No Butter Bargain

Should the U.S. sell butter to Russia? The question was touched off by Soybean Processor Dwayne Andreas of Mankato, Minn., when he asked the U.S. Commerce Department last week for permission to sell Russia 40 million lbs. of surplus butter and 14 million lbs. of surplus cottonseed oil (used to make margarine). The result was a searching re-examination by the President's Cabinet of U.S. policy on East-West trade.

If permission were granted, the deal would amount to twelve times last year's tiny trickle of U.S. exports to the Soviet, bloc. In addition, Andreas indicated that the Russians might eventually take 150 million lbs. of each commodity. That is more than half the Agriculture Department's hoard of butter and almost a sixth of its larger store of cottonseed oil, both of which Agriculture Secretary Ezra Benson would love to unload.

Juice & Fruits. The Cabinet contemplated Andreas' scheme and decided that it was in favor of some nonstrategic trade with Russia. It rejected the argument that, because the Kremlin's biggest current embarrassment is its failure to produce enough food for its own people, the U.S. should let it stew in its own juice. On the contrary, by the fruits of free enterprise the Russian people could learn to love freedom more, it was argued. And besides, such exports might give the U.S. a chance to make an advantageous barter deal, getting from Russia materials in short supply, e.g., manganese.

The week before, Foreign Operations Administrator Harold Stassen announced he would push for increased East-West trade as one way of puncturing the Iron Curtain with democratic ideas. Stassen said, "From its newly attained position of strength, the West can use economic forces to play a major part in lessening the East-West tension."

Thumbs Down. Since nonstrategic trade is permissible and butter is not strategic, the only questions left to the Cabinet were price and the effect on allied butter exporters. Benson feared that dumping so much butter would upset the world market and hurt friendly countries.

As to price, Andreas offered about 50-c- a Ib. Though Benson has sold some of his butter to the U.S. Army for 15-c-, the Government actually paid dairymen 67-c- for it, and butter is now costing U.S. housewives upwards of 70-c-. Should the U.S. subsidize the Russians?

Clearly not. On that point the Cabinet turned thumbs down on the butter deal. Emerging from the meeting, Commerce Secretary Sinclair Weeks said, "I shall not approve any application ... to buy butter at considerably lower prices than those paid by the American housewife and then send that butter into Russia."

Still pending, however, was Andreas' offer to take cottonseed oil off Benson's hands at 12 1/2-c- per Ib., a price at which the U.S. has sold before. Since cottonseed oil is not directly a consumer product, there may be less domestic pressure to deny the Russians a bargain in it.

Meanwhile Russian domkhosiayki (housewives) would not get any fine U.S. butter, and Ezra Benson was still stuck with 262,000,000 lbs. of it.

This file is automatically generated by a robot program, so reader's discretion is required.