American farmers, in an astonishing acceptance of the federal surplus-reduction program, have agreed to remove 82 million acres of wheat, corn, cotton and rice land--an area larger than three Virginias--from production this year.
Secretary of Agriculture John R. Block, announcing the enrollment figures yesterday, said they mean that production of wheat and corn, the basic grains, will be cut by about 25 percent each.
The secretary, calling the sign-up "in many ways breathtaking," said the so-called payment-in-kind (PIK) plan will bolster farmers' prices and draw down overflowing federal surpluses, yet will have only a "minimal" impact on consumers. He conceded, however, that the land-diversion plan will have an adverse effect on farm supply dealers.
The sign-up means that more than 128,000 square miles of crop land, the equivalent of Iowa, Illinois and half of Indiana, will not be planted. In return, farmers will be paid partly in cash and partly in crops already stored with the government from years past.
Looked at another way, the sign-up represents 36 percent of the 187 million acres eligible for enrollment in payment-in-kind, a plan hastily devised by the administration last winter as an almost last-ditch gambit to prop up the troubled farm economy after three years of sagging prices. (Another 50 million acres of crop land without established production bases were not eligible.)
"Setting land aside is not my cup of tea," Block told reporters. "Farmers are not comfortable with it . . . . We could have gone more slowly, and we could have spent four or five years to dig our way out of the mountains of grain. But farmers do not have four or five years."
The overwhelming sign-up means that farmers this year will not harvest about 32 million acres of wheat (35 percent of eligible land), 39 million acres of corn and grain sorghum (39 percent), 6.8 million acres of cotton (44 percent), 2.3 million acres of barley and oats (12 percent) and 1.7 million acres of rice (43 percent) that otherwise would have been planted.
In return, they will be given amounts of grain and cotton roughly equivalent to the crops they would have grown. Farmers may sell the commodities as though they had grown them or use them to feed livestock.
Block said he expected the heavy sign-up to have an immediate effect on farm prices and to draw down huge federal stores, while having little short-term impact on consumers. And even considering the possibility of bad weather, he said that remaining supplies would be adequate to supply U.S. domestic and export needs.
For example, Block said, he anticipates a corn crop this year of slightly more than 6 billion bushels, compared with the record 8 billion-plus bushel crop of 1982. Farmers will grow about 2 billion bushels of wheat this year, compared with 2.8 billion bushels in 1982, he said.
"This has already had an impact on prices since last fall," Block said. "I expect net farm income will be up this year . . . . There will be fewer farm foreclosures."
The sign-up, which Block described as the largest government crop-reduction program in history, far exceeded the Department of Agriculture's early projections.
"This was beyond my wildest expectations," Block said. "There is a message coming through. Never before has there been such a unified effort among farmers . . . . Farmers by nature are production-oriented. Producing is our life work . . . . Cutting production is never easy, but farmers were ready to do it."
Overall, he added, the crop-reduction effort "will stimulate prices, improve the outlook; psychology will be improved." But, he said, a drawback is that suppliers of seeds, chemicals and implements, all vital elements in the rural economy, "are not going to sell as much."
He said that the USDA will not determine until later whether to continue the program next year.
Block also said that the massive idling of crop lands will promote soil conservation. Under the terms of the PIK program, idled land must be seeded with grasses or soil-stabilizing plants and tended to prevent wind and water erosion.
"The most fragile lands will go out of production first," he said, "but this will be very, very beneficial to conservation."
Although Block and the administration have billed the crop-swap as a way of holding down soaring federal budget expenditures, perhaps by as much as $5 billion by 1985, the secretary was unable yesterday to provide figures on the value of commodities to be given to farmers.
The land-diversion program is made up of several components. Farmers had the option of idling entire farms or limiting their land diversion to half of their production base, established by previous participation in federal support programs.
To take advantage of the payment-in-kind provisions, farmers first had to agree to participate in an earlier land-diversion plan that reduced their acreage by 20 percent in return for federal payments. The PIK exchange will involve either the entire farm or the acreage between 20 and 50 percent.