Farm Policy's New Course

Report Outline
Consequences of Farm Recession
Government's Role in Agriculture
Beyond Today's Farm Problems
Special Focus

Consequences of Farm Recession

Farmer's Plight: Surpluses, Low Prices

Three years ago, President Carter's secretary of agriculture, Bob Bergland, announced the federal government saw no need to pay farmers to take a single acre of crop land out of production. What could not be sold at home could be shipped abroad to satisfy a seemingly insatiable world market that already was claiming one-third of this country's grain production.

In the topsy-turvy arena of global food needs and U.S. farm policy, such optimism now seems like ancient history. As farmers prepare for spring planting this year, the message from Washington is dramatically different. Bergland's successor, John R. Block, is offering farmers new and old incentives, including paying them with surplus crops, to leave up to 50 percent of their wheat, feed grain, rice and cotton lands idle. Bumper crops in 1981 and 1982, falling demand, rising export competition and the dollar's strength abroad have left farmers and the government stocked with price-depressing surpluses.

Market prices for wheat, corn and other important grains have shrunk by one-third in the past two years. Cotton prices dropped 25 percent. Farm income has nose-dived along with prices, from a historic high of $32.7 billion in 1979 to an estimated $19 billion last year. That is less than the interest payments on outstanding farm debt of $215 billion — a figure that has nearly doubled since 1977 and quadrupled since 1972, according to the Department of Agriculture. Adjusted for inflation, farmers' income last year was the lowest since 1933.