Asia Bailout Said Necessary
To Protect Ag Export Market

WASHINGTON —(AP)— American farmers and ranchers need International Monetary Fund rescue packages to restore financial stability in Asia so they do not lose markets for their products, contends the Clinton administration.

Agriculture Undersecretary August Schumacher Jr. told a Senate panel recently that the administration believes the Asian financial crisis "will be manageable and not catastrophic for American agriculture" as long as it does not spread.

Without IMF support and reforms, he said, "we would not feel comfortable in making our large export guarantee program allocations, and export credit guarantees would not be used, thus further reducing our exports to the region."

The United States exports about $23 billion worth of agricultural products a year to Asia, roughly 40 percent of U.S. agricultural exports worldwide. Until the financial crisis hit, Asia was the fastest growing market for U.S. agriculture.

Most goods go to Japan, China, Taiwan and Singapore, which have so far escaped the financial turmoil that has hit Thailand, South Korea and Indonesia.

The 182-nation IMF arranged $100 billion-plus rescue packages for Thailand, South Korea and Indonesia. Their farm imports from the United States are expected to decline by $900 million in 1998.

Schumacher's testimony supporting new funding for the IMF followed Senate Appropriations Committee approval of nearly $18 billion for the IMF that contained conditions designed to pressure the lending agency to reform.

the Asian financial crisis.

The backdrop for increasing farmers' interest in Asia's financial troubles is the big increase in foreign markets as a destination for American-grown products.

Rice farmers in Arkansas, California and Louisiana have found new customers in Japan and South Korea. So have beef and pork producers in Midwest and Western states.

Poultry farmers in the South have increased sales to Poland and the Philippines, and Mexico has become Texas' largest cotton export market.

For American farmers and ranchers, administration officials told Congress, trade has become an essential part of their livelihood as government subsidy payments are phased out.

In 1997, U.S. agricultural exports totaled more than $57 billion and the agricultural trade surplus approached $22 billion. Forty percent of America's agricultural exports go to Asia, 23 percent to Canada and Mexico.

"Market by market, our farmers and ranchers are reaping real benefits," Agriculture Secretary Dan Glickman recently told the House Agriculture Committee. "There are new opportunities that are measured in the only way that counts — dollars coming home to American producers."

Peter L. Scher, the U.S. special trade negotiator for agriculture, warned the United States cannot turn its back on the financial crisis in Asia, where agricultural exports will be lower in 1998 and 1999.

"The United States has enormously important economic and national security interests at stake in promoting restoration of financial stability in Asia," he said. "When we act to resolve the Asian crises, we act to protect and benefit American people. The countries in trouble are some of our biggest customers."

Scher said the role of the International Monetary Fund in resolving the Asian crisis was critical because "using its pool of capital spreads the burden around the globe so that we are not left doing all the heavy lifting."

Schumacher made the same point before the Senate panel, calling the IMF the right institution to lead the effort to help the affected Asian economies.

"Only if these countries have stable growth-oriented economies will we see global trade, including agricultural trade, reach new heights," Schumacher said.