Growers baffled by new farm bill

Down on the farm, the doings of Capitol Hill look a little quirky. On Friday, the Reagan administration announced a new farm bill that would change the course of 50 years of farm legislation. Many farmers -- caught in the worst crisis since the 1930s -- were disappointed with it. Others were baffled.

``I was a wee bit disappointed,'' says Jay Mosher, a hog farmer from Milo, Iowa. ``Maybe the direction is right, but the speed is way too fast.''

``I do not understand what our leadership is thinking,'' says Doug Wildin, a broker of large farms and ranches, who farms with his son in Kansas. ``The problem is that the prices are so low'' already.

A solution, he suggests, is that Agriculture Secretary John R. Block (who wants to cut back programs) trade places with Defense Secretary Caspar W. Weinberger (who is holding out for more defense spending).

The administration wants to make United States agriculture more competitive by bringing US prices back into line with world market prices. Secretary Block proposes to:

Reduce price supports. Currently, the government in effect supports prices of several major crops through commodity loans. Farmers can exchange their crops for a government loan and, if they can't get a good price for their harvest, keep the money and forfeit the crop. The administration wants to set loan levels for major grains and cotton at 75 percent of the average market price during the three years preceding each crop year.

Lower income supports. These so-called target prices are set by Congress above the loan rate so that if market prices fall below the target, participating farmers get a direct government payment to make up the difference. The administration would phase out these payments over five years.

Cap government payments. The administration would limit to $200,000 for any one year the amount of crops a farmer can forfeit in the government loan program. Above that amount, farmers would have to repay with cash plus interest. Direct payments in the target price program would be limited to $20,000 initially; $10,000 by 1988. Currently there is no limit on commodity loans and a $50,000 annual limit on direct payments.

Overhaul dairy and peanut programs. Dairy loan levels would be reduced, and, beginning in 1988, dairy farmers would receive direct payments under a target-price system that eventually would be phased out. The peanut program would be opened up to allow all farmers to sell peanuts domestically. Loan levels would be set at 75 percent of average three-year market prices.

Replace the current federal crop reserve program, which has accumulated large surpluses, with a small reserve for humanitarian needs.

Eliminate direct emergency loans by the federal Farmers Home Administration. Commercial banks would have to take up the slack, with the government guaranteeing a portion of their emergency loans to farmers.

Many farm groups have criticized these proposals. Even the conservative American Farm Bureau Federation, the nation's largest farm organization, condemned it for being ``based solely on budget considerations with a total disregard for its economic impact on farmers.''

Many in Congress appear to agree. Even Republicans are skeptical about the chances of passage for the administration bill.

``It sunk to the bottom'' as soon as it was submitted, says an aide to one Republican senator. ``It was dead on departure.''

``I don't think there's any question that loan support levels will come down somewhat,'' says Gene Moos, agricultural aide to House minority whip Thomas S. Foley (D) of Washington. ``But Congress will want to move more slowly in that direction.''

Many observers predict the fight in Congress will not be easy -- even though the bill would not take effect until next year. Already, the Senate has been filibustered by farm-state legislators who held up the confirmation of Edwin Meese III as attorney general in order to force the administration to broaden its farm-credit relief package.

Some farmers -- even those who are in trouble -- are wary of the immediate help that Congress is trying to provide. ``I don't feel pessimistic about it,'' says Lee Bernier, a northwest Iowa sheep farmer, who is about to lose his operation. ``I'm going to feel more pessimistic about it if they put in some phony deal.

``They're going to really think they're helping us,'' he says. ``Maybe not doing too much of anything is better than striking off in some direction that's going to cost.''

Other farmers, such as Mr. Wildin, doubt that the apparent quid pro quo in Congress -- immediate debt relief in exchange for lower commodity prices -- is going to stabilize the situation. Wildin says he supports mandatory production controls as a way of raising prices and reducing crop surpluses.

``I hate to say it,'' says Mr. Mosher, ``but I guess maybe mandatory [control] is not that bad.''

Two years ago, he says, he believed in reducing government involvement. Now, his own debt-heavy operation is in jeopardy of going under, and he as yet has no credit to plant this spring. ``That changes your mind a little bit when it affects you personally.'' -- 30 --