Major changes have occurred in the 25 years since it was identified as a bastion of racial discrimination, but the politically powerful Agricultural Stabilization and Conservation Service (ASCS) continues to be a major problem child of the Agriculture Department.

A 1965 study by the U.S. Commission on Civil Rights singled out the ASCS for policies that systematically discriminated against black farmers and denied employment to blacks, citing the agency for mirroring local patterns of racial segregation and discrimination.

Subsequent laws, court rulings and policy changes have substantially changed the employment and program-delivery practices of the ASCS. A strong antidiscrimination statement by Agriculture Secretary Richard E. Lyng last year put more pressure on the ASCS to change.

But the agency, which determines who can qualify for billions of dollars of federal farm subsidies each year, is under new scrutiny. Lyng's policy order has brought a flood of complaints about the ASCS. And Agriculture Department oversight reviews found widespread abuses of civil rights and equal opportunity laws in the Florida and Arkansas branches of the ASCS.

The recently released Florida study, for example, found the ASCS leadership structure was virtually all-white. None of the agency's 41 county ASCS offices was headed by a black and the state headquarters staff included only one black -- a GS-4 mailroom employe who had been trained for a county director's job but not placed. The Agriculture Department recently settled the employe's discrimination complaint with a promotion and a cash payment.

The department's reviewers also reported equal-opportunity insensitivity on the part of managers; several white county directors referred to black males as "boys" and to black females as "negresses." They also found that ASCS job applicants often learned of openings through friends already employed there, suggesting the "old-boy" network criticized by the civil rights commission was alive and well.

A similar situation was depicted by reviewers last year in Arkansas, where recommendations were made to correct 48 instances of employment inequities (only 12 blacks were on the full-time payroll statewide) and lack of civil rights enforcement in ASCS operations. Agency officials here say that most of the problems have been corrected or are in the process of being corrected.

Civil rights specialists at the department believe that similar ASCS abuses are occurring in other states, particularly in the Southeast, but none can be documented because of Reagan administration budget cuts that have sharply curtailed regular compliance reviews of agencies' activities nationwide.

"I feel the ASCS is sitting on a time bomb," said one Agriculture Department civil rights counselor. "The entire system operates to exclude blacks; the general counsel's office has told them they simply could not win any class-action complaint brought on the basis of sex."

Richard W. Goldberg, the acting undersecretary for international affairs and commodity programs who is a sub-Cabinet level overseer of the ASCS, took issue with that assessment. "I'm satisfied that we're complying with Secretary Lyng's order," he said. "The ASCS as an agency looks pretty good compared to many other federal agencies."

Goldberg said he felt "upbeat" about progress the ASCS has made since Lyng's order 15 months ago. "We've had meetings in every state on equal employment policies and we're in the process of following up with training sessions to make certain we are in compliance."

But random interviews with ASCS black employes in Arkansas, Oklahoma, Alabama and Florida indicate an ongoing pattern of discriminatory practices, many of them rooted in the political appointment system that makes ASCS unique among Agriculture Department agencies.

State directors and state committees that handle ASCS affairs traditionally are appointed on a political basis by the administration in power. County committees that determine who gets federal subsidies and who is hired are elected by farmers, usually on a county-wide basis -- which works against minority candidates.

The committees in turn hire staff directors who, although trained and paid by the USDA, are in effect county committee employes. Trainees who are not hired within 18 months usually are dropped from the roles or offered other jobs elsewhere in the agency.

"We pay for them and we train them, but we don't have that much control," Goldberg said. "The only reason the system can be defended is that as a practical matter 90 percent of the county directors are outstanding . . . dedicated folks who do a good job with complicated programs."

One result of this system is that blacks are hired far less frequently than whites. According to ASCS statistics, as of July 31, only 33 of 2,520 county directors in the nation -- that is, about 1.3 percent -- were black. Twenty-five of the 33 were based in southern states, where the bulk of the black farm population resides.

ASCS officials said that six of 13 blacks who received county-director training during the last year were hired by local committees. Three were hired for federal positions; the other four were "non-selected," one because of "inadequate farm background" and three for "unknown reasons."

"The problem is this county committee system," said one black county director who was interviewed and rejected 13 times before he was hired on orders of his state's ASCS office. "Most of the offices are staffed by white women and the white-dominated committees just don't want to put a black man in charge."

"It's a system that has its advantages," he continued, "because the committee members know all the producers and they know who is legitimately entitled to federal benefits. But you still come up against the personal prejudices. It's a good-old-boy buddy system and it will drag the whole agency down . . . . It's so overwhelming when you're here and you can't swim."