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Taken together, these major structural changes suggest that 

 global grains, oilseeds and livestock trade should expand. 

 Trade flows from North America will tend to decline further 

 going East, and to expand more rapidly West and South. The 

 United States is uniquely positioned to capture the lion's 

 share of this new trade, for there is substantial handling 

 capacity in place to accommodate both growth and redirection 

 in export flows. That is not so true for any of our 

 competitors. 



Macroeconomic. U.S. agriculture has learned the roller 

 coaster effects macroeconomic shifts can have on its vitality 

 and growth. Generally inflationary fiscal policies and a 

 declining dollar in the 1970s artificially boosted commodity 

 export volumes and values that already were rising because of 

 crop problems and geopolitical shifts. 



Tight monetary policies and an appreciating dollar in the 

 1980s aggravated an agricultural slowdown occurring because 

 developing countries were constraining their purchasing power. 

 Inappropriate farm policy decisions accentuated the decline. 

 In the second half of the decade, mounting budget pressures 

 put tightening constraints on farm program outlays and 

 produced an excessive reliance on supply controls to contain 

 costs . 



The 1990s will continue to see budgetary pressures. However, 

 as the recession bottoms out and the economic "free fall" of 

 the former Soviet Republics is slowed, a foundation for growth 

 will solidify. The decade also shows prospects for a more 

 stable dollar and more balanced fiscal and monetary policies. 

 This should enable U.S. agriculture and agribusiness to 

 capitalize on heightened efficiency and productivity that 

 recent tough times encouraged. 



Environmental. Changes occurring on the environmental front 

 also are important. Domestically, the challenge will be 

 whether society's rising environmental expectations of 

 agriculture will be met through mandates and taxes, or through 

 incentives and market-based regulation. 



Command/control approaches threaten to put American 

 agriculture in a straight-jacket of rising costs and declining 

 prospects. More flexible market-based approaches offer 

 producers the opportunity to align productivity and 

 stewardship and enhance competitiveness. 



How much American agriculture is viewed in a global context 

 will significantly affect how this policy debate resolves 

 itself. World food needs continue to grow. Constraining U.S. 

 agriculture's ability to serve those needs will result in both 

 a hungrier and a dirtier globe as unscientific agricultural 

 systems in developing countries are pushing onto more fragile 

 areas to meet pressing food needs. Empowering U.S. 



82-820 0-94-5 



