Date: 1984-07-24
Speaker: DE LA GARZA (democrat)
Chamber: H

Mr. Speaker. we read very often these days that international bankers are worried about the debt crisis in the Third World. Weve been reading about it in the Wall Street Journal. and the New York Times. and the Washington Post. And if they tell us that bankers are concerned. Im sure its true. I have only one complaint about this. Mr. Speaker. I think that we ought to be hearing more about this problem outside the boundaries of Wall Street. Washington. and Chicago. We should alsobe looking at the problem in towns and cities all across this country where agriculture is a vital part of the economy. The fact is that if we have a serious debt problem in the Third Worldand we dothen the fallout could affect more than just a few big international banks. It could affect farmers and others in agriculture in almost every part of this country. We know that when the Third World is in a debt crisis. we can look for two developments affecting agricultureand both of them can spell trouble. First. we can expect developing countries to look for every conceivable chance to increase raw material exports to help earn exchange needed to pay their debts. I want to emphasize that I am not criticizing the natural development of agriculture in other countries on a sound economic basis. But none of us would want to see cases where other countries push the production of crops which may offer a shortrun payoff at the expense of solid. lasting progress in meeting their own development needs. The second troublesome prospect lies in what a debt crisis abroad can do to our own prospects for expanding exports. All through the export boom of the 1970s. we found that the fastestgrowing markets for American agriculture were in two groups of countries. One was the newly industrial nations like Korea. The second group Included many Third World countries which were farther behind in developing their economiesand that includes many countries in LatinAmerica and Africa. Now. some of those countries are having trouble making their debt payments. and this has affected agricultural credits as well as other loans. We all know. for example. that the Agriculture Department has had to take over some export credit loans that it had guaranteed in past years--and It has had to make plans for the possibility of taking over additional guaranteed loans. Credit programs are fine. I support them. We have used them effectively in the past to help maintain agricultural exportsand we will use them again in the future. both in commercial credit programs and in the FoodforPeace Program. But we have to face the fact that nations which cannot pay existing debts are going to be trying desperately to improve their balance of payments. They are not likely to want to create new debt in order to expand imports beyond levels of absolute necessityand this could slow down the expansion of American farm exports we are all hoping for. Where credit is used. we could be seeing a greater demand for concessional terms rather than the commercial. freemarket trading that is everybodys longrun goal for the bulk of our exports. Just a few days ago. the Overseas Development Council issued a report noting that recession and debt problems in the Third World have seriously depressed American exports to many countries. The report said the impact has been most serious on our exports of machinery and other manufactured products. But it added that agricultural exports have also been affected. The Development Council report says economic recovery in the United States would help move toward a broader recovery. But that wont be enough. American recovery by itself wont help Latin America pay its debtsit wont solve the problems of drought in Africaand it wont deal with the problem of high American interest rates and the highpriced dollar. Were going to need action on a number of fronts. including steps that will bring interest rates down. So when I read these days about the debt crisis abroad. I think about more than banks. I think about American agriculture. When I read about the importance of getting interest rates down so foreign borrowers can afford to make payments to our country. I think about more than banks. I think about the American farmer and the way his income is affected by exports. I suppose the lesson is that in this problem of Third World debt and international interest rate problems. we are all in the boat together. We had better begin working together to bail out the boat. We may need to restructure not only the debt owed by foreign countries or by foreign borrowers of every kind. but also our policies. rules. and regulations dealing with this problem. Such Mr. Speaker. should be done with full knowledge that what we do may well impact in a most negative way upon our countrys agriculture economy if not done properly and with concern for the most productive sector of our economy which is agriculture and that vast sector known as agribusiness.