March 21, 1983
Secretary Block and Deputy Secretary Lyng, the ladies and gentlemen here on the dais and all of you from the Department of Agriculture, honored guests who are here and those who are listening throughout the country:
Today we commemorate stocked cupboards, healthy children, the spirit of enterprise, railroad cars and trucks heavy with food, free men and women living and working on their own land, government workers researching and developing scientific farming techniques, fields overflowing with grain and cotton and corn and vegetables, orchards laden with fruits and nuts, pastures dotted with cattle and hogs. I had to get that last one in here or the Secretary wouldn't let me speak. [Laughter] But most importantly, we commemorate all the people who plant and harvest, transport, market, and distribute America's food and fiber.
Have I left anyone out? Yes, because I want you, the employees of the Department of Agriculture to know that this day is your day, too. You've been doing a tremendously professional job, and I'm grateful for your dedication. I know you've been putting your nose to the grindstone implementing the 1981 farm bill. You started the PIK program from scratch and have done an admirable job. Believe me, I know how hard it is to get the word out sometimes, and our cheese operation went from zero to full steam ahead overnight.
So, whether you've been part of our efforts to increase exports, handling the very sensitive work over at the Farmers Home Administration, or taking care of any of the other myriad of responsibilities of this Department, thanks for all you're doing.
Today, we salute an endeavor that is vital to our well-being, yet one Americans have been so successful at that it's often taken for granted: agriculture. All of us should be grateful to God for making American abundance possible and grateful to the families and all the others involved in agriculture for taking over from there.
I feel a story coming on. [Laughter] Forgive me if you've heard it, but it's about an old fellow who had taken over some scraggly creek bottom land all covered with rocks and brush. And he went to work on it, clearing away the rocks and the scrub brush and all. He cultivated and he fertilized and finally he had a garden that was his pride and joy. And one morning after Sunday services, he asked the minister if he wouldn't like to come out and see just what he'd accomplished. Well, the Reverend arrived. And the first sight were the melons. And he said, `"I've never seen melons so big.'' He said, "My, the Lord has certainly blessed this land.'' And the Reverend came to the corn and he said, ``That's the tallest corn I've ever seen.'' He said, ``Blessed be the Lord.'' And he went on that way about everything he saw. Finally, he said, ``What you and the Lord have accomplished here is a miracle.'' Well, all the time this was going on, the old boy was getting pretty fidgety standing there. And finally he said, ``Reverend, I wish you could have seen this place when the Lord was doing it all by himself.'' [Laughter]
Well, the Lord's help, along with muscle and sweat and sophisticated technology and modern business methods are producing some miracles today. Farm output has jumped more than 89 percent since 1950, with agricultural productivity rising more than four times faster than industrial productivity per hour worked. One hour of labor on the American farm today produces 15 times as much as it did 60 years ago. American production of food and fiber, always admirable, now holds the rest of the world in awe. With less than three-tenths of 1 percent of the world's farmers and farmworkers, our country produces -- think of it, less than three-tenths of 1 percent -- produce 65 percent of the world's soybeans, 48 percent of the corn, 32 percent of the sorghum, 25 percent of the oranges, 31 percent of the poultry, 26 percent of the beef, and the list goes on and on.
As I walked into the Department of Agriculture this morning, I noticed the words of George Washington inscribed on the front of this beautiful building. He said, ``With reference either to individual or national welfare, agriculture is of primary importance.''
Well, this was never more true than today. With stores and markets overflowing, our citizens each consume 1,408 pounds of food annually. Their relative health, creativity, and high energy level can, to a large degree, be traced to a diet that is the envy of the world. And yet, we spend less than 17 percent of our disposable income on that food. That's the lowest rate of any people anywhere in the world.
The health of our economy is also tied to agriculture. American agriculture, taken as a whole, is an industry so vast that it stretches the imagination, with assets exceeding $1 trillion, employing 23 million people -- 22 percent of America's work force.
And we aren't just feeding ourselves. Today, wheat harvested in the Great Plains is eaten as pasta in Italy. Our soybeans are part of the soy sauce used in the Orient. Our cottonseed is pressed into oil and shipped to Venezuela. Our grain is consumed in Russia. And African children are fed by the tillers of Nebraska soil.
In 1982 our agricultural export revenue was five times what it was in 1970, helping to offset the increased cost of energy imports over this period. Today, two of every five agricultural acres are devoted to export and over one-fourth of all farm income comes from sales overseas. Our agricultural exports use rural elevators, grain terminals, railroads, canals, seaports, ships, barges, and warehouses. It's a vast network, incredibly efficient in providing income for tens of millions of people and feeding many millions more.
In the United States we're proud of what our free people, with the profit motive and private property, have produced, and that is especially true of agriculture. Our agricultural system is a national treasure, and this administration is unflinching in its commitment to maintain and strengthen agriculture's role in the American economy.
Yet, as proud as we are of American agriculture, all of us should be aware of -- and I know you who are present in this hall are -- and sensitive to the weight borne by the American farmer in recent years. A decade of overspending and overtaxing shot interest rates sky-high and unleashed devastating inflation on all of us. Nowhere was it felt more than down on the farm. They were the greatest victims of the cost-price squeeze.
A farmer once won a sweepstake, thousands and thousands of dollars in a sweepstake, and someone asked him what he planned to do with all the money. And he said, ``I'll just keep on farming till it's all gone.'' [Laughter]
Surviving has been a job in itself, but I think it's fair to say that although the winter has been harsh, it's going to be a beautiful spring. We've planted the right seeds, and now economic recovery is popping up all over the country. And America's farmers aren't going to be left out.
For the first time in years we've got inflation -- which was public enemy number one when we came here -- under control. In the 2 years -- '79 and '80 -- farm production costs rose 30 percent. By last year they were only going up 2 percent, and in 1983 it's expected to be the same or less. The prime interest rate is down to 10\1/2\ percent. It was 21\1/2\ just before we came here. And I told these people here on the platform and will tell all of you: that, along with spring this morning, came an announcement from the Department of Commerce that the growth in gross national product for the first quarter of '83 was 4 percent. In the last quarter of '82, it was going down 1.1 percent. In our own estimates, we only predicted it was going to be going up 1\1/2\ percent in this first quarter.
To get back to the interest rates and so forth and what they mean for every farmer: For every 1 percent drop in the average interest rate on outstanding farm debt, net farm income goes up $2 billion.
Do you remember when we decontrolled the price of oil and some so-called experts howled that it would add to inflation and predicted that the price of gas would go above $2 a gallon? Well, decontrol unleashed a stampede of exploration, contributed to the oil glut, and brought oil prices down from -- or gas prices down from about $1.27 a gallon, when we started, to below a dollar now in most of the country. The decline in the price of diesel has been a godsend to the American farmer.
Bringing down interest rates and reducing fuel costs will help, but increasing farm income is better. With the cooperation of Secretary Block, Trade Representative Brock, and all relevant agencies and departments, that's exactly what we're trying to do -- not by increasing subsidies or Federal controls, but instead, by opening markets and introducing alternatives in order to overcome excessive surpluses.
We believe in free trade, but we're no longer going to play patsy for those who would use this commitment as leverage against us. Free trade means access for those trading with us, and it also means access for Americans to their markets, those foreign markets. Our Trade Representative must do everything it takes to tear down trade barriers and end unfair trade practices.
In the meantime, we've sent trade teams around the world -- and they included your Secretary -- to Europe, to Africa, to Latin America, the Middle East, and the Far East. The intent was to seek new markets, and these efforts are paying off. We expect to ship more grain to Iraq and Morocco, to have sizable grain sales to India, and, of course, we have a deal with Egypt that represents one-sixth of the world's wheat flour trade.
Another plus for farmers is a program that we've started -- with the full cooperation of Congress -- which puts surplus commodities, now sitting idle in bins and warehouses, to work helping the American farmer. It's called the PIK, and you know that's the Payment-In-Kind program. And under this crop-swap agreement, farmers -- or concept -- farmers are given a certain amount of grain or cotton, rather than money, in payment for not planting. The self-help nature of PIK makes farmers themselves, not government, the solution. It leaves them with much more personal freedom, and it has the potential of whittling down a surplus problem that's been a serious drag on the entire farming community.
The final tally on farmer participation won't be known until 3 o'clock tomorrow afternoon, but from the reports that I've been getting from Secretary Block, the program is being received with open arms.
Although our large surplus remains a problem, we can be grateful that even in economic downturns America has an abundance of food. This bittersweet situation afforded us the opportunity, early last year, to initiate a program to help those hard-hit by the recession by giving away surplus cheese and other dairy products. Your Department has given away over 250 million pounds of cheese and dairy products, valued at nearly $400 million, to 10 million needy people during these past 14 months.
Those of you who work here at the Department of Agriculture are aware of other surplus commodities held by the Federal Government. Now, I personally believe that we shouldn't keep agricultural commodities locked up in storage that needy people require and can't afford to buy. So, I'm asking the Secretary to explore ways some of the other commodities in government warehouses can be distributed to the needy to alleviate unusual hardship, without disrupting our farmers' markets. The Secretary informs me he's already taken the first steps to make milled rice and cornmeal available.
These have been difficult times, and while we're encouraged that recovery is underway -- and that it looks like it'll be long and strong -- we haven't ignored those who, through no fault of their own, are suffering. Emotional and often politically motivated attacks notwithstanding, overall nutrition assistance provided to the unemployed and the needy of this country is at a higher level now than ever before. This assistance takes the form of food stamps, school lunches, child and nutrition activities, and donated commodities.
Comprehending the pain and the deprivation resulting from this recession should bolster us in our resolve never to be lured back into the irresponsible policies of tax and spend and inflate that caused this suffering in the first place. The ultimate solution to these heartrending problems remains a healthy economy. Yet, while heading toward that goal we have not, as some would like you to believe, permitted people to go hungry. In times like these we must use our heads to make things get better, but we must never forget our hearts, either.
Consistent with this, our efforts -- getting control of farming costs, opening markets, and coming to grips with the surplus problem -- will reap long-lasting benefits for farmers.
I grew up in farming country during the dark days of the Great Depression. And in the last few months, there have been stories reminiscent of those days -- farmers losing their land, foreclosures, and tears. Now obviously, we've been unable to rescue all of them, but the Farmers Home Administration has been operating under instructions to work with farmers on a case-by-case basis, taking every responsible measure to help individual farmers get back on their feet.
There is a Federal role in agriculture. Consistent with this, we've increased money for agricultural research and expanded the Federal Crop Insurance program. We've strengthened the Department of Agriculture's market-development program, implemented the blended credit program to finance U.S. agricultural exports, increased the level of agricultural export credit guarantees to the highest level in history -- $4.8 billion.
By the end of this year, we will have cut income taxes by 25 percent across the board and, beginning in 1985, indexing will prevent people from being pushed into higher and higher tax brackets by inflation.
In 1987 the estate tax, which has been the most potent enemy of the family farm since the Dust Bowl, will be entirely eliminated for a surviving spouse. And the exemption will be increased by then to about $600,000, making it easier for family farms to be passed on to their children.
We also, as you've been told, ended the Soviet grain embargo and have pledged never again to single out agriculture from the rest of the economy for use as an economic weapon. In addition, I signed into law legislation that assures the sanctity of agricultural export sales contracts.
Throughout history, farming has been recognized as irreplaceable to the vitality of any society. The nobility of those who grow food has not escaped notice. In ancient Rome, Cicero said, ``Of all occupations from which gain is secured, there is none better than agriculture -- nothing more productive, nothing sweeter, nothing more worthy of a free man.''
Well, here in the United States where new dimensions have been added to the word ``liberty,'' the Jeffersonian vision of free men working their own land is still rooted in our consciousness. So in many ways, we look to agriculture not just for sustenance of the body, but also to prove to ourselves that our ideals are still alive.
Recently, farmers in States across the Nation, in spite of their troubles, donated thousands of bushels of wheat to help feed the unemployed in hard-hit urban and industrial areas. In North Dakota the goal was set at 2,600 bushels, and on the first day of the project, 6,000 bushels were donated. The wheat was ground at a State-owned mill and pressed into macaroni. That North Dakota project alone provided enough food for more than 1,700,000 meals. Every aspect of the project was a product of voluntary contributions -- the wheat, the baking, the bags and boxes, as well as the trucks and fuel. All of this done at a time when the wheat farmers, as I said before, are themselves in a bind.
[At this point, the President noticed members of the audience watching photographers, who were preparing to photograph a calf and some 4-H Club youngsters in a pen set up near the stage.]
I once learned, never get in a scene with a kid or an animal. [Laughter]
But similar events to this charity thing have happened in Minnesota, Oklahoma, Oregon, South Dakota, and Washington. This isn't just a story of good farmers; this is the story of good people and good Americans. No matter how industrialized we become, America's heart, her soul, her sense of justice and decency will remain strong as long as the American farmer continues to be an integral part of our national life.
As a young boy growing up in that small town on the plains of Illinois, I remember those farming families. They were proud, church-going people. They were independent and yet always ready to lend a hand to a neighbor. We can all be grateful that these folks and their ideals are still with us today.
Today, Agricultural Day, we express our appreciation to them for the bounty of food and fiber they provide and for the strength they give us.
And, now, God bless all of you and them, and thank you.
Note: The President spoke at 11:43 a.m. on the patio of the Administration Building of the Department of Agriculture.