It has become fashionable in recent weeks to talk about how Congress needs to face the facts and pull the plug on the family farm. If this is Congress' approach while it finishes working this month on the 1985 farm bill, it will not be a case of mercy killing; it will be cold-blooded murder.
Congress needs to end the disastrous farm policies of today, which have sent prices to post- Depression lows, pushed up federal farm subsidies by an average of $10 billion a year since 1981 and given us our own home-grown equivalent of the Latin American debt crisis -- a $20 billion to $25 billion farm debt that threatens to boost short-term interest rates a full percentage point.
The authors of the tentatively approved House and Senate committee farm proposals deserve to be commended for their frankness in acknowledging that their plans will do nothing to increase farm income, noth the explosive farm debt crisis and noth increase the value of U.S. farm exports. The only thing the current House and Senate proposals will do is to flush billions more tax dollars down the rat hole of current farm programs.
One means Congress has to help rural America survive is to pass the Farm Policy Reform Act of 1985, introduced by Sen. Tom Harkin (D-Iowa) and Rep. Bill Alexander (D- Ark.). The legislation was based on hundreds of grass-roots meetings held across the heartland of America in 1983 and 1984. The bill authorizes a February 1986 nationwide referendum of farmers.
If a majority of farmers votes to scuttle current farm policies, the production of American agricultural products will be brought into balance with domestic and export demand and world hunger needs. In exchange for production cuts and an end to costly farm subsidies, farmers will get a price floor at a level that covers their cost of producing crops.
The Congressional Budget Office has concluded: "Passage of the referendum would ensure that the farm bill remains under budget while raising farm income an estimated 52 percent." The projected savings of $12.5 billion would come through the elimination of costly direct federal subsidies, which are failing to do the job now because the bulk of the money does not go to the farmers who need the help.
The commonsense, market-oriented approach of the Harkin-Alexander bill means that farmers would stop producing more than they can sell and that they would earn their income from the marketplace, not from taxpayers' pockets. Critics say the supply management approach would hinder U.S. farm exports, but a new academic study shows this farm policy would actually increase the value of U.S. exports by 15 percent.
This break with the failed policies of the past makes the Harkin-Alexander bill the cheapest farm proposal before Congress and the only one that will dramatically increase farm income -- the first big step to easing the $20 billion short-term debt crisis in rural America. The independent Food and Agriculture Policy Research Institute of the University of Missouri and Iowa State University estimates that the one-shot impact on consumer prices would be minimal -- less than a 1 percent increase in the Consumer Price Index, which would merely restore the farmers' share of the food dollar to where it was in 1981.
The Harkin-Alexander bill also is the best plan Congress has to fight world hunger and to institute the long-overdue, aggressive steps needed to prevent an even more disastrous Dust Bowl.
Though it is a new idea for grain crops, the Harkin-Alexander approach is not an untested one. The sound principle of balancing supply with demand is used by every successful business in America from McDonald's to GM. The same supply management approach is now being used profitably for American farmers producing other commodities, including peanuts and a long list of specialty crops.
If good business sense will not drive the 1985 farm bill debate, perhaps the prospects of even deeper deficits will. With the mid-August USDA announcement of near-record grain crop harvests, the options available to Congress have boiled down to either bigger, multi- billion-dollar increases in farm subsidies or supply management of our runaway farm production. It's a simple choice between continuing to mask the symptoms and confronting the real problem.
The 1985 farm bill needn't be the death certificate for the family farm. But if Congress continues on the current path, we will be filling one out all too soon with the cause listed as a "total failure of federal farm policy."