U.S., Soviets to Meet on Grain Sales : Renewal of Pact Could Bolster GOP Chances in Farm Belt

The United States will begin negotiations with the Soviet Union this month on a new long-term agreement on U.S. grain sales to the Soviets, and Reagan Administration officials hope that the pact will boost Republican election prospects in the Farm Belt in November.

The talks, arranged last year by Secretary of State George P. Shultz and Soviet Foreign Minister Eduard A. Shevardnadze, technically are to discuss whether the two sides want to begin negotiations to extend a 1983 grain sales pact that is to expire in September.

However, industry analysts say the fact that the two sides have agreed to meet so early amounts to a clear signal that both countries want to extend the accord for several more years. The talks will begin March 11 in Vienna, it was announced here Thursday.

Carol Brookins, president of World Perspectives, a Washington-based agricultural trade consulting firm, said that extending the pact is crucial for U.S. farmers because it would help provide some stability in an otherwise volatile world market.

“It’ll be a big deal, politically, if it doesn’t happen,” Brookins said. “Wheat farmers here will be pretty angry.”

But Brookins and other trade experts say the bargaining will be unusually tough. The Soviets, determined to attain self-sufficiency in grain production, want to reduce the 9-million-metric-ton minimum purchase that the current pact requires over three years.

Would Be Third Pact

They also want the United States to drop a requirement that Moscow make its purchases evenly by buying 4 million metric tons a year.

At the same time, Moscow is likely to want to keep the deep discounts it is receiving under the United States’ export-subsidy program. Washington tried earlier to withhold them from the Soviet Union but was forced to back down after Moscow boycotted U.S. purchases.

Extension of the pact would mark the third long-term grain sales agreement that the two countries have signed in the past 13 years. The original U.S.-Soviet grain accord was completed in 1975 and expired in 1981. The current pact was negotiated in 1983.

The United States pushed for the 1975 pact as insurance against a repeat of the surprise Soviet grain purchase of 1972, when Moscow--plagued by massive crop failures--unexpectedly bought huge amounts of U.S. wheat and corn, leaving grain bins here empty and sending domestic prices soaring.

The stability sought in the 1975 pact was overturned in January, 1980, when President Jimmy Carter, eager to retaliate for the Soviet invasion of Afghanistan, embargoed U.S. grain sales to the Soviet Union, allowing only minimum sales prescribed by the compact.

As a result, U.S. wheat growers lost sales to European and Argentine farmers, who boosted their own production and then stepped in to fill the void, and the Soviet Union criticized the United States for not being a reliable supplier.

The embargo seriously hurt Carter in the Farm Belt during the 1980 election.

It is still not clear how long any new accord might last or how much grain it would require the Soviets to buy. Under the current agreement, Moscow has had to buy 9 million to 12 million metric tons during the life of the compact.