U.S. CARGO PREFERENCE FUNDING ACCORD SEEN NEAR
The U.S. Departments of Agriculture
and Transportation are close to agreement on how to fund the
increasing share of food aid to be shipped on U.S. flag vessels
under a 1985 farm bill provision on cargo preference.
    Melvin Sims, USDA's general sales manager told a House
Agriculture Appropriations subcommittee hearing that the two
departments are negotiating a "memorandum of understanding" on
cargo preference.
    Under a 1985 farm bill provision, the percentage of food
aid shipments carried on U.S. flag vessels was to gradually
increase over three years to 75 pct in 1988. The increased cost
of using U.S. vessels was to be funded by the Transportation
Department instead of USDA. However, USDA officials said
Transportation has so far contributed no money.
    The agreement between USDA and Transportation is expected
to resolve the matter, USDA officials said.
    Tom Kay, administrator of the USDA's Foreign Agricultural
Service said yesterday the requirement that more food aid
shipments be carried on U.S. vessels has been difficult to
meet.
    "As the tonnage (required under cargo preference) goes up,
its going to be harder and harder to meet," Kay said.
    Two farm state Congressmen, Pat Roberts (R-Kan.) and Glenn
English (D-Okla.) said cargo preference makes U.S. farm export
programs more costly and the program should be eliminated.
    In the past, farm interests opposed to cargo preference
have been defeated in Congress by the maritime interests who
view cargo preference as vital to the U.S. shipping fleet.
 Reuter
