July 30, 1982

The U.S.-U.S.S.R. grain agreement, which has governed our grain trade with the Soviet Union since 1976, is due to expire September 30. After discussion in the Cabinet, I have authorized U.S. officials to explore the possibility with the Soviet Union of a 1-year extension of the existing grain agreement. I have further authorized them to explore in the consultations with the Soviets, normally conducted under the agreement, the possibility of additional grain sales to the Soviet Union.

In this decision, I have ruled out any negotiation of a new long-term agreement at this time. On December 29th, I postponed such negotiations until the Soviet Union indicates that it is prepared to permit the process of reconciliation in Poland to go forward and demonstrates this desire with deeds and not just words. My decision reinforces this objective. The Soviets should not be afforded the additional security of a new long-term grain agreement as long as repression continues in Poland.

At the same time, American farmers will not be made to bear alone the burdens of this policy toward the Soviet Union. In the spring of 1981, I lifted the grain embargo imposed by the previous administration, because it was not having the desired effect of seriously penalizing the U.S.S.R. for its brutal invasion and occupation of Afghanistan. Instead, alternative suppliers of this widely available commodity stepped in to make up for the grain which would have been normally supplied by U.S. farmers. These developments substantially undercut the tremendous sacrifices of our farmers, and I vowed at that time not to impose a grain embargo unilaterally unless it was part of a general cutoff of trade between the United States and the Soviet Union.

I renew that pledge to American farmers today. American farmers can be assured that they will continue to have a fair opportunity to export grain to the U.S.S.R. on a cash basis. Other suppliers, who sometimes criticize our grain sales, also supply grain to the Soviet Union. Grain sales have little impact on Soviet military and industrial capabilities. They absorb hard currency earnings and feed the people of the Soviet Union, who are suffering most from the disastrous economic policies of the Soviet Government.