The New American Farmer

For tall, burly Pat Benedict, 44, the day begins as early as it did for farmers in Mesopotamia in 8000 B.C. He rises before dawn to pull on boots, blue jeans and work shirt. By 6 a.m. he is breakfasting with some neighbors at the Double D Diner off Interstate 94 outside Sabin, Minn. (pop. 333). For an hour or so, he trades community gossip, argues about politics and drops casual remarks about crops and prices designed to feel out what his fellow farmers are doing without asking them a direct question, which is taboo. Then off to the fields--and into the computer age.

Benedict makes a quick trip by pickup truck around his 3,500 acres of wheat and sugar beets. At each of many stops he whips out a pocket calculator and does some rapid figuring before giving the hired hands orders on, say, exactly how much pesticide to spray on each field. By 8 a.m. he is heading home to start the most important part of his day: several hours spent at a rolltop desk in his small study. There Benedict goes over computer print-outs analyzing his plantings acre by acre: inputs of seed, fertilizer, irrigation water, machine time; output in bushels and dollars. He draws up precise operating schedules for his half-million dollars' worth of machinery; after all, every gallon of fuel saved adds a few more cents to profit. His print-outs also help him ponder marketing strategy (when should he time the sale of his crops to get the best price?) and financial problems (how can he distribute the stock in his family corporation so that his wife and seven children pay the lowest estate taxes?).

Sometimes he pauses to reflect wistfully that the demands of managing a business with $3.5 million in assets keep him from doing as much of the actual planting and harvesting as he would like. Says Benedict: "I miss it, because spending eight hours in a tractor cab is a therapeutic kind of work. But I can't assign myself an all-day task running a machine any more. I have to be able to move about to make sure that it all comes together."

For a farmer to complain that he does not get to spend enough time in the fields must be something new in the 10,000-year history of agriculture. But in the U.S. of 1978, Pat Benedict is archetypal of the farmers who make U.S. agriculture the nation's most efficient and productive industry and by far the biggest force holding down the trade deficit. Revolutionary changes are sweeping the croplands, making agriculture an increasingly capital-intensive, hightechnology, mass-production business. As a result, U.S. farmers are dividing into two distinct classes. Small farmers, who do not have the technical expertise, are rapidly leaving the land. Large farmers, like Benedict, who know how to use credit and the latest in agricultural science, are gaining an ever greater share of the market. They produce most of the food that the U.S. eats and almost all that it sells to the world.

To succeed in this fast-changing, low-margin business, a fellow has to be nimble. Says Jack Neuman, 45, who raises corn, soybeans and hogs in Sangamon County, Ill.: "It used to be that if you had a child who wasn't too bright, you'd say, 'Son, you're going to be a farmer.' Nowadays, if that dumb kid comes along volunteering to farm, you've got to say, 'Oh, a man in hell would love to drink a glass of ice water, but it just can't be done.' "

Some city consumers may sneer at that statement. Though recent polls show widespread sympathy for farmers, there has long been a fashionable opinion that big farmers, at least, are pampered wards of Government living high off the inflation that is pushing up food prices--10% this year. Few realize that 87% of the rise in food prices since 1973 has occurred after the food left the farm. That is a consequence of Americans' insatiable desire for ever fancier processing and packaging, along with rising off-farm wages. Last year, for the first time, workers in slaughterhouses, canneries, freezing plants and supermarkets got more (32%) of the retail food dollar than farmers did. Farmers received only 31% of the money spent in food stores and restaurants, down from 37% in 1973.

Zooming costs of processing and distribution have created a strange paradox. Higher farm prices instantly bring increases at the grocery checkout, but retail food prices can also go on rising while farm prices drop sharply. Example: the Soviet grain purchase of 1972 and other heavy export demand kicked off a few years of unprecedented farm prosperity. Net farm income more than doubled in three years to an unparalleled $33 billion in 1973, and soaring retail food prices combined with OPEC's oil gouging to produce double-digit inflation. In 1976 and 1977, farm prices broke; farm income shriveled to $20.5 billion in 1977, and a noisy American Agriculture Movement sprang up overnight to send farmers rumbling into Washington and state capitals aboard their tractors (some cost $30,000, and a few came with air-conditioned cabs and stereo tape decks).

Now, as farmers rush to gather in a bin-busting harvest, their fortunes have improved. The prices that farmers received averaged 23% higher in September than a year earlier, while the prices they paid for tools, fertilizer and consumer goods--including food--rose only 10%. Most crops have been bountiful enough this year to cause even retail food prices to level off after a frightening winter-spring rise. The Department of Agriculture predicts record 1978 crops of corn, soybeans, hay and fall potatoes. Corn is so abundant that Midwestern farmers are storing it on streets, playgrounds and tennis courts.

As always in agriculture, a diverse industry, one farmer's good fortune may result from another's pinch. An agricultural-loan specialist for California's Bank of America asserts: "You'd have to be pretty incompetent not to make money in cattle this year." Reason: a combination of high prices for meat and relatively low costs for corn and other feeds that has corn growers grumbling. Vegetable growers in central Florida are selling big crops of lettuce at prices that have been pushed abnormally high by the winter-spring rains that made California lettuce scarce and unappetizing.

Net farm income is expected to hit $25 billion this year, almost 25% over 1977 and the third highest on record. But the purchasing power of those dollars is no higher than in 1969. Farmers who raise the grain and cattle curse inflation as vehemently as does the shopper grumbling about the price of bread and steak.

Inflation--and a realization by investors that farm land is a vital resource in a hungry world--has more than doubled the price of U.S. farm land since 1972, to an average $490 an acre last February; prime Midwestern corn and soybean land sells for $2,000 an acre. A tractor that sold for $16,000 in 1974 may cost almost twice as much now; it would have a few new features, but be no more powerful. The result is that farmers have been forced into financing decisions as intricate as those facing corporate treasurers. Borrowing money at interest rates of up to 12% to buy or rent additional land and invest in machinery can improve a farm's productivity and profits--or it can ruin a farmer who expands too fast while crop prices are falling, as many growers did in 1976-77. Indeed, the angry protests last fall and winter came largely from younger, undercapitalized farmers who borrowed and bought too much too soon and were badly squeezed by inflation.

Meanwhile, a sweeping change in federal farm laws enacted in 1973 has forced farmers to become marketing specialists. Nearly all crops these days must be sold on the private market. Washington will make cash payments to farmers if market prices fall below Government-set "target prices" that supposedly cover most--not all--production costs. But no longer will Uncle Sam buy and store crops to prop the price; federal purchases these days are limited to small amounts for foreign aid, school-lunch programs and the like. Instead, the Government encourages farmers to store on their own land any produce they do not want to sell immediately, by offering low-interest loans to build storage facilities. All over the Midwest, shiny new galvanized-metal bins with conical roofs have become as prominent as the traditional white frame farmhouse.

The result: instead of selling all their crops at harvest time, as they did for centuries (indeed, millenniums), farmers now spread sales all through the year. That forces them to face tricky questions: Will wheat or corn or soybean prices be higher next March than now, and if so will they be enough higher to justify storing 80% of the crop until then, or only 60% of it? To complicate matters further, a farmer can work out deals to sell part of his crop in October, say, but get the cash next January if that would be better for tax purposes. All of which should stir pride in the ghost of William Jennings Bryan, who insisted in his 1896 cross-of-gold speech that "the farmer ... is as much a businessman as the man who goes upon the board of trade and bets upon the price of grain."

The successful farmer today must understand enough engineering and science to participate in a technological upheaval that is changing the very shape of the land and the nature of his crops. Says Lawrence Rappaport, chairman of the department of vegetable crops at the University of California at Davis: "Agriculture is now in perpetual revolution, and there is no end in sight." People flying over the West and Midwest see an unusual pattern on the terrain below: not the familiar farm land with checkerboard squares, but large polka dots, the result of costly ($50,000 each) center-pivot irrigation machines that automatically propel themselves around the fields in a circle. Some of the strawberries that Americans buy and eat are cloned. Yes, cloned. The process in brief: plant tissue is mushed up, placed in a clear, jelly-like mix of nutrients and injected with hormones that force the cells to divide and differentiate; each cell develops into a strawberry plant. Farmers can thus bypass the seed and can plant well-developed shoots that grow fast and are free from viruses that attack plants germinating naturally.

Because of the technological revolution, one farmer in the U.S. now feeds 59 people. Elsewhere, the ratio of total population to the number of farmers and farm laborers is 19.2 in Western Europe, 13.7 in Japan, a mere 10 in the Soviet Union. U.S. agriculture feeds people well and cheaply too. The average American intake of more than 3,000 calories per day is among the highest in the world, and though citizens of some other nations match the U.S. in calories, probably none do in variety of diet.

To be sure, epicures complain rightly that the bland taste of American fruits and vegetables cannot compare with the flavor of much produce delivered to European tables. In the U.S., food must be refrigerated, preserved and shipped across continental distances, and the varieties suitable to mechanical planting and harvesting often are not as tasty as those cultivated lovingly by hand (some people cannot discover any taste at all in cloned strawberries). But agricultural mass production has a benefit more important to most people: it keeps costs down. High as retail food prices have gone, food accounts for only 23% of all private spending by Americans; only Canadians come very close. By contrast, food consumes 25.8% of all private spending in France, 27% in West Germany, 33.1% in Japan, 42% in Brazil, 52% in the U.S.S.R.

Enough food is left over to make the export capacity of American agriculture the hope of the have-not world. Farm-product exports tripled in the past six years to almost $27 billion, helping mightily to offset the cost of imports. The U.S. exports more wheat, corn and other coarse grains (barley, oats, sorghum) than all the rest of the world combined. Pat Benedict and farmers like him are America's best hope to counter the trade challenge presented by the oilmen of Araby and the energetic manufacturers of Japan. U.S. food exports would be higher still were it not for a variety of barriers: outrageous quotas that keep Japanese consumers from buying as much U.S. beef and fruit as they would like, variable tariffs that hold the prices of American foodstuffs in the European Community above those of locally grown items, and the inability of the hungry underdeveloped nations to scrape up enough cash to buy more U.S. meat and grain.

At home, the necessity for the successful farmer to become a financier-salesman-engineer-scientist has accelerated a rural social revolution. Former Secretary of Agriculture Earl Butz vigorously preached the virtues of large-scale efficient farming, a message often translated in the croplands into five blunt words: Get big or get out. The decline in U.S. farm population that has been under way at least since 1910 has speeded up in recent years. By April 1977, only 1 of every 28 Americans lived on a farm, vs. 1 in 21 in 1970 and 1 in 3 early in the century. The number of people living on U.S. farms, fewer than 10 million, is lower now than in 1830.

Some 70% of the 2.7 million farms left in the U.S. (down from 4 million in 1960) gross $20,000 or less each year, and the people who work them should not be classed as farmers at all. Some have failed to make a living growing crops and now commute to town to work as factory hands or clerks; others are mainly fertilizer salesmen, rural storekeepers or the like who raise, say, a few hogs as a sideline. "Farmers" in the $20,000-and-under class get 80% of their income from off-the-land jobs.

The 30% of U.S. farms classified as medium-sized or large take in no less than 90% of all cash receipts from agriculture. At the top of the scale, farms grossing $100,000 a year or more are increasing --to 162,000 last year, from 23,000 in 1960 --partly by swallowing up the lands of less successful farmers who sold out. Though these very large operations still constitute only 6% of all farms, they take in 53% of all farm cash receipts, almost double then-share as recently as 1967. These big farms are on the cutting edge of the marketing and technological revolution, as exemplified by the operations of Benedict Farms Inc. and its president and sole stockholder, Patrick E. Benedict.

Six foot two and ruggedly handsome, Benedict is an odd mixture of shyness and aggressiveness. He speaks slowly and softly, choosing each word with care, and has to' be coaxed into talking about himself. But in discussing his business, he displays the combative urge that made him a championship wrestler in high school and during his two-year Navy hitch. Says Pat: "It's a sport I identify with. You're out there on your own, and if you can't cut it, it's pretty obvious." He feels much the same about farming, castigating many of his fellows for being too timid about expanding and adopting new technology. As he told TIME Correspondent Roberto Sur: "I think it's because they're alone a lot out in the fields and they have too much time to think. They end up convincing themselves that if they just hold on for a year longer things will get better and there will be no need to make troublesome changes. But the economics are such that I think if you're standing still you're really falling behind. You've got to grow to stay alive."

Pat has been expanding ever since he joined his father Edwin, now 67 and retired, as a full-time farmer in 1951 after two years at Moorhead (Minn.) State University. The Benedict family, originally from France (the first known ancestor came to colonial America after a stopover in England in the early 1700s), has been farming since Pat's great-grandfather moved to Minnesota from Wisconsin shortly after the Civil War. During the Depression the homestead shrank from 1,000 acres to 400 and father Edwin had to hunt partridges to help feed the family. But post-World War II prosperity enabled Edwin to buy another 300 acres when Pat began farming with him.

Throughout the 1950s and 1960s, Pat and Edwin kept reinvesting their profits and borrowing to acquire more land. Today the family owns 1,900 acres and rents another 1,600--underscoring a surprising point about modern U.S. farm economics. Tenant farmers these days are no longer the classic Southern sharecroppers, who have almost disappeared, but are often expanding agriculturists like Benedict who own land too. As it grew, Pat's farm absorbed four others; in three cases, he razed and burned the houses, uprooted graceful shade trees and returned all the land to crops. Says he: "Those farms had lived out their usefulness, and I guess I've brought them back to productivity."

In the past five years Pat has been expanding, and trying to beat the wild fluctuations in crop prices, in another way: bringing to the farm lands the concept known in industry as vertical integration. Like other growers, he resented having to take his beets for milling to the nearby American Crystal Sugar Co. plant. One reason: the company's officers, then based in Denver, insisted on shutting down the mills on weekends, even during harvest time when beets must be ground up quickly before they rot. Recalls Pat: "We were at the mercy of people a thousand miles away who just were not concerned with our needs." So Benedict, as a director of the Red River Valley Sugarbeet Growers Association, organized 1,600 farmers to put up $20 million in cash, borrow another $47 million and buy out the company. Now they run the mills, sell sugar directly to industrial users and have access to a company computer that provides each farmer-investor with a detailed analysis of his beet fields for the past three years.

In 1975, Pat extended vertical integration to wheat. He was miffed because the operators of a country elevator refused to buy part of his crop when he judged the price to be right, but told him to wait several weeks while they worked out storage and transport snarls. Benedict got nine other growers together to put up $1.5 million, buy an elevator and incorporate it as Northern Grain Co.

While these investments have made him a genuine corporate executive, Benedict looks on them merely as extensions of his farm. Says he: "I just wanted to sell grain and beets exactly when it best suited my own operation. The market is so crazy these days that if you can't get access to the price you want the moment it is offered, you might as well give up. Eliminate uncertainties, that's the golden rule. You eliminate uncertainties in production through technology and very careful management. You eliminate uncertainties in price by controlling the marketing as much as you can. That leaves demand and the weather as the big question marks, and you don't worry about them unless you want stomach pains."

He does not get pains, but Benedict admits to some anxiety about taking over failed farms: "Any farm closing is traumatic. You worry that the fellow who sells out knows something you don't because he's shutting down and you're taking on debts to expand." But in his view expansion is the only way to make money: "Each acre produces so little profit that all you can do is go for bigger acres and make sure that each acre produces more crop." So, besides buying land, he has purchased so much machinery that it requires a football-field-sized yard just to park it. A partial inventory: four 15-ton trucks, three pickup trucks, seven tractors, three center-pivot irrigators and three wheat combines that cost $30,000 each, yet are used only about two weeks a year.

Benedict estimates that it costs $300 an acre to raise sugar beets. At an average yield of 15 tons an acre, and a depressed price this year of around $21 a ton, the typical beet grower will receive $315 an acre, producing a thin profit in view of the heavy investment required. But Benedict's mechanization and tight management enable him to grow 20 tons an acre, worth $420, enough to promise a worthwhile return.

In wheat, his size and mechanization make him independent of the Government Had he chosen to "set aside" (not plant) 20% of his 2,000 wheat acres this year, he would have qualified to receive a Government-guaranteed "target price" of $3.40 a bushel. Benedict elected instead to plant all his acres, gambling that eventually he will get a high enough price to make a larger profit on a bigger crop. Whether he wins he will not know for many months. He has signed a contract to sell 40% of his wheat crop, for a price that he says "will cover costs and a little more," and will store the rest to release whenever he judges market conditions to be right. At current prices, about $3 a bushel, his wheat crop would be worth $270,000.

Over the years, Benedict has averaged a return of only 3.5% on the $3.5 million present value of his investment. Of course, since he bought much of the land and many of the machines when prices were lower, his return on original investment is substantially higher; nonetheless, in theory he could enjoy a larger income by selling out and putting the money in bank certificates of deposit paying around 9% interest. Such profits on even the most efficient farms are too meager to interest big corporations. The fears that the family farm would be taken over by "agribusiness" have proved unfounded. Corporations with more than ten stockholders account for less than 2% of U.S. farm sales. Even farms large enough to incorporate themselves generally operate as a family affair--emphatically including Pat Benedict's. His farm, like many others, has been incorporated only to save on estate taxes for his heirs.

Pat employs two full-time hired hands, and during peak planting and harvest periods a dozen migrants from Texas or local high school students. The primary work force is the family: Sons Michael, 20, Blane, 18, Kurt, 13, and Daughters Stephanie, 19, and Lisa, 16. Even eleven-year-old David drives a tractor pulling a harvester that yanks three tons of sugar beets out of the ground every minute. All earn $3 an hour. During the wheat harvest each of them worked eight hours a day in staggered shifts so that some member of the family was in the fields 24 hours a day. Says Pat: "The kids learn that you are paid according to how much you work. That's what it's all about, rewarding productivity."

The only Benedict exempted from chores is two-year-old Luke, and even he tours the fields regularly, bouncing on his father's lap in a pickup truck (his present on his second birthday: a toy tractor). Besides the supervision and paperwork, Pat labors with his hands too, doing most of the machinery repairs himself.

Pat's wife Fran, 43, is somewhat in the background; the Benedict family is a decided patriarchy. A farmer's daughter, she worked as a stewardess for Braniff Airlines and met Pat during a layover in Fargo, N. Dak.; a sister of Pat's who worked at the hotel where Fran stayed introduced them. Fran is the secretary of Benedict Farms and does the bookkeeping. During planting and harvesting seasons she also runs the farm's communications network, relaying messages by private FM radio band between Pat's pickup truck, the other machines in the fields and the outside world--meanwhile whipping up quick meals for all members of the family whenever they come in from the fields, even if that is 1 a.m. as it sometimes is for Pat. She goes along on most of Pat's frequent trips to meetings of farm organizations in big cities, but she is most at home in her kitchen, where she is a master of the Pillsbury Bake-Off school of roast-beef-and-apple-pie cuisine.

Socially, the Benedicts are an example of the conservative values associated with farmers; their life-style would seem spartan to a city family with their assets. Fran delights in giving small dinner parties for neighbors--at which Pat may down a Scotch or two, though his regular drink is beer. But many evenings and weekends are devoted to TV or simply family conversation. The Benedicts are Roman Catholics and regular churchgoers; when St. Cecilia's Church in Sabin burned to the ground two years ago, Pat was elected to help supervise construction of a new building. He is close with his money but has unwound enough in the past few years to buy a Cadillac, several color TV sets and motorcycles for each of his three oldest sons. This year he even treated himself to a two-week trip hunting elk, bear and bighorn sheep in the Canadian Yukon. Pat sounds apologetic about his worldly goods and pleasures: 'Since the kids have gotten older we've bought a lot of things we really didn't need --but that is one of the reasons we've been working hard."

The children all seem to enjoy farming, but Pat insists that they not make up their minds about careers until they finish college. Says Pat: "I've seen some families come to blows because a son was forced to farm when he didn't want to." But last year, when he bought still another neighbor's farm, Pat for the first time left the house standing because "it would be perfect for one of the kids."

If the kids should choose to leave the farm, where is the next generation of Pat Benedicts to come from? That is perhaps the most important question in American agriculture. High interest rates, soaring prices for land, machinery, fertilizer and pesticides, and the very fact that farmers must operate on a large scale to be fairly confident of regular profit, make it difficult for operators of small- and medium-sized farms to expand and even tougher for young farmers to get started.

Says John Strickland, a veteran of 25 years of farming and service as a county agricultural agent in Georgia: "Four or five hundred acres is about the minimum farm from which a decent living can be made. Buying that much land would cost between $400,000 and half a million. No young man, no matter how much initiative and savvy he has and no matter how hard he is willing to work, is likely to be able to raise the capital needed."

Iowa's David Garst, one of the biggest U.S. farmer-businessmen (see box), argues that a young farmer can still get started if he is willing to rent land at first, buy used instead of. new machinery, and take a part-time job off the farm to supplement his income in the early years. But that requires a devotion to back-breaking labor and to the rural life that even many youths raised on farms no longer display.

California Wheat and Barley Grower Ken Lederer, 44, waxes lyrical about the spiritual rewards of farming: "When you see all your work out there on the ground, dependent on so many things you can't control, like the frost, the bugs and the rain, you begin to appreciate how small we really are and that there must be some kind of overall pattern for the world. I think when you get right down to it there's a closeness to God that farmers feel." But will Sons Mike, 19, and Gary, 18, share his beliefs? Says their mother Viola: "All I can tell you is what I hear them say: 'Mom and Dad don't get to go anywhere. The farm is their whole life.' "

Sons of the most successful farmers, naturally enough, see things differently. California's Gary Kitahara, 26, a third-generation Japanese American, studied chemistry, accounting and business administration, and "was never all that excited about farming"--even though his father George, 59, has made enough money growing nectarines, plums, peaches and grapes to buy not one but two airplanes to fly for fun. Says Gary: "I had seen my dad struggle, and there were times that it didn't look real good." But Gary's mind changed rapidly when Dad offered to buy him his own farm and take him into the family corporation, GVG Farms: "The money can be pretty good and the lifestyle is a little less hectic. I like that."

Another problem is whether farmers can keep up the rate of technological innovation that has made U.S. agriculture the productivity wonder of the world. So far, agricultural tinkerers are continuing to develop new techniques and devices. One of them: a herbicide sprayer with a receiver that catches any spray that does not hit a plant and recycles it into the pump, economizing on spray and preventing pollution of the ground. Another innovation is an irrigation system that covers even more ground than a center-pivot machine; it is a diesel-powered contraption that pushes a boom a half mile long and irrigates 320 acres at a crack.

Researchers are talking about having computers monitor the internal workings of cattle, so that farmers could calculate better how to fatten them. The computers could read radio-telemetry signals on body temperature, heartbeat and respiration rates from transmitters swallowed by the cows or carried on backpacks. Already, an electronic entrepreneur named Marvin Marshall tours the dairylands of Illinois, Indiana, Michigan and Ohio in a Ford Econoline van packed with IBM computer equipment. In two hours he will analyze a farmer's dairy cows and whip out a formula for feed calculated to permit each beast to produce the maximum amount of milk while remaining in glowing health.

Scientists are changing the nature of crops so fast that, as George Kitahara puts it, "present varieties of fruit trees are obsolete before they are full grown." Consider, for instance, what scientists at the University of California at Davis are doing with the lowly tomato. They have developed a "square" tomato with a tough flat-sided skin that is ideal for both picking by machine and packing for shipment without bruising; it has become the standard tomato for canning. Now agrono mists are close to developing a tomato resistant to the salt that settles in irrigated fields or is blown onto cropland by sea breezes. One researcher quips: "I don't think we'll ever be satisfied until we've got a tomato that can be grown on the moon and whistles Yankee Doodle Dandy. "In general, the greatest problems concerning agricultural technology seem to be whether farmers can keep up with it and scrape up the money to use it.

A final uncertainty facing agriculture is Government farm policy. Pat Benedict complains that it consists of "frustrating contradictions," and he has a point. For 40 years, starting with the New Deal, policy aimed at having farmers restrict production and sell at high Government-supported prices. In 1973-74, Earl Butz tried a new tack: he lobbied through Congress the law under which farmers could no longer unload their crops on the Government, urged them to increase output by planting "fence to fence," and set target prices far below market quotes. He got away with it because rocketing export demand permitted farmers for a year or two to sell everything they could grow at prices that the Government did not have to prop.

The Carter Administration, which took office when farm prices were falling drastically, partially reversed the Butz policy. Besides urging farmers to participate in set-aside programs, it has, with considerable prodding from Congress, established target prices for wheat and corn that are above today's market quotes, even though these target prices by no means guarantee farmers a profit. Government outlays to support farm incomes have quadrupled in two years, to an estimated $7.9 billion in fiscal 1978. But the Administration has resisted pressure to set support prices still higher--even though Agriculture Secretary Bob Bergland last winter had to climb out a basement window to escape a few fanatic farmers who invaded his office demanding that the Government bail them out.

There is considerable room for improvement in farm policy. If some form of price support has to be continued--and a case can be made for it as a kind of disaster insurance--the practice of setting target prices just high enough to cover most production costs is a good one. But many experts believe the Government should drop its set-aside programs and once more urge farmers to produce. The U.S. and the world need all the food that American farmers can grow. Set-asides also tend to benefit big farmers, who can more easily take, say, 10% of their land out of production than small growers can.

Congress has already put a ceiling --in most cases $40,000 a year --on the target-price payments that any one farm can receive. It could go further and establish a sliding scale, with full target prices applying only to the first 50,000 or so bushels of a farmer's production. That would funnel a larger portion of the payments to small farmers who have less ability to survive a one-year loss.

Washington also could help all farmers--and the world--by pushing agricultural exports even harder. For example, U.S. negotiators at the world trade talks in Geneva might insist that the nation will do nothing to open the U.S. market wider to European and Japanese goods unless industrialized nations let in more American-grown food. The Government might also expand its aid--$10 million this year --to farmers who organize cooperative groups that develop foreign markets. One tempting target: China, which has just begun to buy U.S. meat and grain and could use more. Carter has signed a new law that permits indirect Government loans to finance food exports to China and establishes U.S. Agricultural Trade Offices overseas, strengthening efforts currently carried on by embassy officials.

In the end, the future of American agriculture is really up to the farmers. Paradoxically, in an enterprise perhaps more heavily influenced by the Government than any other, big and efficient farmers like Pat Benedict are giving the nation a lesson in Adam Smith economics. By carefully calculating their potential profit in a free market, planning their operations around those computations and reinvesting the profits in more output, they are acting the way Smith said capitalists should. The results have been about what Smith predicted: growing production, rising innovation, expanding exports--and reasonable costs to customers.

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