14 



I am thinking is, let's say we have 30 percent of our corn, 40 per- 

 cent of our wheat, that is now in the export market. Maybe we 

 should only subsidize 70 percent of our corn acres and 60 percent 

 of our wheat acres and flex, do a flex acre program on the rest of 

 the base. 



In that way, it gives you the potential for a lot more production 

 that is not at a subsidized price. And that would basically be corn 

 and wheat that would be readily available at the world price. Is 

 that too fanciful or is there something to that? 



Mr. Goldthwait. That is difficult for me to comment on, because 

 to be quite honest, I haven't looked in depth at the structures of 

 our domestic programs. 



Mr. Penny. But the point is that we ought to be thinking about 

 how our domestic program relates to our export goals. And I am 

 not sure that this is, this is a cure-all, but it does strike me that 

 when we subsidize virtually all of our production, it creates com- 

 plications for our export strategy, it requires us to do EEP, it re- 

 quires us to do a lot of things. 



And maybe we should be subsidizing only that portion of our 

 crop that is sold domestically and should free up the remaining 

 acres in a way that would allow farmers some planting options, but 

 if they choose to plant the traditional crop, wheat and corn, they 

 produce that for the export market. 



Mr. Goldthwait. I certainly think that those kinds of things 

 need to be looked at, and one of the things that we will be focusing 

 on is the interrelationship between the domestic and the inter- 

 national programs. In fact, we have representatives of the domestic 

 agencies sitting in our international task force and vice versa. And 

 I think one of the next steps in our process will be to contrast our 

 ideas and see where this linkage needs to be addressed. 



Mr. Penny. Could I ask you specifically about EEP and the 

 scheduled cutbacks in the EEP program due to the GATT agree- 

 ment? Where does that leave us? 



Mr. Goldthwait. Well, it leaves us hopefully, because the other 

 subsidizers will also be cutting back, in a somewhat better-off posi- 

 tion. We believe that at the end of the period when there is consid- 

 erably less subsidized commodity in world markets, there will be 

 some increase in prices, and we will have a larger market share. 



Mr. Penny. So you think on balance, even though these EEP re- 

 ductions are sizeable, that we are going to come out ahead? 



Mr. Goldthwait. I believe so, yes. 



Mr. Penny. I am hearing from soybean producers and other oil- 

 seed producers that they don't view it quite the same way. What 

 is the Department's posture on the implications of the elimi- 

 nation — not the elimination, but the dramatic cutback in SOAP 

 and COAP and how that affects our export market for those oil- 

 seeds? 



Mr. Goldthwait. I think you are correct, that the oilseed sector 

 is a more difficult one than the grains sector with respect to these 

 cutbacks. I can't give you quantification of that, but it is clearly an 

 area where 



Mr. Penny. In general terms, is it your view that we may have 

 to do something to ease the transition for the oilseed sector? 



