242 AGRICULTURAL PRICES AND VALORIZATION 



The field now successfully covered by collective bargaining in 

 agriculture is that of whole milk for certain large metropolitan 

 districts, particularly New York, Pittsburg, Cleveland, Chicago, 

 Detroit, Minneapolis, St. Paul, and San Francisco. Here the 

 dairymen control the raw milk supply. Representatives of the 

 organized dairymen bargain with representatives of the organized 

 distributors, and a price is fixed. If consumers ever organize, the 

 farmers may bargain collectively with organized consumers. At 

 present, the problem of protecting the consumer against a " com- 

 bine" of farmer and distributor is being solved in different ways 

 in different cities. Evidently the consumer is entitled to a " voice" 

 in price fixing on the produce he buys. In Detroit, Pittsburg, and 

 elsewhere, he "sits in" with the representatives who do the 

 price fixing. 



The chief problem involved, however, is not by whom shall 

 the price be fixed, but at what point. The farmer asks for "cost 

 of production plus a profit," in other words, a guarantee of divi- 

 dends. But he is never able to sell all his product in this way for 

 a very long time, if he produces a surplus. As the supply increases 

 beyond the consumer's wants, the price must drop; conversely, 

 when the supply decreases below consumer's wants, prices rise. 

 Hence a sliding scale is the solution, representing both cost of 

 production and demand. In other words, collective bargaining 

 will work if and when it follows the law of supply and demand. 



QUESTIONS ON THE TEXT 



1. What factors determine price? What factors should determine price? 



2. Do agricultural prices fluctuate according to the law of supply and demand? 



3. Are agricultural prices higher in the spring than in the fall? 



4. Show the limitations of the theory of supply and demand in price fixing. 



5. Show the attitude of some farmers towards so-called "big business." 



6. Show the farmer's demands for a "just price." 



7. Discuss the theory of price fixing by the government, and show its 



limitations. 



8. Show relationship of "just price," "fair price," and "equilibrium price." 



Define each term. 



9. Define and illustrate marginal producer. 



10. Show how price fixing is sometimes done by collective bargaining. 



11. Quote the conclusions of H. C. Taylor on the use of price commissions in 



price making. 



12. Cite the experience of the California Walnut Growers in making an "Offer- 



ing Price," and show what price factors are given most weight. 



13. Cite experience of California Almond Growers, and show what price factors 



they take into consideration. 



14. Give illustration from wheat market showing where demand may tempo- 



rarily be the dominating factor in price making. 



15. Show limitations to the theory of basing farm prices on cost of production. 



