AGRICULTURE Secretary John Block held a "summit" last month in Washington. It seemed like a good idea. America's farmers and ranchers are battling the worst recession to hit agriculture in 50 years. Bringing together the various representatives of agricultural interests in one room was an exciting premise.
But the summit came up short on several counts. First, the guest list was top-heavy with agribusiness. Bankers and grain buyers, brokers and bureaucrats were there in force, but only a few farmers participated. If the doorkeeper had checked hands for calluses, few would have passed inspection. Perspectives from both agribusiness and food producers are essential if the United States is to forge a meaningful long-term agriculture policy. It's unfortunate that participation was not more balanced.
Second, the summit only confirmed the view of those who came believing that a wide-open free market was the answer to the nation's farm problems. For those of us who wanted to examine other options, the summit was more frustrating than productive.
Summit participants did agree on the imperative need to formulate and implement a long-term food and fiber policy for America. That's good. Our domestic farm programs, rooted in the 1930s, are inappropriate and ineffective in the 1980s
But American agriculture will not be saved by a domestic farm policy alone. Policymakers must recognize that this nation's farm difficulties are related less to philosophical considerations at home than to politics and policies around the world. American agriculture will "make or break it" in the international marketplace. Free- market pricing of U.S. products will not assure American agriculture of a competitive edge in the world market.
It's time for the United States to flex its muscles. It's time we showed our competitors that we will no longer sit still and remain a residual supplier while they cash in on our head-in-the-sand agricultural export policies.
More than a third of our food production is exported. Although American farmers produce food more cheaply than anywhere else in the world, they seldom reap the benefits in the world marketplace. Fluctuating exchange rates, shifting economic conditions and government policies abroad minimize or eliminate our advantage. It's tough to compete with countries like Canada, Australia and Argentina, which seem willing to pay whatever price is necessary in the form of taxpayer-financed subsidies to sell their agricultural goods.
Both political parties have gradually moved toward a free-market philosophy without recognizing that, increasingly, foreign countries purchase U.S. agricultural products only after buying foodstuffs from other countries with which they have contractual arrangements. In other words, The United States sells whatever it can at the going rate -- at prices set by competitors who are mainly trying to dispose of their remaining stocks before the next harvest. At the same time, those nations protect their farm industries through crop subsidies or other government assistance.
Given those circumstances, a decision to commit U.S. agriculture to a price war in the world market is masochistic madness. If the United States lowers its prices, historic experience indicates, our competitors will continue to meet -- and beat -- our rates. There would be no guarantee that this country's share of the world market would increase, and forcing American farmers to survive on price-war levels could be catastrophic to the U.S. agricultural industry.
A number of options should be considered in order to strengthen our position. We should sit down with our friendly competitors, such as Canada, and develop a joint negotiating strategy to go into effect when our markets are threatened by the tariff or trade barriers of others. This would not be a "grain OPEC," a proposal that some have made. But it would provide better coordination between the world's two biggest grain exporters.
We should also examine such measures as subsidies, favorable credit terms or other inducements for our foreign customers. Long-term trade agreements may help reestablish our credibility with buyers -- credibility that was damaged by the Soviet grain embargo.
The time is ripe for American agriculture to become a commanding force in the world marketplace. The world market, particularly in the Pacific, is blossoming. Economists have been telling food producers for a decade that we will have to double food and fiber production by the year 2000. But we cannot cash in on that opportunity if we have to be supplier of last resort and have to live by an outdated domestic farm policy.
In developing a policy for the 21st century, we can start by borrowing a chapter from the Japanese. Like them, we need to manage our markets, not be managed by them. We need to protect the share of the world market that we now have and expand exports into growth areas when the international recession eases and demand increases.
A frustrating oversight at the summit was the exclusion of church groups. Organizations such as CARE and Catholic Relief have played a significant role in reducing world hunger. With starvation a daily threat for millions, the American breadbasket should be viewed as a tool for peace and survival, not a fiscal disaster.
Secretary Block's summit produced no new policy, but it did produce a consensus among diverse interests that we need one. Until Congress, the administration and the American public understand the importance of agriculture to this nation, it is unlikely that any major innovative policy will be implemented.
The American public must understand the close ties between a healthy agricultural industry and a healthy urban America.
Dramaticcchanges in the public perception of agriculture, followed by a shift in the U.S. government's export policies, are essential if American agriculture is to regain its economic strength. The summit did not give reason for optimism that either will take place in the near future.