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Price Tells the Farmer What, Where, and How Much 

 to Plant 



Under the capitalistic system of the horse-and-buggy days 

 the tremendous task of adjusting the complicated supply 

 problems was left to the price system and thereby to farmers 

 individually. Production was wisely guided by price. Whether 

 a farmer produced cabbage -or potatoes rested on a basis of 

 price. Whether a farmer sold corn or turned it into pork was 

 determined by price. Whether the range country produced 

 cattle or sheep was determined in part by price. 



Public desire for more grapefruit and orange juice found 

 expression in public willingness to pay high prices for these 

 foods, or to buy more at the same price. This made it prof- 

 itable for the farmers to increase the acreage of citrus fruits. 

 Through price the nation had told the farmers that more 

 citrus fruits were wanted, and the farmers responded. As the 

 horses on farms and in the cities were replaced by tractors 

 and trucks, less timothy hay was needed. The nation paid 

 less for hay. Farmers noted the falling prices and reduced the 

 acreage. 



With the improvement and cheapening of transportation, 

 the price which could be obtained for potatoes rose in areas 

 distant from market, and a part of the commercial produc- 

 tion shifted from near-by areas to Maine and Idaho. 



By the price system the production of an article can be 

 increased, decreased, or shifted from one farm to another, or 

 from one area 2 to another. Since time immemorial high 

 prices have encouraged the production of food that was 



2 A few years ago three states, Nebraska, Montana, and Wyoming, raised 

 about one half as many dry beans as New York. In 1943 they planted twice 

 as much as New York. Formerly there were price differentials based on 

 location. The regimenters did not approve and for the last year or so ceiling 

 prices were the same for all shipping points. 



