Radio Address to the Nation on the Farm Industry

August 17, 1985

My fellow Americans:

August is a happy time for most of us, a time of vacations and State fairs. A number of America's farmers will be showing their livestock and produce at those fairs, and this month they'll have more to show than ever. It's been another bumper-crop year on the farms, and that's good news for America's consumers, but a mixed blessing for our farmers. Big crops mean weaker prices, and under current conditions, that means more financial strain for some of those who grow the food that feeds our country.

It's no secret that American agriculture is facing hard times. And it's particularly painful to know that those affected are among our most productive and hard-working citizens. American farmers are the backbone of our country. Their crops and stock and related industries account for nearly one-fifth of our gross national product and almost one-fifth of our exports.

Now, not all farmers are in trouble; many are not. And it's important to note that those whose crops are the beneficiaries of governmental programs are worse off than those who operate without such assistance. Current farm problems arise from a host of reasons. There were the shocks of the seventies: grain embargoes, double-digit inflation, and record interest rates at 21 percent. Some farmers borrowed large sums of money based on inflated land values, and when we brought inflation down, those farmers were left with declining land values to cover their loans. But a major contributor to the problem is the Federal program designed to help farmers. For years now, Federal farm programs have distorted the market and sent confusing signals to farmers. Interventionist commodity programs have encouraged farmers to produce more than the market will bear while attempting to prop up prices.

Today we find ourselves with farmers who grow more than they can sell, and the result is low commodity prices and a depressed rural economy -- and this, in spite of how much we've spent. In 1979, for instance, the Federal Government was purchasing less than 1 percent of all dairy products at a cost of $250 million. Just 4 years later, in 1983, it was purchasing 12 percent of those products at a cost to the taxpayer of well over $2\1/2\ billion a year. And it's not just the dairy program. From 1981 through this year, we will have spent just under $59 billion on farm price supports. That's nearly 3\1/2\ times what we spent from 1976 to 1980. Our administration has spent more on the farm program than any other administration in history. If spending more money on agriculture would solve the problem, we already would have solved it by now.

We've got to create a future for the farmer that's every bit as bright as the future is for the rest of our economy. A big part of that is keeping inflation and interest rates down. We've made progress on these fronts, as you know, and it's helped farmers control their own costs. Farm production costs were rising fast in the 1970's, but now they've been stable since 1981.

The other half of the job is to free ourselves from the quagmire created by Federal farm programs. I support long-term policies that will enable the American farmer to enter the 21st century stronger than ever before. The world market holds the potential for increasing opportunities for our products, but we must have a farm policy that maintains our competitiveness. Through our trade policies, we must ensure that farmers have full and fair access to all foreign markets. That is one of the Federal Government's greatest responsibilities; another is to provide stability in programs. Much of the farm problem stems from the past practice of lurching from one emergency program to another, coming up with so-called solutions that never solve anything.

The answer to our farm problems cannot be found in sticking with discredited programs and increasing government controls. The answer can only be found in our ability to help our entire agriculture industry stand on its own feet again. You know, this country is nothing without the farmer, and those who work the land have the right to know that there's a future in farming. Their children have the right to know that they'll still be able to work the family farm generations from now and make a decent living.

The law governing our farm program expires September 30th. I'm eager to sign historic legislation that will put American agriculture on a sound course for the future. In writing farm legislation, I expect the Congress to stay within its own budget goals. I need your help to send Congress an unmistakable message that change in our farm policy is not only desired but essential.

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

Note: The President spoke at 9:06 a.m. from Rancho del Cielo, his ranch near Santa Barbara, CA.