Counter-cyclical approach to quotas suggested
WASHINGTON, D.C. -
The National Cattlemen’s
Association this week
recommended a counter
cyclical approach to quotas
under the Meat Import Act
of 1964.
This and other recom
mendations were made
during a House Ways &
Means subcommittee
hearing on proposed changes
in the law. Outlining NCA’s
proposals to the sub
committee on trade were
Richard A. McDougal,
Lovelock, Nev., president of
the association, and Sam
Washburn, Fowler, Ind.,
chairman of the NCA foreign
trade committee.
McDougal urged that
Congress adopt the Bentsen-
CurUs bill (HR 5052), which
includes the counter-cyclical
approach and which
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Senate.
He pointed out that a
counter-cyclical quota
formula could provide more
stable supplies and prices
over the length of the 10-year
cattle cycle, benefiting both
producers and consumers.
Quotas would be in inverse
proportion to domestic beef
supplies - increasing when
U.S. production was down
and decreasing when
production was cyclically
large.
The quota formula in the
present law, the NCA
spokemen noted, is tied
directly to U.S. production
levels. This compounds
supply and price problems
because imports are per
mitted to rise at the very
time domestic supplies
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already are burdensome and
are required to decrease at
the very time domestic
output is decreasing. The
result is sharper price
fluctuations, both up and
down, than otherwise would
be the case.
Under HR 5052, NCA
explained, annual import
quotas would be adjusted in
relation to domestic cow
beef supplies - the best
indicator of stages in the
cattle cycle. Also, it is cow
beef with which imported
meat is most competitive.
Other NCA recom
mendations, as provided in
the amendments in HE 5052,
are:
1. Include all forms of beef
and veal under coverage of
the Meat Import Act. This is
necessary to prevent the
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kind of circumvention of the
law which has occurred in
the past. (The present law
covers only fresh, frozen and
chilled meat.)
2. Institute a semi-annual
quota system within a year’s
import quota, thereby
preventing disproportionate
imports during a short
period.
3. Modify presidential
authority to suspend the
quotas. Suspension would be
permitted only in time of
true emergencies. If benefits
of a counter-cyclical ap
praoch are to be realized, the
approach must be followed
at both extremes of the
cattle cycle, McDougal
emphasized.
Also, this amendment
would eliminate periodic
political controversies over
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quotas, and it would result in
quota determination and
import levels under a known
set of rules - again providing
more stability. In addition, it
was noted, this amendment
would provide more
predictability, which is
particularly important in an
industry with a long
■production cycle.
McDougal and Washburn
told the Congressmen that
beef imports over a 10-year
cycle period would not be
changed under the new
proposals, but the sharp ups
and downs of supplies (and
prices) would be moderated.
NCA discounted claims
that the II.S. cattle industry
is incapable of supplying
enough ground beef to meet
a growing demand and that
increased imports of
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manufacturing-type beef are
indispensable. McDougal
said the industry already
supplies most of the nation’s
ground beef needs - even
during times of declining
cow beef production. Fur
thermore, with proper in
centive, U.S. cattlemen can
produce, and already are
producing, more
manufacturing-type beef.
Commenting on over
all trade policy, Washburn
reminded Congress that U.S.
policy on beef trade is more
equitable than that of any
other country. The U.S. is
the largest beef importer in
the world, and, through the
Meat Import Act, it
guarantees a certain level of
access to the U.S. market -
something which ho other
importing nation does.
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