American Food Aid and Global Wheat Markets after World War I

During the First World War the U.S. and Allied governments, together with the leading international grain traders, collaborated to stimulate the production, limit domestic consumption, and the coordinate the international distribution of wheat, a key commodity for American and European consumers and armed forces. Using government agencies staffed largely by leading grain traders, they intervened to temporarily control a market already beset by decades of economic crisis.

The 1890s to the 1920s were tumultuous years for American wheat farmers. As American (and global) agricultural markets lurched from bust to boom and back again, new large-scale wheat production areas (Argentina, Australia, Canada, India) added vast quantities of wheat to export markets previously dominated by established producers (Russia, Eastern Europe, and the United States). In an increasingly competitive world market, humanitarian food aid to famine-stricken areas was favored by American wheat interests as early as the Russian famine of 1891 as a gesture of goodwill and as a marketing strategy.

With the end of World War I and the end of government control, a postwar worldwide wheat glut caused a market crisis in 1920. This paper focuses on humanitarian food aid as a strategy for solving the post World War I agricultural crisis in the context of a series of government-sponsored market manipulations. Originally conceived as temporary emergency wartime measures, government interventions into commodity markets became not just a permanent feature of the agricultural economy but part and parcel of American global power.