The 1981 Farm Bill

In late December, after months of sometimes rancorous congressional debate, President Reagan signed the Agriculture and Food Act of 1981. The act provides broad policy directions and authorizes a wide range of agriculturally related programs for the four years 1982-85.

The new legislation contains few fundamental policy changes. For the most part, it continues policies established in counterpart acts of 1973 and 1977. Provisions for price support of agricultural commodities and management of commodity stocks remain the centerpieces, and program instruments authorized for use by the secretary of agriculture also are familiar. Food stamps and commodity distribution for low-income persons are reauthorized for one year, albeit with several amendments affecting eligibility and program administration. Authorization for support of agricultural research, extension, and higher education is extended through 1985, with much the same purpose and form as in the past four years. And foreign food assistance programs (Public Law 480) also are extended through 1985, with a one-third increase in annual spending authorization.

New emphases

Some other modifications are worth noting. Agricultural trade is emphasized, for example, reflecting concerns about the use of agricultural export subsidies by competing nations and the U.S. objective of expanding agricultural exports. In this regard, the act supplements existing authority of the secretary by authorizing the establishment of an export-credit revolving fund and a special standby export subsidy program. And a new provision was added to require compensation of producers in the event of future agricultural-specific trade embargos, an obvious reference to the 1980 embargo of grain shipments to the USSR and the mid-1970s soybean embargo.

National concern about the availability and quality of natural resources prompted new or modified provisions related to resource conservation. One effect is to permit more precise geographic targeting of soil, water, and related conservation programs. Another provision, the Farmland Protection Policy Act, directs the secretary to take greater cognizance of the effects of federal programs on farmland conversion and to develop educational programs stressing the importance of retaining productive farmland. Matching grants to local governments and small loans to producers to encourage natural resource conservation are authorized to augment existing technical and financial programs.

A mélange of other special provisions and technical changes is found in the 145-page bill, including creation of the position of assistant secretary for research and education, a cost-of-production review board, and a task force to study the feasibility of farm income protection insurance, to mention a few.

Politics and dissatisfaction

Enactment of a new agricultural policy bill in 1981 was in itself a major legislative achievement. Given more than the usual political pulling and hauling of interest groups, the fracturing of a traditional and powerful coalition of agricultural commodity organizations, the constraining effects of an unusually well-disciplined congressional budget resolution, and a new administration espousing less government intervention and reduced budget outlays, in some respects it is remarkable that any new legislation was enacted. As it was, the bill passed by only a two-vote margin in the House, and some believe it may be the last of such omnibus legislation. Deep political divisions within the farm bloc, diminishing political power of agriculture in the urban-dominated Congress, and changing economic characteristics of agriculture all undermine the very purpose and political rationale for traditional farm policies.

Under the circumstances, it scarcely is surprising that the act's mosaic of politically compromised programs leaves many persons dissatisfied. The administration achieved some of its goals but failed to secure the added market orientation it sought through elimination of income transfers in the form of deficiency payments to producers when prices fall below specified target prices. And, depending on economic conditions in agriculture, budget exposure estimated at $11 billion over the four-year life of the act for agricultural commodity provisions alone may prove embarrassingly high for a cost-conscious administration.

Many farmers, particularly cash grain farmers, beset by high costs and relatively low farm-product prices, are unhappy with what they regard as excessively low price guarantees. Consumers and some farm groups are upset by favorable programs for sugar, dairy, tobacco, and peanut producers, who generally managed to retain supply-restricting, highly supported programs. And environmentalists are foremost among those who would like to have seen more stringent provisions in the act related to resource conservation.

The ink was barely dry on the new bill when legislation was introduced to amend its commodity provisions. Whether residents of the nation's capital will be confronted by a new "tractorcade" in the immediate future is anyone's guess, but clearly the new legislation has disillusioned many. Coupled with the 1982 congressional elections and no immediate market relief in sight in the farm economy, efforts to amend the legislation almost certainly will accelerate in the months ahead.

Authorization versus implementation

Just how well suited is the 1981 act to U.S. food, agriculture, and natural resources public policy issues? No easy, unequivocal answers exist. While the legislation provides a policy framework, it leaves a great deal of discretion to the secretary to develop and implement programs to attain policy objectives. Further, the act merely authorizes implementation specified programs; it does not appropriate funds for their execution. Thus, the scale and even the existence of several program activities remains uncertain. It is not unusual for the executive branch to defer requests for appropriation, or for the Congress to fail to appropriate funds for legislatively authorized programs. With the distinct possibility of further reductions in the federal budget and outlays, some authorized programs will be implemented only at modest levels or not at all. Until the Congress and the secretary give more precise shape and form to the legislation, judgment of its effectiveness Is not possible.

The Agriculture and Food Act of 1981 should be viewed as but one component—albeit a large and important one—of more, comprehensive food and agricultural policy. For example, value added in the farm sector comprises only 14 percent or the final retail value of food. A comprehensive food and agricultural policy would incorporate those other sectors of the food system, such as food safety and quality, and transportation, that contribute 86 percent of added value. Many of the components of a more inclusive policy already exist in scattered pieces of legislation, and they need to be integrated into a more explicit, consistent, and comprehensive policy framework.

Viewed for what it is—a partial and contributory component to food and agricultural policy—the new act incrementally extends the evolutionary change of the past two decades toward reduced government intervention in agricultural commodity markets. There are no bold new initiatives that would alter the course of food and agriculture in the next four years. The strengths, weaknesses and anachronisms of policies of the recent past remain largely intact. If, in fact, the act is the last such omnibus legislation for agriculture, the challenge is to begin constructing more suitable and effective policies in light of the realities of the 1980s.