Reagan Signs High-Cost Farm Bill : New Measure Likely to Boost U.S. Subsidy Spending to Record

President Reagan today signed into law a farm bill that is likely to boost federal subsidy spending to record levels while it tries to restore health to U.S. agricultural exports.

But despite reservations about the high spending and some provisions the Administration regards as detrimental, Reagan said the legislation is “on balance . . . a step forward for American agriculture” that will move farming closer to the “market-oriented” industry he has sought.

The President said the bill is “moving away from the failed policies of the past” and provides “new hope for America’s hard-working farmers and our rural communities.”

“If things are not going well down on the farm, things cannot continue to go well in our cities and towns,” he said in a ceremony in the State Dining Room at the White House, surrounded by farm-state lawmakers, Agriculture Department officials and farm lobbyists.

The President also signed a rescue package for the financially strained Farm Credit System, the $70-billion banking network that is the nation’s largest farm lender.

Closed-Circuit Conference

The President then went to the Agriculture Department to hold a brief closed-circuit television news conference with farm-state reporters in an effort to demonstrate concern for agriculture’s problems.

Reagan was asked how he could justify the farm bill’s estimated three-year cost of $52 billion when the Administration had set a limit $2 billion lower.

“Because that is what is necessary, if we can do the job,” Reagan replied, adding that his Administration has spent a record amount on farm programs since taking office.

Also, he said, the extra spending will be “necessary if we are to solve the farm problem in the right way” by moving farmers to market-oriented programs “and less of a heavy hand of government.”

Senate Majority Leader Bob Dole of Kansas praised enactment of the two bills as “essential first steps in restoring hope and confidence in rural America.”

‘Real Trouble Out There’

He said, “There’s no doubt there’s real trouble out there, but Congress shouldn’t throw money at the problem. We want the system to put its own house in order, and I believe this legislation will help accomplish that goal.”

The farm bill reauthorizes for five years a long list of programs ranging from crop price supports and income subsidies to foreign famine relief efforts, food stamps and agricultural credit, research and extension programs.

At the heart of the bill are provisions lowering federal price supports for major commodities, including wheat, corn, rice, cotton and soybeans. The action is designed to make the crops more competitive in world trade and restore U.S. market share lost in recent years to an overvalued dollar and excessive support levels.

In a gesture of concern over the badly slumping farm economy, the bill replaces income lost to lower price supports with income subsidies.

While the cost of the bill’s commodity sections has been estimated at $52 billion over the next three years, analysts say it is likely to go considerably higher--perhaps to $75 billion--and set new records for farm-program spending.