To untangle farm policy, tough questions must be answered

In a small office at the entrance of his home in this central California community, Joe Gonsalves digs through a desk drawer. ``I'll show you what I got -- exactly to the penny,'' says the small, rotund dairy farmer, pulling out an official-looking form. Written in at the bottom of the sheet: $8,010,767.60.

``I didn't do this because I had to,'' says Mr. Gonsalves who, in return for $8 million, is selling his 2,000-cow herd and leaving the dairy business for five years. ``I was making enough to service my operation and make a living. . . . [But] this program came up, so I bid on it.''

This is one of the many conflicting images of agriculture today. In the midst of the worst farm depression in 50 years, when many families are losing their farms, large dairy farmers are getting huge payments to quit the business. Despite record spending on farm subsidies, farm income is expected to slide for the second year in a row. Once a bright spot in the trade picture, agricultural exports have fallen so low that the United States has decided to subsidize grain sales to the Soviet Union.

``The public has to be mightily confused . . . about what agriculture is all about,'' says Lynn Daft, a Washington-based agriculture consultant.

``These are all symptoms of the underlying problem,'' says Jim Vertrees, principal agriculture analyst at the Congressional Budget Office. ``It's always been the case that we've had multiple objectives and sometimes conflicting objectives.''

Many goals are stated in defense of current programs, but no one has made the choices about which goals are most important.

``The first paragraph or paragraphs of every farm bill have a lot of high-sounding verbiage and rhetoric about family farms and low income and financial stress,'' notes Robert Thompson, the US Department of Agriculture's chief economist. But ``no program can achieve all the objectives that are laid out in those initial paragraphs,'' Mr. Thompson says.

The result is a program that avoids the hard choices, many agriculture economists and observers say. By trying to support the price of certain commodities, the system inevitably benefits the largest farms in the programs. In 1984, the latest figures available, 5 percent of these farms got 39 percent of the payments. And several economists suspect payments are even more skewed toward the large producer in 1985 and 1986.

Meanwhile, attempts to cap direct subsidies to farmers are increasingly circumvented -- either by large operators who carve up their farms to stay in business or by Congress itself, which is trying to control a surplus that it currently has to buy up and store.

These increasingly apparent shortcomings may force change, many agriculture observers say.

``I think this payment issue will be the trigger,'' says Dean Kleckner, head of the American Farm Bureau Federation, the nation's largest farm group.

Adds one federal official: ``We're at a point where Congress is beginning to ask the question: Isn't there a better way of doing things?''

There are better ways, agriculture economists and others say, but finding them involves choices. Who should receive public support to farm? Low-income farm families? Families that run mid-sized operations? Large farmers that currently raise most of the nation's food?

These questions beget another one: Can one program achieve the various social and economic goals? Probably not, these observers add.

``What it really comes to is separating the economic efficiency from the social issues,'' says Bruce Bullock, agriculture economist at the University of Missouri at Columbia. Current programs are not economically efficient, many large farmers argue, because they encourage all farmers to overproduce and subsidize even the inefficient ones so they can continue operating.

One important social issue, many farm groups contend, is the preservation of farming communities.

``We've got to make the decision that we do want a rural community . . .,'' says Bob Frederick, legislative director of the National Grange, which represents some 400,000 farmers. ``If it takes social programs to do it, let's call 'em what they are and get to it.''

The Grange, once a supporter of mandatory supply controls, now calls for a program that would make up the difference between the market price and a farmer's cost of production, but only up to a certain size. ``If they [large farmers] want to produce for the world market, let them produce at the world market price.''

Another issue is the environment. Why not subsidize farmers, regardless of size, who are good conservationists, argues Joseph Kinney, a Chicago consultant and onetime agriculture aide to the late Sen. Hubert Humphrey.

``We've got to remember: We're using the public's money,'' Mr. Kinney says. ``I think what we ought to do is invest in good farmers. That's a sound investment.''

But fundamental change of production-based farm policies will be difficult, these experts agree, because a whole industrial superstructure has been built around them. Parts of that superstructure are now creaking ominously, but it is not clear that the public or farmers will respond. Other articles appeared Aug. 14 and 15.