The newest zigzag in the Reagan administration's free-market farm policy has been formulated by a nut.
It is the almond, to be precise, showering from the trees in California in such quantities that it is sending the industry into a tizzy that has reached all the way to the White House.
The problem, in a nutshell, is Secretary of Agriculture John R. Block's decision to let the industry hold 25 percent of this year's record crop off the market. The idea is to help protect prices and thus the profits of California growers, which include big guys, little guys, oil companies and investment firms.
But it's not quite that simple.
This year's crop is expected to weigh in at about 400 million pounds--a record, but less than was being forecast when Block's order came down. There is a huge export market for almonds, but selling the excess abroad isn't easy this year, with foreign production also high and a strengthened dollar inhibiting traditional European buyers.
From inside the industry, there's both good news and bad news for John Q. Nutlover. The good news is that, even with the reserve, there are massive amounts of almonds around and consumer prices are expected to fall somewhat in coming months. The bad news, the free-marketeers say, is that prices would fall still more without Uncle Sam's meddling.
Almonds, grown on 400,000 acres in California, are controlled by government marketing orders, procedures that permit the farmers to regulate the flow of nuts to market. Under these orders, growers may ask the secretary to let them salt away some almonds.
Back in the summer, growers and handlers who control the Almond Board of California, governor of the marketing order, saw the big crop coming and proposed the reserve. USDA opposed it, on the same free-market philosophical grounds that it proclaims for other commodities, and asked for another vote.
A second vote reaffirmed the first, and thus began the War of the Nut. Secretary Block approved the reserve on an "interim final" basis, meaning it was final but he might change his mind if public comment pushed him.
Growers, handlers, processors and candy makers have shelled the White House with mail. The White House has funneled it all to USDA, where more than 1,300 cards, letters and Mailgrams are jammed into seven thick file folders.
There's a crunchy political irony here, related to the administration's avowed commitment to reduce federal regulation of agriculture and to let market conditions and competition determine who plants what.
Secretary Block has had to bite the nut, er, the bullet on this issue before. He has announced plans to limit 1982-crop wheat planting because of excess supplies. And he has opened the corn reserve in an effort to push up sagging prices.
So there's a precedent for the almond reserve. But there is dissent in the orchard over whether it is needed. The pro-reserve growers are reminding President Reagan that they voted for him and expect him to endorse their cries for help. The anti-reserve folks are saying they voted for him with the belief that his free-market philosophy should prevail.
At least five California congressmen chimed in on the issue with letters in support of the reserve--mailed within weeks of receiving campaign contributions of $2,000 each from the California Almond Growers Exchange (CAGE), a cooperative with 5,080 farmer members.
They were Reps. Tony Coelho (D), Vic Fazio (D), Robert T. Matsui (D), Charles Pashayan Jr. (R) and Norman D. Shumway (R). California Sen. Alan Cranston (D) also wrote in support of CAGE.
CAGE has blitzed the press with news releases, rhapsodizing about potentially lower consumer prices as a result of the record harvest and claiming the reserve will protect its small family-farmer members. The problem, as they see it, is that a huge supply of almonds could depress prices enough to force some of their members out of business, leaving the industry to the bigger growers, who can more easily absorb losses.
Among CAGE's allies is Tenneco, an energy company that has long tentacles into agribusiness, including almond growing and handling. But Tenneco's interest appears less in protecting its small brethren than in protecting its multimillion-pound inventory, whose value, without the reserve, could be undermined.
On the other side, a Fresno-based group known as Growers for Free Trade is beating the drums against Block's reserve decision. GFT, arguing the position of perhaps a dozen other almond-growing subsidiaries of such oil companies as Shell, Getty, Superior and Zapata, says consumers ought to be allowed to benefit by paying lower prices.