In the lexicon of government, nothing is quite so confusing and mysterious as farm programs -- a world of parity, target prices, price-support loans, diversions, set-asides, call prices, allotments and on and on.
Even presidential candidate Ronald Reagan, maybe showing he was only human, caused a little flap last year when he left an impression that he did not understand the meaning of parity, one of the commonest of the farm terms.
But one you remember the immortal words of George Peek, who said "you can't sell a plow to a busted customer," the mystery becomes a little more fathomable.
Peek was a manager of the Moline, Ill., Plow Co., which went broke in the 1920s when the American farm economy was in the early throes of the Depression. Peek and others promoted the idea of government controls to help assure farmers a steady income through the regulation of production.
It took a while for this sort of idea to catch on, but once it did, through the Agricultural Adjustment Act of 1933, dramatic changes occurred in the U.S. farm economy.
That act and others adopted later by Congress created an incredibly complex, and expensive, system of controls and mechanisms to promote farm stability and adequate food supplies by regulating crops and markets.
Today, as it does every four years, Congress begins gearing up to rewrite and fine-tune this complicated machinery for regulated farming. House and Senate Argriculature committees this week are to begin extensive hearings on renewal of the law governing the complex federal farm-support programs. They hope to finish by mid-April.
With his emphasis on budget frugality, Reagan already has set the tone for the farm debate by proposing major cuts in expensive diary supports which cost $1.4 billion this year and food stamps which cost about $10.3 billion, both components of the omnibus law tht expires Sept. 30.
The answers Congress and the new administration provide, when a formal package of proposals is sent to Capitol Hill, will determine in large ways how the world eats, how farmers prosper and how the food industry functions in the next few years.
Despite a general picture of abundance, observers from Agriculture Secretary John R. Block on down agree that dramatically reduced farmers income in 1980, inflation and high interest rates, growing debt and programs that tend to help the producer who needs it least are policy questions that Congress must address.
Sen. John Melcher (D-Mont.), a Senate Agriculture Committee member, put it this way:
"The 1977 law does not fit what's going on today in farming. Farmers have been losing ground steadily, and they are doing relatively well only because of bumping crops in the last couple of years. But they're going deeper and deeper into debt, and we've got to reverse that if we want to assure a strong farm sector."
The debate this year may be influenced to some degree by a legacy of the Carter administration: a hefty report on U.S. farm structure that calls for sweeping changes in programs in place since the 1930s.
"The structures report says the way we've done it for the past 30 years is flat wrong," said Rep. Thomas A. Daschle (d-S.D.), a House committee member."Fortunately, that plays right into the hands of the budget cutters. . . . If we are serious about balancing the budget, where better to begin than here?"
He added, "Giving Farmers Home Administration loans to large corporate farms is like giving food stamps to Mobil. There seems to be unanimity in the point of view that we have to find where money can be cut and that farm programs by and large should be based on need. The Consenus falls apart on the question of need, however."
Underpinning all is the price support. In its simplest terms, the support puts a floor under basic commodities to assure the farmer that he will receive a certain price for his goods. Government loans, purchase or payments -- or a combination of them -- are authorized for wheat, corn, barley, oats, rye, sorghums, rice, peanuts, tobacco, wool and mohair, cotton, honey, milk and its products, flax, soybeans, sugar cane and beets, gum rosins.
The program is administered by USDA's Agricultural Stabilization and Conservation Service (ASCS), with operations in about 2,800 mostly rural counties, acting as agent for the government-run Commodity Credit Corp. (CCC).
With money borrowed from the Treasury, the CCC makes loans to farmers, buys commodities and resells them and handles crop payments to farmers, all as part of this great regulatory machine.
When market prices are above the suppor floor, CCC usually is not needed. When excess supplies push prices down, the farmer can put his crop on loan to the CCC.
If prices rise, he pays back the loan and sells his crop at the higher market price. If prices stay low, he keeps his support loan and CCC takes over the crop, reselling it later or distributing it through various federal feeding programs.
Loan rates on each commodity are established yearly by the secretary of agriculture and are theoretically pegged to parity -- and illusive dollars-and-cents price aimed at giving the commodity the same buying power it had in the 1910-1914 based period.
Do not be confused. Parity and loand rates, always difficult to calculate and often controversial, are the subject of intense political debates and lobbying that frequently leave the debaters and loppyists confused as well.
"The purpose of all this," said Jerome Sitter, director of price supports and loans at ASCS, "is to provide interim financing to the farmer until the makes his marketing decision."
That is the theory. In practice, however, curiosities have occurred.
USDA studies show that the largest farmers drive greater benefit from the supports and that the large farmers keep getting larger. Some of the support programs have made it profitable for farmers to plant more than they can sell, which means in effectt that they are producing for the CCC.
The corn program, for example, has coast taxspayers about $17 billion since 1933 yet rarely causes a public furor. Tobacco, on the other hand, often identified as the worst of the "subsidy" schemes, has cost only $277 million, making it one of the most cost-effective programs.
Upland cotton and wheat programs each have cost $11 billion and peanuts $1.1 billion. The dairy program, under attack by the Reagan administration, had cost $6.5 billion and is expected to cost at least $1.4 billion this year.
Even in a program in which cost and receipts were balanced, there would be a price -- the difference between what CCC pays for its money and what it charges the farmers. Today, the farmer borrows at 11.5 percent interest; CCC borrows from the Treasury at 13 7/8 percent.
Beyond that, some of the programs, particularly, dairy, peanuts and tobaco, have been sensitive political issues.
The Reagan administration, going against some grower sentiment, already has refused to lift 1981 support price for peanuts and is proposing a cutback on the diary support program. If unchecked, that could cost taxpayers about $1.4 billion this year because of a support price that encourages overproduction of milk.
Ironically, the popular bad guy of the price support programs -- sinful tobacco -- has one of the best payback records at the CCC.
According to Agriculture Secretary John R. Block, the loan program has cost taxpayers about $57 million, a small price, some argue, for stability in an industry that provides thousands of farm and industrial jobs and generates multi-billion-dollar tax revenues every year. A now-defunt export sales program added $220 million to taxpayer costs in tobacco.
The problem with each commodity program, as Daschle noted, is the question of need. Farm groups generally rail against government involvement when times are good, and they insist on having government help when times are not so good.
A near-classic example is wheat, another of the support price is about $3 a bushel, and the grain is selling now at about $4. Et Melcher, representing a wheat state, has introduced a proposal to set the wheat support level at an equivalent of $5.20 a bushel. Other commodities would be supported at similar levels in the Melcher bill.
"That's pie in the sky," said an aide to Sen. Jesse A. Helms (R-N.C.), new chairman of the Senate Agriculture Committee. Others on Capital Hill and the National Association of Wheat Growers, although supportive, tend to agree.
Melcher, however, indicated that his figure may be less important than the discussion he hopes it will provoke. That, after all, is what this congressional hearing process is all about.
"It has to be that high because it costs that much to produce a bushel of wheat," Melcher said. "We have no business selling wheat below the cost of production, and, when we do that, we are subsidizing Russia, Korea, Japan and China [large wheat buyers]. . . .
"We need to express confidense in what markets are going to be to give our farmers incentive. We need to tell them to plant it, because you can have confidence you will have a price."
The din is sure to increase before Congress answers the questions of need.