THE EMERGING farm bill compromise represents an important, if modest, victory for the administration in its attempt to curb federal spending and reform the farm price support system. The compromise was hard won, and it may not endure. House-Senate conferees spent more than a month struggling with the administration before reaching agreement last Tuesday. The bill was quickly ratified by the Senate, but it faces rough treatment in the House where it offends a variety of urban and rural interests--some meritorious and some not.
Farm legislation involves the same risks as all types of insurance. If farm supports are inadequate, the nation--and many other countries--may face food shortages. If supports are too generous, abuse will occur--costly surpluses, inflated farm prices and welfare payments to well-off farmers. The administration came into the farm bill fight seeking to correct imbalances in the present support system, and it emerged with several notable victories.
The conference bill contains a reasonable compromise on the very important grain support program, and it places much-needed limits on the very expensive dairy support program. Dairy supports have greatly inflated dairy prices over the last few years, while building up mounds of surplus products now rotting expensively in government storage.
Other needed reforms weren't made. The administration sidestepped the politically fired issue of tobacco price supports, and the usual congressional coalition lined up to keep that anachronistic system intact. Income supports would still be paid to well- heeled grain producers, and dairy surpluses would still pile up--though not as high as before. Reforms of sugar and peanut subsidies were traded away by the administration last summer in return for votes on its budget package--most of that loss will show up in higher prices for these commodities next year.
In fact, despite all the disgruntled mumbling from the farm lobbies, the biggest loser in the farm bill compromise is the consumer. Sugar prices, for example, will rise by at least 25 percent because of the bill's provisions. The farm bill, you should remember, is one of the many ways that Congress legislates a continuation of inflation from year to year--and these hidden costs to the public are much higher than the direct budget costs on which the administration has focused its attention.
From this perspective, the conference committee's farm bill may not look like much progress. The bill would still contribute upward of $11 billion to the federal spending over the next four years and cost the consumer a good bit more at the supermarket. Much of that expense, however, is needed insurance against farm shortages and important investment in agricultural productivity. And, given the legendary strength of the congressional farm bloc, even modest erosion of the worst features of the farm programs has to be counted as an important political accomplishment.