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US Could Lose Spain, Portugal as Corn Markets

September 20, 1985

WASHINGTON (AP) _ Trade experts in the Agriculture Department are worried that Spain and Portugal may go the way of Italy as a market for American corn farmers after those two countries become part of the European Community.

″Italy was once one of the world’s largest import markets for corn and a leading outlet for U.S. corn exports,″ says James P. Rudbeck of the department’s Foreign Agricultural Service.

But since the 10-nation trading bloc began its Common Agricultural Policy more than 20 years ago, which includes levies on certain imports to protect the higher prices guaranteed European farmers, the Italian corn market has deteriorated.

It’s ″a classic example of what happens when prices overseas are maintained at artificially high levels,″ said Rudbeck, a former U.S. agricultural counselor in Rome.

Rudbeck’s report was included Thursday in a new issue of the agency’s Foreign Agricultural magazine.

Since the EC’s high domestic prices and protective import levies were put in place, the report said, a number of changes have occurred in the Italian market:

-Domestic corn production has been encouraged.

-The demand for livestock products and animal feeds has stagnated.

-Competitive forces have been distorted so that more livestock and dairy products are being imported from other EC countries.

-Imports of corn have dropped by more than one-half, and imports from the United States are down even more.

″What happened to the Italian market does not augur well for U.S. exports of corn to Spain and Portugal, which are scheduled to be integrated into the EC in January 1986,″ the report said.

″There are many similarities betwen the three countries. And what has happened in Italy could be repeated in one manner or another in Spain and Prtugal.″

In the 1960s and early ’70s, Italy was a large corn market. Imports in 1965-66, for example, were about 5.5 million metric tons of corn, roughly one- fifth of the world corn trade that year.

Of that total, 2.6 million tons came from the United States, representing 15 percent of total U.S. grain exports.

And in the mid- to late-1970s, Italy’s corn imports were still high at around four million tons annually, including 2.8 million tons from the United States.

But by 1984-85, Italy’s overall corn imports dropped to around 1.1 million tons, including only about 300,000 tons expected to come from the United States, the report said.

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WASHINGTON (AP) - The Reagan administration has told Congress it supports so-called ″clear title″ legislation that has been made part of the 1985 farm bills.

Agriculture Secretary John R. Block indicated support of the legislation in letters Thursday to Sen. Jesse Helms, R-N.C., chairman of the Senate Agriculture Committee, and Rep. Kika de la Garza, D-Texas, chairman of the House Agriculture Committee.

The legislation began as separate bills but since has been incorporated into Senate and House farm bills.

Block, who noted that he had clearance from the Office of Management and Budget, said he supported the clear-title measure because it would:

-Treat farm products equally with all other products.

-Allow consistency among the states.

-Remove obstructions to free trade and orderly marketing.

-Relieve buyers of farm products from the risk of double payment.

Under current law, if a seller of agricultural products defaults on a loan for which the products were used as collateral, the purchaser can be held accountable, even if the purchaser had no knowledge of a lien on the products.

Such accountability is applied only to agricultural products.

″If a seller-debtor defaults on the loan, or fails to account for the proceeds, the purchaser can be forced to pay twice for the goods, once at the time of the sale and again months or years later when the lender sues the purchaser or commission merchant for conversion of collateral,″ Block said.

″This problem is especially troublesome for buyers of livestock, since the Packers and Stockyards Act requires cash buyers of livestock to pay for their purchases within one day of the sale transaction.″

At least 16 states have taken legislative action to ease the situation, but there has been no clear consistency nationwide.

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WASHINGTON (AP) - A proposed change in Agriculture Department regulations would allow cotton farmers to get price support loans through an authorized agent.

Everett Rank, administrator of the department’s Agricultural Stabilization and Conservation Service, said Thursday that ″Form A″ cotton loans are currently handled by the agency’s county offices.

The proposed change would allow producers of upland and extra-long staple cotton to obtain and repay loans through private agents who may be more accessible than county offices, he said.

Public comments on the proposed rule change can be submitted by Oct. 21 to: Director, Cotton, Grain and Rice Price Support Division, ASCS-USDA, P.O. Box 2415, Washington, D.C. 20013.

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