Word: bushelful
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Sticking on Subsidies. At first blush, a U.S. wheat sale seemed like a good idea. It would cut the nation's 1.2 billion-bushel wheat surplus-if only by 75 million or 100 million bushels. It would narrow the U.S.'s $5 billion deficit in the balance of payments-if only by a small fraction. A.F.L.-C.I.O. President George Meany, an opponent of any deal with the Reds, was for this one. So was Commerce Secretary Luther Hodges. So were Senate Foreign Relations Committee Chairman J. William Fulbright, Senate Agriculture Committee Chairman Allen Ellender and House Agriculture Committee...
...Administration was eager to close the deal. But it had several bushels of problems. The Soviets like to pay only 25% down for their wheat, and the rest over 18 months. But U.S. law forbids credit sales to countries that have defaulted on their debts to the U.S., as the Soviets did on their lend-lease debt to the tune of $800 million. Beyond that, the U.S. taxpayer would be subsidizing the sale: to make up the difference between the high-propped U.S. price of about $2.30 and the world market price of about $1.75, the Government pays U.S. wheat...
Profits can be big; a contract for 5,000 bushels of wheat costs only $500 down, and every rise of a cent a bushel adds $50 to the contract's value. But losses can be horrendous because, as the commodity's price drops, the speculator is called on to put up more margin to cover his investment. Often no one will buy his contract on a sharp price drop, and he is unable to get out. When the sugar price broke last spring, one New York speculator was getting margin calls for $20,000 a day, with...
...supposed to remedy-overproduction and rural poverty. A support price that is high enough to cover the production costs of a small-scale, inefficient farmer provides a glorious opportunity for risk-free profit to the large-scale, efficient farmer with his much lower costs of production per bushel or bale. The support price of corn, for example, is $1.25 a bushel, and the big producer can grow corn for less than 70? a bushel. Clearly, if the Government takes the stuff off his hands at $1.25, the efficient farmer can reap a bumper crop of money from growing corn that...
...designed to cope with the wheat surplus (TIME cover, April 5). If two-thirds of those voting approve the plan, it will become mandatory for the entire 1964 wheat crop. The Agriculture Department will tell each wheat grower how many acres of wheat he can plant and how many bushels he can market under a complex "certificate" plan. And what does the farmer get out of it? A high support price of $2 a bushel on most of his wheat, plus "diversion payments'' on the acreage he takes out of wheat production. If the plan fails...