FARM PLAN ALLOWS ORDERLY TRANSITION TIME

"Something old and something new" could well describe the concept that is being floated by several key members of the House Agriculture Committee. "Simple and within federal budget requirements" also should be added to this description. The old is the ideal of decoupling farm program payments from actual crop production. The new is a seven-year farm program contract between participating agricultural crop producers and the federal government.

The House and Senate must act of federal farm legislation by the end of 1995 or revert back to the archaic and expensive 1930s legislation. They also should propose legislation that would reduce federal spending.

The proposed Freedom to Farm Act would affect wheat, feed grains, cotton, rice and oil seeds, which means that Midwestern and Mid-south farmers should take notice. The act would set up payments to farmers based on their deficiency payments, marketing loans and loan deficiency payments for the past five years. They would sign a contract with the federal government to receive set (and declining) payments for the next seven years. Thus the federal government could accurately forecast the cost to the federal treasury over the next seven years, and producers (and their bankers) would know exactly how much of their gross income would come from these transition payments. The idea behind the transition payments is that this will be a way to gradually reduce payments to farmers and allow nearly all gross farm income to come from the marketplace after the seven-year period is over.

Participating producers would be eligible to qualify for nonrecourse, non-market interfering Commodity Credit Corporation loans on their stored crops for up to nine months with the loan rate set at 70 percent of the preceding five-year average price.

Farmers would be free to plant any crops (other than fruits and vegetables) that market conditions and their particular operations indicated to them. There would be no set-aside acres required, but producers would have to maintain existing conservation plans on lands enrolled in the program. No base building would be permitted after crop year 1995.

It isn't clear if a producer could have one farm in the program and one farm out, but this provision would have to be considered since there will be different landlords involved in many farm operations. The plus for livestock, poultry and dairy producers who buy feed grains and oil seeds for feed is that market conditions, not the U.S. Department of Agriculture, will determine their feed costs.

Some provision must still be made to protect U.S. producers from the subsidized production and subsequent commodity sales on world markets from other countries. The European Common Market still spends close to $50 billion a year on farm subsidies. This action sends the wrong supply-and-demand signals to their producers, and they continue to produce for government-supported prices and not world market prices.

On the surface it appears as if the Freedom to Farm Act may be a relatively simple transition program to move U.S. producers toward free-market production as well as reducing the amount of tax dollars spent on production agriculture. Family farms (large and small) are important to our country's overall economy and must not be pushed out of existence, but allowed to compete on a sound economic basis with other farmers and ranchers in the world markets.

Peter C. Myers Sr. is president of Myers Land Management Co., Sikeston, and served as assistant secretary of agriculture in the Reagan administration. He also is president of Adopt a Farm Family, a Christian outreach organization.