In those sectors of American agriculture that are federally supported, nearly a sixth of gross receipts this year will come from the U.S. Treasury.
Of last year's corn crop, about a fourth was put on loan to the government rather than sold to private buyers, and little has been redeemed so far. Of last year's cotton crop, two-fifths was mortgaged to the government; of last year's wheat crop, a sixth.
The government also now buys about a tenth of all the milk produced in the country.
"We have 1 million extra cows in this country; the rest of the cows produce milk for people to consume but 1 million produce just for the government," said Bruce Hawley of the American Farm Bureau Federation.
The degree of government involvement in the farm economy varies greatly from year to year, rising in bad times and declining in good, almost independent of the ideology of the party in power.
This year it has risen, putting severe strains on the federal budget. Record crops are glutting a market shriveling from the world recession and the high international exchange rate of the dollar.
A year ago, the net cost of farm price and income support payments and loans on wheat, corn, feed grains, cotton, dairy products and a few other supported products, plus related costs such as for storage, totaled about $4 billion. In 1980, the figure was $2.7 billion.
But this year, according to estimates given to Congress in March by the Agriculture Department and soon to be revised upward, the figure will jump to at least $10.4 billion; the Congressional Budget Office has already estimated at least $11.4 billion, others even higher.
That $11.4 billion is equivalent to about one-sixth of the roughly $70 billion farmers are expected to gross from the supported commodities. (They get another $70 billion or so in gross receipts from meat, poultry and fruits and vegetables, which are not supported.)
Wheat, corn, cotton and milk are the big-ticket supported commodities. In 1982, cash marketings of wheat including net government loans are expected to total perhaps $10 billion; net government outlays will be about $1.5 billion. Corn sales including net government loans will be about $13 billion or so, net government outlays about $3.7 billion; cotton marketings will be perhaps $4 billion and government outlays for cotton $963 million; and dairy marketings will be in the $19 billion vicinity and government outlays possibly $1.9 billion.
The $11.4 billion or so in government outlays for price supports and related costs can also be looked at from another perspective, which makes the figure seem startlingly higher: although the gross income of farmers from cash marketings plus a few other items will probably be in the range of $150 billion to $160 billion this year (no one really knows yet), their final net income after all production costs and the like are paid will be much lower, maybe in the area of $20 billion (it was $33 billion in 1979 and $20 billion in 1980).
The government's outlays of $11.4 billion net for price supports would be equal to half or more of this final net income of farmers.
The government's outlays for supports are expected to drop in future years as crops return to normal--there have been record harvests in recent years--and demand increases with the end of the world recession, but even so, the CBO has estimated $7.4 billion for fiscal 1983.
The reasons for the huge expansion of outlays this year, according to Martin Abel, senior vice president of Schnittker Associates, a well-known consulting firm on food and agriculture, are "large crops and relatively poor demand, partly due to the recession."
The 1981 wheat crop, 2.8 billion bushels, and corn crop, 8.2 billion bushels, were all-time records, and big crops are expected again this year. The huge cotton crop,15.7 million bales, was the biggest since 1953, officials said.
Coupled with huge crops, Abel said, is the world recession and high value of U.S. dollars, which have left many countries in Eastern Europe, Latin America and elsewhere without the foreign exchange needed to buy U.S. farm goods.
"The world is running out of money to buy our stuff," said Abel.
The result of high production and lowered demand is surpluses, which drive down market prices; that is when the government steps in.
As high as they are in dollar terms, government support outlays in relation to total cash marketings are lower than at some times in the past.
A Congressional Budget Office study last spring, using its own groupings of base figures, estimated that in the late 1950s, when surpluses were extremely heavy, the combined value of government outlays as a proportion of gross marketings was substantially higher than now.
In some of those early years, according to Agriculture Department officials, the government had an entire year's supply of wheat or cotton in its stockpiles. The figure gradually dropped in the mid-1970s but is now rising.
Ironically, as Bob Mullins of the National Farmers Union pointed out in an interview, inflation in 1980 drove farmer production costs up sharply and as a result pushed net income per farm, as measured in constant 1967 dollars, to the lowest level in a generation. Government aid may be up; even so farmer income is down.