The Reagan administration is under growing pressure to treat the ailing farm economy with medicine that has a philosophically unsavory taste--paying farmers not to plant crops.
Several prominent congressional Republicans, the conservative American Farm Bureau Federation, the National Grange and the National Association of Wheat Growers are among those leaning on the Department of Agriculture to adopt a paid acreage set-aside program.
They are urging Secretary John R. Block to pay farmers not to plant--a step most free-market advocates view with disfavor--reasoning that it will save the Treasury money in the long run.
The alternative, they argue, is that federal budget exposure through crop loans and direct subsidy payments next year is likely to surpass the $12 billion in outlays calculated for fiscal 1982.
Furthermore, they say, potentially huge crops this year will further load the American granary and push farmers' prices down further on wheat, corn, rice and cotton. Net farm income in 1982 is expected to be at its lowest since 1933.
Although his department has until Aug. 15 to make a decision, Block is expected to announce in the next two weeks his plans for dealing with next year's wheat crop. He has until Nov. 15 to rule on other major crops.
Options under USDA consideration include no acreage control program, a continuation of the current voluntary program, a paid acreage diversion or a combination of the last two.
Wheat farmers have been critical of Block for announcing the voluntary program last fall after most had planted their winter wheat, which now looms as a bumper crop that could push the nation's stockpile to an all-time high.
The latest to urge a paid acreage diversion are Sen. Pete V. Domenici (R-N.M.), chairman of the Senate Budget Committee, and Rep. Paul Findley (R-Ill.), a veteran Agriculture Committee member who has not supported such programs in the past.
They contend that paid diversions would raise farm income and reduce grain stocks while trimming federal costs. Both legislators outlined their views in urging Block to adopt paid set-asides in addition to the current voluntary set-aside for the 1983 wheat crop.
Domenici, citing a Congressional Budget Office study prepared at his request, said that a paid set-aside on feed grains, cotton and rice as well as wheat would save taxpayers $3.9 billion in the next fiscal year.
This calculation assumed no acreage adjustments. The federal outlays would involve price-support loans and deficiency payments, subsidies to farmers when market prices do not reach specified levels. CBO said that simply continuing the voluntary plan would reduce federal outlays by $1 billion as compared with no program.
Domenici said that extension of the voluntary retirement of 15 percent of the wheat base, along with payments to farmers for not planting another 10 percent, would cut stocks by 100 million bushels and add 40 cents per bushel to farmers' prices, but only minimally affect consumer food prices.
Findley, in a letter to Block, argued that farmers need incentives to cut wheat production.
As the current wheat harvest began, the nation had a stockpile of 1.146 billion bushels. The new crop is expected to push the surplus near the all-time high of 1.4 billion bushels reached in 1961.
Though CBO's calculations vary markedly with those of USDA, the latter agrees with Domenici that a paid diversion could save the Treasury more than $1 billion.