A House Agriculture subcommittee voted yesterday to raise wheat, corn and feed grain price support levels by 7 percent.
The unanimous vote came just hours after two other Agriculture subcommittees finished questioning the administration's chief inflation fighter, Alfred Kahn, on what he is doing to fight the increase in food prices.
Actually, committee members were less interested in what Khan is doing than in getting him to declare that the recent large increase in food prices were not the farmers' fault.
Saving the family farm took precedence.
"If we destroy the family farm," said Rep. Charles E. Grassley (R-Iowa), turning to look into the television cameras, "we'll really drive prices up."
Khan was not buying that entirely. Pongrams "to save the family farm" were necessary to stabilize fluctuating agriculture and income, he said, but added, "There can be no doubt, however, that government farm policies have in the last two years or so made a palpable contribution to inflation of food costs.
"I refer, for example,to acreage-idling programs, the rebuilding of our grain reserves and higher sugar price supports."
It was the acreage-idling programs that the livestock and grain subcommittee voted to boost for one year, by 7 percent, a move the Agriculture Department estimates will cost the government about $400 million.
Agriculture Department economics director Howard Hjort warned the subcommittee Tuesday that he "wouldn't be surprised" if President Carter vetoed the bill, which the administration vigorously opposes.
The subcommittee arrived at the 7 percent increase, rejecting higher ones, because if fit into the administration's wge increase guidelines.
Rep. Jim Johnson (R-Colo.) had suggested a 10 percent increase but was defeated on an 8-to-8 vote.
What the subcommittee did was raise the target price level by 23 cents a bushel for wheat and 15 cents a bushel for corn for farmers in the acreage set-aside programs. For wheat, a farmer must se aside 20 percent of his acreage. For corn, the farmer must set aside 10 percent, and can get a bonus for setting aside 20 percent.
The target price is guaranteed to a producer, regardless of the market price, if the farmer participates in the set-aside plan.
The average price of wheat at the farm level on March 15 was $3.01 a bushel. Corn was around $2.15 a bushe.
The current target price of wheat for 1979 by law is $3.40 a bushel, meaning the government will make up the difference between $3.01 and $3.40. The 1979 corn target price for the highest set-aside is $2.30 a bushel. The bill would raise the target price for wheat to $3.63 a bushel and for corn to $2.45 a bushel.
As American Agriculture Movement members looked on, Rep. Charles Rose (D-N.C.) called the bill a "small Band-Aid" to assist farmers meet inflationary pressures, and promised to look into more far reaching proposals later.
Meanwhile, Kahn found his inflation-fighting efforts hampered by the administration on one score - a bill to raise price supports for sugar which has the administration's endorsement, although it is estimated it would cost consumers an extra $300 million to $400 million a year.
Rep. Margaret Heckler (R-Mass.) tried to get Kahn to talk about the inflationary effects of the bill.
"I'm terribly sorry. I'm in a difficult position," he said, "I fought it as vigorously I could. My attitude to the suggested legislation is known, but I guess this is the point at which a member of the inner advisers to the president will have to keep his mouth shut."
Heckler pressed him to stand behind previous statements that the bill was inflationary.
"Let thee record show an embarrassed silence," said the visibly rattled Kahn.
Kahn said recent "terribly painful" increases in food prices were, for the most part, the result of competitive market forces, "interference with which could only make matters worse."
Beef was the biggest component, with prices rising at an annual rate of 72 percent. This drove poultry and pork prices up 22 and 24 percent, respectively.
But Kahn explained that the rise in beef prices resulted from a reduction in cattle herds after feed grain prices soared in 1973.
Any effort to reduce prices by increasing the quota of foreign beef or putting on a lid would be counterproductive, Kahn said.
"There is very little to be done about the situation except to let the normal forces of the market restore the balance, and they will," Kahn said.
Weather that raised fruit and vegetable prices, a shift in demand to more costly prepared and restaurant food and increases in the minimum wage also contributed to inflation, Kahn said.
Rep. Glenn English (D-Okla.) argued with Kahn over farm policies. English said the government must act to save the family farmer, whom he called most highly efficient operator in the world.
Kahn said there was "no danger of monopoly" in farming and said subsidies help the big, corporate grower.
"A policy that says we must interfere with the process of competition in the interest of preventing monopoly is like committing suicide to prevent a cold," Kahn said. When English pressed him, Kahn snapped, "If the family farmer is so efficient, why are you worried about his disappearance?"