An article yesterday incorrectly reported food stamp spending increases in the new farm bill. The correct figure is approximately $100 million per year.
Congressional conferees agreed last night on a farm bill that could send U.S. agricultural policy in abrupt new directions, although it fell short of administration demands for less spending.
With a round of last-minute budget cuts, the conferees set projected costs for farm support programs at about $52 billion during the first three years of the five-year bill -- $2 billion more than the White House wanted.
Agriculture Secretary John R. Block refused to say whether he would recommend that President Reagan sign the measure. But Senate Majority Leader Robert J. Dole (R-Kan.) and House Agriculture Committee Chairman E (Kika) de la Garza (D-Tex.) were optimistic about presidential approval.
"The president has an opportunity now to cap this effort by signing the bill and sending a signal to the farmers of the nation that he is sensitive to their problems," Dole said.
The measure, which must be approved by the House and Senate this week, ended months of bitter debate over ways to help U.S. agriculture regain lost export markets yet reduce rapidly mounting federal farm spending.
To achieve those aims, the conferees agreed to steps that would reduce the price support floor under basic commodities such as wheat, corn and milk to make them more competitive, while modestly cutting farmers' income subsidies.
The debate pitted the administration, with its demands for less spending and a "market-oriented" policy, against politically sensitive farm-state legislators who argued that the staggering agricultural economy required more support from Washington.
Agriculture Department officials estimated that in addition to the $52 billion in farm-support programs over three years, the bill would authorize about $73 billion more for food stamps, farm credit, research, exports, conservation and other farm-related activities at USDA.
Dole, Block and others applauded farm policy changes the bill would bring about. But spending would continue at or near the record levels of $18 billion that have occurred in two of the last three years.
Two major sticking points -- the income-subsidy issue and the dairy program -- were resolved by conferees with the administration losing on the first and winning on the second.
The lawmakers, rejecting White House demands for a one-year freeze on income subsidies, agreed on a three-year freeze (some called it a two-year freeze) that could put as much as $4 billion more in farmers' pockets.
The dairy outcome was less than either the House or Senate wanted, but it shaped up as a major victory for the administration in its longstanding effort to override the influential dairy lobby and cut federal supports to discourage surplus milk production.
According to Rep. Tony Coelho (D-Calif.), an architect of the agreement, the dairy changes would reduce federal spending by about $3.4 billion over the life of the bill by gradually dropping supports and encouraging farmers to leave the business.
The conferees abandoned the industry-sponsored "diversion" plan passed by the House, which would have paid farmers to cut production, in favor of straight price-support cuts and a farmer-financed program to allow the government to buy dairy herds and retire them from production.
The support level would continue at its current $11.60 per hundredweight through 1986, then drop to $11.10 by the end of 1987. Meanwhile, an 18-month herd-buyout program would start and the secretary of agriculture could later reduce the supports if acquisition of surplus milk, butter and cheese did not decline.
Under the bill, the support level, which was $13.10 when Reagan took office in 1981, could fall to $10.10 by the end of his second term. Surplus purchases under current law this year will exceed $1 billion.
"We've gone around and around on this," said Sen. Patrick J. Leahy (D-Vt.), another major player in the negotiations. "We felt it was not perfection, but it will save us a great deal of money."
The food stamp agreement, while more costly than the White House wanted, was forged as House Democrats and Republicans argued that any further cuts would lead urban legislators to kill the entire farm bill.
The conferees ignored objections from Sen. Jesse Helms (R-N.C.), the conference chairman, who argued hard for major cuts in the food-stamp program.
They entered the final round on food stamps with more than 50 unresolved differences, but Rep. Leon E. Panetta (D-Calif.) made it clear from the start that his House delegation had given as much as it would.
"I will not go back to the House with zero," Panetta told Helms. "We cannot return without some of these important deductions, particularly with regard to the working poor."
Helms said, "I've not heard one word about reductions. Are you going to pull the money out of thin air?"
Rep. Edward R. Madigan (R-Ill.), echoing Helms' displeasure, added a caveat. "If we try to cut this, we can't pass the bill. A big urban vote carried the farm bill. If we try to take it down further, we're in serious trouble. Dead in the water."
The food-stamp proposal crafted by Panetta and Sen. Rudy Boschwitz (R- Minn.) gave the conferees a take-it-or-leave-it package that would cost about $1 billion per year more than its current $12 billion. Over the five-year life of the bill, the program would cost about $70 billion.
Other features of the bill, the longest and most complicated farm measure ever before Congress, included:
A tough conservation section termed "historic" by de la Garza and Rep. Ed Jones (D-Tenn.), conservation subcommittee chairman.
It would create a "reserve" of up to 40 million acres by paying farmers to retire highly erodible land and prohibit the payment of federal farm benefits to farmers who plow up grasslands or convert fragile wetlands to crop production.
Retention of the sugar and peanut programs without cuts in price-support levels. The conferees also directed the administration to adjust import quotas to avoid federal spending on the domestic support program -- a move that would keep consumer prices high.
Substitution of a Senate proposal to phase out the honey program with a plan to reduce support levels gradually. A Senate plan to pay soybean and sunflower growers a subsidy on their 1985 crop also was scuttled.
Increased support for export promotion and credit programs as part of the drive to recoup foreign markets lost to increased competition, the strong dollar and shaky Third World economies.