Radio Address to the Nation on the Farm Industry

My fellow Americans:

Before I get to my main topic today, I'd like to say a word about tax reform. Next week the House will decide whether the Congress will continue working on this important issue. While the proposals before the House are far from perfect, they do represent an essential step toward a tax code that is fairer, simpler, and encourages greater growth. I hope the House will vote yes next week and allow the Senate to consider debate and to improve this important measure.

Now, permit me to talk about the trouble faced by some of the most important Americans among us: our nation's farmers and those who provide them with goods and services. Here's a letter I received from Debbie Wilson, a farm wife in Bennington, Oklahoma: "Dear Mr. President, we've seen a neighbor lose his farm and we've seen neighbors throw up their hands and quit because they couldn't make enough money to cover their farm expenses. We have felt the devastation those losses inflicted on the children, as well as the parents, because farming is a family endeavor."

Debbie speaks for thousands of farmers from Maine to California. The reason our farmers are facing such hard times are complicated, but three main reasons stand out. First, a dramatic drop in land values as the inflation of the seventies was cut dramatically. Suddenly farmers who used their land as collateral found it much harder to obtain the loans they needed to purchase goods like chemicals, livestock, and tractors. The second major problem involved a fall in the demand for farm exports. The last administration contributed to this by imposing grain embargoes, a failed policy that our administration will never repeat. Later, many countries that had been purchasing large quantities of American farm goods began to purchase less, in large part because their economies had weakened. The third cause involved a sharp drop in the prices of many commodities as inflation slowed. Indeed, in the last year alone, prices that farmers receive for grains have fallen nearly 15 percent. All these problems mean hard times. I'm reminded of the troubles I saw during the Depression, growing up in Illinois, the heart of the Corn Belt, and living later in Iowa. The worst of it then was the hopelessness. Well, I'm determined not to let that terrible hopelessness spread through our farm communities today.

Our farm communities have, as I said, been hurt by grain embargoes and failed policies of other administrations, by past inflation and the difficulty of adjusting to our success in bringing that inflation under control. Well, since government had much to do with causing these problems, government must do its part to help our farm communities get back on their feet. Government should do so, of course, in a manner consistent with its obligation to cut deficit spending. But lend a hand government must.

To bolster farm credit, we proposed and the Senate, under the able leadership of Senators Dole and Helms, has passed a bill to strengthen the farm credit system and put it back on a sound basis. The House Agriculture Committee, under the leadership of Congressmen de la Garza, Madigan, Jones, and Coleman, has reported out a similar bill. I hope to sign an acceptable measure soon. To expand farm exports, Secretaries Block and Baker have been working to open markets and promote stronger economic growth in Europe and the Third World. And Secretary Baker is continually working with his foreign counterparts to ensure that the value of the dollar reflects economic conditions here and abroad. The dollar's decline during the past few months will brighten prospects for agriculture exports. The Congress is also putting together a comprehensive farm bill to guide our agricultural policy for years to come. As they work, the House and Senate must understand that more Federal dollars alone are not the answer. Indeed, during our administration farm price and income supports have more than quadrupled. What's needed is policy reform, including a long-term plan to get government out of farming and establish a more market-oriented farm policy. I call upon the Congress to send me a bill I can sign, one that provides America's farmers with hope.

Perhaps most significant, our administration is continuing the policies that have already done so much to foster economic growth: the encouragement of sound monetary growth, the limiting of government, and the preventing of tax hikes. In the past 3 years, we've enabled America to put 8.8 million more people to work. And in recent months, the news for farmers has been hopeful as interest rates have dropped; indeed, the prime rate has dropped a full point since last spring. And inflation has remained low, helping to hold down the prices farmers must pay for equipment and supplies. Times are still hard, but I'm convinced that a more prosperous future for our farms is beginning to take shape at last.

Until next week, thanks for listening, and God bless you.