Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

West's Policy On Grain Two-Faced

There is a point at which the politics of compromise, usually the best route, crosses a line and becomes the politics of hypocrisy. The wealthy industrialized democracies have come close to crossing that line with their handling of grain credits to Russia.


The result is that confusing and contradictory messages are being sent to the Russian government, threatening the more important issue of the repayment of the former Soviet Union's debts.


In the Paris Club negotiations, Russia's major Western creditors are seeking to work out a solution to the $80 billion in debts held over from the Soviet era.


But while those negotiations continue endlessly, with no agreement seemingly in sight, these countries continue to grant Russia credits to import grain.


The reasons for this are plain: It is not so much a matter of concern for Russian grain supplies as it is a question of domestic concerns - to placate the powerful agricultural lobbies in countries like France, the United States and Australia.


U. S. Sen. Bob Dole, a Republican from the breadbasket state of Kansas, made that point clearly on Tuesday. The United States stopped shipment in November when Russia began defaulting on grain loans backed by the U. S. government.


Dole is warning that unless the United States finds a way to resume shipments to Moscow, other nations will step in.


Some of the countries that sit around the table with the United States at the Paris Club meeting are already doing that.


The European Community reportedly began shipping grain in early February under a credit arrangement for 2. 6 million tons of grain. France is also set to begin sending grain under a $375 million credit arrangement for 2. 5 million tons.


And the Australian Wheat Board said Wednesday that Australia would begin exporting grain again to Russia.


The apparent Australian reasoning is to send new wheat shipments to Russia against the payment made on previous debts.


In a sense, of course, everybody wins under these loose arrangements under which the competition for the Russian market forces countries to bend over backwards to send a product to a debtor that would hot pass a credit check in the private sector.


Russia gets its wheat; the farmers get their subsidies or government guarantees; and the banks get to keep lending.


The losers, of course, are the taxpayers. What is sold in parliaments and congresses as a loan program becomes in a sense an aid program on two levels - aid to the farmers and aid to Russia.