—Lancaster Farming, Saturday, Dec 13, 1975
22
U.S. farm economy
1 Continued horn Pat* HI *
provisions of the Export
Administration Act
Under the law, the
President cannot stop grain
exports unless the Secretary
of Agriculture certifies there
is a shortage of the com
modities involved, or unless
the President certifies the
action as necessary for
national security.
“The action depressed
U S. and world gram prices,
and both the Soviet Union
and Poland bought grain
elsewhere at lower prices ”
Export controls, the
Federation president said,
are contrary to the interests
of farmers and the broader
interests of all citizens in our
balance of payments
position.
Farm exports, he said,
enabled the United States to
attain an overall trade
balance of $2.4 billion in
fiscal 1974 and a $l.B billion
in fiscal 1975.
“Export markets are
essential to a propserous
agriculture as our produc
tive capacity far exceeds
domestic requirements.
“The need to maintain a
high level of agricultural
exports is even greater now
due to the increased price of
imported foreign oil.
“Instead of succumbing to
the folly of trying to manage
agriculture with higher
target prices, larger
government payments,
government reserves and
various types of controls, we
should seek ways of im
proving the market system.
“This approach may in
volve such things as the
increased use of advance
contracts to assure the
availability of needed
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supplies, the increased use of
futures markets including
the development of longer
term futures contracts, and
other innovations.
“The interests of the
United States in in
ternational trade cannot be
advanced by participation in
politically determined in
ternational commodity
agreements.
“International allocation
of markets and deter
mination of prices by
government would (1)
seriously restrict farmers’
opportunity to expand
markets and (2) sub
stantially reduce net farm
income.
“U.S. agriculture must be
allowed to compete in world
markets without impairment
by international commodity
agreements.
“Farm Bureau vigorously
opposes efforts to inhibit
market expansion and limit
exports to a specified
amount or a stipulated share
based on some arbitrary
base period politically
determined in international
negotiations.
“Market sharing, or in
ternational supply
management, penalizes
efficient producers and
encourages uneconomic
production. It bases future
opportunity to expand
markets on political
negotiations rather than on
our economic ability to
compete.
“The International Trade
Commission in its recent
report to the Senate Finance
Committee supports Farm
Bureau’s contentions and
labels international com
modity agreements wasteful,
and inefficient.
_**ru
"The ITC report points out
that the restrictive
provisions of commodity
agreements, such as quotas
and contracts, causes
various degrees of waste and
inefficiency.
“The ITC further stated
that export quotas - a basic
feature of most commodity
pacts - promote resource
misallocation, because quota
share often reward Inef
ficient producers and
penalize efficient ones.
“The important fact to be
emphasized is that the
market system is a more
effective mechanism for the
solution of economic
problems than any system of
government intervention,”
Kuhfuss said.
Kuhfuss, who was recently
named to President Ford’s
Advisory Committee for
Trade Negotiations, said
that in the current multi
lateral trade talks now
taking place in Geneva,
agricultural and industrial
trade issues must be con
ducted jointly, not
separately.
“Failure to adhere to this
overall negotiating objective
could be disastrous to the
expansion of our agricultural
exports and ultimately to the
entire economy,” he said.
The establishment of
government - held grain
reserves was cited by Kuh
fuss as another impediment
to the achievement of a
market - oriented
agriculture.
“The costs of a grain
reserve operated by the U.S.
government - either in
dependently or as a part of
an international program -
*fh
tied to world trade
almost certainly would
exceed the benefits.
"The costs Include adverse
effects on U.S. fanners as
well tax dollars. A govern
ment reserve Inevitably
becomes a part of the supply
demand equation, regar
dless of the efforts made to
insolate such stocks from the
market. Buyers know that
rules established to protect
market pnees are always
subject to change due to
political and other
pressures. Thus, reserves
tend to depress average
farm prices.
“Farmers and the trade
will maintain larger
reserves if the government
does not take over this
function. Domestic con
sumers have a great deal of
protection in the produc
tivity, diversity, and
flexibility of American
agriculture. Domestic
processors and foreign
buyers can protest their
needs through advance
contracts. Importing
'oivr 1700
BUSHELS
/
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SAVE
DUSK—TO
SECURITY
counties are free to maintain
their own reserves.
"Food aid can be made
available to less developing
countries without adopting
an approach that inevitably
would lead to a government -
managed agriculture.
“Consideration should be
given to the establishment of
an international monetary
food fund to be used for
purchase of food only in the
amounts, and when, needed.
Such a fund should be sup
ported by all nations of the
world. To meet disaster
needs, such as starvation,
malnutrition, and other
emergencies, funds could be
withdrawn from the in
ternational monetary food
fund to purchase needed food
from any nation where it is
available.
“Any national or in
ternational food aid program
should be administered with
care to avoid discouraging
needed increases in
production in the recipient
countries.
"The really serious
aspects of the world food
situation involve
overpopulation and
inadequate incentives for
economic development. The
United States can, and
should help the poorer
nations of the world, but this
should be done in ways that
will not 'affect domestic
producers adversely.
“A long-run solution to
world hunger requires ef
fective measures to limit
population growth, to in
crease production sub
stantially in poorer coun
tries, and to'
mutually advantageous'"
international trade. No
system of rationing short
supplies will solve this
problem” Kuhfuss said.
There are 15 million
Americans whose daily lives
are affected by birth defects,
according to The National
Foundation - March of
Dimes.
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