—UnciiUr Firming. Saturday. D#c 13. 1975
14
U.S. farm economy
IConllnMd (ram P«c* >1
compel* In world markets
tax Unproved
The world market for farm
commodities has been
enlarged by increasing
population, rising living
standards, and the in
creasing willingness of
Communist countries to
import grab).
The elimination of surplus
commodity stocks has
removed an important price
depressing factor
As the result of increased
world demand and other
events in the past three
years, farm prices generally
have moved well above
government support levels
and significant progress has
been made toward the goal
of replacing government
farm programs with a
market - oriented
agriculture.
Acreage set-aside
requirements have been
suspended for the 1974, 1975
and 1976 wheat, feed gram,
and cotton crops. Mandatory
planting restrictions have
been removed from all crops
except tobacco, peanuts and
extra long staple cotton.
Direct export subsidies
have been terminated and
import restrictions have
been relaxed.
“There is, however, a
threat to the market price
system in the compensatory
feature embodied in the
target price concept of the
1973 farm act which con
tinues through the 1977 crop
year,” Kuhfuss said.
Under the target price
concept, the federal
government is required to
make up the difference
between average market
prices and politically -
determined target prices. At
the present time, target
prices are relatively
unimportant because
market prices are well above
the target level.
“Some Congressmen
recently have been ad
vocating a boost in the level
of target prices,” Kuhfuss
said, “and this would be a
serious step backward
toward a government -
managed agriculture. Once
again, the responsibility for
determining what is to be
produced would rest with the
Department of Agriculture
rather than the independent
responses of individual
farmers to the pull of the
market.
“It also should be
remembered that a target
price payment on an export
crop is, among other things,
an indirect export subsidy,
and foreign buyers
recognized it as much,”
Kuhfuss said.
Record crop production
and farmers’ increasing
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dependence on export
markets raises questions
about the possibility of a
return to the surplus con
ditions of a few years ago,
Kuhfuss said.
“Under a market -
oriented agriculture stocks
will, of course, rise in some
years and there will be
periods of uncertainly," the
START
farm leader said, "but if wc
can maintain and improve
our access to world markets,
wc should be able to avoid
serious surplus problems.”
In order to maintain and
expand exports, Kuhfuss
said, “Wc need to avoid
government loan rates that
would price our products out
of world markets."
tied to world trade
He added that, "We need
also to avoid export controls
which damage the
reputation of the United
Stales as a reliable source of
supply and to persuade other
countries to reduce their
trade barriers.”
The recent U.S.-U.S.S.R.
agreement was a step in the
wrong direction, Kuhfuss
said, because it implies
further government controls
on exports to a major foreign
buyer.
According to recent news
reports, the State Depart
ment has acknowledged that
the halting of grain sales to
Poland Lost summer was not
legally binding or en-
forccablc under U.S. law,
Kuhfuas reported.
The acknowledgement
came November 21 in
response to a letter from
several Congressmen to
Secretary of State Henry
Kissinger protesting that
officials did not follow
(Continued on Ptge 221
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