THE CRACKS in the once solid farm bloc have been widening ever since the administration persuaded Congress to kill a scheduled dairy price support increase last March. As Congress gropes toward an overdue reauthorization of the farm bill, all the old back-scratching arrangements have deteriorated. Urban-minded representatives are no longer willing to go along with hefty farm price increases since their farm state colleagues have been lining up to gut urban social programs. Even within the farm bloc, members who have gone along with cuts in their favorite farm programs are looking askance at the holdouts. In the House, this week, open warfare may disrupt all the agreements reached thus far.
At stake is a billion-dollar system through which the government supports the prices of various farm products by such means as guaranteed purchases and acreage allotments. The public pays both through taxes to cover purchase and storage costs and through higher prices at the grocery store. But the benefits are substantial. Farming is a risky and arduous business. By protecting farmers from devastating swings in agricultural prices, the government has encouraged the expensive investment in improving productivity that has kept U.S. food prices relatively low and made U.S. agriculture the envy of the world.
The question that the Reagan budget strategy has forced on Congress is whether the farm programs costs have come to outweigh their benefits. A case in point is the dairy price support program, the most expensive of all farm subsidies. By guaranteeing farmers a government market for their surplus dairy products at a healthy price, the program has led to vast overproduction. Last year the government spent over $2 billion to buy and store surpluses--and that doesn't count the costs of diverting land, energy and other resources from more productive uses.
The dairy program owes its past success less to the popular image of the hard-working dairy farmer than to the popular campaign contributions of the even harder working milk lobby. Program excesses were sufficiently obvious, however, to cause one important faction in the lobby to opt for moderation this year. That split in ranks--together with strong administration pressure and some congressional resentment toward the greed of the hard-liners--enabled the Senate last month to vote the lower price supports that the administration sought. Last week, the House followed suit with respect to supports for this year, but held out for a more generous level for the following years.
The dairy fight is by no means over. The milk supports will still cost about $3.5 billion over the next few years and the administration is very unhappy about the several hundred million more that the House voted. But it may do well to settle for what it can get on these and other farm issues, at least for the moment. The alternative may be a congressional stalemate that would activate expensive provisions of the old 1949 farm legislation, one of which has already been exploited by Sen. William Proxmire of Wisconsin to reap a windfall for dairy farmers. A reinstatement of other such expensive provisions could be not only costly to consumers but also disruptive to the farm sector.