U.S. FOREIGN AND EXPORT POLICIES FOR THE AGRICULTURAL SECTOR-ADDRESS BY MICHEL FRIBOURG

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70B00338R000300070010-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 19, 2016
• Document Release Date: September 12, 2005
• Sequence Number: 10
• Publication Date: May 28, 1968
• Content Type: OPEN

Approved For Release 2005/11/21 :CIA-RDP70B00338R000300070010-7
May ,28, Y 968 CONGRESSIONAL RECORD -Extensions o f Remarks
Marty is not concerned that the subdi-
viding of resorts -will curtail the business,
even though this means the cabins become
individually owned and are occupied for but
a few weeks each season. "These resorts
(those subdivided) are the types tourists
don't want."
Too many resort owners, Marty said, "op-
erate thinking that, when we get the people,
we will give them something.... You've got
to have something to get the people."
Marty disagrees with the northwoods busi-
nessmen who are critical of the camping
boom.
"Some families pay more for a camper (in
rental) than they would pay for a goad cot-
tage. They are good for the economy."
He is critical of the resorts which put out
brochures with photos of beaches, the rooms
and the bar-but not a single photo of the
wild animals of the northwoods which he
believes are the "greatest asset" of the area.
ANIMALS CARED FOR
"Why has the conservation department, in
its mana.gesnent of wildlife, given primary
consideration to the gun carrying conser-
vationist?" Marty asked. "It's a throwback
to the turn of the century, and leaves the
department almost totally dependent on li-
cense income."
Marty is disturbed that "there is not in
the state of Wisconsin today a single nat-
ural refuge where wildlife can be predictably
seen in their natural state. This could be
made available to the state on privately
owned land at practically no expense."
"I'm n,ot opposed to hunting," he de-
clared, "but we don't need 100% of the land
for hun.ting."
U.S. ~EI~'?~lvl) EXPORT POLI-
CIES FOR THE AGRICULTURAL
SECTOR-ADDRESS BY MICHEL
FRIBOURG
F~DN. 1~JALTER F. M?NDALE
OF MINNESOTA
IN THE SENATE OF THE UNITED STATES
Tuesday, May 28, 1968
Mr. MONDALE. Mr. President, last
week at the World Trade Conference in
Minneapolis, Minn., Mr. Michel Fri-
bourg gave a definitive statement on the
ramifications of U.S. foreign and export
policies for the agricultural sector. Mr.
Fribourg is president and chairman of
the board of Continental Grain Co.;
therefore, his views have special im-
portance for all of us interested in the
future of agricultural exports.
I ask unanimous consent that his
,speech be printed in the RECORD.
There being no objection, the speech
was ordered to be printed in the RECORD,
as follows:
CAN U.S. AGRICULTURE MAINTAIN ITS DOM-
INANT POSITION IN WORLD TRADE?
(By Michel Fribourg, president and chairman
of the board of Continental Grain Co., at
the World Trade Conference, Minneapolis,
Minn., May 21, 1968)
Gentlemen, I appreciate the privilege and ~
honor of participating in this Conference
on Foreign Trade Policy.
Today, we are faced with a situation that
causes real concern for all of us involved in
foreign trade policy matters. The Chairman
of the Federal Reserve Board, William Martin,
said recently that "We are in the midst of
the worst financial crisis we have had since
1931." And yet the nation's business is in
the eighth year of its longest uptrend Sn
history. American production has never been
higher than right now. Is this a contradic-
tion? I:s Mr. Martin exaggerating? I believe
not. Mr. Martin himself adds, "It is not a
business crisis, but a financial crisis." For
the past two years a booming economy,
combined with a lack of proper financial re-
straint on the part of our Government, has
created an increasing inflation. In addition, a
10 year balance of payments deficit has re-
duced our gold stocks to a point where inter-
national confidence in the U.S. dollar has
been badly shaken. In the month of March,
for the first time In many years, our bal-
ancr. of trade was unfavorable.
My purpose is not to dwell on these serious
and general problems but to relate them to
the area of my business activities-the agri-
cultural trade. Exports of agricultural prod-
ucts, particularly those handled by my com-
pany: grains, oilseeds and their by-products,
are major contributors both to our balance
of trade and our foreign aid programs. U.S.
commercial agricultural exports amounted
to 5.2 billion dollars in 1967, representing
19 % of the total U.S. commercial exports of
27 billion dollars. They exceeded any other
major category of U.S. commercial exports.
The importance of agricultural exports in
terms 'of what they mean to the national
economy is generally not fully understood or
appreciated. This is because we tend to think
of agriculture in terms of farms and farmers.
But today agriculture is industrialized. It
shollld be viewed as a converter of the prod-
uct:; oP industry into food and fiber; in other
words, as agribusiness.
The value of purchased inputs in agribusi-
ness is surprisingly large. Among America's
].2 largest industries, agriculture comes first
in spending for equipment. Farming alone
uses the output of 20 ~ of our petroleum
and rubber industries, ].5 `~o of our motor ve-
hicle industry, and 10 %, of our chemical in-
dusl;ry. Agricultural products provide a ma-
jor :source of revenue fc>r our different types
of transportation, Agribusiness, directly or
indirectly, provides 3 out of every 10 jobs
in t:he U.S. Now, when you consider that we
export the output of one out of every Pour
acres of grain under production, you can
understand the importance of agricultural
exports to our basic industries. When we ex-
port grain, we are also exporting the output
of a broad segment of our econolny.
Continental, as a, major grain company,
Pavors an aggressive policy of trade liberal-
ization. We also firmly believe that it is in
the best interest of all major industries tU
take a similar stand, though certain special
interests can be hurt in doing so, The U.S.
will have to make certain concessions to gain
liberalization. But the alternative of return-
ing to a policy of protectionism; which is ad-
vocated by a few powerful groups, would be
disastrous to our overall economy. We have
supported such efforts as th.e GATT negotia-
tions i~Iasmuch as they would achieve freer
trade. But we have objected to restrictive
aspects of the proposed International Grains
Arrangement which, in my view, threatens
the ability of the U.S. to compete freely for
world markets.
I have wholeheartedly endorsed the crea-
tion of free trade areas of economic units
such as the European Economic Community
and the Latin American Free Trade Agree-
ment, even though these entities make it
tougher every day for our agricultural com-
modities to enter these sectors. There is no
doubt that the European Common Market,
while ii; has succeeded i.n eliminating tariffs
amongst its members, has erected barriers
against third countries such as the U.S. Par-
ticularly in the agricultural field, Europe is
striving, through high internal support
prices, to become more anti more self-suffi-
cient. In South America, the Latin American
Common Market, still in its infancy, has es-
tablished certain advantageous tariffs for its
members. Argentine wheat is already dis-
placing U.S. wheat in some Latin grain im-
porting countries. We can visualize that, one
day, the Far East may form another eco-
E 4713
nomic group, which would favor Australia,
the major grain exporter in that part of the
world. This would be to the detriment of
the U.S. who is a prime exporter to the Far
East. It would appear, therefore, that U.S.
agriculture is becoming increasingly isolated.
There is no question in my rnlnd that our
agricultural exports face a growing challenge.
But I believe we can pursue a program which
will create a dynamic expansion in our farm
exports, At all times, we should follow a pol-
icy of fully competitive international grain
prices. Further, we should exhort all coun-
tries, especially the grain importing ones, to
lower their interior prices, thereby contrib-
uting to an increasing standard of living
worldwide.
It seems evident to me that the efforts
of economic blocs, to become more nearly
self-sufficient in agriculture, when they do
not have a comparative advantage to do so,
are doomed eventually to failux?e, for it in-
hibits economic growth in several ways.
First, excessive use of labor and capital in
agriculture limits their utilization in those
non-farm industries which can produce
goods efficiently. 'this has been specially
true in the EEC where serious nonfarm
labor shortages have caused a. substantial
inflation the last few years. But perhaps
more important, grain prices have been kept
artificially high to promote self-sufficiency,
thereby creating high Pood costs. Consumers
then spend a large percentage of their Sn-
come on food and less on other consumer
goods and services. Lower food costs would
have the opposite effect. The standard of
living rises as a larger share of personal in-
come becomes available for non-food con-
sumer goods. Increased demand in these in-
dustries expands employment and creates
more disposable income. In effect, a reduc-
tion in food costs will stimulate economic
growth, as would a reduction i~I taxes.
I favor the principle that each country,
or economic bloc, should produce goods fcr
which it has the greatest advantage, and
be willing to import what can be produced
by others more economically. This, of course,
requires major adjilstments; but why could
they not be achieved? The European Com-
mon Market, though it has not applied this
policy towards the outside world, has done
so internally. The GATT agreement can also
be considered as a first step toward the long
range economic goal of an Atlantic Com-
munity. This trade liberalization would con-
siderably benefit our agriculture, which is
the most efficient in the world today.
There are a number of actions the United
States can take unilaterally to expand com-
mercial exports of agricultural products. We
must first recognize that we cannot dissoci-
ate our domestic from our international poli-
cies. Our exports of grains and oilseeds have
expanded much mare rapidly than our do-
mestic usage. We cannot have a rapidly ex-
panding and prosperous agriculture without
a growth in exports.
Our agricultural policy has been domes-
tically, rather than internationally, oriented.
We have pursued a policy based on short
run expediency rather than a policy designed
to utilize the potential oP our agricultural
resources for increasing the nation's eco-
npmic strength and the quality of its so-
ciety. Our primary objective of improving
farmers' income has been achieved by main-
taining high domestic prices and restricting
production instead of expanding sales in
open competition in world markets.
Withdrawal of agricultural resources is
best illustrated by our land use policies. In
1968, about one-fourth of the total acreage
normally used for cereal grains and soybeans,
will be kept idle. Frospects are that wheat
acreage for 1969 will be less than two-thirds
as large as in the early fifties when govern-
ment controls were first instituted.
Contrast this performance with other
major wheat exporting countries. In the past
decade Canada expanded its wheat acreage
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 Approved For Release 2005/11/21 :CIA-RDP70B00338R000300070010-7
CONGRESSIONAL RECORD - Extensions of Remarks Nlay ;~8, 1968
more than one-third and Australia doubled
its wheat acreage. During that time, we have
also witnessed the European Common
Market shift from a net Importer to a net
.exporter of wheat. The same is true of such
countries as Mexico, Greece and Spain. Fur-
thermore, their exports are on' commercial
terms whereas. about ~/Z of U.S. sales are on
non-commercial terms.
It is logical to question why some coun-
tries have successfully pursued an expan-
sionist policy while the U.S. has followed
a policy of retrenchment. To put it another
way, our policy of high prices and restrained
output has encouraged production in those
countries to the long run detriment of 'the
U.S. and U.S. agriculture. Although we can-
not dictate the internal policies of other
countries, we can. discourage increased pro-
duction by high cost producers either
through trade liberalization negotiations or
through free and open price competition for
available markets.
The U.S. official endorsement of the In-
ternational Grains Arrangement a year ago,
providing fora 20 cents per bushel increase
over the minimum price of the previous In-
ternational Wheat Agreement, may have
seemed logical ai: the time. The final stage
of the negotiations occurred in a period
when the U.S. and world wheat stocks ap-
peared to be quite low. This apparent short-
age, however, proved to be temporary. Cur-
rently, world wheat production is consid-
erably in excess of consumption. World
prices have been declining and are now
about ten percent under the minimum pre-
scribed in the C:rains Arrangement Treaty
the Senate has been asked to ratify. This is
another example of having applied a long
range policy to a short term problem. The
annual report of the Council of Economic
Advisers sent this February to Congress
stated, "Primary producers sometimes at-
tempt, through commodity agreements, to
raise prices above the long term equilibrium
level. They rarely s~ltcceed. Maintenance of
a price above long term cost requires re-
strictions on supply; the necessary export
quotas are extremely hard to negotiate and
to enforce." In my view, this is sound advice
from an informed body. It should be fol-
lowed.
Another reason our commercial exports
have failed to expand is due to the fact that
we have been unable to compete on equal
terms with the other major exporters, chief-
ly Canada, Australia and France. I am al-
luding to the very substaxxtial commercial
agricultural trade that has developed over
the last five years with the Eastern countries.
The U.S. participation has been minor. In
part, this is due to government prohibition
of all trade with Mainland China; in part, it
is due to restrictive regulations with respect
to most countries in the Soviet Bloc. These
include the requirement that one-half the
quantity of grain exported be shipped on
American flag vessels, if available.
nations and have not been available to U.S.
exporters: government-backed credit insur-
ance programs and bilateral agreements-
though I know the latter are against basic
U.S. trade principles.
Government policy has been more progres-
sive in promoting commercial exports of
feed grains than of wheat. The sour[dness of
a market oriented price support loan and
direct income payments to cooperating
farmers has enabled us generally to compete
with other exporting countries without the
benefit or necessity of export subsidies. Of
course, our position is aided by th~~ follow-
ing factors: the U.S. produces about 50`;b
of the world's major feed crop, corn; and has
supplied over 50% of the feed grains traded
in the world market. Also, feed grains are
consumed mostly in the advanced industrial
nations, where consumption of meat and
poultry has developed substantially on ac-
count of the steady increase in their Stand-
ard of living. Production of-feed grains out-
side the U.S. has and will contint[e to in-
crease. Nevertheless, I believe that, if we
pursue-a policy of reasonable prices, we can
maintain our preponderant positiox in feed
grains fox many years.
U.S. soybeans are another story. Our pro-
duction and exports have seen tremendous
growth since the end of World War II due to
a heavy demand for soybeans anti its by-
products, and limited competition. No acre-
age restrictions were placed, and prices have
been governed more by international values
than by our domestic pricing policy.
Currently, however, U.S. soybeans are over-
priced at the support level of $2.50 per bushel.
Exports have slowed down and mos; soybean
oil exports are under concessional teerms. The
commercial export market has gone by de-
fault to competing products, mainl~r Russian
sunflower oil. Under the circumstances, a re-
duction in the support price oY this com-
modity is warranted.
I would like to make a few remarks con-
cerning non-commercial exports.
Agricultural exports on concessiox[al terms,
ing average of world market prices." Direct
income payments should be paid to farmers
to allow them a decexit income.
We should advocate the concept that pro-
duction of agricultural products on a world-
wide basis should fall into the hands of the
mast efficient farmers. The marginal agri-
cultural producers should be gradually
shifted into more productive non-agricul-
tural pursuits. If we wish to export, we
should be willing to impart goads, even agri-
cultural goods, produced at a cheaper price
than others.
Steps should be taken to facilitate and ex-
pand commercial trade in farm products with
Eastern countries. Trade is the best medium
to build understanding and peace with the
East.
The huge populations of the developing
countries constitute the largest potential
demand for our farm products. We must
continue our aid programs for humanitarian
reasons. But we must also aid these coun-
tries to became commercial customers. In
order to do so, we will have to lower our own
protective barriers. They must have access
to our markets.
In the final analysis, the best way to ex-
pand sales is to provide a consistently reli-
able supply of a good product at a reason-
able price. Our agricultural policies should
be directed to these ends.
The nation has huge underutilized agri-
cultural resources. Conditions require that
we direct these resources and our best efforts
into effective assets which will contribute
to the nation's ecoxxomic strength and the
vitality of its citizenry.
THE FORGOTTEN MAN IN THE MID-
DLE: THE NEEI? FOR TOTAL JOB
ESCALATION
HON. THOMaAS B. CURTIS
mostly PL 480 sales for foreign non-convert- of rvr,[ssouax
ible currenpies or long term credit, are use- IN THE HOUSE OF REPRESENTATIVES
ful as a tool of foreign policy, humanitarian Tuesday, May 28, 1968
goals, and surplus removal. They .have also
contributed to commercial market develop- Mr. CURTIS. Mr. Speaker. I submit for
ment, since some of our best customers for the RECORD my remarks to the 66th
dollars, Japan and Spain, for example, were annual meeting of the National Forest
once recipients of PL 480 aid. But, as now ex- products Association:
ecuted, most PL 480 sales to the developing
countries fail to make much contribution It is a great pleasure to appear before this
to our balance of payments. group as a participant on 'the panel today
In my view more can be done to increase with Senator Smothers and Mr. Sam Shaffer
food shipments to the hungry nations of the of Newsweek magazine to discuss the topic
world without increasing costs W ou.r govern- "Do We Have A New' Forgotten Man?-The
ment. In fact, such shipments can and American in the Middle". This is a most
should make a contribution to our economy. timely subject, and i.t embodies several key
It will not be easy but important problems issues which must be faced. I would like to
seldom have simple answers. briefly sketch some lxasic themes which are
Some concessions will be required on otxr pertinent to this topic which perhaps can be
part. For instance, we should consider giving developed more fully in our ensuing discus-
special market access to the goods, mostly Sion, as set forth fn the paper I prepared for
those using labor intensively, of the develop- the T7.S. Chamber of Commerce Symposium
Even if we assume that our policy toward ing countries. in December 1966, entitled "T"he Guaranteed
Communist China is correct, I fail to see It will take ingenuity to facilitate exchange OPPortunity to Earn An Annual Income".
what we have achieved by restricting tom- of our current and potential agricultural sur- My fixst theme, which permeates the others
mercial trade in non-strategic goads, mostly pluses for the goods and services of the that follow, is that we must return to accent-
agricultural products, with such countries as hungry. But it can be done? it must be done. uating the positive ae>pects and values of our
the Soviet Union and some of its Eastern society. Too many Americans in high places
European partners. Other exporters, such as sutvxivlaxY ntvn RECOMMENDATIONS today are emphasizing the negative. They are
Canada axtd France, have derived great bene- I would like now to summarizes the few viewing our society tlxrough the anxious eyes
fits from these trades. We have not prevented proposals 2 have made io achieve an ex- of a hypochnodriac, which aggravates our ills,
the East from meeting its needs. Actually, pansion of our agricultural trade-so vital to and blacks efforts 'to correct them. Attention
we have only denied ourselves an important help prevent a severe financial crisis. and study should be given instead to our
source of dollar earnings, so vital to our bal- The first step is to adopt a positive inter- successes, not to ignore the` failures, but
ante of payments. nationally oriented rather than a restrictive rather that from our successes we can see
As stated by the U.S. Council of the Inter- domestically oriented agricultural policy. what it is we are doing right and apply that
national Chamber of Commerce, "Trade by Our long range thinking should be an ex- knowledge to eliminating our shortcomings:
definition does not take place unless benefits pansion of demand rather than a reduction My second theme then is to locate and call
accrue to both parties. If one nation refused of supply. attention to the keystones of our success as
to participate, insofar as the second party We should increase the shift :in emphasis a dynamic society. Certainly one oaf them is
can find another trading partner, the loss is for supporting farm income from one of high the ability and spirit; of the average Ameri-
entirely sixstained by the country refusing to price supports to one of market oriented can working men and women. Their ability
do business." price supports, where, as recommended by to accept challenges and opportunities and
Two other important advantages have been the President's Food and Fiber Ca~nmission, keep pace with changes and advances, as well
given by some of the i~pprovee~x~ornKelease52p~05/11/21maCIA RDP70B00338R0003000700110 7 e Symbols of the