By picking U.S. Trade Representative Clayton Yeutter as the next Secretary of Agriculture, President-elect Bush has sent an encouraging signal.
The signal is that the new administration recognizes the importance of foreign markets to American farmers. Implicit in that message is a tacit promise to keep working to reduce and eventually eliminate costly farm subsidies. Though Bush says he won't be proposing "substantial cuts" in the new farm bill, the key word is "substantial;" some belt-tightening seems unavoidable under the Gram-Rudman budget-balancing law.In any event, efforts to promote U.S. farm sales abroad and curb subsidies are particularly timely. One of Bush's campaign promises was to devote the next summit conference of the leaders of the western industrial democracies to agriculture issues. Moreover, budget deficits are putting Washington under mounting pressure to cut farm spending when Congress writes a new agriculture bill next year to replace the one that expires in 1990.
A tough negotiator who is familiar with agricultural trade, Yeutter has aggressively promoted U.S. farm interests in international markets in recent years. But this effort still has a long way to go.
The unpalatable truth is that American farm products are no longer as competitive as they should be in foreign markets. Though U.S. farmers and ranchers supplied 80 percent of the world food market after World War II, they now supply only about 30 percent. Other nations are muscling in with cheaper grain and other farm products.
Often those foreign farm products seem cheaper only because they are even more heavily subsidized than are U.S. crops. That goes particularly for the European Common Market. Yet such subsidies impose heavy burdens on the taxpayers and distort economic decision-making.
The U.S. has been anything but immune from such problems. Though the federal farm program is supposed to increase farm exports, stabilize farm income, and reduce crop surpluses, it has had just the oppose results.
What's more, nearly a third of the U.S. subsidies go to farmers with an average net family income of $97,000 - about four times the average American family income. Some wealthy farmers seem more adept at harvesting federal funds than they do at harvesting their own crops.
This situation has put the U.S. in a difficult bind as Trade Representative Yeutter has spearheaded efforts to persuade the world to phase out farm subsidies by the turn of the century. The U.S. can't reasonably expect other nations to gradually eliminate subsidies unless Washington does so, too. But Washington can't take the lead by acting unilaterally on this score without making American farmers less competitive in world markets than they already are. The upshot is the stalemate in last week's negotiations at Montreal among the western industrial democracies. Sadly, the stalemate on agriculture is endangering agreement on other kinds of new trade pacts.
To these demanding challenges, Yeutter brings impressive credentials from a long background in ranching and government. His nomination as Secretary of Agriculture enjoys wide support among farm state politicians.
It will be instructive to see how long that support lasts. Few jobs are tougher and more thankless than that of Secretary of Agriculture, a post that often serves as a lightning rod for public anger and frustration more appropriately directed at Congress and the White House.