Congress seeks middle ground on bill to prop up farmers. Challenge is to balance need for aid with mandate to curb federal spending

Farmers who crowded congressional hallways last winter with dire warnings of a farm crisis have long since returned home, where most are busy working in their fields. But the message they brought of a collapsing agricultural community still echoes in the United States Capitol.

Lawmakers, now struggling over a farm bill that will direct federal farm policy for the next four years, are caught in a wrenching dilemma. They want to help farmers. They also want to cut the federal deficit, which means reducing payments to farmers.

As a result, both houses are moving toward a new farm program that takes the middle ground.

``We are trying to draft a bill that takes into consideration farmers, consumers, and the deficit,'' says Sen. Thad Cochran (R) of Mississippi.

The compromise shaping up would provide a safety net of federal price supports to forestall a collapse of agriculture. But it would not rescue farmers who have fallen deep into debt.

The final bill will probably restrain federal farm spending, which has risen to the highest level in history during the last four years. But with thousands of farmers on the financial ropes, almost no one involved expects drastic cutbacks.

``The hard times in agriculture'' require more spending ``than we earlier hoped,'' says a spokesman for Agriculture Secretary John R. Block. The Reagan administration has already had to shelve its plans for an austere farm bill.

Instead, both parties are coming together behind what a senior House Democratic aide calls a ``transition'' approach. ``We have to send [farmers] a signal that this is a period of adjustment,'' says the aide.

The adjustment period may not be easy. ``I don't see any solution in the new farm program for a fairly large number of farmers in deep trouble,'' says Martin E. Abel, a Washington farm economist and longtime observer of farm policy.

``At the same time, there is a feeling that what is being done will enable'' many farmers ``to survive and, the hope is, to prosper again,'' Mr. Abel said.

Major aspects of the four-year farm bill, as proposed in congressional committees, include:

An innovative crop loan plan. Developed by Senator Cochran, the plan would permit farmers to borrow money from the government based on relatively high prices and repay the loans at the lower rate the crop brings at the market. The plan would permit crop prices to fall with out devastating farmers.

Lower prices would, in turn, make US products more competitive in world markets.

Although Cochran's ``marketing loan'' has won support on both sides of the Capitol, GOP sources say the Reagan administration is skeptical of its cost.

Lower prices. The current farm program, written in 1981, when inflation was still high, provides for higher crop price supports.

``Now we're in a position where our prices are out of whack'' with world markets, says an aide to Senate majority leader Robert Dole (R) of Kansas.

The new program will almost certainly edge prices downward.

Removal of marginal farmland from production. Tough conservation provisions could idle as much as 25 million acres of land that is easily eroded. Shrinking acreage would also be part of the effort to reduce farm surpluses.

The shape of the program displeases some in Congress.

It calls ``for continued shrinkage of our industry,'' says an aide to Sen. Rudy Boschwitz (R) of Minnesota, who has tried to redirect the farm bill toward greater use of acreage, with fewer high-cost chemicals and fertilizers.

Farm policy expert Abel applauds the cautious direction of the new farm program as ``generally the right one.''

But there are few Pollyannas when it comes to the effects on agriculture.

``I think we're realistic in our view that it is going to take two or three years to turn this thing around,'' says Rand M. Russell, deputy assistant secretary of agriculture for economics.

At least, he adds in an interview, the new program will replace the 1981 policies, which ``added to our problems.'' Competing nations saw high US price supports and decided to boost their own production at lower prices, according to the agriculture official.

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