Call it sound management or foolhardy politics. But, no matter how it is looked at, the Reagan administration's willingness to take a hard look at the nation's soaring costs for US agricultural programs - and particularly the whole complicated matter of farm subsidies - deserves support from all Americans.
What is generally not recognized is the huge financial cost of American farm programs. So in deciding to challenge projected increases in such programs the administration runs a very real risk of threatening Republican political gains in a wide swath of farm-belt states in the 1984 presidential election.
At the outset, it must be stressed that the issue is not one of precipitously ending US support programs for agriculture. The administration itself has accepted the notion of federal crop support programs. Nor is the issue one of slashing back funding for farm programs at a time when many segments of the agricultural community are still in economic distress because of the recession. In fact, there is a strong case for actually bolstering and expanding programs pertaining to rural housing, soil erosion, and farm exports, and working to prevent farm bankruptcies through various lending packages. But the question is to what extent the American public - at a time of soaring budget deficits projected at $200 billion and above - can continue to fund crop support programs that cost taxpayers on the order of $12 billion for 1982, and could jump to as much as $21 billion this year with no end in sight to further increases.
It is precisely because of the skyrocketing explosion in the costs of farm programs that the President has threatened to veto the omnibus farm and food program bill now before the Senate. The measure, which has cleared the House, is pegged at a whopping $34 billion.
The administration would like to freeze scheduled increases in target price support programs for all basic US commodities, including wheat, corn, and cotton. It would also like to cut back dairy price targets. The reason for seeking such a freeze and cutback is not hard to understand. Farmers are given payments for the difference between actual market prices and what they would receive under legislatively mandated target prices. Since market prices are now down, because of recession, and many farmers have huge surpluses, the nation's farmers have jumped aboard the various crop support programs in huge numbers.
Could the administration actually muster up the votes to prevent scheduled increases in target prices? At first glance that seems unlikely, given the Democratic margin in the House, where there is considerable sympathy for support programs. But then again, lawmakers are keenly aware of the deficits. And, as they also realize, there are precedents for trimming price support levels. Indeed, the administration was able to win Congress over to canceling several projected increases in price supports for milk that would have gone into effect in the past several years.
What should be kept in mind as the debate about subsidies gets under way is that the support programs are entitlement programs, in the same category as, for example, veterans programs, or US Export-Import Bank subsidies for industry. In other words, despite the fact that several generations of Americans have lived with subsidies, such subsidies should not be considered sacrosanct. They were initiated to help farmers through hard times - such as the present recession. But now that recovery is on the way it is only appropriate that the administration and Congress look for opportunities to trim future costs for the subsidy program. Not with an eye to ending such programs outright but, rather, holding down costs which in some cases are indefensible (such as tobacco subsidies) and which add to the huge budget deficits, thus endangering economic recovery.