The United States urged its trading partners yesterday to join in a revolutionary restructuring of global farm policies that would phase out subsidies within 10 years and allow free trade in agriculture.
The revisions, if carried out, could eliminate virtually the entire $30 billion a year in U.S. farm support programs that affect world trade, including irrigation and water resource policies, agricultural extension programs and price supports.
At the same time, the 12-nation European Community would have to abandon its $26 billion in farm subsidies, and Japan would be forced to dismantle barriers to food imports, especially rice.
President Reagan called the program, put on the table in global trade talks in Geneva and simultaneously unveiled at the White House, "the most ambitious proposal for world agricultural trade ever offered." Prospects in Geneva for the far-reaching proposal are uncertain, however, since other major producers reacted coolly.
Reagan said farm subsidies in most nations have distorted global agricultural trade, caused a worldwide glut of farm products and depressed commodity prices -- all at the taxpayers' expense.
"It has become clear that ultimately no one benefits from the current agriculture policies employed around the world -- not farmers, not consumers and not taxpayers," the president added in a statement released at the White House.
But he and his aides -- U.S. Trade Representative Clayton Yeutter and Agriculture Secretary Richard Lyng -- emphasized that the United States would not abandon its current farm policies unless major trading partners, especially the EC, does the same. Otherwise, Reagan said, American farmers could be "devastated by the policies of other countries.
"The only hope is for a major international agreement that commits everybody to the same actions and timetable," he said.
The administration has made agricultural trade reform a major priority in the talks under way in Geneva to strengthen the global compact that regulates world trade, the 94-nation General Agreement on Tariffs and Trade (GATT). The United States is pressing for an "early harvest" of results late next year for the farm section of the trade talks.
That would be after elections in the United States and key European nations. That timing, trade strategists from the United States and other nations believe, will provide a narrow window for action.
"These are politically sensitive issues in all countries," Yeutter said. "There is no way to accomplish this kind of change overnight. What we are talking about is a huge adjustment in agricultural production and trade policies throughout the world. It will have to be done gradually, and everyone will have to go down the road together."
Japan and the EC are expected to try to block the proposal at the GATT talks. The EC's initial comment on the plan, issued by a spokesman in Brussels, was unfavorable, and Japan has resisted past efforts to change its policy of excluding farm products, especially rice. Leaders of the major Western industrial countries, including the EC nations and Japan, declined to give full support to the Reagan farm proposal when it was raised at the economic summit in Venice last month.
In Brussels, EC spokesman Nico Wegter said, "We think this is not a realistic proposal." Wegter said it goes beyond the agreement reached prior to the summit by the Organization for Economic Cooperation and Development (OECD), calling for major reforms in farm trade.
But Canadian Prime Minister Brian Mulroney, whose country belongs to a 14-nation group of so-called free traders in agriculture, applauded the U.S. move. "The United States proposal is a statement which challenges all countries interested in trade liberalization to move toward a world where production and trade decisions will not be distorted by government intervention," Mulroney said.
The reaction was mixed on Capitol Hill, where Congress eventually will have to approve the results of the trade talks and pass any legislation that dismantles U.S. farm programs. Sen. Rudy Boschwitz (R-Minn.) said he was "very enthusiastic" about the Reagan proposal, which he described as "visionary." But he wondered "how far Japan and the European Community will be willing to go."
On the Democratic side, Senate Agriculture Committee Chairman Patrick Leahy (D-Vt.) took a wait-and-see attitude and challenged the nation's trading partners in the GATT talks to respond.
Major U.S. farm groups also were cautious. The American Farm Bureau Federation, for instance, said it supported it, but withheld approval of changes in the U.S. farm program until it sees how far nations such as Japan and Western Europe are willing to go.
But Bob Denman of the National Farmers' Union charged that the president's plan would return U.S. farmers to "the constant boom and bust" cycles that preceded the 1929 Depression, with more years of bust.
Lyng and Yeutter insisted that the plan would benefit U.S. farmers, who they said are highly competitive in world agricultural markets. At the same time, they said consumers, who likely would pay more for their food because of higher prices for farm commodities, would benefit in the long run from a decline in their costs as taxpayers for farm programs.
But the shift would hit at numerous protected special interests across the globe, including some in the United States. U.S. sugar growers, for instance, benefit from quotas that keep out lower-priced cane products from the Caribbean Basin and the Philippines. European sugar producers, however, would likely be wiped out of the world markets without subsidies, which have lifted the EC nations from net importers of sugar in 1975 to their present position as leading suppliers.