Reagan planted today’s ag seeds

Despite his rural Illinois roots, Ronald Reagan, like most modern presidents, had little interest or success in American farm policy.

During his White House tenure, Congress, as usual, did most of the heavy lifting in ag policy.

Yet some of the more innovative and progressive farm programs of the last 25 years came into being under Reagan.

A few endure today.

Endurance. The biggest, most successful is the 36-million-acre Conservation Reserve Program, born during the dark farm days that led to the 1985 farm bill.

Also, Reagan’s bone-deep belief that “government is the problem” planted the first seeds to decouple farm payments from farm production.

The idea sprouted briefly under two Reagan acolytes, senators Rudy Boschwitz, R-Minn., and David Boren, D-Okla., as a 1985 farm bill alternative.

By 1996, however, decoupling not only had taken root, it became the ground-shifting Freedom to Farm ag policy that killed cropland set-asides, the key component of farm programs for 60 years.

Rewards? Reagan’s first presidential stroll into the American farm program thicket, however, was anything but rewarding.

Loved by every American farmer for lifting the Jimmy Carter-imposed ag export embargo on the Soviet Union shortly after inauguration, Reagan attempted to parlay that popularity into moving the 1981 farm bill more toward the market.

Standing in his way, though, was an overwhelming Democratic majority in the House and a Senate whose every member knew a farmer.

Moreover, Tom Foley, the House majority leader, served notice early that spring he would not support any farm bill that failed to reinstitute a sugar price support program, largely gutted in 1977, for his Washington state beet growers.

The resulting bill, which revived sugar price supports, passed the House in late 1981 by a slim 205-203 margin. (“My single vote,” Foley told me later.)

A monster. But the compromises required for House passage turned the bill into a two-headed monster.

On one side was Roosevelt’s New Deal: set-asides and higher, ever-escalating loan and target prices for every major commodity.

The other side, effected in Reagan’s sweeping tax cuts earlier that year, delivered fat ag tax plums to tens of thousands non-farming investors.

Remember “safe harbor” equipment leasing and accelerated depreciation for breeding animals and single-purpose livestock facilities?

Insurance companies and tax lawyers certainly do.

When the two – ag tax shelters and guaranteed high government prices – met, overproduction resulted.

Irony. The irony of the competing policies was highlighted Dec. 22, 1981, the very day Reagan signed the new farm bill.

Immediately after signing the law that contained an unbelievably creamy milk support price of $13.10 per hundredweight – set to rise to $14.60 by 1985 – he also authorized USDA’s Commodity Credit Corp. to release 30 million pounds of stockpiled government cheese for free distribution to needy citizens.

That low point was the 1981 bill’s high point; from there, U.S. agriculture quickly unraveled.

Continued overproduction drilled market prices and spawned big export subsidy programs in 1982, the massive Payment-In-Kind program in 1983 and later, a huge dairy herd buyout program.

Two problems. Reagan was strapped with two other problems in his first term: an ag economy headed for an equity implosion and a secretary of agriculture, fellow Illinoisan John Block, who didn’t know what to do about it.

A widespread 1983 drought was the tipping point and land values crashed.

The 1985 farm bill cut back the excesses of the ’81 act.

Out went escalating target and loan prices and in came the huge land retirement of the Conservation Reserve Program.

Also born in 1985 were the beef and pork checkoffs and mandatory country-of-origin labeling for imported poultry and red meat.

Legacy. While the legacy of Reagan farm programs is mixed, Reagan carries little fault and claims little credit.

After all, a Democratic Congress delivered the wrong legislation for the wrong time.

The go-go 1970s were going going and few foresaw it.

Reagan’s richly larded tax policies did, however, exaggerate the resulting farm calamity by adding to overproduction.

Most farmers, though, loved Reagan. They saw him as one of their own, a plainspoken, often wisecracking optimist who believed in America.

(The author is a freelance ag journalist who lives in Delavan, Ill. He can be reached via e-mail at: AGuebert@worldnet.att.net.)

© 2004 ag comm