224 



undertaking economic reforms under internationally approved 

 guidelines, Russia should resume its place as a commercial bor- 

 rower. This is in everyone's interest, both the Russians and ours. 



The objective of our credit programs and our aid programs is to 

 expand markets for U.S. products by assisting countries to buy 

 those farm products. Certainly, if we don't sell to those countries, 

 the cost to the U.S. Treasury for domestic farm programs will in- 

 crease on the spendihg side. Tax receipts also will decline, because 

 we will not produce or sell as many farm commodities. So it's a 

 double loss for the U.S. economy. 



Now, how should we use these export programs? Speaking as a 

 taxpayer, if you'll permit me, Mr. Chairman, I think the fiduciary 

 responsibility of the U.S. Government in operating this wide range 

 of programs, from donations to deeply concessional aid to commod- 

 ity credit guarantees, must be focused on expanding exports at the 

 lowest cost to the taxpayer. Concessional programs cost more than 

 credit guarantees due to cargo preference requirements and due to 

 lower repayment terms. Credit guarantees are far more cost-effec- 

 tive than concessional aid programs for co\intries as resource-rich 

 as Russia. 



Russia has resources. Russia is earning large amounts of hard 

 currency even today. The problem for Russia right now is one of 

 cash-flow, not earning power, and I don't say that that's the same 

 situation for many other states in the former Soviet Union. But for 

 Russia, which is the largest grain importer, a GSM-103 intermedi- 

 ate program might be the appropriate approach if Congress takes 

 two actions in clarifying the 1990 farm bill: First, in allocating a 

 total statutory minimum to the credit guarantee programs; and, 

 second, to clarify its intent in the application of creditworthiness 

 language of the 1990 law. 



Here I would say that the letter sent to the Secretary of Agri- 

 culture dated May 30, 1991, from Chairman de la Garza and other 

 House Members provides an excellent and appropriate basis for 

 clarifying current legislative language. 



We don't need a new program to isolate Russia. What we do need 

 to do is utilize the tremendous wide-ranging authorities we already 

 have to build the Russian market and to build our own market. 



Thank you very much, Mr. Chairman. 



[The prepared statement of Ms. Brookins appears at the conclu- 

 sion of the hearing.] 



Mr. Penny. Thank you, Carol. 



Steve. 



STATEMENT OF STEVEN A. McCOY, PRESIDENT, NORTH 

 AMERICAN EXPORT GRAIN ASSOCIATION, INC. 



Mr. McCoy. Mr. Chairman, I appreciate the opportunity to tes- 

 tify. I'd like to use my time today to address the situation of Rus- 

 sian food needs on the microlevel and to emphasize that, at least 

 in my experience, what we see in Russia today is not an instance 

 of absolute, but rather of relative need for foodstuffs. 



There's no starvation in Russia, as you know. There was that one 

 instance of the soldiers, but I think that was a glitch. However, 

 today there is severe deprivation affecting the most exposed ele- 

 ments of Russian society — that is, the children, the elderly, stu- 



