Frenzied Poker Game

Congress is moving too far, too fast in its rescue mission for America’s farmers.

The extraordinarily complex and important issue of restoring long-term prosperity in American agricultural has been converted into a partisan political issue. The short-term responses to the credit crisis, apparently drawn with an eye on the 1986 election, are inflated and could do more harm than good for the distressed farmers of the nation.

With House and Senate heaping billion-dollar program on top of billion-dollar program, farmers have been deterred from turning to existing programs and testing their adequacy. As one official in the Department of Agriculture lamented, a great poker game has been created with the players guarding their cards while they watch the size of the pot. Furthermore, some of the congressional remedies are bank-relief programs offered at a time when there are adequate protections for the banks.

The package of emergency measures made available in September already has been liberalized. There is, unfortunately, a serious weakness in what Secretary of Agriculture John R. Block has proposed. He does not have any realistic estimate of just how many farmers are not going to be helped out of their crisis and are going to go under. That imprecision encourages the congressional activity and invites exaggeration of the problem.

But that imprecision does not justify a refusal to test the safety net that has been extended. Most of the troubled farmers can benefit from the existing plan. The ceiling on government funds to guarantee commercial farm loans has been lifted, for example. Now the Farmers Home Administration will guarantee 90% of outstanding commercial loans to farmers who have a prospect of at least breaking even. The basic condition is that the banks must write off 10% of those loans by cutting principal or interest, which seems a reasonable enough requirement. Direct government loans have been liberalized for borrowers who can’t qualify for commercial loans. And a five-year set-aside of debts up to $200,000 owed the government is offered for the first time to hard-pressed farmers who qualify. The programs in place appear to assure most farmers the credit that they need to proceed with spring planting.

In addition to these emergency measures, the government is now rushing to put 90% of the cash for this year’s regular farm programs into farmers’ hands by April 1. That amounts to at least $12 billion. It includes accelerated advance deficiency payments where the market is expected to fall below support prices for rice, cotton, feed grains and wheat. And it also includes payments for the diversion of wheat, upland cotton and rice acreage as well as commodity loans.

This will not save every farmer who is in financial trouble. Nor should it. But the breadth of this program justifies full implementation and a fair test. Only if there is hard evidence of shortcomings should more money and additional programs be voted.