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Block Comments Draw Angry Reaction

February 13, 1985

DES MOINES, Iowa (AP) _ Agriculture Secretary John Block drew fire from Iowa farmers and politicians Tuesday after he said in an interview that the Reagan administration has ″drawn a line″ on emergency credit relief for farmers and that it is up to the states to provide more aid.

″John Block is to agriculture what Benedict Arnold was to the military,″ said Sen. Tom Harkin, D-Iowa, after the interview with Block was published in Tuesday’s editions of The Des Moines Register.

Block said the Reagan administration will fight any attempt by Congress to expand the government’s role in dealing with the farm credit crisis. Because the problem is ″regionalized,″ local communities and states will have to provide more aid to financially ailing farmers, he said.

″This is a national problem. It’s deep and it’s big. It’s not just a regional problem, as John Block said,″ said Harkin.

Speaking at a town meeting in Centerville on Tuesday, Rep. Jim Leach, R- Iowa, said if the administration cuts off aid, many farmers will be forced off the land.

″The only program the administration has so far endorsed is a loan- guarantee program that affects one-third of 1 percent of American agricultural credit,″ Leach said. ″And only 10 percent of that program has been implemented. If the administration buries its head in the sand ... 5 to 10 percent of American farmers could see their livelihood foreclosed this spring alone.″

George Maher, president of Houghton State Bank in Red Oak, said Block’s statements came as no surprise to him.

″I never expected any help. We’ve always known we would have to solve this problem ourselves,″ he said.

Block noted that many bankers have asked the administration to provide $100 million in cash grants to subsidize a two-point cut in farm loan interest rates. If the government did that, an official of the Independent Bankers Association said last week, the banks would provide an extra two-point cut in the rates.

″Why don’t bankers just go ahead and reduce interest rates two points on their own?″ Block asked. ″That’ll help farmers quite a bit. If they’re prepared to do that, they should go right ahead.″

In response, Maher said he expects to do just that, although only in isolated cases.

″I want to know where $100 million is going to come from. I don’t want deficit spending,″ he said.

Echoing Harkin’s sentiments, Runnells farmer Max Allsup said the farm debt crisis is a political football.

″We expect very little. This thing has been thrown back and forth. They’ve thrown it back to the states, and in the meanwhile, the federal government has failed to address the problem ... Some bankers may buy down interest rates, but I wouldn’t count on it solving the problem,″ said Allsup.

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