Dole Claims Australia Subsidizes Wheat Sales : Plans to Press for Cut-Rate U.S. Grain Exports Despite Opposition of Canberra Government

WASHINGTON — Senate Majority Leader Bob Dole (R-Kan.) tossed charges of unfair competition back at visiting Australian officials Monday as he vowed to press ahead with legislation to require the Reagan Administration to subsidize the sale of farm products to the Soviet Union, China and probably other countries.

Dole disputed Australia’s contention that it does not subsidize the export of wheat and other agricultural products. He said the Canberra government provides technical assistance and bonuses to farm exporters, an indirect subsidy that puts U.S. farmers at a disadvantage.

“They’ve gotten markets we’ve lost,” Dole told reporters after a meeting with an Australian delegation headed by John C. Kerin, the cabinet officer responsible for agriculture.

Lobbying in Capital

Kerin’s five-member group represents all of the political parties in the Australian Parliament, the first time an all-parties delegation has been sent to the United States. The group is in the midst of a week of lobbying in Washington.

Canada also opposes the Dole bill, which has split the Reagan Cabinet. Agriculture Secretary Richard E. Lyng, Commerce Secretary Malcolm Baldrige and Treasury Secretary James A. Baker III favor the measure, but Secretary of State George P. Shultz and Defense Secretary Caspar W. Weinberger oppose it.

On Monday, Shultz surprised White House officials by again voicing strong misgivings about the subsidized sales. In an interview with editorial executives of Gannett newspapers, he said the Soviets “must be chortling” at their ability to pay less for American food than American housewives can. And he warned that the sales could lead to “a subsidy war.”

The conservative Heritage Foundation, which often sets the ideological tone for the Reagan Administration, issued a biting attack on the Dole plan, which it said would “perpetuate the farm crisis.”

“U.S. taxpayers’ money would be used to bail out failed communist agricultural policies, freeing Soviet funds for weaponry, its forces in Afghanistan or its KGB spy network,” the foundation, a Washington-based think tank, said. “It is one thing for American farmers to sell grain to the Russians for hard currency at market prices. It is quite another to give the Soviets U.S. government handouts.”

European Subsidies

Under legislation approved last year, the U.S. government subsidizes agricultural exports to markets where other countries are selling farm products at artificially low prices. The measure originally was aimed at countering the European Economic Community’s grain export subsidies in Egypt and elsewhere in the Middle East.

Dole’s legislation would broaden the existing program, requiring the Administration to subsidize sales to any nation with which the United States maintains a trading relationship. The Senate late last month approved the measure as a rider on a routine House-passed bill.

A Senate-House conference committee is expected to begin work this week on compromise legislation.

Subsidy for Soviets

President Reagan sought to defuse the controversy Friday by authorizing subsidies on the sale of up to 4 million metric tons (4.4 million tons) of wheat to the Soviet Union during the next two months. Monday, the subsidy was set at $13 a ton, which would bring U.S. wheat down to the world price of about $91 a ton.

Canada and Australia said the White House action was less damaging than the Dole bill. But Dole and his allies said it was not enough.

Administration officials said Dole warned the White House that the bill was vital to the reelection hopes of several farm-state Republican senators and, therefore, to continued GOP control of the Senate. However, some Democrats have jumped on the bandwagon, possibly diluting the partisan impact.

Letter to Prime Minister

Dole handed Kerin a letter, addressed to Australian Prime Minister Bob Hawke, in which he described his subsidy plan as an effort to “open up international grain markets” by combatting European Common Market trade practices.

Kerin, in a series of press conferences in Washington, has agreed that the European Common Market is the cause of the problem. He said European export practices have generated growing anti-European sentiment in Australia, and he warned that the Dole measure could produce matching anti-American feeling.

Kerin said Australia would have to match any subsidies paid under the Dole measure. But he said it probably would not be necessary to order subsidies in response to Reagan’s executive order.