One over-riding, non-political fact underlies American agriculture production. In one corn-belt and Great Plains area--starting from Ohio on the east to the Rocky Mountains on the west, from the Canadian border on the north to the high plains of Texas on the south--we have the world's largest contiguous land mass with fertile soil, a good growing climate, adequate rainfall, and topography that lends itself to a high mechanization.
In our vast irrigated valleys of the west we have intensive farm production unrivaled anywhere.
From our rich pastures and croplands of the southeast come. further essential agriculture diversification. And the farms and dairies of the northeastern region provide a wealth of farm production close to our heaviest population areas.
Truly, America has been blessed with farm lands unequaled any place on earth. This magnificent natural resource is managed by skilled farmers operating highly capitalized farms under a free market incentive system.
The American farmer, by far the most productive in the world, continues to grow more food for an expanding U. S. population and for fast increasing export markets.
Uncertainties abound in agriculture and always will. Weather is the major variable, but such other factors as inflation, changing consumer demand, inflation, strikes, currency revaluations, and international sales all make farming a high risk vocation.
THE FORD FARM POLICY
The basic tenet embodied in President Ford's farm policy is to keep government out of the business of farming to the extent possible. The American farmer has come a long way from the past when his planting acreage was prescribed by the government, the prices for his crops largely determined by the government, and large surpluses were held at great expense in government storage.
Since passage of the Agriculture and Consumer Protection Act of 1973, the government has, in fact, largely moved out of the farming business, and the United States, under President Ford, has had three years of the highest net farm income in history. Net farm income in the past three years has averaged $28.5 billion, compared with $12.9 billion average during the last three years under a Democratic President.
"We must sell grain, not pile it up in storage," President Ford told farmers in Springfield, Illinois, last March, "That is the program of my Administration."
The President went on to specify some of his other views:
"I am firmly opposed to the government holding your reserves in a government bin or warehouse. I'm against policies that would have farmers producing again for a government storage bin and a government check.
"I am firmly opposed to any international reserve that would put your farm products under control of an international body where this country could be outvoted fifty to one-or even by one hundred to one.
"I am firmly opposed to subsidized imports. I don't want American farmers competing against the treasuries of foreign governments."
FARM EXPORT POLICY
One result of the reduction of government involvement in agriculture has been vastly increased production, with surpluses being sold to alleviate hunger abroad. The value of agricultural products shipped to foreign countries in the farm year 1975-76 will reach $22.1 billion more than triple what they were in 1970.
To a large extent, it is the American farmer who has enabled this country to withstand the economic shock of quadrupled oil prices for imported oil, for which we paid $27 billion in 1975.
Over one-half the grain moving across international boundaries today is grown by the American farmer. President Ford believes that if the United States is to maintain dependable export markets for its food products, then it must be a reliable supplier.
To maintain this reliability, the United States has concluded long-term purchase agreements with the major countries around the world, from Western European nations to Japan. But in recent years, the Soviet Union, with which we had no such long-term contract, has entered the market with great unpredictability because of its inability to provide adequately for its own needs.
In Knoxville, Tennessee, President Ford spoke to this problem and its effect on the economy:
"We have had some very wide fluctuations in the purchase of grain, corn, wheat and soybeans from the Soviet Union. One year . . . it was around 55 million bushels, the next year it went up to 599 million bushels, and the next year it dropped down to 75 million bushels. The peaks and valleys have caused serious disruptions in our markets in the United States."
President Ford worked out a comprehensive five-year agreement with the Russians that benefits all Americans -- grain farming communities, workers, farmers and consumers. Under this agreement the Soviet Union committed itself to purchase a minimum of six million metric tons of grain per year -representing $1 billion in annual export earnings.
This agreement will:
* * *
"We have transformed occasional and erratic customers into regular customers. We have averted an outcry every year that the Russians are coming to make secret purchases in our markets. The private marketing system has been preserved. Record exports are moving right now."
AGRICULTURE AND POLITICS
President Ford has refused to play politics with the food produced by the American farmer. When pressed to cut off exports to Russia because of its involvement in Angola, the President said:
"The linkage of grain diplomacy would mean disruption and hardship for you, the farmer, a serious increase in tensions between the world's two superpowers, and no effect whatsoever in Angola."
By contrast, Jimmy Carter has stated that he would consider using agricultural produce as a weapon to accomplish foreign policy objectives in both the Soviet Union and Middle East.
Carter was asked, "In the case of the Soviet Union doing things like intervening in Angola, would you favor using our economic leverage to get the Russians to cease and desist?" He replied, "Yes I would."
August 8, 1976
Carter says a new cut off of oil shipments to the United States would be "an economic declaration of war" and that he would "Instantly and without further debate" suspend U.S. exports of food, weapons, spare parts, oil drilling rigs and oil pipes to the offenders.
Associated Press, 7/8/76
SCALING DOWN GOVERNMENT INVOLVEMENT
The policy of the Ford Administration is to scale down in an orderly fashion the costs to the government formerly devoted to managing the individual farmer. Outlays for farm income stabilization (price supports, direct payments) will decline by $630 million in 1977. Legislation is being proposed to eliminate conservation practices. The program in 1977 will be cut by nearly half. As President Ford said to the farmers of Wisconsin last April:
"Farming is too important to be left to the politicians in or out of Washington."
President Ford expressed his commitment to the American farmer in a speech last spring in St. Louis:
"We start this Bicentennial year with justifiable pride in our agricultural strength and progress. The last three years have been the highest on record in the terms of net farm income . . . . I pledge to do everything in my power of the Presidency to keep farm income high and it will be."
Secretary of Agriculture Earl Butz, speaking for the President last year, told of his and President Ford's pride in the American farmer's use of the free market:
"Agriculture is doing fine on its own; fields are filled with growing crops, and the flight of rural people to the cities has ended. At the same time, American taxpayers also no longer have to pay up to $1 million a day to store inefficiently produced, government-owned grain. We still have the reserves, but now individual farmers and grain dealers hold the grain until they choose to sell it on the free market . . . ."
ENDING GOVERNMENT REGULATION
The President has repeatedly said that he believes that a necessary condition of a healthy economy is freedom from the petty tyranny of massive government regulation:
"We are wasting literally millions of working hours costing billions of consumers' dollars because of bureaucratic red tape. The American farmer, who not only feeds 215 million Americans but-also millions worldwide, has shown how much more he can produce without the shackles of government control."
President Ford believes that America's farmers must profit if America is to profit. There must be enough income for farmers to replace machinery, conserve and enrich the soil and adopt new techniques and buy essential supplies.
Above all, President Ford is ending government regulation of the American farm -- to make the American farmer truly independent, able to take the greatest advantage of the free enterprise system. In a speech before the farmers of America at the convention of the American Farm Bureau, President Ford said:
"You believe in a farm policy that builds strong markets at home and abroad, and so do I. Some nations with other political philosophies have virtually the same tractors and the same combines that you use in your fields, but their farmers do not have the same incentives. They don't have the greatest piece of farm machinery ever built -- free enterprise. . . .
"The American farmer died for freedom on the bridge at Concord 200 years ago. The least that America can do today is to let the farmer live in freedom from the stifling interference and control of big .government."
AGRICULTURAL POLICY COMMITTEE
The President announced on March 5, 1975 a reorganization of the Administration's agricultural policy-making machinery -- a new Agricultural Policy Committee has been formed with Secretary of Agriculture Earl Butz as Chairman.
In making this announcement, the President said:
". . . I am today asking . . . Secretary (Butz) to assume a new and vital role in strengthening America's agricultural policy making within the Executive Branch.
"The Secretary will be the Chairman of a new Cabinet-level Agricultural Policy Committee that I have created. This committee will consolidate all agricultural policy-making functions of existing Executive Branch committees . . . . This new Committee -- and its leadership -- reasserts the importance I attach to Secretary Butz as my chief agricultural policy advisor and spokesman."
President Gerald R. Ford
March 5, 1976
This new Committee consolidates agricultural policy-making into one group which reports directly to the President and will advise him on the formulation, coordination and implementation of all agricultural policy. The scope of the Committee will include both domestic and international issues.
The new Committee replaces the International Food Review Group, chaired by the Department of State, and the EPB/NSC Food Committee, co-chaired by the Department of State and the Treasury.
TAX PROPOSALS TO PRESERVE THE FAMILY FARM
". . . For the sake of future generations we must preserve the family farm . . . I will propose estate tax changes so that . . . family farms can be handed down from generation to generation without having to be sold to pay taxes."
The death of an owner of a farm can create major financial problems for the heirs, particularly if they wish the business to remain in the family. Unless sufficient liquid assets are available (or become available upon the death of the owner) to pay the estate tax liability, heirs may be compelled to sell the farm.
President Ford has called upon the Congress to pass legislation permitting heirs of owners of small farms to defer the first payment of estate taxes for five years and amortize the balance over 20 years at 4 percent simple interest. This will ease significantly the current problem faced by heirs of being forced to sell farms that have been in a family for years in order to pay estate taxes.
And, President Ford recently called upon the Congress to increase the estate tax exemption from $60,000 to $150,000:
"To further encourage the revitalization of rural America, I have proposed an increase in estate tax exemption from $60,000 to $150,000
March 11, 1976
THE PRESIDENT'S PROPOSAL
The President has proposed a number of changes in the Federal estate tax laws to make it easier to continue the family ownership of a small farm or business. The proposed changes would stretch out the estate tax payment period so that Federal estate taxes can be paid out of the income of the farm or business. No payment will be required for five years and 20 years will be allowed for full payment of estate taxes at a 4 percent interest rate. This reform will help ensure the survival of smaller farms and businesses for future generations and allow them to expand their current operations.
These changes would liberalize the present rules under section 6166 of the Internal Revenue Code which permit the payment in 10 annual installments of estate taxes attributable to a family farm or other closely-held business constituting a substantial part of an estate (35 percent of the total estate or 50 percent of the taxable estate). Currently, interest on deferred estate tax payments is charged at the normal rate of overdue tax payments (currently 9 percent, but 7 percent effective February 1, 1976).
This first proposal has the following features:
In addition to these changes, the estate tax exemption would be increased from the current $60,000 to $150,000. This would partially offset the effects of inflation on the exemption originally set in 1942.
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