Bloodthirsty cries now are resounding around the town. They are about agriculture. This is hardly surprising because the American farmer is going through a tough time. Real farm income is said to be the lowest since the 1930s; exports are falling; foreclosures are stalking the land.
It's time to find a scapegoat. And so from a thousand throats comes the cry that the European Community is responsible for the troubles of the American farmer. Behind every foreclosure there stands decked out with tail, three-pronged spear and evil grin, a centrally heated representative of the European Community. Now, that is hogwash.
What are the real reasons for the American farm crisis? The Farm Bureau News records that on Dec. 13, 1982, U.S. Deputy Assistant Agriculture Secretary J. Dawson Ahalt spoke to the American Farm bureau Federation's Washington Staff on "A look at what caused current farm problems." Ahalt was clear and precise about the causes of trouble on the farm: "rising production, due in part to the promise held out by the booming '70s combined with weak demand (is) responsible for current low prices. . . . For the first time in 12 years, U.S. farm exports in 1982 dropped by $4 billion. A big chunk of that was due to the strength of the dollar . . . All of this has come during a period of widespread recession in which the growth of industrialized countries has fallen markedly and instability has wrecked other (export) markets."
It is true that tacked onto all this, Ahalt added a reference to the United States "now being beaten by the European Community's export subsidies in the (Soviet) and other markets." However, against the massive factors he set out, a final reference of this kind was clearly an afterthought. 2 Let's take a look at some facts about U.S. agriculture and how it might have been affected by subsidized European exports. To begin with, agricultural subsidies are not just a European phenomenon. In 1982, the U.S. federal government and the Community (including expenditures by member states) each subsidized its farmers to the tune of about $30 billion. Comparisons are difficult because their methods of supporting agriculture are different. But given that the U.S. farm work force is barely one-third the size of the Community's, the U.S. government spent more per farmer than did the European Community.
Agricultural export subsidies were recognized as a fact of life during the most recent round of international trade negotiations. All participants, including the United States and the Community, agreed that agricultural export subsidies were permitted so long as they did not allow any trading partner to take a more than equitable share of world trade.
Community exports have not crowded out U.S. farmers. Corn is the U.S. commodity that has been hardest hit by declines in export prospects. It is interesting to note that the Community is not even an exporter of corn. Corn exports have fallen off because the strong dollar has made U.S. corn less of a bargain.
In the case of wheat and wheat flour, which account for nearly one-third of the volume of total U.S. farm exports, the European Community's share of the world market between 1969-71 and 1979-82 increased by 3.4 percentage points, while the U.S. share expanded by 11.9 percentage points.
For chickens, the Community's share of the market fell from just under 55 percent in 1975-77 to 43.2 percent in 1982. The U.S. share in the meantime fell from 38.5 percent to 24.9 percent not because of the European Community (whose own market share was declining), but because of subsidized exports from Brazil, which went from a 6.5 percent to a 31.9 percent market share over that period.
So the facts are clear. We have not taken more than an equitable share of world trade. But the real issue may be a different one. What many in Washington seem to be saying is that it would be a great convenience to American farmers if the European Community were to get off the world market.
The Community has no intention of doing so. If we did, we would be throwing several million European farmers on the bread line--in addition to the 12 million of our citizens already unemployed. We are going to stay on the world market, but we are not going to hog it. This seems to us a reasonable line.
Let us hope that, bearing these facts in mind and by building on the U.S.-Community agriculture conversations of January and February, we can find solutions to our problems within our existing systems. Individual actions can easily produce counter-actions, and these can escalate. But, jaw-jaw, as Churchill once said to Stalin, is better than war-war.