Grain Jam-Up

The Nixon Administration's eagerness to help U.S. maritime industries (TIME, Oct. 23) has led to an unforeseen irony: it is contributing to a massive jam-up at U.S. ports of wheat destined for Russia. Only about 10% of the 400 million bushels of wheat scheduled to be sent to the Soviet Union by next June have left the U.S. Some 27 million bushels of grain are crammed into storage elevators in Houston alone, waiting for ships to carry them off.

Lining up ships to haul so much grain so quickly would have been difficult in any case. But the problem has been intensified because maritime unions demanded that one-third of the ships carrying wheat to the Soviet Union be U.S.-flag vessels, and Washington got Moscow to agree. President Nixon's negotiators had little choice; U.S. longshoremen might have refused to load Russia-bound wheat aboard any ships and scuttled the whole deal.

Getting the U.S. ships ready and moving will be not only time consuming but also expensive for the American taxpayer. The Russians will pay the world free-market shipping rate, currently $10.50 per ton; under the Merchant Marine Act of 1970 Washington will pay ship operators an additional $8 to $10 a ton in subsidies necessitated by the American lines' high costs. In a complex rebate deal, the shipowners will have to pay back part of the profit they make as a result of the subsidy, but the business still promises to be lucrative. Right now, subsidy applications from owners of U.S.-flag vessels are pouring in, and the Maritime Administration cannot process them rapidly enough to keep wheat from piling up on U.S. docks.

This file is automatically generated by a robot program, so reader's discretion is required.