Mixing Politics with Parity

By WALTER ISAACSON

Too many cooks threaten to spoil the farm bill

"Before very long, we're actually going to have to dig big holes and bury this stuff," said Deputy Secretary of Agriculture Richard Lyng in Chicago, waving a piece of moldy cheese. "American taxpayers are spending almost $2 billion this year buying up dairy products nobody wants." Lyng was referring to the most blatant and expensive byproduct of the nation's complex array of agricultural support programs: the 12.6 billion Ibs. of surplus milk produce that the Government has purchased (at a cost of $1.9 billion) to help stabilize dairy prices.

Despite its anxiety about out-of-control deficits, the Administration has fought with less than total zeal for a farm bill that would cut back on agricultural subsidies, which cost the taxpayers about $3 billion in the past fiscal year. The reason, as usual, is politics: the White House agreed to continue supporting certain commodities in exchange for needed votes on its tax and budget bills. Complained Democratic Congressman Bob Shamansky of Ohio, after losing a battle to end tobacco protection: "Instead of democracy in action, we had hypocrisy in action."

Shamansky has a point. The Senate passed a farm bill that would hold the line on future subsidies for grain and dairy products but allow additional protections for sugar and peanuts. The House last week passed by a 192-to-160 vote a totally different bill that would increase dairy and grain subsidies but would eliminate protection for sugar and peanuts. The Senate bill would cost at least $7 billion over the next four years; the House bill would cost $13 billion. The only ones totally pleased with the bills were Southern tobacco planters. Their peculiar allotment system remained untouched in both versions, and presumably will survive this week's negotiations to reconcile the measures.

After much debate last month, the Senate voted to let the milk price supports drop from close to 80% to below 70% of parity, which is defined as the relative buying power that farm commodities had from 1910 to 1914. But the dairy lobby, which, according to Common Cause, a consumer lobby, dispensed more than $1 million in contributions in the past two elections to the Congressmen who voted its way, outmaneuvered Administration supporters in the House. Vermont Republican James Jeffords countered a bipartisan proposal to pare dairy supports to the Senate levels by offering an amendment that would increase subsidies by $2.5 billion over four years. As battle lines were being drawn, Iowa Democrat Berkley Bedell introduced a "compromise" proposal, backed by the dairy industry, that would raise supports by only $400 million over the Senate version. His plan won the day.

The dairy industry also profited from a bit of grandstanding by Senator William Proxmire, the Wisconsin Democrat who regularly dispenses "Golden Fleece" awards for egregious waste of the taxpayers' money. Proxmire, who is up for re-election next year in the country's No. 1 dairy state, may have retired the award by pulling off his own fleece. Both the Senate and House had agreed that pending the passage of a new farm bill, dairy supports should remain unchanged, rather than being allowed under a legal quirk to revert to a higher rate on Sept. 30, when the 1977 farm law expired. But Proxmire blocked single-handed the compromise measure for a month. By then, more than $1 million had been spent in additional dairy subsidies.

The House also raised the so-called target prices for grains and cotton, which require the Government to subsidize farmers if market prices drop below the targets. This year, with the target for wheat at $3.81 per bu., payments for that crop may exceed $400 million. The House bill would raise the wheat target to $4.20 per bu.

The Administration was against the dairy and grain subsidy increases. But representatives from Midwestern farm states were defiant, partly because the White House had earlier agreed to maintain subsidies on sugar, peanuts and tobacco as a way of gaining Southern Democratic votes for its economic package. In fact, resentment over those deals led to a breakdown of the traditional backscratching among Southern and Midwestern Representatives. After winning their grain and dairy supports, most Midwesterners joined other Congressmen to defeat a package of sugar and peanut programs that had been passed by the Senate. Caught between principles and promises, the Administration stood unhappily on the sidelines.

House Democratic leaders, clearly delighted by the unraveling of the Administration's deal with the Southern conservatives, went along with the elimination of sugar and peanut protection. But then came a vote on the tobacco allotment program, which allows only certain landowners to grow the crop. North Carolina Democrats, who had not cut any deals with President Reagan on the economic package, persuaded their party to stick with them. Representative Charles Rose argued that he and his fellow Democrats would be politically crushed at home by the state's powerful Republican Senator Jesse Helms if they let down tobacco.

The shameless politicking over the bills did nothing to reduce many farmers' sense of alienation from Washington. Currently, the Midwest is trying to cope with problems created by the most bountiful harvest ever: 8 billion bu. of corn and 2.8 billion bu. of wheat. The resulting fall in prices has been compounded by rising costs, high interest rates and stagnant consumer demand. But many farm leaders now argue that subsidizing overproduction will not solve their problems. Says Iowa Agriculture Secretary Robert Lounsberry: "The election produced a mandate for the marketplace to set the price, but now a lot of people in Washington are talking differently."

Yet the disarray evident on Capitol Hill last week shows that when it comes to cutting these subsidies, neither budget realities nor congressional protestations about faith in the free market carry much weight. The only encouraging sign that the programs may be controlled is the infighting that has sundered the once unified farm bloc.

--By Walter Isaacson.

Reported by Gisela Bolte/ Washington and Lee Criggs/ Chicago

With reporting by Gisela Bolte, Lee Criggs

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