Budget cuts reap protest on the farm

Both the dollar value and the social value of individual federal programs depend mightily on your perspective.

For Washington policymakers determined to chain down ballooning federal deficits, ''subsidies'' paid to farmers seem obvious candidates for budget cuts. After years of well-publicized problems with dairy, tobacco, and peanut price support programs, some budget experts may even have assumed they could cut away without fear of opposition.

From the farmer's viewpoint, however, Reagan administration proposals to prune agricultural programs bring the risk of serious damage. True, not many farmers will shoulder pitchforks to defend dairy, tobacco, or peanut programs. But they are lining up to defend less-publicized but far more important grain price supports, farm credit, soil conservation, and agricultural research programs.

The White House wants to hold US Department of Agriculture (USDA) spending to adding $5 billion to the $23.5 proposed in January. This step down from the $33. 4 billion budgeted for 1982 comes at a difficult time for the already weakened farm sector. The House Agriculture Committee, by contrast, has recommended spending up to $32.6 billion for 1983.

Defending what he called his ''austere'' budget, Secretary of Agriculture John Block told the Senate Budget Committee that cuts ''in almost every area of the department'' are necessary in order to ''continue our joint efforts to reduce the growth of federal spending.''

Mr. Block has a number of reasons to expect farmers and their legislators to accept cuts quietly.

The farm belt, which voted heavily for President Reagan in 1980, can be expected to maintain a sense of Republican loyalty despite difficult times.

Moreover, the sharpest cuts in USDA spending are not aimed at farm programs. The largest piece of the agency's budget, the food stamp program, is to drop from $11.2 billion in 1982 to $9.5 billion in 1983. Loans for rural housing, industry, and utilities are to be cut $4.3 billion.

Farm operating loans that directly benefit working farmers are to get a $135 million increase. A $54 million increase is planned for agricultural research.

But farmers and farm organizations are growing restless. They are particularly concerned by indications that net farm income may drop below $15 billion this year, a devastating fall from 1979's $32.7 billion and from last year's $22.9 billion. Farmers argue that faced with such dim prospects, the only way to prevent a wave of foreclosures sweeping through the Midwest is to increase, not cut, federal supports.

Farm-belt support for spending increases seems to contradict continuing demands for less government interference in agriculture.

Many farmers say they accept the need to cut federal deficits in order to reduce inflation and high interest rates, which are particularly hard on farmers.

Farmers and farm organizations insist, however, that 10 years of relative prosperity on US farms meant that federal spending on farm programs declined steadily during a period when spending in other sectors escalated dramatically.

According to an aide to a Republican member of the House Agriculture Committee, ''We have already taken our budget cuts because we didn't get the big increases that everyone else got in the '70s. So it is unfair to have farmers bear even greater cuts at this point.''

In its report to the Senate Budget Committee, the Senate Agriculture Committee warned that the ''worsening economic situation for US farmers'' may make ''remedial legislation'' necessary this year. House Agriculture Committee chairman E. ''Kika'' de la Garza (D) of Texas is supporting additional money to promote exports ''to help American farmers pull out of their current dismal economic situation.''

The House Agriculture Committee's senior staff analyst Gene Moos says that the committee plans a series of regional hearings so that ''if circumstances continue to deteriorate we can come forward quickly with emergency legislation.''

Congressional Budget Office analyst Howard Conley says he agrees that low farm commodity prices and poor export prospects point to continuing problems for farmers. But he doubts Congress will be able to provide extra funds either to prop up farm prices at home or to open new markets overseas. Even though such spending now would help the economy as a whole when the harvest begins next autumn, he says, such action is unlikely because ''it would add directly to the deficit.''

University of Minnesota agricultural economist G. Edward Schuh says he sees an immediate need for increased spending on agriculture. Professor Schuh warns that today's strengthening dollar is forcing major adjustments in American agriculture. He calls for government programs to smooth the transition over the next five years and prevent a ''spiralling of foreclosures.''

Low commodity prices and declining export sales reduce land values and the problem ''feeds on itself,'' Mr. Schuh says. ''You get one group forced to sell out, which puts land values further down and that weakens the equity position of another group and their banks start getting nervous and the first thing you know , they're foreclosing and this just pushes itself right on across the land.''

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