1116 



GENERAL FARM PROGRAM 



FARMERS NOT RESPONSIBLE FOR HIGH COST OF LIVING 



In the first place, farmers as a group were not responsible for the outrageous 

 rise in food prices and general living costs which has occurred since the war. 

 That came about because the NAM and its member organizations were successful 

 in getting Congress to remove price controls. The major benefit of that action 

 didn't go to the farmers. It w"ent to the processors and distributors of farm 

 products. This is clearly shown by Bureau of Agricultlural Economics data. 

 From June 1946 to December 1948, the annul cost of the family market basket 

 rose $183. The processors and middlemen got 54 percent of this increase (the 

 Marketing and Transportation Situation, February 1949). Profits after taxes in 

 the food processing industry doubled between 1945 and 1947 (Survey of Current 

 Business, July 1948). In the same period leading food processors doubled their 

 rate of profit on net worth (National City Bank letter, April 1947 and April 1948). 



MIDDLEMEN SHIFTING PRICE DECLINES ONTO FARMERS 



Now that farm product prices have started to decline, is it the processors and 

 middlemen who are absorbing the bulk of the decline? Not at all. The BAEI 

 points out that, "considering only the relatively short recent period of decrease 

 in retail prices, July 1948 through December 1948, we find that the farmers bore 

 $39 of the $45 reduction in the retail cost of the family market basket. This 

 recent trend becomes even more pronounced when we study the changes between 

 December 1947 and December 1948. During this period the retail cost of the 

 market basket decreased $20, the farm value decreased $34, whereas the market- 

 ing margins were still increasing. Marketing margins were $14 higher in Decem- 

 ber 1948 than they were in December 1947" (Marketing and Transportation 

 Situation, February 1949). 



It is, of course, unrealistic to ^«k processors and distributors to forego the 

 unparalleled opportunities lor profit ni.j,king uhich have '^xisted sine ;)ric>' 

 controls were removed, and to expect them voluntarily to absorb any price declines 

 which may now result from the fact that their exorbitant prices and profits helped 

 to curtail consumer buying power. What we do suggest is that the Federal 

 Government has a solemn responsibility and obligation to protect both farmers 

 and consumers from economic hardship resulting from this situation. 



Farmers didn't want "high" prices in the first place; they wanted "good" 

 prices — stable prices at levels adequate to provide a decent margin above costs 

 and a decent family living. City workers never wanted "low" prices for farmers, 

 when they know from experience in the 1920's and 1930's that such prices bring 

 farm foreclosures, curtailed buying by farmers, and widespread unemployment, in 

 cities. 



MYTHS ABOUT FARM PROSPERITY 



There has been a great deal of loose talk about farm prosperity in recent years, 

 about farmers driving Cadillacs and flying airplanes and wearing diam.ond stick- 

 pins, etc. "That kind of talk is just as false as the myths about all industrial 

 workers during tlie war wearing silk shirts and drinking champagne. There are 

 some well-off farmers, just as there are some well-off workers among the most 

 highly skilled craftsmen ; but it is national averages which count in making national 

 policy, and the national averages show an appalling discrepancy between farm and 

 nonfarm incomes and living standards. In 1948, farm income per capita was 

 only $665, compared with $1,730 per capita nonfarm income. 



1 Including 4.6 billion dollars for value of home-consumed production. 



Sources: Income— Department of Commerce, Survey of Current Business, February 1949; Population- 

 Department of Commerce, Census reports: Farm Population Changes, June 4, 1948; Estimates of the Popu- 

 lation of the Continental United Statps, Aug. 13, 1948. 



