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NEWS FOR RELEASE IMMEDIATELY



MONSANTO PRESIDENT SAYS EXPORTS KEY
TO U.S. FARM PROBLEM


St. LOUIS, May 11 - The long-term health of U.S. agriculture depends on America's regaining its fair share of international markets, a Monsanto Company executive said today.

Speaking at the Bank for Cooperatives meeting here, Richard Mahoney, Monsanto's president and chief executive officer, said the U.S. needs to adopt "a rational, long-term farm policy" or the American farmer may be forever struggling for financial stability."

"A strong dollar, an archaic farm export policy coupled with band-aid solutions to growing surpluses, raging inflation and high interest rates have all played havoc with the ability of the nation's farmers to earn a consistent, fair return on their investment," Mr. Mahoney said. "The industry simply cannot tolerate the kinds of price swings, the massive upheavals, the inconsistent export policies that have characterized the last 20 years."

Mr. Mahoney told the group of finance executives that agri-business employs more than 22 percent of the nation's population and accounts for more than 20 percent of the total domestic economy. He noted that in 1982, for the first time in 13 years, the volume and value of farm exports declined.

"Price support costs are the highest in over a decade, while real farm income is the lowest since the depression," Mr. Mahoney said.

The first step in attacking the problem, Mr. Mahoney said, is expanding exports, a topic around which a consensus is forming.

"Expanding the programs of the Commodity Credit Corporation would make credit available on reasonable terms," he said. "And increased aid under the Agricultural Trade and Assistance Act of 1954 would provide food to hungry nations. These not only can make our exports more affordable, they direct the food where it's needed most.

But Mr. Mahoney said that is only a partial solution.

"Farm policy is linked in the long run to basic monetary, domestic and foreign policy, and to such issues as price supports and agricultural research," Mr. Mahoney said.

"As we expand imports, we run into the problem of export subsidies by other nations," Mr. Mahoney added. "While we pay farmers not to produce, other countries subsidize their exports. There are no easy answers to this truly international problem."

Secondly, he said, "Our commodity subsidies must also be addressed. These programs are a marvelous opportunity for everyone in the world to take advantage of us -- as we build high price umbrellas, our export trade gets eroded by the floods of grain exports from other countries.

"In the long run, we need a carefully worked-out program that moves prices toward market levels, over time, while providing farmers with that necessary safety net.

"PIK (Payment-In-Kind) is another in a long line of 'shooting ourselves in the foot' incidents," Mr. Mahoney added. "It makes no sense for farmers to export when we'll pay them more not to grow their crops. You can't idle one of the most productive resources this country has -- its farms -- and not suffer in the long run."

In addition, he explained, there has been a tradition in this country of using food as a diplomatic weapon.

"A lot of us have pointed out the folly to the government of using ag exports as an instrument of the State Department," Mr. Mahoney said.

"But the government has heard the message we've all been giving -- that it hurts America more than it punishes others -- and there was restraint," he said, citing the end of the grain embargo to the Soviet Union and the U.S. government's decision not to pursue a similar embargo after the Korean Airlines incident.

Mr. Mahoney called for a combined effort from state and federal governments, local farm bureaus and other grower organizations, cooperatives and others.

"In the final analysis, whether this most important of American resources is allowed to wander aimlessly depends primarily on us," Mr. Mahoney said. "If we want to stop the roller coaster economics of the past, if we want to fully reap the benefits of our country's most productive resource, then we will all have to work together to ensure success. We can afford to do no less."


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