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Show Solving ll Will Require Great Wisdom Sunday, January 12, 1986 ftjP Fate of U.S. Farmers, Exports Closely Linked to Latin Debt Crisis By Sonja Hillgren United Press International - A new study WASHINGTON farmers, American of the fate says and the future of U S. farm exports on which farmers are dependent, are closely intertwined with a resolution of the Latin American debt crisis. Great wisdom will be needed to resolve a conflict between the necessity for Latin American nations to make their Interest payments to keep the U.S. financial system healthy and the facf that Latin American nations have taken business from American farmers and workers to raise money to pay their debts. Although it is widely recognized that U.S. banks face the prospect of collapse if debtors do not pay, it is less well understood that U S. workers and businesses will lose jobs and markets if the Latin Americans try to pay," the study said. Every American worker and business that must compete in the international marketplace is directly affected by the debt crisis. Between 1981 and 1984, the Latin American debt crisis was responsible for a greater share of the increase in the U.S. trade deficit than were im ports from Japan. Various estimates put the resulting American job loss at between 400,000 to 1 million. Between 1981 and 1984, the U.S. trade balance with Japan deteriorated by slightly more than $18 billion while the U.S. trade position with Latin America was eroded by $23 billion. The Japanese deficit has been caused mostly by an increase in imports of Japanese products. But the Latin American trade gap is due mostly to loss of American exports, also translated into loss of American jobs. The study, entitled "Till Debt Do Us Part," was published by the Roosevelt Center for American Policy Studies. It was written by Alfred J. Watkins, an economic policy consultant to the center, former professor at the University of Texas and former congressional staff economist. It said that, U.S. dominance in world agricultural markets is rapidly eroding, in part because Latin American debtor nations are trying to service their debts by boosting agricultural exports. "For U.S. farmers, this is tantamount to additional competition in world export markets competition that is as injurious to U.S. farmers as steel imports from Latin America are injurious to U.S. steel producers." The study said Latin American agricultural exports have helped further depress world commodity prices for U S. farmers already trying to cope with worldwide excess capacity, thus driving "U.S. farmers closer to bankruptcy. Watkins' study shows that the U.S. trade deficit has increased dramatically, in part due to a decline in exports to Latin America, where countries have less money to buy American goods, and due to an increase in imports from Latin America, as those countries attempt to raise money to service their debts by exporting to American consumers. Between 1980 and 1983, American s exports fell by $20 billion and of the decline was concentrated in Brazil and Mexico. American agricultural machinery exports to Latin America fell by 86 percent from 1981 States by $14 billion as they trimmed total imports from all sources from 1980 81, Argentina was barely a factor in world soybean trade. The United States and Brazil were the major players. By 1984 85, Argentine soybean exports had risen by almost as much as American shipments had fallen. During the same period, world wheat trade rose by 10 million tons. Yet American shipments fell by 2 2 million tons while Argentine shipments rose by 3 6 million tons. Last January, Cargill, the giant grain trading company, announced it was going to import Argentine wheat into the United States cheaper than it could buy American wheat. Cargill $68 9 billion to $42 2 billion. And 85 percent of the increase in Latin American exports between 1982 and 1984 went directly to U.S. markets American exports to Latin America increased in 1984, but they were still below their peak, and in 1984 Latin America shipped well over half its export growth to the U.S. market Latin countries also are competing with Americans in other foreign markets. The impact of Latin American exports on the U S. farmer is most obvious in world soybean markets. In canceled the deal but it showed how strong Latin American competition had become. Individual American farmers arte at a disadvantage because their debt' is privately held and thus adds (d their costs of production. Because tlje ' Latin debt is public and therefore hot held by individual farmers, Latin farmers can better weather low com1"; modity prices and still make a profit!' Watkins examines several options' for dealing with the Latin debt, not1'' ing that a healthy dose of inflation;" rising trade and rapid economic growth would enable debtor nations f to purchase more imports and pay more interest. 4 Earn Our High Rates two-fifth- 0 i to 1983. Also from 1980 to 1983, six major I IA Latin American debtor nations reduced their imports from the United a itl Tax Credits Still Available Energy-Savin- g By The Associated Press home improveFederal tax credits for energy-relatements expired at the end of 1985, but some Americans can still get state tax credits for energy conservation. Under the federal program, established in 1973 during the height of the energy crisis, homeowners could recover 15 percent for energy home improvements up to $300 of up to $2,000. Most homeowners recognized that installing insulation in their attic was a good way to save energy and take advantage of the tax credit, says Michael Krach, vice Fiberglas Corp., a building president of Owens-Cornin- g materials manufacturer. r "However, there are several other energy improvements that the average homeowner may be overlooking," Krach says. "For example, caulking, weather stripping and insulating other areas of the home will qualify. Also, new furnace burners, fuel restrictors and fur d nace ignition systems, storm doors and windows and clock thermostats are included in the tax credit." According to Krach, a tax credit is of greater benefit to the taxpayer than a tax deduction because a credit is subtracted directly from the tax bill while a deduction is subtracted from gross income and lowers the tax payment only slightly. The tax credit applies only to items installed in a principal residence, whether owned or rented, Krach explains, and improvements made to a vacation or second home do not qualify. The $2,000 total is registered on a cumulative basis starting April 1977, he adds, and the credit applies only to homes built on or before April 20, 1977. 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