Related topics

Lyng Blasts Farm Panel’s Budget-Cutting Plan

December 8, 1987

WASHINGTON (AP) _ Agriculture Secretary Richard E. Lyng said Monday that a savings package fashioned by farm-state senators appears unlikely to reach the goals set by last month’s budget summit.

″I think it’s unacceptable in terms of it complying with the efforts made by the summit budget compromise,″ Lyng said in a telephone interview. ″I doubt for one thing if it produces enough savings.″

The budget summit between Congress and the Reagan administration produced a savings plan calling for $900 million in farm cuts in the fiscal year that started Oct. 1.

It called for a 2 percent cut in target prices that are set by the government and represent a key factor in determining the size of payments to farmers.

The Agriculture Committee was slow in acting on the blueprint. It finally convened late Friday afternoon after a meeting with leaders that Chairman Patrick J. Leahy, D-Vt., described as ″at times somewhat tense.″

It produced its own $2.5 billion, two-year savings blueprint.

Lyng was highly critical of a provision that would slow the planned lowering of price-support loan rates. They have been going down for the last two years as a way of reducing the price of U.S. goods and thus stimulating sales overseas.

The change would ″make us less competitive,″ Lyng said.

Lyng also said the package contains a payments program designed to stimulate oilseeds exports that could prove expensive. The committee had held that the marketing loan provision, similar to ones that have greatly spurred cotton and rice exports, would not be costly.

″It won’t in this fiscal year,″ Lyng said. ″It most certainly wouldn’t cost us any money as far as soybeans are concerned, but the provision also calls for a marketing loan for other oilseeds.″

″It probably would be in the hundreds of millions,″ Lyng said.

Lyng said he talked with Senate Agriculture Committee members Monday and ″I’ve urged them to adopt the provisions that were tenatively approved by the summit group.″

″That was a bipartisan group,″ he said. ″I don’t believe there’s been any real opposition. I don’t understand why they didn’t just adopt it and go on about their business.″

Leahy said fashioning the savings package ″was a major challenge″ and that the panel ″worked together to reduce its impact on farm income.″

″The package we have put together will require some painful adjustments, but we have done everything we can to minimize its impact on farm income,″ Leahy said in a statement issued by his office.

″Saving $2.5 billion is not easy but we have done it,″ he said.

The package contains more than a dozen components. But major savings would be achieved through a few key features.

The secretary of agriculture would be authorized to increase the maximum acreage idling requirement for feed grains by 5 percent. But farmers would be allowed to plant those acres in soybeans, sunflowers and other oilseeds - other than cottonseed - without losing their acreage bases.

In addition, the program calls for a 5 percent paid diversion program for 1988 and 1989. Corn farmers would get $2 a bushel in 1988 and $1.75 in 1989 for yield they would have achieved if the acreage had not been idled.

Savings were calculated by the committee at $820 million in the current fiscal year and $450 million next fiscal year.

The measure also calls for a 1 percent cut in the target price for 1988 crops of wheat, feed grains, upland cotton and rice. Savings of $135 million in the fiscal year that started Oct. 1 and $205 million in 1989 would be achieved, the committee said.

Spending in the milk price support program also would be reduced one percent as would the 1988 support price for wool and mohair. The panel said that would save $28 million this year and $9 million next year.

The secretary would be empowered to slow the decline in price support loan rates from the scheduled 5 percent in 1988 to one percent. In 1989, the limit on the drop in the loan rate again would be 5 percent.

Such a move would realize savings of $135 million in the current fiscal year and $275 million in 1989, the committee said.

Update hourly