Statement of Administration Policy: H.R. 2100 - Food Security Act of 1985

(Revision)
(House)
(Rep. de la Garza (D) Texas)

The Administration strongly opposes enactment of H.R. 2100 in its present form because it fails to make those fundamental reforms necessary to assure long-term prosperity in the agricultural sector. If this legislation were to be presented to the President in its present form, the President's Senior Advisors would recommend its disapproval.

As presently written, the Committee bills

— Is almost $16 Billion over the Congressional Budget Resolution, despite the Committee claims.

— Continues to insulate production decisions from true market prices by freezing target price levels well above market prices, thus encouraging overproduction;

— Fails to establish support prices based on market conditions in an automatic fashion;

— Increases the cost of milk to consumers through an unfair and costly milk diversion program;

— Raises the possibility of massive commodity dislocations and consumer price increases through a poorly thought out marketing certificate referendum;

— Fails to make needed reforms in the outdated sugar, honey, peanut, wool and mohair programs;

— Fails to target Federal assistance to family sized farms;

— Substantially increases the cost of foreign humanitarian relief programs;

— Establishes an unnecessary Special Assistant to the President for Agricultural Exports and Food Aid, which would be incompatible with current management systems for food aid programs;

— Mandates expenditures for an unacceptable intermediate export credit program; and

The Administration believes that an acceptable 1985 farm bill must contain the following elements:

— Establishment of commodity price supports that allow export-dependent commodities to become competitive in international markets;

— A gradual reduction in the level of target prices each year;

— A reduction in the dairy support price each year as long as ' surpluses exist;

— A phase-out of acreage reduction programs;

— A targeting of income benefits to legitimate family farm operations; and

— Retention of discretionary authority for financing export credit programs.

The Administration strongly supports the following amendments which will help reduce the cost of the Committee bill and will gradually begin to institute some of the reforms necessary to assure an improved farm economy:

— The Olin/Michel dairy amendment, which will delete the Committee-passed dairy diversion program while retaining a modified dairy price support program;

— The Gradison/Downey sugar amendment, which lowers the minimum loan rate by one cent per year beginning with the 1986 crop through the 1988 crop;

— The Lundine Peanut amendment, which would gradually phase out the current two-price peanut program;

— An amendment which will reduce target prices;

— An amendment which will delete the marketing certificate referendum provision; and

— Amendments which will make necessary reforms in the honey, wool, and mohair programs.

Adoption of these amendments will help to improve this otherwise unacceptable legislation.

Moreover, H.R. 2100 includes highly objectionable Food Stamp provisions that would result in a three-year cost exceeding the President's 1986 Budget and budget projections by $1.4 billion. The bill would repeal previously enacted reforms that target assistance on the neediest individuals; it would also base allotments on uncertain predictions of future food prices.