4. AMERICA'S AGRICULTURAL DISASTER OF 1983 -- A PIK IN A POKE

In early 1983, President Ronald Reagan introduced a new federal program called Payment In Kind, or PIK. It was designed to reduce surpluses by giving farmers government-owned surplus crops which they can then sell in return for leaving their own crop lands idle.

The program was a total but little publicized national disaster:

-- one third of all eligible crop land in the U.S. was left unplanted, more than three times the acreage originally expected to be in the program;

-- about 250,000 jobs were lost among suppliers, farm laborers, and in farm-related industries;

-- hundreds of fertilizer, farm-equipment, and seed dealers were forced out of business;

-- feed prices increased significantly, hurting poultry, pork, and cattle growers;

-- billions of dollars in farm-export sales were lost;

-- federal laws which prohibit the USDA from giving more than $50,000 to any single farm were knowingly broken;

-- giant farm corporations and major grain companies profited by millions of dollars while smaller farmers went bankrupt;

-- an extra $11 billion for farm aid will be charged to the taxpayers;

-- total farm subsidies were increased to about $28 billion more than we spend on welfare for the entire poverty population in the country;

-- and now we can expect more than $20 billion to be added to consumer food bills in 1984.

Despite all this, John Block, Secretary of Agriculture, said PIK "has proved to be one of the most successful farm programs in agriculture's history" and it appears it will be repeated in 1984.

Finally, in late 1983, President Reagan signed into law a new dairy price support bill that will pay farmers not to produce milk. The program is expected to turn out to be a "golden calf" for some farmers, including at least five big dairy operations that will get more than $1 million each for not producing milk.

SOURCES:

THE NEW FARM, November 1983, "A PIK in a Poke," by Rodney Leonard; WASHINGTON POST NATIONAL WEEKLY EDITION, 11/21/83, "Grain Trades and Conglomerates Benefit from PI K." and
4/2/84, "How the USDA Gave Birth to a Golden Calf," both by Ward Sinclair; and READER'S DIGEST, April 1984, "Fiasco on the Farm," by James Bovard.