In the 1981 farm bill we set high target prices. There is no way to read higher target prices except as an incentive to produce more. The consequential fact however is that the farmer is producing for the Government rather than the marketplace. The farmer does not make the necessary production adjustments that the market demands, thus surplus production continues and forces market prices lower. Therefore the taxpayer must pay more to the farmer to meet the difference between the high target price and the low market price.
Runaway deficit spending most adversely affects the farmers.
High real interest rates have caused interest expenses to become the largest single element in farmers' cost of production. Moreover, few industries are as dependent on exports as agriculture. Agriculture has suffered as the deficit has contributed to the increasing value of the dollar relative to other currencies. In conclusion, by reducing target prices we have a rare chance to do something positive for farmers and the Nation. Conversely, failure to reduce target prices in a gradual but steady manner, as this amendment proposes, will only hurt farmers by adding further inducements to create even greater surpluses of all commodities that now exist, and by adding further to the massive Federal deficits that bring with them an over-valued dollar and high interest rates.