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Price Supports Extended to Grain Stored on Ground

August 13, 1986|ELEANOR CLIFT | Times Staff Writer

SPRINGFIELD, Ill. — President Reagan, campaigning for GOP candidates in the economically stricken Farm Belt, said Tuesday that his Administration will give price support subsidies to farmers for surplus grain that they are forced to leave on the ground because of overflowing storage facilities.

"I give you my promise: The nation will see our farmers through," he told an enthusiastic crowd of Illinois State Fair goers.

Shucking his suit jacket under the noon sun and speaking from a platform stacked with bales of hay, Reagan declared that "government has a responsibility to lend a hand" when such a traditional way of life as farming is threatened.

It is unclear how much the added subsidies--in the form of loans on the farmers' crops--will cost. But an Agriculture Department spokesman estimated that the price tag would be at least $100 million and perhaps more. Ordinarily, grain must be stored in facilities such as farm silos or grain elevators to qualify for the federal loans.

Bins Already Full

But many of these storage bins already are full because the 1985 harvest was huge and sales were sluggish. Another large harvest begins soon and farmers forced to store grain on the ground or in temporary facilities that are approved by the government now will be able to get loans on that grain for nine months.

In his speech, Reagan defended his recent decision to sell subsidized grain to the Soviet Union, a decision that ran counter to his hard line Soviet rhetoric and that was denounced by Secretary of State George P. Shultz as blatantly political.

"For some, this is difficult to understand--after all, the Soviets are our adversaries," Reagan said. "The truth is, I didn't make this decision for them; I made it for the American farmer and all Americans."

Asked at his news conference in Chicago on Tuesday night about Shultz' criticism, the President said: "You guys all caught Secretary Shultz (after) he'd been away. You caught him before he had a chance to talk to us and find out what it was we really had done."

Under Political Pressure

With the fate of several Republican senators from the Midwest possibly hinging on his farm policies, Reagan is under great pressure to deliver for farmers despite his long-standing aversion to government subsidies.

In fact, Reagan boasted in his speech here that his Administration has spent some $26 billion on farm support programs this year alone--more than the $20 billion spent by the Jimmy Carter Administration during its four years in office.

He also claimed that his Administration has provided more support to farmers than did the administrations of the last five presidents taken together. He did not mention that he had initially fought the current farm bill because he considered it bloated.

Of the new crop loans, he announced, Reagan said:

"Farmers need these harvest loans, and we intend to see they get them, regardless of problems with storage that are beyond their control."

Corn Production Up

Figures released Tuesday by the Agriculture Department show that corn production this year is at a record 120.4 bushels per acre, up 2.4 bushels per acre from last year's record. While soybeans and wheat are down slightly from last year, they still qualify as bumper crops.

If farmers who own the grain securing the government loan subsequently sell it, they must repay the loan. But if the grain does not sell, the farmers keep the federal money and the government adds the grain to its stockpiles.

Last month, after a similar campaign visit to South Carolina, Reagan announced a number of measures to assist farmers suffering from the severe drought conditions. Tuesday, he underscored that commitment with the announcement of a Federal Drought Assistance Task Force that will work with state governors and local officials to assess weather-related damage and to expedite federal assistance.

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