SHULTZ NOT OPPOSED TO WHEAT SUBSIDY TO SOVIETS

  Secretary of State George Shultz has
  decided not to oppose any U.S. wheat subsidy offer to the
  Soviet Union and has left the final decision on whether to sell
  subsidized wheat to Moscow up to President Reagan and the
  Agriculture Department, a State Department official said.
      "Shultz feels like he fought the battle against a subsidy
  last summer, and he's not going to the mat again. It's now
  basically the USDA who has to make their decisions as to what
  they want to do," the official said.
      If USDA decides to go ahead with a subsidy offer to the
  Soviet Union, he said, "Shultz will not wage a vigorous
  campaign against it. He might not come out in favor of it, but
  he won't go to the President and voice his objections."
      In an official statement clarifying Shultz's remarks
  yesterday to leaders of the National Association of Wheat
  Growers, the State Department said, "Secretary Shultz expressed
  his belief that whenever possible, U.S. grain should be
  competitive on world markets, including the Soviet Union.
      The Agriculture Department is in the best position to
  determine whether consideration should be given at this time to
  extending to the Soviets a subsidy under the Export Enhancement
  Program."
      Although Shultz will not oppose a wheat subsidy to the
  Soviets, there remain obstacles to another subsidy offer to
  Moscow, the State Department official said.
      "Everyone in the government agrees that if there is a
  subsidy to be offered, we would not offer it unless we had a
  firm commitment from the Soviets that they would buy."
      USDA does not want a repetition of last summer when the
  USSR baulked at its offer of four mln tonnes of subsidized
  wheat, the official, who asked not to be identified, said.
      The Soviets rejected the U.S. offer then on the grounds
  that the 13 dlr per tonne subsidy was insufficient to bring
  U.S. prices down to competitive levels.
      The Soviets want a higher subsidy offer this time, the
  State Department source said.
      "What the Soviets want is something equivalent to the
  lowest price being paid by anyone in the world," he said.
      The Soviets argue that they are the best customer of the
  U.S. and that they are entitled to the best price, he said.
      Government and commodity sources also said there are
  elements in the USDA, most notably undersecretary Daniel
  Amstutz, who remain opposed to a wheat subsidy to the Soviets.
      "Subsidized wheat to the Soviet Union is still not a
  foregone conclusion," the State Department official said.
  

