20 July 1998
Clinton orders wheat purchase
in bid to force up farm prices
US president Bill Clinton has ordered a $250 million (£151m) Government purchase of 80m bushels of home-grown wheat to be sent to North Korea, Indonesia, Sudan, Eritrea and Ethiopia.
He hopes the order will raise farm prices ahead of congressional elections in the autumn, reports The Financial Times.
The agriculture department estimates the purchase will increase prices by ¢/bushel.
Now Dan Glickman, agriculture secretary, says the acquisition could be followed by procurement for other surplus commodities.
The purchase is a strong example of how the farm lobby wields its clout when there is an election for the House of Representatives.
Crops have been set back by disease and bad weather in the Northern Plains states, and there have been bankruptcies in Texas, Washington, Idaho and Oregan, pushing farm policy to the top of the political agenda.
President Clinton urged Congress on Saturday to reverse the 1996 Farm Bill which phased out production subsidies. He also wants to boost US markets by paying US “dues” to the International Monetary Fund.
But Republicans, who are resisting a return to higher subsidies, have offered a Bill which would allow farmers to collect the payments which they still get in October – a month before the elections.
This year is expected to be a tougher year for the US agricultural economy with grain prices dipping and Asian demand weakening.
Meanwhile, the US Department of Agriculture has forecast another record soyabean crop and maize is likely to be close to its 1994-95 peak.
- Financial Times 20/07/98 page 5