GENERAL FARM PROGRAM 545 



y. PROGRAMS FOR CORRECTING THE GENERAL DISPARITY IN FARM AND 



NONFARM INCOME 



We believe that the general situation of lower prevailing income 

 in agriculture than in nonagricultural occupations, which we pointed 

 out yielded farmers an income from 1910 to 1948 that averaged only 

 60 percent of the earnings of industrial workers, arises out of two 

 main causes. One of these is the continuous surplus of farm peoples 

 that has averaged annually about a half million surplus during the 

 past three decades. The other major cause of farm disparity is the 

 inherent nature of farms to continuously turn out a full output dur- 

 ing depression and prosperity periods alike. 



The continuous surplus of farm people has resulted in a total net 

 balance of immigi-ation to urban centers of 15,000,000 since 1920. 

 Since this surplus of farm peoples is the combined results of rela- 

 tively higher birth rates in rural districts than in cities and of con- 

 tinuously increased productivity per worker in agriculture, and since 

 both these factors are evidently to continue in force into the fore- 

 seeable future, it is neither desirable nor possible to check these causes 

 of low farm income. 



This surplus of farm people affects farm income in two ways. 

 First, by constant pressure on the use of more workers on the land 

 than are needed and, secondly, by a tremendous drain of wealth in 

 costs of rearing and educating these excess boys and girls. In the 

 11 Southern States this net drain amounted to over a third of the net 

 income of farmers from 1920 to 1929. 



The second major cause of general disparity is the inherent nature 

 of the farm business to turn out a steady full output at all times af- 

 fected only by bad crop years. Farmers and farm family workers 

 furnish 80 percent of all labor needed to operate the farm. Contrary 

 t o the belief of many, mechanization has constantly increased and will 

 continue to increase, the proportion of labor supplied by the family 

 and has thus greatly increased the economic strength of the family 

 farm. To all effects this unpaid family labor is a fixed cost and other 

 fixed costs of operating the farm such as taxes, insurance, seed, etc., 

 brings the average of fixed costs to around 75 percent of all costs of 

 farming. Nonagricultural industry and business operates with an 

 average of around only 25 percent of all costs as fixed costs. 



Farmers, because of these high fixed costs, can't close down their 

 plant and output without greater losses than they would sustain if they 

 operated at full output. The opposite is true with nonagricultural 

 industry. This inherent difference plays a vital part in keeping farm 

 prices and income at a general lower level than the prices of industrial 

 goods. 



Although there are other causes of general farm income disparity, 

 these two as stated are the major causes. Since neither of the two are 

 preventable, only direct rural aid and price-support measures will off- 

 set their influence on the welfare of farmers. 



Since Federal aid to rural districts for schools, hospitals, roads, 

 etc., to offset in part the wealth depleting influence of surplus peo- 

 ples, is not in the province of the Agricultural Committee, we wnll 

 not discuss these aspects of the problem. Tliey are mentioned merely 

 to show the complex nature of the problem of correcting farm in- 

 come disparity. 



