LETTER TO JOHN R. BLOCK FROM GEORGE P. SHULTZ

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M00539R002303730007-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 22, 2016
• Document Release Date: September 28, 2009
• Sequence Number: 7
• Publication Date: July 5, 1985
• Content Type: LETTER

EXECUTIVE SECRETARIAT
21
cretary
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3637 Dol.
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Identical ltr also to Director Stockman, OMB.
 Approved For Release 2009/09/28 : CIA-RDP87M00539R002303730007-4
I am writing to you and to Dave Stockman about the domestic
price support program for sugar now before the Congress as Title
IX of the proposed Agricultural Adjustment Act of 1985. This
program has important implications for our foreign relations and
security interests.
Our imports of sugar are declining sharply. For 1985, our
imports are estimated to be about 2.1 million tons, roughly half
of what they were traditionally, before enactment of the present
price support program in 1981. Some experts estimate that, if we
continue our sugar support program unchanged, our imports will
continue to decline and may disappear entirely by the end of the
decade.
Given the disastrous condition of the world sugar market,
this reduction in our imports is further weakening the already
depressed economies of certain regions and countries that are
strategically important to the United States. For example, sugar
has long been the third largest export to the U.S. from Latin
America. It is a key foreign exchange earner for the countries
.of Central America and the Caribbean, and for such major debtor
countries as Brazil and Argentina.
I know that sugar is a very difficult and many-sided issue,
and that our program is not the primary cause of the disarray in
the world sugar economy. Indeed, to a large extent, our program
is a response to the distortions caused by other countries,
including the EC's agricultural subsidies. I fully understand
the importance of sugar to the U.S. agricultural community. I
also fully realize that the Administration must look at any
possible revision of this program in the light of overall farm
policy and the impact on budgetary and other economic goals.
The Honorable
John R. Block,
Secretary of Agriculture.
 At the same time, the way we structure our sugar program for the,
remainder of this decade will have a major impact on many
countries important to the U.S.
We have a major national interest in revitalizing the
economies of the strategically important Caribbean Basin and in
continuing to provide export opportunities to those countries
which are struggling to repay their external debts. The
contraction of the U.S. sugar market, and the continued downward
pressure on world sugar prices, could mean a continuation of
major economic, and hence political, stress in these countries.
The need for U.S. economic assistance, especially
balance-of-payments support, will likely increase, and the
arguments for extending that aid will become more compelling.
Similarly, access to the U.S. market for other traditional and
new exports from friendly sugar suppliers will be increasingly
important.
I hope that you will keep these factors in mind as you
follow the progress of the sugar portion of the farm legislation
through the Congress, and as you consider other relevant economic
decisions affecting these countries.
cc: Secretary Baker
Secretary Baldrige
Ambassador Smith
Mr. McFarlane
Mr. Casey
 I am writing to you and to Secretary Block about the
domestic price support program for sugar now before the Congress
as Title IX of the proposed Agricultural Adjustment Act of 1985.
This program has important implications for our foreign relations
and security interests.
Our imports of sugar are declining sharply. For 1985, our
imports are estimated to be about 2.1 million tons, roughly half
of what they were traditionally, before enactment of the present
price support program in 1981. Some experts estimate that, if we,
continue our sugar support program unchanged, our imports will
continue to decline and may disappear entirely by the end of the
decade.
Given the disastrous condition of the world sugar market,
this reduction in our imports is further weakening the already
depressed economies of certain regions and countries that are
strategically important to the United States. For example, sugar
has long been the third largest export to the U.S. from Latin
America. It is a key foreign exchange earner for the countries
of Central America and the Caribbean, and for such major debtor
countries as Brazil and Argentina.
I know that sugar is a very difficult and many-sided issue,
and that our program is not the primary cause of the disarray in
the world sugar economy. Indeed, to a large extent, our'program
is a response to the distortions caused by other countries,
including the EC's agricultural subsidies. I fully understand
the importance of sugar to the U.S. agricultural community. I
also fully realize that the Administration must look at any
possible revision of this program in the light of overall farm
policy and the impact on budgetary and other economic goals.
The Honorable
David A. Stockman,
Director,
Office of Management and Budget.
 Approved For Release 2009/09/28 : CIA-RDP87M00539R002303730007-4
At the same time, the way we structure our sugar program for the
remainder of this decade will have a major impact on many
countries important to the U.S.
We have a major national interest in revitalizing the
economies of the strategically important Caribbean Basin and in
continuing to provide export opportunities to those countries
which are struggling to repay their external debts. The
contraction of the U.S. sugar market, and the continued downward
pressure on world sugar prices, could mean a continuation of
major economic, and hence political, stress in these countries.
The need for U.S. economic assistance, especially
balance-of-payments support, will likely increase, and the
arguments for extending that aid will become more compelling.
.Similarly, access to the U.S. market for other traditional and
new exports from friendly sugar suppliers will be increasingly
important.
I hope that you will keep these factors in mind as you
follow the progress of the sugar portion of the farm legislation
through the Congress, and as you consider other relevant economic
decisions affecting these countries.
cc: Secretary Baker
Secretary Baldrige
Ambassador Smith
Mr. McFarlane
Mr. Casey