Representatives of 20 countries begin a crucial round of negotiations in London today in a 45-year-old search for some way of stabilizing world wheat prices.
There have been international wheat agreements on and off since 1833, but none has proved effective. The strongest one, the International Grains Arrangement of 1967, collapsed within a year.
Now, with food and grain prices rising in the United States and with wheat import bills of poor, developing countries totaling billions of dollars a year, U.S. officials say they are pressing for a breakthrough that would end one of the oldest impasses in international economic affairs.
"We're running out of time in our negotiating schedule," said Julius Katz, assistant secretary of state for economic affairs. "This ought to break the back of the talks - we hope it will."
The United States favors a stabilization plan that would rely on a 30-million-ton wheat stockpile spread among exporting and importing countries. Individual governments would control the portions of the stockpile allocated to them, so that the estimated $750 million annual storage cost would be shared internationally
Representatives to the wheat negotiating council of the United Nations Conference on Trade and Development(UNCTAD) will meet for two weeks in London. If they are successful, senior officials would meet this fall to complete the agreement.
The Carter administration has generally been favorable toward international pacts to stabilize commodity prices. The United States recently signed, with 72 other countries, an international sugar agreement.
Agriculture Secretary Bob Bergland, who returned last week from a nine-day trip to the Soviet Union, said he had the impression that the Russians were ready to join a wheat pact. Other U.S. officials close to the talks said that the Russians, though "cautious," seem interested in accepting responsibility for holding stocks of wheat and cooperating on stabilizing prices.
By far the toughest obstacle appears to be the attitude of the nine-member European Common Market, representing 260 million people and the largest single outlet for Amercian food exports.
The Europeans favor a smaller stockpile - 15 million tons - because of the cost entailed in storage.
They have also insisted that the wheat agreement be expanded to include tough international economic controls on the prices of feed grains - corn, barley, sorghum and oats. Amercian officials have rejected this flatly, on grounds that the United States provides more than half the world's trade in these animal feedstuffs and would suffer from controls.
Huge international grain trading companies, as well as organizations representing grain processors and farmers, have been lobbying hard against any interference with a free market in feed grains resulting from a wheat pact. The U.S. governments has told the Europeans that, if necessary. it will take "unilateral steps" to stabilize feed grain prices during a shortage to protect the domestic livestock industry.
Common Market Vice President Finn Olav Gundelach, in a speech May 18 in Kansas City, said of wheat and feed grains that the "the two must go together." He said the Europeans oppose boom and bust price movements."
U,S. officials say that they are prepared to offer the Europeans "consultation" on stabilizing feed grains prices - but no rigid international price-fixing formula. They noted that the Europeans have not relaxed import duties on grain that protect European farmers from undue foreign competitions. However, they also described the Danish Gundelach as a "practical man" who has helped to hold European farm price support increases this year to 2.1 percent.
Negotiations for a wheat agreement broke down in February over the feed grains issue.
Members of the UNCTAD wheat negotiating group are the United States Canada, Argentina, Australia, Japan Kenya, Egypt, India, Brazil, Finland the Soviet Union and the nine-nation Common Market.
Developing countries have expressed concern about the financial burden or acquiring mandatory wheat stocks and paying storage. The International Monetary Fund is studying whether some countries qualify for "soft" loans meet their commitments under a future wheat pact.
Officials hope that France, the leading European agricultural country may take a more flexible position in Common Market Councils how that its elections are over. French farmers are a potent political force.