
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, March 22, 1990                   TAG: 9003222668
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/4   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                 LENGTH: Medium

U.S. REACHES AGREEMENT WITH SOVIETS ON GRAIN PACT

The United States and the Soviet Union have reached an agreement in principle on a new long-term grain contract, the government announced today.

Agriculture Secretary Clayton Yeutter and U.S. Trade Representative Carla Hills said the tentative five-year agreement was reached during negotiations in Vienna. The current pact, which has been in effect since 1983, will expire on Dec. 31.

The new accord will increase the annual minimum shipments of U.S. grain to the Soviets to 10 million metric tons from nine million tons under the current agreement.

In a joint statement, they said the agreement "represents a welcome advance in the relations between the United States and the U.S.S.R."

Julius Katz, deputy U.S. trade representative, said in Vienna, "We think this is a good deal, that it assures U.S. farmers of a stable market over the life of the agreement."

Katz said details of the pact will be disclosed after it is signed during the June meeting between President Bush and Soviet President Mikhail Gorbachev.

The Kremlin will have some greater year-to-year flexibility under the new arrangement, although over the life of the pact the average minimums will be met, officials said.

Under the new agreement, the Soviets are committed to buy at least four million tons each of wheat and feed grains. However, in any one year Moscow can substitute up to 750,000 tons of one commodity for the other.

Also, for the first time, the agreement includes barley and sorghum as well as corn under the definition of feed grains.

Additional flexibility also was provided by giving Moscow automatic permission to buy up to 14 million tons of grain annually without further discussion with Washington.

The automatic limit under the current pact is 12 million tons, although the United States has routinely increased that lid to fit Soviet needs.

As of March 8, the Soviets had bought more than 13.8 million tons of U.S. wheat and corn under the current agreement for delivery this year. Last year's sales totaled 21.7 million tons.

The Soviet Union has been a big user of the U.S. export subsidy program to buy wheat. Corn is not covered by the program.

According to Agriculture Department records, the Soviet Union has bought more than 21.3 million tons of U.S. wheat at subsidized prices since the program began in 1985.

by CNB