The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. Here are today's news headlines. American journalist Jeremy Levin is free 11 months after being kidnapped in Beirut. Jordan and the PLO have agreed to send a joint team to any peace talks on the Middle East. Chrysler Corporation, once near bankruptcy, made record profits in 1984. The International Monetary Fund cancelled a loan to Brazil, raising fears of a new debt crisis. Jim?

JIM LEHRER: The NewsHour tonight divides into two major focus segments after the news of the day. The first subject is the farm crisis with a report from Minnesota, Agriculture Secretary John Block and three men from the Farm Belt. Second, the Israeli troop withdrawal from Lebanon as seen by a variety of people and as reported by Ann Medina.

News Summary

MacNEIL: Jeremy Levin, the American journalist who disappeared 11 months ago in Beirut, turned up in good health today in the hands of the Syrians. Levin, who is 51, was bureau chief of the Cable News Network in Beirut. One report said the Syrians had secured his release, another that Levin himself had escaped from his captors and walked two hours until he ran into Syrian soldiers near the Lebanese town of Baalbek. Outside her home in Washington, Levin's wife, Lucille, showed a wire-service photograph of her husband, saying he looked a little bewildered but in good health.

LUCILLE LEVIN, wife of released hostage: Well, here's the picture, you know, that came over the -- what do you call it, photofax? And so that's really very good, isn't it? He's just all looking very firm and very, very positive, and I think the gesture's very, very good, don't you? And now we just have to see the others released and take this for what it means, which is a positive sign that they want peace and we want peace, and let's build a good firm bridge to the Middle East.

REPORTER: How does he look to you?

Mrs. LEVIN: He looks wonderful. How does he look to you? My valentine.

MacNEIL: Mrs. Levin left for Howard University to see the Reverend Jesse Jackson, whose help she'd enlisted to win the release of her husband through Jackson's Middle East contacts. While she was there, a facsimile of a note from Levin was brought to her saying he was well and hoped to see her soon. This afternoon in Washington, the Syrian ambassador, Rafic Jouejati, said Levin was in Syrian hands in Damascus and was free to join his family. He claimed a Syrian role in Levin's release.

RAFIC JOUEJATI, Syrian Ambassador to the U.S.: After a lot of strenuous efforts we located, the Syrian authorities located the place where Mr. Levin was, and they assured his release. He is now in Damascus, the subject of care and hospitality -- hospitality of the Syrian government and people.

MacNEIL: Mrs. Levin was leaving tonight for Frankfurt, West Germany, on a U.S. government plane to meet her husband. In Beirut, a man claiming to represent the shadowy extremist group Islamic Holy War phoned a news agency saying Levin had been released and suggested a deal had been struck. Levin was one of five Americans missing in Lebanon. The others are William Buckley, U.S. Embassy political officer; the Reverend Benjamin Weir, a Presbyterian minister; Peter Kilborne, librarian at the American Embassy; and the Reverend Lawrence Jenco, a priest who headed the Catholic Relief Services office. In London today former boxing champion Muhammad Ali said he hoped to go to Iran to persuade the Ayatollah Khomeini to obtain the release of the remaining four. And in Portugal, Angolan rebels announced today that they would release 22 American, British and Filipino hostages under a plan being worked out by the International Red Cross. Jim?

LEHRER: More details of the Jordan-PLO peace initiative came out today. The Jordanian prime minister said King Hussein and Yasir Arafat have agreed to send a joint negotiating team to any future international peace conference. He said PLO leader Arafat had thus dropped his previous demand that the PLO be heard as the Palestinians' sole representative. He also said the Jordan-PLO proposal is for a peace conference among all parties to the conflict, including, presumably, Israel and the five permanent Security Council members. This idea is likely to come up at the Middle East discussions in Vienna next Tuesday between the United States and the Soviet Union.

MacNEIL: In economic news, the once nearly bankrupt Chrysler Corporation today reported all-time record earnings. Fourth-quarter profits of $610 million brought its total profits for 1984 to a record $2.4 billion.

The government reported that sales of manufactured goods rose 0.6 percent in December, the third consecutive monthly increase after three months of decline last summer.

On Wall Street trading was mixed today after a big rise yesterday. The Dow Jones industrial average closed down 10 points at 1287.88.

A group of former government economists warned today that it was too early to declare a victory against inflation. The group, headed by Herbert Stein, former chairman of President Nixon's Council of Economic Advisors, and Henry Fowler, President Johnson's Treasury secretary, said the current 4% inflation was not low enough and might in fact start rising again.

LEHRER: The International Monetary Fund has decided to cancel a $400 million loan to Brazil. Reuters News Agency said the IMF is taking the action because of Brazil's failure to implement sweeping economic reforms. The $400 million is part of a financial rescue package negotiated two years ago that would provide $4.5 billion in all. Brazil has the largest foreign debt of any nation in the world. Its first democratically elected civilian government in 20 years takes over from a military regime in March. U.S. officials expressed the hope today the new president, Tancredo Neves, can move quickly to head off financial disaster. Brazil's rate of inflation was 300% in January.

MacNEIL: In Cambodia, Vietnamese troops and tanks overran one Khmer Rouge stronghold near the Thai border and captured part of another. A Thai military observer predicted that the entire complex of guerrilla camps would fall by Friday after a three-month campaign by the Vietnamese. Thousands of Cambodian refugees are already crossing the border into Thailand.

LEHRER: And finally, William Schroeder has the flu, or at least he has fever and other symptoms of flu. Schroeder is the man in the Louisville, Kentucky, hospital with the artificial heart. His condition is especially significant because today was not only Valentine's Day, it was also his 53rd birthday. An elaborate birthday party was cancelled because of his flu. It's probably no comfort to him, but he is not alone. The National Centers for Disease Control in Atlanta reported today the current flu season could end up as the worst in four years. Farm Crisis

MacNEIL: Our lead focus section tonight is about the mounting political pressure on the Reagan administration to do more to help American farmers. As we've reported on this program, many farmers have been driven close to bankruptcy by falling prices for crops and land. Last night we showed you an intimate portrait of one Iowa farm family where the father had been driven to suicide by his plight. Farm-state politicians say a third of the nation's farmers now face the risk of bankruptcy and they say many won't even qualify for loans to plant crops six weeks from now. Across the Farm Belt, farmers are taking their protests to state capitals. The South Dakota state legislature responded this week by voting to send itself to Washington later this month to seek more federal help. But that may be in short supply. Yesterday budget director David Stockman reiterated his opposition to a farm bailout program. He attacked last week.

DAVID STOCKMAN, director, Office of Management and Budget [February 5]: For the life of me I cannot figure out why the taxpayers of this country have the responsibility to go in and refinance bad debt that was willingly incurred by consenting adults who went out and bought farmland when the price was going up and thought they could get rich, or who went out and bought machinery and production assets because they made a business judgment that they could make some money. Now, it turns out that the land prices couldn't go up forever, and didn't, and all kinds of loans for land have now gone bad because the collateral has collapsed. Why do the taxpayers have the responsibility to bail out through loan guarantees which will create, costs down the road, that kind of speculation. If that had been caused in the first place by New York banks and other city slickers who tempted those farmers with money to buy land, it would be one thing. But I can prove to you that the entire land boom from 1977 to 1981 was financed by the Farm Credit Administrations, particularly the land banks which are owned and controlled by the farmers who made loans to each other to buy each other's land. And now that has all gone sour because it was based on unsound economics, and because it was propped up with federal price supports and cheap credit that couldn't be justified.

MacNEIL: The day, after Stockman said that, the Reagan administration announced a credit assistance plan of loan subsidies. Many farm-state congressmen called that too little too late. Yesterday's front-page cartoon in the Des Moines Register, drawing on a famous front page of a decade ago, gave its opinion of the Reagan proposals [Reagan to Farmers: Drop Dead]. Tonight we'll be hearing from the man at the center of all this, Agriculture Secretary John Block, plus three Farm Belt representatives. But first a background report from Minnesota, a farm state where farmers are hard hit but organizing themselves politically to do something about it. Our report is by Carol Levinson of public station KTCA, Minneapolis-St. Paul.

CAROL LEVINSON [voice-over]: Gerald Kohnen has been farming almost all of his life. So has his wife Alicia(?). Their 260-acre dairy farm in central Minnesota now has three generations of Conans living and working on it.

ALICIA KOHNEN, farmer: If we don't have efficient farms by the year 2000, then we're going to be like Africa; people are going to be hungry and starving, and there's going to be no food to feed them. And I do think that if things don't change drastically now, there'll either be -- we'll probably -- farmers will probably really have a revolution right here, or else something is going to happen. Either we're going to give up and we'll go into a thing like Africa, or else there'll be a revolution right here, unless the government gets off their high horse and helps the family farm out.

LEVINSON [voice-over]: The Kohnens have never considered themselves financially rich but rich in other ways, though they've always managed to keep up with their payments -- that is, until last summer. The First Bank of Paynesville demanded payment on an operating loan of $149,000, money the Kohnens didn't have. With the threat of foreclosure the Kohnens wanted to negotiate a new payment plan, but the bank wasn't interested. Their plight seemed to ignite the smoldering discontent and despair felt by their fellow farmers across the state, all experiencing the worst depression in agriculture since the 1930s. Their neighbors joined with them to protest the foreclosure in a '60s-style sit-in at the Paynesville Bank.

FARMERS [singing]: "Solidarity forever, for union makes us strong."

BANK OFFICIAL: Well, again, as I stated, if you've got some representatives that we can meet with in an orderly fashion, not with a hundred people standing around singing.

1st FARMER: Why are these hundred people here? Because they're concerned about this bank and the policies of this bank and the policies of Mr. Dietrich.

2nd FARMER: This is your community. This --

1st FARMER: This is your community.

2nd FARMER: What difference does it make whether there's one or one thousand people here? We've got a farmer here in trouble; he's got problems, he's here, he's got us here to help him.

BANK OFFICIAL: I'll say again that we're willing to meet with Mr. and Mrs. Kohnen and their attorney, not -- we're not going to have a discussion with the whole group. That's it.

1st FARMER: We're not going to leave the bank here until we've worked this thing out.

LEVINSON [voice-over]: Attempts at negotiation failed, and the Kohnen filed for Chapter 11 bankruptcy. In the end, 37 people were arrested for trespassing at the bank. They were scheduled to be tried in early January, but the charges were dropped a few days before the trial was to begin. But the farmers haven't dropped their protesting. Among themselves they don't have a strong history of organizing, but now they've done that and more by joining with union laborers and small businessmen into a movement they call "Groundswell, the Voice of the People. The held their first major ralley on the steps of the Minnesota capitol on January 21st.

4th FARMER [January 21]: See, the thing people don't understand right now is we have cheap food, and cheap food is good. But if the family farm don't keep going, you're not going to have cheap food, because if the corporations buy up all the farms, they're going to set their price and they're going to make a profit and there's no more cheap food in this country. So people in the cities, figure it out. McDonald's hamburger, it's going to cost you 10 bucks instead of two, you know?

LEVINSON [voice-over]: Farmers aren't just protesting in Minnesota. Similar rallies have also been held in Iowa, Nebraska, Kansas and other Farm Belt states. The message is the same: help the family farmer or lose what's left of rural America. Recent comments about farmers simply being bad managers, like those made by David Stockman, anger many in the Midwest. Jim Nichols is the Minnesota commissioner of agriculture. A farmer himself, he thinks the Reagan administration's farm policies worsen the situation.

JIM NICHOLS, Minnesota Commissioner of Agriculture: Reagan says farmers got to learn to be better managers. If we borrowed money like he does, we'd have been sold out 10 years ago. You can't have $123 billion balance-of-trade deficit and a $200 billion deficit and survive as a nation. And I can assure you it won't work because as farmers we've been borrowing for five years just like the federal government is doing now, and someday it catches up with you. And it's going to catch up with this government. The question is when. You know, the President is just hoping it's after he gets out of office. He's in favor of a balanced budget, but not while he's in office. He doesn't want to balance the budget while he's there; he's going to propose a budget with a deficit of $200 billion. The greatest problem facing the American farmer today is the budget deficit. It causes exports to drop by one-fourth and interest to go up by one-fourth. And that price squeeze between high interest and low prices is killing'em.

LEVINSON [voice-over]: Other community leaders are also deeply concerned about the farm crisis. Father Elmer Torborg, one of those arrested at the Paynesville bank, worries about the emotional toll the crisis has taken on farmers.

Rev. ELMER TORBORG: I have this friend who is running a dairy farm about 20 miles from here, and he's been having financial trouble for quite a number of years. And as he went in to get his loan from FMHA and so on, PCA, they always told him you got to get bigger, you got to improve, you got to enlarge your operation by about 15%. He didn't want to do that. They said, "The only way you get this loan is if you do what we tell you, you've got to get bigger." So he had to grow bigger. Now he's several hundred thousand dollars in debt, and even now he says, "I just can't see how to keep going," and he told me a few weeks ago -- couple of months ago, "I'd just as soon die." That just hurt me to hear him say that -- "I'd just as soon die."

LEVINSON [voice-over]: The Kohnens haven't been that discouraged yet. They're still fighting for their life on the family farm.

GERALD KOHNEN, farmer: Well, we've worked too hard to get where we are just to give up and walk away from it. And what would you get? There's no farms selling, the machinery is worth nothing, so what are you going to do? You walk off of here, then what? What am I going to do?

Mrs. KOHNEN: Up 'til now the farmers have just been thinking about surviving and keeping things rolling. But there's a lot of farmers now that can no longer survive, and they realize that if they don't take time now to go fight for what we need, we won't have to worry about time of year from now. We can just sit back and think, well, it's going to happen. It's not going to happen unless we make it happen, and we've seen this now. We know that if we don't get out, we aren't going to have anything to get out for.

LEVINSON [voice-over]: For the Kohnens, saving their farm means more than just getting this year's crops planted. It means preserving their way of life for their children and their grandchildren. So for them the fight will continue.

LEHRER: That report by Carol Levinson of KTCA-Minneapolis-St. Paul. Now to the secretary of agriculture, John Block.

Mr. Secretary, are the farmers of this nation on the verge of revolution as was suggested in that tape?

Sec. JOHN BLOCK: They're not on the verge of revolution, but there is just severe pain in many parts of this country, especially in the midsection of the country where the land values have declined as much as they have. And the pain and pressures that people are feeling out there is a perfectly normal reaction, people wanting to save what they've worked for, what they've spent a lifetime working on, their family. So I can see it and I can feel it and I understand it myself.

LEHRER: Is David Stockman right when he says that this is just a natural shakedown process and nothing that anybody can do anything about?

Sec. BLOCK: Well, I don't agree with the way he characterizes the American farmer. Frankly, I think the American farmer's made a tremendous contribution to the country, and I believe the American farmer has been caught in this situation and in a lot of ways blind-sided by it. Because the demand for food in the '70s, the thought that we'd never be able to feed this hungry world -- everyone was saying it. The banks were saying it; they shoveled the money out. So did everyone else, farm magazines, the universities. And then the walls came tumbling down in the '80s with the worldwide recession. And the interest rates got very high at the end of the '70s; they still aren't down enough. You put it all together and it's really put the farmer behind the eightball, and of course the obvious question is, "Well, who's going to save the day?" And I guess I would submit that the President is deeply concerned about this. He's been outreaching, trying to help, and I think the federal government has done a great deal. In fact, just last week we did announce this program that was talked about here, and I --

LEHRER: The credit program --

Sec. BLOCK: And I think that it will help.

LEHRER: But it isn't going to save the day, is it, Mr. Secretary?

Sec. BLOCK: There just isn't anything that can save everyone. There's going to be some casualties. This problem has been thrust upon us by massive, powerful, international and sometimes national economic forces. And to hold them back, even the President can't do it alone. It's going to take a lot of help.

LEHRER: The Minnesota agriculture commissioner said on that tape that it was Reagan administration policies that have caused this problem.

Sec. BLOCK: Well, I don't -- I wouldn't agree to that at all. I think probably most farmers will say that the grain embargo was in the -- started it. The high interest rates, which were 21% when the President came to town, probably were the next biggest problem. And then on the heels of that came worldwide recession, came the strong dollar. I do agree with the commissioner that there are some things that need to be done. We do need, definitely need to address the budget deficit; we need to get interest rates down, and we need to do all we can to get this dollar relationship straightened out.

LEHRER: But in a nutshell, the legislators in South Dakota who are about to come to Washington and protest, the Minnesota group, the Iowa group, you name them, that are getting ready to come and see you and the President looking for help -- forget it, right? They're not going to get any?

Sec. BLOCK: Well, I just want to say we've done a great deal already. And to those that want to come to Washington, you know, we'll welcome them. I'll with meet these people because they're my people. But it's time that the states reached out and helped too, and the local communities. I know the Father has been helping people. He's got a record of working with the people that are in trouble there. I also know the state of Minnesota, and they were just on the air. I talked to the governor in the last two days. They're looking towards making some $25 million available, leveraging that into $300 million worth of help for farmers. Illinois made $100 million of lower-interest loans available. Governor Branstad in Iowa is helping. These states are starting to help. A bank in the last two days in Iowa, in Burlington, Iowa, the bank vice president announced that he is making $5 million of low-interest loans available to his farmers. Now, this is what we need. Federal government, yes, we have an obligation. But everyone has an obligation to help.

LEHRER: What about Stockman's additional point that there's too much money already invested in farming, that it's an overinvestment problem? Instead of putting more money there, less money should go.

Sec. BLOCK: Well, we did overbuild the agricultural plant in the '70s. We can't quarrel with that. But this process of building down this plant must be done in somewhat of a gradual way. We can't pull the rug out from under it. We've seen the land values plummet anyway. And we're going to have to help some farmers, the ones that have a chance of making it, get in the field this spring and plant this crop. And I'd urge the banks to look at this credit package, try and make it work, because we need to help our farmers.

LEHRER: From your perspective, Mr. Secretary, as the man who's in charge of trying to resolve this problem, do the comments of David Stockman help or hurt you?

Sec. BLOCK: They haven't helped me very much.

LEHRER: Have you told him that?

Sec. BLOCK: Yes, I've told him that. But I do have to say, Mr. Stockman's worried about the budget; he's trying to hold the line. And the farmers want us to balance that budget. So he has a tough job too. But I tell you, we have to have the kind of sensitivity to this problem that's necessary, because farmers are really suffering.

LEHRER: Thank you. Robin?

MacNEIL: We now hear from three representatives of farm interests. Dixon Terry is an Iowa farmer who's with us tonight from Iowa Public Television in Des Moines. Donald Butler is the president-elect of the National Cattleman's Association, a group that has supported Reagan administration efforts to cut back farm programs. He joins us tonight from our Denver studio. Father Donald Battiato is a community leader from Verdigre, Nebraska, where as we reported six weeks ago, the town's bank had closed and many farm families were living on charity food. Father Battiato is also with us from Denver.

Father Battiato, listening to Secretary Block, what kind of reaction do you have to his statement the federal government's done a good deal already, not everybody can be saved, the states and communities need to reach out and help too?

Father DONALD BATTIATO: Oh, I would agree the state needs to help. I think we all have to rally, just as the people of Verdigre have rallied together to help each other. I think the federal government can do much more. I don't think they have reached the exhaustion point. I see our farmers really suffering, as Secretary Block adverts to. And I don't like to see anyone suffer. I don't see the need for it. I think we look at people first, and then we look at budgets.

MacNEIL: Mr. Terry, what kind of reaction in Des Moines? As a farmer yourself, and I gather a farmer carrying a good load of debt yourself, what is your first reaction to hearing the secretary?

DIXON TERRY: Well, first of all I don't believe that Secretary Block realizes the degree of hurt that there is out here and what that's going to translate into in terms of organized activity, not only among farmers and rural communities but among our banking community out here in the Midwest. Because the impact of the long-term lack of return to farmers in agriculture has gone on for so long that we've let the situation deteriorate to the point where the very fabric of our rural lending institutions are threatened now. And there's general agreement at the highest levels of the leadership of the banking industry within the state of Iowa that there needs to be more action from the federal level. There are responsibilities on all levels from state government to local communities to the federal government in dealing with the current crisis, but we need to be very clear that there is a very strong and major federal responsibility, both in terms of short-term debt relief and in terms of long-term farm policy to raise farm prices.

MacNEIL: Mr. Butler, in Denver, you're the cattleman in this group. Both Father Battiato and Mr. Terry say there needs to be more federal effort. Do you agree with that?

DONALD BUTLER: Well, I think we agree with what Secretary Block has said. As far as federal involvement, we and our association, the cattle industry, which I think should be pointed out is not receiving any price supports -- we believe that we would like to see the government fade out of the agricultural business over a period of time. We're sympathetic. We've got a number of our members that are now out of business and more on the brink of it. But we don't see a bailout as being the answer. Short-term help, yes.

MacNEIL: Father Battiato, in Verdigre, Nebraska, where I believe there are 77 farm families with serious debt problems and having trouble refinancing those debts and faced with foreclosure, is the credit assistance program announced by the administration going to help them?

Father BATTIATO: It doesn't seem like it will. I think there is included in that program the cash-flow requirement, and also they talk about credit-worthy farmers. And I don't know how many farmers that have been involved in the bank failure and taken over by FDIC as regarding their loans -- I don't see how they're ever going to be credit-worthy in the normal sense of that word.

MacNEIL: Let's be clear. The basis of the credit assistance plan is that if the local bank would forgive or write down 10% of the outstanding loan, the government would then guarantee the remaining 90% of the loan, but you would need tobe credit-worthy to get that arrangement, is that as you understand it?

Father BATTIATO: That is the way I understand it. I've read the actual news release from Secretary Block, and there are a few hitches in there that I think would just disqualify the Verdigre farm borrowers right off the top.

MacNEIL: Mr. Terry, in Des Moines, you're a farmer with an outstanding loan. Is the credit assistance plan as you understand it going to help you?

Mr. TERRY: Well, I am a Farmers Home Administration borrower and I do believe that the 25% set-aside program for FHA borrowers that was announced before the election may be of some help to me as an individual. But at the time that I went in to go through the figures to find out if it would help us, my supervisor told me that ours was the first instance that it appeared of any of the ones that they'd done that we would actually qualify for the program due to the cash-flow requirements.

MacNEIL: You mean many did not qualify?

Mr. TERRY: Very many will not qualify for the FHA program. In terms of the federal loan guarantee program to guarantee bank loans, that part of the program that was announced at election time has been a total failure, in that in all that time since October when the plan was released, a total of seven loans in both the states of Iowa and Nebraska, a total of seven loans have been guaranteed under that program. So clearly the banks are not responding to this guarantee program.

MacNEIL: Thank you. Well, we'll go back to Secretary Block for his reaction in a minute. But now on the other prong of the administration's new approach, of gradually getting out of farm support programs and trying to create a market economy in farm goods. Father Battiato, what is your reaction to that, of turning back to the market economy in the farm area?

Father BATTIATO: I think the timing is as horrible as you could imagine. I think, as Mr. Butler said, it has to be a gradual kind of thing, but I don't think 1985 is the year to start that gradual decline of government involvement. I would much rather see it done at a time when interest was at a normal rate, when the dollar was at a level that would be more acceptable to correct trade relations with other countries, a time when the interest rates could be livable. And I understand in Omaha the going rate is about 15% for farm borrowers. And there's now way, as Secretary Block has said on a different news release, that our farmers can live with that.

MacNEIL: So you think the government should just hold back on this idea of moving into the farm economy and keep support programs in force for at least another year or so? Is that what you're suggesting?

Father BATTIATO: I would suggest that, and perhaps some other creative programs as well that could be inserted into the farm economy to bring back to life or bring back to health, at least, some of our people who are suffering greatly, not only in Verdigre but throughout the United States.

MacNEIL: Mr. Butler, what would you think, maybe because the timing, as the Father says -- he says the word it's horrible -- that it would be a good idea just to delay this process for a bit?

Mr. BUTLER: Well, I don't think if you started today that we'd be talking about the 1985 crops. And I know it's got to be done, and we the cattle people are more than supportive on this. But we feel that over a period of five to seven years it should be phased down. But there has to be some temporary help.

MacNEIL: Yeah. Excuse me, Mr. Butler. Mr. Terry, what do you think of the idea of moving back to a market economy in agriculture as the administration is proposing?

Mr. TERRY: I think it's obvious to anyone who looks at the projected figures for the different farm program alternatives that are being considered now that to take the free market route would be a disaster for the family farm system in this country, and would mean the elimination over the next few years of as many as 50 of our family farmers in many of our major rural states. But beyond that it would be turning over a complete upheaval of the type of agricultural system we've developed in this country for many years. And it'd be going to a more of a corporate-based system that in many people's opinion is not only not in the interest of family farmers, but neither is it in the interest of the society as a whole, consumers and the rest of society.

MacNEIL: Okay, let's go back to Washington. Jim?

LEHRER: Yes, and back to Agriculture Secretary Block. You've heard what was just said. To pursue what you're pursuing will end up destroying 50 of the family farmers in this country.

Sec. BLOCK: Well, Jim, I don't accept that. I do believe that we need to phase it in over a period of five years or so. We shouldn't do it overnight. The President has said many times that he would not pull the rug out from under agriculture. We all know that a portion of agriculture has become hooked on government, and that's not good for the farmers, to be dependent on government. We need to get away from that. Two thirds of agriculture in this country does not receive direct supports. Mr. Butler, the cattlemen don't; the swine industry, the poultry, fruits, vegetables, specialty crops. And I would submit that the two thirds of agriculture that does not receive direct support is probably healthier than the third that does,and I think that should be telling us something in giving us a course of action that we should take.

LEHRER: Mr. Terry, do you want to say anything to the secretary about why you believe 50 of the family farms will go under?

Mr. TERRY: You bet. First of all, those two thirds of agriculture that he was talking about are not in good shape. The livestock industry in Iowa is suffering, and the cattle industry is leaving Iowa. But beyond that, I would quote directly some of the leading agricultural economists from our state land grant college, who, to quote directly, said, "Half of Iowa's farmers are on a conveyor belt to insolvency." And the fact is that studies done by Iowa State University and other universities are projecting that the free market alternative would lead to prices even lower than we have now up through 1990.

LEHRER: Is that right, Mr. Secretary?

Mr. TERRY: And it's clear.

Sec. BLOCK: The suggestion here is that more of the same old programs, it seems to me, which got us, or at least contributed to getting us into this mess, are the solution. I'm saying we're here because of many reasons and let's find a different route, one that will give us a chance to succeed.

LEHRER: And your different route is the open market route?

Sec. BLOCK: That's right, and I think we need to do it over a period of time. We'll keep a safety net in place, we'll phase it in gradually; it'll be compassionate, it'll have a soft landing. But American agriculture needs to look towards expansion, production, jobs, opportunities. We have problems in this country, but the problems can be better corrected by addressing the deficit, getting interest rates down and getting agriculture back to work.

LEHRER: Mr. Terry, do you agree with that?

Mr. TERRY: Not at all. I would certainly say that the farm programs of the past 20 years have been absolute failures. Most farmers would agree with that. And what we're saying is not to repeat or continue the programs that we've had recently, but to reorient them, make them supply-management programs that are meant to work, with adequate participation so that we're actually producing for the market that is there. And those type of programs do not have to be expensive. I think history shows this, and what it really comes down to is not a question of putting a safety net under agriculture or of the timing of phasing in the free market alternative; it's a question of in whose interest will agricultural policy be determined? And it's very clear from studying the situation that the free market alternative is in the interests of the big grain trade, the exporters; it's in the interests of corporate livestock confinements, who thrive on cheap grain; and it is in the disinterest of farmers, of consumers and our economy as a whole.

LEHRER: Mr. Butler, he's right, is he not, that from the cattleman's point of view, the cheaper the grain, the better off you all are, right?

Mr. BUTLER: No, not really. We've never really made any money feeding cheap feed. And by that --

LEHRER: Explain that if you choose. Why would you want to pay more for something like that?

Mr. BUTLER: Well, when there's cheap grain, you get into overproduction. Everybody's going to feed more cattle or more chickens or more pork. And it might be a short-lived period of time when we do make a profit, but in the long run that's why we've been in some trouble, because we have had some cheap feed and we just had an oversupply.

LEHRER: Mr. Secretary, what about Father Battiato's point about the credit program that you've recently announced, in fact, goes into effect fairly soon? And he says that in his particular town in Nebraska, in the first place, most of the farmers out there won't even be eligible because they're not "credit-worthy."

Sec. BLOCK: Well, I don't -- I can't speak specifically to a particular group of farmers. But the plan is designed to help those that are on the brink of losing their farms and insolvency, and to pull them back from the brink.

LEHRER: How is the brink defined?

Sec. BLOCK: All right. The brink is defined that if the farmer can be made to cash flow, that he has a chance of survival, then we say, "Banker, you have to do something, you write down that interest or you write down that principal. And then the U.S. government will do something. We'll guarantee 90 of the loan, and then we'll help that farmer." Now, if the bank agrees to do it -- and I hope they do, I hope they pick up the program and help the farmers -- it'll work for these people. There are some farmers that are over the brink that cannot be pulled back, that have no chance of making it, and in those cases then --

LEHRER: They should go --

Sec. BLOCK: Well, they just can't be helped. I don't know what you do about it.

LEHRER: Father, what do you think about that?

Father BATTIATO: Well, I don't like to see anyone go over the brink. That's kind of accepting a premature death as inevitable. I look at the family farmer as something to be preserved. I don't look at it as a commodity to be expended. I believe that that family farmer has the right to exist. He is the victim of international or national forces, as Secretary Block adverted to. And I can't agree --

LEHRER: Father?

Father BATTIATO: Yes.

LEHRER: Excuse me. What do you say to David Stockman and others who would come back to you and say, "Hey, wait a minute. There are a lot of unemployedsteelworkers in this country. There are a lot of unemployed auto workers in this country. There's a lot of small-business people in this country who have also been victims of various international problems, and the federal government doesn't bail them out; why should they bail out the family farmer?"

Father BATTIATO: Well, we do have a record of bailing out people like Chrysler and cities like New York. So I don't think that's beyond the realm of possibilities when you have a large industry like the steel industry. I believe if you have a healthy farm economy you're going to have a lot of other segments in America that are going to be healthy also. If the farmer is not producing well from the land, which is really the only real source of wealth, then how can we expect the rest of the country to remain in a stable condition? You must look also, I believe, if the family farmer is going to be going by the wayside, how many banks are going to be pulled down in the process of that? If the banks have to foreclose, if their loans are classified, as happens so often, what's going to happen to the banking system of America?

LEHRER: Let's ask Secretary Block about that, because Mr. Terry made the point at the very beginning to Robin that you are not aware of how bad this situation is, and the trickle-down effect and the banking industry and whatever. And the Father has just mentioned that too. What's your feeling about it?

Sec. BLOCK: Well, I do believe that I am aware of it. My family's on the farm and I talk to my son often, and we're listening to farmers. There are farmers in my office daily. We've been meeting almost every day at the White House trying to figure out the best way to address this problem. So I'm convinced that we are aware, and I believe that the announcement that was made will work. I urge the banks to take it and run with it, help the farmers, have the local communities help. And I believe that there's going to be a brighter day. It's going to be a really tough 60 or 90 days, and people getting their money to plant this crop. That we need to address the short-term problem. We need to look at the long term and write longer-term legislation for farmers that give us a chance to prosper in the future, for farmers to get their income out of the marketplace and not from the government.

LEHRER: All right, gentlemen. Thank you all very much. Mr. Terry, in Des Moines, thank you; Mr. Butler and Father Battiato in Denver, thank you both for being here; Mr. Secretary, thank you.

Sec. BLOCK: Thank you, Jim. Lebanon: After Israel Leaves

MacNEIL: For our next focus section tonight we have a documentary report. Recently Israel has begun the first stage of withdrawing its troops from southern Lebanon. The emotions and the political attitude surrounding the withdrawal are complicated. In another of her vivid reports from the Middle East, correspondent Ann Medina of the CBC Journal gives us a feeling of what it's like for the Israeli troops pulling out and for the different factions of Lebanese they leave behind.

ANN MEDINA [voice-over]: Lebanon has never been an easy place for the Israelis. Here it's natural for an army to question the whys and what-fors of the war. They came to drive out the PLO. For two and a half years they've dominated a countryside. Now they no longer feel like victors. They're single targets, getting killed by a new enemy, the Shiites. The Israelis have had enough of Lebanon. The bridges, the fortifications and structures that a year ago seemed ready for a long stay, are coming down. Bit by bit, building by building, the first of three withdrawal phases is under way. For a few of the soldiers, that means they won't be coming back. For most of them it's the right decision.

1st ISRAELI MAN: We never came to stay. We're leaving because we intended to leave in the first place. We didn't think it'll end up like this.

MEDINA: Two and a half years ago it all seemed so simple to the Israelis: a quick, fast operation, that's all it would take, and then there would be a new Lebanon here, a country without the PLO and one that would want peace with Israel. Two and a half years ago the Israelis thought they could understand the Lebanese. Now they know they didn't and they couldn't, that they had been wrong. The Israelis may call it a redeployment, a withdrawal, a pullback. But the Lebanese here, they're calling it a defeat.

[voice-over] They wanted the Israelis out. They fought to get them out. Because they feel the south is theirs. Some 500,000 Shiites live here, the overwhelming majority. But it was their beliefs and their background that the Israelis failed to understand. In two short years the Shiites have gone from relative nonmilitancy to an organized resistance. For years they had resented the Palestinians, and then, just when they thought they were getting their villages back, they faced a liberator who wouldn't leave. They used to be known as the gentlest of the Lebanese -- no longer.

The Israelis should have seen the change coming. Now they have to be wary of any stranger that passes, no matter how harmless he appears to be. There is no peace treaty here, no welcome, just fear on both sides. This is what maintaining security has achieved. The Shiite homes and shops can be searched, people can be questioned at will and their daily lives interrupted at any time.

[on camera]This is Bidyas, one of seven Shiite villages that make up what's called the liberated zone, a refuge, or hiding place, if you will, for the Shiite resistance fighters. This is where they are organized, where they are trained, where they learn the lessons that they want to teach the Israelis. [voice-over]Here there are no routine Israeli patrols through the streets. It's a kind of minifortress that involves everyone in the village. The moment that the warning is given that a stranger is approaching, most of the guns quickly disappear. Two years ago many people here wouldn't have dared challenge the Israelis. Now they know they can. This position had just been captured from Israeli-backed Christians. The Shiite flag signals another victory.

Daoud Daoud has made Bidyas his base. He's a leader of the more moderate wing of the Shiite resistance, called Amal.

DAOUD DAOUD, Shiite resistance leader: We are ready, the majority of our people are ready to sacrifice, to explode themselves in heavy trucks. This is what we said before.

MEDINA: The suicide bombs?

Mr. DAOUD: Not suicide, I don't say suicide. There is difference between suicide and martyr.

MEDINA: Will there be more of these martyr bombs?

Mr. DAOUD: More martyrs, yes, because the martyr is -- well, he is hoping to change the situation to better.

MEDINA [voice-over]: And there have been more. Borg Schemali, just east of Tyre. Last week a suicide bomb here wounded 10 Israelis, and while the army investigated, the Shiites let them know they were nearby. Israel suspects the attackers came from around Bidyas. This past Sunday three soldiers died in similar attacks. They're common now, and few Shiites are objecting.

NASSEER BASRA, store owner: I condone it.

MEDINA [voice-over]:Nasser Basra owns a local video shop in downtown Tyre.

Mr. BASRA: Force has been used, and this is one of the reasons that they had in mind when they were pulling out, and they're pulling out now.

MEDINA: Now, you're a businessman who would probably not normally condone that kind of force. But against the Israelis I gather you do.

Mr. BASRA: Not only the Israelis. It means any foreign force that are here to stay, or they think they're here to stay. I would condone that.

MEDINA [voice-over]: Tyre has now replaced Sidon as the capital of resistance. But that kind of acceptance of violence can backfire. Already there have been bombs and attacks between Lebanese, to remind them of their history. Last week two bombs went off below this hotel dining room. Sometimes the targets are suspected collaborators; sometimes they're old enemies.

LEBANESE MAN: I feel all people crazy, that there's nothing -- there's no one can help us. No one.

MEDINA [voice-over]: That feeling of helplessness is acutely felt by the Palestinians in Aln Helweh and Sidon. Most of the people here can't leave now. There are some 1,200 young fighters, but without the arms they once had. These Palestinians remember Sabra and Shatila and the Christian-Israeli alliance against them. That alliance is now breaking down. Many of the Christians are now growing tired of Israel, just as they're tired of 10 years of fighting. Now they want a Lebanon of their own no matter what the outcome.

In Gizin the Christians are the majority, but they're surrounded by Druse and Moslems, so Israelis have given them a kind of protection. Of all people they should want the Israelis to stay. Some do, but others are willing to gamble on peace with the Druse. In one cafe here the Christians play cards while they talk about the difficulties getting their goods to Beirut. They blame the occupation, and so do the Druse only two doors away. There they play their game of cards and discuss their business problems at the same time. The two groups gather separately but peacefully -- at least for now. Nearby at Sami Karum's sweetshop I'm told it's time for the Israelis to go.

CHRISTIAN MAN: You know, they come here and they make here very much trouble. And all this trouble are for what? This is the question: what for?

MEDINA [voice-over]: The official reason has always been the security of Galilee. There, settlements and kibbutzes have taken the brunt of the Palestinian assaults. Before '82 this northern frontier was where the Katyusha rockets and the terrorists would first hit, since Lebanese villages are often only a few hundred meters away. Many of those villages are Shiite.

Mike Ginsberg is a security officer in Misgauam. It's a kibbutz right on the border. He still checks the shelter, especially the nursery where a baby and a settler were killed two years before the invasion. Misgauam could be one of the first places to feel any of the consequences of the withdrawal, just as it's been one of the few to directly benefit.

MIKE GINSBERG, Israeli security officer: The past two years, since the beginning of the war, have been the quietest years in the past 10 years.

MEDINA [voice-over]: There has been a difference. Birthdays are celebrated and people aren't afraid to sit together now on Friday evenings. One would think that Mike and his friends therefore would object to the withdrawal and the chance they might lose all this to Shiite attacks. But they don't.

Mr. GINSBERG: You know you're in the wrong spot and you have the strength to pull out, that's just a sign of strength.

MEDINA [voice-over]: They feel the government is finally facing up to the facts, but before that it misjudged and misled.

1st ISRAELI MAN: The government thought they could go and crush the Palestinian movement, and that's what they -- that was their attempt. It wasn't -- they gave it the name the Peace of Galilee, Peace for Galilee, but it's not peace for Galilee; it wasn't an attempt to defend me.

2nd ISRAELI MAN: You felt good at the time -- not felt good at the time doing, you felt, "Well, at least we're doing something. We're not just sitting here beomg cammpm fodder.".

3rd ISRAELI MAN: There is no way you can get around the fact that the Israeli army is withdrawing from Lebanon, and really nothing tangible to show for that.

MEDINA [voice-over]: The first withdrawal is under way, and now it's a race between the suicide bombers and the politicians' timetable for those who have to come back. Jussi Levi has more than a year left of weekend passes from the army. But now they're becoming a little more precious. Miriam and Leo, his parents, accept the risks, as they've accepted the war. But it's an acceptance based on faith.

MIRIAM LEVI: We don't believe it can ever have been, you know, in vain. I mean, there has to be a purpose to what happened, even though today we don't see it, but maybe eventually we will realize that there was some purpose to this anyway.

MEDINA: It's tempting for Israelis to judge the war in terms of this border. Peace for Galilee, after all, was a stated objective. And so if this border remains quiet one could say that the war was a success. It sounds tempting, but it doesn't work very well. Because on that side the war turned the Lebanese into an actively anti-Israel people, and on this side it turned Israel from a country that knew how to fight and win into one that questions and doubts and even second-guesses its leadership. On that side the war killed thousands of Lebanese and more than 600 soldiers died on this side. Even if this border remains calm, few Israelis today anyway accept that kind of a tradeoff. And so an army is withdrawing. It took Israel two and a half years to learn that it may not have lost the war in Lebanon, but it's not one that it will ever win.

LEHRER: Wehave an update now. It's on the spreading drought and famine in Africa. It is not over; the death and disease and hunger is, if anything, getting worse. The wandering tribes of the Sudan have now been hit and been forced to leave their traditional grazing grounds. Brian Stewart reports.

BRIAN STEWART [voice-over]: In much of the Sudan a vast, relentless migration is beginning to build. Old tribes flee before the great famine. After years of worsening drought a large part of the north is a virtual furnace, dust blown and deadly. Nomadic tribes are driving whatever livestock they've got left southwards in search of water. A nomad says, "We're not afraid, but back up there there's no rain and no grass at all. Cattle are dying. We've got to move on now."

The Sudan, largest country in Africa, is hopelessly ill equipped for this crisis. Backward and near bankrupt, it can't even get to tens of thousands starving in its isolated north. One desperate international relief effort is under way to try and save what's left of the legendary Beja people here in the Red Sea hills. These, the fierce warriors made world famous as the fuzzy-wuzzies by admiring British soldiers and later Hollywood epics. They broke a British battlesquare in the last century. Now they in turn are broken by famine.

MAN: See, all this, she had an edema in her lower limbs. They be too small. And this one is nine years of age and --

STEWART: Nine years of age.

MAN: Yeah, and now she's very weak and she cannot mostly stand unless she's supported.

STEWART: She looks very poor.

MAN: Yeah, and this is a newly admitted one brought by the Red Cross.

STEWART [voice-over]: Only a few of the estimated 200,000 Beih(?) have received any medical attention. The condition of those is appalling. Most cling on to inaccessible hilltops until herds have shrunk to a pathetic remnant or have banished altogether, accepting assistance only when it's too late.

MAN: And in some villages, they are losing 10 or 15 people a day. And some villages they are empty, absolutely nobody. Nobody knows either whether they are, all dead or they are migrated to another area.

STEWART: So at the moment there does not seem to be that much hope for the Beih people. They're just one more ancient group now being swept up and decimated in this great famine. And aid workers aren't even all that confident they can keep them alive over the coming year, let alone ever revive their fabled way of life in these rugged hills.

LEHRER: That report by Brian Stewart of the CBC. Again, the major stories of this day. Jeremy Levin, the CNN Beirut bureau chief kidnapped 11 months ago, is free and safe. And the once-sick Chrysler Corporation tallied a record $2.4 billion profit in 1984. Good night, Robin.

MacNEIL: Good night, Jim. That's our NewsHour tonight. We'll be back tomorrow night. I'm Robert MacNeil. Good night.