All the way to the horizon, it is a view of paradise.

Farmer Irwin Efird sharply banks his twin-engine plane through the smog of the arid San Joaquin Valley and drops down closer to see the movement in the fields.

On the left, tomatoes and oil derricks. On the right, garlic and field hands. In the distance, grapes and tree fruits. And straight ahead, six big red combines harvesting an endless golden expanse of ripe wheat.

"What kind of yields do they get?" the passenger asks.

"Don't know," says Efird. "Two-and-a-half, three tons per acre."

"Well, what's that come to in bushels?"

"Don't know," says the farmer. "Out here we measure in tons."

That is farming, California-style, and it is phenomenal. Three tons of wheat is 200 bushels, more than triple the average national yield.

Such yields in parts of California and Arizona are made possible by federal irrigation water sold to farmers at a fraction of its real cost. Moreover, they and the farmers in 15 other western states that receive below-cost federal water also can qualify for the same Agriculture Department loans and subsidies designed to help all farmers stay in business.

By contrast, Kansans and North Dakotans and other drylands farmers must provide their own water or rely on nature. Left at a competitive disadvantage, with far lower yields and profits, they plant more in order to compensate.

As a result of these phenomena, the nation's bins spill over with unsellable surplus wheat that must be bought and stored by the government at enormous cost to the taxpayer.

American agriculture, the most productive in history, is studded with contradictions and curiosities of this sort.

These are fueled by conflicting federal laws and policies that encourage the abuse of the nation's natural resources and, in the long run, may hurt as much as help farmers.

As it does each four years, Congress is attempting to write legislation to guide the nation's farm and food policy.

This time around, it approaches the task in the most antagonistic and crisis-driven air since the farm programs were created during the New Deal era.

Consider some examples of the state of agriculture:

* Policies that encourage production for the exports that bring in about $35 billion per year also drive farmers and investors to topple forests, tear up fragile rangelands and pump irrigation water as though there were no tomorrow.

* A farm policy designed ostensibly to nurture family-size farm units is undermined by a tax policy that helps big farmers get bigger and brings tax-shelter-seeking investors into agriculture as competitors.

* A farm policy that subsidizes farmers to conserve their soil is undermined by other policies that spur farmers to abuse the land, silt up lakes and rivers and lace them with toxic pesticide residue.

* A farm policy that pays farmers to reduce surpluses by not planting crops runs headlong into tax policies that encourage surplus production on marginal lands and make it profitable to do so, at the general taxpayer's expense. About 18 percent of the nation's cotton, 14 percent of its barley, 12 percent of the rice and 3 percent of the wheat are grown with subsidized water.

* Federally subsidized research unlocks advances that boost production and speeds the treadmill that eventually shuttles the farmer off his land.

Some of these contradictions threaten the agricultural system that has made the U.S. farmer the envy of his foreign brother.

Some threaten the soil and water base that makes the great American abundance possible.

Some drive otherwise good farmers to farm in neglectful ways that would have appalled their grandfathers.

The issues facing Congress are enormous and difficult, and the debate could determine the shape of U.S. agriculture for decades, for this is a time of unusual uncertainty brought on in part by the policy contradictions and conflicts.

Stories these days about credit and price crises, about farm-program costs and surpluses, about fears of undermining rural towns and businesses are byproducts of this. Complex Chain

Increasingly, there is recognition that the fate of the "family farm," as it romantically has come to be known and wept over, hinges not just on farm policy. It is tied to government actions on taxes, monetary policy, the environment, credit, science and export sales.

A case in point is the great export boom of the 1970s. Expanding foreign demand sent farmers' prices soaring and raised the possibility that, finally, American agriculture's golden era had come. Government officials, bankers and agricultural experts at the land-grant colleges urged farmers to get more land and machinery to cope with the boom.

Many farmers followed that advice. Marginal lands were brought into production, farmers and developers rushed pell-mell into expanding output, and during the 1970s, export sales climbed from $10 billion to $40 billion. At least 40 percent of U.S. harvests during that time were exported.

The American landscape was transformed, literally. Great rangelands in the West were put to the plow.

Millions of acres of irreplaceable wetlands in the Southeast and North Carolina were timbered, drained and put into crop production. The fragile Sandhills of Nebraska were converted from grazing land to corn fields.

But today, with export markets blitzed by recession and new competition, U.S. farmers are paying a heavy cost: depressed prices from overproduction, bank notes they cannot meet, overwhelming losses of net worth from falling land and machinery values, topsoil lost by erosion for export production, insolvency. Mississippi Muddle

In textbook fashion, the confluence of federal farm, tax and development policies working in these contradictory ways -- spurring farmers to do more, yet putting them deeper in trouble -- rushes most clearly to view in the lower Mississippi valley.

There, millions of acres of priceless bottomland hardwood wetlands have been chopped, drained, bulldozed and moved into farm production by farmers and land and insurance companies.

The U.S. Fish and Wildlife Service says that between the mid-1950s and the mid-1970s, the nation lost more than 11.7 million acres of wetlands that were vital to wildlife, flood control and water-quality protection.

Of that acreage, an amount twice the size of New Jersey, 87 percent was converted to farm production,, with the bulk of it in the southeastern states.

A 1980 study by Leonard Shabman, a Virginia Tech agricultural economist, found that a combination of tax and crop subsidies made wetlands conversion a profitable, low-risk venture.

Tax law allows large deductions for land-clearing and soil and water conservation costs, including drainage. Equipment needed for land conversion is tax-depreciable. Interest expenses and other costs can be deducted from the tax bill. Part of the farmer's and land investor's costs are shifted to the taxpayer.

After this, the farmer is eligible for federal crop-support loans and cash subsidies that guarantee a price on his crop. If he suffers a crop failure, he may get federal disaster payments or subsidized federal crop insurance. The taxpayer, in other words, underwrites the risk.

The circle is completed with other policies that provide flood control for farmers whose newly cleared swamps are inundated with the inevitable runoff.

"It is not clear that you could change the pattern of conversion even without these policies," Shabman said.

"Since 1980, some of the technical and financial aid from federal agencies has been cut down due to an executive order by President Carter," he noted. "But most of the policies that encourage this are still there . . . . Everyone acknowledges that the tax code has a tremendously pervasive influence, but then they throw up their hands." Lure of the Soybean

The biggest factor behind bottomlands conversion, a Fish and Wildlife Service official explained, is the soybean.

"It is a fast crop, matures quickly," he said. "You can clear an area, plant it and get it to market in a short period of time. In a relatively short time, you can amortize the cost of the clearing and planting operation. It may flood two or three times every five years, but you can get your profit."

Agriculture Department statistics verify the southern soybean boom. In Arkansas, soybean planting went from 4.6 million acres to 5.2 million between 1977 and 1979. Louisiana plantings climbed from 2.7 million to 3.2 million acres in the same period; Mississippi went from 3.7 million to 4.2 million acres.

Soybean exports are down now, and southeastern plantings have declined in the past couple years -- but the wetlands are gone.

As an added benefit of the short soybean season and benign climate, southern farmers are able to get an additional crop of wheat or rice in the same year.

Both commodities are eligible for federal crop loans and cash subsidies. The southern wheat found a ready buyer when mainland China came to the U.S. market, but China stopped buying last year and the wheat is now a surplus item.

Moreover, the increased wheat acreage in the southeastern United States during the past decade accounts almost exactly for this country's surplus wheat production. Put another way, prices for farmers in the traditional wheat-growing sectors would be higher without the surplus. Denuded Grassland

Similar things have happened in the past decade in Colorado and, Montana, where hundreds of thousands of acres of fragile rangelands have been plowed under by sod-busting land speculators and farmers, who create wheat ranches that qualify for the federal crop support loans and cash subsidies.

Gone with one pass of the plow is grazing land that nature took centuries to establish with native grass covers in the highly erodible, thin topsoil.

Conservationists say the land is so delicate that once wheat production is abandoned, the erosion-stopping grass cover is almost impossible to restore.

In Colorado alone, according to the U.S. Soil Conservation Service's Don Gillespie in Denver, about 629,000 acres of fragile grazing land were converted to wheat production between 1978 and 1984.

Windblown erosion from the bared soil, blocking roads and damaging other ranches, has led a few counties in the state to pass damage-control land-use regulations.

Economists at Montana State University concluded in a recent study that sod-busting in the West has as much incentive for investors, who get tax benefits through land resale, as for ranchers seeking the income supports of federal programs.

In either case, the study said, the assurance of crop supports helps drive the price of land above its intrinsic value.

But while the Soil Conservation Service tries to regulate the plow-out through persuasion, it is powerless in the face of farm-program subsidies that encourage it. And while USDA crop programs attempt to regulate surplus production, tax laws spur it by providing investment credits and capital gains advantages to speculators who may make as much as $200 an acre reselling converted rangelands.

"This became particularly serious about four or five years ago when the farm economy began to slow. Some farmers and ranchers were getting kind of desperate and started to convert rangeland to wheat," said Ken Pitney, assistant state conservationist.

"There were others from Canada and from our cities who came in and bought ranches to plow out, plant to wheat and then sell the land at a profit," he said. "The whole plow-out is so serious that it has brought to a head the contradiction in the programs." From Dunes to Debt

The Babe Ruth of contradictions, however, may be found in the Sandhills region of central Nebraska, where farm programs, tax breaks, helter-skelter development and irrigation policy have conspired to write the last word.

For decades, ranchers grazed their cattle on these sand dunes, whose 19,000 square miles made it the largest expanse of grassland on the continent. But huge center-pivot irrigation systems, perfected after World War II, made it possible to pump water from the underground Ogallala Aquifer and spray it over quarter-mile sections of land.

With this, the delicate Sandhills were on their way to becoming cropland.

Outside real estate investors, including Prudential Insurance Co. and the wealthy Bass family of Texas, flocked into the Sandhills in the 1970s, spurred by the chance to get tax breaks on land and equipment purchases, on clearing costs and even depletion allowances on water pumped from the estimated 10,000 wells drilled into the aquifer.

The federal farm support programs increased the profit potential for the investor corn growers. With the supports, the tax breaks and the free Ogallala water, land that cost no more than $500 an acre to purchase and develop could be far more profitable than richer land selling for five times that much in the Iowa-Illinois heart of the Corn Belt.

Sandhills corn production climbed from 95,000 acres to 500,000 acres during the development rush of the 1970s, adding to the glut that keeps corn prices generally low and to USDA's crop-program outlays. The heavy use of nitrogen fertilizer and toxic chemicals, filtering easily through the sandy soil, threatens the aquifer's purity.

And removal of the sand-holding grass cover has added to wind erosion problems.

There is a final twist to the contradictions that allow an area such as the Sandhills to be changed from fragile prairie dunes to row crops.

The Sandhills region has become one of the state's most financially stressed farm areas. Farmer-run production credit associations at O'Neill and Valentine went out of business in the past year, pulled into insolvency by their heavy commitment to expensive center-pivot irrigation development for growing corn.

Over the past four years, as corn prices stagnated and interest rates stayed high, land prices fell and the development thrill evaporated. The real estate promoters who transformed the Sandhills count on land turnover for their profits and tax benefits, and now, the land isn't moving.

So, even with markets presaging continuing low corn prices, agricultural interests are fighting to get congressional approval of the O'Neill irrigation project in the Sandhills. It's a $407 million plan to allow about 80 farmers to put subsidized federal water on 77,000 acres and expand their plantings of . . . still more corn.

Next: Debt and disaster