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Whut’s PIK Role in Farming?

Click to see original imageSome significant farm policy decisions await Congress’ retum in September from a monthlong recess – and one of the ticklish issues which merits deliberation is the “payment-in-kind” (PIK) program. PIK was authorized by Secretary of Agriculture John Block to reduce surpluses of farm commodities, particularly cotton and grains, that were depressing market prices. In exchange for not planting all or part of their normal 1983 crops, some farm producers are paid “in kind” out of surplus stocks of commodities they ordinarily would produce. The very nature of the program makes it susceptible to potential abuses and requires tight regulations administered with extreme care. A farm state lawmaker, Sen. John Melcher, Montana Democrat, told the Senate shortly before recess that he thinks additional debate is necessary and that more input is needed from producers. In terms of cost, PIK is a “raging failure,” Melcher claimed. In value to the nation he wondered if it has “accomplished a great deal” and declared huge payments to corporate producers are not in keeping with the intent of the program. That is one man’s opinion, of course. All sides need to be heard, The administration is entitled to present a detailed report. Possibly Melcher’s statement can serve as a starting point in the discussion. The Montanan said PIK has brought welcome money to family farmers in debt because their crops have continued to sell below their cost of production. “But the limitation set by statute of $50,000 per individual producer is not being followed in the program. Payments of up to a million dollars have gone into the pockets of corporate or conglomerate producers,” he charged. With tms and many other farm matters awaiting discussion when they reconvene in September, members of Congress should do their homework during recess and return prepared for debate leading to enlightened decisions. Possibly PIK can be reshaped with more constraints, loopholes, plugged, and better application of the program to promote foreign and domestic sales under stable marketing conditions. in other words, Congress and the Agriculture Department should not miss this opportunity for evaluation and adjustment of the course.