How to rile US farmers, Kremlin, Europe's diplomats in one stroke
Houston — It's billed as a measure to encourage better Soviet behavior, boost US export earnings, and please US farmers. But President Reagan's offer of a new US--Soviet grain-sales agreement could fail on all three counts.
To critics, Mr. Reagan ''surrendered'' both to the Kremlin and to US farmers when he ended a dispute within his own Cabinet by approving a second one-year extension of the five-year grain agreement first signed in 1975.
Neither farmers nor the Soviets, however, are claiming victory. Both wanted less US government involvement with US-Soviet trade. Instead, grain traders explain, Reagan's limited offer means that grain sales will remain directly tied to US-Soviet political developments.
One view is that the President put priority on boosting US farm exports in order to improve the depressed farm income situation before the November elections. But the main result may be to leave the administration with a difficult diplomatic assignment. France and West Germany, in particular, are angered by what they see as Reagan's ''contradictory'' attempt to prevent Europeans from selling pipeline equipment to the Soviets while at the same time encouraging US farmers to sell more grain to the Soviets.
Both Reagan and Agriculture Secretary John Block are well briefed for answering critics of their new grain-sales offer. The ''pipeline argument'' came up repeatedly during a series of Cabinet and National Security Council discussions over the past month. Another argument: guaranteeing the Soviets a supply of cheap US grain following a third straight year of severe Soviet grain shortages is inconsistent with ''punishing'' Soviet aggression in -Poland and Afghanistan.
The Reagan-Block response is that the Soviets will be punished by having to pay more than $6.6 billion in hard currency per year to import 46 million tons of grain - and that American farmers should supply at least one-third of this grain. Both Reagan and Block point out that European pipeline-equipment sales would have the opposite effect of helping the Soviets build a natural gas pipeline that would earn hard currency from the West.
Farm-belt criticism could prove harder to answer - because US-Soviet trade may decline rather than improve. American Farm Bureau editor Rankin Lusby explains that offering the new agreement to the Soviets simply ''invites the Soviet Union to shop elsewhere for its grain.'' The Farm Bureau has opposed any new US-Soviet grain sales agreement, instead backing legislation to guarantee that private grain-sales contracts will be honored.
The Farm Bureau and grain traders argue that offering only a one-year extension is a clear signal to the Soviets that the Reagan administration plans to continue the past practice of using farm exports as a ''foreign policy weapon.''
Under the proposed extension, the Soviets would be required to purchase a minimum of 6 million tons of US grain, required to obtain additional US government approval for any purchases over an 8 million-ton ceiling, and required to provide information on Soviet crop production. The US government has permitted additional purchases - this year raising the ceiling to 23 milion tons, with 14 million already contracted. From the grain trader's viewpoint, however, Reagan's offer of the same 6 million- to 8 million-ton terms this year will limit US-Soviet sales and depress grain prices.
Grain traders argue that if Reagan wants to encourage US exports, he must either offer a multiyear agreement with a far higher ceiling or else allow the Soviets to purchase grain without any government restrictions as was the case until 1975. Such a policy switch is needed, traders insist, to correct the damage caused by President Carter's 1980 embargo on grain sales to the Soviets. If year-to-year agreements continue, some grain traders predict, then the Soviets increasingly will buy from other suppliers even at higher prices to prevent overdependence on ''an unreliable supplier.''
Agriculture Secretary Block says that under the one-year extension he expects US farmers to supply 35 to 40 percent of Soviet grain imports this year.