GENERAL FARM PROGRAM 



1119 



Storable commodities would continue to receive support through loans and 

 purchase agreements. 



AH commodities might be assisted by diversionary and other operations. 



A new list of "basic" or group 1 commodites would be supported at the full 

 support-price standard, including wheat, corn, cotton, tobacco, whole milk, eggs, 

 farm chickens, hogs, beef cattle, and lambs. 



Other commodities would be supported in relation to group 1 in accordance 

 with available funds and other factors. 



Benefits would be limited to 1,800 units, roughly a gross production of $26,300 

 at support prices, e.xcept when acreage allotments or marketing quotas are invoked. 



Aside from the new list of basic commodities, most of the actions listed above 

 are authorized under the Triple A Act of 1938. They are repeated under the 

 Agricultural Act of 1948. Mr. Brannan simply proposes to make wider applica- 

 tion of production payments than previously has been contemplated. 



Leaving aside questions of support levels, cost, and controls, which will be 

 discussed later, the method of supplemental or compensatory payments is quite 

 generally favored by agricultural economists. Based on our own record, there 

 are many of us in the grain trade who cannot fail to support employment of this 

 method under suitable terms and conditions. 



During 1947-48, a joint committee of the National Grain Trade Council and 

 the National Association of Commodity Exchanges and Allied Trades, Inc., did 

 considerable work on price policy. At a general meeting of flour and feed miilers, 

 grain interests, and others, held in Chicago on April 3, 1948. a proposal for farm- 

 income insurance was offered for consideration and comment. In principle this 

 does not differ greatly from production payments. While no action could be 

 taken at such a meeting, the idea was quite generally approved for study and 

 further development. The method is adapted from' a contest paper for the 

 American Farm Economic Association by Dr. Merrill K. Bennett of Food Research 

 Institute, Stanford University. It appeared in the Journal of Farm Economics 

 for November, 1945. In certain parts we quote from it literally, without giving 

 further credit. 



In approaching the study we found it necessary to keep in mind a rough analysis 

 of farms and farming. We realized that there is not one farm problem, but many. 

 There are as many problems as there are different commodities, different types of 

 farms and farmers. Some of the problems are economic, others are social in 

 their aspects. So while a general over-all program is about all that can be pro- 

 vided by Congress, it should be clearly designed to furnish help where help is 

 needed: and to do so, so far as it is possible, on an individual farm basis. 



In analyzing farms, we made use of the 1945 data by the Census Bureau and 

 BAE. Farms are ranked in six groups, according " to value of output, as 

 follows : 



1 Average. 



The 1,600,000 farms in this last group are now cla.ssified as full-fledged farms, but 

 probably should not be. They produce little, and people on them earn most of 

 their Hving in off-farm work. Including them distorts agricultural statistics and 

 makes average farm income look lower. 



The top 28.7 percent of farms that raise 75.4 percent of all jiroduce are the farms 

 that are important commercially. It is likely that they receive the lion's share of 

 benefits from price-siipport programs, particularly when only the present basic 

 commodities are supported. 



The Colmer Committee Report (Tenth Rejiort of the House Special Committee 

 on Postwar Economic Policy and Plaiming, dated .\ug. 6. 19461, savs that the 



01215— 49— ser. u, pt. 5- 



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