Statement of Policy, Approved and Issued by the President, on Foreign Trade as Related to Agriculture.

THE GENERAL foreign economic and trade policy set forth in the President's message to Congress of March 30, 1954, is applicable to and in the general interest of American agriculture. United States farm programs, both short-run and long-run, should be consistent with this policy.

United States agriculture, as well as other segments of the economy, stands to gain from such a sustained policy of expanding world trade, based upon the most productive use in each country of the available labor, natural resources and capital. Therefore, it is in the long-run interest of the American farmer, as well as all Americans, for this country to work with other nations in a mutual effort to expand international trade, and to promote the fuller convertibility of currencies, the freer movement of investment capital, and the interchange of technical and scientific information.

Today, the United States agricultural situation is complicated by two factors on the domestic front: (1) prices of many farm products are not competitive with world prices; and (2) production of certain farm products is badly out of balance with demand, thus creating rapidly mounting surplus stocks which overhang and tend to unsettle both domestic and foreign markets. Both of these factors promise to remain operative for some time. It therefore becomes necessary to reckon with them in any formulation of an agricultural foreign trade policy for the United States.

Consistent with the principles set forth in the President's message of March 30, 1954, it is essential that our agricultural foreign trade policy take into account the position of other countries and that our policy be understood by them.

Today, the magnitude of the United States holdings of many commodities is such as to be capable of demoralizing world commodity markets should a policy of reckless selling abroad be pursued. This potential greatly alarms other countries despite the fact that past behavior of the United States has shown no intention of pursuing a harmful policy.

At the same time, the United States cannot accept the role of limiting its sales in world markets until other countries have disposed of their production. The adjustment of world supply to world demand will require adjustments of production in other countries, as wall as the United States.

The capacity of certain areas of the world to produce food and fiber in excess of current market takings presents a basis and a hope for improving living standards around the world--provided ways can be found for improving marketing and distribution systems and enlarging the purchasing power of consumers. This represents a challenge to the nations of the world to develop sound means for utilizing their productive capacity in the improvement of living standards.

1. The world supply and demand situation in agricultural products requires in the interest of the general welfare, an orderly and gradual liquidation of our surpluses. Such a policy, arrived at with the full knowledge of friendly nations, would go far to eliminate fear arising from uncertainty.

2. The United States cannot be satisfied with the position of holding its own supplies off the market and accumulating surpluses while other countries dispose of their entire production. Accordingly, the United States will offer its products at competitive prices. At the same time, the United States will not use its agricultural surpluses to impair the traditional competitive position of friendly countries by disrupting world prices of agricultural commodities.

3. The United States will seek in cooperation with friendly countries to utilize its agricultural surpluses to increase consumption in those areas where there is demonstrable under-consumption and where practical opportunities for increased consumption exist or can be developed in a constructive manner. The United States will attempt to utilize such opportunities in a manner designed to stimulate economic development in friendly countries and to strengthen their security position.

4. The United States recognizes that the movement of goods in foreign trade is dependent upon the enterprise of private business--foreign and domestic. In implementing these policies with respect to agricultural commodities, the United States Government will seek to assure conditions of commerce permitting the private trader to function effectively.