The Senate Agriculture Committee, rushing yesterday to beat the adjournment clock, approved legislation that would allow the administration to give farmers grain, rice and cotton from federal stockpiles if they agree not to plant in 1983.
The proposal, although somewhat different from that outlined formally by the administration last week, is designed to cut mounting surpluses of grains and raise prices, while holding federal farm outlays to a minimum.
Department of Agriculture economists estimate that the payment-in-kind (PIK) plan, as Secretary John R. Block calls it, would have only slight impact on farm prices during 1983. But by drawing down burgeoning stocks, it would bring supply in line with demand and boost prices in 1984 and 1985, they say.
Block's PIK scheme also is aimed at curbing federal payments to farmers, which threaten to drive budget projections off the charts. Payments, earlier calculated at $4 billion, will actually hit $12 billion or more this year and threaten to be that high next year unless production is curbed.
Block and William G. Lesher, his assistant secretary for economics, say the program would cut federal outlays between $3 billion and $5 billion by 1985 if farmers take part as they expect.
The Senate committee's quick action, a reflection of growing concern over the limping farm economy, cleared the somewhat amended PIK proposal for consideration on the Senate floor, where approval of the bipartisan bill is expected without difficulty.
Chairman Jesse Helms (R-N.C.) and Thad Cochran (R-Miss.), who earlier yesterday pushed the bill through his subcommittee, said they would attempt to move the bill through the Senate this week, probably as a "rider" on another piece of legislation.
Prospects in the House are less clear. Several key members of the House Agriculture Committee have expressed doubts about Block's PIK proposal, and Chairman E (Kika) de la Garza (D-Tex.) has told colleagues that any farm-assistance programs should be discussed thoroughly in the committee.
Sen. Walter D. Huddleston (D-Ky.), ranking Democrat on the Senate committee and co-sponsor with Cochran of the bill, acknowledged that "this is a different approach to a major problem--oversupply--but we have tried to think through the questions as they've come along. We've given the department the tools and I think the department is determined to make this work."
The Senate version would authorize the secretary to give farmers grain, which they could use, or certificates authorizing them to resell the commodities as though they had raised them. Unplanted lands, under the plan, would have to be devoted to conservation programs.
An amendment by Sen. Alan J. Dixon (D-Ill.), directed at one of the major questions about PIK, established that grain turned over to farmers would be valued at no less than 75 percent of the price-support loan rate for that particular commodity to assure a price floor and encourage farmers to participate.
Cochran and Huddleston also agreed to drop their proposal for higher price-support loan rates next year if the administration would not insist on freezing target prices, direct subsidy payments to farmers when market prices fall. Lesher indicated support, but he said that iron-clad assurances could not be given.
The Senate-approved package also would extend bonus amounts of grain to foreign purchasers who agreed to continue buying at regular levels, and it would authorize the donation of lesser amounts of government surpluses to needy countries.