

189 



This Josbph OoMrANTisa. Incorhumatbd 

 Or MINNKAPOL.IS (J.C.I.) 



ORAIN KXCIIANOM ininj>IN(l 

 MINNKAI<OUi«. MINNRSOI'A MMIB 



March 31, 1993 



Public Ksarlng 1300 Longvorth House Office Building 



Testimony by Burton M. Joseph at the United States Rouse of 

 Representatives Agricultural Sub-Comnittee on Foreign Agriculture and 

 Hunger. 



The Joseph Companies Inc. of Minneapolis, directly or through 

 subsidiaries, has been involved in the connercial side of agriculture 

 within the former Soviet Union since 1963. 



Some members of this committee might recall that in November of 1963 a 

 delegation of American grain executives, which I chaired, was invited to 

 meet in Canada with EXPORTKLEB (the Soviet grain export/import monopoly) , 

 to discuss the lifting of the grain sales embargo ^fron .the United states 

 "to "the Sovi«t TJnion. My good friend from Minnesota, Secretary of 

 Agriculture, Orville Freeman, and I met with President Kennedy and the 

 President decided It was time to open trade between the two super powers. 

 Unfortunately, Kennedy's death in late November, 1963, delayed a decision 

 on these sales until the spring of 1964 when President Johnson decided to 

 go forward. 



Since that opening, with the exception of the interruption during the 

 early part of the Afghanistan criels, the United States has participated 

 in the shipment of a substantial quantity of wheat, feed grains and 

 soybean meal to the Soviet Union. These quantities represent about 50% 

 of the total Soviet imports. On average, the Soviets have imported 

 between 30-40 million tons of wheat and coarse grains each year during the 

 last twelve to fifteen years. Their peak year was in 1984 when they 

 imported close to sixty million tons. (Please note these figures in the 

 attached schedule.) The Soviet domestic wheat and coarse grain production 

 during this same period has averaged between 180-200 million tons/year. 



It is well )cnown that one of the tragedies of Soviet grain, oilseed and 

 potato production is that 20-25% of these crops in the field, ready for 

 harvest, never get to consumption. It's no coincidence that since 20% of 

 a 200 million tons field production is forty million tons, this crop loss 

 roughly matches the 30-35 million tons of Soviet grain imports over the 

 last several years. If we use a modest delivered price (in the trade, we 

 call this CIF: cost, insurance, freight) of 5100/ton, the Soviet Union, 

 and now the Former Soviet Union (F.S.U.), Is spending three and one half 

 to four billion dollars per year to "pay" for grain Imports. I use the 

 word "pay" in quotations since during the last twenty-four months the 

 Russians and many of the other Republics of the Former Soviet Union, using 

 USDA credit programs, have defaulted on their payment schedules, both 

 interest and principal; the Commodity Credit Corporation as well as the 

 European Common Mar)cet is now very wary of extending further credit. 



