"Nailed for a Billion-Dollar Loss"

Like the Secret Service guards and the White House itself, the farm problem comes with the job of being President. Last February, President John Kennedy began trying his hand at solving the farm fiasco with a complex feed-grain program--and by last week, as Agriculture Department experts studied the first solid returns on the 1961 crop, it was obvious that Kennedy, like most of his predecessors, had only succeeded in making matters worse.

Kennedy's program set out to grapple with the fact that U.S. farmers constantly overproduce feed grains--particularly corn--thereby causing prices to fall and Government surplus stockpiles to bulge. To induce the farmer to grow less, the program bribed him with subsidies: for cutting his normal acreage of corn or grain sorghums by 20%, the Government paid him 50% of the value of the forgone crop. This payment was made either in cash or in the form of grain taken from the surplus stockpiles, which the farmer could then sell or feed to his stock.

$500 Million Bargain. But this was only one of the lures that the Government offered the farmer to take part in the program. Farmers could sell their corn to the Government at the support price of $1.20 a bushel--about 20-c- above the average market price. In addition, the Government punished farmers who did not come into the program by dumping grain on the market to hold down the competitive price. Finally, the Government allowed farmers in the program to use land withdrawn from feed grains to raise other crops.

Won over by these obvious advantages, nearly half of the nation's feed-grain farmers signed up for the program, agreed to cut 23.1% of their corn acreage and 31.1% of their sorghum fields. As late as

July, Agriculture Secretary Orville Freeman was jubilantly predicting that the program would slash feed-grain production by 800 million bushels, reduce surplus stocks by "several hundred million bushels.'' Freeman admitted that the program would cost about $500 million--but called it a bargain, since the reduced stockpile would ultimately save the taxpayer over $500 million in carrying costs.

$1 Billion Loss. But Freeman reckoned without the skill of American farmers, who boosted production on their curtailed acreage by the liberal use of fertilizer and intensive cultivation. In addition, the summer weather through the Midwest was nearly perfect for the crops: days of warm sun broken just often enough by rain. As a result, corn and sorghum production was off only 490 million bushels. From present signs, the $1.8 billion stockpile of surplus corn will be reduced only slightly. To make matters worse, many farmers who cut feed-grain production made a killing by using their fields to raise soybeans, which the Administration was buying at the handsome support price of $2.30 a bushel. Not only did the rush to soybeans produce a record crop, but it gave the U.S. the beginnings of another stockpile of surplus food to worry about.

Far from costing only $500 million, the Administration's feed-grain program will pay out an estimated $768 million. Adding up his estimates of the program's total cost, Charles Shuman, president of the American Farm Bureau Federation, angrily claims: "The program has nailed the American people for a billion-dollar loss." As for Orville Freeman, he was traveling in Asia, while the dismal totals were being totted up.

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