Advertisement

The great Soviet grain robbery -- 10 years later

By
SONJA HILLGREN

WASHINGTON -- It was a decade ago this summer that the Soviet Union caught Americans off guard with massive grain purchases that became known as the great Soviet grain robbery.

The Kremlin bought one-fourth of the U.S. wheat harvest in 1972. Farm prices and consumer food prices shot upward.

Advertisement

Those controversial sales were a turning point for American agriculture, ushering in a new era of U.S.-Soviet grain trade that provided a major market for American farmers. It also helped the Kremlin maintain relatively stable livestock production, although it has failed to meet goals for meat consumption by the Soviet people.

The relationship has been rocky. There were embargoes in 1975 by President Ford who feared a repeat of 1972; and 1980, by President Carter in retaliation for the invasion of Afghanistan.

Between the two embargoes, the United States and Russia made a five-year grain agreement that went into effect Oct. 1, 1976. When President Reagan lifted the Carter embargo in April, 1981, the two nations agreed to extend the pact for a sixth year until this Sept. 30.

After martial law was imposed in Poland in December, Reagan postponednegotiations on a new long-term agreement. After again rejecting negotiations for a long-term pact, Reagan now is offering extend the agreement another year.

Advertisement

The United States first sold grain to the Soviet Union in 1963. The Soviets bought no more American grain during the 1960s. Then, in an effort to increase livestock herds, the Kremlin embarked on a policy of importing grain every year.

In 1971, the Soviets bought some American feed grains. The next year the Soviets quietly and suddenly bought one-fourth of the U.S. wheat crop. U.S. wheat prices rose from $1.68 per bushel in July 1972 to $3 in May 1973.

In defense of the sales, then-Agriculture Secretary Earl Butz told Congress it was 'good for all citizens -- it is a major contribution to bettered commercial and political relations between two powerful nations.'

Sen. Henry Jackson, D-Wash., charged that if U.S. officials were telling the truth when they claimed not to know about those transactions between the Soviets and a handful of grain companies, they were guilty of 'incredible negligence.'

If officials knew, Jackson said, they had deliberately concealed the sale from the public and farmers who had sold grain to the big dealers at low prices.

One of the resulting reforms was an export sales reporting system under which large sales much be reported quickly to the Agriculture Department.

Advertisement

In 1975, amid reports of a another Soviet crop failure, Ford suspended grain sales until an arrangement could be worked out to prevent Soviet disruption of the market.

Ford administration officials wanted to link the grain trade to U.S. imports of Soviet oil at a favorable price, but the oil portion never materialized.

What did occur was a five-year agreement that guaranteed the Soviets would buy 6 million tons of grain a year, and could purchase 2 million more tons without consultation.

The agreement worked smoothly and grain sales rose dramatically, surpassing 15 million tons worth almost $2 billion in fiscal 1979, a year when the United States supplied 78 percent of Soviet grain imports.

But when Soviet troops invaded Afghanistan in early 1980, Carter embargoed 17 million tons of grain.

The embargo became a hot political issue. Reagan promised to lift it, arguing it hurt U.S. farmers while Russia was able to buy grain elsewhere.

Reagan lifted the embargo in April 1981 and this year promised farm products would not be embargoed unless all exports to the Soviets were blocked.

Latest Headlines