Exchange of Letters With Mrs. Eston Luke of Baxley, Georgia on the Farm Program

December 21, 1977

Dear Mrs. Luke:

Thank you for writing about the problems farmers are facing.

Well publicized demonstrations in Georgia and around the country have brought home forcefully to the American people the fact that the welfare of American consumers and American farm families cannot be separated. This ability of farmers to act together and focus public attention upon the problems of American agriculture is a new and healthy development.

You and others who have written and called are asking what this administration is doing to help farmers and how, as a farmer, I view the whole situation.

This has been an even more difficult year than usual for many farmers. Drought has done terrible damage to some sections of our country.

Our own home state has been one of the hardest hit. Last year Georgia produced [p.2167] 134 million bushels of corn. This year only 24 million bushels.

There is a word for that situation and others like it across the country--"disaster"--and the disaster programs we inherited were sadly inadequate to deal with so widespread a problem.

Farmers have had to pay higher and higher prices for machinery, fuel, fertilizer, land and everything else needed to produce crops. When production expenses are going up and prices are going down, I know firsthand how impossible that situation can seem.

In the 11 months since I took office, I've tried to face up to those problems with the best interests of both farmers and consumers in mind. I'd like to tell you about some of the steps we have taken since January, both through administrative action and by working with the Congress, that will ease the problems that now affect farmers.

We passed a new farm bill this year-in record time---because both I and the Congress were aware that existing policies and programs were inadequate. That bill went into effect this October and will be of great help to farmers next year.

The new farm bill has several important features. It raises both loan levels and target prices. Target prices were increased 17 percent and will continue to increase each year as production costs go up. As I promised during the campaign, the bill links income support levels to cost of production. Also, the bill authorized formation of a farmer-held grain reserve to help stabilize farm markets in a way that will avoid a repeat of the mistakes of the early 1970's.

The new Food and Agriculture Act of 1977 also authorized $1.2 billion in wheat deficiency payments, more than $800 million above the amount authorized under the old act. By December I, checks were on their way to about 1.8 million farmers under this program.

In April, even before the farm bill was passed, we reduced the interest rates on commodity and storage loans, boosted feed grain loan prices, and established a farmer-owned wheat and rice reserve. We later expanded this program, and announced a feed grain reserve. To keep excess grain from being turned over to the government, we liberalized the farm storage loan program.

In May, the administration provided $479 million in emergency loans to help producers who had been hurt by the drought. Three months later I authorized another $50 million in loans. Later I signed legislation authorizing disaster payments based upon acreage planted instead of upon outdated allotments.

On August 31, we increased the loan rates for feed grains again.

During these last 11 months, we have also made progress in international negotiations that affect our farmers. The results here were good: An international sugar agreement has been formulated, an international wheat reserve is under discussion, and the multilateral trade negotiations are again underway.

Farm exports this year will be the highest in the history of our country, and we will be making an even greater effort to sell American farm products abroad next year.

We have not solved our farm problems, but these efforts--along with 'record loan activity and stronger demand for our farm products---have pulled farm prices up. By the end of this year agricultural exports will be at their highest level in our Nation's history. The price of wheat climbed from a season low of $2.03 a bushel in June to $2.48 in November. [p.2168] The price of corn rose from $1.60 a bushel in September to $1.91 in November.

A hundred pounds of sorghum sold for $2.52 in September, and $3.15 in November. The average price received by farmers for soybeans moved from a season low of $5.27 to a November average of $5.68 a bushel.

Farm prices and income are still too low, but they have improved. Farm production costs are rising but not as fast as they did before. The prices of supplies, interest, taxes and wage rates have been essentially unchanged for the last three months.

I hope farmers will continue to use the farm programs. They are now redesigned to help through periods, like the present one, when supplies are abundant and prices too low.

One other chronic problem is that even when prices are high in the supermarket, they're still too low on the farm. Farmers know but most consumers don't--how little of the food dollar actually goes to those who take the risks and produce the food. I promised as a candidate to try to hold down the "middleman" portion of food costs. We have taken steps to deal with this problem, too.

My Agriculture Secretary, Bob Bergland, a family farmer himself, has ordered the Agricultural Marketing Service to conduct a full-scale investigation into the pricing of meat between the farmer and the consumer. The investigation is focused on pricing at the wholesale level, to see whether the current system blocks competition.

We are spending $1.5 million this fiscal year to set up direct farmer-to-consumer marketing, a system which would eliminate the substantial costs associated with middleman mark-up.

The Agriculture and Transportation Departments are jointly studying the food transportation system, looking mainly at inequities in the system that prevent more efficient and less costly means for the movement of food.

We have given our support to the idea of a food marketing commission. That commission would look into the whole food marketing system, including pricing at the middleman level. In commenting publicly on this issue, officials of this administration have focused particularly on the costs associated with transportation, advertising and packaging of food.

I hope this letter answers some of your questions; I wish it were possible for government action to solve all the problems that farmers face. But you know that the combination of nature's chance and the farmer's determination makes that impossible; that very challenge is what has drawn so many of us to farming. I respect that spirit, and I am glad for a chance to explain my views to you.

I cannot promise that I will solve every problem. I know that is not what you want, and you know that no President and no government can do that.

I cannot promise a guaranteed profit, but I have never met a farmer who asked for that.

What farmers want is a fair chance, and I do believe we can and have begun to change the policies of this government so that the farm family gets a decent break. If the changes we've made this year don't have the results we expect, they will themselves be changed.

Sincerely,

JIMMY CARTER

[Mrs. Eston Luke, Route 6, Box 201, Baxley, Georgia 31513]

December 14, 1977

Dear Sir:

Please help farmers in their efforts to get better prices for their crops. We deserve a decent living for our hard work as U.S farmers produce such a fine fare for all Americans and many others.

Thank you,

MRS. ESTON LUKE
Route 6, Box 201
Baxley, Georgia 31513