The Post, in a July 10 editorial, says the administration's proposal at the General Agreement on Tariffs and Trade negotiations is "showboating."
The editorial pointed out that export subsidies by the United States and other nations are a very costly burden -- "an expensive scandal worldwide" -- and should be brought under control. But The Post contends that the urgency of that goal "should not be lost in a campaign to eliminate all farm supports -- because that is neither realistic nor desirable."
The U.S. proposal to GATT is simple. We proposed that GATT nations should, during the next year and a half, negotiate a plan for each country to phase down its farm subsidies and import controls over a 10-year period in return for other nations' doing the same. We said that the United States is willing for that negotiation to phase out virtually all such subsidies and import controls if other nations agree. We reserved two areas from that phaseout: food aid at home and abroad and a "safety net" for farmers, including protection against natural disasters and direct income supplements, such as outright payments to small, needy farmers. Those aids, which aren't directly tied to production and markets, don't greatly interfere with trade.
Do those proposals go too far and suggest giving up too much for our own good? Remember, this is an international negotiation. U.S. farm subsidies, farm programs and producer protection will not be negotiated away unless the United States gets equivalent offsetting action from other countries. In unveiling the plan on July 6, the administration pointed out that if we change, everybody else will have to change also, and other countries will have to walk down the road with us arm-in-arm. We stressed that we must dismantle mounting world subsidies and trade barriers gradually, globally and together.
The Post argues that "subsidizing farmers' incomes is useful social policy" and suggests that it's the export subsidies that have gotten out of control.
The problem with present domestic farm programs here and abroad is that they are tied to support prices that encourage excess farm production. The resulting surpluses depress farm prices. Low market prices lead to more subsidies to make up for the low prices. More subsidies pile up more surpluses. Export subsidies are enacted to move the surplus, thus heaping problems on other exporters. Import barriers are erected to protect the unrealistic prices, again making problems for other exporters and distorting trade relationships and upsetting national trade policies. It becomes a vicious cycle and a "subsidy and protection treadmill" -- and we should get off it and bring more common sense and economic good sense to these programs.
Any farmer worried about whether there is enough demand to support a market-oriented world agriculture need only look at the Third World. About 8 out of 10 of the world's people live there. They have enormous potential -- that is, if they are not discouraged by subsidies of wealthier countries, if they have an opportunity to export their products competitively to developed nations, if they are allowed to earn the currency to pay off their debts and if they are given a chance to achieve a reasonable level of prosperity.
We are willing to put virtually all farm subsidies and import controls on the table at GATT. We will demand reciprocal action for whatever we give up. But we sincerely hope that other nations will follow our lead and agree to go as far down this road as possible.
Our farmers have nothing to fear from this. They should welcome it. Our plan preserves "safety nets." We will not abandon our subsidies and protection for U.S. farmers unless we get like action from other GATT nations. We will not negotiate for any less than that. We will not agree to anything less than that. Congress, which must ratify any agreements, will not approve less than that.
-- Richard E. Lyng The writer is secretary of agriculture.