COMMENTS ON OMB DRAFT OF A PRESIDENTIAL ISSUE PAPER ON TARGET PRICES (S-6767)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000600010008-8
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 3
• Document Creation Date: December 12, 2016
• Document Release Date: April 13, 1999
• Sequence Number: 8
• Publication Date: February 7, 1975
• Content Type: MFR

. C ~A/~ER/5-~06767~-~'S ~,.~N~~~ ~~,~IA-R~P~6o8R{~~ :~~ DRAFT' ~ 0~'~ P-DES I DENT IA L I SS;U`E
PAPER ~~B 75 UNCLICT.A `INT~RNAI. USE ONLY 01 OF 0
 Approved For Release 2001/12/05: CIA-RDP86T00608R000600010008-8
i ~r~ ~~r'TCi~t~r~~ t~~~ OIVL~1~
..~ 6 ~ ~ 7
7 February 1975
SUBJECT: Comments on OMB Draft of a I~residentLa::.
Issue Parer on Target Prices (5-6767)
1. On ~~ February 1975, I telephonically provided
comments to Richard Butler, OMB, on the subject paper
(attac:~-d) with the qualification that they did not
represer..t a L-ormal CI~~ position but only my personal
views. The comments were as follows:
a. The paper is predicated oil tco pessimistic
an economic outlook for the 1975/76 period -- both
for the US and worldwide. No allowance is made for
some economic improvement by early 1976 -- so
stated in Presidctit Ford's economic report ?--
~wizich could strengthen demand for grain and live-
stock products.
b. The paper strongly implied that US grain
will be in excess supply in FY 76 causing grain
prices to fall below target prices. Yet, the
Secretary of Agriculture h~.s asked L'~S farmers to
maximize production because demand will be strong
and prices profitable. ~4hat aro the facts?? :10
USDA study has been presented to the Deputies
Group on Food projecting FY 76 demand for grain
or probab],e farm price levels.
c. Given the short stock position for US
grains, strong foreign demand, and inflation,
it doesn't seem realistic to project next year's
farm prices below $2.50/bushel for wheat and
$1..50/bushel fur corn. Therefore, target prices
could be raised as much as 25 cen is :without any
danger of increasing budget expos~,:rc~. It might
be proposed that the President agree to a small
increase in target price:: to blunt Congressional
critics, to provide an incentive to farmers, and
to lend su,~port to the administration's call for
full farm production.
C?A I~JTERi~.~1L USE O~JI.Y G~----''~
Approved For Release 2001/12/05: CIA-RDP86T00608R000600010008-8
 Approved For Release 2001/12/05 :CIA-RDP86T00608R000600010008-8
CIA IPJTERNAL USE ONLY
d. The paper: points up the lack of a national
agricultural policy which caould address such Problems
as building grain stocks in a year of eVicess supply,
multi--year food aici programs, and projected foreign
demand for US agricultural products.
2. The Ot4I3 proposa:L was discussed at the 5 February
meeting of the Deputies Group on Foac~. It was recommended
that OP?1B recast the paper to give the President tizree
options:
m accept some increase in target prices for
wheat and feedgr_ain;
veto any increase; and
e 'take no public stand on the issue at this
?;.ime .
Senior Res~~rch Analyst
Industrial Nations Di~Tision
Office of E~:on~;nic Rosearca
T.ttachment: As stated
Distribu'~ion
1 - D/OER
1 - D/I
1 -~NIO Economics
2 - I/AM
OER/I/AM /ljl/5$68/7 February 1975
25X1A9a
Approved For Release 2001/12/05 : CI 06088000600010008-8
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