Block Urges Deep Cuts in Basic Farm Subsidies : Secretary Outlines ‘Market-Oriented’ Plan as Senate Remains Deadlocked on Emergency Aid

WASHINGTON —  Agriculture Secretary John R. Block on Friday proposed deep cuts in basic farm subsidies, even as the Senate remained deadlocked over the more immediate issue of emergency aid to debt-plagued farmers.

At a news conference, Block unveiled details of his sweeping “market-oriented” bill, formally kicking off what is sure to be a raucous debate on long-range proposals to overhaul a complicated system of farm subsidies that all sides agree has not worked.

Despite strong bipartisan opposition to deep cuts in subsidies, Block said: “We’re going to get substantially what we are asking for, because there really aren’t any other viable alternatives that make any sense at all for American agriculture.”

Meese Action Blocked

In the Senate, Democrats who demanded an opportunity to consider legislation that would expand the Administration’s emergency farm credit relief program continued a filibuster that has blocked the expected confirmation of Atty. Gen.-designate Edwin Meese III for a third day.

As expected, Block implemented a new package of emergency measures Friday that he had reluctantly agreed to Thursday in negotiations with a bipartisan group of senators.

But Democrats, protesting that the measures are not enough, sought assurances that Senate Majority Leader Robert J. Dole (R-Kan.) would allow a Senate vote on relief proposals that they hope to make early next week.

Early today, however, after hours of fruitless negotiations, Dole testily rejected Democratic demands to bring up seven farm relief bills and recessed the Senate until later in the day. He warned that he would begin round-the-clock sessions on Monday, if necessary, to try to break the filibuster.

“Rest up over the weekend, get a lot of sleep and rest,” he said. “Starting Monday, we’re going to stay all night.”

He noted that not only the Meese nomination was being held up, but also urgently needed highway aid and African famine relief bills.

But Senate Minority Leader Robert C. Byrd (D-W.Va.), defending the filibuster, responded: “In order for us to help the American farmer, this is our best shot. If we give this little bit of leverage up, we won’t be able to help the American farmer at all because it will be too late.”

On Friday, as the two sides sparred over what should be done, Sen. J. James Exon (D-Neb.) told reporters: “Whatever we propose won’t be a panacea,” noting that Democrats were still haggling over various proposals. “But unless we do something more, an avalanche of bankruptcies and disasters will descend on American agriculture.”

Sen. David L. Boren (D-Okla.) said that, while Democrats had taken the initiative and provoked bitter partisan wrangling with Republicans, “there have been a lot of private words of encouragement spoken to me by Republicans this week. . . . These votes next week will not be along party lines. I think you’ll see substantial support from Republicans.”

In announcing the new relief measures, Block said the Administration had decided to go ahead with implementation, instead of continuing to bargain with the Democrats over additional demands.

‘End the Fooling Around’

“It is time to end the fooling around,” Block said, “so that people in agriculture will know what the game plan is.”

A key measure is designed to encourage banks to offer more federally guaranteed loans to farmers needing to restructure their debts.

Previously, for a bank to receive federal protection against default, it had to reduce the loan’s interest rate enough to enable the farmer to forecast a 10% profit. Under the new plan, however, the farmer would only have to break even. Thus, with banks able to charge higher interest rates, more loans presumably would be offered to farmers.

Banks have used less than $50 million of a $650-million federal loan guarantee program, announced by Block last fall along with other credit relief measures that have failed to work.

Additional Funds

As part of the new program, Block has agreed to seek “adequate” additional funds, if needed, for both the loan guarantees and for direct loans made by the Farmers Home Administration to farmers who cannot get credit from banks.

Despite demands by many farm-state lawmakers, Block had refused to ease the 10% profit requirement imposed on those seeking Farmers Home loans. A bill to be considered next week by the House would drop that requirement to zero; would authorize $3 billion in additional loan guarantees and would allow farmers to get cash advances on crop loans that they would normally receive at harvest time.

The Administration and some farm groups oppose the cash advances, saying they would subvert the crop loan program and might lead to increased defaults costing taxpayers as much as $9 billion.

Expanding World Markets

The Administration’s “market-oriented” long-term farm bill calls for phasing out price supports and other subsidies so farmers can grab a larger share of expanding world markets--and federal deficits can be reduced by up to $50 billion over the next five years.

Block conceded that many farmers, unable to compete in the marketplace, would be forced out of business and that food prices would rise under the Agricultural Adjustment Act, as the bill is titled. But, he said, “in the end it will provide higher prices to farmers.”

Despite his optimism over the bill’s prospects, opposition in Congress is so strong that Block had difficulty lining up a House sponsor for it. And he had to split off the section ending tobacco subsidies to mollify Sen. Jesse Helms (R-N.C.), chairman of the Senate Agriculture Committee.

Farmer to Farmer

Speaking as one farmer to another, Sen. Mark Andrews (R-N.D.) bluntly told Block the other day: “You are one of the damn few farmers I know who thinks your program is going to give us a future in agriculture.”

And Rep. Kika de la Garza (D-Tex.), chairman of the House Agriculture Committee, told Block that farm-state legislators had already taken their fair share of budget cuts the last four years.

“We have cut, bled, suffered, cried and fought with each other, and we have more than fulfilled our responsibility,” he said. Rep. Edward R. Madigan (R-Ill.), the panel’s senior Republican and reluctant sponsor of the Block bill, congratulated de la Garza on his “erudite remarks” and said they “express the feeling of a majority of people in the farm community.”