Hold the line for farms

AT a time when American agriculture is facing its most serious challenges since the 1930s -- and perhaps the 1920s -- it would be especially unfortunate if Congress were to avoid enacting a comprehensive new farm bill. Some weeks back, many longtime Capitol Hill watchers were suggesting just that -- that farm legislation would have to be postponed until next year, given intense debate in Washington over rising federal outlays for farmers at a time of multibillion budget deficits. Now, thanks to some creative efforts under way on all sides of the congressional aisles, it looks as though a farm package may yet work its way through the legislative hoppers before the winter snows permanently settle in for many of the nation's farms. Surely, a new farm bill is in the nation's best interest. For all their problems, the nation's farmers remain the most efficient agricultural producers in the world. Moreover, US farm exports remain a key component of the nation's overall foreign trade.

Specificially, two significant developments are now taking place in Congress that warrant attention:

The shape of the farm bill has yet to fully emerge as of this writing. Senate and House versions would differ sharply regarding costs. But the underlying principle in both approaches remains essentially the same: The final bill would be essentially a ``status quo'' or ``hold the line'' measure. Existing support programs would be retained. Some outlays would be reduced. A few new programs, modestly funded, might even be started.

Key farm-state legislators also have been working on legislation to reorganize and refinance the financially troubled farm credit system.

The large farmer-owned system holds something like one-third of the nation's total farm debt. The system's collapse could have a devestating impact on rural America.

As we have noted this year, there is a strong argument against fundamentally restructuring farm policy -- which the administration wanted to do -- at a time of economic uncertainty. True, the national economy continues to post modest growth. But the overall farm economy, as the column opposite by H. Thomas Johnson points out, has a striking similarity to the farm economy of the 1920s, a period of deep difficulty for US agriculture. Many farmers today are burdened by debt. Farm land values have dr opped from the heady days of the 1960s and '70s, when farmers acquired more and more debt to extend acreage and production. Production costs are up. So too are foreclosures.

Granted, federal farm costs are too high, underscored by the recognition on Capitol Hill that a new farm package will cost at least $50 billion -- well over $10 billion annually.

Compare that with the early 1970s, when farm packages tended to run about $3 billion annually.

Federal farm costs should be reduced. Can costly dairy price supports be justified, for example, when the US now has enough dairy surpluses on hand, as Sen. John H. Chafee (R) of Rhode Island has noted, to provide every American ``a two-month supply of butter, a three-month supply of cheese, and a two-year supply'' of milk?

Still, reducing farm costs should not come at the expense of the well-being of rural America.

It is important that the nation's agriculture sector be stabilized. Until Congress figures out how to pare back federal support without destabilizing the farm economy, it must continue the structure it has in place.