The MacNeil/Lehrer Report; Farmers Talk

JIM LEHRER: This has been the winter of the U.S. farmer`s discontent, with farmers in Nebraska and elsewhere having to decide: to plant another crop, or sell out; to participate in a new federal program, or stay out; to strike, or not to strike. Tonight, three farmers in Mead, Nebraska discuss their discontent with the two agriculture leaders of the U.S. Senate in Washington.

Good evening. The farmer has used dramatic means to make his discontent known to his fellow Americans this winter. Led by the striking American Agriculture movement, farmers have been on the front page and the nightly newscasts regularly since December, demonstrating with their tractors, disrupting traffic and clashing with police, throwing eggs at Agriculture Secretary Bob Bergland. Over the weekend there was more trouble, as farmers blocked trucks carrying Mexican meat and produce on the Texas border, and in other parts of Texas, South Dakota and New Mexico, stopped a couple of freight trains and asked truckers to stop delivering food to supermarkets.

FARMER: What are you hauling, pardner?

TRUCK DRIVER: Beer.

FARMER: Beer? Well, our farmers gotta have beer, go ahead.

LEHRER: But they`ve been lobbying, too, and Congress is reacting. The Senate finishes eleven days of hearings on new farm legislation this week; the House completed its own last month. The two key men on the Senate side are Senator Herman Talmadge, Democrat of Georgia, Chairman of the Senate Agriculture Committee; and the Committee`s ranking minority member, Senator Robert Dole, Republican of Kansas. They are with us tonight in Washington to listen, and then respond, to three farmers who are in a local cafe in Mead, Nebraska, population 488. Jim Levy of the Nebraska ETV Network is with them. Jim?

JIM LEVY: Jim, the nation`s farmers, including those here in Nebraska, are experiencing one basic economic problem: the cost of producing agricultural products is rising twice as fast as the prices being paid for those products in the marketplace. These spiraling production costs and weak prices have combined to bring national farm income down to its lowest level in five years. Here in Nebraska, net farm income has dropped more than $9,000 per farm since 1974. Even before the strike, there was some legislative action for farmers. Congress passed, and the President signed into law, the Food and Agriculture Act of 1977. This complex legislation includes provisions for income price supports, farm loans, voluntary acreage set-asides, and farmer-controlled grain reserves. The Carter administration is pitching set-asides and grain reserves as the farmer`s best chance for getting higher prices. Under the set-aside program, the administration is asking farmers to idle ten percent of their feed grain acreage and twenty percent of their wheat acreage. Farmers who do not participate will be ineligible for federal farm aid. At the same time, farmers are being urged to put as much as one billion bushels of grain into reserve in order to further tighten the supply. Secretary of Agriculture Bergland has said, "If farmers participate in the reserve and set-aside programs, grain prices will increase. These are self-help programs." In other words, the administration is telling farmers that it`s up to them to raise farm prices.

Duane Neuenberg raises corn, alfalfa and livestock on a 2,000-acre farm and ranch near Cozad, Nebraska. Duane, the administration has said in effect that obtaining higher prices is now the farmer`s responsibility. How do you react to that?

DUANE NEUENBERG: Well, self-help is a nice phrase. I think all farmers like to think about themselves as having the ability to help themselves. We pride ourselves on being efficient producers and not parasites. But the fact is, this present farm program, as it`s being administered, I think is self-helping us to extinction. The support prices are below the cost of production, the set-aside provisions are too low to reduce the surplus, or the supply. Mr. Carter, in a meeting with farm interests on the 14th of February, said -- and I do not now quote him directly -- the beginning of the phrase was, there will be some rewards -- and I now quote Mr. Carter -- "to those who can survive this period." At the present time, 1,200 farmers a week are going down the tube, many of them because they`re forced out of business. I say that we need all the self-help we can muster, and now is the time for the federal government to address themselves to helping us somewhat, to get us out of this position into which they`ve forced us.

LEVY: Okay, Duane. Next to Duane is Bob Pearson. Bob farms about 1,000 acres near Plymouth, Nebraska. He raises corn, wheat and cattle. Bob, what`s your basic reaction to the administration`s farm program?

ROBERT PEARSON: I like the farm program. I think, generally speaking, it`s very well-conceived. I think there may be somewhat limited participation, though, and I think this is going to be a big drawback.

There has to be some adjustment in the target price to encourage participation or it will not be as effective as we`d like to have it.

LEVY: Okay; and next to Bob is Ralph Knobel, and Ralph raises corn and feeds cattle on his 1,100-acre operation near Fairbury, Nebraska. Ralph, your basic reaction to the farm program.

RALPH KNOBEL: Well, I agree with Bob in that the program has some very good possibilities if administered correctly. However, the problem we have right now is we simply have too much grain. The problem that we must face is to get a reduction in production, and the set-aside as it is recommended by the Secretary at the present time is simply not nearly large enough. I believe we`d have to have at least a twenty percent set-aside, and then along with an increased set-aside we have to have an incentive for the farmers to participate. The American farmer will react to an incentive any time he has the opportunity, but the way the present program is being administered, there just simply is not an incentive for the farmer to participate. The man who feeds his grain to livestock has almost no incentive to get into it; where the futures markets are at the present time, you can contract your fall production at the point of the target price at the present time, so there again, the grain producer really has no incentive to participate. Without an incentive to participate, farmers will go ahead with the thing they like to do most, and that is to produce, and I believe we`ll have a self defeating farm program in the present situation.

LEVY: Okay, Ralph. Now let`s go to Jim for some reaction from Washington. Jim?

LEHRER: All right, now to Senators Talmadge and Dole, chairman and ranking minority member, respectively, of the Senate Agriculture Committee. First, Senator Talmadge, you heard what Mr. Neuenberg said, that this self-help program is self-helping the farmer to extinction.

Sen. HERMAN TALMADGE: I agree with the Nebraska farmers. Farm income several years ago was over $30 billion a year; that`s declined to $2Q billion last year. I don`t know of any other group in our economy that`s taken a one-third reduction in their income, and the cost of producing these farm commodities has escalated, in many instances, a hundred percent during that relatively brief period of three or four years. Now, the `77 Act that the Congress passed is sufficiently flexible to where they could raise the loan levels and force up the price of these commodities and provide a greater incentive for compliance with the set aside, which is ten percent for feed grains and twenty percent for wheat. The big problem is that we have huge carry-overs of surplus commodities. We`ve got about 5,800,000 bales carry-over of cotton.

LEHRER: And that`s keeping the price down.

TALMADGE: That`s keeping the price down. We`ve got a carry-over of corn and feed grains of over 1,200,000,000 bushels. We`ve got a carryover of wheat of over 1,100,000,000 bushels. So Senator Dole and I, along with the majority of the members of our committee, yesterday introduced a bill which we hope will not only encourage farmers to comply with the set-aside but pay them further to retire land. We hope to get about 31 million acres of land retired. With the program it will cost approximately $2,300,000,000. But the beauty about this program is if they set aside the land it will be cost-efficient because it will save deficiency payments. So it`ll cost the government virtually nothing, yet it`ll add to farm income immediately.

LEHRER: Well, Senator Dole, picking up on the point that Mr. Knobel and Mr. Pearson made, and also that Senator Talmadge just brought up, of the participation problem, that you have the set-aside program in the Act but the farmers apparently are not willing to participate in it. How can that be improved? Will your bill do it just by itself?

Sen. ROBERT DOLE: I think all three farmers -- Mr. Pearson, Mr. Knobel, Mr. Neuenberg -- hit on it: the word "incentive." There really isn`t any incentive for the set-aside. Now, some farmers will set aside because they hope other farmers will set aside. We believe -- in fact, we have a little different approach, so we`ve co-sponsored the bill with Senator Talmadge to demonstrate the bipartisan efforts we`re trying to make, and also to send a very clear signal to the administration -what the farmers want, as we understand, having heard, what, a hundred and some witnesses the past ten days, they want to make a profit; they don`t want it out of the treasury, they want it out of the marketplace. They want some incentive so they can pay their bills. And we would hope that Secretary Bergland might move on his own; there are a lot of things he could do right now that would save us from a lot of legislative problems.

TALMADGE: They certainly would.

LEHRER: The word that the farmers used -- the concern that those three gentlemen in Nebraska have -- is how the program is being administered. All three of them used that term, how it`s being administered. What can you do about that?

TALMADGE: The bill is completely flexible. The Secretary of Agriculture has authority to set aside land and make payments therefor. The Secretary of Agriculture has authority in many instances to raise the loan levels to a hundred percent of parity. The Secretary also has various other authorities which he has not used. Now, we had the Secretary before our committee on January 20, and at that time I advocated a five point program, and the Senate adopted it -- the committee adopted it unanimously. And at that time if Secretary Bergland had acted, it would have immediately plowed about eight and a half billion dollars into the hands of the farmers. What we recommended was retirement of 50 million acres of land, raising the loan level on corn and raising the loan level on wheat, raising the loan level on soybeans, and a program for peanuts, the...

LEHRER: Got to take care of the peanuts, right, Senator? (Laughing.)

TALMADGE: Got to take care of the peanuts...

DOLE: I think Senator Talmadge makes a point, and that is that there`s enough flexibility in the Act -- those who condemn the Act I think condemn it the way it`s being administered at present, and I don`t condemn Secretary Bergland; it`s a tough job he has, he`s under great restraints. I think Senator Talmadge has the best line: you don`t blame the lieutenant when the captain gives the orders. And I think that`s the problem.

LEHRER: Let me ask you finally, gentlemen, before we go back to Nebraska: have things changed that much for the farmer since that 1977 Act was passed, or have things like the demonstrations and the lobbying and so on gotten the ear of the members of the United States Congress more so than they have...

TALMADGE: I think it`s really a combination of all of them. Things have changed. 2,300 counties in the United States last year were declared Tisaster areas. In my own state of Georgia we had the worst drought in the history of our state. Each of the 159 counties in Georgia were declared disaster areas. And commodity prices have fallen drastically since we passed the farm bill, and our government has done nothing to try to stop that sudden, drastic fall of commodity prices. We had witnesses today; tractors that cost $3,000 three years ago cost $6,000. A cotton picker that cost $22,000 three or four years ago costs $55,000 today. Diesel fuel that cost fifteen cents three or four years ago costs forty-six cents at the present time.

DOLE: But it`s a combination of a lot of factors, and I might say, as a Republican, it`s not all the problem of this administration; I think there`s enough blame to go around. It was developing in the last couple of years of the last administration, but it`s our responsibility as the Congress to try to help the farmers, and I think we`re making some progress. It may not be exactly what they want, but we`re looking at emergency legislation, something we can pass through the Congress.

LEHRER: All right. Let`s go back to Nebraska. Jim?

LEVY: Thank you, Jim. Ralph, I`d like to ask you if what you heard Senators Talmadge and Dole describe seems to provide the kind of incentive that farmers need in order to participate in a set-aside program.

KNOBEL: Well, I certainly think it`s a step in the right direction. While I have not read the bill, so I do not believe I could pass judgment on it at this time, it certainly seems as if this is what we have to have. For a long time I`ve been a proponent, and the Farm Bureau, which I happen to be a member of, has been a proponent, of paying for the set-aside acres, and the administration has been wanting to get them free; and you simply have to have that incentive, and that`s been brought up several times today.

LEVY: Bob, what would you like to see them do, beyond the kind of legislation that they`ve proposed so far?

PEARSON: I`d like to see the target price tied to a percentage of parity, so that as the parity fluctuates and prices fluctuate, then the target price will fluctuate with it. The figure I have in mind is eighty percent; if the target price were tied to eighty percent of parity it would move with the parity price.

LEVY: And Duane, what would you like to see done, beyond what`s been proposed by Senators Dole and Talmadge?

NEUENBERG: I`m a representative of the American Agriculture movement. Our proposal is that market prices be established at 100 percent of parity. I think that as we examine what American Agriculture is after, it needs to be developed that we are after not only a price but a principle. Parity as it is commonly understood is a means of tying one set of costs or values to another set of costs or values and keeping them in relationship -- sort of a cost of living type of slider. American Agriculture is also proposing very strongly that some new input be put into determining farm policies, and that is what we call in our five-point proposals the board.

LEVY: Let me involve the Senators at this point before we go too much further. Senators, you`ve heard them mention tying the target price perhaps to a percentage of parity, and I think that what Duane is talking about is perhaps some kind of legislation that would set a minimum price at the parity level. How do you respond to that?

TALMADGE: We set out in our bill last year, which Senator Dole and I introduced on January 18, 1977, to support commodities at about the cost of production with the target price, and a loan level of about eighty percent. However, when we got through with the bill under the threat of a veto and also a conference with the House, the bill was less effective than it was when it left the United States Senate. Now, realistically, I don`t think there`s a chance of getting a hundred percent of parity, because the President was asked about it in a press conference not long ago and he replied that he didn`t support it. I doubt that there would be the votes in the Senate and I doubt that there would be the votes in the House. In the legislative process it`s all but impossible. Our committee, as Senator Dole has stated, is completely nonpartisan; American agriculture is not a partisan matter. It`s a matter that affects all American people and affects a good portion of the world because we feed not only 217 million Americans but hundreds of millions of people overseas. So our committee is dedicated to do its dead level best to improve farm income, and that`s our objective and we`ll do the best we can.

LEVY: So it`s not politically feasible that a bill could ever be passed that would support prices by law at a hundred percent of parity.

TALMADGE: I don`t think so.

DOLE: And I share that view. I think if you`re going to fix prices -- I`ve suggested a flexible parity act which would say to the farmer, if you`re willing to set aside as much as fifty percent of your cropland, then you would receive a target price of a hundred percent of parity. This wouldn`t be a government payment; I know the farmers understand, but other viewers may not -- because I think the market price would rise and there wouldn`t be any exposure to the government. But we`re not certain we can pass this concept as an emergency piece of legislation. I think what we`re faced with now is, what can we get through the committee, what can we pass in the Congress in the next thirty days? I think we`re up against it. Many farmers can`t wait much longer.

TALMADGE: If we can achieve supply in line with demand, we can achieve something like parity in the marketplace, and that`s the reason that Senator Dole and I and other of our colleagues have introduced this bill, to retire, hopefully, about 50 million acres of land from production. That would get rid of our surpluses, it would draw down the surplus level rather than adding to it. Now, if farmers plant what it`s indicated they`re going to plant by the Department of Agriculture this year, and we have anything like normal growing weather, we`re going to add to the surpluses rather than detract from them.

LEHRER: Which goes to the question that Mr. Neuenberg raised a moment ago and is one of the points of the American Agriculture movement, which is, who sets farm policy in the long term? Many, many committees in Congress, all kinds of branches of government are involved. What about the long term, Senator Dole? Even if you get immediate things passed, how are you going to solve the problem over the long run?

DOLE: I think Duane has a good idea in the so-called "advisory board." I`m not certain just how they`re going to construct that -I don`t think you can give any one board a veto power over what the Congress might pass or what the Secretary might need to do in a discretionary way to take care of supply and demand in the marketplace. But I think there`s a lot of frustration -- I know there`s a lot of frustration out there -- and farmers are very concerned; the prices, as Senator Talmadge said, are cut in half below the cost of production, the prices they pay have increased almost double, and more in some cases, and I think they`ve sort of lost confidence in the system. Now, we believe we can help restore that confidence if we act, and act promptly, and that`s the thrust of our bill.

LEHRER: Let`s ask the farmers in Nebraska. Mr. Knobel, have you lost confidence in the government`s farm system as such?

KNOBEL: I`m not sure I know what you mean by the government`s farm system. I have not lost confidence in the free enterprise system, and I think our long-term objectives ought to be to be sure we retain the free enterprise system. As I look at countries like France and Italy, who are on the brink of electing communistic governments, I am a little dubious about giving up my freedom, even on a small basis. So the long-term goal, I believe we`d have to give a little bit of thought to the freedom and the amount of freedom we`re willing to give up on some of these things.

LEHRER: Mr. Pearson, how do you feel about that issue?

PEARSON: I think the present program does give us probably more freedom than any farm program has given us so far. Freedom is fine, but we have to have participation in the program or it isn`t going to do the job for us.

LEHRER: Mr Neuenberg, I would assume you would want the government more involved, right?

NEUENBERG: On the contrary, in the long run I don`t think we do.

I consider the American Agriculture movement`s ideas to be basically very conservative. That may seem rather striking; my definition of a conservative is one who feels that government cannot solve all the problems of man. The reason we have risen up with demonstrations and show of support is to demonstrate to the American people, all of them, the urgency of the situation. I think a careful analysis of what we are asking for would indicate that in fact it`s a very clean way, as political matters go, to implement getting parity in the marketplace. The original premise that we have gone with is that we want parity at the marketplace, not as a contrivance of supports or loans or some other government involvement which will entail employing a lot of people to administer it and build a new bureaucracy and involve a lot of government funding and a plundering of the federal treasury in order to implement getting these prices. Obviously, to achieve this at the marketplace, the government will have to use one of its authorities, and that will be to mandate some regulation of production until supplies get back in line with demand.

LEHRER: All right. Jim Levy?

LEVY: Yes. Jim, we have some other farmers here in the cafe who also are very opinionated about to what extent they want government involved in agriculture and who have some additional things to say about their own particular situations; and I know that earlier some had indicated that they wanted to come up and speak with the Senators, if given the chance. Did you? We have one gentleman here who had some things, I know, that he wanted to talk about. What`s your name?

FARMER: Phil Mincke.

LEVY: Phil Mincke? From...?

FARMER: I`m from Cozad, Nebraska.

LEVY: Okay, Phil, how do you feel about this? To what extent do you want the government involved in agriculture, and are the kinds of programs being talked about by Senators Talmadge and Dole going to provide the necessary kind of relief?

FARMER: What I want the government to do, they`ve become involved in food policy for over thirty years; they`ve embroiled us in a situation where on the one hand they`ve encouraged me to become extremely efficient in terms of production efficiency, on the other hand they dictated that the market efficiency where the pricing level of my products was such that we`d first have a priority for cheap food, secondly worry about whether I made an adequate return on my investment so that I could represent my operation to my banker and come back with a viable business. Because I have been trapped in this situation, I feel they have some responsibility at this point to help American farmers maintain somewhat nearer to parity income than we presently are achieving. The ultimate goal I have is when I increase my production efficiency is to achieve more marketing efficiency with it. The Senators were talking about incentive; that`s a basic incentive to a farmer.

LEVY: Okay. We have to go back to Washington. I`m sorry to interrupt you. Jim?

LEHRER: In a word, Senator Talmadge and Senator Dole, do you agree that that is the government`s responsibility?

TALMADGE: To a degree. I think it`s the government`s responsibility not to encourage farmers to plant fencerow to fencerow and then let them go bankrupt.

LEHRER: All right. We have to go. Gentlemen, thank you in Nebraska. Thank you, Jim Levy. Senators, thank you very much. I`m Jim Lehrer; Robert MacNeil and I will be back tomorrow night. Thank you and good night.