In Pages '09, you could drag and drop an image onto existing body text, visit the Inspector > Wrap tool and simply click In Background. The image would plunge under the existing body text. There was also an option on that panel for the Background object are selectable. And on Pages '09 Format menu, one could select Advanced > Move Objects to Section Master.
The rewrite of Pages that was released in Oct 2013 and subsequent versions was not based on Pages '09. What you once were able to do in Pages '09 became implemented in a different way, or simply was omitted from the new design.
There is no Inspector panel, or Wrap tool now that lets you shove an image behind body text. The only means to do so now is to select the image, and apply Arrange menu > Section Layouts > Move Object to Section Layout. That places the image behind the body text where it appears for every page of the current section. The layer buttons on the Arrange panel have no bearing on an image in the current Pages application unless in the context of other inserted objects in case you wanted to (for instance) position a text box above an image.