US WEIGHS FOOD CREDITS SUBSIDIES, TO E. BLOC

US WEIGHS FOOD CREDITS SUBSIDIES, TO E. BLOC

Agriculture Secretary Clayton Yeutter opened the door Wednesday to increased U.S. subsidies for food exports to the Eastern bloc as relations improve and competition for markets increases.

Washington would consider subsidizing meat exports to the Soviet Union if needed to counter other nations' subsidies, and may consider bolstering credit guarantees for food exports to meet demand from Eastern bloc countries, he said in an interview.But he stopped short of saying the United States would offer Moscow direct food aid.

"If our competitors begin to use significant subsidies in order to penetrate the Soviet market, we'll have to consider the desirability of countering those practices," Mr. Yeutter said, adding that no proposals have yet been made to subsidize meat to the Soviet Union.

He also said he would welcome a proposal, cited in Japanese press reports, whereby the Japanese government would buy U.S. rice for foreign food aid programs as a way to help defuse a row with the United States over Japan's rice import restrictions.

In addition, he said the United States remained resolved in its aim to see the worldwide elimination of all trade-distorting farm subsidies. But he acknowledged that "we're not likely to achieve all of our objectives."

Competition among Western nations to sell meat to the Soviet Union, a major importer, is increasing as Moscow loses access to Eastern European supplies.

Recent sales of meat to Moscow have included a subsidized sale announced in February of 10,000 metric tons of Canadian hog carcasses and a heavily subsidized $295 million sale of meat and dairy products by West Germany.

Mr. Yeutter said the main U.S. export subsidy program - the Export Enhancement Program - was designed to counter other nation's subsidies and could be used to subsidize meat to Moscow.