Statement on Signing the Agriculture and Consumer Protection Act of 1973.

TODAY I am approving the Agriculture and Consumer Protection Act of 1973, which sets our national farm policy for the next 4 years.

This law represents a realistic compromise between the Congress and the Administration on a number of important economic issues. Though it falls short of the high standards I have set for reforming farm legislation and eventually moving the Government out of agriculture, it does provide a constructive framework for encouraging the expansion of farm production.

As consumers, Americans are the most fortunate people in the world. Our farmers and ranchers have traditionally provided us with a plentiful supply of the best food and fiber in the history of mankind. Their importance to our economy-and their right to share fully in the fruits of that economy--cannot be denied.

In the current period of unprecedented demand for farm commodities, it is essential to provide expanded production by allowing farmers the freedom to make production decisions. The bill I am signing today continues the system of Government participation in farm production but does so in a way which will ensure administrative flexibility and thus encourage larger supplies of farm goods.

The effect of this bill is to set up a new system of price guarantees for American farmers. It means that our farmers can expand production during the current period of worldwide food and fiber shortages without fear of a serious drop in farm income. Thus, it will encourage full production and dampen inflationary pressures without risking a market disaster for America's farm families as they respond to new demands.

This new agriculture law establishes target prices for farm commodities. But these target prices are significantly below present market prices and thus will not inhibit our efforts to stabilize food prices for consumers. Indeed, this law should help in our battle against inflation by encouraging American farmers to produce at full capacity. The cost to taxpayers of Government payments to farmers will be reduced and in some cases eliminated during periods of strong demand and high prices such as we are now experiencing.

But even as we await results under the new act, I have taken a number of actions to expand food supplies. These include suspension of meat import quotas, relaxation of import quotas on nonfat dry milk and cheese, a 20 percent increase in rice allotments, and release of about 43 million "set-aside" acres for grain production. Next year there will be no set-aside programs for any farm commodities. Thus, we will use the provisions of this act to maximize food production in 1974.

I am asking the Secretary of Agriculture to administer the new system in the best interests of both the farmer and the consumer and to report to me regularly on its effectiveness.

S. 1888 also provides for several changes in the food stamp program including expanded coverage and higher benefits, and extends that program through June 30, 1977. In addition, it restores eligibility for food stamps to certain recipients of supplemental security income benefits, in order to ensure that they will not suffer a loss of income under the new system.

While it is generally agreed that people should not lose benefits in shifting from the present welfare program to the Supplemental Security Income program, it is unfortunate that the Congress has chosen this method of maintaining assistance levels.

H.R. 1, enacted last October, federalized the public assistance programs for the aged, blind, and disabled under the new Supplemental Security Income program. That law made recipients of the new Federal benefits ineligible for food stamps, but made it possible for such recipients to receive cash in lieu of the bonus value of food stamps as part of their monthly checks. It was considered preferable, by the Congress as well as by the Administration, to give those in need extra cash, which they could spend according to their needs as they best know them.

I am willing to accept a temporary return to "in-kind" benefits as provided in this act as a stopgap measure, but I continue to believe that our long-term goal should be to provide income assistance in cash, rather than in food stamps or other forms of in-kind assistance that rob the individual of the chance to make his own spending decisions.

While I am willing to go along with the restoration of food stamp eligibility, the particular device used in this bill for achieving that end is highly undesirable and must be corrected. In effect, the bill would require the States to maintain the records and staff involved in the present welfare system merely to make the determination of whether or not a person is eligible for food stamps, even though that system is no longer in use for any other purpose. This provision would perpetuate a massively complex eligibility determination process. The result would be high administrative costs and the potential for great abuse. I will shortly propose legislation to correct this serious and costly defect.

I also opposed those provisions of this act which preclude State approval of loans and grants under the Rural Development Act. The effect and intent of precluding State participation is once again to centralize decisionmaking authority in the Federal Government rather than in the States and localities where it belongs. Though I respect the wishes of the Congress on this point and will adhere to this legal prescription, I plan to administer these new Rural Development Act programs in a way which will give the fullest possible consideration to State rural development goals and the local priorities expressed in those goals.

Another feature of S. 1888 requires the Secretary of Agriculture to continue a program for sharing the costs of conservation practices on private lands under the Rural Environmental Assistance Program. I stopped funding this program in fiscal year 1973 because it supported at Federal expense actions which were short-term in nature. Fortunately, this new act provides that the practices supported be of a permanent nature and subject to contractual agreement for maintenance up to 25 years. I will ask the Secretary of Agriculture to use this reformed and improved approach in lieu of the former program.

Finally, this act authorizes a forestry incentives program to encourage the increased production of timber on small tracts of private lands. I will ask the Secretary of Agriculture to use this authority for experiments to determine the most cost-effective methods for carrying out commercial forestry on small tracts.

On balance, the Agriculture and Consumer Protection Act of 1973 provides that the farmer will receive most of his income in the marketplace, a goal underscored in my radio address last February.¹ Because foreign and domestic markets for farm commodities are expanding, the American taxpayer will be a direct beneficiary of these new programs. This new law is good for the consumer, good for our growing domestic economy, and helpful to our foreign trade balance.

¹ See Item 52.

Our Nation has been blessed with a great ability to meet its food and clothing needs. The bill I sign today will help American agriculture continue to meet our growing needs in the most productive and economical way possible.