BUDGET PACT CUTS U.S. FARM FUNDS 1.25 BILLION DLRS
  U.S. House and Senate budget
  negotiators agreed as part of an overall budget accord reached
  yesterday, to cut 1.25 billion dlrs from fiscal 1988 spending
  on agricultural programs, Congressional sources told Reuters.
      The agreed cut in farm programs is a compromise between 1.4
  billion sought by the Senate and one billion by the House.
      The negotiators also agreed to cut 1.6 billion from the
  farm budget in fiscal 1989 and 2.45 billion in 1990, for a
  total of 5.3 billion in saving over three years, sources said.
      The agreement presents the House and Senate Agriculture
  committees with difficult choices on how to make changes in
  agriculture programs that achieve the budget savings targets
  without jeopardizing popular support payments, senior
  Congressional aides told Reuters.
      Some farm state lawmakers already are manuevering to find
  the budget savings.
      Rep. Dan Glickman, D-Kan., Chairman of the House grains
  subcommittee, has introduced a bill which would freeze wheat
  and corn loan rates for the 1988 crop at the current 2.28 dlrs
  and 1.92 dlrs respectively, saying it would save 500 mln dlrs.
      House Agriculture Committee chairman Kika De la Garza has
  said the committee will consider the Glickman proposal.
      But Congressional sources said the proposal is unlikely to
  be approved because of opposition from Republican lawmakers and
  a strong stance by Agriculture Secretary Richard Lyng, who said
  freezing loan rates would send the wrong signal to other major
  grain export competitors and would not achieve the budget
  savings Glickman claims.
      Another area where Glickman and other have said budget
  savings might be made is to increase acreage reduction program,
  ARP, levels for wheat and corn.
      However, on this issue also Lyng has taken a strong stand
  within the Reagan administration, arguing that the 1988 crop
  wheat acreage reduction should be left at 27.5 pct and not 30
  pct as sought by the Office of Management and Budget, OMB. Most
  commodity lobbyists expect Lyng to prevail.
      Congressional sources said the only way to achieve
  significant budget cuts through ARP increases would be to boost
  the 1988 corn ARP. But one informed Congressional source said
  singling-out corn for an ARP increase would would be seen as
  unfair to one commodity.
      Congressional sources said the areas where Congress is most
  likely to eventually look for budget savings are some
  tightening of the payment limitation rules, and possible 
  adoption of a 0/92 program for the 1988 crops of major grains.
      Those changes would achieve a portion of the 1.25 billion
  but not enough, they said.
      Ultimately, Congressional sources said the agriculture
  committees may be forced to apply an across-the-board cut on
  all Commodity Credit Corp. payments to farmers, including price
  support loans and deficiency payments, similar to the
  Gramm-Rudman-Hollings budget cut applied in fiscal 1986.
      This idea has been suggested by the American Farm Bureau
  Federation, AFBF, as the fairest approach for all commodities.
  

