SUBSIDIZED AGRICULTURAL EXPORTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00109R000100060013-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 10
• Document Creation Date: December 21, 2016
• Document Release Date: April 15, 2009
• Sequence Number: 13
• Publication Date: October 8, 1982
• Content Type: MEMO

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0
THE WHITE HOUSE
WASHINGTON
a
CABINET AFFAIRS STAFFING MEMORANDUM
DATE: 10-8-82 NUMBER: 0 7 7 5 3 0 cA DUE BY:
SUBJECT: Subsidized Agricultural Exports
ACTION FYI
ACTION
FYI
ALL CABINET MEMBERS ^ G~
Baker
0
Deaver
^
Vice President ^ ^
State ^ ^
Clark
0
^ ^
Treasury
Darman (For WH Staffing)
011-
^
Defense ^ ^
Attorney General ^ ^
Harper
Interior ^ ^
Jenkins
Agriculture ^ ^
WhPP1ar
^_
Cdr
Commerce ^ ^
^ ^
L
b
Kudlow
or
a
HHS ^ ^
HUD ^ ^
Transportation ^ ^
^ ^
Ener
^
gy
Education ^ ^
Counsellor ^ ^
OMB o ^
CIA ^ ^
UN ^ ^
USTR ^ ^
CCCT/Gunn
^
^
CCEA/Porter
^
G3~
CEA ^ H
CCFA/Boggs
^
^
CEQ ^ ^
CCHR/Carleson
^
^
OSTP ^. ^
^ ^
CCLP/Uhlmann
^
^
^ ^
CCNRE/Boggs
^
^
REMARKS: Attached for your information is a report on the Subsidized
Agricultural Exports in response to questions raised at the
September 16 meeting of the Cabinet Council on Economic
Affairs.
RETURN TO: ^ Craig L. Fuller M Becky Norton Dunlop
Assistant to the President Director- Office of
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October 5, 1982
MEMORANDUM FOR THE CABINET COUNCIL ON ECONOMIC AFFAIRS
FROM: ROGER B. PORTER 43/
SUBJECT: Subsidized Agricultural Exports
At its September 16 meeting, the Council discussed the
issue of subsidized agricultural exports and requested the
Department of Agriculture to develop specific proposals to
improve the U.S. agriculture trade position.
In response to several questions that were raised in
the discussion about U.S.-European comparisons and compari-
sons with other countries, the Department of Agriculture has
prepared the attached information paper.
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v~Qnxr:Me.~..,
? W
DEFAR T N EN T CF AGRiRE
r-) F7
WASH NG C N. D, C _C26C:
October 1, 1982
TO: Members of the Cabinet Council
on Economic Affairs
At a recent meeting of the Cabinet Council on Economic. Affairs I brought
to your attention the fact that the EC subsidizes its agricultural exports
extensively. Also highlighted was the point that their subsidies were
concentrated on high value agricultural products which have hurt us in the
way of additional employment and GNP.
At that time a number of questions were raised concerning: (1) a comparison
of our agricultural expenditures versus those of the EC; (2) the level of
grain stocks that the U.S. carries; (3) the level of agricultural exports
from the EC to the USSR; and (4) the share of world agricultural exports that
the U.S. has compared to those of other nations. Attached you will find a
summary page that answers these questions, in addition to four tables that
give a more detailed perspective on these issues.
Secretary
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Attached are four tables t highlight the adjustment bun the United States is
carrying fdr the rest of a world and the problems we face in maintaining our markets
within the current trade policy environment.
European and United States Government Expenditures on Agriculture, 1977-81
Over the past five years the EC has spent more than twice as much money in support
of agriculture as the United States per unit of production value.
While EC outlays for agriculture from 1977 to 1981 increased nearly 75 percent,
the outlays for marketing and processing have doubled. Most of the outlays in
this category are for export subsidies.
In recent years EC outlays for marketing and export subsidies have constituted
around one-third of total outlays as they moved into export markets.
World Grain Stocks
World grain stocks have increased nearly 30 percent since 1980/81 with virtually
all of the buildup in the United States.
At the end of 1982/83, world stocks will be at the highest level in over 20 years,
and equal to about 16 percent of annual usage.
The U.S. will be carrying 54 percent of the stocks; the largest share of world
stocks since the early 1960's.
U.S. stocks will equal about 42 percent of domestic and export use while the rest
of the world's stocks to use ratio is only 8 percent.
USSR Agricultural Imports from the U.S. and the EC
Since 1979 USSR purchases from the U.S. have fallen by over 30 percent and purchases
from the EC have nearly quadrupled.
In 1979 the USSR imported $3 billion in agricultural products from the.United
States and around one-half billion dollars in products from the EC.
In 1982, after the 1980 embargo had been lifted, estimated USSR purchases from
the U.S. totaled around $2 billion while purchases from the EC totaled around
$2.1 billion.
World Agricultural Exports
The United States accounts for around 19 percent of the world's total agricultural
trade in terms of value.
Trade in cereals and oilseeds accounts for over half of U.S. trade value and. the
U.S. accounts for 45 percent of the total world trade in these products.
U.S. exports of animals and animal products represent only about 4 percent of the
total value of world trade.
The EC, which accounts for about 12 percent of the value of world trade, relies
on animal products and other high value exports for most of its trade value.
The EC accounts for about 17 percent of the world's trade in animal and animal
products and only about 5 percent of the world trade value in cereals and oilseeds.
In 1980, the EC, including national government outlays, spent $7.6 billion on export
subsidies to support $26.4 billion in total net EC trade in agricultural products.
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EUROPEAN AND UNITED STATES EXPENDITURES ON AGRICULTURE, 1977-81
Item 1977 1978 1979 1980 : 1981 : 1977 1978 1979 1980 : 1981.
European Community (EAGGF*)
United States Government 1/
? -Bils. of Eur. Currency Units (ECU)-:
--------Billion of Dollars--------
Production/Income Support
(price/income supports, disasters, etc.) :
3.96
4.92
5.46
5.62
5.93
5.41
9.59
9.41
6.83
8.84
Production/Structures Support
(conservation, land improvement, farm
investment, etc.)
.11
.17
.23
.29
.30 :
.45
.56
.54
.52
.57
Marketing and Processing
(quality control, inspections, export
subsidies) .
2.70
3.85
5.08
5.80
5.38 :
.53
.56
.60
.69
.75
Subtotal ?
6.77
8.94
10.77
11.71
11.61:
6.39
10.71
10.55
8.04
10.16
National Governments 2/
3.46
4.40
5.07
5.26
4.98
N.A.
N.A.
N.A.
N.A.
N.A.
TOTAL :
10.23
13.34
15.84
16.97
16.59
6.39
10.71
10.55
8.04
10.1f
--------------------------------------------------------------------------------------------------------------------
Value of Agricultural Production :
89.8
96.4
104.6
117.9 128.7 :
136.9
145.5
163.1
171.9
174.1
Expenditures on agriculture as percent of
value of agricultural production
11
14
15
14 13 .
4.7
7.4
6.5
4.7
5.8
1/ Excludes expenditures for functions related to agricultural research and extension, food aid (foreign and domestic),
rural development and other functions that are non-production related.
2/ 1978-81 are estimated. Includes expenditures on above items only. Excludes expenditures for research and extension,
food aid, rural development, and contributions towards income tax relief and social security.
* European Agricultural Guidance and Guarantee Fund.
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? World Grain Stocks* ?
Countries 1978/79 1979/80 :?1980/81 : 1981/82 1982/83 F
Million Metric Tons
Uni ti
d States
72.6
78.1
62.2
100.9
129.3
Cana
da 22.0
14.2
12.6
14.8
17.0
EC-10
16.5
14.6
15.7
13.7
13.6
Indi
21.3
15.2
12.2
13.1
12.5
Japa
9.9
10.1
8.3
6.5
5.6
USSR
23.0
10.0
5.0
5.0
5.0
Rest
of World
55.8
54.4
63.7
62.1
55.0
Wo
rld Total
221.1
196.6
179.7
216.1
238.0
U.S. Share (Percent) 33% 40% 35% 47% 54%
n ing stocks of wheat, coarse grains and rice. (July/June year)
F = orecast.
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USSR: AGRICULTURAL IMPORTS FRCS TEE US AND THE EEC
(Calendar Year)
_ 1978 __---_ 1Q79 ----__ 19 8 C 19 R 1 __-~ 19 8 2
--.illiors of Dollars--
fro
m the US:
otal Ag Imports
1765.1
3000.1
1129.7
1720.3 2075.0 A/
Grain
1471.2
2394.3
1020.3.
1609.4 1950.0 A/
Other
293.9
605.8
108.9
110.9 125.0 A/
Fro
m the-Zssr:
244.5
579.2
1540.9
2000.0 A/ 2100.0 A/
Grain P/
104.3
55.4
311.2
600.0 A/ 700.0 A/
Livestcck'and Dairy
43.3
371.2
556.5
6CG.0 A/ 700.0 A/
Raw and Refined Sugar
13.7
5C.2
401.2
500.0 / 400.0 A/
Other
83..2
102.4
272.0
300.0 A/ 300.0 A/
Sources: US data fcr 1978 through 1981 are calculated from Vneshnvava
t rao_v.ly(Foreign Trade of the USSR) for various years. EEC data
for 1978 through 1980 are from The United Nations Trade Data Summary for
various years.
A/
B, /
Estimates of the EE-USSR Branch of the Economic Research Service.
Includes cereal ;reparations. Grain and flour exports to the USSR in
1981 and 1982 are estimated to be 2.2 and 2.4 million metric tons (or
about $370 billion and $400 billion) respectively.
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World Agricultural Exports, Major Countries and Commodity Groups, 1980
Iota] agricultural
Cereals
Oilseeds
Products
:Animals
animals prod.
ter
OA JVI 47
Value
: Share
Value
Share
Value
are
Value
are
Value :
are
Bi1. dol.
Pct.
Bil. o
ct.
Bil. dol.
Pct.
o
Pct.
o
c.
U.S.
42.5
17.6
46
7.6
43
1.6
4
15.7
0
EC-9
(74.4)
(6.7)
(2.0)
(24.6)
(41.1)
Intra
(48.0)
(4.1)
(1.4)
(17.9)
(24.6)
Net EC-9 :
2,6._4..
12
2.6
7
0.6
4
6.7
17
16.5
13
Australia :
9.2
4
3.1
8
0.4
2
2.4
6
3.3
2
?
e
3razil
9.1
4v'
1.1
6
0.6
1
7.4
6
Canada s
6.9
3
3.6
9
0.7
4
0.8
1.8
Argentina :
5.4
2
1.5
4
1.2
7
1.0
1.7
Total
99
5
44
28
4
11
6
66
13
1
33
46.4
40
Other
.
128.2
56
.
.
9.9
.
6.0
34
.
26.8
67
85.5
65
total :
227.7
100
38.3
100
17.6
100
? 39.9
100.
131.9
100
..ompiled from UN and FAO data.
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