The lull is about to end in the Reagan administration's longest farm-expenses battle, the attempt to turn off the spigot that has flooded the country with surplus dairy products and cost the government billions of dollars over the last four years.
As the administration and Congress joust over a new farm bill, a renewal of their four-year feud over the costly dairy problem seems a certainty. Current dairy law expires Sept. 30.
Despite several rewrites of the dairy program since 1981, only a dent has been made in surplus production -- federal costs continue at more than $1 billion a year. The problem, as it has been since 1981, is simple: too many cows making too much milk.
"Once again, we're fighting the same battle," Agriculture Secretary John R. Block said recently. "This has been the toughest, most persistent ongoing issue we've faced. It just goes on."
And, just as it has been since 1981, the dilemma for Congress and the administration lies in finding a way to reduce federal costs without putting large numbers of farmers out of business by suddenly dropping the price supports that keep a floor under their earnings.
New pressure to reshape the program and cut spending has been building since April, when the latest surplus-reduction scheme ended and thousands of cows, held in readiness, were brought into milk production, again boosting purchases of surplus by the government.
These highlights of the situation stand out:
* The just-ended 15-month "diversion" program, a farmer-financed plan that paid farmers $10 for every 100 pounds of milk they agreed not to produce, cut output by less than 4 percent and reduced the 10.8-million dairy herd by only about 10,000 cows. Payments were $955 million. The government share of that, while far less than predicted, was $80 million.
* Federal purchases of surplus dairy products are estimated to cost $1.5 billion this fiscal year, adding to the dairy mountain that contains about 3.4 billion pounds of dry milk, butter and cheese -- roughly 15 pounds for every American. Annual storage costs are $346 million; interest costs are about $300 million.
* Although still a major political force by dint of its huge election war chest, the vaunted dairy lobby appears to be on the defensive for the first time in ages. Block, congressional allies and consumer groups have mounted a strong campaign to discredit a farm-bill proposal the producers are floating.
"We're facing a situation worse than two years ago, when the current law was passed," said Ellen Haas, executive director of Public Voice for Food & Health Policy, a consumer group. "It was an ineffective mechanism for reducing costs to the Treasury and the consumer and for building consumption."
The proposal by the farmer cooperatives' National Milk Producers Federation, late out of the barn after replacing its top Washington lobbyists last winter, has divided its members, antagonized some traditional friends on Capitol Hill and offended dairy farmers in milk-rich Wisconsin and Minnesota.
Sen. Rudy Boschwitz (R-Minn.), for one, a longtime ally of the industry, has parted company with the federation. He has introduced a bill that would target federal assistance on the smaller dairy farms that predominate in his state and Wisconsin.
The federation wants a mandatory diversion program -- anathema to the administration -- if surplus acquisitions by the government reach 7 billion pounds. Assessments on farmers would underwrite the cost of paying dairy farmers to reduce production. The proposal also would alter the regional price differentials stipulated by milk marketing orders, a change that midwesterners oppose.
A federation bill is expected to be introduced soon in the House. Rep. Tony Coelho (D-Calif.), chairman of the Agriculture Committee's dairy subcommittee, has indicated that this will be the basis for developing a dairy section in the overall farm bill. But the lobby is finding less enthusiasm on the Senate side.
"The federation used to be a formidable organization," a Senate aide said, "but they really blew it this time. Key dairy-state people in the Senate simply won't go along with this plan, which would cut Upper Midwest prices and shift more milk production to other parts of the country."
Dairyman Don Haldeman, president of the Wisconsin Farm Bureau, seconded that. "The federation plan is a method of increasing prices for the Southeast and lowering them for the Upper Midwest," he said. "Everything was on the come in this industry for 10 years . . . . Now, when we have to shrink, there is a lot of infighting. Our real problem is that we have 16 to 20 percent more capacity to process milk than we need."
Block described the federation plan as "far from reality" but said it might pass the House.
"Congress is listening to the special-interest people, whether it is cooperatives, dairymen or political action committees. It is hard for Congress to vote for change because it is disruptive and makes enemies," he said.
Echoing Haldeman, Block said dairy farmers and the cooperatives that represent them are not necessarily in step.
He said that "farmers are concerned about getting control of the dairy program" but that the cooperatives are the problem. "They serve the farmers, but they have an interest in their own survival -- their plants process cheese [solely] for the government -- and that is not serving farmers," the Cabinet member said.