President Reagan bowed to the Farm Belt yesterday and, in an announcement certain to rile the European allies, said he will accept another one-year extension of the U.S. agreement to sell wheat and corn to the Soviet Union.
The president held out the possibility of expanding 1982-1983 sales beyond the current 23-million-ton level, but he said the United States will not discuss a new long-term agreement "as long as repression continues in Poland."
The decision was complicated because of the hard line the administration has taken against the Soviets since the imposition of martial law in Poland last winter. As part of this, the president has tried over allied opposition to block the sale of U.S. technology and parts for a new Soviet natural gas pipeline to western Europe.
Reagan's announcement, authorizing U.S. officials to renew talks with Moscow on the one-year extension, ended weeks of jockeying within the administration and lobbying by agricultural groups for a clear statement of U.S. farm export intentions.
The president, Agriculture Secretary John R. Block and Treasury Secretary Donald T. Regan defended the grain decision as more of a favor to American farmers than to the Soviet Union.
Reagan said U.S. farmers "will not be made to bear alone the burdens" of his policy toward Moscow, saying they "can be assured that they will continue to have a fair opportunity to export grain to the U.S.S.R. on a cash basis."
But, he added, "Grain sales have little impact on Soviet military and industrial capabilities. They absorb hard currency earnings and feed the people of the Soviet Union who are suffering most from the disastrous economic policies of the Soviet government."
Regan, speaking at a White House briefing, said the pipeline and the grain-sales issues were not comparable. He said the United States could help prevent completion of the pipeline, but that the Soviets could find badly needed grain supplies elsewhere.
"We're not doing the Soviets any favors," he said.
Block, who had mounted an intensive campaign for expanded grain sales, agreed with Regan that "we're doing it for ourselves." Block called the president's decision "a pretty good shake for American farmers."
With the current agreement due to expire Sept. 30 and with the prospect of another U.S. bumper crop keeping prices at depressed levels, the administration has been under growing pressure to clear the way for more sales to the Soviets.
The current agreement obligates the Soviets to buy a certain amount of grain each year, allows them to buy a second amount without permission and requires them to get government approval to go beyond that second level.
The reaction yesterday from farm organizations and farm-state legislators followed a predictable line: pleasure that Reagan had made the decision, displeasure that it didn't go as far as they had been urging.
The American Farm Bureau Federation's Bruce Hawley, for example, said "It means absolutely nothing to the American farmer. All we're getting is a one-year extension on government authority to impose a ceiling."
Sens. Larry Pressler (R-S.D.) and Thomas F. Eagleton (D-Mo.) also were critical. Pressler said the decision will perpetuate the Soviet view of the United States as an unreliable supplier and send them elsewhere for their grain. Eagleton said farmers should feel "betrayed."
But Michael Hall of the National Corn Growers Association and Carl Schwensen of the National Association of Wheat Growers viewed the decision as a time-buying move that will allow for eventual resumption of negotiations on a long-term agreement.
"Farmers shouldn't have to guess from year to year," Schwensen said. "We want a new long-term agreement with higher purchase levels. Otherwise we will continue to produce for an uncertain market."
Sen. Robert J. Dole (R-Kan.) and Rep. Pat Roberts (R-Kan.), who represent a major wheat state, welcomed Reagan's decision, but both encouraged the administration to push for the longer-term sales arrangement.
The Soviets have purchased only about 14 million tons of the 23 million authorized by the current agreement, although they are facing a fourth consecutive bad harvest and a continuing need for foreign supplies.
U.S. trade with Moscow has been in turmoil since early 1980, when President Carter imposed a limited sales embargo after the Soviet invasion of Afghanistan. By the time Reagan lifted the embargo in April, 1981, the Soviets had turned to other sources for long-term supply agreements.
The United States is expected to provide a record-high volume of about 17.8 million tons this year, but the U.S. share of the Soviet market will be only around 40 percent, compared with 78 percent in 1979.
Washington Post correspondent Dusko Doder reported that there was no immediate official reaction in Moscow to Reagan's decision, although it was assumed the Soviets would agree to the extension.
He said, however, that it has been speculated recently that the Soviets, in the interest of more securing a long-term agreement, might show reluctance to accept another extension as a way of putting reverse pressure on the Republican administration prior to the November congressional elections.