Export Subsidy Showdown Looms Bilateral Commission Seeks Solution To Grain Dispute

A blue-ribbon, U.S.Canadian trade commission said Thursday that export subsidies used to boost wheat sales should be abolished to help resolve a trade dispute between the two nations.

“This form of competition has in many cases reduced prices at the point of sale in international markets, with adverse effects in the grain sectors in both countries,” the 10-member U.S.-Canada Joint Commission on Grains said in a preliminary report. Elimination of export subsidies should “move forward as soon as possible.”

The recommendation hits Pacific Northwest wheat farmers especially hard. They export 90 percent of their annual harvest, and as much as 75 percent is sold using export subsidies, according to Agri-Advisory Service, a Portland consulting firm.

The National Association of Wheat Growers, America’s largest wheat producer group, immediately criticized the commission report.

“We are back to the same circumstances that existed a year ago” when the commission was formed, said NAWG president Ross Hansen. “It’s time for a showdown.”

NAWG’s Capitol Hill lobbyist is co-chairman of the commission. Jim Miller recently left his farm in Garfield, Wash., to join NAWG, but he has served on the commission since its inception last October.

Fed up with a flood of cheaper Canadian wheat flowing across the border, American farmers had demanded that the Clinton administration do something.

In September, the administration capped the level of Canadian wheat imports at 1.5 million metric tons. The quota expires Sept. 12 unless extended.

NAWG’s Hansen called on the Clinton administration to continue a quota on Canadian grain until trade inequities are eliminated.

A House appropriations subcommittee last week approved spending for $800 million in direct agricultural export subsidies in fiscal 1996.

Meanwhile, wheat prices rose sharply Thursday on speculation that China will buy around 1 million tons of U.S. wheat. Portland grain traders snapped up Inland Northwest soft white wheat for $4.80 a bushel, before shipping charges, a 15 cent jump from the day earlier.

, DataTimes