GENERAL FARM PROGRAJVI 541 



plex aspects of the problem. Many of these cannot be clearly seen in 

 advance. A stock of remedies with as much flexibility of adminis- 

 tration as it is safe to give the administrator is a necessity of a sound 

 permanent program. 



We propose to discuss these six causes of disparity in turn and will 

 point out ways of correcting their influence on farm welfare. 



II. STABLE FARM OUTPUT AND UNSTABLE NONAGRICULTURAL OUTPUT AS 

 A CAUSE OF THE FARM PROBLEM 



We believe a far greater part of the problem of low farm jirices and 

 income arises out of unbalance in farm and nonfarm output than has 

 generally been recognized. Unless we clearly understand why over- 

 all farm production is very stable and industrial output is extremely 

 unstable we are likely to rely on production control of farm output 

 when it will do more harm than good. Clearly reasonable stability 

 of output of all economic goods from year to year is desirable. If so, 

 the chief problem does not lie in reducing output on the farm but 

 lies in bringing more stability to industrial output; rather than in 

 bringing instabilit}^ to farm production. 



First, let's look at the facts of stability of output from our farms 

 and the unstable output in industry and see how these influence 

 incomes in the two. For the 32 years from 1910 to 1942, year to j^ear 

 changes in farm output averaged about 4 percent up or down per year 

 compared with 13 percent for industrial output, or more than 3 times 

 as much change in industry as in agriculture. During these same 

 years net labor income of farm operators changed on an average of 25 

 ]:)ercent each year up and down compared with 8.8 percent for indus- 

 trial workers' annual earnings. 



Farm output is remarkably stable and farm income remarkably 

 unstable ; while industrial output is remarkably unstable and rates of 

 l)ay only half as variable as in agriculture. 



In these ojiposite or crisscross movements rest the major seat of 

 the problem of low farm income ; and indeed much of the difficulties 

 of labor and industry. If we expect to meet the challenge to our free 

 enterprise system we must find ways of keeping industrial employment 

 and output parallel with high farm output and prevent their periodic 

 movement in the opposite direction. 



This truth of opposite tendencies on the farm and in industries can 

 Ije shown convincingly^ by the outputs and income of industry and 

 agriculture in 1933 compared with 1929. In 1933 industry as a whole 

 turned out just about half as much goods as in 1929, and agriculture 

 only 3 percent less. There was only one-half as much goods of indus- 

 try to exchange for a full measure of farm output in 1933. N'o wonder 

 farmers' labor earnings in 1933 struck rock bottom at only 2.5 percent 

 of their earnings in 1929. 



We are not pointing these facts out to imply that this committee's 

 function is to try to find ways of stabilizing industrial output. Rather 

 we point these facts out to show that the trouble and solution of the 

 production problem lies largely in industry rather than on the farms. 



Does it appear sensible to bring instability to farm output in order 

 to stabilize the farmers' income^ That is exactly what control of 

 production proposes. Or is it not better to trv to stabilize industrial 



