Skip to main content

Full text of "Foreign agriculture :weekly magazine of the United States Department of Agriculture, Foreign Agricultural Service, U.S. Department of Agriculture"

See other formats


Historic, Archive Document 

Do not assume content reflects current 
scientific knowledge, policies, or practices. 



<► 



p7GFo 




FOREIGN 

ASRICULTUKE 




United States Department of Agriculture Foreign Agricultural Service ^ 



PD C' 
rn , 



cy*j 



Open-air peanut storage, 



CD 

C~J 

Senega] 



In this issue: 



^ r n 

-a y 




Africa’s share 
of world peanut 
trade slips 

page? 



European Community 
raises farm 
prices slightly 
page 12 



FAS schedules 37 
trade promotions 
for 1979/80 

page 18 



Prices push 
October-June farm 
exports to record 

page 23 



Perspectives on 
U.S. Form Trade 



Trade is a long-time thing 

T here are no “quick fixes” to long- 
term agricultural trade 
development. We have established a 
record of solid, sustainable growth, 
which is reflected throughout our 
domestic agricultural programs, 
foreign market development 
activities, and trade negotiation. 

We have ruled out the “fire sale” 
approach for eliminating commodity 
surpluses, and instead adopted a grain 
reserve strategy. We have ruled out 
export embargoes in response to 
tightening supplies, and we have 
ruled out other “quick fixes” that may 
at best offer short-term solutions to 
long-term, complex issues. 

A wheat cartel to control supply and 
raise prices sounds good if you forget 
that the four major wheat exporters — 
United States, Canada, Australia, and 
Argentina — control only about one- 
fourth of the world’s wheat 
production. There are more than 100 
other countries which can and will 
grow wheat if the price is right. 

There could be short-term gains in 
some of those schemes, but the long- 



term effects for U.S. farmers would be 
a reduction, if not a loss of foreign 
markets that have been built up over 
the last two or three decades. 

Gimmicks will not solve complex 
agriculture trade issues in an 
increasingly interdependent world. 
True progress comes only when 
nations work together to build 
international trade based on sound 
economic principles. 

— By Secretary Bob Bergland 



Japan still No. 1 



Despite the public focus on farm 
exports to the Soviet Union, Japan is 
still the leading agricultural market 
for the United States. So far this fiscal 
year (October-June), the USSR is 
about equal to West Germany as a 
U.S. market — behind Japan, the 
Netherlands, and Canada. 

With the flurry of publicity that 
follows every increase in sales of U.S. 
grain to the Soviet Union, there is a 
tendency to forget that Russia is only 
one of scores of countries that buy 
U.S. farm products. Japan bought 
more U.S. feedgrains last year than 
any other country, including Russia, 
and it has been doing that for the past 
10 years or more. It is our best 
customer for wheat and second as a 
market for U.S. soybeans. 

The United States shipped 20 
million tons of wheat, feedgrains, and 
soybeans to Japan in 1978, 5 million 
tons more than to the Soviet Union; 
Japan’s purchases were valued at $2.7 
billion, compared with $1.6 billion in 
sales of these products to the Soviet 
Union. 

But Japan didn’t stop there. The 
Japanese bought well over $1.5 billion 
more in a wide range of U.S. products, 
including fruits, vegetables, nuts, and 



cotton, for total farm imports from us 
of $4.4 billion. Soviet imports other 
than wheat, feedgrains, and soybeans 
totaled about $100 million worth of 
U.S. agricultural products. 

The Soviet Union is an important 
market, and it will continue to be 
important, but we must remain aware 
of all of our markets, some of which 
are in the billion-dollar class. 

Large changes in Soviet agricultural 
production and import needs from 
year to year generate intense interest, 
and this is understandable. However, 
sales to the Soviet Union this fiscal 
year will represent only about 6 or 7 
percent of total U.S. agricultural 
exports of around $32 billion. 

That’s the bottom line: $32 billion in 
foreign exchange, added farm income, 
and more jobs from the export of 
wheat, feedgrains, soybeans, livestock 
products, tobacco, cotton, fruits and 
vegetables, poultry. You name it, and 
American agriculture has got it. 

We expect all of Asia, including 
China, to be a customer for almost $12 
billion this fiscal year. That would be 
$2 billion more than Western Europe 
and only a little better than $1 billion 
short of all Europe and Russia 
combined. Sales to the Soviet Union 
this year are expected to be somewhat 
over $2 billion. 

— By Secretary Bob Bergland 



Adapted from remarks included in 
recent speeches by Secretary of 
Agriculture Bergland. 



CONTENTS 



FOREIGN 

AGRICULTURE 

Vol XVII No. 18 Sept. 1979 

Bob Bergland, Secretary of 
Agriculture 

Dale E. Hathaway, Under 
Secretary for International 
Affairs and Commodity 
Programs 

Thomas R. Hughes, 

Administrator, Foreign 
Agricultural Service 

Editorial Staff: 

Kay Owsley Patterson, Editor 
Beverly J. Horsley, Assoc. Editor; 

G. H. Baker; Marcellus P. Murphy; 
Aubrey C. Robinson; Isabel A. 
Smith. 

Advisory Board: Richard A. Smith, 
Chairman: Richard J. Cannon; 
William F. Doering; Richard M. 
Kennedy; J. Don Looper; Larry N. 
Marton; Jimmy D. Minyard; Larry F. 
Thomasson; John A. Williams. 



The Secretary of Agriculture has determined 
that publication of this periodical is necessary 
in the transaction of public business required 
by law of this Department. Use of funds for 
printing Foreign Agriculture has been approved 
by the Director. Office of Management and 
Budget, through June 30. 1984. Yearly 
subscription rate: $14.00 domestic. $17.50 
foreign; single copies $1.20. Order from 
Superintendent of Documents. Government 
Printing Office, Washington. D.C. 20402. 
Contents of this magazine may be reprinted 
freely. Use of commercial and trade names does 
not imply approval or constitute endorsement 
by USDA or Foreign Agricultural Service. 



Africa’s Peanut Output Down 

Since the mid-1960's, Africa’s share of the world’s peanut supply and 
trade has fallen. 


7 


Brazil’s Orange Juice Exports 

Ten years ago the U.S. was the world’s biggest exporter of orange 
juice: last year it became Brazil’s No. 1 juice customer. 


10 


Korea’s Livestock Imports Slip 


11 


EC Sets 1979/80 Prices 

The Common Market has raised farm prices 1.5 percent but has shied 
away from making some tough decisions. 


12 


Mexico’s Grape Output Jumps 

With production up, exports to the United States of grapes and raisins 
are rising. 


16 


USDA/FAS Trade Promotions, 1979/80 


18 


West German Imports of U.S. Sunflowerseed 

U.S. sunflowerseed made up 76 percent of West Germany’s imports of 
this product in 1978. 


20 


Japanese Eating More Red Meat 

Fisn still rules the Japanese table, but red meat is becoming more 
popular. 


21 


U.S. Farm Exports Up 16 Percent 

Both volume and value jumped in the first 9 months of 1978/79. 


23 


Departments 


Comment 


2 


Agri-Data 


4 


Commodity Update 


5 


Fact File 


25 


Country Reports 


27 


Trade Briefs 


33 


World Agricultural Daybook 


35 




Page 16 




West Germon 
Imports of U.S. 



Rising 




Page 20 



Page 21 




AGRI-DATA 



Value of U.S. Agricultural Exports 
Oct.-June, 1977/78, 1978/79;— Fiscal 1978, 1979 




Animal 

Products 



Fruits, 

Nuts and 
Vegetables 



Cotton 




Oct.-June 1977/78 
Oct.-June 1978/79 
Fiscal 1978 





Other ''| 



1 1 1 1 1 1 

0 2 4 6 8 10 12 14 

Billion Dollars 




Major Markets for U.S. Agricultural Exports, 
Oct. 1978-June 1979 




Billion dollars 



USSR: Production and Trade of Grains, 
1969/70—1979/80 




1969/70 




T 




f Total Grain 


70/71 






M 


Production' 


71/72 






31 


1 1 Total 


72/73 









73/74 


1 1 All' 


74/75 






fl 


Grains^ ^ 


75/76 










76/77 


.11 


77/78 




78/79 




79/80'* 






1 1 

D 50 100 

Million Metric Tons 


1 

150 


200 


1 1 

250 300 


Wheat Ir 

1 969/70 
70/71 


nports® 

P 








71/72 


1 








72/73 




i 




1 


73/74 


i 1 








74/75 


L..1 1 






tiSSi U.S. Origin 


75/76 


.fiJ 


1 




76/77 


.1 1 






1 1 Other Origins 


77/78 


1 1 






78/79 








All sources 


79/80“ 








1 1 

0 5 

Million Metric Tons 

Coarse Grain Imports^ 


10 




1 1 

15 20 


1969/70 

70/71 








liw'.l U.S. Origin 
1 1 Other Origins 

All Sources 


71/72 


rn 






72/73 








73/74 


i 








74/75 


^ 








75/76 


mmwmifmmmmmmmmmm 1 


76/77 


mmmmmmM 1 








77/78 




1 1 






78/79 




1 1 






79/80“ 










1 1 

0 7 

Million Metric Tons 

' Production occurs during first year of indicated split year. 
^Includes wheat, coarse grains, and rice. 

''Imports are July-June. 

■•Aug. 10 forecasts. 


14 


21 



Weekly Inspections of U.S. Grains^ and 
Soybeans for Export^ 




June 7 14 21 28 July 5 12 19 26 Aug 2 9 

Million Bushels 

'Grains include corn, wheat, sorghum, barley, and oats. 

^Week ending on date given. 



Page 4 



Foreign Agriculture/September 1979 








COMMODITY 

UPDATE 



IN RECENT WEEKS, WORLD GRAINS HAVE MOVED IN THE DIRECTION OF SOMEWHAT EASIER SUPPLIES, 
moderated by continued strong demand. World grain production, including milled rice, is currently es- 
timated at 1 ,388 million tons, less than 1 percent above last month’s estimate, but 4 percent below that of 
a year ago. World trade, however, is now forecast at 190 million tons, 1 percent more than that of a 
month ago and 10 percent above last year’s level. 

Although world wheat production in major producing countries is expected to remain below last year’s 
generally record levels, coarse grain prospects appear bright for some countries. The United States, 
China, Brazil, France and West Germany are all expecting near-record or record crops. 

Since last month, the forecast of world grain trade for 1979/80 has been boosted by an increase in es- 
timated trade levels for both coarse grains and rice. Wheat trade, which continues to be throttled by 
logistical constraints, remains forecast at 78 miliion tons, 8 percent above last year’s record volume. 

Relative to earlier forecasts, demand for coarse grains is expected to increase in the USSR and East 
Europe, and in Brazil and the Republic of Korea for rice. 

By June 30, 1980, world stocks are expected to be about 14 percent of world utilization, compared with 
16 percent a year earlier. 



THE AUGUST WORLD OILSEED PRODUCTION FORECAST FOR 1979/80 WAS 176.7 MILLION METRIC TONS, 
1 1 percent above the 158.6 million-ton 1978/79 output. Both larger harvested area and improved yields 
are expected to contribute to record crops for soybeans, sunflowerseed, and rapeseed . In addition, 
world cottonseed and peanut crops are expected to be above the 1978/79 levels. U.S. oilseed produc- 
tion during 1979/80 is forecast at 67.9 million tons, roughly 38 percent of world production. 

The meal and oil equivalent of world oilseed and copra production, along with fishmeal and treecrop, 
animal, and marine oils, during 1979/80 is expected to reach 97.8 million and 41.6 million tons, respec- 
tively. 

Through the first three-quarters of the current marketing year, U.S. exports of soybeans and products 
were above the year-earlier levels. September-June bean exports were up 6 percent, October-June 
meal exports up 10 percent, and October-June oil exports up 14 percent. 

The total value of U.S. exports of oilseeds and associated products during October-June was $7.1 bil- 
lion, compared with $6.0 billion a year earlier. 



WORLD COTTON PRODUCTION IN 1979/80 IS PROJECTED AT 63.6 MILLION BALES, compared 

with 59.8 million produced in 1978/79. U.S. cotton production is expected to increase nearly 3 million 
baies over the 1978/79 level, while foreign production may increase about 1 million bales. 

World cotton area is projected at 32.3 million hectares for 1979/80, slightly above the 32.2 million 
harvested in 1978/79. Expected area increases in the United States and Colombia may more than offset 
likely declines in India, Iran, Nicaragua, and Turkey. While some early season weather problems have 
developed in India, Pakistan, and the USSR, present indications are that world yields will exceed the 
1978/79 level. 



Foreign Agriculture/September 1979 



Page 5 



U.S. cotton exports for 1979/80 are forecast at 6.0 million bales ( ± 1 million), compared with 6.2 million 
shipped in 1978/79. In 1978/79, Japan was the largest market, taking over 1.2 million bales, with South 
Korea a close second. 

U.S. spot market price in early August averaged 61 cents per pound for SLM 1-1/16”, compared to 59 
cents a year earlier. The northern Europe Index “A” averaged 77 cents a pound in August, 

4 cents above the August 1978 average. 



EC NONFAT DRY MILK (NFDM) INTERVENTION STOCKS, WHICH ACCOUNT FOR WELL OVER HALF OF THE 
WORLD’S TOTAL, have been declining dramatically in 1979. In mid-June, NFDM stocks 
amounted to 443,000 metric tons, down from 827,000 tons a year earlier. 

Germany, which holds most of the NFDM stocks in the European Community, has experienced a 90,500 
ton decrease from June 1978 stock levels. Even with this decline, Germany still holds almost 80 percent 
of the EC NFDM intervention stocks. This is mainly because the strong Deutcshe mark makes it more 
profitable for dairies of EC member countries to send NFDM for intervention to Germany , rather than 
selling it through their own national intervention agencies. 

Despite increases in EC NFDM production of about 9 percent in 1978, EC NFDM stocks are at their 
lowest level since 1974, when ending stocks were 506,000 tons. This substantial decline has been 
achieved primarily through the aid of large subsidies which have made NFDM feeding 
to hogs and calves competitive with other protein sources such as soya meals. 



A SMALLER WORLD TOBACCO CROP IS FORECAST FOR 1979. Early indications are 

that world production of unmanufactured tobacco will be down slightly in 1979 to 5.54 million tons, 
compared with 5.58 million metric tons in 1978. An expected 15 percent drop in both the U.S. and 
Turkish crops will not be entirely offset by anticipated increases in most other major producing 
countries. 

World flue-cured output is projected to drop 2 percent in 1979 to 2.3 million tons. Oriental production is 
expected to decline 1 percent in 1979 to 948,000 tons. Burley production may be up 6,400 
tons , an increase of 1 percent over the 1978 crop. 

Prospects for the 1 979 world flue-cured crop indicated a 2 percent reduction to 2.3 million tons. U.S. and 
Japanese crops are expected to be down 15 and 12 percent, respectively. Sizable increases forecast for 
the Brazilian, Rhodesian, and Polish crops will not be sufficient to counterbalance this drop. 

Based on current indications, world burley production is estimated to be up 1 percent to 611,739 
tons in 1979. Expected increased output in South Korea, Brazil, and Malawi will more than offset 
declines in the U.S. and Italian burley crops. The U.S. burley crop is projected to be down 6,500 metric 
tons in 1979. 



THE EUROPEAN COMMUNITY IS EXPECTED TO RESUME IMPORTING CANNED MUSHROOMS 

from Korea shortly, ahead of schedule, in a move to prevent mushroom price rises and ensure a stable 
supply of canned product, Korean officials announced. This move was made in view of the growing 
shortage of inventories within the Community, officials at the Republic of Korea’s Ministry 
of Agriculture and Fisheries said recently. 

The officials said the EC had earlier agreed to consider allowing the resumption of mushroom imports 
from Korea on and after September 1. The Community had suspended imports of Korean 
mushrooms since June 26 last year to allegedly protect the mushroom industry in the EC. 

In view of the EC’s recent attitude regarding mushroom imports from Korea, the Ministry has asked the 
Korean Diplomatic Mission to the European Community to negotiate with EC authorities to increase the 
annual quota for mushroom imports from Korea to 5,500 tons, and to allow an additional 
1,500-2,000 tons this year. 



Page 6 



Foreign Agriculture/September 1979 



Africa’s Declining Share 
Of World Peanut Output 

By Abdullah A. Saleh 



A frica’s contribution to the world 
peanut supply has declined con- 
siderably since the mid-1960’s — from 
5.6 million metric tons, or 36 percent 
of the world total in 1965/66, to 4.6 mil- 
lion tons, or about 26 percent for 
1978/79. 

Although total African peanut 
production swung up and down during 
this period, there was a general 
downtrend in output and exports 
relative to world production and 
trade. 

Africa’s share of world peanut ex- 
port market declined to 43 percent in 
calendar 1977 from 88 percent in 1968. 
During this period, the U.S. share ex- 
panded from 3 to 38 percent. 

Africa’s share of the peanut oil ex- 
port market also has declined — from 
78 percent in 1968 to 55 percent in 
1977. The U.S. share of this market 
during the same period rose from vir- 
tually nil to 9 percent. 

Repeated droughts have played a 
significant role in depressing yields, 
and disease infestations and in- 
stitutional factors also have been im- 
portant in curtailing output in several 
key producing countries. 

Assessments of the peanut situation 
in the principal African producing 
countries of Senegal, Gambia, 
Nigeria, and Sudan follow: 

Senegal. Currently, Senegal stands 
as the largest peanut producer in 
Africa and the world’s leading ex- 
porter of peanut oil. About 70 percent 
of its farmers are engaged in peanut 
production. On average, area planted 
to peanuts exceeds 1 million hectares. 
For 1978/79, Senegal’s peanut produc- 
tion is estimated at 1.1 million tons — a 
substantial improvement over the 



Dr. Saleh, who recently returned from 
a survey of peanut production in four 
African countries, is an agricultural 
economist in the Oilseeds and 
Products Division, Commodity Pro- 
grams, FAS. 

Foreign Agriculture/September 1979 



drought-stricken level of 677,000 tons 
produced in 1977/78 but about 300,000 
tons short of the record outturn of 
1975/76. 

Since 1971/72, marketing of peanuts 
in Senegal has been conducted by a 
Government agency — the National Of- 
fice of Cooperation and Assistance for 
Development (ONCAD), which in- 
fluences production and marketing of 
peanuts by such devices as the setting 
of producer prices, subsidizing farm 
input costs, and extending credit. 

Peanuts collected from farmers are 
delivered by ONCAD to the Societe 
Nationale de Commercialisation de 
Oleagineaux du Senegal (SONOCOS), 
a Government-industry organization 
in which ONCAD holds a 65 percent 
interest. 

SONOCOS purchases commercial 
crops from ONCAD at prices based on 
world prices of crushing-quality 
peanuts, oil, and meal. It allocates the 
supply of collected peanuts to the 
various crushers who process peanuts 
for SONOCOS. 

Peanut crushing in Senegal is 
handled by five private companies but 
marketing of the oil and meal products 
is under control of SONOCOS. These 
crushing facilities have a total 
capacity of about 1.1 million tons. 

The mills, locations, and capacity 
(in tons] of each: 

Lesieur Afrique, Dakar, 400,000; 
SODEC, Lyndiane-Kaolak, 350,000; V. 
Q. Peterson, Dakar, 150,000; STEC, 
Ziguinchor, 100,000; and SIEB, 
Diourbel, 60,000. 

An estimated 875,000 tons of 
Senegal’s 1978/79 peanut production 
of 1.1 million tons have been procured 
by ONCAD as a commercial crop, and 
the remainder — about 20 percent of 
production — is accounted for by on- 
farm consumption, seed, and waste. 

Senegal’s peanut oil consumption in 
1978/79 is estimated at 57,000 tons, 
leaving 223,000 tons for export. Vir- 
tually all of the 330,000 tons of meal 
produced is for export. Edible peanut 



exports are about 20,000 tons annually. 

Because of late-season rains in 
January 1979, about 20 percent of the 
harvested peanuts piled in fields 
became infested with mold, and the 
resulting deterioration is expected to 
be reflected in higher levels of acidity 
in the oil and aflatoxin in the meal. 

Peanut oil produced in Senegal 
usually has an acidity level of 0.5-1 
percent, but this year’s acidity level 
may reach around 2-3 percent. As a 
result, this oil may have to be dis- 
counted to sell in world markets. 

In 1977/78, the European Com- 
munity threatened to restrict imports 
of peanut meal from Senegal because 
aflatoxin had been detected in some 
shipments. This year’s heavy rains 
and resulting mold infestations have 
produced lower quality meal. Because 
of this, Senegal is not expected to find 
normal demand for its meal and may 
have to look for new markets to clear 
its available supplies. 

Exports of peanuts and peanut 
products account for more than half of 
Senegal’s annual export earnings, and 
any decline in either production or ex- 
ports would be a severe blow to the 
country’s economy. 

To minimize its dependence on a 
single crop, the Government’s current 
5-year plan (1977-81) calls for diver- 
sification of crops and increases in 
production of cereal grains. It also en- 
visages expanded output of edible 
peanuts and aims at stabilizing total 
peanut production at about 1.2 million 
tons, with emphasis on improvement 
of quality. 

Since 1974, the producer price for 
crushing-quality peanuts has 
remained at the equivalent of 9-10 
U.S. cents per pound. 

Gambia. Although it is a relatively 
small producing country, Gambia is 
heavily dependent on its single crop — 
peanuts. In 1977, about 83 percent of 
the country’s export earnings were 
supplied by the peanut industry. 

In 1978/79, Gambia harvested only 

145.000 tons of peanuts from about 

100.000 hectares, but it ranks among 
the significant exporters of peanuts 
and peanut products. Estimated ex- 
ports for the 1978/79 marketing year 
are: 

Fair-average quality (FAQ) peanuts 
for crushing, 30,000 tons; hand-picked, 
selected (HPS) peanuts, 3,500 tons; 
peanut oil, 15,000 tons; and peanut 
meal, 20,000 tons. Production for the 
1978/79 year was a distinct improve- 

Page 7 





From top: Loading peanut oil 
and meal at Dakar, Senegai, 
for export. Trucks loaded 
with shelled peanuts leaving 
the weighing scale at a 
Dakar crushing mill. Peanut 
and cottonseed stocks ready 
for crushing at a Kano, 
Nigeria, mill. Peanuts for 
crushing near Banjul, 
Gambia. 





ment over the 1977/78 outturn, which 
amounted to only 94,000 tons because 
of a drought. 

Gambia’s wet season — like 
Senegal’s — extends from June through 
October. Planting starts in June, and 
harvest is in November. As in Senegal, 
harvested peanuts piled in fields dur- 
ing November-January were damaged 
by untimely rains, and mold infesta- 
tions may have caused aflatoxin 
problems — a major obstacle to 
marketing peanuts and peanut meal in 
Western Europe. 

Gambia is a member of the African 
Groundnut Gouncil, along with 
Senegal, Niger, Nigeria, Sudan, and 
Mali. The Gouncil provides an infor- 
mation service to members as part of a 
promotional campaign to extend the 
use of peanuts and peanut products in 
the major European markets, and 
serves as a medium of informational 
exchange between the member 
countries and the food and feed sec- 
tors of importing countries. 

Peanut marketing in Gambia is coor- 
dinated through the Gambia Produce 
Marketing Board (GPMB). 

The producer price for 1978/79 was 
the equivalent of about $210 per long 
ton or about 9.4 cents per pound, only 
slightly higher than the price per 
pound paid to producers in Senegal. 

Nigeria. Although it was the leading 
African producer-exporter of peanuts 
in the 1960’s, Nigeria currently is an 
importer of vegetable oil. Peanut 
production has suffered severe set- 
backs since the mid-1970’s, and com- 
mercial production has collapsed 
almost to nil. 

The decline in production is at- 
tributed to several factors, the most 
important of which are: 

• Lack of high-quality seeds that are 
early maturing and disease-resistant. 

• More attractive returns from such 
crops as sorghum and millet. 

• Shortages of such inputs as labor, 
fertilizer, and chemicals. 

• Lack of adequate credit. 

• A shift in weather patterns 
characterized by repeated droughts. 

Nigeria’s main peanut production 
area around Kano in recent years has 
turned into a near-desert because of 
inadequate rainfall. Repeated crop 
failures have induced shifts in crop- 
ping patterns, mainly diverting land 
from peanuts to other crops that re- 
quire less labor and entail less risk. 

Fungus and virus diseases spread 
with little deterrent. Although scien- 



Page 8 



Foreign Agriculture/September 1979 



tists have been able to develop 
disease-resistant seed varieties suited 
to Nigeria’s climate, tbe Government 
bas not provided sufficient funds for 
seed multiplication. As a result, higb- 
quality seed is scarce and farmers are 
compelled to use traditional varieties 
that have lost tbeir ability to resist dis- 
ease. 

Peanuts are a labor-intensive crop, 
compared with millet and some other 
crop options. Higher per capita in- 
come, resulting from higher 
petroleum prices in recent years, has 
boosted tbe standard of living and 
large numbers of farm workers have 
migrated to tbe cities, leaving a labor 
deficit in agricultural areas. 

Also, peanut production has become 
more costly and less profitable. Ir- 
rigated areas suitable for peanut 
production are also economically at- 
tractive for vegetable production, 
wbicb provides better returns. These 
factors — together with inadequate 
supplies of credit and fertilizer — have 
led to the decline in Nigeria’s output 
of peanuts. 

Crushing capacity is not a limiting 
factor in Nigeria. Total seed crushing 
capacity, accoring to trade sources, is 
about 1 million tons and is located 
mainly in the northern region around 
Kano. 

Although peanuts are now exempt 
from import duties, other oilseeds and 
their products are still subject to 
relatively high tariffs. 

Nigeria currently is meeting the 
deficiency in its vegetable oil require- 
ments by importing such oils as soy- 
bean, rapeseed, peanut, and oc- 
casionally palm. Consumer tastes are 
changing, and urban dwellers now 
prefer refined soybean oil to the 
traditional vegetable oils. 

The most viable solution to the 
Nigerian vegetable oil deficit 
probably would be restoration of free- 
market production and trade. 

Sudan. Africa’s largest country in 
terms of area, Sudan has tremendous 
potential for expanding both crop 
areas and yields. 

Sudan’s oilseed crops include 
peanuts, sesame, cotton, and castor. 
Peanut production is the second 
highest in Africa, and its peanut ex- 
ports rank second to the United States 
on a world basis. 

Peanut production for 1978/79 is es- 
timated at 829,000 tons — down about 
19 percent from the 1977/78 crop of 
1.021 million tons. Much of the decline 

Foreign Agriculture/September 1979 



was .attributed to lower yields in ir- 
rigated areas, but a shortage of fuel to 
operate irrigation equipment was also 
a limiting factor. 

Irrigated area in 1978/79 declined to 
134,820 hectares from 159,000 hectares 
in 1977/78, with yields averaging 1,919 
kilograms per hectare in 1978/79, com- 
pared with 2,671 kilograms per hec- 
tare in the previous year. 

Yields in rain-fed areas, however, 
were better in 1978/79 than in 1977/78, 
averaging 674 kilograms per hectare 
compared with 630 kilograms per hec- 
tare in the previous period. The ir- 
rigated share of total peanut produc- 
tion declined to 31 percent in 1978/79, 
compared with 41 percent in 1977/78. 

The domestic Sudanese oilseed 
market is competitive, but the export 
market is contolled by the Sudan 
Oilseed Company, in which the 
Government holds 58 percent control 
and the private sector 42 percent. It is 
the sole exporter of peanuts, 
sesameseed, and castor beans. 

In contrast, Sudan’s vegetable oil in- 
dustry is market-oriented in both the 
domestic and export markets. 

On average, about one-third of 
Sudan’s peanut exports are HPS and 
about two-thirds are FAQ. A signifi- 
cant proportion of the HPS exports 
goes to the Middle East, while the bulk 
of the FAQ production is shipped to 
Europe. 



Sudan’s main source of vegetable 
oil is cottonseed. Exports of cot- 
tonseed oil have been nil in recent 
years because of domestic demand for 
this oil. There is some crushing of 
sesameseed for oil in years of low cot- 
tonseed supply. 

In 1974/75, 40,000 tons of FAQ 
peanuts were crushed for oil by 
domestic expellers, but consumer ac- 
ceptance was poor. Given the con- 
sumer preference for cottonseed oil, 
any increase in peanut oil production 
in the future would likely be chan- 
neled to the export market. 

Two mills at Port Sudan crush pea- 
nuts and produce oil in crude form for 
overseas shipment. There are about 20 
cottonseed crushing facilities — mostly 
in the Khartoum region — that also 
crush peanuts and sesameseed from 
domestic production. 

Most of Sudan’s oilseed meal 
production is utilized in domestic out- 
put of mixed feeds. Oilseed meal ex- 
ports average about 150,000 tons per 
year. 

Sudan has a potential export 
capacity of about 300,000 tons of 
peanut kernels and 200,000 tons of 
sesameseed. Sudan is the world’s 
largest exporter of sesameseed. 

However, Sudan plans to expand 
peanut oil exports and peanut produc- 
tion, the latter mostly in irrigated 
areas, where yields are about four 
times the yields in rain-fed areas. □ 



Africa: Unshelled Peanut Production in Selected Countries, 
1972 / 73 - 1978/79 



1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 

1,000 MT 1,000 MT 1,000 MT 1,000 MT 1,000 MT 1,000 MT 1,000 MT 



Gambia 102 140 140 137 125 94 145 

Malawi 165 165 165 165 165 165 165 

Mali 150 100 120 178 119 120 150 

Niger 195 77 129 42 79 82 82 

Nigeria 1,125 340 530 332 350 390 315 

Senegal 610 700 994 1,424 1,182 677 1,100 

South Africa 197 536 256 146 240 311 222 

Sudan 568 553 928 932 740 1,021 829 

Zaire 180 200 230 268 289 295 295 

Subtotal 3,292 2,811 3,492 3,624 3,289 3,155 3,303 

Other 1,394 1,382 1,366 1,368 1,251 1,261 1,301 

Total 4,686 4,193 4,858 4,992 4,540 4,416 4,604 

World total . . 15,439 16,556 17,052 18,852 16,967 17,193 18,012 



Pet Pet Pet Pet Pet Pet Pet 

Africa’s share 

of world total 30 25 28 26 27 26 26 



Source: Oilseeds and Products Division, Commodity Programs, FAS. 



Page 9 



More Boom Years Ahead for 

Brazil’s Orange Juice Exports 



By John H. Wilson 



A pause may be in store for Bra- 
zil’s heretofor-booming exports 
of frozen concentrated orange juice, 
as a result of a reduced orange crop in 
Sao Paulo State — source of about 
three-fourth’s of Brazil’s total produc- 
tion. But that trade interruption is 
likely to be brief, since orange output 
is expected to rebound in 1980/81 and 
go on to achieve strong gains in the 
early 1980’s. 

This, in turn, implies further in- 
roads in a world market where Brazil 
surpassed the United States in 1968 as 
the top exporter and then 10 years 
later sold more frozen orange juice to 
the United States than to any other 
outlet. To capitalize on this continuing 
strong world demand, Brazilian 
processors are moving ahead with 
plans to expand and modernize their 
industry. 

Following a record output of 150 
million boxes of oranges last season. 
Sab Paulo’s 1979/80 orange crop is 
seen declining about 15 percent 
because of poor flowering during 
August and September. However, the 
good rains in July, coupled with new 
trees entering the bearing stage, in- 
dicate a rebound to the 150-million- 
box level in 1980. 

Total commercial production even- 
tually could hit 220 million to 240 mil- 
lion boxes by the mid-1980’s as new 
plantings come into bearing north of 
Bebedouro in Sao Paulo and near the 
town of Frutal in Minas Gerais. 
Between 75 and 80 percent of commer- 
cial orange production in Sao Paulo 



The author — an agricultural econo- 
mist, Horticultural and Tropical 
Products Division, FAS — has just 
returned from a survey trip to Brazil’s 
major orange producing regions. 



State is processed into frozen con- 
centrated orange juice (65° Brix], and 
almost all is exported. 

This anticipated production 
growth — amounting to a gain of 
between 45 and 60 percent by 1985 — 
means that Brazil will have that much 
more juice to dispose of, either in 
world or domestic markets. The key 
question now is: Where will the ad- 
ditional output go, especially in view 
of a prospective rebound in Florida 
production from the freeze-reduced 
levels of the last two seasons? 

That freeze, in January 1977, caused 
subsequent Florida crops to fall sharp- 
ly from the 1976/77 outturn of 186.8 
million boxes. As a result, U.S. im- 
ports of Brazilian frozen concentrate 
orange juice rose sharply. By 1978, the 
United States had emerged as Brazil’s 
No. 1 buyer of frozen concentrated 
orange juice, taking 148,000 tons or 44 
percent of that country’s total exports, 
compared with 22 percent the 
previous year and 8 percent in 1976. 

The resultant price differential 
between domestic and imported juice 
made it attractive for U.S. importers 
and processors to buy Brazilian juice 
and still pay the U.S. duty of 35 cent 
per gallon of natural juice. This is 
roughly equivalent to 34 cents per 
pound (solids] of concentrates. 

U.S. imports in the upcoming season 
will depend on the size of the 1979/80 
crop in Florida. Assuming a larger 
crop, Brazilian exports to the United 
States will more than likely decline. 

Brazilian trade sources, however, 
are optimistic that the U.S. market 
will be maintained at a relatively high 
level during the next several years, 
despite occasional fluctuations in de- 
mand. They feel that the trend toward 
increased U.S. consumption of orange 
juice, coupled with population 
growth, will help maintain sales here 
even when U.S. production returns to 
normal levels. 



Page 10 



Moreover, the Brazilians do not ex- 
pect Florida production to exceed the 
1976/77 level by more than 10 million 
boxes because of a downward trend in 
bearing acreage — from 660,000 acres 
in 1970/71 to 579,000 in 1977/78. 

Elsewhere, trade prospects also are 
promising. The Brazilians see per- 
capita consumption increasing in both 
Western Europe and Canada, at least 
into the mid-1980’s, largely as a result 
of a trend in consumer preference 
away from fresh oranges to juice. 
Orange juice consumption in Canada, 
for example, rose 84 percent between 
1971 and 1977, and during 1976-78 
Brazil’s share of the Canadian market 
jumped from 35 to 54 percent. 

Brazil also is looking more seriously 
to Eastern Europe as a viable market 
because of low per capita consump- 
tion there, and one major firm ex- 
pressed interest in stepping up ship- 
ments to Japan. 

The industry also plans to market 
more juice domestically. A 1-liter 
tetra-brik pack of concentrated orange 
juice is currently being test-marketed 
in Belo Horizonte, and 1-liter and half- 
liter tetra packs of single-strength 
juice are being test-marketed in Rio 
de Janeiro. 

No promotional campaigns exist at 
present for these products but the in- 
dustry is aware of the need for adver- 
tising to stimulate demand. 

Brazilian processors, meanwhile, 
are gearing up for the expected surge 
in domestic production. Existing 
orange-juice plants are expanding 
their processing capacity, and a few 
smaller plants will be constructed. As 
a result, the number of extractors in 
Sao Paulo State is expected to in- 
crease from the current level of 447 to 
595 by the middle of next season. 

Two of the largest firms are in- 
stalling tank farms (consisting of 20 to 
30 100,000-gallon cold-storage tanks) so 
as to reduce handling costs, obtain 
consistent blends, and facilitate the 
transfer of juice in bulk. Such tank 
farms have been in existence in 
Florida for the past 5 years, but never 
before in Brazil 

By the middle of next season, one 
major firm plans to export a sizable 
portion of its output to Europe in bulk, 
rather than in the conventional 52 gal- 
lon drums. The frozen slush juice will 
be transported from the plant by truck 
at temperatures well below freezing 
to the port of Santos in fiberglass con- 
tainers holding 20 to 22 tons each. The 

Foreign Agriculture/September 1979 



Higher Livestock Costs 
Curb Korea’s Imports 



juice will be pumped and stored at 
Santos in 100,000-gallon tanks (cur- 
rently under construction) and later 
discharged directly into a vessel 
specially adapted for bulk transport 
of concentrated juice. 

When the ship reaches its destina- 
tion, the concentrated juice will be 
discharged into another tank farm and 
then transported by truck to various 
bottlers. 

Officials of the plant have indicated 
that they expect to save $80 to $100 per 
ton, or 10 percent of the f.o.b. price of 
orange juice, when the bulk transpor- 
tation system is fully operational. The 
savings will be from not having to bear 
the high cost of handling of the drums. 

Officials also anticipate lower fuel 
costs and have indicated that bulk 
transportation will ensure a better 
quality product because of reductions 
in contamination and heat loss. □ 



Brazilian Exports of Frozen 
Concentrated Orange Juice, 
Calendar 1976-78 

[In 1 ,000 metric tons] 



Market region 


1976 


1977 


1978 


United States 


17 


47 


148 


Canada 


16 


21 


34 


European Community . 


125 


100 


95 


Other Western Europe . 


27 


30 


32 


Eastern Europe 


5 


4 


2 


Israei 


15 


6 


9 


Other 


5 


6 


16 


Total 


210 


214 


336 



Source: Bank of Brazil (CACEX) 



Number of Extractors Per Orange 
Juice Processing Plant in Sao 
Paulo State, Brazil, 1979/80 and 
1980/81 



Extractors 



Location of plant 


1979/80 


1980/81 


Araquara 


84 


84 


Araras 


28 


28 


Bebedouro: 


Plant A 


60 


80 


Plant B 


48 


71 


Plant C 


0 


10 


Colina 


48 


96 


Limeira: 


Plant A 


44 


44 


Plant B 


24 


24 


Matao: 


Plant A 


12 


24 


Plant B 


4 


8 


Plant C 


83 


83 


Olimpia 


0 


10 


Santo Antonia do Posse , 


12 


12 


Sao Jose do Rio Preto . 


0 


18 


Sao Paulo 


0 


2 


T otal 


, 447 


595 



H igher costs are dampening South 
Korea’s plans to increase 
livestock imports this year, according 
to Gerald W. Sheldon, U.S. 
Agricultural Attache in Seoul. Im- 
porters are hesitating to push ahead 
with their calendar 1979 plans to im- 
port 30,000 head of dairy breeding cat- 
tle and 10,000 head of beef breeding 
stock in the face of higher prices for 
imported animals, rising input costs, 
and relatively small increases in 
Korean livestock prices. 

Korea’s imports of cattle in 1978 
were 32,339 head, including 28,000 
head of dairy stock and 4,339 beef 
animals. The U.S. share was 16,500 
head of dairy cattle (59 percent] and 
1,525 beef animals (35 percent). 

Imports of beef in 1978 — mostly 
from Australia and New Zealand — 
jumped to 45,000 metric tons from 
about 8,000 tons in 1977. The U.S. 
share — mainly for the hotel and 
restaurant trade — was only 473 tons. 
The Government forecasts 1979 beef 
imports at 62,800 tons, including about 
600 tons of high-quality beef for hotels 
and restaurants. 

South Korean cattle population at 
yearend 1978 was 1.8 million head, up 
10 percent from the year-earlier level. 
The increase is attributed to con- 
tinued strong consumer demand for 
beef and dairy products, and Govern- 
ment bonuses for newborn beef 
calves. The Government projects cat- 
tle numbers by yearend 1979 at about 
2 million head. 

Gattle slaughter in 1978 at 367,000 
head was up 12 percent from the 1977 
level, producing 83,995 tons of beef — 8 
percent more than in 1977. 

Imports of breeding swine in 1978 
were 6,439 head — 5,149 from Japan 
and 1,290 from the United States. The 
Government import target for 1979 is 
about 2,000 head. 

Swine numbers at yearend 1978 



totaled 1.7 million head, 16 percent 
higher than the year-earlier level. 
Slaughter, reflecting strong consumer 
demand for pork, in 1978 jumped 28 
percent from the 1977 level to about 3 
million head. 

Pork imports in 1978 were 8,555 tons, 
of which 4,820 tons were supplied by 
the United States and the remainder 
by Taiwan and Australia. The Govern- 
ment’s original plan to import 12,000 
tons in 1979 was dropped in mid- 
March after the arrival of 9,000 tons 
(5,800 from the United States, 3,200 
from Taiwan) because of a sharp 
decline in prices for domestic pork. 

Poultry numbers at yearend 1978 
totaled 40.8 million, 35 percent more 
than the year-earlier level. Poultry 
meat production during the same 
period increased 22 percent to 88,846 
tons. The Government projects 1979 
output at 19 percent over the 1978 
level. 

Korea’s domestic hide production in 
1978 — representing only 4 percent of 
the total hide supply — was insuf- 
ficient to meet even domestic require- 
ments. Imports of raw hides and skins 
in 1978 rose to 149,313 tons, up 26 per- 
cent from the 1977 level in spite of a 65 
percent import price increase and 
relatively low availability in such ma- 
jor supplying countries as the United 
States and Australia. The U.S. share of 
imports in 1978 was 75 percent, com- 
pared with 79 percent in 1977. 

The Korean hide industry has in- 
dicated that the difficulty in obtaining 
raw hides and skins — resulting from a 
40 percent price rise in the first 
quarter of 1979 and reduced supplies 
from import sources — has caused the 
hide tanning industry to operate at 
only 60 percent of capacity. As a result 
of this difficulty, raw hides and skin 
imports in 1979 may decrease by at 
least 20 percent from 1978 levels to 
about 130,000 tons. □ 



Foreign Agriculture/September 1979 



Page 11 



EC Defers Hard Decisions, Sets 
1978/90 Programs and Prices 

By Dan Conabie 



More than $7 billion worth of U.S. agricultural products were exported 
during 1978 to the nine European Community (EC) countries — together, 
the largest market for U.S. farm products. In the EC a single agricultural 
policy framework guides the production and marketing of farm 
products, and each spring representatives of EC countries meet to 
hammer out a new price package for the coming marketing year that 
will affect levels of crop production, degrees of market access for many 
agricultural imports, and patterns of competition in third-country 
markets. This article reports on the EC’s most recent price-package 
negotiations. 





Top; Harvesting wheat in France: Bottom: Livestock buyers and sellers on market day in 
Hoorn, the Netherlands. 



T he European Community Council 
of Agricultural Ministers has set 
an across-the-board increase of 1.5 
percent in agricultural support prices 
for all products outside the dairy sec- 
tor for the 1979/80 marketing year, * 
Meeting from June 18 to 21 for its an- 
nual price negotiations, the Council 
approved the smallest price increase ! 
in years, but rejected a call by the 
Commission — the Community organ 
charged with the implementation of i 
common EC policies — for a complete ! 
freeze in support prices. 

Only prices for milk and milk 
products were held at 1978/79 levels, | 
while Commission suggestions for an 
increase in the co-responsibility levy 
(a tax intended to discourage surplus 
milk production on all milk delivered 
to dairies or processed on the farm) 
was rejected as well. 

The combined effect of the Coun- 
cil’s 1979/80 price and subsidy deci- 
sions will be an estimated increase in . 
budget outlays for agricultural price 
support and subsidy measures in 1980 
to $14 billion, $1 billion above the 
amount budgeted for 1979. 

The increased expenditures stem- 
ming from the Council’s decisions will 
hasten the day — now anticipated as 
early as 1981 — when the Community 
must look beyond its income from 
customs duties, agricultural levies, 
and the remittance of 1 percent of 
Member States’ value-added tax 
(VAT) collections to make ends meet. 

ECU prices. Common EC support 
prices for 1979/80 have been an- 
nounced in terms of European cur- 
rency units (ECU’s), replacing the 
agricultural units of account (a.u.a.’s) 
in which prices and levies were 
denominated before the new Euro- 
pean Monetary System went into ef- 
fect (Foreign Agriculture, May 1979). 
To compare old a.u.a. prices with new 
ECU prices, it is necessary to multiply 
the a.u.a. prices by the coefficient 
1.208953. The dollar value of 1 ECU 
was about $1.35 in mid-July 1979. 

The 1.5 percent increase in common 
prices, spelled out in ECU terms, will 
mean different things in different 
countries, since — as in previous 
years — general price decisions were 
accompanied by a number of changes 
in the green rates of exchange used to 



The author is an international 
economist, Developed Market 
Economies Division, FAS. 



Page 12 



Foreign Agriculture/Septeraber 1979 



translate ECU prices into national cur- 
rencies. 

Revaluation of green rates outside 
the dairy sector for West Germany 
and the Benelux countries will reduce 
the effective price increase caused by 
the 1.5 percent hike in ECU prices by 1 
percent and 0.5 percent, respectively. 

Green rate devaluations for the 
United Kingdom, France, and Italy 
will result in price support increases 
in those countries of 5.3 percent, 1.5 
percent, and 4.4 percent, respectively, 
in addition to the 1.5 percent increase 
in common prices. 

These gains follow increases 
resulting from devaluations ranging 
from 3.6 percent (France) to 5 percent 
(Italy and the United Kingdom], 
agreed to in April. Only in the cases of 
Denmark and Ireland do increases in 
ECU prices translate into higher 
national currency support prices of 
about the same 1.5 percent magnitude. 

The calculation of actual price 
levels in effect in the various Member 
States has been further complicated 
by elaborate staging of when different 
green rates will take effect for dif- 
ferent commodity sectors. 

This elaboration reflects the con- 
tinued drift in the Common 
Agricultural Policy (CAP) into ever 
more subtle mechanisms designed to 
reconcile the disparate (and often 
conflicting] demands of national farm 
and agri-business interests with the 
formal requirement of maintaining 
common EC rules and administrative 
procedures. 

Surplus problems. The EC Commis- 
sion, with strong initial support from 
the United Kingdom, proposed a 
freeze on all agricultural support 
prices in an attempt to halt a steady 
growth in the cost of the CAP, and to 
discourage surplus production of such 
commodities as milk, sugar, olive oil, 
wine, tobacco, wheat, barley, and rye. 

The EC meets its farm income goals 
through a policy of unlimited 
purchases of most field crops and 
livestock products at set intervention 
prices. This price policy is supported 
by variable levies that raise the price 
of imports enough so that they cannot 
undercut target prices for domestic 
producers. 

Previous price decisions by the 
Council of Ministers have pushed EC 
farm prices far above world market 
levels for most products, thereby 
creating a prosperous agricultural sec- 



tor in those regions where field crops 
and livestock products predominate, 
but distorting agricultural markets at 
the same time. 

When intervention purchases result 
in the accumulation of surplus 
stockpiles, the Community must bear 
the expense of storage until outlets 
can be found, either through 
charitable donations, by denaturing or 
processing the surplus products into 
other products with lower values 
(Bread wheat and nonfat dry milk — 
NFDM — into livestock feed; wine into 
industrial alcohol], or as subsidized 
commercial exports. Other 
agricultural exporters have main- 
tained that in the past EC export sub- 
sidies have had a disruptive effect on 
third country markets. 

Dairy policy. The results of a policy 
of unrealistically high support prices 
have been particularly apparent in 
the case of the EC milk marketing 
regime. Steadily increasing Com- 
munity milk production — currently 
running 16 percent in excess of 
domestic consumption — has put 
mountains of butter and NFDM into 
the hands of intervention agencies 
and in subsidized private storage. 

Intervention. NFDM stocks in July 
1979 stood at 444,000 metric tons, down 
substantially from 1978 levels — thanks 
in part to subsidies that encouraged 
the use of EC NFDM in animal 
feeding — but still at an uncomfortably 
high level. Despite special programs 
to increase domestic butter consump- 
tion and commercial exports at sub- 
sidized prices, butter intervention 
stocks were more than 400,000 tons on 
June 11 — substantially higher than the 
year-earlier total. 

Management of the EC dairy regime 
has become a focal point of internal 
criticism of the Common Agricultural 
Policy, since the dairy program is ex- 
pected to consume about 39 percent of 
total CAP price support expenditures 
in 1979 (44 percent in 1980], while 
agriculture as a whole absorbs three- 
fourths of the entire EC budget. 

The Commission’s proposals for the 
1978/79 marketing year included a 
modest increase in support prices in 
the region of 2 percent, and a suspen- 
sion of intervention buying of NFDM. 

In its price negotiations in May 1978, 
the Council of Ministers accepted the 
price proposal, but refused to suspend 
intervention buying of NFDM, and 
went on to lower the milk co- 
responsibility levy, instituted in 1977 



to discourage the growth in milk 
marketings, from 1.5 to 0.5 percent. 

The Commission put forth further 
proposals for dealing with the im- 
balance in the milk market later in 
1978, but a consensus has failed to 
emerge because of debate within the 
Community over such issues as the 
needs of small versus large producers, 
efficiency goals versus income goals, 
the wisdom of production quotas 
versus a decrease in real prices, and 
the use of native forage versus im- 
ported concentrate feeds. Before the 
1979/80 price package negotiations, 
the Commission proposed an increase 
in the coresponsibility levy to 5 per- 
cent, in addition to the price freeze 
sought for all commodities. 

The Council accepted the suggestion 
for a freeze in prices for milk and milk 
products for the 1979/80 marketing 
year, but rejected any change in the 
coresponsibility levy for the time be- 
ing, agreeing only that if 1979 milk 
deliveries to dairies exceeded 1978 
deliveries by more than 2 percent, the 
coresponsibility levy would rise by 1 
percentage point in 1980/81. (Such 
prospective price arrangements have 
more symbolic than practical 
significance, since they can be over- 
ridden in the next round of annual 
price negotiations.] 

The Council also agreed to examine 
the suggestion that an increased co- 
responsibility levy be charged only on 
a quantity exceeding a new produc- 
tion limit for each farm, expressed in 
liters of milk per hectare of land on 
the farm under fodder. Such a plan 
would tend to discriminate against 
dairy farms that rely largely on 
purchased compound feeds for milk 
production. 

Other Council decisions in the dairy 
sector included increased Community 
support for a school milk program and 
butter subsidies of about 28 cents per 
pound for the United Kingdom to be 
financed entirely from Community 
funds, and a choice of either a short- 
term subsidy (e.g., around the 
Christmas season] of about 55 cents 
per pound with complete EC financ- 
ing, or a general butter subsidy of 
about 37 cents per pound for the 
whole year with 75 percent support 
from common funds, for the other 
Member States. 

A Commission proposal to include 
55,000 tons of butter oil in the Com- 
munity’s food aid program will be con- 
sidered in the near future. 



Foreign Agriculture/September 1979 



Page 13 



Few observers expect that these 
measures, taken together, will solve 
the market imbalance in the dairy sec- 
tor, where production rose 4 to 5 per- 
cent in 1978, and is expected to in- 
crease as much in 1979. The Commis- 
sion has promised new proposals on 
the milk problem for Council con- 
sideration in the fall. 

In addition to the general increase 
in ECU support prices except in the 
dairy sector, the Council announced 
policy decisions affecting a number of 
other commodity areas: 

Grains. Although ECU intervention 
prices were increased by only 1.5 per- 
cent, changes in transportation cost 
elements have resulted in increases in 
target prices ranging from 2.3 to 2.7 
percent for grains other than rice. 

These increases have in turn raised 
the thresh- old (minimum) prices for 
imports — which are derived directly 
from the target prices — by an average 
of 2.5 percent, ranging from a 2.2 per- 
cent increase in the threshhold price 
for Durum wheat (now $369 per ton] to 
a 2.6 percent increase in the thresh- 
old price applicable to both barley 
and corn ($241.50 per ton at the begin- 
ning of the 1979/80 marketing year). 

ECU prices for rice in 1979/80 were 
an exception to the general 1.5- 
percent rule, with an increase of 3.33 
percent in the intervention price for 
milled rice, and 4.96 percent in the 



target price for producers. 

The special levy reduction for 
feedgrain imported into Italy by sea 
was increased to roughly $8 per ton. 
The Council agreed to maintain a 
premium of about $14.50 per ton for 
rye of bread-making quality, while al- 
lowing the Commission to take steps to 
keep the market price of rye at about 
the 1978/79 intervention price level 
despite the intervention price in- 
crease. 

Sugar and isoglucose. In reviewing 
the sugar sector, the Council again 
declined to take steps suggested by the 
Commission to reduce economic in- 
centives to surplus production, as it 
had in the case of the dairy sector. 

The EC normally produces almost 
20 percent more sugar than it con- 
sumes, and is further committed to the 
purchase of 1.2-1. 3 million tons of 
sugar annually from the African, 
Caribbean, and Pacific (ACP) 
countries that benefit from the EC’s 
Lome‘S Convention agreement with 
former colonies. 

In keeping with the price rise for 
domestic sugar production, the price 
guaranteed for ACP sugar has been in- 
creased by 1.5 percent to 26 cents per 
pound for white sugar and 21 cents per 
pound for raw sugar. 

The present EC sugar policy — 
unaltered in its broad structure by 
1979/80 price decisions — required the 



EC to export an estimated 3.5 million 
tons of sugar (white basis) with the aid 
of export subsidies in 1978/79. The 
Commission had suggested a decrease 
in the “B” quota for sugar — the level 
of production beyond which refiners 
are forced to export their sugar 
without benefit of export subsidies. 

Following a ruling by the European 
Court of Justice that a production levy 
of 10 a.u.a. per ton designed to dis- 
courage isoglucose (high-fructose 
syrup) production was illegal, the EC 
has revised its isoglucose regulations 
to make them analogous to those that 
apply in the sugar sector. 

Production quotas have been es- 
tablished for the Community’s 
isoglucose industry, with a production 
levy of 48 ECU ($64.80) per metric ton 
on any isoglucose produced in excess 
of 140,000 tons. Export subsidies for 
Community isoglucose will be 
available, but not for production out- 
side the "B” quota of 178,500 tons. 

Beef and pork. Aside from the 1.5 
percent increases in the guide price 
for cattle and the basic price for pork, 
no significant changes were made in 
the beef and veal or pork regimes. 
However, the basic price increase for 
pork will not take effect until 
November 1, 1979, the start of the pork 
marketing year. The special pork 
green rate for France resulted from 
the Council’s 1978 price deliberations, 
when several special adjustments in 
green rates for pork only were made 
in response to problems in the pork 
sector of various countries. 

Oilseeds. Programs for sunflower, 
colza and rapeseed, castor seed, 
linseed, and cottonseed were con- 
tinued, along with the general price 
increase. The subsidy for soybeans, 
however, will now be based on actual 
production, rather than on a 
theoretical standard yield. 

The ECU intervention and produc- 
tion target prices for olive oil were in- 
creased 1.5 percent, along with the 
production aid. As a result of the 
green-rate changes in April and June, 
this change will result in an 11.5 per- 
cent increase in lira prices in the ma- 
jor olive producing country, Italy. 

A new consumption subsidy for EC 
olive oil, equal to the difference 
between a set representative market 
price and the producer target price 
less the production aid, went into ef- 
fect April 1, 1979. No change was an- 
nounced in the consumption subsidy 
after the price negotiations, but the 



Green Rates of Exchange for EC Agriculture 

(situation on Sept. 1, 1979) 



Exchange MCA 

Country rate percentage 

West Germany 1 DM = .359271 ECU’ 9.8 

1 DM = .355326 ECU" 10.8 

Belgium/Luxembourg 1 BF/Lux F=.024634 ECU’ 2.8 

1 BF/Lux F=.024498 ECU" 3.3 

Netherlands 1 f. = .357252 ECU’ 2.8 

1 f. = . 355292 ECU" 3.3 

France 1 F=. 181501 ECU" 3.7 

1 F=. 184265 ECU* 5.3 

1 F=. 175052 ECU" 0 

Italy 100Llt.=.095343ECU“ variable 

100 Lit. = .099502 ECU* 

United Kingdom 1 L stg. = 1 .72039 ECU' variabie 

1 L stg. = 1.90625 ECU* 

Ireland 1 L lr=1.53177 ECU 0 

Denmark 1 DKr=. 141125 ECU 0 



' Applies to all sectors except pork, wine, fisheries, and milk. Effective for pork on Nov. 1. wine on Dec. 16, and fisheries on 
Jan. 1, 1980. ’ Remains In effect for pork until Nov. 1., wine until Dec. 16, 1979, fisheries until Jan. 1, 1980, and milk until 
further notice, “ Applies to all sectors except pork, wine, and fisheries. Effective for wine on Dec. 16, and fisheries on Jan. 1 . 
* Remains in effect for wine until Dec. 16, and fisheries until Jan. 1. “ Applies to pork sector only. ' Applies to all sectors ex- 
cept wine and fisheries. Effective for wine on Dec. 16, 1979, and fisheries on Jan. 1, 1980. 



Page 14 



Foreign Agriculture/September 1979 



U.S. — Financed Farm Exports Decline 

Exports of U.S. farm products under concessional Government-financed 
programs are projected at $1.5 billion for 1978/79 (Oct. -Sept.) — 3 percent 
below the previous year’s total — as a large decline in Agency for International 
Development (AID) disbursements offset the rise in P.L. 480 shipments. 

Exports under P.L. 480 for fiscal 1979 are forecast at $1.1 billion, about 8 per- 
cent higher than the year-earlier total, with most of the increase occurring in 
Title II donations. The quantity of P.L. 480 shipments is estimated to be 
somewhat lower than in the year-earlier period, indicating that the value gain 
is partly a result of higher prices. The value of shipments under Title I is es- 
timated at $750 million, about 2 percent higher than in fiscal 1978, while the 
volume of shipments may be smaller. The value of Title II exports is estimated 
at $400 million, nearly 20 percent above last year’s level, with quantity es- 
timated to be slightly higher. 

AID disbursements are estimated at $350 million, about one-fourth less than 
last year’s total, with almost all of the decline in shipments to Egypt. The value 
of inedible tallow shipments to Egypt under AID was considerably lower, and 
there were no cottonseed oil AID disbursements, which in fiscal 1978 
amounted to $72 million. AID to Israel is estimated at about $250 million, 
generally the same value as in fiscal 1978. — Susan Libbin; International 
Economics Division; Economics, Statistics, and Cooperatives Service. 



U.S. Agricultural Exports Under Government Programs: 
Oct. 1978-June 1979 and Oct. 1978-Sept. 1979 Estimates 



Oct.-June Oct.-Sept. Oct.-June Oct.-Sept. 

Program shipments estimates shipments estimates 

1,000 mt 1,000 mt Mil.dol. Mil.dol. 

P.L. 480, Title I 2,753 4,200-4,500 448 750 

P.L. 480, Title II D,162 1,500 ^293 ^ 

Total 3,915 5,700-6,000 741 1,150 

AID 605 1,130 262 350 

Total 4 520 6,830-7,130 1,003 1,500 



'Estimate of actual shipments from USDA Quarterly Report of the General Sales Manager. 



subsidy is likely to change when the 
new representative market price is 
announced on or before October 1. 

Fruits and vegetables. Under the 
CAP, the prices of imports of a 
number of fresh fruits and vegetables, 
including cauliflower, cucumbers, 
tomatoes, peaches, lemons, oranges, 
tangerines, pears, table grapes, and 
apples are monitored to assure that 
they meet reference (minimum im- 
port] price levels. The Commission 
will examine the possibility of es- 
tablishing reference prices for egg- 
plants, courgette squash, green pep- 
pers, and bell peppers. 

When imported fruits or vegetables 
from a given source sell below the 
reference price in the Community, a 
compensatory tax, similar in effect to 
a variable levy, is imposed on the 
product from that origin. Formerly, 
those taxes could be lifted by ad- 
ministrative decision when 6 days had 
elapsed without imports from that 
source, but the Council agreed that in 
the future countervailing taxes will be 
removed only after they have actually 
been in effect for 2 days. 

In the 1978/79 price negotiations, 
the Council established processing 
subsidies for canned tomatoes, tomato 
juice, tomato concentrates, canned 
peaches, and dried prunes. For the 
1979/80 marketing year, processing 
subsidies have been extended to 
tomato flakes, frozen peeled tomatoes, 
tomato juice with a concentration 
from 7 to 12 percent, William pears, 
and cherries in syrup. 

Starch products. Along with 1.5 per- 
cent increases in ECU production sub- 
sidies for grains used in starch 
manufacture and minimum producer 
prices for potatoes used in starch 
manufacture, the special premium for 
potato starch required to make that 
product competitive with corn starch 
has been increased 40 percent to 
about $23 per ton. 

U.S. starch manufacturers filed a 
countervailing duty petition with the 
U.S. Treasury in December 1978, al- 
leging that EC and national subsidies 
for starch manufacture give dextrines 
and other converted starches from the 
Netherlands an unfair competitive ad- 
vantage over starch produced by U.S. 
manufacturers. 

Manioc. The Council approved the 
Commission’s position on manioc im- 
ports (calling for the deconsolidation 
of the 6 percent duty bound in the 
General Agreement on Tariffs and 



Trade for imports in excess of current 
levels), but with the Netherlands 
reserving its position on the issue. 

Manioc imports — chiefly from 
Thailand, which recently agreed to 
hold its manioc exports to the EC at 
current levels — have tended, with the 
help of imported vegetable protein 
(largely soybean meal), to replace the 
EC’s more expensive feedgrains in 
livestock rations. Community grain 
farmers have been pressing for 
restrictions on imports of manioc and 
other nongrain feed ingredients. 

Future decisions. In addition to 
studied inaction on the overall 
problem of price levels and attendant 
surpluses in dairy and other 
agricultural sectors, the Council of 
Ministers also deferred decisions on a 



number of other questions, including: 

• A group of Commission proposals 
to restructure the wine sector; 

• The establishment of Common 
Agricultural Policy regimes for 
sheepmeat, alcohol, and potatoes, all 
of which have been under discussion 
for several years; and 

• A revision of programs for 
regional aids and structural reforms 
for agriculture in the Community. 

The Council will attempt to act on 
all of these matters before the end of 
1979. The reconsideration of present 
EC aid programs for less developed 
agricultural regions in the Community 
must be carried out in the context of 
plans for the enlargement of the Com- 
munity to include Greece, Spain, and 
Portugal within a decade. □ 



Foreign Agriculture/September 1979 



Page 15 



Grape Output in Mexico 
Rising Rapidly 

By L. P. Bill Emerson 




A s Mexico’s grape production con- 
tinues to trend upward, the flow 
of exports of table grapes — and 
raisins — to the United States is begin- 
ning to rise rapidly. 

The Mission wine grape that was 
first introduced by Jesuit missionaries 
and conquistadores in the wake of 
Cortes has given way to new table and 
wine varieties. In the past two 
decades, the table grape and raisin 
industries — patterned after those 
flourishing north of the border in 
California and Arizona — have blos- 
somed. This development has been 
marked by a shift in vineyards to the 
northwestern tier of the country. 

Mexico’s bearing grape area, now 
totaling 50,000 hectares, is expanding 
at an extraordinary rate. The top 
producing State is Sonora, located in 
the Pacific Northwest bordering the 
United States. Sonora has 15,000 hec- 
tares of bearing vineyards plus 
roughly 5,000 hectares of nonbearing 
vineyards that will begin yielding fruit 
in 3 to 5 years. In addition, some 10,000 
to 20,000 hectares are expected to be 
planted in all varieties of grapes. 
Thus, Sonora’s output of table grapes, 
raisins, and wine is likely to double by 
the mid-1980’s. 

More than one-fourth of Sonora’s 
table grape marketings are shipped 
abroad, with the United States rank- 
ing as the principal export outlet. 
Mexico’s exports of fresh grapes are 
heaviest during June and July when 
California’s Coachella Valley — the 
earliest U.S. table grape district — is in 
peak production. 

Presently, Mexico supplies only 3 to 
5 percent of the annual U.S. consump- 
tion of table grapes and 20 percent of 
all such U.S. imports. However, these 
exports from Mexico are expected to 
accelerate during the 1980’s to the 
point where they may represent more 
than half of all U.S. table grape im- 
ports and more than 10 percent of this 
country’s annual domestic consump- 
tion. 

Over the past 50 years, Mexico’s 
grape production has risen fiftyfold, 
going from 10,000 metric tons to 500,- 
000 tons as value has rocketed from 
just $220,000 to $175 million a year. 
During the same period, expansion in 
area — paced by plantings in Sonora — 



The author is an agricultural 
economist, Horticultural and Tropical 
Products Division, FAS. 



Page 16 



Foreign Agriculture/September 1979 




has increased thirtyfold from 1,600 
hectares in 1929— and is still rising. 

As a result of favorable weather 
thus far and the dramatically larger 
bearing area, a record grape crop ap- 
pears in the offing this year in Sonora 
(the 1977 level of 150,000 tons of all 
varieties still stands). Consequently, 
Mexico’s exports of table grapes to the 
United States during June-September 
1979 should show a sharp gain from 
the 5,400 tons, valued at $3.4 million, 
shipped during 1978. 

In 1978, the absence of the usual 
cold winter, necessary for flower for- 
mation, caused a drastic drop in 
Sonora’s table-grape production as the 
harvest fell to an estimated 20,000 tons 
from 30,000 tons in 1977. Average 
yields per hectare plummeted from 
1,000 boxes (10 kilograms per box] for 
Thompson Seedless and 850 boxes 
each for the Perlette and Cardinal 
varieties to roughly 150-250 boxes for 
all three varieties. 

Despite a lower raisin output last 
year due to the smaller grape harvest, 
Sonora’s raisin production has in- 
creased over the past decade as 
growers channel larger quantities of 
Thompson Seedless table grapes into 
dried fruit production. 

Although Mexico is only a residual 
supplier of raisins to the United 
States, the flow increased following 
California’s disastrous 1978 crop. U.S. 
distributors imported 1,400 tons of the 
Mexican product, valued at $2.2 mil- 
lion. 

Mexico does not export wine, but its 
rising output has an indirect impact on 
the U.S. grape industry because Mex- 
ico’s Thompson Seedless grapes are 
often diverted from the fresh export 
market to local wine production. With 
several new wineries coming on line 
and more under construction, Mex- 
ico’s wine outturn is expanding rapid- 
ly. Wine production last year is es- 
timated at 15 million liters (4 million 
gallons) while brandy output reached 
65 million liters (15 million gallons). 

Grape areas in Sonora are con- 
centrated around the cities of Her- 
mosillo and Caborca, located about 
400 and 200 kilometers, respectively, 
south of the Arizona border. The 
climate is similar to that in Arizona, 
except Sonora has a warmer winter. 
Temperatures may fall below freezing 
in the winter, but not long enough to 
produce damaging frosts. 

Because of the hot dry weather. 



Sonora’s climate is ideal for growing 
grape varieties suited for table use, 
raisins, and dessert wines. 

In contrast, Mexico’s older vine- 
yards — southwards in the Central 
Plateau— suffer from almost constant 
rainfall from July through September. 

During the 1960’s, Sonora became 
the focal point to Mexico’s table grape 
industry by establishing table grape 
vineyards of the Thompson Seedless, 
Perlettes, Cardinals, Exotic, and Black 
Beauty varieties. Later, a local raisin 
industry was started using Thompson 
Seedless table varieties, while a 
sizable wine business was begun 



based on Caringnane grapes These 
grapes are often blended with other 
red wine varieties, such as Ruby 
Carbenet, Barbara, Grenanche, and 
Alicante. 

The region surrounding the city of 
Carborca, Sonora, became Mexico’s 
leading raisin district during the 
1970’s. 

Some Thompson Seedless grapes in 
Hermosillo are also used to make 
raisins, but untimely rains make sun- 
drying risky. Therefore, the center of 
the raisin industry moved north to 
Caborca, where the humidity is lower 
and rainfall is not a problem. D 




Mexico's table grape and raisin industries have been patterned after those in the United 
States. In above photos, grapes in California are drying in sun to produce raisins. 



Foreign Agriculture/September 1979 



Page 17 



FAS/USDA Export Promotions 

October 1, 1979 — October 31, 1980 



Location 


Date 


Type of event 


MEXICO 
Mexico City 


Oct. 1-8, 1979 


National livestock show 


BAHRAIN 

Manamah 


Oct. 15-17 


Solo U.S. exhibit — full product line, firm representation required. 


UNITED KINGDOM 
London 


Oct. 24-25 


Solo U.S. exhibit — health foods only, firm representation required. 


ERANCE 

Paris 


Oct. 27-29 


Solo U.S. exhibit — health foods only, firm representation required. 


GUADELOUPE, ANTIGUA, 
BAHAMAS November 


Sales team of 6-8 U.S. firms. 


MEXICO 

Queretaro 


December 1979 


National dairy show. 


NETHERLANDS 


Feb. 11-14, 1980 


ROKA international exhibit. 


DOMINICAN 

REPUBLIC 


February 


National livestock show. 


EGYPT 

Cairo 


Mar. 10-12 


Solo U.S. exhibit — full product line, firm representation required. 


SAUDI ARABIA 


March 


Sales team to Jiddah and Dhahran — 8-10 firms following Cairo exhibit. 


BAHRAIN 


March 


Sales team following Cairo exhibit. 


ERANCE 

Paris 


March 


Paris international agricultural show — livestock/feedstuff show. 


ITALY 

Verona 


March 


International exhibit — livestock/feedstuff show. 


MEXICO 


March 


National beef cattle show. 


[APAN 

Tokyo 


Apr. 22-24 


Red meat, poultry, and seafood show — full product lines, 
representation required, solo U.S. exhibit. 


KOREA 

Seoul 


Apr. 28-29 


Extension of Tokyo show for 20 U.S. firms. 


UNITED KINGDOM 
Brighton 


April 


HRP exhibit — U.K. agents and U.S. firms with products for 
the institutional trade. 


ITALY 

Reggio Emilia 


April 


Swine exhibit. 



Page 18 



Foreign Agriculture/September 1979 



Location 



Date 



Type of event 



PANAMA 



Panama City 


May 


Sales team. 


COSTA RICA 
San Jose 


May 


Sales team. 


NORWAY 

Oslo 


June 


Attache product display — full product line, 
firm representation not required. 


VENEZUELA 

Caracas 


July 


Solo U.S. exhibit — full product line, firm representation required. 


TRINIDAD 


July 


Sales team following Venezuela exhibit. 


BARBADOS 


July 


Sales team following Venezuela exhibit. 


BRAZIL 

Esteio 


Aug. 16-27 


International agricultural fair — livestock show. 


HUNGARY 

Budapest 


Aug. 19-Sept. 4 


69th National Agricultural and Food Industrial Show. 


JAPAN 

Tokyo 


Aug. 26-27 


Snack food show — solo U.S. exhibit, representation required. 


SINGAPORE 


Sept. 2-3 


Solo U.S. exhibit — full product line, representation required. 


GERMANY, WEST 
Munich 


Sept. 19-24 


IKOFA, international exhibit. 


ITALY 

Cremona 


September 


Dairy-livestock show. 


UNITED KINGDOM 
London 


October 


Solo U.S. exhibit — full product line, firm representation required. 


NIGERIA 

Lagos 


October 


Attache product display — full product line, 
firm representation not required. 


IVORY COAST 
Abidjan 


October 


Attache product display — full product line, 
firm representation not required. 


CANARY ISLANDS 


October 1980 


Sales team composed of firms participating in 
Lagos and Abidjan exhibits. 



' Hotel, restaurant, institutional. 

For information regarding any of these promotions contact: William F, Dobbins, Director, Export Trade Services Division, 
FAS/USDA. Telephone (202) 447-6343. 



Foreign Agriculture/September 1979 



Page 19 



West German 
Imports of U.S. 
Sunflowerseed 
Rising 







S hipments of U.S. sunflowerseed to 
West Germany have increased in 
recent years and in calendar 1978 they 
made up 76 percent of West Ger- 
many’s sunflowerseed imports from 
all sources. Most of the U.S. seed was 
crushed for oil and the meal was 
largely fed as dairy feed supple- 
ments, although a sizable share also 
was exported. 



Based on report from Office of U.S. 
Agricultural Counselor, Bonn. 



The rise in West Germany’s sun- 
flowerseed imports has been in line 
with area increases in the United 
States, which have made larger 
volumes available for export. West 
Germany’s imports of U.S. sun- 
flowerseed jumped from 77,800 metric 
tons in 1974 to 206,000 tons in 1976, and 
to a new record of 503,000 tons in 1978. 
Argentina, the only other major sup- 
plier, provided 13 percent of the 1978 
total of 650,000 tons. 

Value of the U.S. shipments 
climbed from $23.7 million in 1975 to 
$77.6 million in 1977, and to $142.0 mil- 
lion in 1978. 

The U.S. shipments put sun- 



flowerseed in fourth place on the list 
of U.S. agricultural exports to West 
Germany, following soybeans and 
products, corn, and tobacco. 

Germany’s demand for sun- 
flowerseed oil formerly was met en- 
tirely by imports, but the percentage 
has dropped in recent years. Between 
1972 and 1975, for example, about 80 
percent of the demand was met by im- 
ported oil, mostly from the USSR and 
Romania. 

As export availabilities in these two 
countries dropped off, their share of 
West Germany’s imported oil declined 
to one-third in 1977, while seed im- 
ports from all sources increased con- 
siderably. 

West German data show that as the ' 
country’s sunflowerseed oil imports 
fell, the rise in exports was almost as 
steady. A comparison of the two, in 
1,000 metric tons, follows for the years 
listed: 



Year Imports Exports 

1972 146 24 

1974 137 36 

1976 66 36 

1978 28 117 



In 1978 sunflowerseed oil produced 
by German mills exceeded domestic 
requirements and as much as 51 per- 
cent was exported, mainly to France, 
the Netherlands, and Belgium. Fol- 
lowing the three big traditional sun- 
flowerseed producing/crushing 
countries — the Soviet Union, Argen- 
tina, and Romania — West Germany 
ranked fourth among the world’s ma- 
jor sunflowerseed oil producers. 

Despite the rise in sunflowerseed 
imports, domestic use of sun- 
flowerseed oil has not expanded 
notably since 1967, right after several 
identified sunflowerseed oil 
margarines were introduced on the 
West German market. 

The West German market for sun- 
flowerseed oil products — mainly iden- 
tified margarine and a relatively small 
volume of salad and cooking oils — has 
been developed and promoted by the 
processing industry, largely by means 
of extensive market promotion ac- 
tivities. Furthermore, a general move 
by consumers to greater use of high- 
quality products and so-called natural 
foods — which usually sell well despite 
higher prices and steep price 
fluctuations — has brightened the 
image and favorably influenced the 
sales of sunflowerseed oil products. 

However, the use of sunflowerseed 
oil margarine has been retarded by a 



Page 20 



Foreign Agriculture/September 1979 



Japanese Red Meat Use Up 

Shortage of High Quality Fish and 
Changing Tastes Seen Responsible 



general stagnation in margarine con- 
sumption. 

Per capita consumption of sun- 
flowerseed oil products averaged 
about 2.2 kilograms between 1966 and 
1978. The peak was 2.6 kilograms in 
1973, the low, 2.0 kilograms in 1975 and 
1976. Per capita use recovered to 2.2 
kilograms in 1977 and to 2.3 kilograms 
in 1978. 

Although this appears small when 
compared with that of other vegetable 
oils, sunflowerseed product consump- 
tion was actually equal to more than 
one-third the total butter consumption 
figure in recent years and to almost 
one-fifth of all margarines and cook- 
ing and salad oils consumed in West 
Germany. 

One of the factors strengthening the 
relative position of sunflowerseed oil 
margarine in the spread market is the 
widening difference between the 
prices of butter and margarine. Butter 
costs about DM9 per kilogram. 
Regular sunflowerseed oil margarine 
in the good-quality category — con- 
taining 21-27 percent linoleic acids in 
the fat component — sells for 22-50 per- 
cent the price of butter. 

The price of so-called very good 
quality margarine — having more than 
28 percent linoleic acid — is from 31 to 
58 percent the price of butter. Even 
the more expensive dietetic 
margarines, which sell for DM7, are 
still 22 percent cheaper than butter. 

With the rise in sunflowerseed 
crushings for oil used in margarine, 
sizable amounts of meal remain. Com- 
mon West German dairy feed for- 
mulas may contain up to 20 percent 
sunflowerseed cake and/or meal, 
along with a number of other oil 
products. 

West Germany’s output of 
sunflowerseed cake and meal rose 
from 58,100 tons in 1972/73 to 342,900 
tons in 1977/78 

Until 1976/77, most of the meal used 
in West Germany was imported, main- 
ly from Argentina. In 1977/78, such im- 
ports were 141,600 tons, about the 
same as the volume imported each 
year since 1974/75. 

However, by 1977/78 German mills 
had increased production to the point 
they were able to export 112,600 tons 
of meal to the Benelux countries and 
Denmark. 

Between 1972/73 and 1976/77, West 
German sunflower cake and meal ex- 
ports averaged only about 25.6 tons a 
year. □ 



F ish consumption has long held a 
commanding lead over red meat 
and poultry, but the latest figure from 
the Japanese Ministry of Agriculture, 
Forestry, and Fisheries MAFF] show 
the gap is beginning to narrow. 

Red meat and poultry per capita 
consumption, based on Japanese 
April-March fiscal year (JFY) data has 
increased substantially, rising from 5 
kilograms in 1960 to 20 kilograms in 
1977. This compares with a 6-kilogram 
growth from 28 kilograms to 34 
kilograms for fish and shellfish during 
the same period. 

From 1960 to 1973, per capita con- 
sumption of red meat and poultry in- 
creased about 1 kilogram per year, but 
from 1973 to 1975, consumption growth 
almost stopped because of depressed 
economic conditions. In 1977, red meat 
and poultry consumption resumed its 
growth, because of improved 
economic conditions and possibly 
because of shortfalls in catches of 
high-quality fish. 

As a consequence, there has been a 
decline in per capita consumption of 
fish and shellfish, possibly in favor of 
red meats. 

In 1977, per capita fish consumption 
fell for the first time in a decade and 
apparently encouraged the 8.5 percent 
rise in red and poultry meat use — the 
largest percentage increase since 1971. 

Between 1970 and 1977, poultry con- 
sumption climbed by 90 percent, pork 
by 74 percent, and beef by 55 percent. 

MAFF’s food balance sheet shows 
that for JFY 1977 per capita consump- 
tion of beef rose by 10.3 percent to 4.3 
kilograms, pork by 7.3 percent to 11.8 
kilograms, and chicken by 10.5 percent 
to 8.4 kilograms. Fresh and frozen fish 
consumption was 6.7 percent lower at 
25.2 kilograms and processed fish use 
was down by 2.8 percent to 38.3 
kilograms. 

A study of processed products 
shows that pork use in calendar 1978 
was up 7.4 percent to 202,594 metric 



tons, horsemeat use up 1.0 percent to 
36,935 tons, and mutton use down 7.6 
percent to 89,551 tons. By contrast, the 
use of beef in processed products 
soared by 49.2 percent, although the 
total amount was just 11,644 tons. 

Mutton use declined because prices 
increased sharply — particularly for 
mutton from New Zealand — and there 
was a noticeable shift in demand from 
products containing mutton to those 
made entirely from pork. The in- 
creased use of beef in processed 
products follows the general con- 
sumption uptrend in beef’s favor. 

During January-May 1979, Japan’s 
chilled and frozen beef imports in- 
creased 20 percent over those of the 
same period a year ago to 49,125 tons; 
product weight, and imports from the 
United States more than doubled to 
10,594 tons. Imports from the United 
States were mainly frozen beef 
purchased under Japan’s general 
quota and by hotels under the hotel 
quota. 

Beef imports for calendar 1979 from 
all sources are forecast at 120,000 tons, 

19.000 tons expected to be shipped 
from the United States. Last year’s im- 
ports were close to 100,000 tons, with 
nearly 13,000 tons from the United 
States. 

Pork imports in the January-May 
1979 period were up 25 percent to 
49,018 tons. Much of the increase was 
accounted for by imports from the 
United States, which rose in the 
period from 8,681 tons in 1978 to 13,372 
tons in 1979. According to importers, 
most of the 1979 growth has been in 
pork loins to meet growing consumer 
demand for so-called loin hams. 

Imports of fresh chilled and frozen 
pork in 1979 are expected to total 
about 120,000 tons, compared with 
103,503 tons in 1978. 

The general beef quota for the first 
half of the 1979 Japanese fiscal year is 

55.000 tons, 15,000 tons more than the 
quota in the first half of JFY 1978. The 



Foreign Agriculture/September 1979 



Page 21 




From top: Japanese hogs on 
farm near Takasaki; Hokkaido 
University experimental 
farm; fish being moved from 
dockside to outlets at Tokyo’s 
fish market. In recent years, 
Japan's inadequate catches of 
high-quality fish may have 
caused some consumer move- 
ment to red meats. From 1960 
to 1973, per capita consump- 
tion of red meat and poultry 
increased by about 1 kilogram 
per year. Growth almost stop- 
ped from 1973-75, hut has 
again started upward. 




expected larger quota reflects the 
growing demand for beef. In recogni- 
tion of this demand and consumer dis- 
satisfaction with high retail prices, 
MAFF has ordered beef release prices 
increased to designated retail stores 
starting next fall. 

Also, for 1979, MAFF has boosted 
from 6,000 to 11,000 head the number 
of feeder cattle that may be imported 
into Japan duty free. Because quaran- 
tine spaces are limited, these imports 
will probably reduce the number of 
slaughter cattle imported in that year. 
In calendar 1978, total imports of fat 
cattle were 4,270 head. 

If the entire number of feeder cattle 
is imported in JFY 1979, slaughter cat- 
tle imports probably will not exceed 
1,500 head. Australia is again expected 
to monopolize the feeder cattle import 
market this year because of price and 
shipping advantages made possible by 
using chartered cattle shins. 

(Hide and skin imports recovered 
somewhat in 1978 to some 270,000 tons, 
but both importers and exporters 
predict a drop of about 15 percent in 
calendar 1979 because price increases 
will make hides and skins almost as 
costly as the finished product.) 

Japan’s beef and swine numbers 
have been increasingly steadily for 
some years, and MAFF surveys in 
February 1979 reveal therp were on 
Japanese farms 9.49 million head of 
hogs and 2.08 million head of beef 
animals. These totals represent in- 
creases of 8.1 percent in the number of 
hogs and 2.6 percent for beef cattle 
over the livestock numbers recorded 
in the February 1, 1978, census. 

The number of sows in the survey 
was up from the 1.093 million head 
recorded in the 1978 data to 1.618 mil- 
lion in February this year. Based on 
the 1979 rise in sow numbers, MAFF 
forecasts hog marketings this year at 
19.28 million head and pork produc- 
tion at 1.42 million tons (carcass 
weight equivalent — ewe). 

The MAFF survey indicates that 
dairy beef numbers are up 11 percent, 
while total Wagyu cattle numbers are 
down slightly. 

Beef production for 1979 unofficial- 
ly is estimated at 405,000 tons (ewej. 
However this figure may prove to be 
too low if overproduction of milk 
prompts a larger than expected 
slaughter of milk cows. — Based on 
report by Dudley G. Williams, 
Counselor for Agricultural Affairs, 
Tokyo. □ 



Page 22 



Foreign Agriculture/September 1979 





U.S. Farm Exports Up 16% 
In October-June 



E xports of U.S. farm products dur- 
ing October-June increased $3.3 
billion or 16 percent to reach a record 
high of $23.8 billion. Although exports 
were up in each of the first three 
quarters of the fiscal year (Oct. -Sept.), 
most of the increase occurred in the 
first two quarters, which were up 34 
percent and 17 percent, respectively. 

Exports in the April-June quarter of 
$7.9 billion were only 1 percent above 
those for the like quarter a year 
earlier. Higher export value stemmed 
from both higher prices and increased 
volume. Higher prices — especially for 
grains, oilseeds, meat, and hides and 
skins — accounted for 99 percent of the 
overall value increase. 

Export prices generally have in- 
creased during the 9-month period. 
Wheat export unit value increased 17 
percent and feedgrains by 6 percent. 

The soybean export unit value of 
$266 per ton was up 11 percent over 
the year-earlier value. Cotton’s unit 
value was up 10 percent. However, ex- 
port unit values for rice and dried 
beans declined 3 percent and 11 per- 
cent, respectively. 

Other export unit values showing 
substantial increases include hides 
and skins (up 58 percent), tobacco (up 
10 percent), soybean meal (up 22 per- 
cent), meat (up 29 percent), fresh 
fruits (up 20 percent), and almonds 
(up 51 percent). 

Export tonnage reached a record 
90.7 million metric tons — up 1 percent 
from the same period a year earlier. 
Increased volume was noted for 
feedgrains, rice, soybeans, soybean 
meal, vegetable oils, cotton, and 
tobacco. However, wheat volume of 
22.1 million tons was 6 percent lower 
than in the year-earlier period. 

Some reasons for the sharp increase 



This article was prepared by the 
World Analysis Branch of USDA’s 
Economics, Statistics, and 
Cooperatives Service. 



in U.S. farm exports this fiscal year: 

• Larger purchases of U.S. com- 
modities by China. 

• Stronger demand in major 
developed markets resulting from 
improved economic growth during 
most of 1979. 

• Continued large purchases by the 
Soviet Union. 

• Rapid economic growth in the 
fast-developing countries. 

• Relatively little growth in 
agricultural production in the poorer 
developing countries. 

U.S. agricultural exports to leading 
markets rose strongly, with China (up 
260 percent) and Mexico (up 51 
percent) registering the largest in- 
creases. Japanese demand remained 
strong, up 18 percent, for a total value 
of $3.8 billion, with the largest value 
increases in wheat, soybeans, and 
hides and skins. 

Demand from European Com- 
munity (EC) countries was up 
moderately, with large increases in 
shipments to the Netherlands, West 
Germany, the United Kingdom, and 
Italy. Heavier demand for soybeans, 
hides and skins, and wheat accounted 
for the growth. 

Exports to the USSR were down 19 
percent to $1.2 billion because of an 
import drop of 525,000 tons of wheat. 
Increases to China were mainly in 
grains (up 1.3 million tons) and cotton 
(up 35,000 tons). U.S. export increases 
to Mexico were primarily in 
feedgrains (up 400,000 tons) and 
oilseeds. 

The volume of wheat exports 
declined 5 percent (1.1 million tons) 
during October-June, compared with 
the same period a year earlier. The 
unit value, however, increased 
significantly (17 percent), more than 
offsetting the effect of declining 
volume. 

Wheat exports to the Middle East 
and North Africa fell short of last 
year’s 4.1 million tons. Most notable 
was the decline in shipments to 
Morocco, which has not imported U.S. 



wheat since September, but which 
took nearly 700,000 tons during 
October-June 1977/78. 

Reduced exports to Morocco, in ad- 
dition to Brazil, were examples of the 
impact on U.S. wheat export sales of 
EC wheat export subsidies. 

Elsewhere notable tonnage gains 
were realized in shipments to China 
(up 1.3 million tons), and Mexico (up 
600,000 tons). The USSR has taken 2.2 
million tons, 19 percent less than the 
year-earlier total. However, reduced 
prospects for the winter wheat crop 
probably will cause the Soviets to take 
substantially larger quantities of 
wheat during the rest of this fiscal 
year and next. 

U.S. rice exports have slowed 
somewhat in recent months but still 
remain 11 percent ahead of last year’s 
performance. Because of a preference 
for rice over wheat and somewhat 
smaller availabilities from other 
sources, U.S. rice exports to the Mid- 
dle East and North Africa increased 41 
percent, bringing the export total to 
almost 700,000 tons. 

Feedgrain exports in October-June 
advanced 3 percent over year-earlier 
levels. Unit values rose 5 percent to 
$107.46, fueling an 8 percent increase 
in value. Corn exports alone ac- 
counted for the increase, with barley, 
sorghum, and oats all recording both 
volume and value reductions. 

Feedgrain exports (virtually all 
corn) to Japan in June were 15 percent 
above the year-earlier level, but the 
October-June total is 5 percent below 
last year’s mark. 

Soybean exports slowed con- 
siderably in June after a torrid early 
pace, but are still 3 percent above the 
1977/78 cumulative total. Value in- 
creased 15 percent in October-June, 
off from the 40 percent increase of the 
October-March period. 

Brazil entered the market for U.S. 
soybeans following its crop shortfall 
and to date has purchased 78,372 tons. 
Other increases over year-earlier 
totals were in shipments to China 
(94,573 tons), Korea (171,102 tons), and 
Taiwan (261,383 tons). Japan imported 
3 percent less volume from the United 
States, but the 13 percent increase in 
unit value to $271 resulted in a 10 per- 
cent increase in total dollar value. 

Reasons for the slowdown in the 
rate of growth in soybean exports dur- 
ing recent months include the record 
Argentine harvest of 3.8 million tons, 
increased fishmeal production in 



Foreign Agriculture/September 1979 



Page 23 



U.S. Agricultural Exports: Volume By Commodity 
October-June, 1975/76-1978/79 



1977/78- 

1978/79 



Commodity 


1975/76 


1976/77 


1977/78 


1978/79 


change 




1,000 mt 


1,000 mt 


1,000 mt 


1,000 mt 


Percent 


Wheat and products 


22,252 


16,929 


23,374 


22,057 


- 6 


Feedgrains and products 


36,608 


39,190 


40,962 


42,139 


-1- 2 


Rice 


1,298 


1,567 


1,707 


1,897 


-1-11 


Soybeans 


12,990 


13,514 


16,639 


17,113 


-h 2 


Protein meal 


4,027 


3,546 


4,939 


5,045 


-1- 2 


Vegetable oils 


744 


939 


1,143 


1,203 


-L 5 


Cotton, excluding linters 


526 


836 


1,003 


1,041 


-1- 4 


Tobacco 


223 


216 


210 


242 


+ 15 


Total 


78,668 


76,737 


89,977 


90,737 


-1- 1 


U.S. Agricultural Exports: 


; Volume By Leading Market 




October-June, 


1975/76-1978/79 




1977/78- 












1978/79 


Commodity 


1975/76 


1976/77 


1977/78 


1978/79 


change 




Mil.dol. 


Mil.dol 


Mil.dol. 


Mil.dol. 


Percent 


Japan 


2,570 


3,054 


3,209 


3,815 


-M8 


Netherlands 


1,356 


1,804 


1,691 


1,851 


-1- 9 


Canada 


1,067 


1,233 


1,147 


1,257 


-MO 


West Germany 


1,292 


1,628 


1,169 


1,211 


-h 4 


Korea, Rep. of 


551 


670 


745 


1,073 


-1-44 


USSR 


1,630 


966 


1,496 


1,208 


- 19 


United Kingdom 


524 


748 


683 


858 


+ 26 


Italy 


603 


725 


729 


795 


+ 9 


China 


2 


n 


198 


713 


-1-260 


Spain 


569 


539 


634 


686 


-t- 8 


Taiwan 


420 


488 


545 


753 


-L38 


Mexico 


404 


346 


459 


693 


-t-51 


' Not adjusted for transshipments. ^ Less than $500,000. 



U.S. Agricultural Exports: Value By Commodity 



October-June, 1975/76-1978/79 

Commodity 1975/76 1976/77 1977/78 1978/79 


1977/78- 

1978/79 

change 




Mil.dol. 


Mil.dol. 


Mil.dol. 


Mil.dol. 


Percent 


Animals and animal products 












Dairy products 


92 


121 


122 


87 


- 29 


Fats, oils, and greases 


299 


421 


425 


515 


-1-21 


Hides and skins excl. furskins 


480 


636 


444 


722 


-1-62 


Meat and meat products 


455 


453 


496 


632 


-1-27 


Poultry and poultry products 


165 


215 


251 


275 


-t- 9 


Other 


161 


136 


374 


532 


-F42 


Total animals and products 


1,652 


1,982 


2,112 


2,763 


-1-30 


Grains and preparations 












Feedgrains and products 


4,634 


4,321 


4,191 


4,541 


-1- 8 


Rice 


421 


481 


636 


687 


-1- 8 


Wheat and major products 


3,516 


2,187 


2,811 


3,096 


-1-10 


Other 


110 


113 


112 


117 


-F 4 


Total grains and preparations . . . . 


8,681 


7,102 


7,750 


8,441 


-1- 8 


Oilseeds and products 












Cottonseed and soybean oil 


259 


456 


547 


681 


-1-24 


Soybeans 


2,547 


3,836 


3,976 


4,557 


-F14 


Protein meal 


631 


787 


902 


1,105 


-F22 


Other oilseeds and products 


384 


403 


614 


677 


-F10 


Total oilseeds and products 


3,821 


5,482 


6,039 


7,020 


-M6 


Other products and preparations 












Cotton, excluding linters 


629 


1,302 


1,293 


1,477 


-1-14 


Tobacco, unmanufactured 


756 


784 


855 


1,092 


-1-28 


Fruits and preparations 


541 


571 


709 


756 


-F 6 


Nuts and preparations 


140 


171 


220 


354 


-F60 


Vegetables and preparations 


717 


571 


499 


593 


-F18 


Feeds and fodders 


270 


473 


411 


561 


-F36 


Other 


198 


536 


625 


741 


-F18 


Total products and preparations . . 


3,251 


4,408 


4,612 


5,574 


-F20 



Total 17,405 18,974 20,513 23,798 -1-16 



Peru, reduced feeding in the EC of 
manioc (which requires more protein 
meal than grains], and somewhat less 
favorable soybean prices in relation to 
grain prices in the EC and other 
developed markets. 

Shipments of protein meal to 
Canada dropped 54 percent to 310,903 
tons in October-June. Likewise, Mex- 
ico took 86 percent less meal. 

U.S. exports to Eastern Europe in- 
creased substantially (41 percent), 
highlighted by shipments of 359,303 
tons to the German Democratic 
Republic — a jump of 479 percent. 

Vegetable oil exports increased 5 
percent, almost solely on the strength 
of soybean oil. This component 
realized a 14 percent increase in ton- 
nage and a 34 percent gain in value. 

Iran has been the leading U.S. ex- 
port market for vegetable oil in fiscal 
1979, replacing India. Shipments of 
this oil to Iran in October-June 
amounted to 178,110 tons (most of this 
quantity was shipped after the revolu- 
tion), a 179 percent increase over the 
year-earlier level. 

Cotton export volume rose 4 percent 
to 1,041,467 tons, boosted by increasing 
economic activity that pushed world 
cotton consumption higher and lower 
foreign production. Total value rose 14 
percent to $1.5 billion, reflecting an in- 
crease of 10 percent in cotton’s unit 
value to $1,420 per ton. 

U.S. exports to Japan advanced 31 
percent in value to $333 million, and 
exports to China jumped 61 percent to 
$157 million. 

U.S. tobacco exports rose 15 percent 
in volume during October-June to 
242,196 tons. Exports to the United 
Kingdom increased to 41,984 tons (up 
41 percent). West Germany to 19,980 
tons (up 21 percent), and Taiwan to 
13,475 tons (up 85 percent). 

Total unmanufactured tobacco ex- 
port value increased 28 percent to $1.1 
billion, while the unit value of tobacco 
rose 10 percent to $4,507 per ton. 

U.S. exports of animals and 
products increased 31 percent in value 
during October-June. Much of the in- 
crease was a result of higher values of 
hides and skins, beef, and veal. 

Meat export volume declined 1 per- 
cent from the year-earlier level. 
Larger beef shipments did not offset 
the drop in pork and variety meat ex- 
ports. Meat exports were down 45 per- 
cent to Canada and down 11 percent to 
France, but were up 27 percent to 
Japan. D 



Page 24 



Foreign Agriculture/September 1979 



FACT 

nLE 



United States and China 

The Agriculture Connection 



U.S. -China Relations 

Following establishment of the Communist Government in 
1949, China and the United States were without diplomatic 
relations for almost 30 years. In 1971, the two governments 
began a dialogue, resulting in the Shanghai Communique of 
1972. Economic lines of communication developed, and 
liaison offices were established in Washington and Beijing, 
In 1977, President Carter reaffirmed the Shanghai Com- 
munique as the basis for relationship and reaffirmed U.S. 
intentions to move toward normalization. Secretary of State 
Cyrus Vance visited China in 1977, and in the fall of 1978 
agreement was reached on full normalization. On 
December 15, 1978, it was announced that diplomatic rela- 
tions would be established January 1, 1979. The two liaison 
offices changed to Embassy status on March 1, 1979. 

Official Exchanges 

At the end of July 1978, a 30-person Chinese agricultural 
team arrived in the United States for a 6-week visit at the in- 
vitation of the Mid-America International Agri-Trade Coun- 
cil (MIATCO). While in Washington July 28, leaders of the 
Chinese group invited Secretary Bergland to visit China. 
This invitation was accepted, and Secretary Bergland led a 
team of 15 agriculturalists to China November 4-14 to dis- 
cuss trade and scientific exchanges. This led to a second of- 
ficial agricultural visit March 15-25, headed by Under 
Secretary of Agriculture Dale E, Hathaway. Seven 
members of the Hathaway team represented the nonprofit 
“cooperator” organizations that work with the Foreign 
Agricultural Service in export development. These 
representatives developed plans for continuing cooperation 
in agriculture with the Chinese. On July 7, a trade agree- 
ment was signed in Beijing, following a trip to China in May 
by Secretary of Commerce Juanita Kreps. This agreement, 
which provides a framework for expanded trade, is impor- 
tant to U.S. farmers because their products predominate in 
U.S. exports to China (71 percent of the total in 1978). 

Farming in China 

Since 1949, the Chinese have made efforts to modernize 
their agriculture. Throughout the 1950’s, production was 

Foreign Agriculture/September 1979 



organized on an increasingly larger scale, starting with the 
production team (about 40 households) and ending with the 
commune (about 4,000 households). The commune con- 
tinues today as an administrative unit, but in reality many 
production decisions are the responsibility of the produc- 
tion brigade (about 400 households) and the production 
team. Individuals make production decisions only with 
regard to the private plots they cultivate. 

Changes Since 1960 

Major efforts have been made in rural capital construction. 
These efforts started in the early 1960’s, partly in response 
to the severe production shortfalls in 1960/61. The objective 
is to insulate more effectively the agricultural sector from 
drought and other severe weather occurrences. The invest- 
ments are labor-intensive and include terracing the fields, 
construction of walls, irrigation, and land reclamation. 
Other improvements include the use of small-scale, 
semimechanized agricultural equipment and the use of 
chemical fertilizers. The principal crop is rice; other major 
crops include wheat, corn, soybeans, peanuts, cotton, and 
tobacco. Total grain and soybean production reached 304 
million metric tons in 1978 (including 137 million tons of 
rice), and total hog numbers reached 300 million. 

Decisions To Modernize 

The Chinese have plans to modernize their agriculture 
further, including increased mechanization and use of 
agricultural chemicals. During Secretary Bergland’s visit, 
the Chinese showed strong interest in U.S. agribusiness 
products and technology: (1) Agricultural machinery — 
whole plant and equipment for mechanization and irriga- 
tion: (2) Seed processing machinery — for drying, selecting, 
grading, packaging, and testing; (3) Agricultural 
chemicals — pesticides for cotton, wheat, rice, soybeans, 
corn, and fruit trees; plant growth regulators: herbicides for 
rice, cotton, corn, and soybeans: (4) Feedstuff industry — 
complete equpment for premixed feed, bulk transportation, 
pelleting, computers for feedstuff formulation, alfalfa 
dehydrating, feedstuff additives: (5) Plastics for agriculture 
and food processing — pipes for irrigation, plastics for 
fisheries and packaging; and (6) Food processing 
equipment — automated production lines for canned foods, 
beverages, and bread. 

Technical Exchanges 

The United States and China have signed an agreement on 
cooperation in science and technology and have reached an 

Page 25 



understanding on agricultural exchanges. During Secretary 
Bergland’s visit, it was agreed that it would be mutually 
beneficial to promote cooperation in agricultural 
technology, economic information, science, and education. 
Groups had previously been exchanged under the auspices 
of the National Academy of Sciences in science and 
research, farm machinery, citrus fruits, wheat, and 
vegetables. A Chinese seed delegation visited the United 
States during March, and the U.S. cooperator team, 
representing livestock, feedgrain, soybean, fruit, seed, and 
wheat cooperators visited China during March. A Chinese 
grain inspection team visited the United States in July and 
an agricultural delegation representing the northern and 
northwestern provinces — concerned with water conserva- 
tion, animal husbandry, and grasslands management — 
visited the United States during June. There have also been 
scientific exchanges on biological control of pests, animal 
health, and plant germplasm. Other areas under considera- 
tion include exchanges in economic analysis and statistics, 
forestry, agricultural engineering, improvement of grass- 
lands and management of pasturelands, cultivation of fruit 
trees, medicinal plants, and the application of remote sen- 
sing and computer technology to agriculture. 

Cooperator Agreement 

The U.S. market development cooperator team to China in 
March reached informal agreement to exchange technical 
delegations in seeds and grassland management, baking, 
feed processing, laboratory equipment, and animal 
husbandry. The Chinese wish to work closely with the 
cooperator groups in modernizing the agricultural sector, 
and they are considering additional cooperator proposals in 
the fruit and livestock sectors. 

Modernization is intended to enable the Chinese both to 
improve their diet and to reach an output of 400 million tons 
of grain by 1985. Most observers believe this grain produc- 
tion target is the maximum level the Chinese could produce 
by 1985, and say that 350 million tons is more likely, based 
on the historic rate of growth. 

1972 — A Renewal of Trade 

In the years preceding 1972, U.S. agricultural exports to 
China were zero. In 1972, a combination of poor crop 
weather in China and improving contacts with the United 
States brought the Chinese back into the U.S. market for $61 
million in farm product purchases, mostly of wheat and 
corn. The following 2 years, Chinese purchases of U.S. farm 
products expanded in a big way — to $626 million in 1973 and 
$664 million in 1974. In those years, sizable imports of grain 
continued along with substantial amounts of cotton and soy- 
beans. The Chinese also imported U.S. soybean oil in 1973 
and animal fats in both years. By 1975, however, improved 
crops in China along with trade balance considerations 
brought a sharp drop in purchases from the United States. 
Imports of U.S. farm products fell to $80 million in 1975, 
almost entirely cotton, and virtually to zero in 1976. 



Since 1977 — A New Plateau 

In 1977, the Chinese market for U.S. farm products began to 
rebound, based largely on soybeans, soybean oil, and cot- 
ton, with no imports of U.S. grains. The total for the year 
was $66 million. In May 1978, the Chinese began to buy U.S. 
wheat and corn aggressively, ending the year with 3.3 mil- 
lion tons of those two grains valued at over $400 million. Ad- 
ded to that were purchases of U.S. soybeans, soybean oil, 
cotton, and fats and tallow, for a total for 1978 of $614 mil- 
lion. 

In the first half of 1979, Chinese purchases of U.S. grains, 
cotton, soybeans, and soybean oil continued active, 
amounting to $430 million for the 6 months. Chinese 
purchases in this calendar year may total over $800 million. 

Chinese Exports 

China’s exports of agricultural commodities are an 
important means of obtaining the hard currency necessary 
for purchases of agricultural technologies and commodities. 
China exports certain agribusiness products, but these are a 
small part of its agriculture-related exports. Rice, fruits and 
vegetables, and livestock and products have been leading 
Chinese agricultural exports. Chinese exports of fruits and 
vegetables totaled $500 million in 1977, and its exports of 
live animals, meat and meat products, fish and fish 
products totaled over $700 million. 

U.S. agricultural imports from China have been insignifi- 
cant, totaling $84 million in 1978. In 1978, the major U.S. 
agricultural imports from China included, in their order of 
magnitude: Feathers and down ($26 million), bristles ($6.5 
million), cashews ($6.5 million), tea ($5.5 million) cassia oil 
($4.3 million), raw silk ($4.3 million), cashmere ($3.1 mil- 
lion), gelatin ($3.0 million), tung oil ($2,8 million), licorice 
root ($3.5 million), and cocoa ($1.7 million). 

Obstacles to Trade 

U.S. exporters meet intense competition in China. Japan, 
the European Community, Australia, and Canada are 
among these competitors. China does not have most-fav- 
ored-nation (MFN) trading status with the United States, 
and this probably has limited its access to the U.S. market. 
However, the U.S.-PRC trade agreement (now before the 
U.S. Congress) provides for MFN status and thus will grant 
China access to the U.S. market equal to that of most other 
nations. China is eligible for credit under the Commodity 
Credit Corporation (CCC) export program, but has not 
asked for it. Moreover, China’s major credit needs relate to 
projects that CCC credit does not cover. China will contract 
many of these projects with foreign investors, and has 
already been extended several billion dollars in credit by 
Japanese, British, French, and Arab banks. To date, U.S. 
bank loans to China have been minimal. However, China is 
considered very creditworthy, and U.S. banks may become 
more heavily involved in lending to the Chinese. 



Page 26 



Foreign Agriculture/September 1979 



COUNTRY 

REPORTS 



PORTUGAL 

Grain Imports Seen Reaching 
Record Levels in 1979/80 



P ortugal's grain imports 
in 1979/80 (July-Junej 
are forecast at a record 3.6 
million metric tons 
(including rice] — 400,000 
tons above those in 
1978/79 — with nearly three- 
fourths of the total coming 
from the United States. 

Both wheat and corn im- 
ports are seen surpassing 
1978/79 levels by some 200, 
000 tons each, to 2 million 
and about 1 million tons, 
respectively. An additional 

470,000 tons of sorghum and 

105,000 tons of barley and 
oats will be needed as well. 

Depending on the 
availability of Commodity 
Credit Corporation (CCC] 
financing, the United States 
might supply about 2.8 mil- 
lion tons of these imports, 
compared with 2.6 million 
tons estimated for 1978/79. 

Portugal’s grain stocks 
were drawn down during 
the current season in an- 
ticipation of recovery in this 
year’s crop. But unfavorable 
weather and continued un- 
certainty over ownership of 
land under the ongoing 
agrarian reform program 
have again cut into grain 
area and yields. As a result, 
the 1979 grain crop is 
forecast at only 970,000 tons 
(including rice), some 12,000 
tons below that of 1978. 



Planted winter grain area 
was up from last season’s 
reduced level, but 
harvested area is expected 
to decline slightly as a result 
of widespread flooding in 
early February. Current es- 
timates point to a wheat 
crop of about 210,000 tons — 
less than half the normal 
crop of more than 500,000 
tons and the worst in recent 
years. 

Excessive moisture also 
delayed spring plantings, 
mainly of corn, which is ex- 
pected to come in well 
below historical levels 
although still somewhat 
above last year’s reduced 
crop of 443,000 tons. Total 
coarse grain production in 
1979 is forecast at 660,000 
tons — up slightly from the 
previous year’s but con- 
siderably below the 1968-77 
average of about 824,000 
tons. 

While production has 
foundered, Portuguese grain 
requirements have grown 
steadily. Wheat consump- 
tion has risen about 200,000 
tons since 1974 to nearly 1.1 
million tons, largely in 
response to the return of 

750,000 people from Por- 
tugal’s former African pos- 
sessions. 

Feedgrain requirements 
have risen in line with 



Government emphasis on 
livestock expansion as a 
means of curtailing 
livestock-product imports. 

Continued expansion in 
livestock production could 
push feedgrain require- 
ments to 3.2 million tons 
(including nonfeed uses) in 
1978/79 and 3.3 million in 
1979/80, compared with 1.9 
million tons 6 years earlier. 

Prospects for significant 
improvement in Portugal’s 
grain situation are not 



A fter a year of detailed 
negotiations, the Euro- 
pean Community (EC) and 
57 African, Caribbean, and 
Pacific (ACP) countries 
have completed talks that 
should lead to renewal of 
the Lome Convention — an 
agreement covering, among 
other things, preferential 
tariff treatment in the EC 
and economic and technical 
assistance for the ACP coun- 
tries. 

If the ACP countries for- 
mally assent, Lome' II will 
take effect March 1, 1980, 
and extend until 1985. 

Disagreement over a num- 
ber of substantive issues 
prevented an early con- 
sensus on Lome' II. 

ACP countries were dis- 
satisfied with the budget of- 
fered by the EC for the new 



good — especially in Alente- 
jo, the main producing 
region. The return of some 
land to former owners is 
creating serious problems 
and the uncertainty of 
agrarian reform may well 
preclude expansion in grain 
output for several years. 
Thus, Portugal will have to 
rely on large grain imports 
to meet domestic demand. 
By James Lopes; Economics, 
Statistics, and Cooperatives 
Service. D 



Lome Convention. The EC 
had announced in May that 
the new budget would be 
equal to the Lome' I budget 
after adjustment for infla- 
tion. ACP countries had re- 
quested a budget increase of 
nearly 50 percent and 
refused to negotiate other 
sections of Lome II until an 
acceptable compromise on 
the budget had been 
reached. 

The EC finally agreed to 
increase its financial aid of- 
fer by $240 million (up 4 per- 
cent, in real terms), and to 
complement this amount 
with an additional $400 mil- 
lion for loans. 

This offer — more accep- 
table to the ACP delegates — 
will raise the Lome II 
budget to nearly $7.5 billion, 
an increase in real terms of 



EC-Lom6 Countries 

Talks Concluded 
on Lome' Extension 



Foreign Agriculture/September 1979 



Page 27 



10 percent over the previous 
budget. The new budget in 
nominal dollars is 72 per- 
cent higher. 

The AGP negotiators were 
also discontented with the 
EC’s offer of improved 
market access for some 
agricultural products. 

After prolonged negotia- 
tions, the EC consented to 
extend the list of agri- 
cultural and fishery 
products under the Stabex 
system from 34 to 44. (The 
Stabex system provides for 
automatic loans or grants to 
an ACP government when 
exports of selected products 
drop to specified levels. The 
system guarantees a 
minimum revenue for the 
exporting country, but not 
for individual exporters 
and/or producers.) 

The new products to be 
added to the Stabex list are 



peppers, cashew nuts, 
legumes, oil cake, cot- 
tonseed, beans and lentils, 
essential oils, shrimp, squid, 
and rubber. 

Several ACP countries — 
especially Malawi — urged 
inclusion of tobacco on the 
Stabex list, but EC officials 
concluded that such a move 
would inordinately disrupt 
the EC market. The agree- 
ment to omit tobacco is 
viewed with relief by U.S. 
tobacco producers, whose 
exports otherwise could 
have been hurt. 

Special provisions have 
also been made for ACP ex- 
ports of farm products sub- 
ject to the EC’s Common 
Agricultural Policy. These 
are eligible for reduced 
levies and/or quota restric- 
tions. For example, ACP 
beef enters the EC under 
concessionary quotas. 



During Lome II negotia- 
tions, the EC offered a quota 
on ACP beef of 30,000 tons 
per year — an increase of 
3,000 tons or 11 percent over 
the Lome I beef quota. 
Because of EC animal 
health restrictions, 
however, only four ACP 
countries — Botswana, Swa- 
ziland, Kenya, and 
Madagascar — are eligible to 
ship beef to the EC. 

Other trade concessions 
were agreed upon for corn, 
tomatoes, carrots, onions, 
asparagus, and passion 
fruit. 

An important step in 
cooperation is the EC’s 
agreement to establish an 
Agricultural and Rural 
Technical Center to 
promote cooperation 
between the EC and ACP. 

Important economic in- 
novations include establish- 



ment of a new Stabex for 
mineral products and a 
guarantee against ex- 
propriation by ACP govern- 
ments of EC investments. 

The Stabex for mineral 
products will allow ACP 
mineral producers to take 
advantage of very low in- 
terest loans (1 percent) from 
the EC in the event that a 
crisis should force an ACP 
producer to reduce exports 
to the EC by more than 10 
percent. 

Because some ACP repre- 
sentatives were reluctant to 
accept the Lome II package, 
the agreement was made on 
an ad referendum basis and 
is to be confirmed on a date 
to be set by a Council of 
Ministers selected from 
ACP countries. — By Diane 
L. Pa mess; Economics, 
Statistics, and Cooperatives 
Service. □ 



Greece 

EC Accession 
Treaty Signed 
In Atnens 



T he accession treaty that 
confirms Greece as the 
10th member of the Euro- 
pean Community (EC) was 
signed May 28 in Athens and 
ratified shortly thereafter 
by the Greek Parliament. 

Accession is not expected 
to hamper Greek imports of 
U.S. farm products — mostly 
grain — but may increase the 
country’s production of 
tobacco, cotton, fruits, and 
vegetables that compete 
with U.S. products, par- 
ticularly in EC markets. 

The next step to be taken 
before Greece’s accession to 
the EG can become effective 
will be ratification of the 
treaty by the legislative 
bodies of the present EC 



members (Belgium, Den- 
mark, France, Ireland, Italy, 
Luxembourg, Netherlands, 
United Kingdom, and West 
Germany). 

Negotiations for Greece’s 
entry into the EG focused on 
Greek acceptance of the EG 
treaties (and legislation 
based on these treaties) that 
are subject to transitional 
measures for resolving ad- 
justment problems for 
either side. 

The negotiations, which 
extended from July 1976 to 
April 1979, resulted in es- 
tablishment of a general 5- 
year transitional period for 
Greek accession. 

Two important exceptions 
to this general agreement 
are a 7-year transitional 
period for free movement of 
Greek workers within the 
enlarged EG and a 7-year 
transitional period for 
Greece’s exports of fresh 
and processed tomatoes, 
and fresh and preserved 
peaches. 

The EG’s transitional 
measures for the agri- 



cultural sector will be 
primarily concerned with 
progressive elimination of 
residual customs duties on 
Greek imports of EG 
products, and alinement of 
the Greek tariff with the 
EG’s Gommon Customs 
Tariff (CCT). 

Greece’s transitional 
measures will relate to 
alinement of domestic 
prices with those of the EC. 
During the transitional 
period, price differences 
between Greek and EG 
products will be compen- 
sated for by a system of ac- 
cession compensatory 
amounts (AGA’s). Special 
transitional compensatory 
mechanisms will be applied 
to selected fresh fruits and 
vegetables. 

Gertain Greek national 
aids to agriculture that have 
no exact counterparts in the 
EG’s Gommon Agricultural 
Policy (GAP) — including 
direct payments to 
producers of various hor- 
ticultural crops and input 
subsidies (seed, machinery. 



fertilizer, feedgrain) — will 
be phased out during the 
transition period, while the 
CAP price-support/market- 
intervention system is put in 
place. 

To' insure that Greece 
receives as much from the 
EG’s common funds during 
the transition period as it 
contributes in import duties 
and variable levies col- 
lected on Greek imports, the 
EG has agreed to supply 
GAP price supports for 
Greek olive oil production, 
beginning with the 1980 
crop, and has allocated $33 
million for cotton price sup- 
port in the year following 
accession. 

Measures to support 
Greek raisin and dried-fig 
production by incorporating 
those products in the EG’s 
GAP for processed fruits 
and vegetables will be in 
place in the fall of 1981, with 
a tentative budget of $13 
million. 

The bulk of U.S. farm ex- 
ports to Greece are in the 
livestock and poultry feed 



Page 28 



Foreign Agriculture/September 1979 



Czechoslovakia 

Grain Shortfall May Lead 
To Increased Imports From U.S. 



ingredients category — 
chiefly corn (valued at $104 
million in 1978) and soy- 
beans and meal ($29 million 
in 1978). 

Greek soybean imports 
have been expanding rapid- 
ly, and should continue to 
do so under the EC import 
regime, since soybeans will 
not be subject to duties or 
import and marketing con- 
trols. 

Corn and other feedgrains 
imported from non-EC 
countries will be subject to 
variable levies, which is 
likely to increase the overall 
cost of livestock production 
and to bring about shifts in 
feeding practices, such as 
wider use of protein meals. 

Greece’s membership in 



the EC could have a 
beneficial effect on its 
overall agricultural produc- 
tion and competitive poten- 
tial, tempered with such 
resource and infrastructure 
constraints as arable land, 
water, transport, and labor. 

Greece produces a 
number of agricultural 
products that compete with 
U.S. exports to Europe, in- 
cluding tobacco, cotton, 
raisins, table grapes, 
lemons, canned peaches, 
and fruit cocktail. Expanded 
Greek production of any of 
these crops could displace 
U.S. sales to the present 
nine EC members. — By 
Diane L. Parness; 
Economics, Statistics, and 
Cooperatives Service. □ 



C zechoslovakia’s grain 
production this year 
may well be one of the 
poorest in recent years, put- 
ting a decided crimp on the 
country’s drive to achieve 
self-sufficiency in grain 
production. The shortfall is 
expected to lead to an in- 
crease in grain imports, par- 
ticularly from the United 
States. 

The weather-damaged 
grain crop could fall to just 
above 9 million tons in 1979, 
compared with a record 
harvest of 10.9 million tons 
in 1978. The planned output 
of the country’s grain crop 
was targeted at 11.2 million 
tons this year. The produc- 
tion dropoff this season may 
force Czechoslovakia to im- 
port nearly 2 million tons of 
grain during 1979/80 and to 
reduce somewhat its level of 
livestock feeding of grains. 

The winter grain crop suf- 
fered severe damage and 
more than 10 percent of the 
fall-sown winter wheat had 
to be plowed under and 
resown to spring grain. In 
addition, the hot and dry 
weather that started in early 
May and lasted until mid- 
June also was damaging to 
the spring-sown grain crops, 
with the exception of corn, 
which appears to have 
benefited from the mid-June 
rains. Harvesting of small 
grains was not expected to 
be completed until the last 
of August. 

Czechoslovakia’s drive to 
achieve self-sufficiency in 
grain production so far has 
met only with moderate suc- 
cess. As the country’s 
production of grain has in- 
creased, demand for 



livestock feed has also risen. 

As a result, Czechoslo- 
vakia has continued to im- 
port growing quantities of 
protein feeds (corn) and 
meals (soybean meal), 
chiefly from Western 
sources. It appears that this 
trend will be difficult to ar- 
rest during 1979. 

In anticipation of the poor 
grain harvest, Czechoslo- 
vakia already has con- 
tracted for about 100,000 
tons of U.S. wheat for 
delivery during the 1979/80 
marketing year. Further 
purchases of grain may de- 
pend on the harvest and on 
credit arrangements. 

The disappointing crop 
prospects in East European 
countries and the Soviet 
Union as well suggest that 
Czechoslovakia will rely 
more heavily on Western 
nations — particularly the 
United States — for grain im- 
ports in the 1979/80 
marketing year. 

Total 1979/80 Czech grain 
imports from the United 
States could total above 1.0 
million tons. During 1978/79, 
Czechoslovakia imported 
about 400,000 tons of corn 
from the United States, up 
from nearly 300,000 tons of 
U.S. corn imported the 
previous year. 

In addition to grain im- 
ports from the United 
States, Czechoslovakia nor- 
mally takes between 600,000 
and 800,000 tons from its 
CEMA partners, the USSR, 
Hungary, and Romania un- 
der long-term delivery 
commitments. — Based on 
reports from Nicholas M. 
Thuroczy the U.S. 
Agricultural Attache, Vienna 




Top, workers in Skydra, Greece, preparing peaches for canning. 
Bottom, bales of cotton awaiting shipment in Greece. 



Foreign Agriculture/September 1979 



Page 29 




United Kingdom 

New Tory Government Pro-Farmer, 
Pro-European 



B ritain’s new Conser- 
vative Government, led 
by Margaret Thatcher, is ex- 
pected to take more of a so- 
called pro-European view 
than its predecessor in 
terms of European Com- 
munity (EC) agricultural 
policy, according to several 
speeches by Peter Walker, 
Britain’s new Minister of 
Agriculture. 

This implies a departure 
from the rigidity of Britain’s 
previous attitude towards 
increases in Common 
Agricultural Policy (CAP) 
farm support prices. The 
former Labor Government 
wanted prices frozen for 4 
years — a view partly shared 
by the Conservatives in the 
past. 

However, the present 
Tory Government has 
departed somewhat from 
this position by supporting a 
moderate (average 1.2 per- 
cent in terms of the new 
European Currency Unit) 
general hike in EC farm sup- 
port prices for 1979/80, 
although insisting on a 
freeze in dairy prices. 

In addition to a 
philosophy of cooperation 
on the price issue, the new 
U.K. Government has 
pledged to support the 
farmer, departing somewhat 
from the strong consumer 
orientation of the previous 
Government. 

The present Government 
contained in its manifesto a 
promise to the farmer of 
“parity of opportunity’’ 
through green pound 
devaluation. Minister 
Walker, in a recent debate 
in the House of Commons, 



declared that “the U.K. 
green pound will be ad- 
justed in gradual steps to 
parity with Continental EC 
partners during the next 4-5 
years.’’ 

The gap between farm 
prices in the United 
Kingdom and West Ger- 
many for some commodities 
exceeded 40 percent for a 
period last year. Prior to the 
May election, the EC Coun- 
cil of Ministers agreed to the 



Chile 

Bumper Crops 
May Cut 1979 
Grain Imports 



B umper crops of wheat, 
corn, and rice, mostly 
the result of record yields 
on increased areas, may cut 
Chile’s wheat and corn im- 
ports in 1979. In the case of 
rice, the high production 
level may make the country 
a net exporter. 

While not a record, 
Chile’s final wheat-yield es- 
timate was higher than 
previously set because dry 
conditions in much of 
Southern Chile late in the 
growing season apparently 
favored crop development 
and harvesting, according- to 
Max F. Bowser, U.S. 
Agricultural Attache', San- 
tiago. 

The result was a wheat 
production level close to the 
1-million-ton mark, a 
volume that could help 
Chile cut its wheat imports 



U.K. Labor Government’s 
request to devalue the green 
pound by 5 percent. In 
response to a request from 
the new Tory Government, a 
further devaluation of this 
magnitude went into effect 
in July for milk, beef, pork, 
and sugar, and at the start of 
the next marketing year, for 
all commodities. 

The effect of these 
devaluations is not only to 
raise British farm prices vis- 
a-vis the European unit of 
account, but also to reduce 
Monetary Compensatory 
Amount (MCA) subsidies on 
imports. 

The pro-farmer attitude of 
the Thatcher Government 
should encourage the ailing 
pig industry, which only 
recently has shown signs of 
revitalization after several 

to the 700,000-800,000 ton 
range. Also, Chile will 
probably reduce stock 
levels in an effort to keep at 
a minimum its payments for 
wheat imports, currently 
under upward price pres- 
sure. 

Both corn and rice yields 
were estimated at record 
levels and in the case of 
corn, production also hit a 
new high. Rice, and to some 
extent corn, benefit from ir- 
rigation throughout the 
growing season. 

The 1979 corn production 
estimate of 489,270 tons is 
about 90 percent larger than 
the 1978 level of 256,880 tons 
and 38 percent larger than 
the previous record of 355, 
320 tons in 1977. 

Rice production is of- 
ficially estimated at 181,170 
tons, although trade sources 
indicate the yield and 
production levels may be 
somewhat smaller than the 
Government’s figures. 

A cut in Chile’s wheat im- 
ports to 800,000 tons in 1979 
would mean a reduction of 
150,000 tons from the 
volume imported in 1978, of 
which the United States 



years of stagnation. Pig 
producers in the United 
Kingdom had been hard hit 
by bacon imports from Den- 
mark, Ireland, and Holland, 
which have benefited from 
what British farmers see as 
a distortion of competition 
resulting from the method of 
computing MCA’s. 

Leaders in the bacon in- 
dustry still would like the 
Government to continue to 
press the EC to change the 
method of calculating 
MCA’s for their benefit — 
and warn of possible 
closures of some bacon fac- 
tories. 

Nevertheless, current 
Government policy posi- 
tions have been partly 
responsible for more op- 
timism among U.K. 
producers. 

provided approximately 
900,000 tons. With an f.o.b. 
Gulf price of $175 per ton for 
No. 2 Hard Red Winter 
wheat, the c.i.f. Valapa- 
raiso, Ghile, price would be 
about $205 per ton, 
representing a potential im- 
port savings of $30.8 million. 

Significant corn imports 
are unlikely in 1979 because 
of record production. With a 
Valaparaiso price of about 
$155 per ton, these reduced 
imports represent a poten- 
tial savings of about $31 mil- 
lion. 

The sharp increase in 
1979’s rice output probably 
will enable Chile to export a 
sizable volume of rice this 
year, although it may have 
to import some long-grain 
rice. The potential net trade 
balance could be in the 
neighborhood of $4-$5 mil- 
lion. 

In 1978, because Argen- 
tina filled the bulk of Chile’s 
corn requirements, the 
United States supplied only 
about 20,000 tons of Chile’s 
imported corn. 

'The last time Chile im- 
ported rice from the U.S. 
was in 1974. □ 



Page 30 



Foreign Agriculture/September 1979 



Other policy intentions of 
the present Thatcher 
Government are to find 
ways of minimizing 
wasteful expenditures of 
the CAP, particularly since 
the United Kingdom’s con- 
tributions to the EC budget 
in the form of customs 
receipts, agricultural levies, 
and value-added tax (VAT] 
receipts far exceed the 
benefits received in the 
form of CAP price supports 
and MCA’s. 

One aspect of this policy 
direction is the United 
Kingdom’s desire to cut 
down on market interven- 
tion to maintain high 
minimum producer prices, 
which — with the cost of sur- 
plus storage and disposal 
programs — make up a large 



part of the EC budget at the 
present time. 

Thus the EC Council of 
Agricultural Ministers’ deci- 
sion to freeze milk prices in 
European units of account 
for the coming year could be 
counted a “victory” for the 
United Kingdom since the 
cost of financing the surplus 
in dairy products normally 
takes a heavy 40 percent of 
common agricultural budget 
expenditures. 

U.K. milk and milk 
product prices automatical- 
ly increase for the new 
marketing year anyway 
because of the latest 5 per- 
cent devaluation of the 
green pound. — By Marshall 
H. Cohen; Economics, 
Statistics, and Cooperatives 
Service. D 



Indonesia 

Higher Duties 
Affect Imports of 
U.S. Food Products 



E ffective April 23, 1979, 
Indonesia began to ap- 
ply a specific duty rather 
than ad valorem duty on 211 
consumer items. Included 
were 44 food products, 
representing $35.6 million of 
imports in 1977. Imports 
from the United States of 
those food items amounted 
to $8.4 million, and included 
meat, poultry, fresh and 
processed fruits, cereal 



products, and beverages. 

The Indonesian action 
results in a substantially 
higher effective duty on im- 
ports. The Indonesian Im- 
porters Association es- 
timated the average duty in- 
crease at 50 percent, but 
many items were raised 
considerably more. For ex- 
ample, meat products were 
boosted 400 percent and 
fresh fruit over 100 percent. 

The official justification 
for the action was the need 
to protect domestically 
produced consumer goods 
and to simplify the calcula- 
tion of import duty rates. 
The new duty structure is 
designed to curtail reported 
customs irregularities. — By 
Dewey Pritchard, Inter- 
national Trade Policy, FAS. 



Canada 

Oilseed Production Soaring 
to New Records 




The Canadian landscape is made bright by a rape field in bloom. 



P roduction of all of 
Canada’s oilseeds are 
expected to expand in 
1979/80 with rapeseed, flax- 
seed, and soybeans hitting 
new records. Soybean out- 
turn may jump by 27 per- 
cent, rapeseed by 30 per- 
cent, and flaxseed by nearly 
100 percent. However, the 
jump in production may not 
be reflected in higher ex- 
ports of some of the 
oilseeds. 

Largely responsible for 
the larger outturns were low 
comparative wheat and 
barley prices and the oppor- 
tunity for immediate cash 
returns from rapeseed, 
which caused many farmers 
to switch some land from 
grain to oilseeds — mainly 
rapeseed. 

Their expected marketing 
opportunities boosted area 



not only for rapeseed but 
also flaxseed, soybeans, 
sunflowerseed, and mustard 
seed. 

Large carryovers are ex- 
pected by 1980 particularly 
of rapeseed and flaxseed. 

Some analysts believe 
that unless there is an ex- 
ceptionally strong oilseed 
flow to the Japanese market, 
and a better relationship 
between the Canadian dol- 
lar and the Japanese yen, 
lower prices in this primary 
Canadian market may be in 
the offing. They further 
think that if Canadian and 
world economies continue 
to weaken, volume and 
price levels of oilseed ex- 
ports to all markets may 
drop. 

Rapeseed production rose 
from 3.4 million metric tons 
in 1978/79 to a currently 



forecast 4.5 million in 
1979/80, while seeded area 
climbed to an estimated 3.3 
million hectares in 1979/80 
from 2.8 million in 1978/79. 

Canada’s rapeseed yields 
have been rising in recent 
years, largely because of 



improved production 
techniques. Farmers are us- 
ing more fertilizer and have 
learned that rapeseed 
grown in stubble fields will 
yield as much as that grown 
on fallow land, provided 
fertilizing is adequate. 



Foreign Agriculture/September 1979 



Page 31 



Exports of Canadian 
rapeseed are expected to 
reach 1.7-1. 8 million tons in 
1978/79, with Japan taking 
over 1 million tons, and In- 
dia and Europe taking some 

200.000- 250,000 tons each. 
The remaining major 
markets of North Africa, 
Korea, and Bangladesh col- 
lectively will probably take 
about 100,000 tons. 

Rapeseed exports in 
1979/80 are expected to be 
in the same range as a year 
earlier. 

Canadian producers ex- 
pect Japan’s imports to rise 
from the 1-million-plus-ton 
level of 1978/79 to some 1.5 
million tons this year. 

Canada’s rapeseed 
crushing activity has 
utilized nearly all of the 
country’s mill capacity dur- 
ing the last 6 months, and 
the year’s crushing level — at 
825,000 tons — will be slightly 
less than the industry’s 900,- 
000-ton capacity, and well 
ahead of 1978/79 crushings 
of 750,000 tons. 

New crushing mills com- 
ing on line include one each 
in Alberta and Ontario 
Provinces. About 40 percent 
of the vegetable oil and 25 
percent of the meal con- 
sumed in Canada comes 
from rapeseed. 

Flaxseed area and 
production are estimated to 
have increased by about 95 
percent each. Planted area 
almost doubled to slightly 
more than 1 million hectares 
in 1979/80 from the previous 
year’s level, while output is 
seen climbing from 559,000 
tons to nearly 1.1 million 
tons. Farmers increased 
their sowed area because 
unfavorable weather earlier 
in the season precluded the 
planting of wheat. 

Flaxseed crushing 
capability is limited to less 
than three mills and official 
statistics are not released. 
However, it is unofficially 
estimated that meal produc- 
tion has remained stable at 

35.000- 38,000 tons a year in 
recent years. Most of this 



output goes to the export 
market — primarily to Japan 
and Europe. 

Prompted by strong 
prices, soybean producers 
in Ontario boosted area 
from 285,000 hectares in 
1978/79 to 316,000 hectares 
in 1979/80, and production is 
expected to climb to 656,000 
tons from 516,000. Produc- 
tion has been favorably in- 
fluenced by strong market 
prices, the use of improved 
soybean varieties, and a 



F ood tradesmen from 11 
countries and emirates 
on the Arabian Peninsula 
are being invited to attend 
an FAS trade-only exhibit of 
U.S. food products, 
scheduled for October 15-17, 
at the Bahrain Hilton, 
Manamah, Bahrain. 

Importers, wholesalers, 
and others in the food trade 
from the host country, as 
well as from Saudi Arabia, 
Qatar, Kuwait, and the 
seven emirates making up 
the United Arab Emirates 
are being invited to send 
representatives to the ex- 
hibit. 

An FAS Trade Develop- 
ment Officer has made a 
field survey of the city, its 
facilities, and the food re- 
quirements of Bahrain and 
the surrounding area; infor- 
mation packets have been 
sent to U.S. food processors 
and exporters. 

Bahrain is both an 
agricultural importer and 
entrepot/reexporter, serv- 
ing as distribution center for 
most of the U.S. foods that 
find their way to the 
countries and emirates on 
the Peninsula. Bahraini 
agricultural imports are 



decline in output of white 
beans. 

Canada imports more soy- 
beans than it exports, most 
of them from the United 
States. In 1978/79, imports 
were 392,000 tons and ex- 
ports were only 115,000 tons. 
In 1979/80, imports are ex- 
pected to be 330,000 tons and 
exports 136,000 tons. 

A new crushing mill will 
go on line in 1979/80. 
Domestic crushing is ex- 
pected to climb from 785,- 



mostly grains and grain 
products, meat products, 
and processed foods. 

A large part of these come 
from the United States and 
in 1978 included rice, 
beverage bases, fats and 
oils, canned vegetables, 
frozen vegetables and fruit 
and vegetable juices, 
poultry meat, beef and beef 
byproducts, and snack 
items. Other U.S. farm 
products shipped to the 
Peninsula included wheat 
flour, eggs, dairy products, 
fresh fruits, popcorn, and 
beans. 

U.S. farm product exports 
to Bahrain rose from $5 mil- 
lion in 1977 to $6 million a 
year later. Saudi Arabia 
took $315 million worth of 
U.S. food products, versus 
$171 million in 1977, and 
Qatar imported about $5.4 
million, compared with $1.6 
million in 1977. U.S. 
agricultural exports to the 
United Arab Emirates were 
valued at $31.0 million in 
1978 compared with $12.5 
million in 1977, while the 
comparative figures for 
Kuwait were $20.6 million in 
1978, $16.0 million in 1977. 

All of the countries and 



000 tons in 1978/79 to 825,- 
000 tons a year later. 

Canada’s 1979/80 sun- 
flowerseed production is 
expected to climb to 171,000 
tons from 114,000 tons in 
1978/79, a rise of 50 percent, 
largely because of a switch 
to U.S. hybrids. Area also 
has increased by almost that 
much— to 130,000 hectares. 
— Based on a report by 
Evans Browne, Assistant 
U.S. Agricultural Attach^, 
Ottawa. □ 



emirates on the Peninsula 
have certain practices in 
common that tend to ease 
the task of selling to im- 
porters there. In most cases, 
trade is conducted without 
government control. Import 
licenses generally are not 
required, although in 
Kuwait the Government ex- 
cercises a certain measure 
of control. 

Generally, imports of 
pork and pork products are 
controlled or banned and li- 
quor imports are barred. No 
foods shipped to the Penin- 
sula may contain any 
products of Israeli origin, 
nor may U.S. exports be 
shipped through Israel. 
Shipments of fresh or frozen 
meat and poultry must be 
accompanied by statements 
that the animals were 
slaughtered in accordance 
with Moslem law. 

Firms or individuals in- 
terested in participating in 
any future exhibits — or in 
any other FAS food promo- 
tion activity overseas — 
should write to the Director 
of the Export Trade Services 
Division, FAS, Washington, 
D.C. 20250, telephone (202) 
447-6343. □ 



Bahrain 

Arabian Peninsula Food Show Set For October 15-17 



Page 32 



Foreign Agriculture/September 1979 



TRADE 

BRIEFS 



U.S. Share Growing 
In U.K. Cotton Market 


The U.S. cotton market share in the United Kingdom increased sharply 
during the first 9 months of the 1978/79 marketing season, accounting for 
16 percent of U.K. cotton imports, compared with a 9-percent share during 
the same 1977/78 period . . . British imports of U.S. cotton in this 1978/79 
period amounted to 33,882 bales (480 lb net], compared with 23,993 bales 
during the comparable 1977/78 period . . . the gain this season makes the 
United States the third leading cotton supplier of the United Kingdom — 
behind the USSR and Turkey . . . for the entire 1977/78 marketing year 
(August-July) , 12 percent, or 61,086 bales, of U.K. cotton imports came from 
the United States. 


Japan Plans To 
Build Grain Elevator 
In Louisiana 


Ze-Noh, Japan’s national ag-coop federation, is planning to build an export 
grain elevator near Ama, Louisiana . . . the $55-million elevator will 
feature a silo capacity of 100,000 tons, with a loading capability of 20,000 
tons daily . . . the project will add another link in Ze-Noh’s worldwide 
chain of facilities and ocean vessels, which its trading company (Unicoop] 
uses to help move feedstuffs from export sources to Japanese farmers. 


U.S. Aid Program 
To Egypt Called 
‘Largest’ Ever 


“We are mounting in Egypt the largest sustained economic development 
effort ever mounted by the United States. It is larger, even measured in 
constant dollars, than our Marshall Plan and Vietnam aid program,” 
declared Joseph C. Wheeler of the Agency for International Development. 
Wheeler heads AID’s Near East program . . . speaking at an “Egypt Up- 
date” symposium in New York recently, Wheeler said that by September 
30 the United States will have obligated $4.3 billion since 1974 and will 
have spent about $2.4 billion . . . “We are obligating $1.05 billion a year,” 
he said. 


New Dates for Paris 
Health Food Show 


Dates for the FAS-sponsored health food show in Paris have been changed 
to October 27-29 from the original dates of October 17 and 18 . . . the Paris 
show now follows the FAS show in London that is scheduled for October 
24 and 25. 


U.S. Sunflowerseed 
Oil Exports 
To Japan Up 


U.S. sunflowerseed oil is beginning to find its way to Japan in an increas- 
ing volume . . . though negligible last year, these exports totaled 1,913 
metric tons, worth $1.3 million during January-June 1979 . . . overall, U.S. 
exports of sunflowerseed oil are running at 20,240 tons, valued at $13.2 mil- 
lion, compared with 15,915 tons worth $10.2 million during the same 1978 
period . . . the leading export markets are Venezuela, Poland, and Iraq. 



Foreign Agriculture/September 1979 



Page 33 



India Taking More 
Malaysian Palm Oil 


Over the year’s first half, India’s orders for Malaysian palm oil have in- 
creased spectacularly . . . through June, India had placed orders for 
281,216 tons of palm oil and related products from Malaysia . . . during the 
first 4 months of the year. Peninsular Malaysia produced 590,945 tons of 
crude palm oil, an increase of about 57 percent over the corresponding 
1978 period when drought greatly reduced output . . . full-year production 
now is estimated at around 2 million tons, compared with 1.64 million tons 
a year earlier. 


Canada’s Pork Exports 
To Rise Sharply 


For the first time since 1973, Canada could become a large net exporter of 
pork in 1979 with shipments estimated in the range of 40,000 tons, carcass 
weight . . . the combination of a sharp reduction in imports — especially 
from the United States — and a significant increase in exports (both spur- 
red by an expected record pork production] is responsible for the outlook 
of a more favorable trade balance in pork. 


U.S. Gains Second 
Place In Austria’s 
Rice Market 


The United States has moved to second place in the Austrian rice market, 
even though America rice continues in the top price brackets . . , this gain 
testifies to the effectiveness of the U.S. Rice Council’s market develop- 
ment program of building an image of superior quality for U.S. branded 
long-grain rice . . . Austria does not produce rice, and imports of this com- 
modity are liberalized and duty-free . . . historically, the major supplier of 
regular milled rice has been the European Community. 


Japan Plans To 
Open Wholesale 
Market For Beef 
And Pork Cuts 


Japan’s first wholesale market to deal in beef and pork cuts is scheduled to 
begin operating in early 1981 and will be located near Tokyo . . . the new 
market, called the Japan Meat Distribution Center, is expected to help 
rationalize Japan’s oft-criticized pricing and distribution system for meat 
. . . prices will be published daily. 


Philippines Increasing 
Sales Of Rice 


Rice exports by ihe Philippines are up sharply, with total sales so far this 
year of 150,000 tons to Indonesia, 30,000 tons to Brazil, 25,000 tons to 
Malaysia . . . during the 1978/79 marketing year, the Philippines exported 
14,000 tons of rice to Indonesia and nearly 40,000 tons to Malaysia . . . gains 
in rice production enabled the Philippines to resume rice exports in 1977 
/78 for the first time in almost a decade. 


Paraguay Intends 
To Join lie 


The Government of Paraguay has notified the International Institute for 
Cotton that it is sending an application to join IIC . . . support for IIC also 
has been provided by the U.S. cotton industry as the American Cotton 
Shippers Association, AMCOT, the National Cotton Council, including the 
Oscar Johnson Cotton Foundation and the Cotton Foundation, and the Cot- 
ton Board and Cotton Incorporated have pledged $350,000 for IIC’s ac- 
tivities in 1979 ... in response to a request for additional funds for pro- 
gram activities in 1980, the American Cotton Shippers Association and 
AMCOT have pledged an additional $100,000 and $37,500, respectively. 


Page 34 


Foreign Agriculture/September 1979 



WORLD 

AGRICULTURAL 

DAYBOOK 



September 



Trade/Technical Team Trips 



U.S. Teams Overseas 



Date 


Team 


To 


4-13 


Tanners Council 


Paris Leather Show 


6-27 


U.S. meat 


Belgium, Denmark, 
W. Germany, U.K. 


8-26 


Feed protein (Natl. 
Renderers Assn.) 


Japan, Korea, Taiwan, 
Philippines. 


10-21 


Feed protein (Natl. 
Renderers Assn.) 

Foreign Teams 


Egypt, Poland, Hungary, 
German Democratic Rep. 

in the U.S. 


Date 


Team 


To 


Aug. 20- 


Taiwanese wheat 


California, Oregon, Colorado, 


Sept. 15 


industry 


Nebraska, Minnesota 


Aug. 22- 
Sept. 2 


Greek poultry feed 


Georgia, California 


Late Aug.- 


Brazilian rice 


Texas, Louisiana, 


early Sept. 


cooperative 


Arkansas, Tennessee 


Aug. 24- 
Sept. 10 


Tunisian wheat trade Illinois, North Dakota, 

Idaho, Minnesota, Kansas, 
Washington, D.C. 


Early 

Sept. 


Italian farmers 


California, Oregon, Colo- 
rado 


2-16 


Argentine and 
Chilean Seed 


Minnesota, Oregon, Texas, 
Washington, D.C. 


2-16 


Czechoslovak seed 


Illinois, California, Oregon 


2-25 


Taiwanese feed and 
livestock 


California, Nebraska, Illi- 
nois, New York, Louisiana, 
Washington, D.C. 


5-26 


Taiwanese soybean 
technicians 


California, Minnesota, Illinois, 
New York, Missouri, Ten- 
nessee, Louisiana, 
Washington, D.C. 


7-21 


Egyptian pulse 


Washington, Oregon, Idaho, 
California, Wash., D.C. 


8-15 


W. German 
journalists (peanut 
industry) 


Georgia, Virginia, 
Washington, D.C., New York 


11-18 


French corn 
specialists 


Iowa, California 


15-Oct. 4 


W. German margarine 
producers 


Illinois, Missouri, Georgia, 
Ohio, Washington, D.C. 


15-30 


Japanese seed 


Oregon, Idaho, Minnesota, 



California, Wash., D.C. 



16-30 Italian agricultural Indiana, Illinois, California, 

journalists Louisiana, Washington, 

D.C., New York 

In Sept. USSR poultry To be set. 

(American Soybean 
Association) 



Trade Fairs/Exhibits 



Date 


Event 


Location 


8-13 


ANUGA (hotel, 
restaurant, insti- 
tutional) food 
exhibit 


Cologne, W. Germany. 


17-20 


Food America ’79 


Edinburgh and 
Manchester, U.K. 


17-30 


U.S. food promotion 


Hong Kong 


20 


California wine 
tasting 


The Hague, 
Netherlands 


21-30 


International Dairy 
Cattle Fair 


Cremona, Italy 


28-Oct. 1 


Dairy cattle fair 


Torrelavega, Spain 


Meetings 




Date 


Organization and location 



3-7 European Maize Congress, Cambridge, U.K. 

3- 14 UNCTAD Interim Committee on Common Fund 

Negotiations, Geneva. 

4- 7 World Food Council, Ottawa. 

10-14 UN Committee of the Whole, New York. 

12-14 U.S. -Brazil Subgroup, Washington, D.C. 

12-14 OECD Fruit and Vegetable Working Party, Paris. 

17-18 OECD Joint Working Party, Agriculture and 

Trade, Paris. 

17-21 UNCTAD Fourth Preparatory Meeting on Cotton, 

Geneva. 

24 Cotton producing countries (meeting sponsored 

by International Institute for Cotton), Geneva. 

24- 28 FAS Western Hemisphere Attaches, Miami. 

25- 28 Organizational meeting, prospective member 

countries. Cotton Development International 
(CDI), Geneva. 

In Sept. GATT consultation on soybean oil marketing 
quota, Spain. 

In Sept. U.S.-Mexico Research and Planning Committee, 
Albequerque, New Mexico. 

Sept. -Oct. Bilateral discussion, Andean Pact Commission. 



Foreign Agriculture/September 1979 



Page 35 



U S. DEPARTMENT OF AGRICULTURE 

WASHINGTON. D C 20250 

PENALTY FOR PRIVATE USE $300 
OFFICIAL BUSINESS 



POSTAGE AND FEES PAID 
US DEPARTMENT OF 
AGRICULTURE 
AGR lOl 




First Class 



Foreign Agriculture/September 1979