April 1996
Mark Ritchie and Karen Lehman, Institute for Agriculture and Trade Policy
Despite public pronouncements to the contrary, the Clinton administration
could be forced to limit or halt U.S. grain exports sometime next year.
Sparks Commodities, one of the most influential private crop forecasting
firms, predicted last week that U.S. corn stocks would fall to the lowest
level in nearly 50 years. Feedstuffs magazine has speculated that the U.S.
may even run out of corn completely in September, a scenario they called
horrific. Analysts have set 300 million bushels of carryover stocks as the
level that would trigger a grain export embargo. When U.S. stocks on hand
fall below this level, the U.S. will be forced to restrict exports or else
livestock may starve.
Maybe there will be some miracle and we can avoid this disaster. If not,
and an embargo becomes necessary, let's not repeat the mistakes of the last
shortage-prompted embargo, President Nixon's ban on soybean sales to Japan
in 1973.
First of all, let's not tell the grain corporations about the embargo
before telling the American people. The Nixon administration tipped off
companies like Cargill and Continental Grain back in 1973. The result?
They made a handsome profit while farmers and consumers suffered. No
matter how much money grain company executives contribute to presidential
election campaigns, they should not receive a courtesy call in advance of
the announcement of a boycott.
Second, let's figure out how to minimize the impacts on poor people, both
in the U.S. and overseas. Unfortunately, this Congress has just abolished
farm price stabilization programs, which were originally created to bring
stability to agriculture markets, benefiting farmers and consumers. Unless
this policy is revisited, poor people will be at the mercy of whatever the
free market offers up. Here in the U.S., higher food prices will squeeze
both the middle class and poor people, exacerbating current hard times and
creating more hunger.
In the Third World, many countries have become hooked on a steady flow of
artificially low-priced U.S. grain exports. This has reduced local food
production capacity and forced farmers off the land in numerous countries,
ranging from Mexico to Nigeria, where the cheaper imports drove out local
competition. If we do impose an embargo, the result could be famine and
starvation around the world. We had better think carefully about how to
avoid the level of social chaos this could create in other countries.
Third, there will be serious environmental impacts as a result of the
current supply and demand imbalance which is leading to this embargo. We
have to be careful not to allow the embargo to be used as the rationale for
rolling back environmental and conservation measures in a mad rush to feed
the planet.
The current food deficit is not the result of low U.S. production. Rather,
farmers in other regions have been thwarted by weather, war, and politics.
The U.S. should not rush to increase pesticide use, implement biotech
before it is safely tested, and dig out the Mississippi River to make room
for more grain barges.
An embargo is a last resort. But since the possibility is looming, we
should start now to make sure this embargo is the last one, beginning with
serious reforms of federal policy. If Congress can de-regulate and then
re-regulate cable television, surely it can undo the poor decisions
codified in the Farm Bill, passed last month. Putting food security ahead
of agribusiness campaign contributors' profits and blind faith in global
markets is a good starting point for new farm policy discussions.
Perhaps most important, we should work internationally. How about using
the upcoming World Food Summit in Rome as a place for governments and farm
leaders to sit down together and talk about a long-range plan for food
security? There are things we can do, such as follow the lead Senator Kent
Conrad who, in the 101st Congress, called for the creation of a system of
food reserves that can prevent these kinds of shortages from happening
again in the future. President Clinton should announce that he will attend
the Summit and take the lead in shifting the global debate to a focus on
secure access to high quality food for all citizens.
The U.S. public has had enough shocks and surprises. We can't afford a
repeat of Nixon's 1973 embargo fiasco. If I were a sitting President
running for re-election, with only three weeks worth of food stocks on my
plate, I'd start making plans. Let's hope Bill Clinton puts a trip to Rome
in his calendar for November.
Mark Ritchie is the President and Karen Lehman is a Senior Fellow at the
Institute for Agriculture and Trade Policy, an independent policy research
center based in Minneapolis, Minnesota.
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Mark Ritchie
President
Institute for Agriculture and Trade Policy
1313 Fifth Street, SE, Suite 303
Minneapolis, MN 55414 USA
tel. 612-379-5980
fax. 612-379-5982
email mritchie@iatp.org
URL: http://www.iatp.org/iatp