Poland will get $55 million in new long-term credits to purchase about 350,000 tons of U.S. corn to salvage its poultry industry, Agriculture Secretary John R. Block said yesterday.
In a liberal interpretation of American law to help relieve Poland's food shortages, the Reagan administration reached back to the designation of Poland as a "friendly" country. That designation was last used with regard to Poland in the early 1960s to grant it credits under the Food For Peace program.
Additional, Cardinal John Krol of Philadelphia said at the White House that President Reagan has agreed to permit the Catholic Relief Service to purchase at low cost government-owned surplus foodstocks for private shipment to Poland.
These actions, plus unused allocations remaining from $670 million in short-term credits earmarked for Poland last year through the Commodity Credit Corp., U.S. officials said should carry that nation through its food emergency. Poland's overall economic crisis is so severe, however, U.S. specialists pointed out, that these measures can be no more than "Band-Aid help" in meeting its long-term requirements.
Secretary of State Alexander M. Haig Jr. told the Senate Finance subcommittee on international trade yesterday that, when considering the large debts owed to the West by Poland and other communist nations of Eastern Europe, "the knuckles of our private-institution officials get quite white on this subject."
Poland's total debt to the West, which is in the $27 billion range, is a problem that will have to be dealt with "continuously," Haig said, and "I think we have to be prepared in the period ahead to be responsive to internal Polish needs."
Equally, Haig said, the Soviet Union and other Eastern European nations must be responsive to their share of the problem. The total Eastern European indebtedness to the West, Haig noted, is about $70 billion.
The basic policy of the Reagan administration in East-West trade has two objectives, he said:
"First, our trade relations, and our broader economic relations, must reinforce our efforts to counter the Soviet Union's military buildup and its irresponsible conduct in a number of areas of the world. While clearly we have commercial interests which must and will be taken into account, security concerns must remain paramount.
"Second, we must strengthen cooperation among friends and allies in this area. We cannot carry out an effective East-West economic policy unilaterally. We must take into account the complex inter-relationships that exist" among friends and allies of the United States "and among the individual countries of the Warsaw Pact."
Haig was not pressed to explain how the administration intends, simultaneously, to achieve such diverse objectives.
The $55 million in Food for Peace credits to Poland will provide most of the 400,000 tons of corn is sought to sustain its broiler chicken industry, its quickest source of protein. Those credits will be in a 10-year loan, with a three-year grace period for payments on the principal, during which Poland will pay 8 percent interest; afterward, interest will be at commercial rates. Communist nations ordinarily are barred from receiving Food for Peace credits.
A requirement to ship half such shipments in more costly U.S. merchant vessels still has to be resolved.
In addition, $5.5 million of short-term CCC credits for Poland remaining from last year's $670 million authorization has now been allocated, officials said. These three-year credits, however, require Poland to pay the differential between the 6 percent interest that CCC guarantees and the prevailing market rates.
A White House spokesman said last night that Reagan expressed "strong interest" in Cardinal Krol's efforts to send additional privately financed food. Presidential national security adviser Richard Allen was designated to coordinate these efforts inside the administration.Krol, speaking to reporters, stressed that "this is the people of the United States trying to help feed the people of Poland."
Krol said the American Agricultural Movement has expressed its willingness to make "tons and tons" of flour, rice, powdered milk, butter and cheese available, and he said the Teamsters union has agreed to transport the food to ports cost-free.