A $1 million, two-year study of American agriculture by the Carter administration has concluded that dozens of longstanding government policies aimed at helping farmers actually have bastened the trent toward bigger and fewer farms and jeopardized the future of family ownership.
The study, produced by a task force at the Department of Agriculture, was described by officials as the most extensive study of U.S. farming since World War II. It recommends the "modification" of current policies on taxation, farm credit, commodity price supports, federally supported agricultural research, trade and conservation.
The report is openly critical of subsidies for producing gasohol from grain and other organic materials -- a program supported by the Carter administration -- on grounds that such a plan "has gret potential for distoring the efficient use of scarce resources [and] adding to households' food budgets."
At the same time, the report calls for an end to most federal subsidies and income support for the largest farmers -- the 2.4 percent with sales over $200,000 a year who account for 39.4 percent of U.S. food production.
It also urges a sweeping reexamination of tax provisions and farm credit procedures that have encouraged land speculation, expansion of landholdings, and the bidding up of land prices by outside investors who can take advantage of capital gains provisions and tax shelters in farming.
Instead of these treaditional supports and preferences, a new set of policies is needed to help the 53.2 percent of the farmers whose sales are between $5,000 and $200,000 a year, the report said. This group produces 56.6 percent of the nation's food, but its interests differ markedly from those of the large farmers, the study found.
Agriculture Secretary Bob Bergland, who says he has not yet found a new job, said at a news conference yesterday that he would like to work toward getting the recommendations carried out after he leaves office next Tuesday.
"If we don't change our programs, we're going to see small and medium farmers go out of business. People might say, 'So what?' Well, the question should be debated whether 1,000 farmers are enough. Was Jefferson right when he argued for as wide a distribution of land ownership as possible?" Bergland said.
Bergland's successor is John R. Block, whose 3,000 acres of prime Illinois farmland make him one of the nation's largest and richest farmers and a beneficiary of the trends that Bergland wants slowed. (Bergland's own Minnesota farm is 600 acres.)
Republican farm policy generally has stressed increasing "efficiency" and farm exports and has tended to accept the changes in the structure of farm ownership in American as inevitable.
However, the Bergland concern about the impact of farm subsidies is mirrored to some degree in a report produced by the conservative Heritage Foundation for the incoming Reagan adminstration.
These concerns are based on exhaustive research that included taking testimony from hundreds of farmers around the country.
In addition to confirming the notion that fewer and fewer wealthy farmers produce more and more of the nation's food, the Agriculture Department study produced some findings that surprised some farm experts. For example;
About one third of all farmland is owned by landlords, many of them absentees, who rent it to farmers. In this case, the benefits of rising land prices and tax concessions go to individuals outside the farming sector.
Contrary to widespread opinion, the income of families living on the tiniest farms is about the same as the ncome of families living on much larger ones, up to about $40,000 a year in annual sales. This is because outside jobs have become a major source of income for farm families. Thus, the availability of jobs, not a shortfall of farm income, is the most serious economic problem for small farmers.
Farms get more efficient as they increase in size and their sales of farm products grow. But the efficiency gains level off once farms reach an average $160,000 in sales. Therefor, the study argues, there is no benefit to consumers or taxpayers from government subsidies encouraging still further growth.
There may have been too much rather than too little credit available to agriculture in the last few years. Therefore, the loans made by the government's farm credit system "might have contributed to inefficient resource allocation, inflation in land values, and further concentration of production and landownership."
The major problem facing medium and small farmers, the department's study concludes, is the steep rise in real estate prices, which increasingly puts farmland out of the reach of younger operators.
This trend is being driven by domestic inflation as well as by global developments. From the stability and relatively low prices of the 1950s and 1960s, U.S. farming has moved to extreme instability and higher farm incomes that larger, better financed operators are best able to exploit.
In 1950, exports accounted for less than one acre out of five planted. Today that is up to one out of every 3.5 acres planted. The United States now supplies 11 percent of all the food consumed abroad -- equivalent to the contribution made to world energy supplies by the oil of the Organization of Petroleum Exporting Countries.
Bergland said yesterday that America's efforts to supply rising foreign demand have contributed to escalating land prices and to soil erosion. "The fact is we don't have a carefully thought through trading policy," he said. "The question can be raised whether it makes sense to grow corn in western Iowa for sale abroad when the soil is being eroded down the [mississippi] River. The answer is no, it doesn't."