Budget Tales: Frustrated Farmers and Crowing Dealmakers

IT'S 80 degrees and sunny on Mike England's grain and cotton farm in Mercedes, Texas - only days until spring planting starts there and on thousands of farms across the Southern United States.

But as Washington's budget battles kick up a storm of uncertainty over farm policy, producers like Mr. England charge that Congress is sowing little but seeds of doubt. ''Congress has got us dangling on strings like puppets,'' says England, who with his father tills 1,500 acres of milo and cotton in the heart of the Rio Grande Valley. ''We're fed up.''

Farmers' frustration as planting season arrives with no national farm program in sight is perhaps the most striking example of how budget wrangling in Washington can disrupt American lives.

Recognizing that growers cannot wait much longer for Washington to act, congressional leaders are putting legislative wheels in motion this week to try to reach a compromise farm bill that is not linked to the budget resolution.

Meanwhile, from Texas and Mississippi and into the Midwest, farmers say crucial decisions on obtaining fertilizer, pesticide, and seed - as well as financing - are being held up by the failure to approve a new farm bill.

''We're in a real quandary,'' says Don Waller, a cotton farmer and president of the Mississippi Farm Bureau in Jackson, Miss. ''We're in a terrible state relative to planting decisions for 1996; we've got to have some answers right away.''

In Mississippi, the $5-billion agriculture industry is the state's biggest, with major crops of cotton, corn, and rice, Mr. Waller says.

''This is a very critical situation,'' agrees Gene Hall, spokesman for the Texas Farm Bureau in Waco, Texas. ''Our farmers are generally the first in the nation to plant, and they don't know what to do.''

Farther north in Illinois, where planting begins in mid-March, farmers complain their planning is off schedule. ''Typically, you'd like to have it all done by now,'' says Pete Tempke, who raises corn, soy beans, and alfalfa on a 960-acre farm in Freemont, Ill.

Growers must gamble on one of two opposing strategies:

* They can ''plant for the market'' with an eye on commodity prices as proposed by farm legislation in House and Senate bills introduced by Republicans this month. These bills would allow farmers flexibility to grow what they wish and also grant them seven years of fixed, steadily shrinking ''market transition payments.''

* Or, they can stick to the crop and acreage guidelines set down by the traditional farm-subsidy program. Written in 1990, the old program expired Sept. 30. But Democratic lawmakers are pushing for an extension of the old plan until a new law is crafted.

Many farmers interviewed say they hope for swift passage of the new Republican legislation, originally called the Freedom to Farm Act.

Still, amid uncertainties that GOP and Democratic lawmakers can break their deadlock, and with a congressional recess scheduled for most of February, analysts predict that a new US farm policy is unlikely to be final until March at the earliest - well into the planting season.

If Congress fails to act, the country's farmers could face what all parties agree is the worst-case scenario: reversion to the antiquated ''permanent'' farming statutes of 1938 and 1949, which lay down prohibitively high crop support prices and strict quotas on planting acreage.

''The 1949 statute would be a disaster for agriculture,'' says Terry Francl, an economist with the American Farm Bureau Federation in Park Ridge, Ill.

The steep support prices, for example $7.80 per bushel for wheat compared with an international market-clearing price of about $5 today, would make American commodities too expensive for overseas buyers and cost the United States export markets, Mr. Francl says.

Overall, farmers unsure over the direction of farm policy are likely to act conservatively and plant fewer acres, predicts Francl.

The impact of the uncertainty is especially harsh for farmer England and the 1,000 producers of the Rio Grande Valley.

Last year, the Texas region suffered its worst harvests in more than 20 years for all its major crops: cotton, corn, and other grains, according to Wayne Labar, executive director of the Cotton and Grain Producers of the Lower Rio Grande Valley. Drought and pests reduced the region's cotton yield from a projected 400,000 bales to only 50,000.

Widespread layoffs of farm hands and business shutdowns followed. Now, banks and other lenders jittery over the lack of a clear-cut farm policy are withholding loans that the region's cash-strapped farmers vitally need to finance spring crops.

As a result, producers in the region will probably plant what they can best afford: milo. ''People say, 'Shoot, we'll just grow a cheap crop of grain and try to make it,' '' England says.