It might seem to have the makings of a dog-chasing-tail story, but the government has found another way to use its overflowing bins of grain.
They're using the surplus grain, acquired because of slumping exports and overproduction, to pay for promotion of other surplus farm goods that have trouble breaking into some overseas markets.
Dried prunes and almonds, fresh citrus and canned peaches, raisins and frozen potatoes, wine and walnuts are among the products that the Agriculture Department is hawking overseas as a result of an obscure section of last year's farm bill called Targeted Export Assistance (TEA).
As part of a larger effort to challenge countries that have limited the entry of U.S. products, Congress directed USDA to concentrate on promoting items that have allegedly suffered from unfair trading practices. The TEA is an extension of an existing farm-export promotion effort that also is subsidized by taxpayers.
So far, USDA has approved promotion programs for 10 commodities, agreeing to make available $40 million worth of surplus grain or cotton to cover the government's 50 percent share of the cost of the overseas promotion efforts. Seven of the 10 promotion items chosen happen to be California specialties.
It was Sen. Pete Wilson (R-Calif.) who went to bat for TEA, when other legislators were losing interest, to keep it in the final farm bill.
"Dear Eddie," Wilson wrote in a memo to Sen. Edward Zorinsky (D-Neb.), "Please help keep these . . . . They are very important to my exporters." Zorinsky prevailed and the $110 million TEA program survived.
Under the plan, crop promotion groups will mount their programs, then be paid the government's share in the form of certificates entitling them to equivalent amounts of surplus grain. They can sell the grain and keep the money.
The largest of the programs is $8.5 million to promote fresh and processed citrus from Arizona and California in Japan, Hong Kong, Taiwan, Malaysia and Singapore. (To keep things in political balance, USDA this week also announced a $4.6 million promotion for Florida citrus in Asia and Western Europe.)
A walnut promotion will cost $7 million; a raisin program, $6.3 million. A $4 million program is planned for dried prunes, $2.3 million for wine, $2 million for frozen potatoes, $1.9 million for plywood.
"Does it make sense? Congress thought it was a good idea," said Thomas Kay, chief of USDA's Foreign Agricultural Service (FAS). "It is sensible in that it provides an opportunity to promote a product and to increase consumer demand. We feel that in the long run it is a good investment."
Wine, although not precisely a farm product, will be promoted by USDA and the Wine Institute in a program targeted for Japan and the United Kingdom -- the two leading offshore export markets for U.S. vintners -- plus Hong Kong and Singapore. A less costly trial run in Japan, financed through 1984 trade legislation, has set the wine-makers to bubbling.
That promotion campaign, in combination with tariff reductions by Japan over the last two years, resulted in additional U.S. wine sales of about $3 million -- a return of $7.50 for every $1 spent on promotion efforts. Unlike the earlier program, the new TEA will allow the Wine Institute to advertise in magazines and on television.
But while the Reagan administration has agreed to spend up to $110 million on the TEA program, it wants to cut in half another 30-year-old FAS marketing promotion effort that has produced big benefits for California's specialty crop growers.
Wilson is opposed to that. Arguing on the Senate floor against the administration plan to cut the FAS promotion to $18 million, he cited the program's success in increasing export of such items as pistachios, avocados, cling peaches, cotton and grain.
"This 50 percent funding reduction also contradicts the emphasis on promoting exports in the 1985 farm bill," he said. "It will cost the United States many more millions of dollars in lost agricultural exports in the years ahead."