Preserving an agrarian heritage
]CONGRESS is working on its own version of the ``FarmAid'' spectacle -- spurred on no doubt by the attention to farm troubles drawn by entertainer Willie Nelson and others Sunday night. The House will take up amendments this Thursday on its new five-year bill. The most innovative feature of the new bill calls for a referendum of farmers on an acreage set-aside and loan program. If 60 percent of all farmers and 50 percent of wheat and corn growers approve of voluntary acreage restrictions, then loan rates would be raised from current levels (that is, from $2.55 to $3.25 per bushel for corn and from $3.30 to $4.50 for wheat). Acreage idling, while voluntary, would be required for participation in the loan program. Because the world market price would like ly be lower than the guaranteed level, a two-price system for corn and wheat -- a US level and a world level -- would be established. The US in effect would be providing an export subsidy.
The acreages to be idled would be substantial. This harvest year, with a 10 percent acreage cut on feed grains, production still is expected to run 20 percent above market needs. This year, an idling of 30 percent would have been necessary to bring supply and demand into balance. Through 1990, acreage reductions of 20 percent to 40 percent could be required -- running against the farmer's own basic instinct to plant as much as he can, as well as continued technological progress that seems to produce m ore and more on less and less land. A competing proposal would make production limits mandatory.
What would be the impact on food imports? Would the US in effect be exporting its feed lots overseas? As it is, US meat producers rely on import controls to exclude beef and pork imports. Lower grain prices abroad could give foreign meat producers a further cost edge, while the protectionist barrier would become more deeply entrenched. Otherwise, more than the livestock producers would be affected. The impact of shifting feed lot and food processing abroad, in lost American jobs and income, could be c onsiderable.
On the plus side, the referendum acreage-loan program would mean a net gain for farmers, who would begin by saving on expenses for not planting idled land. While the size of the potential subsidy is not really known, for the time being banks -- who have been foreclosing farm loans at record rates -- would be encouraged to go another round with the cash grain producers, though not necessarily with the livestock producers.
Farm legislation can produce some of the most innovative, and costly, programs Washington can devise. US overproduction can be traced back to earlier federal incentives for fencepost-to-fencepost planting.
The ``FarmAid'' entertainment show from Champaign, Ill., last weekend was intended to dramatize the plight of those farmers sqeezed off their homesteads by debt, to pressure Congress for action as well as to raise money for debt relief. Observers of the performance could not help but note how vigorously the image of America's agrarian past survives, despite the tremendous migration from the land to the city that has occurred since World War II. It is evident not only in the popularity of country-and-wes tern songs and attire and the trendy ownership of gentlemen ranches and farmsteads (often as a tax hedge for the well-to-do); the tradition of rural populism, which led to many political reforms, also continues today. It remains to be seen how greatly House members, and senators considering a similar bill, value this agrarian heritage at a time of deep federal deficits and demands for protection against imports from abroad.