The massive size of PIK sign-up: a barometer of US farm troubles?
Houston — After his long battle against any increased federal role in US agriculture, Agriculture Secretary John Block now presides over a massive and expensive federal program to boost depressed farm income.
The size and scope of the program was revealed March 22 when Mr. Block released figures on participation in the ''payment-in-kind'' (PIK) acreage set-aside program. In exchange for crops from bulging government surplus stocks, farmers have agreed to remove a record 82.3 million acres of cropland from production this year. This compares with the earlier record of 64.7 million acres idled in 1962.
The program is intended to bolster low farm income, which Mr. Block primarily blames on excess crop production. The US Department of Agriculture (USDA) responded last December by offering PIK as an extra incentive for acreage reduction. The widely supported objective is to give an immediate boost to farm prices by signaling world markets that the 1983 US grain and cotton harvests will be well below the records set in recent years.
The US signal went out loud and clear. Block noted that even before he announced this year's acreage reduction figures, farm prices had improved significantly in the expectation that PIK would lead to smaller harvests.
Block described this year's overall 36 percent reduction in eligible acreage planted as ''beyond my wildest expectations.'' Farmers have signed up to reduce their normal corn and sorghum acreage by 39.4 million acres, or 39 percent; to reduce wheat by 32.1 million acres, or 35 percent; to reduce cotton by 6.8 million acres, or 44 percent; to reduce rice by 1.7 million acres, or 43 percent; and to reduce barley and oats by 2.3 million acres, or 12 percent.
USDA officials expect some ''slippage'' in the results due to farmers obtaining higher yields by concentrating their efforts on the acreage they do plant. But USDA and industry experts are predicting sharply reduced production. Block told reporters and farm-belt radio listeners Tuesday he expects the 1983 corn harvest to drop from last year's record 8.4 billion bushels to 6.5 billion bushels or less this year. For wheat, he said he expects a decline from last year's 2.81 billion-bushel record to 2 billion bushels.
But, as Block acknowledges, the PIK sign-up is an indication of widespread acceptance that US agriculture is in serious trouble - not an indication that a solution has been found. One House Agriculture Committee staff member says that despite PIK, ''we're still left with a tremendous agricultural production overcapacity.'' He forecasts that Congress will continue to press for major increases in export promotion programs as the best long-term means of balancing supply with demand.
He also says PIK may run into problems when the public realizes that more than $5 billion in taxpayers' money, in the form of government-owned commodities , may be spent this year to pay for idling cropland. At a time when federal support is being cut for a variety of programs to help the poor and unemployed, he says he expects a ''backlash'' against PIK payments, which may be worth as much as $1 million each to some individual farmers.
Along with many other farmers participating in the program, Iowa grain and dairy farmer Charles McLaughlin says PIK payments are not unfair ''handouts.'' He says they represent compensation for damage done farmers by President Carter's grain embargo and President Reagan's refusal to negotiate a new long-term grain agreement with the Soviet Union.
''PIK is probably the only politically possible answer to the oversupply situation, because we can't afford to continue piling up more surplus grain in storage,'' he says. ''But our farm problems and government payments will go right on until we learn that food should not be used as a military weapon and learn to negotiate with our overseas neighbors again.''