Agriculture Secretary John R. Block, out on a long political limb with his latest antidote for the sagging farm economy, says he still is trying to find some way to give farmers surplus federal grain in return for not planting crops this year.
Thwarted in his last-minute effort to get approval for his payment-in-kind (PIK) proposal in the lame-duck Congress in December, Block now has Department of Agriculture lawyers studying ways he could go ahead on his own legally.
USDA forecasts of continuing hard times for farmers have put additional pressure on the administration to come up with an answer to the quandary of huge surpluses, low prices, restless farmers and a bloated federal budget.
In 1982, another bumper crop added to the surpluses and sent federal farm program expenses soaring to $12 billion, compared with the $4 billion anticipated just a year ago. The fiscal 1984 budget to be sent to Congress later this month is expected to request $13 billion for farm programs.
Reports emanating from the Agriculture Department are bleak about prospects for a major turnaround in the farm economy next fiscal year unless the government intervenes dramatically.
The usually optimistic Block recently acknowledged in Senate testimony that the farm economy has reached "a crossroads." All else having failed, he said, a large-scale, federally financed, crop-reduction program is "the only game in town."
Although legal questions remain, Block's biggest problem may be time. Block, members of Congress and farm groups agree that something must be done quickly if it is to have an impact on next year's crop.
Farmers, now making financing and planting decisions for the new year, must know very soon what federal incentives will be available. With a new Congress not expected to get into high gear until March, Block apparently cannot count on help from Capitol Hill in setting up the PIK program he has proposed.
While the outgoing House quickly passed legislation to give Block the authority he said he needed, a similar Senate bill was stopped by Sen. John Melcher (D-Mont.), who complained that the agriculture secretary would get too much power while too many questions about the program remained unanswered.
Democrats and farm-state Republicans pressured Melcher to relent and let the measure pass in the late hours of the lame-duck session, but he refused. Melcher later said the administration would have ample time to get the program approved this year if the answers he and others wanted were forthcoming.
Sen. Robert J. Dole (R-Kan.), a leading figure on the Agriculture Committee, last week urged Block to go ahead and announce details and compliance requirements for PIK in early January, while he and allies in Congress renew their legislative efforts.
The secretary's failure to quickly respond to questions raised by Melcher and other Democrats who increasingly distrust the administration's management of farm programs may have been a serious miscalculation.
"We never really thought this would happen," one Block aide said. "On most farm issues we've had better luck in the Senate than in the House . . . . But I think the longer this drags on, the more partisan it's going to become."
The two key authorities Block sought were waiver of a $50,000 limit on payment of program benefits to individual farmers and cancellation of a requirement that federally held food commodities be sold at no less than 110 percent of the farm support loan rate. Agriculture Department sources said the major stumbling block for government lawyers now is finding a way to put a PIK program into effect without violating the $50,000 limit on federal payments.
J. Dawson Ahalt, deputy assistant secretary for economics, said recently that the Agriculture Department has not set a target date for announcing a program, but he agreed with others that it must be in place by mid-month.
"It's the only thing we've got in 1983 to deal with this overproduction problem," he said. "Our expectation is that we can do the PIK program. The secretary is committed to it."
Block's proposal, as outlined before congressional committees, would take two approaches to dealing with the surpluses.
A farmer who idled 20 percent of his acreage under an existing federal payment program could set aside 30 percent more in return for payment in the form of his crop from federal storehouses, which he then could sell.
Under the second option, a farmer could idle his entire farm in return for in-kind payments of wheat, corn, grain sorghum, rice or cotton, all of which are in surplus.
The goal is to reduce nationwide production of these crops this year, realigning supply with demand, to increase market prices to farmers and to reduce the potential cost of government loans and direct subsidy payments because of sagging prices.