The Carter administration has decided not to pay farmers to cut their crop production this year because doing so might make inflation worse, Secretary of Agriculture Bob Bergland announced yesterday.
He said the decision should not depress farm prices or hurt farmers' income because world demand for grain is high.
But farm-state lawmakers and farm organizations immediately denounced the decision and predicted it will create political problems for President Carter.
"If anyone in the White House thinks I'm going to file as a [carter] delegate to the Democratic National Convention, they're mistaken," said Sen. James J. Exon, Jr. (D-Neb.), a leading advocate of new efforts to support farm prices.
Virtually every major farm lobbying organization had urged the administration to approve some sort of "paid diversion" program to pay farmers for not growing crops on part of their land this year.
Advocates of the program said it was necessary to prop up farm prices, particularly since the president has halted grain exports to the Soviet union. p
After the president canceled grain sales to the Soviets in January as retaliation for their invasion of Afghanistan, the administration was forced to launch a $2 billion program to buy the grain and keep it off the market to avoid depressing prices.
Even that failed to prevent grain prices from plunging 10 to 20 cents a bushel in the past two months.
To prop up prices, the administration drafted a plan to spend about $300 million to pay farmers not to plant about 10 percent of their usual acreage.
A month ago the plan seemed virtually certain to be implemented, but growing concern about its impact on inflation apparently caused the administration to back off.
The administration apparently decided that a high inflation rate was a greater political danger than the threat of low farm prices.
Bergland said he recommended against paying farmers not to grow crops this year. Carter agreed after meeting Wednesday with representatives of the Council of Economic Advisers and the Office of Management and Budget.
Bergland said the $300 million diversion program would not have added much to the federal budget deficit and would have increased feed grain prices by only 5 cents a bushel.
While rejecting that approach, Bergland said the administration is willing to consider less costly ways to protect farm income, including increasing the amount of money the government would loan farmers against their crops.
Bergland warned, however, that Carter would veto any bill for new farm price supports that might contribute to inflation.
"The president is very concerned about the recent trend in inflation," Bergland said. "The feeling is some rather strong action is going to be required."
That could include cuts in Agriculture Department programs that channel funds to rural areas for housing, industrial development and other spending programs.