The export-enhancement program, to subsidize American farm exports, is a particularly flawed part of the five-year farm bill adopted last year, and now some farm-state senators, panicked by this year's election, are seeking to make it worse by broadening its already mischievous provisions. If they have their way, the export subsidies will be extended to such nations as the Soviet Union and China, and will be used in competition with nations such as Australia and Argentina that do not subsidize their exports. Thus the disruption of the world grain market would be compounded by unfair trading practices against nations that are important friends.
Leading the legislative battle is Bob Dole (R-Kan.), majority leader of the Senate. Dole seems intent on winning votes for his party in the financially troubled farm belt, and also for his 1988 presidential bid. But the shortsightedness and counterproductive elements of his proposal undermine rather than enhance the credibility of the Republicans, and do not speak well of his own judgment as a leader. Those sponsoring this maneuver do a singular disservice to the farmers whom they pretend to help, for export subsidies are a guaranteed way to weaken the very world markets that they claim to be enhancing.
In its first year the export-enhancement program has been used with discretion to avoid undercutting free-market exporters, like Australia, that do not subsidize exports. It has been used only to counter export subsidies of the European Economic Community--applied for the most part to wheat, flour and other U.S. grain exports.
Dole's proposal to sell wheat to Moscow at less than American consumers pay has an additional troubling dimension. The Soviets have not been faithful to the 1983 grain-purchase agreement that set minimum purchases over a five-year period. Last year the Soviet purchases of wheat alone were more than 1 million tons below what they had promised to buy, and this year they have purchased only 153,000 tons of the minimum agreed amount of 4 million tons--indicating the virtual certainty of a shortfall when the Oct. 1 deadline comes. There is no good reason to subsidize sales to a customer already in breach of contract.
Dole and his fellow farm-state legislators sell the wisdom of the American farmer short when they think that this sort of legislation will win votes. The farmers of America know that they need exports to prosper. They have learned over the years the value of free trade. As the lower 1986 loan rates take effect, American farm prices are declining, and the Department of Agriculture forecasts even more competitive prices by next month. Effectively competing in the world, not disrupting the market with export subsidies, is the best way to improve American farm security.