GENERAL FARM PROGRAM 



355 



Briefly, the assumptions on which these tables are calculated are that the 

 Index of prices and rates paid by farmers (the "parity index") will stabilize at or 

 somewhat below its current level, that cash farm receipts or the average purchasing 

 power thereof will stabilize somewhere about the level now in prospect for 1949. 

 and that prices of the several farm commodities over the next few years will 

 maintain approximately the same level relative to each other as prevailed during 

 the 10 years, 1940-49. It should be noted that the relative prices of different 

 commodities under both plans are strongly influenced by their common starting 

 point of average commodity prices for the 10 years, 1940-49. 



Under the price-support standard the moving income base would call for the 

 substitution of the current and following years for the low-income years of 1939-41 

 and, if farm income continues at the assumed level, this would cause the over-all 

 level of I he price-support standards to rise by about 2 percent a year for perhaps 

 the first 3 years following 1951. The proposed legislation would allow support 

 prices for the livestock commodities which would be supported under the 

 Secretary's proposal to be reduced by not more than 15 percent below the full 

 price-support standards to levels which the Secretary determined would reflect 

 -desirable feed ratios. 



Again, assuming that the index of prices and rates paid by farmers stabilizes 

 at either of the levels indicated, the average level of title II parity prices would 

 also stabilize at the current level except for some small decline in the first 2 or 3 

 years due to the use of transitional parities for such commodities as cotton, corn, 

 and wheat. Under title II, however, the parity price is not the support-price 

 standard. For the basic commodities (and potatoes) title II provides that 

 support prices shall range between 60 and 90 percent of parity, depending upon 

 conditions relating to supply, to v. hether or not acreage allotments or marketing 

 quotas are in effect, and other factors. In line with this, the tables showing 

 projected price supports under title II simply indicate the range within which 

 price supports would likely fall, assuming that the prices of nonbasic commodities, 

 beef cattle, lambs, whole milk, chickens and eggs, might also fall within this range. 



Actual support-price standards and parities for any year would, of course, 

 depend upon a number of factors, and it is doubtful if tliere is much validity in 

 projections beyond 1953. Should conditions continue at about the assumed 

 level over the years 1952 forward, the support-price standards or probable support- 

 price ranges under the two plans would tend to stabilize at or somewhere fairly 

 close to the projections shown for 1953. 



The prices-paid index of 144 (1939-48=100) used in th/^ calculation of the 

 price-support standards is equivalent to the index of 246 (1010-14=100) used in 

 the projections of the title II parities. This is also true of the 136 (139-48= 100) 

 and the 232 (1910-14=100). 



Table 1. — Projections of price support standards for group I or priority commodities 

 under specified assumptions, 1950—53 ' 



I. ASSUMING PARITY IXDEX AT 144 2 



[Work table: Illustrative calculations only] 



See footnotes at end of table. 



