advantage continues, despite hikes in Canal tolls since 1974 and the advent of air transportation and innovative land-sea connections.

Last year, for instance, the Canal handled 70 percent of all U.S. farm commodity exports to 15 markets in East, Southeast and South Asia and Oceania. The Asian market as a whole now means $8.5 billion to U.S. farmers and ranks alongside Western Europe as the leading outlet for U.S. agricultural products. Japan-the largest single-country market, with imports of U.S. farm products approaching $4 billion—took over 12 million tons of U.S. agricultural shipments through the Canal last year. That adds up to around 60 percent of all U.S. farm product exports through the Canal and an even larger percentage of U.S. farm trade with Japan.

South Korea and Taiwan each took more than 1.5 million tons of U.S. products via the Canal last year, while Hong Kong, Indonesia, and Chile also received large quantities of westward bound shipments.

Such products originate throughout the eastern half of the United States, ranging from the granary States of the Midwest and Great Plains to the cotton fields of Arkansas and Louisiana.

U.S. corn and soybeans bound for the Far East travel to Great Lakes ports or down the Missouri, Ohio, and Mississippi River to the gulf for westward shipment through the Canal.

Short-staple cottons used by Asian markets are produced in Texas and the western Old South and shipped out of the gulf.

While White wheat and Hard Spring wheats produced in the Pacific Northwest tend to go to west coast ports, Hard Red Winter wheats and almost all grain sorghum move out of the gulf and—again—through the Canal.

PANAMA CANAL CARGO MOVEMENT, BY PRINCIPAL TRADE ROUTES, 1966-751

1 Toll-paying ocean-going commercial traffic (vessels of 300 Panama Canal net tons and over).

Source: "Panama Canal Company Board of Directors Report of Panel on Proposed Changes in Rates of Tolls for the Panama Canal," Sept. 13, 1976.

PANAMA CANAL: MOVEMENT OF MAJOR AGRICULTURAL PRODUCTS THROUGH THE CANAL IN 1976

Note: Atlantic/Pacific lumber and products in 1976, were 216,000 metric tons and Pacific/Atlantic shipments were 5,432 000 tons.

Trade between the U.S. east coast and Asia was 47,900,000 tons or 48 percent of the total canal cargo volume through the canal. Japan was the origin or destination of 44,700,000 tons of cargo transiting the canal or 77.1 percent of the total cargo moving to and from the Far East.

Source: Panama Canal Company, "Annual Report. Fiscal Year-June 30, 1976."

Also of significance are shipments from the U.S. west coast to Europe, as well as to the U.S. east coast. Last year, 60,802 bales of California and Arizona cotton moved eastbound into export through the Canal. In addition, much canned fruits and vegetables moving from the west coast to east coast, as well as some citrus and dried fruits, go through the Canal.

Total shipping through the Canal during fiscal 1976 included 13,201 ship transits and cargo movements of 119.3 million metric tons. (However, this was the lowest level since 1965, reflecting the worldwide recession and reopening of the Suez Canal.)

Of all foreign trade going in and out of U.S. seaports, 7 percent passed through the Canal in fiscal 1976, compared with 13 percent in 1949. More than two-thirds of this trade either originated in the United States or was destined for U.S. ports.

Tolls on the Panama Canal have been increased three times since 1974-once as a result of a technical change and twice to make up for deficits incurred by the Panama Canal Company, which is required by law to be self-sustaning. So far, these increases have carried charges some 50 percent above those prevailing before 1974, to $1.29 per ton currently.

Still, the Canal is a much more economic means of shipping bulk products than any other alternative now available.

Recruiting grain shipments around South America might almost double transportation costs, according to USDA analysis. And transit time would be increased considerably; for example, shipping time from New Orleans to Yokohama wuold rise from an average of 25 to 45 days in vessels that normally carry shipments of bulk grain.

Such factors would lessen the U.S. farmer's ability to compete for Asian markets, thus benefiting Australia and other exporting nations with access to the Pacific or those with closer locations to major markets. Cross-country land-sea transportation-including the minibridge system with surface carriers now used extensively for container shipping-also would be prohibitively expensive for grains and soybeans. Moreover, existing transportation and port facilities could not handle the volume increases that would be required to circumvent the Canal.