New USDA budget: treading minefield between consumers and farmers

President Reagan's attempt to clamp down on federal spending is putting the squeeze on the US Department of Agriculture (USDA) from three directions. * The White House promise to "revise entitlements to eliminate unintended benefits" includes chopping $11.7 billion from food stamp spending over the next five years.

* The promise to "reduce middle-upper income benefits" includes a five-year,

* The promise to "apply sound criteria to economic subsidy programs" includes five- year reductions of $9.6 billion from dairy price supports, $1 billion from alternate fuel projects, $32 billion from Rural Electrification Administration loan programs, and $11.8 billion from Farmers Home Administration loan programs.

With a series of smaller-scale cuts in nutrition, commodity, and soil conservation programs, the proposed cuts in the USDA's $28 billion 1982 budget would provide more than 10 percent of the Reagan administration's proposed federal budget savings. Yet congressional observers, farm group representatives , and agribusiness spokesmen not only expect that the cuts will be implemented -- but implemented with little wrangling either in Congress or in the farm states, for now.

Bitter wrangling could surface later, congressional aides say, adding that the quiet now and a possible storm later are logical because of the "high visibility" of farm programs.

Consumers may have little interest in set- asides, reserve levels, and target prices. But they are keenly aware of supermarket food prices, which are the visible results of complex government policies.

Currently, there is little opposition to the Reagan farm policy proposals because they promise such universally popular things as, according to the White House budget statement, "lower prices for consumers and increased consumption of dairy products." Thus it was no surprise when the Senate Agriculture Committee approved the White House plan to cancel a dairy price support increase set for April 1.

Even dairy industry groups accepted the proposal to cut dairy supports without a fight. National Milk Producers Federation spokesman Doni Dondero explains why: "Dairymen naturally recognize that we have more milk now then we have demand for. We are really not on the opposite side of the fence from the administration."

Yet fights could break out on several fronts quickly, congressional aides warn, if food prices climb steeply rather than moderating as promised in the Reagan- Stockman scenario.

Farm organizations such as the American Farm Bureau Federation have endorsed the Reagan budget proposals heartily. But there was similar enthusiastic endorsement for President Carter's Soviet grain embargo 14 months ago. Observers warn that just as farmers turned against Carter, their patriotic support for the Reagan cuts could sour quickly unless there is visible progress in what a Farm Journal editorial praises as Reagan's "all-out effort to bring inflation under control."

Recalling his meetings with farm groups to outline the proposed cuts, chief USDA spokesman John Ochs reports that "we are getting far better support then we ever expected."

He believes that increasing consumer support will join this farm support as consumers and farmers reap the benefits of a more productive agricultural sector.

Yet if farmers' and consumers' hopes are not fulfilled, both groups could switch teams again. To prevent this, President Reagan will need both to keep down supermarket prices and keep down farm production costs. These costs could skyrocket if energy price increases and farm loan program cuts take effect before inflationary pressures ease.

Already some congressmen have joined public interest groups in warning that even "the truly needy" will suffer from the proposed food stamp cuts. A more effective and less controversial way to cut food stamp spending, say the critics , is to deal directly with the national economy.

They point out that a 1 percent drop in the unemployment rate would remove 1 million people from the food stamp rolls. They see inflation as the key factor in ballooning food stamp costs, because a 1 percent increase in the consumer price index automatically raises the government's food stamp costs by $100 million. And this explains why half of the USDA budget is a ccounted for by the

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