Agriculture Secretary Richard E. Lyng said yesterday that the rebounding U.S. farm economy will continue to show improvements in 1988, although government subsidies will remain high and heavy debt will threaten about 10 percent of the nation's farmers.
Lyng predicted that cash farm income will be down slightly from this year's record $57 billion, but the decline will be offset generally by falling debt payments and stabilizing land values. Consumer food prices, he said, will go up between 2 and 4 percent.
The secretary said 1987 has been highlighted by recovery in farm exports, with volume and dollar value up; by reductions of commodity stockpiles that have depressed prices; by record income and declining production costs; by lower farm debt and a firming of land values.
Departmental statistics indicated that 56 percent of the nation's 2.2 million farmers would end the year in a "favorable" position with high income and low debt. And 34 percent will be in reasonably good shape while 10 percent will be burdened by low income and heavy debt.
During a year-end review of the farm economy, Lyng said that much of the positive change that occurred this year was linked to the 1985 farm bill, in which Congress forged new policies designed to recapture export markets while maintaining farm income through federal supports.
Lyng also listed farm program spending as one of the ongoing problems, although 1988 costs are expected to decline from this year's $23 billion. Fiscal 1986 spending was a record $26 billion; it is predicted to range between $19 billion and $21 billion in fiscal 1988.
The secretary also said:
He is concerned about the high-debt, low-income situation that threatens more than 200,000 farmers, but he suggested no new government initiatives that might stave off bankruptcy or foreclosure for the most seriously endangered.
He is troubled by the idling of massive amounts of crop land as part of the government campaign to reduce overproduction, although he did not foresee major changes in the coming year. Government programs idled about 69 million acres of crop land in 1987, the second highest level this decade. His campaign to end civil rights and job discrimination at USDA has been taken seriously by employes and administrators, but the department's problems have not ended. Lyng refused to promise a higher budget for civil rights enforcement activity, saying instead that would review spending levels.
The United States, buoyed by some signs of success, will continue to pressure Japan, the European Economic Community and other nations to lower trade barriers and farm subsidies. He also said this country will insist that Japan end beef and citrus import quotas this year and that he has "cautious optimism" about General Agreement on Tariffs and Trade (GATT) negotiations under way in Geneva that were set in motion at a major trade conference last year in Punta del Este, Uruguay.
"Nothing is more important to U.S. agriculture than successful negotiations in the Uruguay round, where agriculture is on center stage," Lyng said. "This is the best chance we have had in a long time to agree to some programs where we don't need these huge expenditures."
The secretary said that farm program changes ordered by Congress this month as part of the deficit-reduction agreement for the next two years obviated the need for further major alterations by the Reagan administration. However, he said an announcement will be made soon about dairy support program changes.