MA Puts Business Principles 

 Into Farming -Smith 



V/^V^ HE Agricultural Adjustment 

 ^^""/^ Act, the most vital legislation 



^^ affecting agriculture today, was 

 characterized by Earl C. Smith, president 

 of the Illinois Agricultural Association as 

 "an opportunity afforded farmers to put 

 business principles into the business of 

 farming," in remarks before the Mid- 

 West Farm Bureau Training School at 

 Lafayette, Indiana, July 21. 



There has been too much talk about 

 crop production control and not enough 

 about surplus control, Mr. Smith said. 

 The chief purpose of the Act is to pre- 

 vent surpluses already accumulated from 

 wrecking fair price levels. 



"Our efforts in controlling crop sur- 

 pluses are prompted solely from the 

 standpoint of national welfare. As a group 

 farmers normally represent about half of 

 the buying power of the country. We 

 know from experience that when the in- 

 come of this great consuming group is 

 out of balance and below what it ought 

 to be, when the exchange value of farm 

 products is abnormally low, then there 

 is lack of buying among rural people, 

 with resulting unemployment and indus- 

 trial stagnation in the cities. 



"We hear from the opposition that 

 there is no over-production, that the 

 trouble is under-consumption. I agree 

 with this thought, particularly as applied 

 to industrial products. There is a po- 

 tential demand in rural America for all 

 the fine furniture, electrical appliances, 

 sanitary plumbing, modern farm imple- 

 ments and machinery, building materials, 

 fence, radios, and other goods the fac- 

 tories can turn out. But farm products 

 don't "buy" enough of these manufac- 

 tured commodities in exchange. That is 

 the reason why more are not consumed." 



Mr. Smith said it was the responsibility 

 of the farm organizations and their lead- 

 ership who had secured enactment of the 

 adjustment act to correct its mistakes and 

 weaknesses and secure the best possible 

 administration of the legislation. 



"We expect to have a frank conference 

 in the not too distant future," he said, 

 "to check up and try to plug the holes 

 which administration of the act has un- 

 covered." 



I 



Making the AM 

 Work 



The difficulty of developing a farm 

 program suitable to all sections of the 

 country was related recently by a district 



AUGUST, 1938 



AAA administrator who visited the 

 northern peninsula of Michigan. 



"Up there I was struck by the tremend- 

 ous acreage of prairie and timothy hay," 

 he said, "and the small acreage of soil- 

 depleting crops. So at a local meeting, 

 I asked the farmers what they were going 

 to do with all the hay." 



" 'You ought to know,' one man spoke 

 up, 'you've been getting us to grow more 

 of it.' 



"This farmer seriously suggested a 

 plow-up campaign to get rid of the sur- 

 plus hay. Up there hay is selling for $1 

 a ton. There's practically no market for 

 it. We're going to have to do something 

 about that another year." 



TolleyOntheMA 



V^^W^HE Agricultural Adjustment Act 

 ^""Y^ of 1938 offers the best means 



^^ farmers thus far have had for 

 obtaining equality for agriculture. It en- 

 ables farmers to contribute to the country 

 at large that balance and stability which 

 are so necessary to general prosperity, 

 Howard R. Tolley, administrator of the 

 Agricultural Adjustment Act told dele- 

 gates attending the Midwest Farm Bureau 

 Training School, Lafayette, Ind. July 18- 

 21. 



Explaining the provision of the AAA, 

 as well as the entire farm program, he 

 said that purchases of crop surpluses 

 through the Federal Surplus Commodities 

 Corporation was one of^ the most signifi- 

 cant steps taken by government to bridge 

 the gap between unmarketable farm sur- 

 pluses on the one hand and hungry peo- 

 ple on the other. 



Referring to criticisms of the program, 



"Ht't taUng llw rap iec Im kriMf't 



agdaP 



particularly by metropolitan and political 

 newspapers, Tolley said that the 100,- 

 000,000 bu. of Argentine corn imported 

 into this country a year or so ago, was the 

 result of efforts to make up a shortage 

 of 700,000,000 bu. of corn due to the 



1936 drought. That year the corn crop 

 was less than 1,500,000,000 bu., or ap- 

 proximately 700,000,000 bu. short of 

 normal requirements and production, he 

 said. 



Thus far, the United States has ex- 

 ported close to 100,000,000 bu. of the 



1937 corn crop largely because of the 

 relatively low price here, the short Argen- 

 tine crop and favorable world markets. 



The charge that this country had im- 

 ported more than 200,000,000 bu. of 

 wheat for domestic consumption from 

 Canada during the past five years, is an- 

 other falsehood and misrepresentation 

 Tolley said. Such stories were pub- 

 lished in newspapers in the northwest 

 by opponents of the AAA, he explained. 

 ■When they reached Washington the 

 facts were checked and it was disclosed 

 that imports amounted to only 135 mil- 

 lion bushels of all kinds of wheat during 

 this period and that half of this quantity 

 was imported in bond for milling here 

 and export. The wheat imported only 

 for milling, then exported, did not affect 

 the home market. During the past five 

 years, the facts showed, only 74,000,000 

 bu. of wheat were imported for human 

 consumption, which amount was less than 

 had been imported the previous five years 

 despite the short crops of 1934-35-36. 



Another name for surpluses, Tolley 

 said, is inventories. The piling up of 

 industrial inventories in 1937 he believes, 

 was one of the major reasons for the new 

 depression. A surplus of $5,000,000 of 

 manufactured goods which couldn't be 

 moved at profitable prices, tied up a great 

 deal of money and led to the cessation 

 of industrial activity all along the line. 



A preliminary checkup reveals that 

 AAA compliance in the corn belt states 

 is varying from 45% to 75%. Illinois 

 is expected to come through with ap- 

 proximately 55% compliance. Iowa 

 and Indiana are expected to be about 

 the same, possibly a little higher, South 

 Dakota and Minnesota seem to be 

 leading in percentage of cooperators. 



We estimate that approximately two 



corn growers out of every three in the 

 corn belt are cooperating in the corn 

 acreage adjustment program, says 

 Claude Wickard, AAA administrator 

 for the north central division. 



The only way farmers can be sure of 



maintaining a farm parity price pro- 

 gram is to secure a high percentage of 

 participation in such program. 



