Drought Panel Stops Short of Urging New Aid

President Reagan’s task force on the drought declined today to recommend any new major federal aid for farmers but promised to help producers if the devastating dry weather continues.

The preliminary report by the President’s inter-agency committee said a continuation of the drought well into July could severely cut crop production, damaging farmers’ income and hurting rural communities.

Agriculture Secretary Richard E. Lyng presented the task force’s interim report on the effects of the debilitating dry spell to Reagan this morning.

The inter-agency committee, co-chaired by Lyng, Interior Secretary Donald P. Hodel and Assistant Secretary of the Army for Civil Works Robert W. Page, was instructed by Reagan to submit a final report in two weeks.

Higher Food Prices

The interim assessment of the drought, the worst since the dust bowl days of the Great Depression, stopped short of endorsing any specific measures to offset the income losses some farmers are expected to suffer from crop damage and higher animal feed costs.

But it said that if the weather pattern does not change, the U.S. government will have to take more steps to alleviate economic and social stress in severe drought areas.

Lyng said the drought could increase U.S. food prices an additional 1% this year and an extra 2% next year from higher crop prices propelled by the bad weather.

The Agriculture Department is currently estimating that food prices overall will rise 3% to 5% in 1988, up from their earlier estimates of 2% to 4%. The increase in food prices will not be enough to spark general inflation, economists and government officials have said.

A drawdown in American crop production may force a reduction in the use of the U.S. agricultural export subsidy program, the Export Enhancement Program, Lyng said.