US PREPARES TO RETALIATE AGAINST EU SUBSIDIES FOR BARLEY FARMERS

US PREPARES TO RETALIATE AGAINST EU SUBSIDIES FOR BARLEY FARMERS

The Clinton administration will soon announce retaliatory measures to protest a subsidized European Union barley shipment headed to California, Agriculture Secretary Dan Glickman said Monday.

In his sternest statement yet on the two-week-long trade dispute, Mr. Glickman said the EU could not ''expect our farmers to pay the price of their distorted farm policies.''U.S. farmers and lawmakers have bitterly criticized a subsidized 30,000 metric ton shipment of Finnish grain as unfair, saying it depressed already low grain prices.

The cargo is viewed by some as an indication that the EU may be planning to dump more of its heavily subsidized farm commodities in the U.S. market.

Barley is used as livestock feed and is a key ingredient in beer.

''I have said on numerous occasions we won't sit by and watch the European Commission target our markets, so I have instructed USDA officials to work through the holiday weekend to come up with the appropriate response,'' Mr. Glickman said in a statement issued on Memorial Day, when federal government offices were closed and a spokesman was unavailable for comment.

The administration said it would announce its response later this week. Mr. Glickman gave no indication what action the United States might take against the barley shipment.

Farmers have repeatedly urged the USDA to fight unfair trade practices by reactivating its Export Enhancement Program for selling wheat, barley and other small grains. The program last offered subsidies to U.S. grain farmers in 1995 to match low world prices.

''This issue is a lot bigger than just barley farmers. It is a trade policy issue of high import for all,'' said Jack Pettus, an official with the National Barley Growers Association. ''If we can galvanize the elected and executive branches to get ready for the 1999 world trade talks, that's good for all of us in agriculture.''

Over the weekend, an administration source told Reuters that retaliatory action was planned against the shipment, due to arrive in Stockton, California, this week. The cargo was sold in a private transaction to grain trader Penny Newman Co. and is legal under World Trade Organization rules.

Mr. Glickman also said he was growing impatient with the EU's refusal to act on a U.S. request to de-list the United States as a destination for subsidized exports.

EU Agriculture Commissioner Franz Fischler recently said that a large gap between U.S. and world barley prices made it inevitable that some foreign barley would enter the U.S. market.

The tougher language marked an escalation in the tension between the United States and the European Union. Previously, the United States had said it was prepared to take action only if additional subsidized farm shipments occurred.

The statement was timed to coincide with a meeting of EU farm officials in Brussels Monday and Tuesday. The group was to discuss an EU import concession allowing U.S. malting barley into the trading bloc at reduced duties, but the deal would mainly benefit brewer Anheuser-Busch, not U.S. grain farmers.

An aggressive U.S. response on the barley shipment would also step up pressure on the EU ahead of the next round of world trade talks.

The Clinton administration has already said the 1999 talks would focus on European agricultural subsidies and state-owned trading enterprises.

American farmers saw most of their agricultural subsidies phased out in the landmark 1995 farm bill. A combination of near-record world grain supplies and low prices has forced many farmers off the land in the Dakotas.