House Rejects Referendum for Farm Plan

A bipartisan House coalition gave the Reagan Administration a major victory on farm policy Thursday, defeating a proposed new system of crop production controls that was aimed at boosting the incomes of struggling wheat and corn growers.

“I’m extremely pleased,” Agriculture Secretary John R. Block said after the House voted 251 to 174 to strip the hotly contested provision from a five-year, $141-billion farm bill, a measure that would spend several billion more than President Reagan has said he wants.

Eighty-two Democrats ignored the pleas of their top party leaders and joined 169 Republicans in rejecting the plan.

Sponsored by Iowa’s Bedell

The proposal, sponsored by Rep. Berkley Bedell (D-Iowa), would have allowed wheat and corn farmers to decide in a national referendum whether they wanted cuts of up to 50% in planted acreage in exchange for sharp increases in crop price supports.

Proponents of the plan--including Midwestern House Democrats and a grass-roots farm group, the American Agriculture Movement--called it a necessary gamble and contended that it would have pumped up farm incomes while reducing huge grain surpluses.

Opponents, however, argued that the farm bill already contained a better alternative for boosting incomes: reductions in government price supports, thus making American crops more competitive in fast-growing foreign markets. They asserted that the lower prices would be more than offset by the expanded volume of sales.

Block, who personally lobbied more than 100 House members, said that rejection of the proposal significantly enhances prospects for a House-Senate compromise farm bill that President Reagan could sign.

The House version is a massive measure that would lower price supports but continue expensive income subsidy programs in an effort to tide thousands of debt-ridden farmers through the worst rural crisis since the Great Depression.

A Companion Bill

The Senate will take up a companion bill this month that contains a production controls provision similar to that deleted by the House.

Block and his House allies argued that stiff production controls might aid farmers’ income in the short run but that it eventually would leave them worse off by drastically shrinking export markets.

Instead of production controls, the Administration is pushing to move toward a “market-oriented” system that would tie prices closer to the forces of supply and demand.

The Administration wants Congress to lower not only price supports but also income subsidies. And although both the House and Senate Agriculture committees have refused to slice income subsidies, they have agreed to lower price supports--that is, minimum guaranteed prices established through a crop loan program.

Farmers Get Loans

Under that program, farmers obtain government loans for their crops at harvest, then simply let the government keep the crop without repaying the loan if market prices turn out to be lower than the crop-loan support price.

Vigorously backing the Administration in its opposition to production controls were seed, fertilizer and farm equipment suppliers who would lose sales in the event of reduced farm output--and beef, pork and poultry producers who would be undercut by foreign competitors in the event of increased feed grain prices.

Production controls also would affect grocery shoppers, driving up the price of bread, cereal, hamburger and other foods.

“A lot of congressmen will vote for the referendum because they have been propagandized by country singers (at the recent Farm Aid concert) and because they want to avoid a vote on which they themselves can be held responsible,” Rep. Ron Marlenee (R-Mont.) charged in opposing the production control idea.

Taxpayer Savings Cited

However, proponents of the controls argued that taxpayer savings would be substantial because the government would be forced to buy up smaller amounts of grain and the “target price” income subsidy program would be eliminated.

Rep. Dan Glickman (D-Kan.), who said that half of the farmers in his district face bankruptcy, declared it is time to try something new with the production controls.

“Yes, it involves a lot of risk,” he said, “but it just might save a lot of farmers in the next 10 to 20 years.”

Ostensibly, the controls, if approved in the referendum, would have been voluntary--although in reality, most farmers would have had little choice but to participate. Farmers who did not join would have been barred from selling their crops domestically, although they could have exported them at the lower world price.

Participating farmers, meanwhile, would have been issued marketing certificates for domestic sales and would have been eligible for export subsidies to keep them competitive in world markets.