Hows that again? The Reagan administration has proposed reducing bulging federal grain surpluses by paying farmers not in cold hard cash but in grain if they withdraw up to half of their land from production.
Not surprisingly, this novel approach has triggered heated controversy throughout the US agricultural community. Proponents, such as Secretary of Agriculture Block, argue that such a plan could reduce government supluses and save taxpayers $3 billion to $5 billion through the mid-1980s. Critics contend the plan would further depress already sagging farm prices and injure merchants and equipment manufacturers who help farmers produce crops.
Many hard questions will have to be put to the administration about the program, especially the effort to freeze or reduce ''target price'' subsidies. Such direct farm subsidies cost taxpayers $1.2 billion in 1982. Given the current financial plight of many farmers, this would hardly seem the moment to lower the safety net for agricultural America.
Nor is the program without its comic twist - paying farmers with farm commodities not to grow farm commodities. A somewhat similar effort was tried and proved unsuccessful back in the 1960s. And yet, despite all the questions to be answered, there are a number of elements about a pay-in-kind plan that make good sense and have in fact already drawn substantial interest from such key farm-community Democrats as Thomas Foley and Walter Huddleston. Senator Huddle-ston recently introduced legislation with a pay-in-kind provision.
The US federal farm support program costs taxpayers upwards of $12 billion annually. It is equally clear that the federal acreage reduction program is not working. Sur-pluses follow surpluses. While US farmers barely hold their own in foreign markets - at the same time as their overseas competitors are gradually boosting export market shares - the US now has 3 billion bushels of surplus corn and another 1 billion bushels of surplus wheat. American taxpayers foot the costs.
Thus, there is something to be said for encouraging farmers to idle some acres - and instead receive payment in crops which they could then sell, or use as feed grain. The land idled could be covered with a soil restoration crop, such as alfalfa, so long as the crop was not subsequently marketed.
The Reagan plan, it should be noted, would be in addition to the existing paid diversion program, under which farmers are paid for idling farmland. Obviously such a scheme, even assuming it could go into effect next year - which seems unlikely - is not an end-all solution to restoring the well-being of the nation's farm economy. The administration must be more vigorous about opening up overseas markets to exports. But a pay-in-kind program should not be dismissed out of hand. The task for lawmakers is to read the fine print on the administration's initiative.