Subsidies for Not Growing Surplus Crops to Be Sought

The Reagan Administration, in an effort to curb overproduction on U.S. farms, will ask Congress to let it pay subsidies to growers who quit raising surplus crops, Agriculture Secretary Richard E. Lyng said Monday.

The Administration’s so-called decoupling proposal would end the current practice of requiring farmers to plant 50% of their land to receive subsidies for agreeing not to grow a surplus commodity on their other acreage. The bid to separate farm income subsidies from crop production reflects an effort to both reduce federal agriculture spending and to prevent new surpluses from arising.

Lyng, speaking to reporters after appearing in Anaheim at the 68th annual meeting of the American Farm Bureau Federation, said that details of the decoupling proposal have yet to be worked out. In theory, however, the plan would maintain farmers’ income while relieving the federal government of the costly burden of buying and storing excess commodities.

Under the current program, a farmer who in previous years planted 100 acres of wheat, for example, would grow wheat on 50 acres and receive subsidies for holding the other 50 acres out of production. The new proposal would provide the farmer with nearly the same amount of overall income from the 100 acres without requiring any wheat production.

Lyng said the proposal would apply to cotton and rice, which are major California crops, along with feed grains and wheat.

The agriculture secretary also reaffirmed the Administration’s plans to ask Congress to increase the size of scheduled cuts in so-called federal target prices. These prices are benchmarks that govern subsidies for farmers when market prices drop to unprofitable levels.

The current five-year farm law, enacted in December, 1985, would reduce target prices 10% over the next three years. The Administration proposes revising the law to slash those prices by 30%.

Crop payments authorized under the farm in the last fiscal year have totaled $25.8 billion--50% more than anticipated--and are projected to cost $25.2 billion this year, Lyng said.

“It becomes obvious that something must be done to get this massive expenditure under control,” he said.

At the same time, Lyng said, it “would be a great mistake” to entirely rewrite the existing farm law.