A curious thing happened to the Reagan administration on its way to prying the government's financial crutches away from those who can afford to pay their own share.
It hasn't gotten around to dealing with one of the biggest crutches of all--a subsidy of more than $1 billion a year in low-cost irrigation water that goes to farmers in 17 western states.
Instead, the administration is in effect sitting this one out as House and Senate committees prepare for hearings next week on the controversial law that set up the program, the Reclamation Act of 1902. While the law specifies that federally subsidized irrigation water will be provided only to farms smaller than 160 acres, over the years large agribusinesses have managed to take advantage of it. Some members of Congress tried to revise the law in the last Congress, but the effort died under pressure from farmers unhappy with the changes that were taking shape.
While the farm-water subsidy has been controversial for years, the pressure for reform took on a new urgency in 1976.
A federal court ruled that year that the law had been administered illegally in favor of the large growers. The court said that unless Congress revised the statute, the Interior Department would have to issue new regulations assuring that the old law--and its acreage limitation --would be strictly enforced.
Thus the decisions made by Congress and the administration will have a major effect on the future shape of farming on irrigated land in the West--whether farmers must pay a more realistic price for their water, whether large holdings will be broken up, who can farm with subsidized water and where.
A key element in the debate is the cost of the water. The idea behind the law 80 years ago was that vast arid expanses of the West could be made productive if irrigation projects were financed by the government. Farmers then would pay back the treasury, albeit at no interest.
But the farmers' repayment schedules rarely reflect the true costs of the reclamation projects. A General Accounting Office study earlier this year found they actually were paying less than 10 percent of the project costs. Taxpayers and hydroelectric power users help pick up the difference.
Rep. George Miller (D-Calif.), the leading congressional proponent of making water rates reflect true delivery costs, said that he again will insist that any new legislation be strict on that point, as a means of ending the subsidy as well as forcing conservation.
"Interior Secretary James G. Watt has made it clear that he cannot continue to subsidize irrigation water as has been the case in the past," Miller said. "The bottom line in this legislative debate is going to be the pricing structure and there will be efforts to drive huge loopholes in it."
In this high-stakes atmosphere, the administration is maintaining a low profile. It is offering no legislation of its own, and, although it has commented on congressional proposals, it still has no formal policy on the issue, according to Garrey E. Carruthers, assistant secretary of the interior for land and water resources.
Meanwhile, Interior is preparing to issue, perhaps by mid-1982, the stricter regulations required by the court for enforcing the 1902 statute.
The process was started during the Carter administration, then stalled when water users opposing the changes forced the department to draw up an environmental impact statement. The comment period on the statement will end Dec. 31, and the department intends to go ahead with the regulations, Carruthers said.
The court ruling set off intense lobbying by western interests anxious to avoid any break-up of operations made lucrative by subsidized water. At least four former members of Congress joined other influential lobbyists to affect, and finally bottle up, the revision legislation.
This time around, the lobbying focus is again on Capitol Hill, with hearings set for next week on bills by Rep. Manuel Lujan (R-N.M.) and Sen. James A. McClure (R-Idaho). Their approaches vary, but both would liberalize the 1902 law by substantially increasing the acreage limitations and permitting large operators to lease more irrigated land, with at least some water continuing to be provided at bargain rates.
Western water users, however, vary on what will be acceptable, largely because the irrigators generally are split into two camps--Californians worried about higher rates, non-Californians concerned about losing excess lands.
But Gordon Nelson, Washington coordinator for the Farm/Water Alliance, one of the principal lobbies for farmers outside California, said he is optimistic that legislators from the Northwest will push hard to protect their constituents' interests, meaning no less than the status quo.
None of which surprises George Ballis of National Land for People, a small farmers' group from California that brought the suit that started all the reclamation turmoil. The group is pushing for tough limits on farm size, residency requirements and lottery distribution of excess lands, but Ballis doesn't think the group will succeed.
"If Reagan is going to be tough on fiscal matters, let's see how tough he's going to be with his rich California farm friends," Ballis said. "Let's have it up front that reclamation is a welfare program. But it shouldn't be used to subsidize the most inefficient and exploitive type of agriculture--which it does."