Second Try

In a stuffy annex of the State Department last week, tired delegates of 42 nations pushed back their yellow leather chairs, faced each other around a horseshoe-shaped conference table, and cheered. After eight perspiring weeks of negotiations, they had reached a world agreement to "stabilize" the price and export market of wheat.

The agreement was full of ifs & buts, and it still had to be approved by the U.S. Congress and the other nations. But, in principle, it would provide a steady, four-year market for a maximum of 456 million bushels of wheat a year for five major wheat exporters--the U.S., Canada, Australia, France and Uruguay. It would permit 37 importing nations to buy at a price of $1.50 to $1.80 a bu. for No. 1 Manitoba wheat at Ontario ports the first year, and as low as $1.20 a bu. in the fourth year. (This rate would allow a maximum of $1.98 a bu. at U.S. Atlantic ports.)

Secretary of Agriculture Charles Brannan, who signed provisionally for the U.S. (see cut), thought there was a much better chance of congressional approval now than last year, when a similar agreement died in the Senate. Then U.S. farmers, with wheat bringing $2.60 a bu., laughed down the proposed world price of $2 a bu. Now the price of wheat was down to around $2.25 a bu. and--with a huge carryover and another bumper crop in prospect--a price of $1.98 might soon look good.

In the face of the U.S. surplus, the U.S. share of exports under the pact (168 million bu.) was comparatively small, though the cost to the U.S. might prove large. As long as wheat support prices are higher than the pact price, the Federal Government would have to pay the difference. In effect, it would subsidize the exports. Furthermore, importing nations would be required to take their maximum quotas under the agreement only when the price fell to the minimum. As long as the price was above that, they could buy from Russia or Argentina, if those nations wanted to undersell the U.S. Considering all this, the agreement seemed to be what the Wall Street Journal called it: a case of "heads they win, tails we lose."

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