Statement on Signing the Food Security Act of 1985

I have today signed H.R. 2100, the Food Security Act of 1985, into law. This legislation reauthorizes virtually all of our farm programs, from the major commodity price support programs to research, credit, food stamp, and export promotion. It represents the culmination of a year-long effort to establish a sound policy to guide U.S. agriculture for the rest of this decade.

Farmers and ranchers, hard-working men and women who till the fields and tend the herds, have always been an important part of our heritage and of our economy. Today, however, our farmers and ranchers and the thousands of small towns and communities in which they live are currently suffering through difficult times. These difficulties have been caused in part by the very same government programs that were designed to help American agriculture. Earlier this year, my administration proposed a market oriented farm bill designed to correct past farm policies that have often worked at cross purposes. We have encouraged farmers to produce more commodities by artificially propping up prices while, at the same time, forcing farmers to set aside more and more land to reduce production so prices would not drop. As a result of years of such counterproductive farm policies, the American farmer has become less competitive in the international marketplace, the cost of our farm programs has risen to unsustainable levels, and farm income has stagnated. Clearly, our past policies have failed.

The legislation that I have today signed contains some of the needed reforms sought by my administration:

• Crop price support levels that are a major factor in establishing minimum market prices are lowered, thus helping make U.S. commodities more competitive in the international marketplace.

• Planting decisions are partially uncoupled from government program income benefits by making those benefits available if only 50 percent of a farmer's acreage is planted into a price-supported commodity. Planting decisions on the remaining 50 percent of the land will be based on market signals, not government benefits.

• Farmers are discouraged from increasing their planted acreage for the purpose of receiving greater Federal income payments.

American agriculture is the most efficient in the world. This legislation will help our farmers use that efficiency to regain export markets without sacrificing the income they need to operate effectively in our domestic economy.

Unfortunately, however, the bill did not make all of the reforms we requested. By failing to totally uncouple farm income support from planting decisions, and by keeping support prices artificially high, we will encourage more and more farmers to become dependent upon our farm programs. In addition, the legislation includes several highly objectionable features that must be changed. These include:

• A mandatory 3-year payment-in-kind export promotion program which will give away $2 billion worth of commodities to encourage U.S. exports. A program of this size and nature threatens to precipitate an agricultural commodity trade war with our allies. Moreover, it may well be impossible to fulfill the $2 billion goal over the next 3 years without subsidizing exports in a manner which will be contrary to the national security interests of the United States.

• A mandatory reduction in the size of the sugar quota that threatens to severely disrupt the economies of the Caribbean Basin countries and the Philippines. This provision is inconsistent with the foreign policy objectives of our country and may also be violative of our obligations under international trade agreements. I find it difficult to ask other countries to bear the cost of our sugar program while encouraging them to maintain a stable course toward development with democracy.

• The inclusion of a dairy assessment tax, which will tax all milk producers to fund a program that will force the Government to pay farmers to liquidate their dairy herds. The Government is also required to buy meat above our needs in order to keep prices up while dairy herds are being liquidated.

These programs represent the worst in the way of policy. My administration will seek modifications of these programs next year. Although I have serious reservations about these and other provisions of the conference agreement, I have signed this bill into law because it represents a step in the right direction toward a sound agricultural policy. It promises to make American farm products more competitive in the international marketplace, and it begins to break the link between high government price supports and production decisions. Most importantly, the bill will ensure adequate supplies of reasonably priced food for American consumers and the beginning of renewed hope for America's farmers and our rural communities. They have suffered far too long because of the mistakes of the past. Because I believe this bill represents a promise of a better future, I have signed it into law.