What effect grain embargo? Soviet harvest will tell; $105 Bumper crops at home could allow Moscow to suffer little from US cutoff
Carter administration officials and US farmers are paying close attention to grain harvest forecasts -for the Soviet Union. The reason: Until President Carter's Jan. 4 embargo on new grain sales to the Soviets, "the Moscow pipeline" looked like it provided the best long-term outlet for America's overflowing supplies of corn, wheat, and soybeans.Skip to next paragraph
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Now farmers and administration officials say that the embargo's effect depends largely on this year's Soviet grain harvest:
* If there is a bumper Soviet crop -considered highly unlikely on the basis of current weather and planting reports -the Soviets apparently won't suffer from the embargo.
Current US Department of Agriculture estimates calculate that, even with only moderate crops this year, the Soviets will replace most of the 17 million metric tons of grain cut off by Mr. Carter's embargo by turning to other suppliers. Congressional observers agree that the Soviets will fall below their grain targets by only 5 million to 7 million metric tons this year, or 2 to 3 percent of their total usage.
According to the experts, if the Soviets harvest this year is sufficient to avoid turning the US grain suppliers such as Brazil, Argentina, Australia, and Canada will step up production in order to become suppliers in years ahead.
Burned once by a surprise US grain embargo, the Soviets likely would decide to purchase grain in the future from non-US sources, even if this meant paying a higher price.
One congressional expert on agricultural policy says that "if the Soviets can by grain in any other market they are not again going to buy in the US." A sign of this new Soviet mood is that to date the Soviets have not invited US participation in the grain sales negotiations due to be held later this month in Moscow.
* If the Soviet grain harvests range from poor to disastrous, thhe situation could be very different, however.
Experts on international grain outside the United States has been purchased. Thus a serious shortfall in the Soviet Union's own prodution would force it to return to the US as a major supplier -either directly or indirectly.
Such a situation could be politically embarrassing on all sides. The Soviets have let it be known that they are in no mood for friendly bargaining with the United States.
The Carter administration would find it equally hard to back down.
The grain embargo was designed to punish the Soviets for invading Afghanistan. It came as part of a package deal including halting exports of high-technology equipment such as computers and oil drilling machinery, cutting back on Soviet fishing in US waters, and withdrawal from the moscow Olympics.
To dilute any of these reprisal measures while the Soviets remain firmly entrenched in Afghanistan, says one congressional spokesman on agricultural policies, "would be a signal that the US has pulled back in its stand and is willing to give in to Moscow."
President Carter has authorized the sale of 8 million metric tons of grain to the Soviets both this year and next as part of a five-year internatonal contract. Administration spokesmen say this is an act of good faith which does not show any giving in to Moscow or any bending to American farmers, who blame the embargo in part for low grain prices.
Yet it is true that the embargo plugged a pipeline that was increasingly important for American farmers, for grain traders, for shipping companies, and for the US balance of payments.
The immediate result of the embargo was to halt the sale of $2.6 billion worth of US grain.
In the longer term, the political and economic impact could be far greater. According to spokesmen for the Chicago Board of rade, which is the chief marketplace fro grain, the Carter embargo could undermine overseas confidence in the United States as a dependable trading partner.
Currently, thhere is talk here that President Carter might either allow more direct grain sales to the Soviet Union or might turn a blind eye to US grain shipments reaching the Voviets throug third parties. But Chicago Board of Trade spokesmen point out there are also reports that the Russians are digging their heels in and already are preparing fro grain shortages by feeding cattle on corn stalks.
"Now the question is," says one expert here in Chicago, "will the Soviets actually condescend to take US grain if we offer it?"