tremendous importance to the citizens 

 within each county. I strongly recom- 

 mend that each county Farm Bureau 

 immediately select a permanent tax 

 committee of the ablest men available 

 and that these committees become im- 

 mediately acquainted with the possible 

 effect of this legislation within the re- 

 spective counties. In the higher as- 

 sessed counties, the problem will large- 

 ly be one of finding adequate revenue 

 for the orderly continuance of local 

 government, while in the lower as- 

 sessed counties, the citizens must be 

 eternally vigilant or they are likely to 

 wake up and find a substantial increase 

 in property taxes. The issues are such 

 as to afford every county Farm Bureau 

 the opportunity of rendering great 

 service not only to farmers but to all 

 property taxpayers in their counties. 



In the Public Relations Conference 

 this afternoon, the opportunity will be 

 provided for the consideration of these 

 and other broad questions of public 

 interest in much greater detail than it 

 would be appropriate for me to discuss 

 here. 



Face National Problems 



On the National front, farmers must 

 be prepared to meet ever increasing 

 and most difficult problems. These 

 problems can rightfully be divided into 

 two classes — first, problems within ag- 

 riculture, and the other, farmers' in- 

 terests and relations with other groups 

 of the National economy. While I 

 recognize there are many and involved 

 problems within agriculture, I can deal 

 here only with a few of the more im- 

 portant and broad questions of policy. 

 As we emerge from the war, it is only 

 natural that the rank and file of farm- 

 ers begin to wonder what is the pro- 

 spective outlet for the products they 

 have the ability to produce. Every- 

 where farmers are wondering and ask- 

 ing, "Can we depend upon the many 

 statements that have come from men 

 in National authority that the Govern- 

 ment's responsibility in feeding the 

 peoples of devastated and conquered 

 countries would absorb any surpluses 

 that American farmers could pro- 

 duce.^" I do not believe anyone is 

 warranted in attempting definitely to 

 answer these inquiries. I have not the 

 slightest doubt that the immediate 

 needs of the world could easily absorb 

 any food surpluses American farmers 

 will produce, but I am beginning to 

 wonder at what price. 



Price Support Program 



■ Many weeks ago, representatives of 

 the American Farm Bureau Federation 

 met with the top officials of the De- 



partment of Agriculture and made spe- 

 cific recommendations as to the steps 

 that should be taken to meet and cope 

 with any surpluses of given farm com- 

 modities that are marketed but cannot 

 be absorbed at the price floors author- 

 ized by Congress. Frankly, I was keenly 

 disappointed at the inadequacy of plans 

 developed in the Administration to 

 carry out this mandate of Congress, 

 which was enacted four years ago. 

 While our recommendations were 

 rather cordially received, we do not yet 

 know of any decisions by those in the 

 Administration responsible to the 

 farmers of America. I know, of course, 

 of the ability and the desire of farmers 

 to produce food to meet every possible 

 need in the peacetime domestic market 

 and to do their utmost in assisting the 

 Government to discharge every obliga- 

 tion it may have to the people of other 

 nations of the world. But I am not 

 going to be disillusioned by any glossy 

 promises which encourage farmers to 

 produce to the limit, where by doing 

 so they run the risk of again experi- 

 encing the disastrous results following 

 the last war. I regard it as one of the 

 chief duties of our National organiza- 

 tion to continue to insist that the re- 

 sponsible officials of government, par- 

 ticularly those administering the De- 

 partment of Agriculture, decide and 

 announce the prospective needs of the 

 various major commodities in agricul- 

 ture and simultaneously announce the 

 responsibility Government is assuming 

 to make effective price floors, so that 

 large scale production will not result 

 in the collapse of farm commodity price 

 levels below the 90 per cent of parity 

 as directed by Congress. To be prac- 

 tical, such plans should be announced 

 substantially in advance of the planting 

 or production period of the com- 

 modity. As much as I desire to see 

 large scale production in agriculture, 

 unless this is done, I cannot do other- 

 wise but advise farmers to move for- 

 ward with caution. 



A year ago I said with some em- 

 phasis that regardless of some weak- 

 nesses in the Agricultural Adjustment 

 Act or mistakes in its administration, 

 farmers should uphold and defend this 

 basic law, as it was entirely possible it 

 would be needed in the years ahead 

 even more than during the days of the 

 last depression. I repeat that state- 

 ment. 



Possibly the most important provi- 

 sion of this Act is the parity formula. 

 As you well know, this formula is the 

 legal yardstick for determining cur- 

 rently what is a fair price for the basic 

 soil crops, corn, wheat, cotton, rice, 

 tobacco and peanuts. Throughout the 

 years it has drawn criticism from many 

 .sources. Some have charged that it was 



out-moded. Some charge that its basic 

 period was too favorable to agriculture, 

 while others have stated it was unsound 

 because it did not take into considera- 

 tion current wage levels of agricultural 

 workers. And some even insist that 

 computations should include wages for 

 the farmer and all members of his 

 family who work upon the farm. Still 

 others criticize the application of the 

 parity formula to livestock and dairy 

 products. With the last criticism, I am 

 in wholehearted agreement. These and 

 other criticisms are again becoming a 

 popular pastime. 



Because of the importance of the 

 parity formula to the long-time interest 

 of farmers, I feel impelled to discuss 

 it at some length. First, we must re- 

 member that it legally applies only to 

 the basic soil crops. Second, we must 

 remember that its purpose is to deter- 

 mine what constitutes currently the 

 price at which such commodities must 

 flow in the channels of trade to give 

 these commodities a fair exchange value 

 with the industrial commodities farmers 

 generally purchase. 



Parity Formula Defended 



Dealing with the first mentioned 

 criticism, let me say that when the 

 parity formula was written into law in 

 1933, the 1910 to 1914 base period was 

 accepted only after a review of the price 

 relationships of industrial and agricul- 

 tural commodities during every five- 

 year period between 1900 and 1933. 

 The 1910 to 1914 base period was ac- 

 cepted because there were not only 

 more stable conditions within agricul- 

 ture during that period, but a fairer 

 relationship existed between the price 

 levels of agricultural commodities and 

 industrial commodities during that time 

 than in any other five-year period dur- 

 ing the years mentioned. You will re- 

 member it is the five-year period im- 

 mediately before the first World War 

 and it was the war, which caused radical 

 change in normal price relationships. 



Pressure for the inclusion of farm 

 wages in the parity formula has much 

 popular support. It is, of course, easy 

 for one speaking before a partially in- 

 formed audience to make light of any 

 yardstick for the determination of a 

 fair price for farm commodities that 

 does not recognize agricultural labor 

 costs as an important factor in their 

 production. But we must remember 

 that the premise of the parity formula 

 is to give agricultural commodities a 

 fair exchange value with industrial com- 

 modities and it is not a cost of produc- 

 tion plus profit formula. Today we are 

 living in an economy where relatively 

 high industrial wages are being paid 

 and we are witnessing daily continued 



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