Saving farmers from surpluses -- and debts
Houston — The nation's largest industry - agriculture - is in trouble. One measure of trouble is that US taxpayers shelled out a record $12 billion for federal farm programs in 1982. Despite a series of cost-control measures, farm program costs are expected to climb to more than $18 billion this year, according to the latest US Department of Agriculture (USDA) estimate.
Another leading indicator of hard times: Agricultural export earnings are expected to drop substantially this year. The likely decline to $36 billion would follow a 1982 decline to $39.1 billion from 1981's record $43.8 billion. Agriculture Secretary John Block warns that further losses in export value, volume, and market share lie ahead unless the US responds quickly and aggressively to unfair trading practices increasingly being used by competing suppliers.
Faced with the prospect that net US farm income for 1983 will decline from 1982's $20.4 billion to $16-$20 billion, well below 1981's $25.1 billion, Mr. Block has been lobbying hard to win congressional support for his farm programs. But instead of endorsing Reagan administration farm policies, the strengthened Democratic majority on the House Agriculture Committee hopes to implement its own broad range of corrective measures.
As a first step, the House Agriculture Committee proposes adding as much as $ 4.3 billion to the Reagan administration's $39.2 billion USDA budget request for 1984. Congressmen support increasing direct government action to promote US farm exports and to support the growing number of farm families threatened with foreclosures or bankruptcy. They point to statistics showing that total US farm debt has risen from just 8 percent of production expenses in 1975 to 16 percent last year.
Secretary Block's answer, given March 7 in one of a series of conference telephone calls connecting him with journalists around the nation, is that ''In all my years associated with agriculture, never has there been a more critical time for farmers to make the right decision.'' For Block, the right decision will mean that 23 million acres of US farmland will be enrolled in his new ''payment-in-kind'' (PIK) program by this week's March 11 deadline for signup.
Under PIK provisions, participating farmers will be repaid with government-surplus bushels of grain and bales of cotton for crops they agree not to harvest this year. The aim is to reduce the US surplus of grain and cotton, which ends up being purchased and stored by the US Department of Agriculture.
''If we don't make PIK work, then we will be the victims of our own inaction, '' Block warns. ''PIK is the life preserver that we must cling to.''
Block agrees that endorsing PIK contradicts his own commitment to reducing government intervention in agriculture. But he finds current farm problems so serious that special measures are required. He recommends PIK because ''it does self-destruct and it positions us so that we can get out once we get the supply and demand into much closer balance than we see it today. . . .''
Blaming current low farm commodity prices on excess supplies, Block explains that the PIK program is intended to remove at least 10 million acres of feedgrains, 10 million acres of wheat, and 3 million acres of rice and cotton from production.
Block warns that producers risk driving prices still lower if many decide to stay out of the PIK program. Excess production cannot continue, he says, adding that the only choice is that cuts can be achieved ''either through a government program which can be helpful in easing the pain, or simply as a result of the fact that farmers would eventually have to quit producing because the prices would get low enough that they would in effect be starved out.''
Texas Farm Bureau president S. M. True, who raises cotton, wheat, grain sorghum, and soybeans on his 960 acres in the Texas panhandle, agrees on the need for production cuts and supports PIK enthusiastically. He has entered the program by agreeing to hold 50 percent of his eligible cropland out of production and expects most of his neighbors to do the same.
PIK, says Mr. True, should help ''eliminate current burdensome surpluses . . . reduce the cost to the government of our agriculture programs . . . and it gives me an opportunity to clean up some land.''
For Tom Toll, farming 1,500 acres in Kansas, this year's PIK offer came too late. He'd already planted his crop. But despite his general aversion to any form of government intervention in agriculture, he expects to sign up his land next year.