Watering of grain rather than high labor costs may be the reason Peavey Co. is having trouble keeping corn shipments moving through its export terminal at Kalama, Wash., the president of the International Longshoremen's and Warehousemen's Union said.

In a prepared statement presented to the U.S. Senate's Subcommit- tee on Agriculture Research, Conservation, Forestry and General Legislation, ILWU chief David Arian linked grain watering to loss of ILWU jobs.Addition of water to grain shipments increases their weight, but Peavey argues that the practice is an effective way to avoid the possibility of grain dust explosions.

Disclosure that some U.S. grain is sprayed with water has led one major South African corn importer, Mielieraad Maize Board, to tell U.S. grain inspectors it would no longer buy grain from any U.S. export facility that adds water, he said.

"The halt in exports to South Africa directly hurts American workers like our members in Kalama, Wash., where corn is a major export from a Peavey- ConAgra elevator," Mr. Arian said. "With a multitude of factors working against U.S. exports, we can ill afford to hammer another nail in the coffin by appearing to cheat buyers."

ConAgra Inc., based in Omaha, Neb., is Peavey's parent company.

Mr. Arian said a grain exporter can generate up to $50,000 in additional profit by adding a half-percent water weight to grain loaded onto a ship with a 50,000-metric-ton capacity. He noted that users of Peavey's Kalama elevator pay for any added water, plus a dust control charge of up to $21,000 a ship.

In July, Peavey managers in Kalama cut the number of ILWU longshoremen being used to load grain ships from six to three. The company argues that high labor costs are one reason it has trouble keeping corn shipments moving through the Columbia River terminal.

Longshoremen working at the terminal filed a complaint with the National Labor Relations Board, alleging that Peavey had failed to negotiate in good faith and that no labor-management impasse existed as required when the manning cuts were imposed. But the NLRB's regional director dismissed the complaint, finding that Peavey had bargained and that an impasse did exist.

The union said it intends to appeal.

Peavey contends that use of water sprays to control grain dust is the safest and most cost-efficient way to control grain dust. In a background paper, issued by ConAgra, the company contends that U.S. Department of Agriculture scientists have shown that use of water for dust control doesn't hurt the quality of corn and that all grain contains moisture because of outside storage, aeration methods or barge transportation.

"Water-based dust suppression integrated with other dust control methods is the most effective means of protecting grain elevator workers from potential explosions, the risk of long-term health problems and environmental pollution," the ConAgra statement concluded. "If the eventual decision by the USDA were to ban water-based systems, the long-term safety of employees and local communities would be compromised."