B6—Lancaster Farming, Saturday, July 5,1980
New directions
NEWARK, Del. - The
nation’s food and
agricultural policy directly
affects both food prices to
the Delaware consumer and
the future of the state’s
agricultural industry, says
Delaware extension com
munity and resource
development coordinator
Gerald F. Vaughn.
The key provisions of the
Food and Agricultural Act of
1977 will expire in 1981, so it’s
time for farmers and con
sumers alike to start
thinking about the
legislation we’ll need for the
1980’s.
Between now and 1981 we
will have national elections,
but a change in the White
House or in the majority
party in Congress won’t
necessarily lead to changes
in the food and agricultural
policy. Over the years it has
become harder to
distinguish a Republican
from a Democrat with
respect to voting positions on
commodity farm programs
or food and nutrition
programs
Regardless of which ad
ministration finds itself in
office in 1961, the consumer’s
demand for reasonable food
prices will have to be
balanced with the farmer’s
demand for a reasonable
income, he says.
A useful and informative
look at U.S food and
agricultural policy, Vaughn
observes, has been prepared
by Willard W. Cochrane, an
agricultural economist at
the University of Minnesota
According to Cochrane, it
is unlikely that the Food and
Agricultural Act of 1981 will
attempt to deal with energy
shortages in any com
prehensive manner, but it
might set forth some prin
ciples for the Department of
Energy’s guidance in
making fuel allocations to
the food and agricultural
sector
The legislation may also
include tax exemptions, loan
programs, and/or technical
assistance to farmers who
want to go into production of
fuel alcohol.
Whether or now Congress
moves to strengthen the
grain reserve program in
1981 may depend on the size
of the world gram harvest in
1980 If the world harvest is
poor for the second straight
year and world gram prices
soar, there may be political
support for expansion of the
existing grain reserve
program
If world gram yields are
high, however, Congress is
likely to authorize a
program with greater stock
capacity to bolster domestic
grain prices And if this
year’s world gram harvest is
about average, Congress
may decide to ignore the
gram reserve u»uc
But whatever the size of
the 1980 harvest, Cochrane
points out, chances are great
that the world will ex
perience both surplusses and
shortages of gram within the
next decade, and we ought to
prepare for both even-y
tuahties in our food and farm
legislation
If we want to maintain a
reasonable degree of gram
and food price stability at
home and to remain a
dependable suppber of gram
to our regular foreign
customers, Cochrane says,
we ought to double the size of
our current gram reserve
program.
This would give the
program the capacity to
stabilize world gram prices.
The government should have
greater control over stocks
released from the reserve to
insure that the released
stocks will not be used for
speculative purposes.
Legislation should define
more clearly the range over
which the U.S. seeks to
stabilize world gram prices,
he says
Such an ambitious
program would involve
substantially higher
Delaware specialist says
needed in food, farm legislation
government costs, but
Cochrane says it is the only
way the U.S, can maintain
an acceptable degree of
price stability in the
domestic market plus a
completely open link to the
world market
Because of the recent
dramatic jumps in the price
of farm inputs such as land,
supplies and equipment,
farmers are likely to push
for a new formula to in
crease commodity loan rates
and target prices more
rapidly in the coming
decade. To be effective, loan
rates should increase with
the increase in farm input
prices
However, loan rates
should not lead input prices,
or the farm commodity
programs will just con
tribute to the general price
inflation Loan rates must
stay close to the longrun
world equilibrium prices for
the export commodities, or
the U.S. will have a hard
time moving export com
modities into mreign
markets.
MAIDENCREEK FARM
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215-925-3851
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Congress and the Ad
ministration face the
delicate task of setting loan
rates high enough to provide
a reasonable level of price
support in a highly unstable
industry, but not so high as
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