Why grain embargoes never work
Last January, when the Soviets went for Afghanistan's jugular, the White House vowed to exact a price for such aggression -- and promptly shot America in the foot. The embargo of US grain to Russia apparently did trigger a frenzied search by Soviet agents for new grain supplies, and maybe even slight declines in USSR meat production. But for its blatant cannibalism the Russian bear was merely inconvenienced -- a small price to pay for another successful maneuver toward global domination.
It is American farmers, grain companies, and taxpayers who have paid the economic peantly for an ill-designed marriage of farm and foreign policy consummated by the Soviet grain embargo.
History proves that economic sanctions are inevitably ineffective weapons of political warfare. Not even small, landlocked, politically ostracized Rhodesia crumbled under the British-American trade boycott of its regime. In fact, the embattled minority government somehow managed to increasem its productivity until overwhelmed by internal guerrilla warfare -- not by external economic pressure.
Nor did Arab oil exporters succeed with their 1973 "embargo" of oil shipments to the US, which found plenty of other sellers eager to accommodate the US market. Such economic strategy is doomed to failure unless the targeted nation or population group can also be physically isolated from alternative sources of goods, as through a blockade or severance of transportation lines.
Thus, the administration's "retalation" for Soviet aggression in Afghanistan proved masochistic, boomeranging upon US farmers especially.
First, the embargo contributed to depression conditions on America's farm scene, which now faces a predicted 40 percent slump in 1980 income. Full blame for depressed prices certainly cannot rest with the embargo. But many economic and agricultural experts agree that huge reserves of embargoed grain now overhanging the market aggravated the severe 1980 plunge in farm commodity prices.
Second, the embargo created perilous conditions for grain exporters, left in the lurch with the cancellation of $2.5 billion worth of sales contracts with the USSR. Urgent pleas from stunned exporters, some of whom faced bankruptcy, resulted in a federal bailout, with Uncle Sam (that is, US taxpayers) purchasing embargoed grain. But some exporters will still absorb losses on broken transportation contracts.
Third, American taxpayers will pick up a $3 billion tab for estimated costs of the embargo, although repayment of agricultural loans will recoup some of this loss.
Fourth, failure by the administration to carefully coordinate the embargo with allies created fresh impressions of erratic, impulsive, incoherent US foreign policy which has unnerved America's friends and emboldened foes. Allies have, in fact, scored somewhat of a coup by picking up aborted US sales, with Australia, Canada, the European Community, and Argentina replenishing much of the Soviets' canceled grain orders.
Ultimately, economic warfare is more effective in achieving domestic political goals than in resolving international power struggles. By flexing Uncle Sam's muscles, the administration may have temporarily bolstered sagging spirits and soothed American egos bruished by the crises in Iran and Afghanistan. In the process, however, we have induced chaos in our own agricultural economy, with farmers suffering a disproportionate burden for ill-designed superpower politics.
The despair of American farmers over the embargo somewhat deflects attention from the root issue, which is the lack of vision, decisiveness and will in America's foreign policy. Unless the image of America as an impotent, vulnerable giant is changed soon, we are sure to see more bold aggression from the Soviet bloc.
But if and when that happens, American farmers should not again be sacrificed to compensate for bungled leadership in washington. Only in the case of war or genuine national emergency should a president be empowered to dictate to US farmers to whom they may or may not sell their commodities. Agriculture is, after all, the backbone of America's foreign trade, and a free market our greatest strength -- making selective politicization of the agricultural market segment a multiple whammy for the US economy.
So this is one farm-country congressman calling for a moratorium on poltically motivated agricultural embargoes. First, because any price paid for America's geopolitical successes, failures, or stalemates must be fully shared by 220 million residents -- not borne by a minuscule 3.5 percent who are farmers. And second, because america's self-inflicted wounds will never, ever, restrain the Soviets or any other aggressors. But restrain them we must -- with far more convincing strategy than buying ourselves in our own grain.