Farm Credit Agency Runs Out of Money
The Commodity Credit Corp. ran out of money to pay farm subsidies Wednesday, and an emergency $5-billion infusion of cash was blocked by an increasingly bitter Senate stalemate over separate farm legislation.
The agency, which acts as the Agriculture Department’s bank, said it could write no more checks until Congress approved the $5-billion appropriations bill that has cleared neither the Senate nor House.
“We’ll conduct business as usual. We just won’t pay anybody,” Milton Hertz, acting Commodity Credit Corp. executive vice president, said Wednesday night.
Hertz said the agency will have to halt payments for subsidies and for government purchases of surplus dairy products.
The emergency money was trapped behind a 10-part farm package, and Sen. Steven D. Symms (R-Ida.) refused a suggestion by Democratic leader Robert C. Byrd that the Senate act first on the additional Commodity Credit Corp. money.
Senate Republican leader Robert J. Dole of Kansas objected when Sen. Tom Harkin (D-Iowa) demanded assurances that his amendment--calling for loans in advance for farmers this spring--be exempt from Gramm-Rudman budget restrictions.
Among the key provisions in the farm package is a spreading out of the 4.3% Gramm-Rudman cut in dairy subsidies, a restriction on the crops that can be grown on idled land and still receive subsidies, a partial offsetting of declines in yields used to determine farm subsidies with government-owned commodities given to farmers, making the export assistance program discretionary, and cutting in half a program that uses government-owned commodities to subsidize farm exports.
Harkin argued that, by providing 50% of the loans in advance, farmers could get the money at an interest rate of 7.75% instead of the 13% or 14% that they would have to pay commercial lenders. Normally, the loans are offered in the fall with crops as collateral.
“The senator is not interested in dilatory tactics,” Harkin said, speaking in the third person. “This senator is interested in addressing the problems of the farmer. I’m hearing from hundreds of farmers that they need a break in the interest rates.”
Calling the Harkin proposal, opposed by the Administration, the first test of Gramm-Rudman, Dole said: “I just believe there isn’t any real hope that we’re going to add to outlays this year and say this isn’t anything.” He offered Harkin an alternative--a non-binding resolution calling for the advance loans that would give the the Agriculture Department discretion to work out some plan for advance loans.
A year ago, advance price support loans were included in a farm debt relief measure vetoed by President Reagan. Dole said the advance loan provision was the reason for Reagan’s veto of the entire bill.
