ECONOMIC

The Administration supports the examination of multilateral approachesto the stockpile issue. It also recognizes that this country has an interest, asthe world's major exporter, in maintaining necessary levels of stocks, sinceotherwise we could not be a reliable supplier of food for the world. It isalso in this country's interest to have adequate stocks to provide a measureof domestic price stability. According to preliminary estimates a contingencyreserve would not have to be large or costly in order to offset mostinstances of poor harvests or abnormal demand. Large costs in the past havegrown out of excessively large stock build-ups under price support programs.The prospects are reasonably strong that market conditions will notagain lead to excessive stock-building in the near future. Any accumulationof contingency reserves would therefore require that the Government purchasecommodities in the market or have ready access to farm-held stocksunder the Government loan program.Agriculture has always been a cyclical industry; and the fluctuations,though relatively minor, have been around a trend of general abundance inthe United States. One cannot say with certainty whether the unusually tightmarkets of 1973 signal a turning point toward a period in which fluctuationswill be around a trend of relative scarcity, or whether 1973 represents onlyan abnormally large cyclical swing. This increased uncertainty implies thatagriculture must be prepared to adjust to market developments as promptlyand efficiently as possible. The current Government policy, with minimumrestrictions on market mechanisms, is designed to make that possible.136