House Rejects Cuts in Sugar, Dairy Subsidies

Combining sympathy for struggling farmers with strong trade protectionist sentiment, the House on Thursday crushed efforts to cut federal price supports for sugar and dairy producers in the first key votes on a new long-term, $141-billion farm bill.

The price support level for sugar was upheld by a vote of 263 to 142, while dairy price supports were retained, 244 to 166. That left untouched in the bill a plan to raise dairy prices through a new price-support system and to revive an earlier program that would pay some dairy farmers to cut production, paying costs of the plan through an assessment against all dairymen.

Blow to Coalition

The surprisingly lopsided margins dealt a sharp blow to a “reform coalition” composed of the Reagan Administration, consumer groups, business interests and selected farmer organizations. The coalition aims to cut the rapidly growing cost of farm subsidies and to lower food costs.

In other trade action Thursday, the House Ways and Means Committee voted to greatly reduce textile imports from the Far East and Brazil, moving Congress even closer to its first direct showdown with President Reagan over trade policy (See Page 14).

The votes on sugar and dairy prices indicated that the bill drafted by the Agriculture Committee will clear the House largely intact--and in a form that the Administration has threatened to veto.

The Democratic-run House will continue voting on amendments to the five-year farm bill next week. The Republican-controlled Senate is expected to wait until the House completes action before taking up its version of the legislation, which generally is more to the Administration’s liking.

In defeating a cut in the sugar price-support level, the House rejected arguments that sugar is artificially overpriced, giving a windfall to growers at the expense of taxpayers and consumers. Proponents of the current support of 18 cents per pound contended that this level is necessary to preserve the domestic sugar industry and its 100,000 full- and part-time jobs.

House Agriculture Committee Chairman E. (Kika) de la Garza (D-Tex.) pleaded for votes against the amendment from lawmakers who are concerned about foreign competition to U.S. shoe, textile and auto industries.

Key Vote on Protection

“This will be the first vote on whether we protect American producers and manufacturers this year,” he said.

Rep. Thomas J. Downey (D-N.Y.), co-sponsor with Rep. Bill Gradison (R-Ohio) of the unsuccessful amendment to reduce sugar supports by a penny a pound each year through 1988, said he was surprised at the result--especially after the House had voted four years ago to eliminate sugar subsidies altogether.

“I underestimated the enormous protectionist sentiment out there,” Downey said. “Also, the farmer at this point is a very sympathetic figure,” he added, noting the severe economic distress in most of the Farm Belt.

As on the sugar issue, sympathy for the plight of debt-ridden farmers figured prominently in the defeat of the amendment by Reps. James R. Olin (D-Va.) and Robert H. Michel (R-Ill.) to cut the milk price support of $11.60 per 100 pounds by 50 cents a year.

Proposal Criticized

“The Olin-Michel proposal would prefer to put people into bankruptcy and to eliminate dairy farmers,” California Rep. Tony Coelho (D-Merced), chairman of the Agriculture subcommittee on livestock, dairy and poultry, charged in debate. Coelho said his panel’s plan would “keep the dairy farmer in business” while reducing massive government stockpiles of milk, cheese and butter.

California Rep. Leon E. Panetta (D-Monterey) said that the overwhelming votes on sugar and dairy prices demonstrated that the general farmer organizations and commodity groups had reunited following a breakup in 1981 over disputes concerning how subsidies should be allocated within a shrinking farm budget.

“Each commodity has decided to support the other in battle,” Panetta said.