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White House Urges End to Farm Support : Phase-Out by 2000 Aimed at Bettering Worldwide Trade

Associated Press

The Reagan Administration today formally proposed the worldwide elimination of all trade-distorting farm subsidies by the end of the century, a move that U.S. officials conceded could virtually wipe out all American farm support programs.

President Reagan, in a statement, called the initiative, also presented today in Geneva, Switzerland, at an international trade-law overhaul negotiating session, “the most ambitious proposal for world agricultural trade reform ever offered.”

The plan seeks a phase-out of “all policies that distort trade in agriculture by the year 2000.”

“The heart of our proposal is the elimination, over a 10-year period, of all export subsidies, all barriers to each other’s markets (including tariffs and quotas) and all domestic subsidies that affect trade,” Reagan’s statement said.

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Most Farm Programs

Agriculture Secretary Richard Lyng, outlining the Administration’s proposal at a news briefing, said that virtually all the nation’s estimated $30 billion a year in farm subsidy and price-support programs falls in this category.

“We are not going to do this unilaterally,” Lyng said. “We obviously would have a lot of trouble doing it unilaterally in this country.”

U.S. Trade Representative Clayton Yeutter, who joined Lyng at the news briefing, agreed that the proposal might be met with considerable resistance, particularly among the European nations that heavily support farm exports.

“This is a negotiation, obviously. But we’re cautiously optimistic that there’ll be a lot of support for this,” Yeutter said.

Foreign Support

And he indicated that a group of farm-exporting nations that have favored an end to farm subsidies all along, led by Australia and Canada, are already “strongly in support conceptually” of the U.S. proposal.

U.S. officials said the proposal would not affect government income-supplement programs unrelated to crop production levels. Nor does the proposal envision ending foreign aid food programs, like Food for Peace, under which subsidized food is sent to some of the world’s poorest countries.

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Lyng told reporters that some farm groups, including the American Farm Bureau Federation, already supported the concept and that the plan was in the long-term best interest of farmers.

“U.S. farmers can compete with farmers around the world. They know they can. But they know they cannot compete by themselves with the treasuries of foreign governments,” he said.

U.S. commodity programs, including price supports for crops and dairy products, totaled a record $26 billion last year, a figure that is equivalent to more than 10% of the nation’s annual budget deficit.

Reagan Administration officials have long contended that the money spent on farm-support programs is a major cause of the swelling of the deficit.

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