Received 26 February 1946
1. Your telegram No.78 wheat and flour. 
I much appreciate the consideration you have given to my suggestions for increasing the amount of wheat and flour for human consumption during the coming months to meet the grave situation with which many countries will be faced. I fully understand your attitude towards the suggested increase in the extraction rate of flour as we had to face some of the same considerations when we decided to put up our rate from 80% to 85%. I realise that during the next few months your problem will probably be one of internal transport. This is the same problem that confronts the United States. Clearly an increase in the extraction rate will not result in increased exports of wheat and flour if transport is already working to capacity. But taking a longer view an increase in the extraction rate does mean that a larger proportion of the wheat crop will be available for human consumption. We are very much afraid that the present wheat shortage will last for at least another 18 months. According to our calculations the quantity of wheat available for export in the four principal exporting countries during the year July, 1946 to June, 1947, will be 15 million tons as compared with 23 million tons for the year July, 1945, to June, 1946. These figures are based upon the latest available estimates of 1946/47 acreages and assuming average yields.
The very great drop in available supplies in 1946/47 as compared with 194/46 arises from the fact that during 194/4 the world has been drawing on stocks whereas next year little will be available for distribution from that source. An increase in your extraction rate would therefore mean that more wheat would be available for export during the next 18 months than would be the case were the extraction rate not raised even if exports could not be stepped up during the next few months. There would be a larger quantity in stock to be carried forward into the next season when as the above figures indicate there will still be a grave shortage.
I recognise that an increase in the extraction rate by reducing the amount of bran and pollard available for livestock must have adverse effects on the pig and egg industries. This has happened here and as the result of increasing our extraction rate and the general shortage of feeding stuffs we shall be able to provide only one-sixth of the feed for pigs and poultry which they enjoyed before the war. This will result in a reduction in our livestock herds and in due course a drop in our production of bacon and eggs. Similar consequences will follow in your own country and I can only repeat what I said in my telegram No.28  that so long as human beings are exposed to famine and starvation as a result of the present wheat shortage human needs must have priority. If, therefore, in order to increase your exports of wheat to the maximum you have to take steps which will effect the output of pigs and pig products we shall quite understand the reason though we naturally hope the reduction will be as small as possible. This view is reinforced by the situation in India which grows graver daily. The more wheat you have available for export the more assistance it will be possible to give to India. The Indian Delegation which is here at present has represented to me how grave is the position that faces them and we are most anxious to do everything we can to remedy the situation so far as possible.
This situation is likely to last well into 1947.
May I also reinforce the appeal I made to you in my previous telegram to do everything possible to increase your wheat acreage for the next harvest. The figures I quoted above regarding exportable supplies of the four principal producing countries are based as I said upon existing estimates of acreage. Every additional acre which can be put under wheat during the next season will make some contribution to meet the problem - particularly in those Empire countries like India, Ceylon and Malaya where shortage conditions are bound to last for some considerable period, and where every assistance we can give will not only save human lives, but may have far reaching political effects on maintaining the stability of the Empire.