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PASTOR GENERAL'S REPORT, SEPTEMBER 16, 1986
PAGE 15
to price increases, the Common Agricultural Policy of the
European Economic Community should forever banish those doubts.
The CAP has dramatically increased farm incomes; in Great
Britain, for example, participation in the CAP has brought
about an estimated 40-percent increase in prices received by
British farmers.... The United Kingdom has gone from being a
net importer of wheat and barley to a major net exporter in
little more than four years•..•
There are many comparable if less dramatic cases. India is now
effectively self-sufficient,
thanks to the technological
adva.nces of the so-called Green Revolution, and Pakistan is
almost so.
Argentine wheat production has nearly doubled,
Thailand's feed grain output nearly tripled, and both Canada
and Australia have had major output increases••••
The importance of agricultural trade for the United States is
obvious.
Agricultural expo·
rts make up one-fifth of overall
U.S. foreign exchange earnings, and produce one-fifth of total
U.S. farm income.
At· least one-third of U.S. farmland is
harvested to provide grain for exports.
Figures for other
producing countries are·equally striking. Thirty-five percent
cf .EEC wheat is exported•••• Canada and Australia continue to
export the great bulk of their grain, and neither· Argentina,
which exports� two-t�irds· · of
i
its grain, nor Brazil, for whom
soybean exports alone" ·constitute almost 12 percent of its
foreign exchange earnings, could meet their foreign exchange
obligations without the "gteen account."••• Western Europe,
which for years was the American farmer's best overseas
customer,
has
become
nearly
self-sufficient,
�nd
the
traditional South Asian markets are no longer growing•• �.
Not surprisingly, competition in the grain export market has
become increasingly aggressive.
Weapons in the competition
include � variety of export incentives and subsidies, such as
differential export taxes, tax rebates, direct support payments
to allow lower export prices, subsidized domestic credits,
subsidized export credits and "food aid."
Agricultural
subsidies and other aggressive trade practices have become a
regular feature of international trade•••• The United States,
long a minor player in the great export subsidy war, has now
become the principle source of subsidized agricultural export
credits••••
There are almost no policy scenarios--for any of the major
exporters--that allow one to escape certain inevitable
conclusions.
World grain production will continue to grow,
export competition will increase, price levels will continue to
fall.
The most poignant example of the anger produced in the developing global
"food war" was the sharp reaction of Australia when the Reagan
Administration recently announced it was going to offer further sales of
subsidized stocks of U.S. wheat to the Soviets.
Australian Foreign
Minister Bill Hayden warned that subsidized American sales of wheat to the