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House Passes Farm Bill Keyed to Price Supports

October 09, 1985|PAUL HOUSTON | Times Staff Writer

WASHINGTON — The House, fearful of precipitately abandoning thousands of desperate farmers, Tuesday overwhelmingly approved a five-year, $141-billion farm bill that would make relatively modest changes in expensive crop subsidy programs.

The massive bill, passed by a vote of 282 to 141, not only renews basic price support programs but also provides for significantly expanded export subsidies, increased food stamp benefits and improved soil conservation measures.

Senate Fight Expected

The legislation now goes to the Senate, which will begin considering its own version next week in what is expected to be a protracted, unpredictable debate.

Both the House-passed bill and a measure approved by the Senate Agriculture Committee reject the sweeping cutbacks in crop subsidy programs that President Reagan proposed last January. Thus, over the next three years, the House bill would spend nearly $34 billion on crop programs, $4 billion more than Reagan originally requested.

The mood was significantly different when work began on farm legislation nine months ago, as many in Congress and the agricultural community apparently agreed with the President's contention that existing programs were costly failures and major reforms were needed.

But over the last few months, as economic conditions rapidly worsened in much of rural America, Congress decided that this was no time to wean debt-ridden farmers from five decades of federal aid.

The Administration, which also softened its proposals as the farm crisis expanded, nevertheless has vowed to veto any budget-busting bill. Agriculture Secretary John R. Block said he still hopes a compromise bill will emerge that substantially cuts dairy price supports and trims the enormous income subsidies paid to wheat, corn, cotton and rice farmers.

At the same time, the Administration hopes to duplicate in the Senate a major victory it achieved last week in the House and again Tuesday, when representatives rejected a proposed farmer referendum aimed at sharply increasing grain price supports while limiting production.

The Senate Agriculture Committee's measure contains a production control referendum similar to that deleted in the House. Sen. Tom Harkin (D-Iowa), strongly supported by the grass-roots farmer group known as the American Agriculture Movement, plans to lead an effort to liberalize the provision, while the Administration hopes to kill it.

The Administration and its congressional allies protest that production controls--if approved by farmers in a national referendum--would push farm policy in the direction of more government intervention instead of less. Reagan seeks a "market-oriented" policy that would phase out income subsidies and tie crop price supports--arbitrarily set by Congress in the past--much closer to the marketplace forces of supply and demand.

Seeks to Avoid 'Quick-Fix'

Reducing price supports, the Administration argues, would make American crops more competitive in fast-growing foreign markets, benefiting farmers more in the long run than a "quick-fix" income boost provided by a production-control program.

The House bill wound up taking a middle road, providing for somewhat lower, "market-oriented" price supports as a means of increasing export sales. However, to maintain an income safety net, the program of direct cash subsidies was continued at increased spending levels.

The Administration, working closely with Senate Majority Leader Bob Dole (R-Kan.), will attempt to force a substantial reduction of those subsidies on the Senate floor and, later, in a Senate-House conference committee.

Besides the provisions relating to crop programs, the House bill includes these other key elements:

--Export subsidies and credits. In a new multibillion-dollar program to boost exports of American crops, the government would give away surplus commodities as price-lowering bonuses to exporters or foreign purchasers. In contrast to a similar $2-billion Administration program announced earlier this year, costs would not be limited.

Expands Loan Program

In addition, the bill would substantially expand loans to foreign buyers of U.S. crops and increase by $200 million a year donations of surplus commodities to foreign countries.

--Food stamps. Liberalization of benefits and eligibility would cost an additional $1 billion over three years, restoring some cuts made in 1981. The total program cost, which was $9.2 billion in 1980 and is nearly $13 billion this year, would rise to an estimated $15.4 billion by 1990.

The House easily rejected a bid Monday by Rep. Bill Emerson (R-Mo.) to hold the benefit increases to currently provided levels. The chief defender of the add-ons, California Rep. Leon E. Panetta (D-Monterey), argued that they are needed to relieve "intolerable levels of hunger."

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