The Multinational Monitor


N E W S   M O N I T O R

Critics Hit Grain Bill Giveaway to Corporations

by Jeff Bentoff

A bill before Congress aimed at opening export markets for U.S. wheat is a multi-million dollar "giveaway" to large corporations, critics charge. Moreover, it could greatly impair the present U.S. ability to respond to global food crises.

The proposal, offered by Senator David Boren (D-Okla), is part of an agricultural export bill (S.822) due for Senate consideration in May. The measure is supported by the National Association of Wheat Growers, the trade organization for the wheat industry.

If passed, S.822 would give the agriculture secretary 1.5 million tons of wheat to use at his discretion for the "development, maintenance, and expansion of export markets for wheat." Observers say the grain would be given - free - to U.S. exporters for use as a bonus when bidding on overseas contracts, helping them compete with price-subsidized exports from the European Economic Community. The wheat would come from the 4 million ton "food security wheat reserve" established by President Carter in 1980 to meet emergency needs abroad, but thus far left untapped.

While the bill directs that the security reserve be replenished by September 31, 1984, food policy activists worry that the reserve might not be refilled and may be even further depleted. The cost of buying 1.5 million tons of new wheat to refill the reserve is estimated at about $204 million dollars.

"The concern is that they're going to use this wheat and never replenish the reserve," said Dave Dyer, an economist with the Senate agriculture committee. Tricia Gabany of Bread for the World, a religious organization concerned about world hunger, believes that a failure either by Congress to appropriate funds for replenishment or by the secretary of agriculture to ask for them would allow the wheat reserve to remain understocked.

The risk in leaving the grain reserve at a low level is that bad weather or a deepening of the worldwide recession could render poor countries unable to grow or buy the food they need. "We're really banking on the roll of the dice, and the dice is good weather," said Carl Eck of the 300,000 member National Farmers Union, which opposes the bill.

Bread for the World is also worried that the Reagan administration may want the reserves to diminish because of the $50 million per year cost of storing the wheat. The organization said that comments by Agriculture Secretary John Block at recent hearings and unofficial comments by Department of Agriculture (USDA) officials indicate a low level of government support for the wheat reserve. Officials at the USDA, however, deny such allegations.

It is uncertain which companies would receive the free wheat bonuses, said economist Dyer, because "there are no strings attached to how it will be used." Dyer pointed to the recent government-subsidized wheat sale in Egypt, which used wheat from general reserves instead of the emergency reserves, as an example of one way such a sale may be handled. The contract with Egypt was for flour, the wheat subsidy going to processors who bid to supply the flour. The multinational companies Cargill and Continental were among those receiving the free wheat, according to Dyer. He noted that in the proposed giveaway, the agriculture secretary could "literally give it away" to the processors, to the grain trading companies, or, possibly, to the foreign countries themselves.

Paola Scommegna of Bread for the World characterized the proposed wheat bonus as "a gift to the multinational grain companies at the expense of people who might be starving in the future." Such a "gift" would probably help food exporters compete in foreign markets, but the implications for world food security may be drastic if emergency wheat is not available in a crisis.

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