Harvest of Greens

The evidence is mounting that all of the dire forecasts made about the farm bill when it was voted a year ago are proving correct with a vengeance. Costs are exceeding expectations, surpluses are still mountainous, benefits remain heavily targeted where they are least needed, and export subsidies are disrupting world markets, harming old friends and compounding problems of poverty and the international drug trade.

Rice and cotton exports are expanding rapidly under marketing loan provisions of the farm bill that have gone into effect in recent months, allowing subsidies that bring the prices down to levels that are competitive on the world market. But the cost has proven to be intolerable, estimated at more than $4 billion this year, much of it in benefits to large producers who have no appropriate claim on taxpayers’ generosity.

And the exports risk doing damage to producers, like Australia, that do not subsidize their farm exports.

The sugar program has, as expected, proven even more disruptive of foreign markets, driving some traditional sugar producers in the Caribbean and Central America into the production of illicit drugs because they have been denied access to the U.S. market under the reduced sugar import quotas that allow Americans to grow more and more at their higher prices. The world sugar market was further destabilized when the U.S. government disposed, at bargain prices, of tons of sugar, forfeited in 1985 under the federal loan program. China bought a shipment of sugar for less than 5 cents a pound for which the U.S. government had paid 18 cents.

Even costlier are the corn and wheat programs. Corn subsidies will cost taxpayers at least $8.3 billion this fiscal year, the wheat program about $3.8 billion, according to some estimates. Administration estimates that new incentives to idle additional acreage will reduce feed grain subsidies to $5.7 billion have been widely challenged. Even with acreage limitations last year, the surplus was staggering, with year-end corn stocks up almost one-third and wheat stocks down only about 5% this year, the first drop in four years.

When all the farm program costs are added up for this fiscal year, they will approach $30 billion. For what? The image of most Americans is that the farm bill supports the traditional family farm. That bucolic vision is reinforced by films of the sad plight of some farmers. But in fact the farm programs have benefited disproportionately the very large producers that do not require government support, and efforts in the last Congress to cap individual subsidies will have only marginal impact. They have postponed adjustments in price and management through which American farmers may be able to regain a competitive place in world markets. And the trend to direct and indirect export subsidies risks destroying the very world markets on which the American farm prosperity is dependent.

President Reagan sought to encourage a beginning of that realistic adjustment last year and was hooted down by a Congress that somehow thought farmers would be impressed by perpetuation of old structures no longer relevant to world markets that have become intensely competitive.

There remains a confidence in Washington that American farmers can compete. Their technological advantage was demonstrated again this year with a new record in the per acre productivity of corn. Before it does more damage, the 1985 farm bill must be reformed to facilitate that competition. To the extent that federal farm programs are in the national interest, they must meet the needs tests that apply to other welfare programs.