lied the people to support him in holding off the reactionary forces 

 that want to prevent any kind of reform. This struggle for democ- 

 racy will continue, but President Yeltsin's task is made much hard- 

 er by the continuing failure of the Russian agricultural system to 

 deliver adequate food to the urban population. It is very difficult 

 to march for reform if you have to stand in line for tomorrow's din- 

 ner. 



The Russian's need our abundant food supplies, and our farmers 

 need this major export market. Our commodity prices in this coun- 

 try first dropped and have now stagnated with the loss of the Rus- 

 sian export market. It is now estimated the taxpayers will have to 

 pay an additional $1.3 billion in deficiency payments to make up 

 for the lost sales to the former Soviet Union. Meanwhile, our export 

 competitors in Europe, Australia, and Canada do continue to make 

 sales to Moscow. If they can make these credit sales, the question 

 is, why can't the United States? 



In recent weeks there has been much talk of opening niassive 

 new food aid programs for Russia — in other words, simply give the 

 Russians the food they need. Personally, I feel very strongly this 

 is the wrong approach. First, United States agricultural exports to 

 the former Soviet Union have been averaging over $2 billion on an 

 annual iDasis. Since the Federal Government owns almost no food 

 stocks now, any donated food would have to be purchased on the 

 open market, and the present condition of the Federal finances will 

 not permit this kind of spending, at least in the agricultural budg- 

 et. 



Second, any t3rpe of donation or concessional sales program must 

 have 75 percent of the shipments made on U.S. bottoms. This so- 

 called cargo preference requirement can raise the shipping costs to 

 $70 to $90 per ton, badly cutting into scarce dollars for donation 

 and reducing the actual grain that is shipped. 



Finally, the Russians themselves, when they were here, have in- 

 dicated that they do not want to be the recipients of large-scale 

 food aid. Russia has perhaps the richest natural resource base in 

 the world and possesses a fijUy developed industrial economy, 

 though it is presently in need of restructuring. Over the long term, 

 Russia is fiiUy capable of repaying any commercial credit for food 

 imports. It is my sense that both the Russian and American people 

 would be more satisfied with ag trade on a commercial basis than 

 any kind of food aid. 



To facilitate the reopening of commercial trade with Russia, on 

 Monday I introduced the Agriculture Commodity Export Expansion 

 Act that I referred to earlier. This is a simple bill that provides 

 greater flexibility for the Secretary in making countries eligible for 

 the GSM export credit programs. It establishes three criteria for 

 eligibility: One, the credit needs of potential purchasers of U.S. ag- 

 ricultural exports; second, the long-term ability of those countries 

 to repay the credit; and third, whether the GSM credits will main- 

 tain or improve the competitive position of U.S. agricultural ex- 

 ports in the world market. 



Eff'ectively, this bill would shift the focus of USDA analysis away 

 from a narrow examination of meeting a payment schedule toward 

 promoting U.S. ag export expansion to countries that have the 

 means to repay the credits over the long term. This simple change 



