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Show ' , Page 6 The UTAH INDEPENDENT '- - -- . h'U'V 'c f The Paper That Dares To Take A Stand November 30. 1972 With Soviet Brain Deal ? Continued from Page 1 which thus snatched nearly 45 per feed her own people. To compound cent of the total Soviet grain deal, Soviet trouble this year the w'eather owned by the billionaire Belgian Michel Fribourg. Known as a man in Russia was exceedingly bad. A very dry. cold winter cut the winter of mystery, he has had close y wheat harvest to less than half of contracts with the Soviets over-manyears and makes frequent the 1971 level. An unusually hot, Russia. to dry summer reduced the summer trips Only three days after the Nixon grain harvest far below normal. on July II, So the Soviets turned to the announcement, another Nixon giant grain the and exporter, United States, Cargill, Inc., concluded its deal Administration sent a special delwith the Soviets to sell them egation to Moscow headed by bushels of wheat. 76.000,000 Secretary of Agriculture Earl Butz this had been under to negotiate. The result of this Obviously, to the Nixon mission was made public on July 8. negotiation prior announcement. The other large A synchronized announcement by which moved in President Nixon in the summer grain exporters for their share of the Soviet White House at San Clemente and quickly deal were the French-owne- d by Secretary Butz in Washington Louis Dreyfus Corporation, the released the news that the Soviets Agentinian-owne- d Bunge would buy 5750,000.000 worth of Swiss owrned and the Corporation, U.S. grain over three years, of Garnac Grain Company. w hich S500.000.000 would be paid The giant grain dealers, who for by loans generously extended obviously had been working on the from the American taxpayers. deal' for many months, moved In making this announcemet. quickly to buy up all the wheat they Secretary Butz and other could. Acting quietly and without Agriculture officials indicated that inkling of the size of the the Soviets would spend these giving any they bought funds mostly for corn and other projected purchases, wheat from vast quantities of feed grains, estimating that only American farmers at prices ranging about 50.000.000 bushels of wheat from SI. 25 to SI. 35 per bushel, would be involved. averaging S .32. The farmers in the Only later did we learn that, early-harve- st states, especially three days before this Texas and Oklahoma, sold most of announcement, the giant their grain at this price. billion-dollinternational The Rising Price of Wheat called Continental . 1 ar corporation Grain Company had already When the Soviet wheat-buyin- g closed a deal with the Soviets to delegation first arrived in this deliver 187.000.000 bushels of country, the domestic price of American wheat this year. This was wheat was S1.64 per bushel (of more than Butz indicated would be which the farmer was paid sold by all companies over a three-ye- ar approximately SI. 32. and the rest period. Continental Grain. w ent for the costs and profits of the grain dealer(. The world wheat price at that time was $1.63. Thus, when the grain exporter sold the wheat to the Soviet Union for SI. 63, he could collect from the U.S. Treasury a cash.subsidy of e per bushel, the difference between the world price and the U.S. domestic price. As the big grain dealers kept buying, and buying, and buying, in order to fulfill their secret sales agreements with the Soviets, the market responded and the price of wheat started to climb. While this w'as going on in July and August, no one really knew what was happening except the Soviet buyers, the international grain dealers, and the top echelon of the and Department of Agriculture they werent telling. Certainly, the farmers, the newsmen and the public did not realize what was taking place. Theoretically, the wheat export subsidy was based on the difference between the world price and the domestic price. But in practice, it didnt work out this way. The domestic price rose rather rapid Iy. The world price rose some, but was-kep- t artificially low because the Department of Agriculture had secretly assured the big grain dealers that all the export subsidies would be based on S .63 per bushel as the world price. The actual world price thus became an irrelevant statistic because the Soviets were paying only SI. 63, 1 1 and the U.S. Treasury was paying the difference between $1.63 and U.S. domestic the rapidly-climbin- g price. July 21, the U.S. domestic price of wheat was up to $1.76 per bushel, which meant that the grain By exporters were receiving a subsidy of 13c. By August 22, the domestic price had risen to $2.01 per bushel, providing the big grain exporters with a fat 38e per bushel subsidy. There was another joker in the deal which proved to be of immense financial gain to the big international gain exporters. The export subsidy paid on a given bushel of wheat was not figured on the day that bushel was brought from the farmer, nor on the date it was sold or delivered to the Soviets, but instead was figured on the date that the sale of the bushel was registered with the Department of Agriculture. Thus, the international gain exporters, being privy to the secret knowledge of the tremendous size of their total purchases, and knowing that the price of wheat would be forced up substantially, could buy the wheat from the unsuspecting farmer in early July at $1.32, sell it to the Soviets anytime during July or August at $1.63, but wait and register ti with the Department in late August when the price had climed to $2.01, or higher, thereby claiming a 38d or higher subsidy. - TRUCK PARTS 47c Subsidy The One-Wee- k By the end of August, even the bureaucrats in the Department of Agriculture biased realized that this export subsidy had reached embarrassing heights. So, they concocted a plan whereby the big international grain dealers would have a final week to score big profits before the door was closed. On August 25, the Department of Agriculture annouced a policy whereby all the wheat already sold, but as yet unregistered, could be registered during the one week from August 25 to September 1, and it would receive a 47c per bushel subsidy based on the difference between the $1.63 price paid by the Soviets and the then domestic U.S. price of $2. 10. The big international grain bushels millions of had exporters of wheat already sold to the Soviets which they had held off registering as they waited for the price to climb higher. Naturally, they rushed in to register all that wheat in the one windfall week. During that one week alone, 280,000,000 bushels were registered for the 47c subsidy at a cost to the U.S. taxpayers of $132,000,000. Continental Grain alone registered 7 1 ,000,000 bushels " for the 47c subsidy, thus drawing from $33,370,000 the Treasury in one week. 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