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Congressional opposition, harvest surplus trip up proposed Reagan farm bill cutbacks

By Jonathan HarschStaff correspondent of The Christian Science Monitor / October 9, 1981



Chicago

Reagan administration plans for swift and decisive cuts in farm program spending have come unstuck. As congressional observers predict at least another two-week delay for the renewel of the 1977 farm bill which expired Sept. 30, two factors are being blamed for the setback:

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*The administration's failure to divide Congress's traditional urban-farm coalition that trades farm price support votes for food stamp and nutritional program votes.

*Bumper harvests, which mean that farmers who planned to make a profit on their own now argue they need more, not less, federal support than last year.

This year's bin-bursting harvests of wheat, corn, and soybeans do promise some lower prices in US supermarkets. But ironically the bountiful harvest ends up socking the taxpayer anyway through higher government support programs. Extra federal spending comes from deficiency payments to farmers forced to sell their grain and cotton below the government-set "target price" and from government-funded loan and storage programs designed to keep excess supplies from depressing prices further by flooding the market.

Some estimates forecast that the bare-bones farm bill approved by the Senate Sept. 18 will cost $4 billion in 1982, rather than the $2 billion planned, simply due to increased support programs triggered by excess supplies.

With a new round of haggling over the farm bill in Congress, President Reagan is expected to have a completed version ready by Nov. 1 at the earliest. But ironing out differences between the Senate and House versions could put signing off until Nov. 15. According to one key congressional Expert dealing with the issue, the final bill will "be designed to meet budget necessities and not designed to meet the producer's expectations." This aide expects that "the ultimate cost of the farm bill as finally signed into law by the President will not exceed the cost of the Senate bill by any significant amount."

Reaching the end result of a pared-down farm bill has been complicated by congressmen sensing a changed mood in the country. Earlier, when the tide was running strongly in favor of sweeping budget cuts, congressmen fought for the honor of sponsoring cost-cutting measures. Now, with more doubts surfacing about the effect of proposed cuts, there is a return to the traditional situation of the House only agreeing to cuts under threat of a presidential veto.

According to the same congressional staffer, "You have a Democratic House wanting to transfer the responsibility for cutting back on agricultural programs to the Republican Senate and the administration, forcing the administration either to threaten . . . or just having to veto finally."

Forcing a farm bill through with a veto threat is far from the Reagan administration's original intentions. Six months ago, the administration set out to eliminate target prices and cut into such controversial special programs as those dealing with tobacco, sugar, and peanuts. The theory was that such programs only survived because votes for welfare programs to help the urban poor were being traded for farm price support votes. The administration hoped to split that coalition and cut spending sharply in both areas.

Administration strategy broke down, say some observers, because of its four-month delay in ending the embargo on grain sales to the Soviet Union. The delay undermined farm state support for the administration and often is blamed for current depressed grain prices.

The nation's largest farm organization, the American Farm Bureau Federation, remains a staunch backer of the administration's original proposals to cut farm price support programs drastically. According to Farm Bureau president robertt B. Delano, subsidizing American farms is counterproductive because it undermines the free market system.

In a Farm Bureau News editorial, Mr. Delano writes, "It is plain that markets are the only appropriate answer to improved farm income -- selling what we have for feed and food rather than placing it in any form of federally supervised storage to depress markets in future years."

Delano sees the answer to current low farm income as marketing more farm products more aggressively. He argues that "a 100 million bushel increase in wheat use . . .will raise the per bushel price by 25 cents. This would put another $700 million in producer pockets and save US taxpayers $400 million in deficiency payments under federal programs."