President Reagan announced his support yesterday for a new administration plan to reduce huge federal grain surpluses and increase farmers' prices, but the idea quickly ran into a flurry of objections on Capitol Hill.
After a White House briefing by Agriculture Secretary John R. Block, the president made an appearance in the White House press room to endorse the proposed payment-in-kind (PIK) scheme, which would entail giving farmers surplus grain instead of cash not to plant crops in 1983.
As envisioned by Block, the PIK program would go on top of the existing paid-diversion program, under which farmers will be paid to refrain from planting part of their farms next year, a congressionally designed plan for cutting surpluses.
Block's PIK plan would idle vast acreages of cropland, while cutting the rising $12 billion cost of federal farm supports and reducing the overflow surpluses of grain now under government control. Farmers' market prices presumably would increase and PIK participants could sell or use the grain they receive from U.S. supplies.
The secretary later yesterday outlined for a Senate Agriculture subcommittee more details of the plan, which he said could save the government as much as $5 billion between 1983 and 1985 while drawing down overflowing grain bins and bolstering the staggering farm economy.
The secretary said he felt the administration already had sufficient legal authority to carry out the PIK program, but he said he wanted it to work in a bipartisan spirit and was open to congressional suggestions and improvements.
Suggestions were quick in coming. Subcommittee members and farm-organization representatives, while agreeing that the deepening agriculture recession demands quick action, expressed some doubts about the administration's ability to put the program in place soon enough to help farmers next year.
Block expressed confidence that it would work, but he also expressed the sense of frustration and urgency within the administration about the farm situation. "It's the only game in town," he said of the PIK proposal.
He said, however, that for PIK to work as he envisions, he would need certain new authorities -- among them, the power to freeze "target price" direct subsidy payments to farmers at 1983 levels. These politically popular subsidies, called deficiency payments, cost the government about $1.2 billion in 1982 and are automatically increased each year.
Block said he must have this and certain other new authorities as soon as possible to operate the program. He said that for PIK to succeed, the Department of Agriculture must announce final details soon, before farmers are locked into their 1983 planting decisions.
Subcommittee Chairman Thad Cochran (R-Miss.), cosponsor with Walter D. Huddleston (D-Ky.) of new farm legislation that expands on the PIK concept, agreed that timing was vital and indicated that efforts will be made to push the PIK proposals through the current lame-duck session of Congress.
Huddleston, ranking Democrat on the Agriculture Committee, said his minority colleagues would join Cochran's call for a bipartisan approach to dealing with the deep recession in agriculture, which has pushed net farm income to its lowest level since 1933 with little relief in sight.
But subcommittee Democrats lost little time in ganging up on Block, who was unable to provide details on a number of questions they raised at yesterday's first formal airing of the PIK scheme.
Howell Heflin (D-Ala.), Alan J. Dixon (D-Ill.) and David L. Boren (D-Okla.) all worried about Block's haste to put the program in place with many of the fine-print details still not ironed out. "I don't want to change PIK to PIP -- that's for Pig in a Poke," Heflin said. "Congress has an obligation to know the details."
Block conceded that "nothing is set in stone" in the PIK proposal, but he said he would need formal congressional authorization to freeze the target prices and approval to distribute more surplus federal grain stocks to needy Third-World countries, another step to reduce supplies.