Secretary of Agriculture John Block said yesterday the Reagan administration may seek total elimination of the present "target price" program of direct income subsidies for farmers in the 1981 farm bill.
But Block said he favored retention of existing loan programs to help farmers and supported higher "call prices." These would be help hold reserve commodities off the market and likely result in higher prices for farmers and consumers.
Block also called for elimation of the grain embargo to the Soviet Union, as repeatedly promised by Ronald Reagan during the presidential campaign. The embargo, which Block called "the most ridiculous thing I ever heard of," is scheduled for a full-scale review in a presidential Cabinet meeting Wednesday.
Block was successful last week in obtaining a Cabinet review of the issue rather than having it discussed only among Reagan's national security advisers, whose inclination is to keep the embargo and extend it to non-agricultural products now being shipped to the Soviet Union.
Meeting with reporters, Block expressed "philosophical" opposition to target prices. When one of them asked why he didn't seek elimination of them if he felt that way, he replied: "I may try to."
Block went on to say that he would be "very happy" to see target prices done away with when Congress rewrites the farm bill that expires this year. He said he found loans to farmers defensible but not the target price mechanism under which direct payments are made to farmers if the price of a commodity falls below a stipulated level.
The federal government paid out more than $1 billion in target price supports in fiscal 1978, principally to wheat farmers, and another $965 million in 1979. Stocks were high and prices depressed in those years. But in 1980, when exports increased despite the grain embargo and prices were moderate, only $80.3 million was paid out under the program, most of it to sorghum growers.
Block said that agriculture is now subsidized very little except for dairy price supports, which topped $1 billion last year. And, while giving no specifics, Block said that the dairy industry recognized that it would be necessary to change this program; dairy supports are one of the programs likely to be cut in the Reagan economic plan that will be submitted to Congress later this month.
Speaking of the proposal to do away with target prices, Sen. Bob Dole of Kansas, the second-ranking Republican on the Senate Agriculture Committee, said that Block might "find some support, depending on what he does to loan rates." Rep. Kika de la Garza (D-Tex.), the chairman of the House Agriculture Committee, was even more noncommittal, saying that the House would take "a close look" at any proposal submitted by the Reagan administration in the new farm bill.
Dole had more to say about the grain embargo, which he opposed during the 1980 campaign. Both he and Block agreed there is an additional factor now: the Soviet threat to Poland, which has prompted some foreign policy advisers to suggest that this is not the time for the new administration to be making any concessions to the Russians.
While several reports have suggested that the grain embargo has hurt the Soviets, Block said that they have been able to make up shortages by purchasing grain from Argentina, soybeans from Brazil and wheat products that were processed in Europe from grain grown in the United States.
The prevailing view within the White House now is that Reagan ultimately will do away with the grain embargo though he may use it to obtain what Dole yesterday called "a quid pro quo of some kind" from the Soviets.
"It's a campaign pledge that Reagan made and made very strongly," Dole said. " would expect him to keep it."