U.S. CARGO PREFERENCE FUNDING ACCORD SEEN NEAR

  The U.S. Departments of Agriculture
  and Transportation are close to agreement on how to fund the
  increasing share of food aid to be shipped on U.S. flag vessels
  under a 1985 farm bill provision on cargo preference.
      Melvin Sims, USDA's general sales manager told a House
  Agriculture Appropriations subcommittee hearing that the two
  departments are negotiating a "memorandum of understanding" on
  cargo preference.
      Under a 1985 farm bill provision, the percentage of food
  aid shipments carried on U.S. flag vessels was to gradually
  increase over three years to 75 pct in 1988. The increased cost
  of using U.S. vessels was to be funded by the Transportation
  Department instead of USDA. However, USDA officials said
  Transportation has so far contributed no money.
      The agreement between USDA and Transportation is expected
  to resolve the matter, USDA officials said.
      Tom Kay, administrator of the USDA's Foreign Agricultural
  Service said yesterday the requirement that more food aid
  shipments be carried on U.S. vessels has been difficult to
  meet.
      "As the tonnage (required under cargo preference) goes up,
  its going to be harder and harder to meet," Kay said.
      Two farm state Congressmen, Pat Roberts (R-Kan.) and Glenn
  English (D-Okla.) said cargo preference makes U.S. farm export
  programs more costly and the program should be eliminated.
      In the past, farm interests opposed to cargo preference
  have been defeated in Congress by the maritime interests who
  view cargo preference as vital to the U.S. shipping fleet.
  

