Farm lawmakers drafting a compromise trade bill agreed Tuesday to expand by more than $1 billion an export subsidy program designed to spur worldwide sales of U.S. agricultural commodities. ``With this action, Congress has demonstrated that it will continue to fight European Economic Community subsidization and give American farmers a fair chance to compete in world trade,'' Senate Agriculture Committee Chairman Patrick J. Leahy, D-Vt., said in a statement. The decision to expand to $2.5 billion the Export Enhancement Program came at a subcommittee session of the House-Senate conference committee that is seeking a compromise version of 1,000-page trade bills passed by both houses. Under the program, which was first established by the 1985 farm law, grain exporters are provided with government bonuses in the form of surplus commodities in return for shipping American farm goods. Proponents say the bonuses offset the difference between U.S. prices and lower price tags abroad. But the panel put off action on the most controversial issue it faces, a Senate plan to prod the European Community to drop export subsidies with the threat of a so-called marketing loan program for wheat, corn and soybeans. Marketing loans represent a form of subsidy that provides producers with the U.S. price while selling the commodities abroad at world prices. The government makes up the difference. Marketing loans established by the 1985 farm law sent exports of American cotton and rice skyrocketing while stemming a surge in honey imports. Being weighed by the panel is a so-called ``triggered marketing loan'' that would be put into effect only if current negotiations under the 92-nation General Agreement on Tariffs and Trade failed to produce an agreement on eliminating agricultural export subsidies by the 1990 wheat marketing year. Supporters of the concept said a congressional visit to the GATT talks in Geneva last week found European negotiators dug in over the subsidy issue and added that American negotiators want the ``club'' of a triggered marketing loan to hold over the heads of their counterparts. ``If you were talking to some of the people we have to negotiate with, then you might think we need it, too,'' said Leahy. He said the attitude of some of the Europeans has become ``arrogant.'' Critics said however that such a plan would strain the budget. ``This is potentially a huge amount of money we're talking about in agricultural programs,'' said Rep. Sam Gibbons, D-Fla., whose export-minded home-district citrus producers have traditionally been as wary of import curbs as they have of barriers to their products overseas. Gibbons distributed a letter signed by Agriculture Secretary Richard Lyng, U.S. Trade Representative Clayton K. Yeutter, White House Council of Economic Advisers Chairman Beryl Sprinkel and James Miller, director of the Office of Management and Budget. It described the triggered marketing loan as a concept that could bring about a presidential veto of the trade bill. It was designed to counter claims that American negotiators in Geneva are encouraging the proposal. Rep. Leon Panetta, D-Calif., whose home district includes numerous fruit and vegetable producers, described the concept as one that could boomerang on the lawmakers politically. ``I can see us passing a $600 million marketing loan and the administration saying on the record that they don't want it,'' Panetta said. ``We get attacked on that point and there's no mention that this was a bargaining chip for the GATT negotiations. I sense that coming.'' Wheat Belt lawmakers countered that the proposal would cost the treasury nothing because it would merely serve as ammunition to hasten agreement on subsidy reductions. ``We're not asking you to take her home,'' said Rep. Pat Roberts, R-Kan. ``We're just asking you to dance with her. Then when it's closing time, you can go out the back door.''
