The farm slide
YOU can't blame the land. Even in Iowa's Blackfoot and Grundy Counties, with some of the world's deepest and richest topsoil, farmers are going broke. Will America let its agriculture, long a symbol of its great bounty, go the way of its heavy industry, once the symbol of its great bustle?
Will Washington view grain and milk the way it does steel and autos -- that is, as declining national commodities that must adjust to new international market forces, instead of propping up farming with crop and income supports that somehow never seem to deliver agriculture from impending ruin?
Basically this is a political, not just an economic question. And it is a big enough political question to require a special national inquiry, the way the future of social security, Central American policy, and strategic defense have been addressed in Washington by special panels or conferences the past few years.
The economics are clear enough. A severe credit crunch threatens perhaps 1 in 7 commercial-scale farms. Excess capacity could require the idling of millions of acres. Recession worldwide and better crops elsewhere have meant a shrinking world market and greater competition abroad. High interest rates and declining land values are making an excruciating squeeze of indebtedness, and bumper crops that depress prices make it impossible for farmers to recover costs on major crops like soybeans.
The White House has set up a cabinet-level task force to review the farm credit system's plight. The White House has been embarrassed by its farm policies: It says it favors a free market approach, but it has presided over outlays of $59 billion in farm price supports, triple the previous administration's level. Congress, with an election coming next year, is expected to vote some form of further short-term subsidy aid for farmers; the price, however, may be further regulation, which farmers and many in
the Reagan administration resist.
When Congress returns, it faces an end-of-September deadline for writing another four-year farm bill. Reelection is very much on Congress's mind. A half dozen farm-state senators face reelection in 1986, another 10 in 1988. Both chambers are thinking of busting their own $30 billion target for commodity supports the next three years, agreed on in their recent budget conference. The House is running $10 billion over the target, the Senate from $5 billion to $18 billion. The White House, having all but dr opped out of the farm legislation action, is holding the proposed spending up to a veto threat.
This is all short-term political maneuvering over a long-term structural problem. What may be needed, as some argue, is an American agricultural policy along the lines of an industrial policy. At the least, the US should consider the kind of government-coordinated grains marketing program that major competitor nations like Canada profitably run. Japan's example of focusing marketing and production forces in industrial product areas could be considered for the US grain trade.
Already a shakeout of American farmers is going on -- 50,000 fewer farmsteads the past year alone. Fewer farmers will not necessarily mean less land tilled, however, just bigger farms. One reason American food costs are low for consumers is the competition among many growers; farm credit and subsidy programs have helped keep many of those small farmers in business.
Farmers are realistic. They can see their own responsibility for their condition and a need to adjust to a changed world food-production climate. ``The life style has been too high,'' says Iowa farmer John Iseminger. ``We've been using everybody else's money -- now they want their money back. It means we've got to tighten our belts.'' To confront chronic surpluses, voluntary acreage cutbacks may have to be made mandatory.
But farmers can see too that while their land values have depreciated, croplands -- and the commercial, transportation, and marketing activity they generate -- still remain a valuable asset to the economy.
Does America want its farm belt idled the way much of its industrial belt has been idled? Or does it want simply to let the financial shakeout of farmers run its course, considering that farmers farm with capital as much as they do with land?
Congress will put some fix on the farm-assistance problem when it returns to Washington next month. But for a longer-range solution, a broader scale inquiry is needed.