The nation's farmers won some - but not all - of the relief they were seeking from the Carter administration yesterday as higher price support loan rates for feedgrains and the creation of a wheat and rice grain reserve system were announced by Agriculture Secretary Bob Bergland.
Farmers, faced with spiraling production costs but lower market prices due to bumper crops, had been lobbying for substantial increases in the support loan system for months. While the new levels do not match those sought by the growers, spokesmen for various farmer associations said the move will provide some relief from inflation.
The loan rates for corn were increased to $1.75 a bushel from the previous $1.50, soybeans to $3.50 from $2.50, sorghum to $1.70 from $1.43, barley to $1.50 from $1.22, oats to $1 from 72 cents and rye to $1.50 from $1.20.
The price support loan system permits farmers to borrow funds from the government to pay the storage and carrying costs on their crops for a year. In a period of depressed prices, it gives farmers a chance to pick an optimum time at which to sell their crops at market.
The new program announced by Bergland doubled the maximum loan amount to $50,000 and cut the interest rate from 7.5 per cent to 7 per cent on outstanding loans and to 6 per cent on 1977 crop loans.
Farmers can sell their grains at anytime during the loan period, usually one year, and pay off the loan. If a farmer fails to pay off the loan, the government will seize the grain.
The loan rate for wheat was left unchanged at $2.25 a bushel, but the farmer-owned grain reserve system tied to the increased rates is designed to provide some aid for wheat growers. The reserve will also apply to rice, but Agriculture Department officials said "very little" will be stored under the program.
The grain reserve's impact on consumer food prices will be "difficult to measure." Bergland said, but it is expected to help stabilize prices in the long run. "In the long haul, it'll be the best thing that consumers could get," he added.
A record wheat crop of more than 2.1 billion bushels was produced last year. As a result, supplies are now at their highest level since the early 1960s and the market price of wheat is far below what it was a year or two ago.
The three-year program granting extended loans on 1976 crops to growers of wheat and rice is expected to put 300 million bushels of wheat or about 14 per cent of the 1976 harvest in reserve. Agricultural economists estimate that 1.1 billion bushels will still be on hand June 1 when the 1977 harvest is ready.
"The amount of rain between now and harvest time in Kansas is going to have a lot more to do with wheat prices than this reserve mechanism," Bergland told reporters yesterday.
The sizeable wheat surplus is hurting more than the wheat growers, according to John Curry, president of the National Corn Growers' Association.
"We expect to have another record wheat harvest and that's going to mean folks'll use wheat for feed grains too. And that means downard pressure on corn and soybean prices," he explained yesterday.