The Reagan administration appears to be moving toward a decision not to renegotiate a new long-term grain sales agreement with the Soviet Union, which is facing its fourth consecutive poor harvest and will badly need U.S. grain.
Two key administration figures, secretary of state-designate George P. Shultz and chief trade negotiator William E. Brock, indicated yesterday that renegotiation of the long-term agreement with the Soviets is not planned.
Both held out the possibility that the current agreement could be extended another year beyond its Sept. 30 expiration, giving Moscow access to the U.S. market. But they said a longer arrangement could not be justified because of the unchanged martial law situation in Poland.
President Reagan suspended U.S. plans to work out a new agreement with the Soviets after last winter's military crackdown in Poland. The Soviet Union is purchasing U.S. grain under a one-year extension of a long-term agreement that expired last year.
The Shultz and Brock remarks were viewed in agriculture circles as a sign that the administration, although facing major decisions on how to handle a huge new U.S. grain crop, is not prepared to bend to farm-state pressures in Congress and commit this country to a new multiyear sales pact with the Soviets.
Agriculture Secretary John R. Block, for his part, has been urging an extension of the long-term agreement as one way of increasing U.S. export income and dealing with growing inventories of U.S. wheat, corn, barley and other major commodities.
Reagan's Cabinet is expected to discuss the long-term sales issue at its meeting tomorrow. It was not known yesterday if the Cabinet will make a final decision then on the grain matter.
But the administration's agricultural trade policy is undergoing intense review, apparently at the initiative of Block, who is under political pressure to find ways to help farmers out of their worst economic pinch since the Depression.
Block met last week with farm lobbyists to discuss the economic situation and trade-expansion ideas. He met Monday with the president to urge extension of the agreement and yesterday hosted a breakfast meeting of top administration officials to review trade policy and crop forecasts.
Brock, Treasury Secretary Donald T. Regan, Commerce Secretary Malcolm Baldrige, Acting Secretary of State Walter J. Stoessel Jr., and Norman Bailey, a senior director of the National Security Council, were among those at Block's breakfast session.
Brock, the special U.S. trade representative, said afterward that a new long-term agreement with the Soviets "would be very difficult to achieve at the present time." He suggested that a simple one-year extension might solve the dilemma.
Shultz, under questioning by farm-state senators at his confirmation hearing yesterday, said negotiation of a new agreement "would be a mistake" as long as the situation in Poland remains unchanged. He added that "as a general proposition, I believe that the use of trade as an instrument of diplomacy is a bad idea . . . . "
After yesterday's breakfast, Block said forecasts of large U.S. grain harvests and another poor Soviet crop had put attention "on both the ability of the nation to export agricultural products to gain valuable positive trade balances and also the necessity for strong agricultural export sales."
His hopes for bolstering the sagging U.S. farm economy have rested largely on expansion of exports and regaining a strong position in the Soviet market.
When President Carter imposed an embargo on extra sales to the Soviets in 1980, following their invasion of Afghanistan, the United States provided about three-fourths of their imported grains. By the time Reagan lifted the embargo last year, much of the Soviets' needs were being filled by other producers.