THE NEW SECRETARY of Agriculture, Bob Bergland, is about to raise dairy support prices - and, by all hints and portents, he's going to raise them far too high. It is taking awhile, evidently, for Mr. Bergand to get used to the idea that he's no longer a congressman from Minnesota. He's reportedly on the verge of moving the price up to $9 for 100 pounds of milk. The present support price is $8.26, and most of the increase would get passed right along to the consumer.
Why make a fuss over a minuscule seven-tenths of percent per pound? Because this country's exceedingly productive dairy herds give us 115 billion pounds of milk a year. That tiny seven-tenths of a cent means something over $800 million a year to consumers. But that's not the full cost to the public. The Agriculture department maintains the price by buying surplus could cost more than $400 million this year, at the resent support level. Raising it to $9 would add another $350 million or so over the coming year - and that's on top of the aforementioned $800 million form consumers.
That kind of an increase in support threatens to bust President Carter's budget. It promises to fan up inflation at the grocery store - adding available damage to the unavoidable food price increase already resulting from this year's strange weather. If the $9 support price goes through, it will raise real doubts about the Carter administration's grip on economic policy.
The principle of price supports is a good and useful one, in dairy products as in other basic of foodstuffs. Milk production fluctuates, and farmers are entitled to insurance against severe and unexpected drops in prices. Supports benefit consumers as well, for they guarantee a steady and adequate flow of milk to market. The issue is where to set the price. The Council on Wage and Price Stability, which is the White House's early warning system for inflationary threats, argues that even the present support price is a shade too high. Other specialists argue that it's a bit too low, in view of rising costs of production. But there's hardly anyone, except perhaps some of the dairymen, who think that it ought to be as high as $9 a hundred weight.