Say cheese.

About 555 million pounds of cheese, in addition to butter and nonfat dry milk -- all owned by the U.S. government -- are tied up in red tape and beginning to deteriorate. The government doesn't seem to know what to do with the surplus, which caused one USDA official to remark to The Washington Post last week, "Probably the cheapest and most practical thing would be to dump it in the ocean."

It's a situation that could motivate the average consumer to become active in politics, says Ellen Haas, director of the Community Nutrition Institute. "Consumers have a great stake in agriculture policy," she says. "It relates directly to the cost of food at the supermarket."

The policy in this case is price supports -- the price that the government guarantees certain farmers will get for their products.

The situation is this: The government supports agriculture by making sure farmers command a certain price for their products. In this case, the government buys a quantity of dairy products (cheese, nonfat dry milk, butter) and removes it from the commercial market. This decreases supply, which drives up the price. The government distributes the cheese in feeding programs such as school lunches.

Trouble arises when the climate for dairy production is good, as it has been in the last few years.

Because dairy farm costs keep rising, the farmer increases production so he has more to sell and can earn more money. Because grain prices are low, the farmer would rather feed the grain to his cows than sell it for a low price. Because beef doesn't command a high price these days, the farmer would rather milk his aging dairy cow than sell her as meat (when dairy cows begin to produce milk less efficiently, they will be sold as lower-grade beef). So dairy supplies increase.

Everybody seems to agree that the surplus has gotten a little out of hand. The picture gets milky, though, when people discuss solutions. Ronald Reagan wants to cut price supports drastically, consumer groups concur. Farmers say they will support a decrease, but only if it is gradual. As the discussion continues, the government still needs to unload 555 million pounds of cheese.

How to do it? A spokesman for the Agricultural Stabilization and Conservation Service of the USDA, which is in charge of the surplus, says about the school lunch program, "They're telling us they're already taking as much as they can use." Other traditional outlets -- Veterans Administration hospitals, congregate meal programs for the elderly, prisons and such -- are glutted, he says.

What's more, dieticians in nursing homes and in schools question the wisdom of feeding a lot of cheese to food recipients. Cheese, although very nutritious, is a concentrated source of calories (about 100 calories an ounce for processed cheddar cheese) and fat. The USDA can't give it to food-stamp users because "the language (of the food-stamp bill) reads that we cannot distribute food in households of food-stamp recipients," says the USDA official.

"The system tells us they are utilizing as much as they can at the present time," he insists.

The problem wouldn't be solved by a give-away program. If consumers get free chunks of cheese then they won't need to buy any. But because of dairy price supports, somebody's got to buy it. If consumers don't, Uncle Sam must, and the warehouses fill up again.

Why doesn't Uncle Sam put his wallet on hold?

Apparently, he's trying to. The administration supports the latest dairy provisions in the new farm bill -- the Food and Agriculture Act of 1982. This allows for paying farmers a certain amount of money ($13.10 in fiscal year 1982) for every 100 pounds of milk that's produced. The figure increases each year until 1985. It also allows the secretary of agriculture to make predictions about dairy supply in the coming year; if he perceives a problem, he can adjust the amount of money the farmer receives.

Consumer groups are happy with this dairy policy. Haas says that traditionally, farm legislation has been "the bastion of the agriculture industry." But now, she says, consumer groups such as Community Nutrition Insitute, Congress Watch and Common Cause are finally beginning to take part in the decision-making through active lobbying.

Dairy farmers, not surprisingly, are unhappy. Rep. Tom Harkin (D-Iowa), chairman of the House Subcommittee on Livestock, Dairy and Poultry, calls this bill the "family farm liquidation act."

His press secretary, Barry Priatt, complains that if this farm bill is passed, it will force many dairy farmers out of business, leading to short supply and rising prices. Priatt says that large farms -- agribusinesses -- will swallow up small ones, resulting in "Exxon dairy farms."

Price supports guarantee that consumers will have a steady supply of milk, Priatt suggests. If milk prices rise a cent or two per gallon, "it would seem prudent to pay that price now," rather than face 50-cent increases later when dairy farmers go out of business and milk becomes scarce. He says supports guarantee a large number of well-distributed, small dairy farms, thus maintaining competition and alleviating transportation and storage problems.

Congressional opinions on farm policy vacillate each day, even as you check the current price for your cheese-plate lunch. But until the president signs the latest farm bill proposal, American dairy farmers will keep producing -- thereby adding to the surplus. Indeed, the research service for the Department of Agriculture predicts that milk production will again increase in 1982.