Reagan Authorizes Sale of Subsidized Grain to Soviets : Overrides Pentagon, State Dept.

President Reagan, overriding objections from the Pentagon and State Department, today authorized the subsidized sales of American grain to the Soviet Union.

The decision, announced in a two-sentence White House statement, ended an Administration debate that combined domestic and international politics in a U.S. election year.

Members of Congress from farm states had urged the Administration to approve the subsidized sales as a way of boosting sagging U.S. farm exports.

The White House statement, issued under the name of presidential spokesman Larry Speakes, said:

Current Prices Recognized

“The President has made a decision today to allow grain to be sold to the Soviet Union at current world market prices in sufficient quantities to fulfill the terms of the U.S.-Soviet long-term grain agreement. The unfulfilled portion of the contract calls for the Soviets to purchase 4 million metric tons of U.S. wheat by Sept. 30, 1986.”

Agriculture Secretary Richard E. Lyng stressed that the Administration’s decision applies only to that amount and does not give the go-ahead for any attempt to win a larger share of the Soviet market.

“Today’s decision should assist American farmers by boosting agricultural exports,” Lyng said. “This decision is designed to help make the American farmer competitive by putting him on equal footing with his foreign counterparts.”

To Match World Price

Deputy White House spokesman Albert Brashear said the announcement means Reagan has authorized subsidized grain sales under the 1985 farm bill. The subsidies will be applied “to make our grain meet world market prices,” Brashear said.

With an eye on close political races this fall in the Midwest grain belt, Reagan’s political advisers had been urging approval of the sales.

On the other side, Secretary of State George P. Shultz had described the proposal as ridiculous and said it would violate agreements with U.S. allies and hurt the exports of other countries overseas.

Australia, for example, registered a strong protest over the possibility of subsidized U.S. sales, saying they “would inflict critical damage on the well being of all Australians.”

Shultz, Secretary of Defense Caspar W. Weinberger and other foreign policy officials were said to have registered strong opposition to the idea at a meeting with Reagan on Monday.