REALIZING THE INDIAN WHEAT DONATION TO AFGHANISTAN

UNCLAS SECTION 01 OF 02 KABUL 000505 DEPT FOR SCA/FO, SCA/RA, AND SCA/A DEPT PASS FOR AID/ANE DEPT PASS USTR FOR DELANEY AND DEANGELIS DEPT PASS OPIC DEPT PASS FOR TDA FOR STEIN AND GREENIP USOECD FOR ENERGY ATTACHE CENTCOM FOR CSTC-A NSC FOR JWOOD TREASURY FOR MHIRSON, ABAUKOL, BDAHL, AND MNUGET OSD FOR SHIVERS COMMERCE FOR DEES, CHOPPIN, AND FONOVICH SENSITIVE SIPDIS E.O. 12958 N/A TAGS: EAGR EAID ETRD ECON PREL AF PK IN SUBJECT: REALIZING THE INDIAN WHEAT DONATION TO AFGHANISTAN REF: Delhi 79 ¶1. (U) This is an action request that has been coordinated with Embassies Islamabad and New Delhi. Please see para 5. ¶2. (SBU) Summary. Post recommends that the Department instruct the three concerned embassies to demarche host governments to work to effect prompt transshipment through Pakistan of India's wheat donation to Afghanistan. Milling the wheat and shipping bagged flour represents a way to overcome GOP phytosanitary concerns. End Summary ¶3. (SBU) From Embassy Kabul's perspective, it is increasingly clear that the Afghan, Pakistani and Indian governments will not be able to effect delivery of the GOI's very generous donation of 250,000 mt of wheat to Afghanistan without outside prodding. This offer represents a very positive development from several different angles. While Afghanistan's near-term food supply situation has improved somewhat, it will need food aid in the second half of 2009. Realization of this Indian donation will not only improve supplies, but will also reduce (though probably not eliminate) pressure on the USG, the main donor so far, to provide additional food aid to Afghanistan. Transshipment of the commodity through Pakistan could also represent a valuable confidence-building measure as we encourage the GIRoA and GOP to negotiate a new, more balanced Transit Trade Agreement allowing, among other things, freer transshipment between Afghanistan and India. While there are other alternatives for delivering the aid, the most direct and probably cheapest is ground transshipment over Pakistan. ¶4. (SBU) GOP officials have raised legitimate phytosanitary concerns regarding the possible presence of the karnal bunt fungus in Indian wheat. According to an Afghan Agriculture Ministry official who participated in recent GIRoA-GOP talks on this issue in Islamabad, GOP officials declined to discuss transshipment modalities until their phytosanitary concerns were resolved. Post understands that this concern would be overcome by milling the wheat into flour in India, and that such milling would not add excessively to the total cost. ¶5. (SBU) Action Request. Kabul therefore recommends that the Department instruct the three embassies concerned to demarche host governments along the following lines, tailoring to specific capitals as appropriate. -- The Indian donation of 250,000 mt of wheat to Afghanistan is a very welcome, generous action. The U.S. would like to urge the governments of Afghanistan, Pakistan and India to work together to realize this donation as soon as possible. -- The USG welcomes President Zardari's commitment to allow and facilitate transshipment of the commodity across Pakistan. -- The U.S. also takes this opportunity to urge the GOP officially to lift its grain export ban. This step would promote regional trade, promote increased predictability in regional grain markets, and facilitate market determination of prices. -- Based on the Indian aid offer, Afghanistan must cover the cost of transport. We understand the Afghan government is prepared to cover reasonable transport costs. But given its straitened financial circumstances, it is critical that the parties find the cheapest possible means to deliver the aid. We believe ground transshipment through Pakistan would be the cheapest and fastest way to deliver the aid. -- Pakistani agriculture officials have raised possible phytosanitary concerns regarding the presence of karnal bunt fungus in Indian wheat. The U.S. understands this concern is scientifically based. However, we urge the three governments to consider creative options for overcoming this concern to enable prompt transshipment of the commodity. -- One way to overcome this issue would be to mill the wheat in India and deliver bagged flour to Afghanistan. Milling would add to KABUL 00000505 002 OF 002 the cost, though not excessively, we believe. If Afghanistan is unable to absorb the cost of milling, perhaps India could donate a lesser quantity of flour without increasing the total cost of its donation to the GOI. -- The U.S. urges the three governments to begin or resume three-way consultations aimed at agreeing on delivery modalities as soon as possible. -- Announcement of an agreed plan for transshipping the commodity would make a welcome deliverable for the Regional Economic Cooperation Conference on Afghanistan, planned for April 1-2 in Islamabad. If time is too short to achieve that, we urge the three governments at least to use that gathering as an opportunity to consult on modalities and report progress to the full conference. DELL