c 



:r^j!^^=^ 90% PAany price fioor for farm commodities 



^^■■■^mm:2ti^ 



THIS'LL BE FIME FOR. 

 TWO VtARS, UNCLE - Bur 



THEN WE'LL N4EED 

 SOMETHIMQ PERMAHENT.' 



PR/a 



SUPPORTS 



IIL 



PRESIDENT Truman's official dec- 

 laration of the termination of hos- 

 tilities Dec. 31 abolisheci many of 

 the president's wartime powers and es- 

 tablished a definite time limit for the 

 end of post-war farm price supports 

 under exfstin^ legislation. 



This proclamation automatically ter- 

 minates at the end of 19*8 the gov- 

 ernment's obligation to support prices 

 of major farm commodities at not less 

 than 90 per cent of parity. 



In November 90 per cent of parity 

 was equal to $1.22 a bushel for corn. 

 $13.86 per c\\t. for ho.qs, and S3. 36 a 

 hundred pounds for milk. 



The minimum "floor" prices will be 

 subject to change from time to time, 

 depending mainly on the prices of the 

 commodities the farmer buys. 



At present, with fTie exception of 

 potatoes, no ^'overnmcnt aid has been 

 needed to maintain prices, since farm 

 commodities have been well above le- 

 ^al support levels. 



During the next two years, however, 

 surpluses of many farm commodities 

 are expected to drive farm prices down 

 to the levels set by price support leg- 

 islatiofi. 



Anticipating the expected post war 

 drop in price levels. Congress during 

 the war passed legislation to protect 

 the farmer against ruinous price de- 

 clines. 



This price support legislation was 

 embodied in the wartime Stabilization 

 Act of 19 i2. The law. as it read to- 

 day, guarantees the price on so-called 

 basic commodities at 90 per cent (921/^ 

 per cent for cotton) of parity for two 

 years. 



The basic commodities protected by 

 this law are corn, wheat, cottorh, to- 

 bacco, rice and peanuts. The law pro- 

 vides that the prices on these com- 

 modities shall be supported by com- 

 modity loans. 



These loans will be set up, in all 

 probability, on a basis similar to those 

 made to producers under the Agricul- 

 tural Adjustment Act of 1938. (The 

 old AAA). 



The scope of the Stabiliz:aion Act 

 was later extended by the Steagall 

 amendment to include price support 

 on hogs, eggs, chickens, milk, soybeans 

 and potatoes. 



While the basic commodities are to 

 be supported by crop loans, the Stea- 

 gall commodities may be supported by 

 one or rnore measures, including loans 

 to producers, purchases in the market, 

 or, as the bill reads, "other operations." 



By LEW REISNER 



Field Editor, lAA RECORD 



The Steagall cornmodities are to be 

 supported at riot less than 90 per cent 

 of parity. In some cases, fluid milk 

 may be an example, prices probably 

 will be supported at levels higher than 

 the legal minimum. 



For all other farm commodities, in- 

 cluding beef cattle, lambs and wool, 

 the Steagall amendment declares, in 

 effect, that they shall be supported in- 

 so-far as funds are available to bring 

 them into parity relationships with 

 basic and Steagall commodities. 



Carrying out a program to keep ef- 

 fective price support floors under farm 

 commodities during the next two years 

 may not be done too easily. The gov- 

 ernment's difficulty with last year's po- 

 tato crop offers an example. This past 

 year the government bought millions 

 of bushels of potatoes to support the 

 price at 90 per cent of parity. This 

 was required under provisions of the 

 Steagall amendment. 



■ The cost, as has been well ^blicizcd, 

 was about $80,000,000. Next ■ year 

 acreage controls will be placed on po- 

 tatoes with parity payments made only 

 to cooperators. 



Again, in 19-43 when farmers were 

 asked to increase hog production at 



L A. A. RECORD 



