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Subsidies Boost US Wheat Sales Abroad

December 14, 1989

WASHINGTON (AP) _ Two Agriculture Department economists say subsidized sales of wheat have helped boost the volume of wheat sold overseas and have generally been good for farmers.

But the net financial gain has not been large because of the costs to carry out the subsidies under the Export Enhancement Program, or EEP, which began in 1985.

″Analysis shows that U.S. wheat exports, prices and gross export revenues rose due to the EEP,″ the report said. ″The gain in export revenues slightly exceeded the value to the U.S. Government of the commodities offered as bonuses.″

Under the program, designated foreign countries can buy specified U.S. commodities - wheat has been the main item - at prices lower than otherwise would be charged. The private exporters then are given surplus commodities held by USDA to make up for the lower prices charged the foreign buyers.

As of Dec. 7, since the program began, a total of 87.2 million metric tons of grain have been sold overseas under EEP arrangements. Wheat made up 65.5 million tons of the total. Overall, the commodities sold were valued at more than $9.2 billion. The subsidies, or bonuses, cost $2.64 billion.

The report by the department’s Economic Research Service compared several research studies of EEP in an attempt to sort out the program’s contribution to wheat exports during 1985-88.

″U.S. prices rose slightly due to the EEP,″ the report said. ″Higher wheat prices improved market earnings for U.S. wheat growers and reduced government outlays for direct income payments to U.S. farmers.″

One of the studies reviewed by USDA economists Ann Hillberg Seitzinger and Philip L. Paarlberg showed that the volume of wheat exports rose 2 percent to 3 percent early in the EEP campaign.

Another showed an increase of 20 percent from June 1986 to May 1987, and one put the wheat export increase at 10 percent to 30 percent from July 1986 to June 1987. Gains of 12 percent to 14 percent, and one of 7 percent through May 1988 also were cited.

One of the purposes of the program was to counteract similar subsidized exports by the European Economic Community.

″EEP wheat sales to some countries replaced unsubsidized commercial sales,″ the report said. ″Competitors displaced from markets targeted for EEP sales sometimes moved into other markets where the United States previously had been a major supplier.″

The analysis said that increases in U.S. wheat exports and market prices resulted in larger gross export revenues.

″But net U.S. export revenues changed only slightly once the value of the commodities from government inventories awarded to exporters under the EEP was weighed against the benefits to wheat exports and prices,″ the report said.

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WASHINGTON (AP) - Three families from Indiana, Kentucky and Utah were announced Thursday as winners in a national awards program to recognize outstanding farm conservationists.

The awards are presented annually by the National Endowment for Soil and Water Conservation and are funded by the Du Pont Co., which presented the winners each with a $1,000 cash award at a dinner Monday night.

Winners for 1989 are: David and Beverly Salomon Churubusco, Ind.; Rick and Stacy Murdock, Murray, Ky.; and Frank W. Bohman, Morgan, Utah.

The national winners during the week are meeting with Agriculture Department and Environmental Protection Agency officials, members of Congress and others. A visit to the White House for presentation of awards certificates also is on the schedule.

Chairman Emmett Barker, president of the Farm and Industrial Equipment Institute, said the winners prove that soil and water conservation can be achieved voluntarily and that it is ″good stewardship and good business.″

John A. Krol of Du Pont said that on farms and ranches ″as in every corporation in America we need vision instead of mere compliance.″ He said Dupont shares the winners’ ″zeal to excel in environmental performance.″

The National Endowment for Soil and Water Conservation says it was founded in 1982 as a non-profit, privately funded, non-political organization ″dedicated to conserving natural resources and promoting a sense of stewardship for the land by all Americans.″

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WASHINGTON (AP) - Agriculture Secretary Clayton Yeutter is scheduled to be in Brussels, Belgium, on Friday for the annual U.S.-European Community ministerial meeting.

The U.S. delegation to Brussels will be led by Secretary of State James A. Baker III and also will include Commerce Secretary Robert Mosbacher, U.S. Trade Representative Carla Hills, and William Riley, administrator of the Environmental Protection Agency, Yeutter’s office said Wednesday.

Yeutter will proceed to Warsaw on Saturday to sign a cooperative agreement for the Agriculture Department to provide technical assistance to the Polish government.

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