European Community agriculture ministers approved the 1985-86 prices for most farm products today but were unable to overcome objections by West Germany to a reduction in prices for grain. They will meet in June to try and settle the issue.
The failure to agree on grain prices was seen by community diplomats and officials as a setback for efforts to bring the EC's $14.3 billion farm support program under control. It was expected to leave the 10-nation community open to further criticism from the United States, which believes the support program distorts world farm trade.
The Agriculture Department said Wednesday that the United States had decided to give away almost $2 billion worth of surplus farm commodities. U.S. officials said the decision was made to discourage subsidized farm exports.
Community officials said the U.S. move could upset the world agriculture market and was not the proper or effective way to influence EC farm policies.
Disagreements over the pace of agricultural reform prevented an agreement earlier this month in Bonn among the Western industrialized nations on a date to start a new round of multilateral trade liberalization talks. The United States wants agricultural export subsidies included in the new talks.
France, which of all the community nations benefits the most from the EC support programs, said it would not agree on a date before it was sure that farm policies would not dominate the new trade talks.
Community spending on agriculture in 1985 is estimated to total about $14.3 billion, two-thirds of the EC budget. This huge farm program, while making the community self-sufficient in agriculture, has at the same time produced enormous surpluses of beef, wine and milk, and diverted funds that officials would rather spend on improving lagging industries.
Efforts to reduce farm spending have faced opposition from powerful agricultural lobbies. Last year, however, the community took a tentative first step toward reform, known as the Common Agricultural Policy, by putting a cap on milk production.
The farm price package proposed by the community's executive commission this year was seen as a holding operation to keep prices relatively steady while officials attempted to muster the political consensus necessary to make significant changes.
The difficulty in reforming the farm program was underlined not only by the refusal of West Germany to agree to a 1.8 percent cut in grain prices -- which had been reduced from an original proposal of 3.6 percent -- but also by concessions made to other member states.
Although his government has been a strong advocate of controls on EC spending, West German Agriculture Minister Ignaz Kiechle argued that an exception should be made for his country's farmers, whose holdings are smaller and less efficient than the EC average.
EC officials expect an increase in tension between Brussels and Washington if Agriculture Secretary John Block is successful in his attempt to reduce government support for farmers and make their products more competitive on the world market. They fear that changes in U.S. policies proposed in the administration's 1985 farm bill will force the community to increase farm spending sharply to keep its products competitive.