PRICE-FIXING AND THE COST OF FARM PRODUCTS 375 



producer of city milk is getting more than he ever got before 

 is not a sufficient consolation if he might be making more profits 

 selling grain, hogs, and butter fat, in spite of the fact that he 

 has gone to greater expense to equip his farm for meeting 

 the requirements of the city ordinances. It is this unsettled 

 condition which has given rise to the recent efforts to regulate 

 prices. 



In deciding upon a fair price to the farmer on the part of a 

 commission the alternative choices of the farmer become the basis 

 for a rational decision. The industry should be made attractive 

 to the farmer if he is expected to remain in it. But what is 

 essential to make a given system of farming attractive ? Must 

 it pay some definite labor income to each farmer engaged in it ? 

 Apparently not, for as a matter of fact men are remaining in 

 each type of farming who are making small incomes while others 

 are making very large incomes. 



Whether or not a man should continue to carry on a given 

 type of farming depends upon his opportunities in other lines of 

 farming or other lines than farming. If there is no better out- 

 look, if he is doing better than he could do in any other place, he 

 will probably continue to produce the supply for the price he can 

 get and look to methods of reducing costs as a means of increas- 

 ing profits. If there is an alternative which will pay him much 

 better, which should he do, ask that his price be lifted to the 

 point where his present activities will pay as well as the alterna- 

 tive or quietly choose the better paying activity ? The answer 

 is not so obvious as it might at first appear. Shifting is often 

 expensive, and there is usually hope that conditions will change 

 and the old line will again pay better. It often takes a genera- 

 tion to build up a type of farming, and when the system becomes 

 unprofitable a serious loss is suffered before readjustment can be 

 made. Yet where permanent changes in market conditions have 

 come about, changes in farming are necessary. Where read- 

 justments should be made it is believed that public expenditures 

 to aid in the readjustment, especially by means of educational 

 campaigns, may often be more desirable than price lifting as a 

 means of making the industry profitable. 



