own eyes time and again in India and Pakistan where 1 acre of land-with the right new kind of seed and new technology, how to plant the seed and properly fertilize it will produce instead of, let us say, 8 bushels per acre, will produce 75 or 80 bushels. In other words, a seven to tenfold increase. You are making 1 acre produce what 7 to 10 did under the old traditional agriculture. And therein, because of the shortage of arable land that is available for expanding production as you have rightly pointed out, lies the key to this food production issue, adequate production of fertilizer and the application of new technology in the developing nations are absolutely essential to stay ahead of growing demands for food in the next two decades.

Senator HUMPHREY. Are you concerned about the alleged shortage of fertilizer in the winter wheat producing areas of the United States right now?

Dr. BORLAUG. Yes. It is a deplorable situation. You see, because of the control of fertilizer prices at levels below world prices more U.S. produced fertilizer moves into export markets. This is not to deny the need for more fertilizer in the developing nations. They, too, must have more fertilizer and there is the dilemma. The world must expand fertilizer production and do so promptly.

Consequently, there is less a shortage of production and supply of fertilizer everywhere in the world today. It seems to me that if we are going to move ahead vigorously to produce more, then we must unshackle the fertilizer industry from controls that currently make it economically nonfeasible to make the proper capital investment to expand this industry.

Moreover, we must reexamine carefully legislation passed or administrative action taken or pending that has been sponsored or urged by extremists in the environmentalist movement that seriously affects the production of food, fiber, forest products, fuel energy supplies, petroleum and the fertilizer industry. When attempting to arrive at decisions on what best serves the Nation's needs on these matters, emotions and fear-provoking tactics must be downgraded and decisions arrived at on a reasonable benefit-versus-risk basis.

In the case of the fertilizer industry shortages, their costs of production are soaring and it is all tangled in the case of nitrogen, into the availability and prices of gas which goes back to the petroleum picture. So we see that this whole fertilizer and food issue gets tangled into many ways into the more general fuel or petroleum issues that we have to be concerned with today.

The fertilizer industry must be given a high priority for the availability of gas and energy if the world is to produce more food to meet growing demands.

Senator HUMPHREY. I have heard a figure, and if I am in error, please correct me, that approximately 30 percent of the total of our feed grain production in the United States is due to the use of fertilizer. Is that a reasonable estimate or is that exaggerated?